Social Cause Marketing As a Tool: Promotion of Social Responsibility

EFFECTIVE EXECUTIVE SEPT.2009

SOCIAL CAUSE MARKETING

Social Cause Marketing As a Tool: Promotion of Social Responsibility

-- Dr. Matjaž Mulej and Damijan Prosenak

Happiness is very essential for the society's well-being (WB), but creativity and social responsibility (SR) provide more to the happiness quotient of the individuals, as the latter are based on ethics of interdependence of human beings. Creative cooperation is necessary for a requisitely holistic society. The article emphasizes that marketers can contribute to successful SR management by bundling various SR initiatives and expanding their focus beyond customers to include other stakeholders.

Nowadays, humankind face complex consequences of many one-sided actions and seek solutions to reduce them. The toughest problems include pollution of the natural environment, climate change, limited natural resources, growing stress, social differences, and alienation among humans. Companies are largely responsible for the emergence of these problems, but are only a tool in the hands of humans for implementation of their personal/collective goals. In this article we will discuss: What are humans' basic goals? Are companies just humans' tools? What should be the basic principles of socially-responsible (business) activity? And what should be the role of marketing?

The Basic Goals of Society and the Role of Business Activities

We must be aware of the role and place of individuals, economic (sub-) system and human society within the complex whole, called Planet Earth. Individuals are part of human society, a part of Earth, dependent on its (natural) equilibrium, though they often act to the detriment of other individuals, groups, organizations, and natural resources, which also form part of Mother Earth. The earth has a rather closed system with a low renewal capacity. Excessive exploitation of the nature—all in the name of progress, but comprehended one-sidedly for short-term benefits—has proved detrimental to the very existence of humankind. Humans find their economic (sub-)system too significant and allow it to influence them too much, which puts it above the entire human society making it dictate the goals of human society (Chomsky, 2005; Korten, 2006).

The socioeconomic development has facilitated humans' survival and increased the quality of their physical existence in addition to making business the central point of human activities. The economic growth, Gross Domestic Product (GDP), profits, etc., are the main measures of success of the economic activities which have not been Requisitely Holistic (RH). Humans are not merely materialistic beings and they cannot live in disharmony with nature. The quality of life cannot be measured with economic measures alone. Besides, business activities match rules of the establishment and authorities that don't match the laws of nature. Nature always maintains an equilibrium by self-balancing, self-adjusting, and self-cleansing (Schumacher, 1989, 156); it is not inclined toward fostering perpetual, one-sided growth of humans alone. The long-term survival of humankind (and not only humankind) is endangered, because goals of economic (sub) system cause disequilibrium of Earth and hinder the Earth's basic existential needs. This is the byproduct of the absence of Social Responsibility [SR] and gives rise to a situation wherein the financial profits are used to alleviate the `side effects' of economic activities.

Possible solutions lie in more SR in business, based on RH management of the basic goals of society. Everyone should contribute towards the realization of SR initiatives and goals based on the strengthening of positive and suppression of negative influences on society and nature. What could these goals be?

The far Eastern philosophy includes attaining happiness and avoidance of suffering as the individuals' main goals. Psychologists, sociologists and some economists indicate that the essential goal of humans' activities should be a RH personal and social Well-Being (WB). Satisfaction with one's own standard of living, health, achievements, personal relationships, feeling of security and affiliation to society leads to WB. The following factors should be provided to ensure social WB: Material basis for good life, good health, good social relations, security and freedom of choice and action (Stutz, 2006, 11). The essential human goal is happiness; for good WB, material, information, psychological security needs, needs for freedom and action, adaptability, efficiency and responsibility should be fulfilled (Hornung, 2006).

SDRN (2006) says that one should distinguish between objective and subjective WB. Objective WB covers material and social circumstances with influence on individual's personal objective WB, including the following dimensions (McAllister, 2005, 9): Material, physical, social and emotional WB, development and activity. On the other hand, subjective WB stems from individual's perception of objective WB (Arthaud-Day, 2005; McAllister, 2005). Perception in turn, depends on individual's Subjective Starting Points [SSP], which include knowledge, emotions, mentality and values [Mulej, 2000, 88]. Therefore, a high objective WB does not necessarily make a high subjective WB. Diener's and Seligman's (2004, 25) partial formula for high WB includes: Living in a democratic and stable society; providing material resources to meet needs; having supportive friends and family; having rewarding and engaging work and an adequate income; being reasonably healthy and having medical treatment available for all kinds of ailments; having important goals related to one's values; and a philosophy or religion that provides guidance, purpose and meaning to one's life.

Another essential feature that is of high significance in achieving WB is the convergence of philosophical considerations about spirituality with discoveries in natural and sociological sciences (Bell, Morse, 2005; Khisty, 2006; Schumacher, 1989; Senge, 2004). They state that interconnected-ness between all subjects (at least in energy terms) makes them interdependent. This explains some essential causes of socioeconomic and environmental problems prevailing in the society. Human beings consider themselves independent from other subjects (and nature) and, therefore, forget about the ubiquitous interdependence. Therefore, humans act rather one-sidedly and cause unpredictable and often undesirable consequences.

Dr. Matjaž Mulej, is a retired Professor of Systems and Innovation Theory, at the University of Maribor in Maribor, Slovenia. He authored the Dialectical Systems Theory and the Model of Innovative Business for the transitional economies and societies. He has published more than 1,200 articles, papers and books in several countries. He is a Visiting Professor and a Frequent Speaker at several foreign universities. As Speaker and Consultant on application of his USOMID methodology he has associated and worked with companies in several countries. He has also served as Dean and Vice- Rector at Maribor University. He is a member of four international academies of sciences and heads the International Federation for Systems Research with 37 member associations from around the world. Damijan Prosenak, is an Entrepreneur who obtained his Bachelors Degree in Electrical Engineering and Computer Science and Masters in Business Administration from Maribor University. His areas of research interests are innovation management, marketing, networking and social responsibility and their requisitely holistic application in business and other fields.

Thus, the basic goals of society should be: Humans should strive for an RH quality of life (objective and subjective WB) and human solidarity (based on ethics of interdependence), simultaneously considering ecological sensitivity of natural environment, its constraints and laws of nature. This goal demands reconciliation of the economic goals with the ecological, psychological and sociological viewpoints as an essential part of humans' values. An RH, SR action should therefore work as follows:

• Increasing social and personal objective WB;

• cause prevention of negative and strengthening of positive influence on natural and social environment; and

• Cause positive influence on human beings' SSP to achieve RH behavior, thus strengthening their subjective WB. (Exhibit I)

Influence of SR in SSP is crucial. SSP influence one's perception of objective WB and consequently one's willingness for (creative) action and, therefore, (non-)creation of social objective WB. The latter became a problem, above all in economically most developed societies. We (Mulej, Prosenak, 2007) called attention to it with our adaptation of Porter's model of evolution of competitiveness (after Brglez, 1999, 22-23) (See Exhibit II).

Porter pictures evolution of bases of competitiveness (without mentioning culture) all the way to phase 4, Affluence. Then the economic laws on meeting needs with scarce resources no longer fit. This kills human beings' ambition to create something that they aspire to have. From economic viewpoint, one should therefore enter the innovation phase as soon as possible and stay there as long as possible. But this neither matches with RH regarding the above problems, nor realizes the society's basic goals.

For instance, constraints of natural environment and principles of human solidarity are overseen. And in terms of individuals' perception of quality of life, we ask: What diminishes the ambition to achieve more and live better in the affluence phase (from materialistic viewpoints)? In this regard, Diener and Seligman, and SDRN establish that satisfaction with one's life grows with growth of GDP, but only to a certain level of GDP; afterwards the connection disappears (Diener, Seligman, 2004, 6; SDRN, 2005, 12). At this point, influence of certain other factors on the perception of objective WB becomes stronger and more important. This proves the importance of influence on one's SSP and consequently on one's perception of objective WB and motivation for creative work. Sheldon (2001) noticed a stronger positive connection between WB and orientation toward inner rather than outer values, (i.e., material and social status, image, etc.). Besides, orientation towards inner values increases the motivation for the realization of one's personal goals.

The innovation phase unavoidably makes affluence, history says. Humankind should therefore attain a new, fifth phase, linking creativity/innovativeness, SR, RH, ethics of interdependence, shorter working time and WB in behavior towards `the cause' – to help our shared society attain basic goals. It should also simultaneously consider the ubiquitous interconnectedness and interdependence, including constraints of the natural environment. Thus, people must unite and work together for long-term survival and betterment of humankind realizing their aspirations for success through their companies (See Exhibit III).

SR Business Activities Ful-filling the Basic Societal Goals

Findings presented so far share thoughts on the role of business activities in human society and on the meaning and use of principles of SR matching with RH in everyday business activities. They should contribute to the fulfillment of the basic societal goals as follows:

• Increasing objective WB by creation of products, contributing to happiness;

• Positive (or the least possible negative) influence on social and natural environments;

• Positive influence on an individual's SSP (both inside and outside the company).

The term `Positive' in this context refers to all the forces that strengthen long-term objective WB, ethics of interdependence and RH.

The human and natural influences on a person's SSP are very important for their impact on and related strengthening of society's objective WB. The influence on one's SSP has an indirect influence on one's consumption of goods. This increases the scarcity of certain natural resources and aggravates the problem of environmental protection. Companies using their marketing tools (for their business goals) to create artificial needs and to accordingly influence consumers' SSP actually cause threefold harm to society and nature: They needlessly use scarce resources; they increase environmental pollution; and they create stress within individuals who wish to satisfy their artificial needs. In order to put these problems at bay, marketing tools should be used for discovering the existent and predicting the future needs (to increase objective WB) and for active inclusion of interested individuals in value creation (Prahalad, Ramaswamy, 2004). Thus, human beings can reduce the production of unnecessary products and use less of scarce resources. Such approach to business action would have a positive influence on the creation of objective WB and the real needs would be fulfilled. Simultaneously, a positive influence on the perception of subjective WB of consumers and employees would be achieved, which in turn, would contribute towards increasing the motivation for creative work, and consequently attaining possible success.

The key factors of an SR business, therefore, include:

• RH understanding of the world and one's role in it;

• enhancing of ethics of interdependence;

• Action on the basis of creation, cooperation, and innovation aimed at finding and realizing solutions for crucial and real human problems;

• Consideration of the complexity of one's own and that of synergetic influences on one's natural and social environments and their constraints.

Business strategies should be planned and executed within the above guidelines. RH/SR culture in both companies as well as society should be based on ethics of interdependence and on individuals' willingness to activate their creative potential for their own benefit as well as for the benefit of the society at large.

But how can this be achieved? One's desire for knowledge, RH personal development, openness and empathy for fellow human beings reinforce one's RH understanding of the world, relationships and interdependence. Everyone can do it, provided one wishes so. Human beings possess creativity that often remains tacit and unused, or is used for leisure time avocations or for one's own benefit only. In addition, human beings lack interdisciplinary cooperation enabling synergetic effects. In many organizations, both public and private, culture does not support creation and cooperation. People must be given a chance to engage in (co-)creative (co-)operation, but in a manner that would be beneficial to society at large. A better contact between companies and users of their products must be enabled as the latter know best what they wish from a product; it should include the phase of future-needs detection and designing of related potential solutions. Hence, they must be involved rather actively in the invention-innovation process to attain the biggest possible benefit for both the customers and society at large, at the cost of the smallest possible destructive impact on the environment. The open innovation concept implies people's role much better than the closed innovation concept (Chesbrough, 2006).

The Role of Marketing

Marketing should also adapt to this open innovation concept. The dominant model of marketing has so far used the notion of customer sovereignty. It made marketing a technical process rather than a moral process, aimed to create and translate demand into production and profit. However, there has been a plea to add a third element, i.e., `society's WB' to the basic elements of marketing—customer satisfaction and profitability. The Societal Marketing [SM] concept calls on marketers to meet the needs of the target audience in ways that will enhance the WB of customers and society as a whole while fulfilling the objectives of the organization (Bednall, Kanuk, 1997; Kotler, 2000; in: Chattananon, 2007, 232). Thus, SM invites marketers to include social and ethical considerations in their marketing practices.

The concern about ethics in marketing is closely related to the issue of SR, making the notion of SM find its way into common business language. Considerations of (un)ethical marketing have primarily tackled evaluations of specific marketing activities such as targeting, advertising and pricing, information asymmetry, differentiation of customers by value, power differences, etc., as opposed to wider macro questions of morality and legitimacy of marketing itself (Crane, Desmond, 2002, 551). Empirical evidence attempting specifically to locate corporate practices directly within the discourse of SM is limited, but literature on green marketing, cause-related marketing and ethical marketing are burgeoning (Crane, Desmond, 2002, 563).

Marketers can contribute to successful SR management by bundling various SR initiatives and expanding their focus beyond customers to include other stakeholders. Following this approach, the importance of SM programs gradually increases (Chattananon, 2007, 230). Among other broader societal benefits, the use of SM has also proven to create competitive advantage for companies in building brand awareness and credibility, enhancing corporate image and stimulating customers' purchase intentions by creating an emotional bond with them. Of course, there are many problems involved with the adoption of SM as a business goal. They include the fact that SM insists on the role of the individual moral agent, which veils the social context and in particular the imbalance in size and power relations between individuals and corporations. Another problem is that managers are mainly called upon to adopt SR behavior for the same reasons for which they are called upon to adopt the `classical' marketing concept, i.e., profitability, which is the measure of `self-interest'.

The adoption of SM must, thus, equally result in the adoption of moral behavior of the company, which signifies that action in the interests of others is action in its own interest. It helps in the longer term, at least, the SR factor, too. Such thinking leads closer to RH (Hrast et al., 2006, 2007, 2008, 2009, etc.).

Therefore, RH and sincere communication between companies and (potential) users of their products and all other members of society who are impacted by the effects of procurement, production, selling and other business functions in relation to the products, is needed for RH marketing relations. Content of the communication must be RH in order to strengthen the awareness of ubiquitous interdependence, thus, contributing to more holistic and less artificial/fictitious solutions to the problems.

Interested individuals should be given an open access to relevant information needed for cooperation in the open innovation process. A platform enabling global connections and (co-)creative (co-)operation in collaborative interest-based networks is needed too (Prosenak, Mulej, 2007).

Companies can take insights from anthropologists, ethnologists and similar social scientists while innovating the marketing process. They can improve the understanding of the fact that a supplier sells the experiences of benefit along with the product. Hence, companies must consider the attributes of the experience including the event, its context, personal engagement in it, and the personally ascribed importance to it.

These insights may reach beyond the usual marketing and R&D methods. They are crucial for the personalization of experience and the creation of the desired experience of every individual customer. The experience of personalization is realizable on the basis of individual's cooperation. Therefore, companies should create proper environment for experiencing personalization, which is a part of experience network of multiple firms (suppliers included) and consumer communities (Prahalad, Ramaswamy, 2004, 85).

In addition, the role of marketing under `open innovation' concept and co-creation should not be limited to detecting and forecasting of (potential) needs alone. It should also include search for the most innovative suppliers and customers, who would strive at adapting the given supply to their short-term and long-term needs. Such persons/firms should be actively included in the invention-innovation process. They can be crucial co-creators of new supplies as well as crucial opinion leaders in making the diffusion of novelties easier with more RH and SR, thus making it more successful.

It must be stressed that in the open innovation phase, marketing, as a teaching or informing tool, must support transparency in the operations of the enterprise. This may include both strong and weak points. Openness creates trust, which in turn, creates cooperation and co-creation. Weak points are increasingly difficult to hide, today. Thus, the support of SR to meet the RH goals of the society is gradually becoming a precondition of survival, rather than an act of charity or modesty.

The laws of RH behavior and SR (of everybody, not just companies) go hand in hand. One should listen to all by giving up all kinds of prejudices. This is an essential precondition for one's RH action, which would consequently strengthen the awareness regarding the ethics of interdependence and, therefore, contribute to RH, SSP of an individual.

Some Conclusions

Humankind is quickly reaching the phase of affluence, if you go by the economic data alone. Happiness is very essential for the society's WB, but creativity and SR provide more to the happiness quotient of the individuals, as the latter are based on ethics of interdependence of human beings. Creative cooperation is necessary for an RH society.

Traditional marketing methods do not provide enough information essential for building an RH society. SR and RH perception, thinking, decision making and action are unavoidable for RH success (positive influence on WB, environment and humans' SSP). Marketing must adapt its methods and insights to meet new challenges. But the answer to making more substantive progress towards RH does not lie with marketers alone, since the market's current flaws make marketing incapable of delivering company's and society's WB at the same time. The market must operate within a society in which WB is adopted as a public policy goal, rather than an aim that is actively pursued through policy implementation. The longer we take to address the issue, the greater the disruption and effort will be.

The sooner a substantive progress is made in this direction, the more likely it is that the story will reach a happy ending, i.e., we will be living on an Earth wherein individuals are steadfast in their RH perception, thinking, decision making and action based on SR.