Is there a responsibility for organisations to influence society for the greater good?
Facebook's Corporate Citizenship
The business pages of the West Australian on Wednesday, 27 October, reported Mark Zuckerberg was riled as a consequence of the bad press received by Facebook due to the documents provided by Frances Haugen to US Congress and the Securities and Exchange Commission. The article reported Zuckerberg as claiming the problems of Facebook were not primarily about social media but a reflection of society in general.
What is Corporate Citizenship?
This raises a crucial question. What is the corporate responsibility of Facebook and organisations in general? Do organisations have an obligation to do more than reflecting society in general? Is there a responsibility for organisations to influence society for the greater good?
There is increasing emphasis on corporate social responsibility (CSR) or corporate citizenship in the business world. Citizenship is, in part, driven by the need for businesses to reduce their carbon footprint and act as good global citizens. What does CSR or corporate citizenship mean?
Like many broad ethical issues, there is no one set definition; instead, how organisations demonstrate their social responsibility or corporate citizenship varies from company to company. Michael Glauser divides corporate citizenship into two main areas:
- What an organisation does to the society or community they are in. This is the principle of doing no harm, such as not polluting the environment, not underpaying employees, or producing faulty goods.
- What an organisation does for society or the pro-active action to benefit the society or community. For example, the mining industry providing apprenticeships and employment opportunities for the traditional owners of the land they are mining.
Zuckerberg’s comment that Facebook is simply a reflection of society leaves unanswered the question of what is Facebook doing for the community? How is Facebook improving society? It is easy to blame society, but corporate citizens must ask hard questions about improving society.
Corporate citizenship is all about trust
The importance of Corporate ethical behaviour
Consumers are increasingly influenced by and make decisions on ethical considerations. It is no longer buying a product that is the best value for money. Consumers consider whether the product is ethically and sustainability made; and whether staff are treated ethically and receive fair compensation. Customers are now willing to pay higher prices if they believe the company is engaging in sustainable practices or contributing to the improvement of society or the environment. Customers are more likely to be loyal to organisations that are good corporate citizens.
It isn’t only consumers who want to engage with businesses that align with their values but also employees. Staff want to work for organisations they believe in, where there is a values alignment. Organisations with strong social responsibility and incorporate that commitment in their vision and mission are more likely to attract committed and talented staff.
Hence, there is a strong case for organisations to be good corporate citizens in terms of staff engagement and customer loyalty.
Corporate Citizens, Corporate Culture and Trust
Corporate citizenship to be effective must reflect the corporate culture of the organisation. If corporate citizenship is simply a cynical exercise to gain customer loyalty or ensure staff retention, there will be no authenticity or genuineness. It will be seen as insincere and disconnected from the organisation.
The result will be a loss of trust. Corporate citizenship is all about trust.
The Edelman Trust Barometer, 2021, makes important points on trust in the business world that organisations need to consider. While the pandemic has put trust to the test, businesses are now the most trusted organisations compared with governments, media and NGO’s. Business is viewed as both ethical and competent. The interesting thing about trust in business is that 84% of people are concerned they may lose their employment, while 53% fear losing their work due to COVID. Despite this fear and anxiety, businesses are still more trusted than governments.
Given the lack of and decline in trust for societal leaders, governments and media and the increase in trust for local sources, organisations must build social responsibility or corporate citizenship into their vision and mission. Rather than simply saying we reflect the society around us, it is about imaging new ways to contribute to and build positive communities locally or nationally.
After all, when citizenship is reduced to its essentials, it is about our responsibility and trust as organisations.
