Jakarta CMO ClubWednesday, 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 PhilosophyBasic Business Philosophy

Basic Business PhilosophyBasic Business PhilosophySeven Principles

Contribution to SocietyFairness and HonestyCooperation and team SpiritUntiring Effort for ImprovementCourtesy and HumilityAdaptabilityGratitude

Profit is the reward and measure of contribution to society

states the codes of conduct for employees in their daily work

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.

Community

SociallyResponsible

Corp SocialMarketing

Cause RelatedMarketing

CausePromotions

CorporatePhilanthropy

Volunteering

BusinessPractices

6 Options of Doing Good

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

What are the types of CSR?

Provides funds, in-kind contributions, or other organization resources to increase awareness and concern about a social cause

Cause Promotions

Option 1: Cause Promotions

MTV – Staying Alive Campaign Example

Cause promotions

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

Cause related marketing

Option 2: 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."

Cause related marketing

Supports the development and/or implementation of a behavior

change campaign

Social Marketing

Anti-Smoking Campaign

Social Marketing

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

Corporate Philanthropy

Supports and encourages employees, retail partners, and/or franchise members to volunteer

their time to support local community organization and

causes

Community Volunteering

Option 5: Community VolunteeringGE Volunteers Example

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

Socially responsible business practices

Jakarta CMO ClubWednesday, 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?

1

Peace and Fulfilment of Humankind's Potential

W.O.W!

Take Good Care of the Environment and the Community;

The Community and the Environment will take good care of you

Future Leaders Series:

Corporate Social Responsibility

Talk given to the Nanyang Fellows, Nanyang Business School, Nanyang Technological University by Pak Kuntoro Mangkusubroto

2005

Philip KotlerSC Johnson Distinguished Professor

of International MarketingKellogg School of Management

Northwestern University

Hermawan KartajayaPresident

World Marketing AssociationPresident

MarkPlus Inc

Hooi Den HuanVice-Dean (Corporate Services)

Nanyang Business SchoolNanyang Technological UniversityInternational Advisor, SBM, ITB