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Jim Doyle

Corporate Social Responsibility or Corporate Social Revenue?

“There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the games, which is to say, engages in open and free competition without deception or fraud” Milton Friedman.

According to Friedman, every corporate social responsibility is an investment into the firm. There is no doubt that CSR is becoming an increasingly integral part of corporatons. For example, in 2011 European companies had three times more CSR activities than its US counterparts. However, fast forward two years and the US firms were number one when it came to CSR (Moravcikova, Stefanikova and Rypakova, 2015).

Despite this development, CSR still has substantial lesser budget than those of core business functions. These functions include finance, HR, and of course, its operations. But why is this? CSR can be classified as an investment that can result in profit, rather than a necessary operating expense to generate revenue. Therefore, CSR is an operating choice.

This begs the question, is corporate social responsibility purely a profit maximisation tool? And why do firms partake in CSR? Especially, when there is evidence to support that companies that act with moderate to high levels of irresponsibility can lead to a higher stock value, as they are “unconstrained by restrictive CSR policies or not precluded from the advantages some irresponsible activities present”. (Ding, Ferreira and Wongchoti, 2016, pg 97).

The Media & Consumer

The media is key when it comes to depicting the CSR activity, and the message it sends to the public (Shim, Chung and Kim, 2017), and in turn, how they perceive the company in lieu of its actions and therefore increases profits as “Customers are interested in a company’s responsible activities and… influences buying decisions” (Moravcikova, Stefanikova and Rypakova, 2015 pg 338) Additionally, the media coverage may result in a cost efficient way to achieve potential advertising. For example, if a firms CSR activities was given full page spread in the global addition of the WSJ, it would result in a saving of $221,353 (Wsjmediakit.com, 2017).

The Shareholders

According to Ding, Ferreira and Wongchoti (2016) investors that are not interested In proactive CSR, often indicates their chase for short term goals. An objective that is not beneficial to the long term health of any organisation. However, long term orientated shareholders pursuit CSR as they believe “that CSR may have a financial pay-off” (Cullinan, Mahoney and Roush, 2017, pg 239). Additionally, an investor may also be drawn to a firm if “they perceive the company’s values… are congruent to their own” (Cullinan, Mahoney and Roush, 2017 pg 239). The aforementioned could be imperatively important to a CEO or MD, as companies that follow socially driven ethical and CSR practices, often receive greater support from their shareholders (Cullinan, Mahoney and Roush, 2017), which is the cornerstone of any stable business.

Stock Value

We already know that good CSR doesn’t automatically mean more profit (Ding, Ferreira and Wongchoti, 2016). However, companies that have an eye on their future stability and long term goals through their CSR activities have a 5% higher stock evaluation than their counterparts acting in irresponsible behaviours (Kecskés, Mansi and Nguyen, 2017).  Additionally, these responsible firms will also have less volatile profits by roughly 5% (Kecskés, Mansi and Nguyen, 2017).

 

Corporate social responsibility may just be one of the most overlooked and mutually beneficial activity for both firms and society. By carefully constructing media messaging, shareholder objectives, and the monitoring of mangers by long term investors, CSR can result in significantly higher stock evaluations, shareholder value, and  an increase sales to ensure profit maximisation. Which in turn, leads to the suggestion of CSR being an extra source of revenue and profit maximisation through socially responsible means.

 

 

 

Bibliography:

 

Cullinan, C., Mahoney, L. and Roush, P. (2017). Are CSR activities associated with shareholder voting in director elections and say-on-pay votes?. Journal of Contemporary Accounting & Economics, 13(3), pp.225-243.

 

Ding, D., Ferreira, C. and Wongchoti, U. (2016). Does it pay to be different? Relative CSR and its impact on firm value. International Review of Financial Analysis, 47, pp.86-98.

 

Kecskés, A., Mansi, S. and Nguyen, P. (2017). Does Corporate Social Responsibility Create Shareholder Value? The Importance of Long-Term Investors. Journal of Banking & Finance.

 

Moravcikova, K., Stefanikova, Ľ. and Rypakova, M. (2015). CSR Reporting as an Important Tool of CSR Communication. Procedia Economics and Finance, 26, pp.332-338.

 

Shim, K., Chung, M. and Kim, Y. (2017). Does ethical orientation matter? Determinants of public reaction to CSR communication. Public Relations Review, 43(4), pp.817-828.

 

Wsjmediakit.com. (2017).] Available at: http://www.wsjmediakit.com/files/uploads/201410/WSJ%20Mag%20Mediakit_FALL%202017_Rates_SpecsOnly.pdf [Accessed 30 Oct. 2017].

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“Yes, No, Maybe, I Don’t Know? Can You Repeat The Question?”

The familiar chorus of Malcolm in the Middles theme song is surprisingly fitting in the aftermath of the Brexit referendum. There is a rising tide of speculation in the sea of ambiguity as the levels uncertainty is at an all-time high as the UK sits in a negotiations deadlock with the EU.

But how has Great Britain found itself in the midst of a potential social and economic crises? One factor would be the outstanding Brexit PR campaign. Albeit that the facts may not have been entirely true, their simplistic, positive and punchy slogans resonated with the public.

 

Vote Leave, Take Back Control

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The leave campaigns message was simple, clear, and most importantly evocative. “Let’s give our NHS the £350 million the EU takes every week”, a powerful statement that was backed with resilience and unity across the leave campaign. In contrast, Remain countered that families would be £4,300 pounds a year worse off as a result of Brexit. The negative and precise prediction, combined with the contradicting reports within Remain led to an ambiguous message, and ultimately led to the public being sceptical of their claims.

 

The Issue of Immigration.image

When appealing to the voters, Nigel Farage utilised the sensitive issue of immigration as a key weapon in his arsenal. Playing on cultural and national identity, combined the complex issue of the Turkey potentially joining the EU. The poster behind the message came in for severe criticism, as the language and imagery was extremely questionable, if not borderline racist. The poster is concise and cinematic, focusing on taking back control, again. In contrast, the lack of direct power in relation to immigration hampered Remain.

 

The Personalities.

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There is no doubt that the personalities and heavy hitters of the two campaigns would play a vital role in the result of the referendum. When compared to a Hollywood movie, the leave campaign had a star-studded cast.

 

The Helper: Wanting only to be loved, solely looking to people please they give love and get it in return. The Helper is played by loveable comedic character of Boris Johnson, garnering support as he soldiered through the fields.

 

The Adventurer: Played by Nigel Farage, who looks for excitement propelling his rash statements. The sometimes loose-cannoned nature of forage could have led to a self-destructive campaign by doing his own thing, but this time aided his co-stars into a victory.

 

The Observer: Played by Michael Grove, brought class and intellect to orchestrate the campaigns messages together. As he appeared cool and wise when appearing on TV referendum specials.

The Villain: David Cameron, the ring leader of the previous governments who had been orchestrating the tough and harsh decisions of a recession. Can you blame people for being sick of listening to the voice of recent oppression, and rebelling against the then current regime?

 

It is evident that between the PR campaigns there was a clear winner. Whether or not the strategies used were ethical is a different question. However there is no doubt that the Brexit campaign schooled Remain, giving a PR masterclass in campaigning through effective slogans, imagery, its ambassadors and utilising their ability to convince the public with more definitive answers. Will the promised outcomes of a Brexit be kept? Yes? No? maybe? Actually, no one seems to know.

P.S.

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REFERENCES:

http://www.bbc.co.uk/news/uk-politics-eu-referendum-36574526

https://www.extreme-creations.co.uk/blog/brexit-the-leave-campaign-a-masterclass-in-pr/

http://www.bbc.co.uk/news/av/uk-politics-36877788/brexit-the-inside-story-of-how-the-leave-campaign-won

http://www.telegraph.co.uk/news/0/eu-referendum-claims-won-brexit-fact-checked/

http://www.bbc.co.uk/news/uk-politics-eu-referendum-36570759

How Much Is Too Much

We all absorb and obsess over digital media and its content, but what does it really mean for the consumer and the PR profession.

Digital media and content creation is flourishing in the rapidly changing environment of Public Relations and Strategic Communications. We’re all culpable for the ever increasing needs of the consumer. Demanding access to media and information 24/7. However, many moral and ethical practices have to be considered in this quest for relentless access to material in the duty of care of the media for the consumer. But firstly, why are agencies and companies investing so much time and money into the expanding field of digital media and content creation?

According to the PRCAs Digital PR and Communications Report of 2016, the top three reasons for taking brands onto social media was to

1) Drive more audience reach

2) Drive awareness of what they do

3) To increase brand awareness

Interestingly, 85% of the reason for not using digital and social media more often was down to a lack of resources, budget 46% and lack of staff accounting for 39%.

Perhaps a contributing factor in the meteoric rise of the exploitation of social media is down to the confidence of in-house staff being able to measure the ROI (Return On Investment) in their activities. Traditional forms of PR activities are down from 72% to 65%, while the biggest growth in  digital media has come from the video and picture social media platforms of Snapchat and Instagram (where they have both risen by 14%.)

There is no doubt that the switch to digital media and social media platform has allowed for a more accessible, cinematic and attractive form of public relations. But at what cost? How credible are the news and views from social media stars? If social media firms such as Facebook are matching and curating feeds to suit your preferences you will almost certainly have a more subjective, bias and narrow minded approach to cultural, political and societal matters. As a result, is the fact based approach the most appropriate one to take? Has the ethical line been crossed by recent PR activities through the sensationalising of facts? (Brexit campaign, I’m looking at you). Nevertheless, more than ever there is a duty of care required by the mass media to inform truthful information, and ensure a healthy and active democracy.

If the aforementioned blog interested you, have a look at this insightful TED Talk by David Puttnam.

It’s time to put the people of Ireland first.

As I scanned through today’s issue of the Independent, I came across a small Island of clarity in the sea of ambiguity surrounding the new drug Orkambi. The drug is manufactured by Vertex, and its dealings with the HSE has been portrayed as difficult, and uncompromising in their approach, when it came to the pricing of Orkambi. (It’s also worth noting, that this small article was positioned on page 26 in the independent, while the developments were not covered in Irelands leading broadsheet The Irish Times.)

 

As I referred to in my previous blog, Vertex were unwilling to change their stance on pricing and did not engage in meaningful discussion with the HSE. However, Vertex have come back with strong statements. The NCPE’s findings was that the drug was “not value for money”. Firstly, Vertex have categorically stated that the €392m price tag is “incorrect”, and that they “continually engaged in good faith with the HSE since Orkambi was licensed over one year ago”, having met with “HSE representatives 6 times in five months”. Secondly, and perhaps more importantly, Vertex “at no time during the process receive a counter-offer or guidance from the HSE on decision making criteria”. In fact, “guarantees of budget certainty for the HSE, novel access schemes and ways to reduce the timelines on future reimbursement decisions” were put on offer to the NCPE.

 

Vertex vice-president and regional general manager in norther, Europe Simon Lem has said that he was ready to meet Mr. Harris at short notice, and has extended his invitation, calling on Simon Harris, “to intervene directly ahead of a decision by the HSE in the mutual interests of patients, clinicians and industry.” Mr. Harris is currently writing to his political counterparts in other countries, to make a collective bid to make the drug more readily available. This is all well and good, but Mr. Harris has seemingly been left with the duties of the European Union, in which the latter, once again seems to be lacking in timely action.

 

In my objective opinion on the matter, with the current and damning developments, I believe the NCPE and HSE have opened questions on their negligence and incompetence on the matter. it’s time for Mr. Harris to engage with Vertex and the HSE, to oversee any negotiations between the two parties. As minister for health in Ireland, it is his duty to prioritise the well-being of Irelands citizens, and the widespread availability of the drug globally, second.

Vertex – “The Science of Possibility”, the price of despair.

Due to recommendation for The National Centre for Pharemaeconomics (NCPE) (HSE drug committee made of doctors and experts), the Irish government have declined to approve funding for the drug “Orkambi”. Roughly, 550 Irish people with Cystic Fibrosis are candidates who could benefit from the drug, which is extortionately priced at €159,000 per patient, per year. This news comes in spite of minister for Health Simon Harris stating that the “HSE has not concluded their assessment process”. Despite this, NCPE has released a contradictory statement with their clinical director, Michael Barry confirming CF sufferers worst fears saying the “price would have to fall to about €30,000 per patient per year to render the drug value for money”. Perhaps €30,000 is an unrealistic target by the NCPE, and maybe they should adopt a similar strategy as the German and French governments, by allowing patients to use the drug, and to pay for those it works for.

There is no doubt in anyone’s mind that the drug is exorbitantly priced, but does putting a monetary value on a persons’ life outweigh the morality of a country looking after its population? But perhaps the darkest revelation was the negligent manner in which CF sufferers have been informed of the decision to not fund the drug. Personally, I’m embarrassed by our countries health boards cynicism in addressing the situation, and the bureaucracy feeding Harris’ excuse for the government having its hands tied in the situation.

As advised by the NCPE, the HSE has Adopted the approach that people with CF are merely another financial statistic on the monetary treadmill Ireland finds itself on. According to these institutions, these potential life changing drugs are not value for money? This lead me to question the following. What if the government was consistent, and adopted its approach on all budgetary measures as “value for money” as a priority? Is social welfare value for money? Is public healthcare investment value for money? Is investment in the arts value of money? All of the aforementioned could arguably be stated as “not value for money”, but all are necessity for a functioning society. Should our CF citizens not be treated in the same manner? Do we as the people of Ireland not only have the duty to look after our own self-interests, but the duty to look after those around us to provide a functioning society?

However, as it stands the drug will not be funded, and as it has been clear for decades that pharmaceutical corporations practices can be stated as non-other but criminal, and those practices do not look like changing anytime soon. Vertex’ slogan is “The Science of Possibility” (which is quite clearly true), but what use is the science of possibility, if it’s extortionate price of Orkambi brings nothing but despair to the CF community and their families. The financial prioritisation and dehumanisation of all the decisions above, are a stark reminder of the rise by right wing fascism/capitalism in today’s society. While in college I learned about a thing called corporate social responsibility. I call on pharmaceuticals be advocates of CSR by remembering the ethical obligations of the work they pursue which is putting its patients first and the filling of shareholders pockets second.

O’Connor, Be a Jack of all trades.

Patience is a virtue, one that SIPTU president Jack O’Connor seems to lack. Enda Kenny insists that there is no capitulation to the demands of the public sector. However, Mícheál Martin has insinuated that the government has buckled under the pressure from Unions. These comments come in the aftermath of industrial action over pay disputes from Dublin Bus and the Luas, which caused havoc throughout the capital. As a result, we have the Trade Unions looking for escalated pay increases for teachers, despite members overwhelmingly agreeing in favour of the Lansdowne Road Agreement that is due to last until September 2017.

10 more months, surely that’s not too much to ask for? Apparently not for Jack O’Connor, who is demanding talks on renegotiation in early February. Or else there will be another vote for industrial action. O’Connor is adamant that the country can afford the pay rise, and he himself has suggested (dubious) options to finance this rise. For example, he highlighted increasing the 9% VAT on the hospitality sector, which in his eyes has now “fully recovered”. This to me demonstrates his tunnel vision and selfish approach to achieve his agenda by any means possible. O’Connor has made no comment or analysis on how this increase may impact this particular sector. Is this fair? I don’t think so. Not for the government, not for the private sector, not for the rest of the public sector and its definitely not in the best interest of the economy.

Firstly, Ireland finds itself in a difficult transition process. With an incoming hard Brexit early in the new year looking likely, the Government should focus its efforts on attracting companies from Britain. Corporations like the EMA, who employ over 885 staff, or perhaps the 83,000 other UK jobs that are at risk if euro clearing is snatched away from London, according to the London Stock Exchange.

Secondly, let us not forget the 290,000 private sector jobs that were lost between Q1 2008 and Q3 2012. Why should teachers be first preference in pay restoration? As many would argue that they have not endured the same hardship in the past 8 years. Secondary school teachers benefits are over 4 ½ months holidays (during which it is possible to find an additional source of income), job security,  a pension, shorter days, and have little performance appraisal or accountability. In general, there is less financial stress and pressure as there is a guaranteed source of income. I am not alone in thinking that the short-term focus needs to be on Brexit, tackling spiralling rents and insurance costs. Not a faster pay restoration for public servants.

As a student I appreciate the difficult nature of teaching, and acknowledge that it is as a profession that should be respected. But, rather than  attacking other industries for tax hikes, or threatening industrial action, a better angle would be to look at restructuring a tax burdened population. This, in turn, will have a positive result for all trades involved.

A good teacher is worth their weight in gold, but one can only pay what one can afford. Be patient, accept the €1,000 restoration that 78% of SIPTU agreed, and move forward from September.

Enda The Road For Kenny?

Is it the end of the road for Irelands Taoiseach Enda Kenny? Recent polls have demonstrated a drop in public opinion as leader to 29%. In comparison, opposition leader Mícheál Martin fairing far better at 48% (let us not forget his party, in government were main architects of the crash of the Irish economy). However,  the recent Governments led by Kenny have been instrumental in helping Ireland turn the corner to economic recovery.

 

It’s obvious that the spending cuts and tax hikes (which totalled 30 billion between 08-14) have had a lasting effect on the populations view of Enda Kenny, who has been the spear head of the hardship that has been admirably endured by the Irish public. In spite of the adversity, the figures are there to confirm that Ireland is well on its way to economic recovery. In 2010 economic GDP growth was at a depressing -.4%, the public balance deficit stood at 32.4% and by 2012 the unemployment rate was at a stagnant 14.8%. Now, fast forward 4 years and GDP growth is at 26.3%, (a once off figure, but the trend underneath is very positive) the budget deficit is currently 2.3%, and unemployment has been slashed in half to 7.8%. This paints a pretty picture for any prime minister who took the helm of public leadership in the midst of the worst global economic crash in history. (Also, bear in mind that Ireland is an open economy, whose actions have been heavily dictated by the EU and IMF.)

 

In spite of the success story to date, Fine Gael suffered a loss of 24 seats in the last general election, which resulted init leading a minority government propped up by some independednts and the main opposition. A result that has created a backlash of various members in Fine Gael calling for their leader to stand down. However, Kenny remains undeterred, and his current comments confirm that he “will not be diverted” from his role as Taoiseach. This poses two questions, if he is not good enough for Fine Gael, is he good enough to be Taoiseach?, and will this divide his party?.

 

If he were to step down as leader of Fine Gael, it would certainly have a destabilising impact on the government, even though Fianna Fáil have distinctly expressed that their deal on seeing out 3 budgets is not dependent on Enda Kenny being Taoiseach. However, it would only be a matter of time before a conflict within Fine Gael, that would find its way to the Dáil.

 

What are the other options from the competing parties? Hard-left Richard Boyd Barret of People Before Profit? Or perhaps the populist republicans Sinn Féin, whose leader’s comments from  on Thomas ‘Slab’ Murphy, left many baffled. Gerry Adams declared that Murphy (a former Chief of Staff of the Provisional IRA) was “treated unfairly” in court. Continuing to say that some TD’s, who were also being questioned on tax evasion had not “been labelled as criminals by those media outlets”. This refreshed and cemented his strong (and obviously current) ties with the IRA to me, and, ruled him out as an option.

 

There is an alternate opportunity to have the crisp and youthful duo of Varadkar and Coveney, to take reigns at Fine Gael.  Irelands (young) population may be able relate to more efficiently to the pair. But, for the time being, I feel it would be wise for all stakeholders to remain patient, allow the experienced Kenny to see out his time as Taoiseach, and keep Ireland on track with its stable recovery. Especially with Brexit on the horizon.

An Apple a day keeps Samsung away.

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Yankees Vs Red Sox, England Vs Everyone, Apple Vs Samsung. The seemingly never ending titanic battle between bitter rivals Samsung and Apple, in the struggle to become the worlds leading innovator of technology has taken an inconceivable twist. To date, Apple held the mantle as the avant-garde of innovation. Recently however, public opinion and consumer behaviour has demonstrated a swing towards their main competitors. Samsung, who have offered a winning alternative of new features and products at a imperative lower price. But, at what cost has this come to the Korean tech giants?

With the scrapping of Samsung’s Galaxy Note 7, the developments have proven to be a PR nightmare for the firm. The damning news of the Note 7 catching fire has come to light, initially causing, the replacements of original handsets, but subsequently recalling all Note 7’s, combined with an immediate cease of production. This rapid and drastic move has left a scary note to resonate in the publics mind, which has been reflected in the markets. Samsung (overnight essentially) has lost $14 billion in market value. This, in turn, has seen Apple’s value sky rocket by $27 billion since Friday.

These developments left me thinking “how and why could this have happened to Samsung?”. Has Samsung’s push to be the the cheaper alternative gone too far? Have they bargained with their manufacturers to produce batteries at such a low cost, that they themselves have turned a blind eye to safety standards?

One can only believe that consumer trust has taken a big hit in the market of handsets and technology, but also (and perhaps more importantly) the manufacturing standards of their household appliances. The future will definitely be interesting, in seeing what tactics and strategies Samsung use in dealing with their public relations to the masses. Its definitely 2-0 Apple, but have we seen the end of a great rivalry? I think not. I hope not.

James Doyle.

Sources : https://www.theguardian.com/business/2016/sep/12/samsung-galaxy-note-7-share-prices-dives-phone-recall

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