CORPORATE SOCIAL RESPONSIBILITY AS AN INTERNAL MARKETING STRATEGY C.B. Bhattacharya
Forthcoming: Sloan Management Review, Fall 2007
In today’s economy, companies must work harder than ever to attract, retain and motivate talented employees. Our research shows that corporate social initiatives (CSR) can serve as a highly effective component of internal marketing programs by fulfilling employee needs and drawing them to identify strongly with the company. Thus, CSR activity is capable of yielding substantial returns to both the employee and the company. This paper highlights some of the challenges companies face in the effective deployment of their CSR strategy internally, among employees. The paper ends with some suggested solutions to these challenges Specifically, we recommend that managers (1) bring their employees closer to the company’s CSR initiatives, (2) use a contingent input-output approach to formulate, evaluate and manage CSR-related outcomes, (3) understand and fulfill employee needs related to CSR, (4) focus on strengthening employee identification with the company, and (5) engage employees in co-creating CSR value. 2 CORPORATE SOCIAL RESPONSIBILITY AS AN INTERNAL MARKETING STRATEGY In today’s employment market, competition for employees who are talented, creative, and driven to satisfy customers is fierce, amounting to what McKinsey & Company has characterized as a war for talent.
Thus, a company’s success hinges on their ability to attract, motivate and retain a talented pool of employees. Evidence is mounting that a company’s corporate social responsibility (CSR) activities is a legitimate, compelling and increasingly important way to attract and retain good employees. For example, in a bid to burnish images as socially responsible companies and thereby attract and retain talent, CEO’s of high profile companies such as Home Depot, Delta Airlines and SAP have pledged to deploy 6.4 million employee volunteers to work on various community projects by 2007.
Such a move seems to be sensible
as increasingly, employees also seek out socially responsible companies: In the words of former Deloitte CEO Jim Copeland: “The best professionals in the world want to work in organizations in which they can thrive, and they want to work for companies that exhibit good corporate citizenship.”
But despite this injection of enthusiasm and resources into CSR, our research in this domain suggests that very few companies are able to optimally leverage their CSR efforts in winning the war for talent. In this article, we identify the key barriers to effective deployment and suggest steps that companies can take to increase CSR effectiveness in the employee realm. Practitioners and theorists are increasingly turning to “internal marketing” as the rubric under which CSR can be used to acquire and retain employees. 4
Such a perspective holds that
just as companies succeed in the market by fulfilling the needs of their customers, they can manage their employees best by viewing them as internal customers, fulfilling their needs through a compelling menu of “job-products.” The features of such job-products include salary, health benefits packages, and job responsibilities and when designed properly, can contribute 3 dramatically to job satisfaction, employee retention, and productivity. A key task for managers then is to identify and understand the needs of the different employee segments, configuring jobproducts – that include CSR – to address the needs of a diverse workforce. While definitions of CSR abound, they all allude essentially to a company’s commitment to improving societal well-being through discretionary business practices and contributions of corporate resources.
Companies can have CSR initiatives in diverse arenas. For example, KLD Research & Analytics, Inc., a major provider of...