Corporate Responsibility and Communication
Communication plays a crucial role in the workplace which is a key ingredient that enables the management to ensure that all the members in the company work towards achieving common organisational goals. Effective communication enables companies to share their vision with their stakeholders and build strong relationships with them (Wirth et al. 2016, pp. 53-60). It is a part of the corporate responsibility of companies to ensure that they communicate with their stakeholders while taking business decisions. Compliance with corporate responsibilities enables companies to build a positive brand reputation in the market which enable them to sustain their growth. In this report, the link between corporate responsibility and communication will be evaluated by using different articles. This report will identify the key issues faced by companies while communicating and complying with corporate responsibility principles and recommendations will be given to address these challenges.
A company is referred to an artificial person that has specific duties and responsibilities towards its stakeholders. Through corporate responsibility, corporations take responsibility for their actions and their impact on their stakeholders that include employees, community, consumers, environment and others (El Akremi et al. 2018, pp. 619-657). One of the key responsibilities of the companies is to ensure that they maintain transparency in its operations by effectively communicating with their stakeholders and informing them regarding their operations and actions. The companies comply with their corporate responsibilities by adopting a corporate social responsibility (CSR) structure in the business. It is referred to a self-regulation structure which imposes accountability on the management of the company and enables them to maintain a balance between the interests of their stakeholders.
Corporate communication is referred to the set of activities which are implemented by the management in order to handle internal and external communications which are aimed to create a favourable point of view among stakeholders of the corporation (Doorley & Garcia 2015). Effective communication is a key part of corporate responsibility to achieve different objectives of the company.
It is important that the management communicates their actions and decisions to the stakeholders through different mediums to make sure that they are familiar with the operations of the company and their rights are protected. There are different ways through which companies communicate with their stakeholders in order to fulfil their corporate responsibilities, for example, issuing a corporate social responsibility statement on an annual basis in which details regarding the major issues faced by the company are included along with the actions taken by the management to address these issues in order to sustain their growth of the company (Kim & Kim 2017, p. 951). The corporations are also expected to provide continuous disclosure to their stakeholders without waiting for a whole year by informing them regarding major incidents which affect their interest. In the digital era, the medium of communication has changed drastically, and corporations are using different ways through which they can instantly communicate with their stakeholders. For example, major corporations such as Apple, Unilever and Microsoft have a specific area on their website dedicated for providing news to their stakeholders regarding major events in the company (Wirth et al. 2016, pp. 53-60). These disclosures enable the management to ensure that they did not hide any actions or operations from their stakeholders.
The Importance of Effective Communication in Corporate Responsibility
Effective communication activities are important for companies to ensure that they disclose relevant information to their stakeholders which limits the number of fraud related cases conducted by corporations. There are many examples in which fraud occurred in a company due to a lack of communication. The recent Volkswagen emission scandal is a good example; in this case, the company was found guilty of violating the provisions of the Clean Air Act by intentionally programming its engines to cheat the emission tests. The senior-level executives were aware regarding these practices; however, they were not enforced to communicate them with their stakeholders (Rhodes 2016, pp. 1501-1518).
Another good example is the case of AMP Limited which is an Australian corporation that offers financial services in Australia and New Zealand. A whistle-blower of the company reported to the CEO of the company regarding unethical behaviour and workplace harassment. However, the CEO rejected to accept the report from the whistle-blower and took no action to prohibit similar behaviour in the organisation (Chanticleer 2018). This example shows that without effective communication practices, it becomes easier for the management to engage in fraudulent activities in the business. Thus, it is important that the management take active participation in implementing policies to promote effective communication in the workplace which enables companies to reduce the threat of fraud.
Although the implementation of effective communication policies is a key part of the corporate responsibilities of companies; however, there are various challenges which they face which creates barriers in relation to the implementation of communication policies.
In most countries, the companies are not legally enforced to implement the CSR structure since there are no legal provisions imposed by the government. Due to the lack of enforcement from legal policies, most companies avoid implementing or complying with effective CSR policies. They did not face any legal consequences if they did not implement or comply with corporate responsibilities (Visser & Tolhurst 2017). Thus, the lack of regulatory guidelines makes it easier for companies to avoid complying with these policies. The failure of the CEO of AMP Limited to comply with their CSR practices is a good example. He rejected to accept the report of the whistle-blower since he knew that there are no legal consequences (Chanticleer 2018). It shows that the lack of regulatory guidelines is a key issue which hinders the effectiveness of communication between companies and their stakeholders.
Key Issues Faced by Companies in Implementing Corporate Communication Policies
In the case of international companies, reaching all the stakeholders through a few communication options is a major issue for companies. They find it difficult to reach their audience without investing a substantial number of resources. Organisations find it difficult to use traditional resources while communication with their audience. Many companies avoid implementing corporate communication policies to save their costs while taking business decisions; however, it negatively affects them in the long run (Bhaduri & Ha-Brookshire 2017, pp. 293-310).
Most companies avoid implementing policies to engage with their customers and employees which promote two-way communication channels. The companies avoid implementing policies to ensure that they collect feedback from their customers and employees regarding the effectiveness of their communication process (Kim & Ferguson 2018, pp. 549-567). Due to the lack of two-way communication, barriers are created between companies and their stakeholders, and it leads to miscommunication. A good example is Starbucks which uses social media sites to positively engage with their customers in order to build strong relationships with them. The company resolve their customers’ queries and collect their valuable feedback to ensure that they build strong relationship with them (Belicove 2010).
Conclusion
In conclusion, the role of corporate responsibility has increased substantially which enable companies to ensure that they sustain their future growth. Organisations should comply with these policies while communicating with their stakeholders to build a strong relationship with them. Effective communication enables the companies in maintaining transparency in their operations to ensure that they did not hide any secrets from the stakeholders that could negatively affect their interest. It also assists in reducing frauds in the companies to ensure that they comply with their corporate responsibility while maintaining a balance between the interests of their stakeholders. The key issues faced by companies while implementing corporate communication policies are identified in this report as well. There is lack of regulatory guidelines which enforce companies to comply with corporate responsibility policies. The companies find it difficult to reach a wider audience, and there is lack of two-way communication which reduces the effectiveness of corporate communication.
Following are various recommendations which can enable the companies in addressing these issues and implementing effective corporate communication policies.
- Organisations should adopt an effective CSR structure to hold their directors accountable for their operations in relation to communicate with the stakeholders of the company. They should be responsible for the accuracy and consistency of corporate communication to avoid misuse of their powers.
- In order to reduce communication costs, companies should rely on digital mediums of communication to ensure that they reach a wider audience. They should take advantage of social media sites to build a positive reputation by communicating with the stakeholders.
- Corporations should promote two-way communication, and they should continuously collect feedback from employees and customers to build a strong relationship with them. Without effective two-way communication policies, companies find it difficult to collect relevant market insight which is crucial for them to innovate and stay relevant in the adverse market condition.
References
Belicove, M 2010, ‘How Starbucks Builds Meaningful Customer Engagement via Social Media’, American Express, April 10, viewed 16 February 2018, < https://www.americanexpress.com/en-us/business/trends-and-insights/articles/how-starbucks-builds-meaningful-customer-engagement-via-social-media-1/>.
Bhaduri, G & Ha-Brookshire, J 2017, ‘The role of brand schemas, information transparency, and source of message on apparel brands’ social responsibility communication’, Journal of Marketing Communications, vol. 23, no. 3, pp.293-310.
Chanticleer 2018, ‘Whistleblower reveals more unethical behaviour inside AMP’, Financial Review, May 10, viewed 16 February 2018, <https://www.afr.com/brand/chanticleer/whistleblower-reveals-more-unethical-behaviour-inside-amp-20180510-h0zx4g>.
Doorley, J & Garcia, HF 2015, Reputation management: The key to successful public relations and corporate communication, Routledge, Abingdon.
El Akremi, A, Gond, JP, Swaen, V, De Roeck, K & Igalens, J 2018, ‘How do employees perceive corporate responsibility? Development and validation of a multidimensional corporate stakeholder responsibility scale’, Journal of Management, vol. 44, no. 2, pp.619-657.
Kim, S & Ferguson, MAT 2018, ‘Dimensions of effective CSR communication based on public expectations’, Journal of Marketing Communications, vol. 24, no. 6, pp.549-567.
Kim, SB & Kim, DY 2017, ‘Antecedents of corporate reputation in the hotel industry: The moderating role of transparency’, Sustainability, vol. 9, no. 6, p.951.
Rhodes, C 2016, ‘Democratic business ethics: Volkswagen’s emissions scandal and the disruption of corporate sovereignty’, Organization Studies, vol. 37, no. 10, pp.1501-1518.
Visser, W & Tolhurst, N 2017, The world guide to CSR: A country-by-country analysis of corporate sustainability and responsibility, Routledge, Abingdon.
Wirth, H, Kulczycka, J, Hausner, J & Ko?ski, M 2016, ‘Corporate Social Responsibility: Communication about social and environmental disclosure by large and small copper mining companies’, Resources Policy, vol. 49, pp.53-60.
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