Harvard Case - The Era of Corporate Citizenship: Perodua's Advertising with a Social Dimension
"The Era of Corporate Citizenship: Perodua's Advertising with a Social Dimension" Harvard business case study is written by Claudia H. L. Woo, Ken Peattie. It deals with the challenges in the field of Social Enterprise. The case study is 23 page(s) long and it was first published on : Apr 9, 2008
At Fern Fort University, we recommend that Perodua continue to leverage its advertising platform for social good, integrating its corporate social responsibility (CSR) initiatives into a comprehensive, impactful, and sustainable strategy. This strategy should prioritize social impact measurement and shared value creation, ensuring that both Perodua and the communities it serves benefit from its efforts. This approach aligns with the principles of social entrepreneurship and triple bottom line reporting, fostering a positive and sustainable brand image while contributing to societal progress.
2. Background
Perodua, Malaysia's leading car manufacturer, faces a unique challenge: balancing its commercial success with its social responsibility. The case study highlights Perodua's efforts to engage in CSR through its advertising campaigns, focusing on initiatives like road safety awareness and environmental sustainability. These campaigns aim to resonate with the Malaysian public, building brand loyalty and contributing to societal well-being.
The main protagonists are:
- Perodua: The company seeking to balance its commercial goals with its social responsibility.
- The Malaysian Public: The target audience for Perodua's advertising campaigns and the beneficiaries of its CSR initiatives.
- Nonprofit Organizations: Partners with Perodua in implementing its CSR programs.
3. Analysis of the Case Study
This case study can be analyzed through the lens of stakeholder theory, which emphasizes the importance of considering the interests of all stakeholders, including customers, employees, investors, and the community. Perodua's approach to CSR can be assessed based on its alignment with the following principles:
- Shared Value Creation: Perodua's CSR initiatives should not only benefit the community but also create value for the company itself. This could involve strengthening brand image, attracting and retaining talent, and improving customer loyalty.
- Social Impact Measurement: Perodua should implement robust systems to measure the impact of its CSR programs, ensuring that its efforts are truly making a difference. This could involve tracking metrics like road accident rates, environmental pollution levels, and community engagement.
- Transparency and Accountability: Perodua should be transparent about its CSR activities and be accountable to its stakeholders. This could involve publishing annual reports on its CSR performance and engaging in dialogue with stakeholders.
4. Recommendations
- Develop a Comprehensive CSR Strategy: Perodua should develop a comprehensive CSR strategy that aligns with its business goals and societal priorities. This strategy should clearly define its CSR objectives, target beneficiaries, and implementation mechanisms.
- Integrate CSR into Marketing: Perodua should integrate its CSR initiatives into its marketing campaigns, showcasing its commitment to social responsibility and building a positive brand image. This could involve creating compelling content, engaging with social media, and partnering with influencers.
- Measure and Report Social Impact: Perodua should establish a robust system for measuring and reporting the social impact of its CSR initiatives. This could involve utilizing social impact measurement frameworks, conducting surveys, and collecting data on program outcomes.
- Foster Partnerships: Perodua should actively seek partnerships with nonprofit organizations, government agencies, and other stakeholders to enhance the effectiveness of its CSR programs. These partnerships could provide expertise, resources, and access to target beneficiaries.
- Embrace Innovation: Perodua should embrace innovation in its CSR initiatives, exploring new approaches to address social challenges and create sustainable solutions. This could involve developing innovative products, services, or business models that integrate social responsibility.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: Perodua's core competencies lie in manufacturing and marketing. Its CSR strategy should leverage these competencies to create value for both the company and the community.
- External Customers and Internal Clients: Perodua's CSR initiatives should resonate with its external customers, building brand loyalty and trust. Internally, these initiatives should inspire employees and foster a culture of social responsibility.
- Competitors: Perodua's competitors are also increasingly embracing CSR. By developing a strong and impactful CSR strategy, Perodua can differentiate itself and gain a competitive advantage.
- Attractiveness: Perodua's CSR initiatives should be attractive to investors, demonstrating its commitment to sustainability and long-term value creation.
6. Conclusion
By adopting a comprehensive and impactful CSR strategy, Perodua can leverage its advertising platform to create positive social change while strengthening its brand image and enhancing its business performance. This approach aligns with the emerging trend of social entrepreneurship and impact investing, demonstrating Perodua's commitment to a triple bottom line approach that prioritizes social, environmental, and financial sustainability.
7. Discussion
Other alternatives not selected include:
- Limited CSR Engagement: Perodua could choose to limit its CSR activities to minimal engagement, focusing solely on its commercial goals. However, this approach would likely lead to a negative perception among stakeholders and could damage its brand image.
- Traditional Philanthropic Approach: Perodua could adopt a traditional philanthropic approach, donating money or resources to various causes. While this approach can be beneficial, it may not be as impactful or strategic as a more integrated CSR strategy.
Key risks and assumptions:
- Measuring Social Impact: Measuring the social impact of CSR initiatives can be challenging and requires robust methodologies.
- Stakeholder Engagement: Engaging with diverse stakeholders and balancing their interests can be complex.
- Financial Commitment: Implementing a comprehensive CSR strategy requires a significant financial commitment.
8. Next Steps
- Develop a CSR Strategy: Within the next six months, Perodua should establish a dedicated team to develop a comprehensive CSR strategy.
- Pilot Programs: Within the next year, Perodua should pilot several CSR initiatives to test different approaches and gather data on their effectiveness.
- Establish Measurement System: Within the next two years, Perodua should establish a robust system for measuring and reporting the social impact of its CSR programs.
- Public Reporting: Annually, Perodua should publish a report detailing its CSR activities and their impact on the community.
By taking these steps, Perodua can position itself as a leader in corporate social responsibility, creating a positive impact on society while driving sustainable business growth.
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Case Description
As a home-grown compact car maker in Malaysia, Perodua has integrated social messages into its corporate advertisements since 1999, seeking to enlighten the local audience about various social issues and values. With the growing concern of corporate social responsibility ("CSR") globally, company advertising with a social dimension ("CASD") seemed to be an effective way for Perodua to portray its good corporate citizen image. However, the impact of the ads on direct and tangible returns in the form of sales was hard to determine. Since 2005, trade liberalization in South-East Asia resulted in reduced government protection for Malaysia's indigenous automotive industry and there was more emphasis on corporate differentiation strategies. In response to the escalating competitiveness and the increasing interest in CSR, Perodua's corporate leaders and its management had to rethink how corporate advertisements emphasizing social aspects could sustain the company's profitability and reputation in the long run. Besides, controversies easily arose when social issues such as race-related topics were not handled with sensitivity, given the diverse cultural context of Malaysia. Set in the context of an industry characterized by intensifying competitiveness and in a multicultural environment in which the social impact of advertising is emphasized, Perodua's strategy of CASD becomes very interesting.
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