CSR as Stakeholder engagement a short intro

Redesigned logo used from 2011-present.

Redesigned logo used from 2011-present. (Photo credit: Wikipedia)

Stakeholder engagement is central to the evolution of CSR. The debate is centred around: how or if stakeholders need to be managed? and if so, how or when you choose to communicate with them? (Reich, 1998, Vogel, 2005). For most companies a broad approach to stakeholder engagement introduces a high degree of complexity that most would rather do without, but there are ways of formulating and engaging in meaningful relationships that can create long lasting value for the company.

One way of engaging is to invite stakeholders to participate in the development of the business in key areas of mutual interest. Starbucks’ relationship with Conservation International to promote sustainable coffee production and fair-trade practices (Austin & Reavis, 2004) is one such example. For the NGO it gives needed exposure to the organisations key mission and for the company, in this case Starbucks, it gives positive exposure and a confirmation on the image as being committed to sustainability. In addition, it can create large saving for the company. E.g. the normal employee turnover rate is around 200% in retail while at Starbucks is it only 65%-70%. In monetary terms it costs the company 500$ to train a new recruit (Austin & Reavis, 2004:3), so huge savings can be made. While there is no direct link between the corporate sustainability and fair-trade practices and its ability to create a nourishing working environment, the active CSR strategy by Starbucks does differentiate the company from others and make it more attractive also to its employees.

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