For this week’s application paper I
wanted to find a company that wasn’t participating or did not have a committed
CSR effort and interview somebody within the organization about how it affected
their business. Turns out this is much easier said than done these days. Perhaps
it was just that the obvious companies to pursue weren’t so obvious, or the
admonition of the business intelligentsia like Franklin (2008) has really sunk
it. I was lamenting my troubles to my younger brother Thursday night and he quipped
how the company he works for, a subsidiary of General Parts International has
no definitive CSR initiative. I started digging and sure enough they have no
advertised or promoted CSR or sociopolitical initiatives. He put me in contact
with the regional manager who was very unfamiliar with CSR in general. He
mentioned how GPI was a privately held company and had little need to impress
investors, which is what he thought CSR seemed to be. He thought there would be
little financial benefit to being involved in it as well stating that it is a “nice
idea” but “definitely not something that is needed.”
To be
honest I was really struck by this. I assumed in looking for a company not
practicing CSR I would find one that was, but just didn’t think of it that way.
In my research via Google I was able to find hints of things GPI does that
would fall under some definitions of CSR, but they take part in these actions
for strictly bottom line motivated reasoning. Unfortunately GPI’s financials
weren’t readily available as it is privately held. I looked to other industry
competition to see what they were doing though; one in particular that I could
find information about was AutoZone. According to CSR Hub (2012) AutoZone is
about 30% larger (based off of number of stores, 3k vs 4k) than GPI so I felt
it was a decent comparison. AutoZone received a 43/100 which is about the same
for the rest of their industry (avg. 47.) But what does this mean? I looked
into some other industries, and as I searched brands it seemed to me that those
with a more consumption based product had higher CSR ratings which made me
think they are probably using it more as a marketing ploy than really doing it
altruistically. Manufacturing companies were rated, but those who had a product
that was an end consumer product (like Toyota rather than AutoZone) had higher
ratings. Here are a few companies and their numbers from www.csrhub.com, I would like to see what you
all think and maybe some numbers from companies you search!
AutoZone: 43
Toyota: 60
Dell: 67
Micron: 40
Adobe: 57
LinkedIn: 33
Google: 54
Whole Foods: 49
Starbucks: 59
Franklin, D. (2008) Just Good Business: A Special Report on Corporate
Social Responsibility, The
Economist, January 19, pp.1-14 (full article)
(2012) AutoZone, Inc. http://www.csrhub.com/CSR_and_sustainability_information/AutoZone-Inc
(2012) CSRHub. www.csrhub.com
Nik, what would be your argument to GPI on why it should implement a CSR program? I know we talked about this in one of your previous application assignments, but how do we differentiate those companies that use CSR as a marketing ploy and those that have a true commitment to a cause? And do we even care about identifying these two types of companies if both give back to society on equal levels?
ReplyDeleteHi Nik,
ReplyDeleteDo you think Whole Foods strategy is a marketing ploy? It seems its entire business is CSR based.
Dr. Pade,
ReplyDeleteFrom a consultative perspective I actually don't think that I would argue for them implementing a CSR program. They are already covering the necessary bases it seems (further research may show otherwise, however) and the financial return for doing so would be negligible within their industry.
Justin,
Yes, I think Whole Foods sells CSR. Although they do have some great products, I have worked with them in the past as a vendor and they are more concerned about product image than the actual product (very American...) They always want Fair Trade certified products, and will give little credence to the fact that Fair Trade ostracizes many small firms because they cannot afford the cost of entry to the market Fair Trade creates.
Nik, this doesn't surprise me either. Although I believe all companies should have some practice of social responsibility that may not be at the level most corporations have, the question is whether they need to or not. Companies that sell directly to a large consumer base would typically have greater efforts towards CSR but whether they do it effectively is another question to raise.
ReplyDelete