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«13TH INTERNATIONAL PUBLIC RELATIONS RESEARCH CONFERENCE “Ethical Issues for Public Relations Practice in a Multicultural World” Holiday Inn ...»

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The proscriptive variables remain the only guidance offered by the theory to explain why no communication is possible with a morally repugnant public, or why the organization cannot move towards greater accommodation with a public when the issue at hand violates the individual’s moral conviction or the organization’s fundamental principles. However, given the exigency and dynamism of a crisis, non-communicating may not be an alternative offered to organizations. It is thus critical to go beyond the proscriptives variables to identify a set of variables that address specifically what factors influence stance movement in ethical elocution during crises.

Identifying factors that drive ethical elocution in crisis communication:

Insights from Corporate Social Responsibility Corporate Social Responsibility (CSR) is defined as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” (Dahlsrud, 2008, p. 7). In other words, CSR is a way in which ethics can be manifested in business. The level of CSR engagement within an organization is contingent on several internal and external factors. Insights from the literature consistently show the predominance of several factors.

Internal factor: Dominant Coalition’s Values

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as they bring their beliefs and values to bear (Kim & Reber, 2008). The internal motivations of dominant coalition appear to stem from two avenues. Logsdon and Yuthas (1997) argued that the interaction of individual and environmental factors culminate in the dominant coalition’s ethical values which in turn determines the organization’s morality. Individual factors refer to personal character traits of the dominant coalition as well as their personal values. Environmental factors refer to stakeholder’s demands, industry standards and laws. These two factors allow the dominant coalition to determine the ethical rules guiding the organization which ultimately translates into how the organization does its business.

Similarly, Joyner and Payne (2002) posit two motivations behind businesses engaging in CSR, “ethical” and “Machiavellian”. The ethical motivation stems from the decision maker’s personal belief in doing the right thing, the individual’s values translate to his way of doing business and as a result, he believes his organization should act ethically as well. The Machiavellian motivation arises from the need to garner support from stakeholders by presenting the organization in a good light with the purpose of avoiding litigation or show that the organization is not only concerned about profit-making but also cares for its stakeholders. The Machiavellian motivation is similar to the environmental factor in Logsdon and Yuthas’s (1997) analysis as they both revolve around how factors external to the individual affect his ethical decision making. The ethical motivation is similar to the individual factor as they posit that the dominant coalition’s individual values affect their way of doing business.

Internal factor: Shareholder Influence The values of shareholders also influence the stance of an organization regarding CSR (O'Rourke, 2003). In recent years, the rise of shareholder activism has changed the way organizations respond to activist demands because shareholders themselves are turning into activists. Shareholders’ ability to withdraw their investments from an organization should there not be active stakeholder dialogue that attempts to incorporate stakeholders demands for reporting and responsible behavior gives them a greater say in effecting changes within an organization. O’Rourke (2003) studied two cases of shareholder activism in the UK to gauge shareholder success in encouraging organizations to be socially responsible and found that it presents several opportunities for shareholders to convince organizations to be more receptive of CSR. First, shareholder activism makes the organization more aware of CSR issues as it garners attention from more than just the sustainability perspective. This is in contrast with external activists who are usually monitoring the sustainability of these activities. Second, shareholder activism almost always comprises demand for greater transparency which will allow them access to information previously denied. They can further their cause by understanding the CSR issues plaguing the organization and working towards solving the issues. Third, through the process of engagement between shareholders and the organization, CSR prerogatives gradually become prioritized in the organization. This is posited as a process which builds trust and makes CSR appear less of a threat. Four, it brings greater media coverage for CSR beyond just the environmental pages. All the above also have the cumulative effect of ensuring top management response. At this point, shareholder activism is limited in scope and influence as some organizations have restricted or even curtailed dialogue with shareholder activists.

Internal factor: Organization Resources 560

The amount of resources an organization has affects its ability to engage in CSR. Smaller organization, for example, may lack the time, financial resources, skills and knowledge to engage in CSR activities (McWilliams & Siegel, 2001; Vives, 2006). Despite that, the difference is argued to lie in the extensiveness of CSR engagement whereby smaller organizations may choose to engage in CSR activities that pertain to their definitive stakeholders such as employees and customers instead of engaging in environmental CSR (Lee, et al., 2009).

Udayasankar (2008) proposed a more specific way of examining how an organization’s size affects its CSR engagement by identifying three factors. First, more visible firms are hypothesized to be more supportive of CSR activities as the high amount of stakeholder scrutiny they are under forces them to engage in activities that heighten their legitimacy and bolsters their reputation. At the same time, smaller firms with lesser visibility may also engage in CSR to gain legitimacy and enhance their reputation. Second, firms with a bounty of resources are hypothesized to be more adept in allocating resources to meeting stakeholder demands through CSR activities. At the same time, smaller firms with access to less resources may engage in CSR with the aim of reaping benefits such as gaining greater access to environmental, human (appeal to employees), social resources ( be part of social networks). Third, the organizational structure allows bigger firms to tap on their well-established issues management system and expertise to handle external issues. Economies of scale also allows them respond to CSR demands at a lower cost while at the same time affecting greater social change and achieving better corporate social performance. At the same time, smaller firms can leverage on CSR’s ability to differentiate their products from competitors to improve sales. However, the effects of these three factors on an organization’s stance towards CSR have still not been empirically tested. From the above analysis, it can be surmized that organizations base their decisions of engaging or not engaging in CSR by weighing their internal capability with the advantages CSR brings.

Internal factor: Public Relations’ Role in CSR function

For an organization’s CSR engagement to be sustainable, a proper structure should be put in place designed to handle CSR related issues (Sumner, 2005). Despite discussions that CSR should be part of PR, it is conceivable that that PR plays no role in CSR at all (Kim & Reber, 2008). However, if public relations practitioners are willing to step up and include this as part of their functions, as some organizations have done (Wilcox & Cameron, 2009), it would help elevate CSR substantially. Kim and Reber (2008) identified four roles practitioners could assume. First, one where they play a significantly substantive role; second, one where they promote philanthropic acts vigorously; third, one where they play guardian to the organization adhering to high ethical standards and serving as a “corporate role model” 9 (p. 339); four, one where they play the communicator’s role and engage the stakeholders.

Internal factor: Exposure to Global Business

Chapple and Moon (2005) in their study of CSR reporting on the corporate websites of seven Asian countries found that organizations that operated beyond their national shores tended to report their CSR engagement. The authors concluded that organizations exposed to the international economy were more likely to engage in CSR lending support to Porter and Van der Linde’s (1995) assertion that organizations facing global competition tended to comply with stricter environmental standards. Chapple and Moon (2005) also argued that MNCs engage in 561 CSR because they are answerable to a wider range of stakeholders. Therefore, it is in their advantage to be socially responsible and proactive in communicating their CSR efforts.

Birch and Moon (2004) also examined small medium enterprises’ (SME) engagement in CSR and found that it may be due to the analogous effect brought forth by globalization, as MNCs may have proliferated CSR standards to SMEs. A ripple effect is created when large organizations, facing pressure from social activists abroad, transfer the need to be socially responsible to the local SMEs, who are part of their supply chain. SMEs will then be required to engage in CSR and even be CSR-certified (Kashinath, 2007). The increasing impetus for SMEs to engage in CSR to be in line with the demands of their larger business partners may have resulted in involuntary engagement in CSR (Kashinath, 2007).

External factor: Governmental Influence and Interference

Whitley (1992) argued that the complexities of examining CSR across global business systems were highly dependent on the level of governmental influences and interferences.

Albareda, Lozano and Ysa (2007) also argued that although CSR started out as a concept borne by organization’s voluntary commitment, it is now under the purview of governments which are actively pushing for it through public policies. Welford (2005) elaborated on this by maintaining that the institutional laws and policies governing stakeholders, labor, and local communities were almost always present in an economically developed country, and this enabled a country to fare well with regards to CSR in these particular social areas. This is very evident in Singapore where the government collaborate with other organizations to facilitate CSR within organizations (Fox, Ward and Howard, 2002). To promote and advance CSR in Singapore, Singapore Compact was set up by the National Tripartite Initiative (NTI) (Singapore Compact, 2005). Its key objectives are based on the capabilities of CSR to foster competitive business advantages. On top of this, government agencies and industry associations collaborate with SMEs to implement various CSR activities.

Albareda, Lozano and Ysa (2007) proposed a “‘four ideal’ typology model” to categorize the government’s role in CSR in Europe. First, partnership. The government sets the framework by facilitating partnerships between businesses, NGOs and public organizations. Second, business in the community. This is when the government collaborates with businesses and provides incentives for them to work with the government to solve social problems. Third, sustainability and citizenship. Organizations assume the role of good corporate citizens and with the encouragement and incentives given by the government, they have to fulfill their responsibility to the community in which they operate. Four, through CSR policies where governments acknowledge the importance of CSR and actively engage the public and businesses on CSR issues.

External factor: Activism

Since the 1980s, the influence of non-governmental organizations (NGOs) has been increasing and their voices have been heard in many important public discussions. According to Naim (2000), NGO are seen as ballast to capitalism. Besides NGOs, governments, the community, and the media are the other actors that pressure organizations to take up what they feel are socially responsible practices (Doh & Guay, 2006; Garriga & Melé, 2004). In response, some organizations try to engage a wide spectrum of stakeholders in dialogue with the two-prong 562 aim of getting a clearer sense of stakeholders’ demands and eliciting empathy from stakeholders on the limitations of the organizations (Kaptein & Van Tulder, 2003) which give rise to CSR activities.

According to Doh and Guay (2006), the institutional environments in a given society shape the meaning of CSR as well as how it is carried out by influencing government policy, organizational strategy and NGO activism targeted at organizations’ behavior. The authors examined the institutional environments and political history of Europe and US and found significant differences that led to varying power accrued to NGOs in effecting policy changes which ultimately resulted in greater support for NGOs and CSR. These institutional changes stemmed from social, political and economic factors as well as cultural factors such as religion and individualism. As a result, NGOs have risen in prominence as an important stakeholder based on Mitchell’s (1997) three attributes – power, legitimacy and urgency – that determine the relevance of stakeholders.

External factor: Exposure to Diverse Societal Culture

The meaning of sustainability and what it entails varies among countries as different societal cultures lead to individuals having different views with regards to CSR (Signitzer & Prexl, 2008). As a result, scholars have proclaimed culture as one of the most important influence in business decision making. For example, in a society largely defined as collectivistic and having long-term orientation such as India, the idea of having sustainable growth for the future generation is given higher priority than in individualistic society that are more presentoriented.

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