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Jakarta CMO Club

Wednesday, 26th March 2008

Corporate Social Responsibility (CSR)

What is CSR?
What are the costs of not having CSR?
What are the benefits of CSR?
What are the types of CSR?
How to decide what CSR to engage in
and how much is enough?
“Corporate Social Responsibility
is a commitment to improve
community well-being through
discretionary business practices
and corporate resources.”
Philip Kotler and Nancy Lee, “Corporate Social Responsibility,” Wiley, 2007
With Nancy Lee at Kotler’s 75th Birthday celebrations in Kellogg, Aug 7, 2006
With Philip Kotler, Hermawan, Michael and Ariana at Kotler’s birthday celebrations in Kellogg, Aug 2006
“Corporate Social Responsibility
is a commitment to improve
community well-being through
discretionary business practices
and corporate resources.”
Philip Kotler and Nancy Lee, “Corporate Social Responsibility,” Wiley, 2007
Basic Business Philosophy
Basic Business Philosophy
Seven Principles states the codes of conduct for
employees in their daily work

™Contribution to Society
™Fairness and Honesty
™Cooperation and team Spirit
™Untiring Effort for Improvement
™Courtesy and Humility
™Adaptability
™Gratitude

Profit is the reward and measure of contribution to society


Companies that got into trouble due to
CSR issues

Dasani mineral water


(part of Coca-Cola)
McDonald’s was forced to
withdraw an advert that claimed
that after selecting its potatoes,
“we peel them, slice them, fry
them and that’s it.”
McDonald’s was forced to withdraw an advert that
claimed that after selecting its potatoes, “we peel
them, slice them, fry them and that’s it.”

This omitted par-frying the


chips, freezing them, adding a
dextrose solution and salt.
CSR examples

IBM UK

Reinventing Education Partnership programme

Interactions and sharing of knowledge through


a web-based technology
- the “Learning Village” software.

Culture of openness and sharing of good


practice
Avon

– a partnership with Breakthrough


Breast Cancer, and its Breast
Cancer Crusade has raised over
10 million pounds since its launch
12 years ago.
6 Options of Doing Good
What are the types of CSR?

Cause Related
Marketing
Cause Corp Social
Promotions Marketing

Socially
Responsible Corporate
Business Philanthropy
Practices
Community
Volunteering

Source: Philip Kotler and Nancy Lee, Corporate Social Responsibility.


Cause Promotions

Provides funds, in-kind


contributions, or other organization
resources to increase awareness
and concern about a social cause
Option 1: Cause Promotions
Cause promotions

MTV – Staying Alive Campaign Example


Cause related marketing

Commits to making a contribution


or donating a percentage of
revenues to a specific cause based
on product sales
e.g. donate 10% of the price of each product sold
Option 2: Cause Related Marketing
Cause related marketing
RED Campaign Example

It is the first time that the


world’s leading companies
have made a commitment to
channel a portion of their
profits from sales of specially–
designed products to the
Global Fund to support AIDS
programmes for women and
children in Africa."
Social Marketing

Supports the development and/or


implementation of a behavior
change campaign
Social Marketing
Anti-Smoking Campaign
Corporate Philanthropy

Makes a direct contribution to a


charity or cause, most often in the
form of cash grant, donations,
and/or in-kind service
Corporate Philanthropy
Warren Buffett Example
Community Volunteering

Supports and encourages


employees, retail partners, and/or
franchise members to volunteer
their time to support local
community organization and
causes
Option
GE Volunteers
5: Community
Example
Volunteering
Socially responsible business practices

Adopts and conducts discretionary


business practices and
investments that support social
causes to improve community well-
being and protect the environment
e.g. community trade, environmental friendly
process
Socially responsible business practices
The Body Shop Example
Jakarta CMO Club
Wednesday, 26th March 2008

Corporate Social Responsibility (CSR)

What is CSR?
What are the costs of not having CSR?
What are the benefits of CSR?
What are the types of CSR?
How to decide what CSR to engage in
and how much is enough?
Future Leaders Series:

Corporate Social Responsibility

W.O.W!

Take Good
PeaceCare of the
and Fulfilment Environment
of Humankind's Potential and
the Community;

The Community and the Environment


will take good care of you

1
Talk given to the Nanyang Fellows, Nanyang Business School,
Nanyang Technological University by Pak Kuntoro Mangkusubroto
2005
Hermawan Kartajaya Philip Kotler
SC Johnson Distinguished Professor Hooi Den Huan
President Vice-Dean (Corporate Services)
World Marketing Association of International Marketing
Kellogg School of Management Nanyang Business School
President Nanyang Technological University
MarkPlus Inc Northwestern University International Advisor, SBM, ITB