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CSR, Company Purpose, and Trust

20 Oct 2017

WRITTEN BY Vlachos Pavlos
Associate Professor of Marketing & Academic Director of The ALBA MBA

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According to Gallup Analytics, 2 out of 3 U.S. employees are not engaged at work. An engaged employee is someone who is involved in, enthusiastic about and committed to her work and workplace. At the same time, in the most recent PwC CEO survey a central concern for CEO’s is the lack of consumer (and employee) trust in business.

To deal with the increasing stakeholder trust deficit and the interrelated employee engagement problem, CEOs report that are committed bringing back purpose in company practice. They seem to do so by actively addressing their societal impact through Corporate Social Responsibility (CSR) activity. Indeed, two out of three CEOs view CSR as being core to what organizations do –as a key success factor for the next five years­– and eight out of ten agree that business success should be defined by more than financial profit (PwC, 2016).

Bringing back purpose in company practice seems to be the right strategy with research showing that purpose stimulates oxytocin production (a brain chemical) which in turn stimulates trust which further produces oxytocin levels and finally happiness (Zak, 2017; see also Kosfeld et al., 2005). For example, compared with people at low-trust companies, people at high-trust companies report 74% less stress, 106% more energy at work, 50% greater productivity, 76% more engagement, 13% fewer sick days, 40% less burnout, and 29% satisfaction with their lives (Zak, 2017).

But through which mechanisms CSR and purpose produce those kind of trust benefits? The answer is that CSR facilitates whole-person growth, essentially allowing people to bring their whole-self at work and at consumption contexts. Indeed, CSR and organizational purpose has been theorized and found to lead to meaningfulness at work (Aguinis & Glavas, 2017) which as we discussed above produces oxytocin levels and in turn trust (i.e., reduces the fear of trusting a stranger) (Zak, 2017).

Although managers seem to be committed to investing in CSR activity they are more uncertain as to ‘how’ to do it namely how to engage with CSR activity. In what follows I will offer 5 guidelines –based on research findings– that can potentially help companies build a culture of trust and signal trustworthiness (a trait) through CSR activity.

 

  1. CSR is an oxymoron with stakeholders feeling comfortable when companies promote the benefits of their products (given that the goal of companies is to make money) but uncomfortable when companies promote CSR (which is against their profit-driven DNA). To effectively deal with this oxymoron companies should do more and communicate less; companies should primarily do and then tell but not sell what they did in terms of CSR activity.
  2. Design CSR events that are low in consensus (do not copy other companies’ CSR activities); low in distinctiveness (commit resources across several societal and environmental domains; don’t focus only on CSR domains that match your business core/industry); high in consistency (commit resources across time). This type of configuration is more likely to be perceived as being genuinely motivated.
  3. There is tendency in CSR reporting to underscore CSR input by focusing on “dry” reporting such as statistics, amount spent, total hour volunteered etc. These are useful but at the end the represent reporting without purpose. Enrich those stats by telling stories of how people have been touched by the company’s CSR activity. This will better address individuals’ interest for messages that fare better with their ancestral tendencies namely feel, hear, smell, touch, or see (see Griskevicius et al., 2012).
  4. CSR should be left to the hand of employees. Start you CSR efforts by firstly engaging female middle managers of higher organizational tenure and of higher moral identity.
  5. Strive for innovative (engaged) giving; generous giving is okay and it works but only the former is likely to generate non-manipulative/genuine perceptions of motives.

 

 

Further readings:

1.Aguinis, H., & Glavas, A. (in press). On Corporate Social Responsibility, Sensemaking, and the Search for Meaningfulness Through Work. Journal of Management.

2.Kosfeld, M., Heinrichs, M., Zak, P. J., Fischbacher, U., & Fehr, E. (2005). Oxytocin Increases Trust in Humans. Nature435(7042), 673-676.

3.Griskevicius, V., Cantú, S. M., & Vugt, M. V. (2012). The evolutionary bases for sustainable behavior: Implications for marketing, policy, and social entrepreneurship. Journal of Public Policy & Marketing31(1), 115-128.

4.Zak, P. J. (2017). The Neuroscience of Trust. Harvard Business Review95(1), 84-90.

 

Web sources:

http://www.gallup.com/poll/180404/gallup-daily-employee-engagement.aspx

http://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2016.html