CSR and Global Crisis

Managing crises within a company is complex and requires various tools and frameworks
in order to infer legitimate conclusions once a crisis has occurred as well as develop a crisis
prevention strategy. Corporate social responsibility (CSR) is a framework that is adopted often to
repair the damage within an organization following a crisis. However, to ensure an organization
does not reach breaking point in the first place it should establish CSR as an important tool in its
crisis prevention strategy too, rather than using it as a way to hastily pick up the pieces in the
aftermath.

It may not come as a surprise, but, crisis management and CSR are closely linked.
However few companies adopt this as an approach in their crisis prevention strategy. CSR has
often been considered as an approach that contributes to minimizing the effects of a crisis
(Coombs and Holladay, 2015), yet companies have been using CSR more so to rebuild
reputations rather than minimizing the risk of a tarnished reputation in the first place.

A company may minimize the (negative) impacts of a crisis if it engages in CSR

initiatives before a crisis occurs and recognizes CSR as an asset. Vanhamme and Grobben (2009)
studied that the CSR history of a company may have a positive impact on crisis management.
The authors emphasize that consumers then perceive a company’s CSR claims to be more
credible if their intention for CSR practice was conveyed genuinely and evidently prior to the
crisis. Furthermore, CSR may also help companies to steer clear of crises altogether as it could
serve as an early warning system in two respects. First, internally: A thorough CSR is integrated
in a corporation’s strategies and supports the firm’s compliance management system, into which
employees are encouraged to feed by reporting on emerging problems rather than being deterred
from doing so – as seen in recent crises in the automotive industry. Second, externally: A
company’s proactive CSR approach involves the various stakeholders including representatives
of institutions such as political parties, trade unions or NGOs and should be manifested in regular
communications with all those who have a ‘piece of the pie’. Such an exchange may lead to a
better understanding of the stakeholders’ perceptions of the company’s strategies and provides
them with the opportunity to address concerns and controversies.
 Companies that were hit by a crisis may actually view it as a unique window of
opportunity that could enable the responsible managers to change their practices sustainably. to
learn from a crisis requires a thorough analysis of the situation and a critical reflection of the
organisation’s culture, as sustainable change within a company will only work if the corporate
culture and identity changes. These are aspects that are often very difficult to observe from the
outside. Changing the corporate culture is a long-lasting process, which takes more time than
changing structures by, for example, creating a task force dedicated to developing and
implementing a crisis prevention strategy, adapting the company code of conduct, increasing
training for employees, etc. However, the underlying behavior and mindsets that might have led
to a crisis cannot be changed overnight.

Finally, corporate governance as ‘a set of relationships between a company’s

management, its board, its shareholders and other stakeholders’ (OECD, 2015) and CSR become
a vital combination to effectively prevent emergency situations or to quickly respond when such
threatening events occur. A company needs to implement crisis management initiatives by taking
into consideration the integrity of its managers, board, shareholders and all the stakeholders.
When a crisis emerges, these sets of relationships are affected; thus, a business should strive to
ensure that all policies underpinning its systems and operations are fairly, correctly and
effectively implemented in order to avoid severe business disruption. Both small-medium
enterprises and large companies should adopt formal measures to prevent crisis management and
to manage them effectively should they occur despite efforts. These policies should be constantly
revised and audited, given the rate at which our institutional environment changes.

CSR strategy

CSR strategy is the comprehensive plan companies and funders use to design, execute,
and analyze their corporate social responsibility initiatives. It includes specific focus areas,
program design, promotion and communication approaches, and evaluation procedures.

Most companies with thriving CSR initiatives use strategy to build and monitor their
programs; a few of these companies also share their strategy publicly. Nestle is a great example,
offering detailed insight into their brand’s approach (called “Creating Shared Value”) that
includes long-term goals for serving individuals, families, communities, and the planet, as well
as measurement procedures and transparent performance and reporting.
 In the world of CSR, it’s especially prudent to look before company leap. This is because
successful CSR initiatives are intricate, complex, and require demonstrable impact. They’re also
public-facing (and potentially brand-damaging when done poorly). And they offer a host of
business benefits you might miss out on by failing to plan.

A well-crafted CSR strategy can help the company to:

 Keep everything organized

 Improve impacts
 Protect brand reputation
 Take full advantage of CSR program benefits