During the last century, Corporate Social Responsibility (CSR) has been inevitably crucial for businesses that strategically perform on the market, through boosting their image, branding and sales, attracting new investors and empowering the workforce’s productivity. Indeed, the basic concept behind the CSR underpins a responsible economic behaviour conducted by corporates to be in line with the society’s expectations. Here’s a clip explaining in detail what CSR is:
However, the pandemic drastically affecting the whole economy has put a strain on businesses from every side, especially when it comes to their social responsibilities.
Thus, “Which are the main factors that have affected the social responsibility of many corporates?”
The beforementioned research question have reasons to be answered if there is the belief that the current situation could have unprecedented consequences on CSR as a result of the most significant environmental changes in modern history.
Unemployment Risk and “Gender Gap”
Total Unemployment Rate, % of Labour Force, Jan 2005 – Aug 2020
(Figure 1) Source: OECD, 2020
- Manufacturing companies such as LVMH, Dayson and Zara have shifted their business models in order to recover the losses, producing masks, hand sanitiser, ventilators and other medical equipment by finding an opportunity to boost their image increasing their social responsibility (Gabriela Gutierrez-Huerter, 2020).
- Many leaders such as Bill Gates and Jack Ma, have strategically decided to be participative in helping to fight Covid-19 through donating money to researches.
- Almost all companies have allowed their employees to work from home, assisting them in changing their habits and working dynamics and investing in the necessary equipment (BBC, 2020).
- This is the effect of the closure of schools, kindergartens and all services aimed at families.
- This crisis has affected sectors, such as the education and care of children, where women are mainly employed.
Word employment impact by industry during 2020
(Figure 2) Source: McKinsey Global Institute Analysis, 2020
Consumers’ Ethical Behaviour and Preferences Distortion
- More oriented towards rational decisions.
- Driven by emotions like anxiety, anger and fear.
- More conservative and cost-conscious.
- The expectation of deep recessions in the long period tend to reduce their consumptions and increase their saving capital needs.
“Which actions businesses can take to continue operating on the market strategically?”
- Consistent: focused on planning actions closely linked to the best areas in which they are most competitive.
- Effective: recognize relevant issues and take practical measures that consistently reduce risks, mainly for their employees that represent the engine of the whole business machine.
- Adaptable: opened towards radical changes through a “cultural flexibility approach”. A flexibility approach doesn’t mean rejecting pre-existing values but adapts actions to be in line with the new market’s requests. Being able to shift the business model using tangible and intangible internal resources will not only provide a consistent response during critical circumstances but will also allow overcoming the hypocritical corporate social responsibility that only generates negative results.
- Communicative: the enrichment of the businesses’ missions consistently relies on the ability to communicate directly and transparently the sense of belonging of corporates to the community; thus, general marketing actions will mainly provide only ineffective results.
- Collaborative: understand the needs of all the most vulnerable groups among their workers, optimising and encouraging smart-working but also starting consumer loan systems and assisting governments in supporting expansionary policies aimed at employment.
The Covid-19 pandemic has inevitably stood as a massive problem for all industrial sectors. However, it still constituted as an opportunity for many other companies to defend their position and overcome the competition. Therefore, investing in a strategic plan focused on CSR could become an invaluable decision to take in order to survive in unpredictable circumstances like the one currently ongoing. Kervyn, Fiske & Malone (2012) suggest that there is a strong relationship between brand perceptions and CSR, and the engagement in socially responsible activities also improve businesses’ equity and performance (Lai et al.2010).
It is fundamental for businesses understand how to interpret and manage the measures aimed at moderating the short and long-term effects that this crisis will have on the economic and social systems whilst assuming obligations or specific guidelines to deal with the situation in the light of their social and environmental sustainability.
If, therefore, there is a lesson to be learned is that markets are in continuous evolution and businesses increasingly need to be supported by dynamic, adaptable and rapid solutions that J7 can provide through substantial experience and reliable advice.