Want to be seen as a responsible company? Then treat your workers well.

Jun 01 2006 by Brian Amble Print This Article

American companies that want to be viewed by consumers as having a social conscience need to put the treatment of their own employees at the top of their priority list before they worry about their record on the environment or corporate philanthropy.

A new national opinion survey commissioned by the National Consumers League and Fleishman-Hillard International Communications has found that American consumers have strong views on corporate social responsibility that run counter to established beliefs.

Eight out of 10 of those surveyed said that it is "extremely" or "very" important to work for an organisation which share their values and principles and two-thirds said that this is a similarly important factor in their decision to buy goods and services.

The fair treatment of employees comes top of the list of these values. Three-quarters of American consumers said that to be socially responsible, companies should place employee salary and wage increases above making charitable contributions.

The fair treatment of employees comes top of the list of these values

A similar proportion believe that a company's treatment of its employees plays a big role in consumer purchasing decisions.

"Activists and consumer watchdog groups remain important opinion leaders, but rank-and-file Americans are becoming more knowledgeable than ever on socially responsible behavior, and this trend will influence businesses and increasingly benefit society," said National Consumers League President Linda Golodner.

According to Fleishman-Hillard CEO John D. Graham, the inexorable erosion of the 'social contract' between employers and their staff is looming ever-larger in the popular imagination.

"What American consumers are telling us perhaps influenced by ongoing coverage of corporate layoffs and employee-benefit reductions sheds new light on how we view corporate social responsibility," he said.

"If companies want to maintain and strengthen their reputations, it will be essential for them to invest actively and visibly in their employees."

Mal Warwick, chair of the Social Venture Network and co-author of Values-Driven Business: How to Change the World, Make Money, and Have Fun said that the attitudes uncovered by the survey reflect an approach to social responsibility called the 'triple bottom line,' in which people, planet, and profit are balanced.

"Rather than detract from the traditional bottom line, this approach, requiring policies that actively favor the key stakeholders in a business its employees, its customers, its suppliers, its community, and its environment, as well as its owners makes that business more competitive."

But while Americans believe that social responsibility is important, only one in five give U.S. corporations top marks for their behaviour.

When asked to rate how companies are performing compared with two to three years ago, fewer than a third (30 per cent) believe that companies are doing a "somewhat better" or "a lot better" job of being socially responsible.

One reason for this low opinion of corporate behaviour is role played by the Internet is broadening access to information.

Almost half of the respondents (47 per cent) say they have used the Internet to learn about the extent to which a company is or is not being socially responsible. Moreover, half of Americans believe that their own online research is one of the most credible means by which to shape their opinions on deciding whether or not companies are being socially responsible.

In contrast, the official line from corporate websites, company reports and senior executives was viewed as the least credible sources of information.

As a result of the information thy have gathered online, almost four out of 10 of those using the Internet have sent e-mail to a company about its products or services or to an elected state or federal official about an issue.

Americans who frequently use online resources were also more aware of global standards.

Paul Argenti, professor of Corporate Communication at Dartmouth's Tuck School of Business said the survey underlined just how far the American public has changed its definition of corporate social responsibility and how much work companies need to do to respond to this change.

"Corporations must engage in a new level of dialogue that resonates with stakeholders' personal values. They also will have to increase transparency and adopt a more integrated approach to monitoring and influencing the online communications shaping their reputations."