The Potential Impact of Social Accountability Certification on Marketing: A Short Note

Author(s): Morgan P. Miles and Linda S. Munilla

Source: Journal of Business Ethics, Vol. 50, No. 1 (Mar., 2004), pp. 1-11
Published by: Springer
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The Potential Impact of Social
Accountability Certification
Morgan P. Miles
on Marketing: A Short Note Linda S. Manilla

ABSTRACT. Social Responsibility (SA) 8000 The corporation is a creation of society

registration/certification is a response by the business whose purpose is the production of
to address consumer and investor needed goods and services, to the profit
community per
ceptions of the importance of emerging global social of society and itself. As an institution
issues such as child labor, worker discrimina of a must reflect
rights, society, corporation
etc. As more ?
tion, compensation, U.S. and European that shared values social,
society's
firms outsource to less nations, and as well as
production developed moral, political, legal,
social, environmental, and reputational issues have economic (Wilson, 2000, p. 37).
become more important. SA8000 is a series of
behavioral standards that represents a
comprehensive, as one
Corporations have emerged of the foun
and potentially global, corporate social responsibility
dations of modern global society. With this
registration system that provides a standard of socially
treatment of workers.
increased power has come the demand by society
responsible This paper explores
for social referred
how SA8000 adoption may impact a firm's marketing accountability, commonly
activities. to ascorporate social responsibility (CSR)
(Wilson, 2000; European Commission, 2001b;
KEY WORDS: globalization, supply chain, social Mc Williams and Siegel, 2001a, b). In this new
responsibility global and media-intensive environment, those
who wish to forward specific social agendas
constantly scrutinize corporate behavior, and
stakeholders and non-stakeholders alike believe
that they are entitled to be privy to this type of
information. A corporation's very existence may
depend on
its "... to defend itself in the
ability
court of public opinion," in addition to a court
of law (Schippers, 2002, p. A16). In a recent
California Supreme Court ruling, Nike was
Morgan P. Miles is Professor of Marketing, Georgia of its First Amendment
stripped protections
Southern University. His research interests include the when releases and letters to the editor,
press
between and entre
interface marketing, ethics, corporate related to its labor practices overseas, were deter
He has been a Senior Research Associate
preneurship. mined to be "commercial This action
speech."
for the Judge Institute of Management, Cambridge means that under consumer
a visiting Professor at the protection laws,
University, of Marketing -laims could be filed with no evidence of
University of Stockholm, and most recently a visiting
personal harm. Obviously this decision is being
professor of entrepreneurship at the University of Otago
where much of the work for this manuscript was com appealed, but if it were to stand, the "...
decision will have a effect on the free
pleted. chilling
Linda S. Munilla is Professor of Marketing, speech rights of all corporations, regardless of
Georgia
Southern University. Her research interests focus on where they are based or where
they speak"
and environmental ethics.
marketing (Schippers, 2002, p. A16).

^g. Journal of Business Ethics 50: 1-11, 2004.

J* ? 2004 Kluwer Academic Publishers. Printed in theNetherlands.

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 2Morgan P. Miles and Linda S. Munilla

Many consumers and businesses in the U.S. (1997) evaluation of ISO 14000, ways in which
and Europe tend to be reluctant to purchase marketing might be impacted by SA8000.
goods from marketers whose corporate reputa
tions have suffered because of sourcing from
"sweat-shop" type or other socially irresponsible The impact of CSR on marketing
manufacturers (see, for example, Webster, 1975;
Drumwright, 1994; Mohr et al., 2001). Maignan As the world becomes more linked and inter
et al. (2002) suggest that socially responsible connected by global media such as CNN and the

buying practices, where corporations use social Internet, alleged and actual corporate social
issues as non-economic
procurement criteria, are misbehavior is rapidly made public. For example,

rapidly becoming important attributes for brand Nike's labor and environmental practices in

positioning in many industrial and consumer Vietnam during the 1990s quickly became a
market segments (Drumwright, 1994). Work by public scandal and a
significant marketing
Miles and Covin (2000) suggests that corporate problem for Nike, resulting in boycotts, loss of
reputation is a powerful intangible marketing revenue and, most significantly, tremendous
asset that allows to leverage a positive
firms social damage to Nike's corporate reputation (Wootliff
reputation to differentiate their marketing mix, and Deri, 2001). To resolve the problem, and in
obtain pricing concessions, and leverage their an attempt to bring back former consumers,
competitive positions in both the business-to Nike ultimately took a proactive approach to
business and business-to-consumer markets.
socially responsible behavior and opened its Asian
Likewise, many private and institutional investors factories to environmental and social responsi
use some type of social issue screening to exclude bility monitoring by non-governmental organi
what they perceive to be environmentally or zations (NGOs) (Wootliff and Deri, 2001;
socially irresponsible investment choices, such as Maignan et
al., 2002). It is not unusual for
firms that exploit children and women laborers NGOs, such as Environmental Defense, or

(Waddock and Graves, 1997; Investor governmental agencies, such as the U.S.

Responsibility Research Center, 2002). The Environmental Protection Agency, to provide

interaction of consumer and investor demands for information related to corporate social responsi
corporate social is, increasingly, a bility on their websites (for
performance performance
strategic marketing issue. example, see Environmental Defense's website,
www. Other such as the
scorecard.org). groups,
Inter-faith Investor Responsibility Research
Purpose Center and the Catholic Church's Socially
Responsible Investment Coalition, monitor and
The importance of all forms of global corporate report on the social responsibility performance
social responsibility (CSR) is evident with the of both multinational corporations and their

increasingly widespread adoption of ISO9000 suppliers. In

addition, at the 1999 World
and ISO 14000 management systems by global Economic Forum, UN Secretary-General Kofi

corporations. As more consumers demand that A. Annan announced the UN's Nine Principles
marketers follow
socially responsible practices, of environmental and social accountability to

corporations are given an opportunity to further create a sustainable global economy (United
exploit the newer, verifiable social accountability Nations, 1999). While the UN's Nine Principles
system, SA8000, to enhance their reputation, are not binding on any nation or corporation,
differentiate their products, and build competi they do provide a uniform set of values for cor
tive advantage (see Miles and Covin, 2000; porations dealing with human rights, labor, and

Maignan et al., 2002; Kama et al., 2003; Schiebel environmental conduct.

and Pochtrager, 2003). The purpose of this paper Work by Mc Williams and Siegel (2001a,
is to examine, in a fashion similar to Bergman s p. 117), in a recent attempt to estimate the

(1994) evaluation of ISO9000 and Miles et al.'s demand function for CSR, define CSR as cor

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 The Potential Impact of Social Accountability Certification on Marketing 3

porate actions "that appear to further some social desirable, to the extent that violent protests
good, beyond the interests of the firm and that occurred where GM
technology was introduced
which is required by law." Mc Williams and Siegel in Europe (Miller, 2002).
(2001a, b) propose that consumers tend to The determination of what is proper and
"demand" CSR-related product attributes for improper is at least as difficult when assessing
product differentiation (such as social and envi work rulesand workplace issues. In the U.S. and
ronmentally responsible sourcing and manufac many European cultures, children are protected
turing) when (1) consumer incomeincreases; (2) by society and are not considered a household
the level of advertising for products with CSR economic asset. However, this is simply not true
attributes increases; and (3) the price differential in some cultures, where the economic value of
between products with CSR product-related children is a significant contribution to house
attributes and products without CSR attributes hold income. These differences in what is con
decreases. While scholars such asWindsor (2001) sidered theproper and
responsible of use
take issue with firms using CSR behavior to resources by business (such as labor and the envi
maximize profits, the use of CSR behavior as a ronment) are motivating factors that are driving
mechanism by which to build reputation and initiatives such as the UN's Nine Principles and
enhance competitive advantage is well accepted the adoption of ISO 14000 and SA8000 certifi
(see, for example, Fombrun and Shanley, 1990; cation by global corporations.
Cohen, Fenn, and Naimon, 1995; Klassen and Recently, the European Commission issued a

McLaughlin, 1996; Nehrt, 1996; Russo and Green Paper proposing a "European Framework
Fouts, 1997; Waddock and Graves, 1997; Miles for Corporate Social Responsibility" (European
and Covin, 2000). Commission, 2001a, b). The European
A major social responsibility issue that corpo Commission explicitly addresses SA8000 as a
rations must address is the contextual nature of global standard (European Commission, 2001b).
what constitutes a "social Actions and This framework offered a more
good." proposed
behaviors that are considered a "social good" are "holistic approach" to sustainable
development,
functions of both individual and cultural values with guidelines on(1) consistent "social labeling"
and often differdramatically between and within of products; (2) corporate social issue reporting
nations, cultures, and market segments. These standards; (3) working conditions; (4) human
different definitions of social "good" can be rights issues; (5) environmental performance;
illustrated by the varying perceptions related to and (6) application ofthe regulations throughout
Monsanto's work in creating
genetically modified a corporation's chain
supply (European
seeds, a dramatic process innovation that was Commission, 2001a). These European guidelines
to eliminate or minimize the use of and the UN's Nine
designed Principles, along with
applied pesticides. Monsanto's CEO, Robert consumer and investor pressures for socially and
Shapiro, strongly believed that genetically environmentally responsible corporate behavior,
modified (GM) seeds constituted an obvious make the adoption of global CSR multinational
social good and that GM seed technology would standards a strong possibility in the near future.
create the foundation of a new environmentally These global CSR standards would include
likely
sustainable, bio-tech-based agricultural produc ISO 14000 environmental quality management
tion system (Magretta, 1997). In the U.S., standards and SA8000 social accountability
Monsanto received praise for developing a more certification.
sustainable agriculture technology. Unfortunately
for the future of Monsanto and its shareholders,
GM seed technology was not perceived by the SA8000
European Commission (that subsequently
imposed strict labeling requirements for GM Social Accountability (SA) 8000 is a set of inter
content in foods and, ultimately, banned national and human
imports) workplace rights standards
or many European consumers as safe or socially by Social Accountability International,
developed

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 4Morgan P. Miles and Linda S. Munilla

with input from the United Nations and The council on economic priorities and
numerous NGOs, and based on the SA8000
"Conventions of the International Labour
Organization (ILO) and related international Social Accountability International (SAI),
human rights instruments including the Universal formally known as the Council on Economic
Declaration of Human Rights and the UN Priorities Accreditation Agency (CEPAA) and
Declaration on the
'Rights of the Child'" affiliated with the Council on Economic
(Leipziger, 2001; Gobbels and Jonker, 2003). Priorities (CEP), is an international organization
SA8000, which has recently been developed to that has evaluated corporations on social and
serve as a global CSR standard by the Council environmental issues since 1975 (Thaler-Carter,
on Economic Priorities Accreditation Agency 1999). The CEP has such a strong reputation
(Thaler-Carter, 1999; Leipziger, 2001), was pertaining to CSR issues that Fortune
magazine
designed to complement and extend ISO9000 partnered with theorganization to create

quality management standards and ISO 14000 Fortune's list of the top 50 "Best Companies for
environmental management certification stan Asian, Blacks, and Hispanics" (Urresta and
dards. SA8000 will likely enjoy widespread Hickman, 1998). CEP has leveraged its reputa

adoption similar to that of ISO9000 and tion as an organization involved in studying and
ISO 14000 as multinational corporations are measuring social responsibility of corporations to

by their stakeholders become a leader in the development of a certi

encouraged (including
consumers, communities,, regulatory agencies, fication/registration standard for social account
and clients) to become more
socially accountable ability, similar to the International Organization
(Rohltratana, 2002). This global and compre for Standardization's efforts to develop global
hensive set of CSR guidelines can be applied environmental standards (ISO 14000). Leipziger
throughout a marketer's supply chain, and it is (2001, p. 139) notes that, "SA8000 combines the

possible that SA8000 certification may even conventions from the International Labour
become an "international passport" for registered Organization with the methodology of ISO . . .
firms or a barrier to entry for unregistered firms (creating) a hybrid of ISO and ILO." SA8000 has
in international and domestic marketing (see become the most frequently adopted social
Miles et al.,
1997). accountability standard because it was designed
CSR standards, when applied to the work to fit into the ISO9000/ISO14000 certification

place, have become an increasingly important and performance audit process, making it rela

marketing issue as more corporations outsource tively efficient for organizations to adopt SA8000
much of the
labor-intensive production activi as a social accountability standard. In fact, many
ties offshore to gain cost advantages. Typically, of the accredited firms that audit for ISO9000
U.S. and European consumers tend to prefer that and ISO 14000 standards are
becoming also

products be manufactured in a socially respon accreditors/auditors for SA8000, creating poten

sible manner, with labor treated fairly and tial economies of scale for corporations that
environmental standards enforced. However, in adopt all three standards.
many cases, standard management practices in a SA8000 certification may have more value to
Third World nation such as China or Vietnam certain industries and specific market segments.
are absolutely to U.S. and European For example, firms that sell to up-scale consumer
unacceptable
consumers. SA8000 is a way for Western markets, such as Ben & Jerry's, Nike, Liz
consumers to be assured that products were not Claiborne, and L. L. Bean, have recommended
manufactured through exploitation of "economic international working conditions and social
slaves" or children under the age of 15. accountability standards 1997, p. 51).
(Rankin,
Work by Miles and Covin
(2000) suggests that
firms marketing to more affluent customer
segments must protect and enhance their cor

porate reputation and that high-end marketers

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 The Potential Impact of Social Accountability Certification on Marketing 5

cannot have firms in their supply chain that do ture and

the extractive industries (Gobbels and
not act in a socially responsible manner. In fact, . SA8000 audits involve not
Jonker, 2003) only
the pressure for these standards to be adopted will ensuring that the processes are in place (as do
be pushed down the supply chain, from ISO9000 and ISO 14000 audits) but also require
consumer marketers to their suppliers, just as was extensive site visits and interviews with workers
the case in the adoption of ISO9000 and and other stakeholders to ensure compliance
ISO 14000 standards (see Miles et al., 1997; (Leipziger, 2001).
Rohltratana, 2002). SA8000 certification, like ISO9000 and
One difference does exist will be based on a
major among ISO14000, single system of
ISO9000, ISO14000, and SA8000 standards: ISO global criteria. This very formal and compre
standards are a series of process-driven standards for hensive response to public interest in workplace
quality management and environmental manage and social accountability issues is intended to
ment applicable to both manufacturing and improve conditions throughout the
working
service companies while SA8000 standards are supply chain and enhance the corporation's
less process driven and significantly more nor reputation. Table I provides a summary of the
mative and outcome based (see Gobbels and components of SA8000 social accountability
Jonker, 2003). In addition, SA8000 tends to focus standards.

on manufacturers, specifically excluding agricul

TABLE I
The SA8000 series of social accountability management standards1

SA8000 Description1
Sstandard1

8.1 Child Labor: Prohibits the use of child labor (less than 15 years of age, unless local regulations are
higher); requires corporate support for the education of school-age workers; time spent daily on
work and school cannot be more than 10 hours; that the corporation does not expose children
either inside or outside the workplace to hazardous or situations.
unhealthy

8.2 Forced Labor: Prohibits the use of "forced labor."

8.3 Health & Safety: Requires safe & healthy working conditions, health & safety training for all
workers, clean and sanitary and conditions
working living (if company provided).

8.4 Freedom of Association and the Right to Collective Bargaining: Requires that the corporation allow,
without discrimination, workers to form trade unions and engage in collective
bargaining.

8.5 Discrimination: Prohibits discrimination based on race, caste, etc., in

gender, hiring, compensation,
or retirement.
training, promotion,

8.6 Disciplinary Practices: Prohibits use of coercion or corporal punishment.

8.7 Working Hours: Prohibits required work in excess of 48 hours/week, and requires at least one day
in seven off. Allows to 12 hours/week overtime at a
up wage premium.

8.8 Compensation: Requires that the corporation pay workers a legal minimum and locally derived
"living wage."

8.9 Management Systems: Requires a company policy for social that includes social
accountability
accountability audits for the corporation itself and its suppliers and sub-contractors.

1
Adapted from Leipziger (2001) and SA8000 (2001).

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 6Morgan P. Miles and Linda S. Munilla

The impact of SA8000 on marketing executives must now consider how

Corporate
strategy the new social standards will impact their mar
keting strategy. For firms that have adopted
Governments, consumer groups, and social ISO9000 and ISO 14000, obtaining SA8000 cer
organizations worldwide are demanding increased tification may be and will
relatively simple
social accountability by multinationals. While it represent an economic decision to gain an
is assumed that dominant multinational cor enhanced corporate reputation, better access to
porations (particularly those who have Asian markets, and the ability to charge a premium in
suppliers) will initially be affected, the new CSR-sensitive markets. While no thorough
standards are expected to eventually trickle down financial assessment has been made of the impact
to the suppliers of the larger firms, the small of SA8000, recent work by Sturm et al. (2000)
and medium-sized enterprises (SMEs) (for an suggests thatadoption of SA8000 can be a

example of the impact of ISO 14000 on SMEs, rational economic decision. Sturm et al. (2000)
see Miles et al., 1999). Social accountability also note that the costs of SA8000 are
adoption
certification for these organizations is particularly impacted by (1) the cost of compliance with
important since small- and medium-sized enter SA8000 labor requirements, which will increase
prises account fora large percentage of world direct labor costs; (2) the costs associated with
manufacturing. Global corporations such as Levi developing and maintaining a social account
Strauss & Co., Nike, Salomon AG, Reebok ability management system; (3) and
actual the
International Ltd., Liz Claiborne the Gap Inc., cost ofthe certification process. Cost increases in
Inc., Toys 'R' Us, Inc., and Mattel Inc., among direct labor are largely a function of how close
others, already have programs in place to monitor the firm is to complying with SA8000 labor
their contractors worldwide. In fact as early as practices (Collinson, 2001). For example, if the
1991 Levi Strauss was "...large the first firm is already complying with most of the labor
manufacturer to develop and publicize a formal practice regulations, then the cost is less signifi
code of conduct for its contract manufacturers," cant than for firms that are farther out of com
(Drickhamer, 2002). The guidelines for the Levi pliance. The cost
of developing the social
Strauss program are based on the International accountability management system would also be
Labor Organization (ILO) standards and those minimized if the firm is already ISO9000 and/or
of the Fair Labor Association (FLA), a U.S. based ISO 14000 certified. Cost estimates aggregated
coalition (Drickhamer, 2002). from Ellipson Consulting (2003) suggest that the
SA8000 will also likely have a direct and actual cost of the SA8000 certification process
dramatic impact on
marketing through the (not including the increase in direct labor costs
standards related to (1) remuneration; (2) control and the cost of establishing and maintaining a
of suppliers/subcontractors and sub-suppliers; supply chain information system) would be
and (3) reporting requirements. Like ISO9000 approximately $50,000.
(an indicator of quality) and ISO 14000 (an Firms that adopt SA8000 will be able to use
indicator of environmental management), SA8000 it as a way to differentiate their products in both
(as a verifiable indicator of socially responsible consumer and industrial markets, in terms of
behavior) will tend to become one of the non price and image, from those of non-certified
economic criteria that influences supply chain competitors, thus creating competitive advantage.
decisions. As more market segments expect cor Sturm et al. (2000) suggest that the benefits of

porations to practice socially responsible business SA8000 include (1) better global market accep
practices, retailers will tend to require SA8000 tance because SA8000; of (2) an enhanced
certification from their immediate these position in the
labor market, attracting a more
suppliers;
suppliers will then pass this social accountability skilled and trained work force; and (3) higher
certification requirement to their supply chain, levels of quality and productivity by the work
resulting in SA8000 having a domino-like effect force. Leipziger (2001) notes that a better trained,

throughout the global supply chain. healthier, and safer workforce will be more pro

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 The Potential Impact of Social Accountability Certification on Marketing 7

ductive, helping drive down production costs. more specific targeting of segments, while pro
Citing an Action Aide study that included data enhanced market opportunities for the
viding
on a garment factory that enhanced its quality more efficient mass marketers. Additionally,
and cut its defect rate from thirteen percent to SA8000 will allow firms to target global markets,
less than one percent by adopting socially respon without a limitation of market access due to
sible labor practices, Hancock (1998) suggests regional social accountability market require
that there is a strong link between enhanced labor ments.

standards and higher quality. These findings

suggest, that for firms that are ISO9000 and/or
ISO 14000 certified and have established supply SA8000's impact on product
chain management information
systems with
socially responsible labor practices, the total Adoption of SA8000 by a firm will have a poten
additional cost of SA8000 certification would be tial impact on product strategy, in a manner
fairly modest and the benefits, in terms of market similar to that found with the adoption of
access, reputation, quality, and productivity, ISO9000 and/or ISO14000. Sourcing and supply
would be significant. However, for firms that are chain decisions will require suppliers to demon
not already ISO9000 and/or ISO 14000 certified, strate that are
they socially responsible (see
and those that are not following responsible labor Drumwright, 1994), a move that will benefit
the cost of compliance would be much vendors who have and becomes
practices, adopted SA8000,
more significant, in a much less attrac an important factor when firms, such as discount
resulting
tive investment. retailers, use cost as the basis of
competitive
As a CSR-based marketing strategy, SA8000 advantage. For example, in the case of large
certification should help enhance the relation discount retailers such as Wal-Mart, adopting
ships between the corporation and many of its SA8000 will be directly impacted by the cor
stakeholders, who are interested in CSR issues, to source the at com
poration's ability product
including labor regulating agencies, international petitive prices from vendors that hold SA8000
NGOs, customers, and investors
(Polonsky, certification. In cases where the product cannot
1995). However, it must be
acknowledged that be sourced from vendors that hold certification,
SA8000 adoption could potentially damage some then the retailer will either have to alter its
of the corporation's relationships with existing product mix, products that can be
selecting
supply chain associations and non-certified sourced from SA8000 vendors, or make a signif
and/or non-compliant suppliers. icant investment in and
training certifying
existing vendors to comply with SA8000 regu
lations.
SA8000's on target markets and of SA8000 use a
impact Adoption by marketers who
the marketing mix strategy differented product strategy will then have addi
tional social accountability product attributes to
SA8000 adoption, like ISO 14000 adoption, will use in
positioning their product mix. These mar
enhance the firm's sources of reputational advan keters will then be able to leverage social issues
tage (such as credibility, trustworthiness, and with product benefits, creating additional sources
reliability), allowing the firm to target more of competitive advantage.
affluent target markets through a focused/differ
entiated competitive advantage or a cost-based

competitive advantage with differentiation based SA8000's impact on pricing

on behavior (see Fombrum,
socially responsible
1990, 1996; Waddock and Graves, 1997; Miles SA8000 adoption will also alter a corporation's
and Covin, 2000; Maignan et al., 2002). For strategies. Adoption of SA8000 is expen
pricing
example, adoption of SA8000 by mass marketers sive in both time and financial resources, with
may force less efficient firms to move toward a direct labor cost increases due to registration,

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 8Morgan P. Miles and Linda S. Munilla

changes in working conditions, changes in com Table II provides a summary of how SA8000 may
pensation, redefining how child labor is used, and impact the marketing mix.
systematic social accountability audits throughout
the supply chain (Leipziger, 2001). Low cost/low
price commodity marketers will be most affected Conclusions/implications
by SA8000, as their source of competitive advan
SA8000 as the international social
tage is eroded by cost increases (see Miles and may emerge
Covin, Marketers of differentiated accountability standard. If this occurs, the effect
2000). goods
will be much less impacted, as their competitive on the supply chain will be extensive, with inter
rests on or national buyers encouraging or demanding
advantage quality, innovation,
customer focus and less on cost. SA8000 compliance by their vendors. Suppliers,
who often operate in less developed countries
and who may have less interest in social
issues,
will be to or comply with
SA8000's impact on promotion pressured adopt
SA8000 requirements if they wish to remain a
SA8000 certification and will allow member of the supply chain of large, multina
labeling
firms to leverage their CSR efforts to tional corporations.
adopting
enhance their consumers, with
the The
adoption of SA8000 may involve signifi
reputation
media, and NGOs. Social offers a cant commitments of both time and resources for
labeling way
to differentiate the firm's brands in the market firms of all sizes. Large multinational firms may
of SA8000 will also provide the actually enjoy enhanced corporate reputations
place. Adoption
firm more in and lower costs due to economies of scale with
options promotional strategy,
it to develop with new the concurrent adoption of ISO9000, ISO 14000,
allowing relationships
market In addition, the adoption of and SA8000 certification systems. Small- and
segments.
SA8000 even insulate the firm from medium-sized firms with limited resources may
may help
media and NGO attention as well as have a much more difficult time complying with
negative
allow the firm to target the more affluent SA8000 standards (see Rohltratana, 2002).
socially
conscious segments.
SA8000, like ISO 14000 and ISO9000, "may
actually alter the
competitive playing for fields
small- and medium-sized enterprises (SMEs) by
SA8000's impact on distribution being relatively more of a burden to the SMEs,

limiting growth and expansion in national

The adoption along with
of SA8000, other CSR income and employment" (Miles et al., 1997).
such as ISO 14000, will In summary, the adoption of SA8000 may be
management systems
international market access to perceived as a very rational, cost effective, and
provide greater
For example, market to managing the corporation's
global marketers. European strategic approach
are more inter social reputation with its stakeholders. Proactive
regulators becoming increasingly
ested in CSR issues such as social accountability. corporate responses to stakeholder concerns

Firms that choose not to with social allow the corporation to have some influence on
comply
standards may find that even some how issues are resolved. Like the adoption of
accountability
domestic markets be closed to them. ISO 14000, partially designed to manage stake
may
Companies such as Saks, Ford, Reebok, and holder concerns about environmental issues, cor
Levi's vendors to abide with CSR that adopt SA8000 as an indicator of
require prac porations
social accountability standards socially responsible behavior may be better able
tices, including
et This that to manage their overall CSR performance
(see Maignan al., 2002). suggests
firms that adopt SA8000 will better access reputation with all relevant stakeholder groups.
enjoy
to markets and distributors then those who do
not and, in fact, firms that have not adopted
SA8000 may have limited access to some markets.

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 on Marketing 9
The Potential Impact of Social Accountability Certification

TABLE II
The impact of SA8000 on the marketing mix

Marketing Child, forced labor, unions, Health safety & hygiene Management systems &
l
mix working hours, compensation, standards2 supply chain CSR
function & work rules standards2 accountability standard1

Product No direct impact, but May enhance product These standards will impact
without the low cost labor, quality due to cleaner, the ability to outsource supply
products may have to be safer, and more hygienic chain functions to firms that
repositioned to be able to working conditions and have not adopted social
command processes. standards and
higher prices. redesigned accountability
may limit the availability of
some materials, and
inputs,

products.

Price
This standard will impact Minimal direct impact on Will likely increase cost, but
a but concern for a allow the marketer to
pricing, allowing premium prices, charge

pricing policy due to a cleaner and safer produc- a price premium for products
"CSR" differentia- tion environment may in some markets,
product
tion result in a lower
strategy. long-term
cost structure.

Promotion Consideration of the CSR Will reduce the "threat" Social accountability labeling
appeal and SA800 label may of negative publicity & will provide more positive
allow the firm to alter its allow stronger communication messages and
product
strategy and target new positioning. allow the firm to use a CSR
segments. differentiation strategy.

Place
Will allow firm to sell in Will allow firm to sell in May be a condition for sale to
markets that are markets that are markets,
requiring requiring specific
that social accountability social accountability
standards to be met. standards to be met.

1
Adapted from Miles et al. (1997).
2
Adapted from Leipziger (2001) and SA8000 (2001).

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