A strategy that appropriately utilizes Corporate Social Responsibility (CSR) will add value to a brand beyond what a typical profit-seeking strategy can produce. I believe that corporations do have a responsibility to society beyond maximizing profit and if shareholders don’t like how their “property” is being spent then they should invest in organizations that are more aligned with their own convictions. While I do not support the spending of shareholder money on superfluous things like private jets and large executive bonuses, it is difficult to find fault in good causes such as education, healthcare, and human rights. However, shareholders should complain if a company begins to lose sight of the actual product or service for which they are in business because of their overcommitment to CSR.
With regard to the Pepsi Refresh HBR Case Study, I concluded that doing good is invaluable to brand equity; however, revenue continues to be a high priority and the results of the [Pepsi Refresh Project] have solidified a resolve for a discontinuation of the project. This is a great example of how doing good can negatively impact an organization’s bottom line because although PepsiCo was earning the approval of millennials (who by the way continued not to drink soda), they were losing market share along with their loyal customer base. Following an analysis of the program it was eventually scaled back and PepsiCo regained the brand they had lost sight of.
Tim Cook is an example of a CEO who has properly used CSR to help reach profit goals, even though that may not have been the motive behind his efforts. As a huge departure from his predecessor Jobs, “Cook has increasingly been using his prominent position to shed light on social issues close to his heart” and although he “has been sharing his personal beliefs, he has also brought Apple into the conversation” by making it “clear that he was speaking ‘on behalf of Apple'”(Chang, 2015). According to Forbes.com Apple has become the most valuable brand with a brand value of $145.3 billion (“The World’s Most Valuable,” 2015). Unlike the Pepsi Refresh Project, Apple’s social initiatives relate to their target audience which creates value for the customer and increases company revenue.
Peter Drucker is right when he states that organizations will have successful futures when management steps beyond self-interested behavior and assume responsibility for the public good. Furthermore, it is a corporation’s moral obligation to do their part in making the world a better place — but never at the expense of the product or service itself.
Chang, A. (2015, March 31). Apple CEO Tim Cook is forging an unusual path as a social activist. Retrieved June 12, 2015, from LA Times website: http://www.latimes.com/business/ la-fi-tim-cook-20150331-story.html
Hernandez, A.J. (n.d.). 2011 PepsiCo Marketing Strategy and the Future of the Pepsi Refresh Project. Unpublished manuscript.
The World’s Most Valuable Brands. (2015). Retrieved June 12, 2015, from Forbes.com website: http://www.forbes.com/powerful-brands/list/#tab:rank