MANAGEMENT COMMUNICATIONS (11/02)

Case: The Era of Corporate Citizenship: Peroduas Advertising with a Social Dimension
Summary
- Perodua: Home-grown compact car maker in Malaysia (est. 1993)
- Since 1999, the company had been integrating social messages into its corporate
advertisements seeking to enlighten the local audience about various social issues and
values.
- Governmental emphasis on encouraging the use of commercial advertisement to
promote social good.
- With the emergence of ASEAN FREE TRADE AREA, competition among car
manufacturers rose in Malaysia, Peroduas corporate leaders and its management had
to rethink how corporate ads emphasizing on social aspects could sustain profitability
and reputation in the long run.

Corporate Social Responsibility (CSR)

- Signifies the responsibility of the corporate towards the society they work in and they
work for.
- Seriously considering the impact of the companys action on society.
- Business is the wealth-creating organ of society. But what is important is that
management realizes that it must consider the impact of every business policy and
business action on society. It has to consider whether the action is likely to promote the
public good, to advance the basic beliefs of society, to contribute to its stability,
strength and harmony. The ultimate responsibility of management to itself, to our
heritage, to our society and to our way of life.
- Business play a key role in job creation in society and in addressing stakeholder
expectations, CSR is generally understood to be the private sectors way of integrating
compliance with economic, environmental and social imperatives with the imperatives
of their own business activities.
- CSR means extending beyond the business compliance with laws and other legal
requirements. It means fulfilling the moral obligations of the business by involving itself
with commitments and activities that contribute to and help improve the condition of
the society, the community, and the environment.
Social & Cultural Concerns in Malaysia Advertising
- Due to diversity prevailing in Malaysia and also the type of government in place.
- Malaysia Government: Parliament
- The government intervention is on a rise and is indeed a concern for the Advertising
Industry in Malaysia
- Stringent (strict & precise) Censorship Laws
- The Ads had to be compatible with the moral sentiments of the Community
- The themes had to be in term of family, civic mindedness, cultural integrity, racial
harmony and national identity
- Festive Advertising: Hari Raya Deepavali
o
- A deviation of from the core of advertising Primary focus on the social value and then
on the product

1. Is it right for companies to try to shape attitudes and values or to promote

social issues which are not directly related to the nature and product of their
business?
Yes, it is right. Through an ad we can reach a wide range of audience.

McDonald Philippines Advertisement (Karen")

Ads resulted in a growth of awareness level among the commoners on the

plight of the lonely left out old people and made people want to visit their
grandparents.
This is an example of creating awareness and shaping values which Perodua
has actually done and it is a proven across the world.

2. Why is it difficult to promote CSR in the business community?

- Businesses are created to make profits and many big firms treat CSR as an
obligation by law.
- Any obligation is not accepted will in the business world.
- CSR may create value on the long run but is not so beneficial for the short run. So,
businesses in the world isnt actually ready to accept it.
- There might be backlash for the ads aired or any community projects. These might
hurt the sentiments of a particular community. This might also prove to be a long
lasting negative effect on the companys reputation and fearing this backlash
companies might not really be interested to take part in CSR activities.
Classical View

FOUR VIEWS ON CORPORATE SOCIAL RESPONSIBILITY

Managerial View
Public View
Christian View

The primary
responsibility of
business is profit
maximization.
Obligation of
management is to
satisfy stockholders
for their investment.

CSR does not

emphasize profit
maximization and
interests of
stockholders.
To balance the
interests of
employees,
customers, suppliers,
and the local plant
community is the
role of managers of
big businesses.

CSR includes the

needs and interests
of the whole society
in contrast with the
classical and
managerial views.
Establishes harmony
with both business
operations and public
interest.

Excess wealth should

be given to the less
fortunate. Wealthy
individuals have a
responsibility to
share their blessings
with the poor.
A successful
corporation should
perform its social
responsibility more
by returning a fair
portion of its profits
to the people in the
form of social
services.
Based on the
teaching of Jesus
Christ as taught in
the bible.

Arguments against the practice of CSR

PROFIT MAXIMIZATION Corporate executives and managers are primarily
responsible to investors and stockholders. It is their duty to maximize the profit of
their business, not the concerns of the society.
LACK OF SOCIAL SKILLS Most businessmen lack the appropriate skills in solving
social concerns. Social problems should be the concern of the government, not the
businessmens who are honed with the disciplines involved in the business.
LACK OF SOCIAL ACCOUNTABILITY The social needs and problems should not
depend on the businessmen. Businesses cannot be expected to solve social
problems. This is the governments job.
HIGHER PRODUCT COST Businesses active participation in social, charitable or
civic projects leads to additional expenses and wastes man-hours of the company.
In order to recover from such losses, businesses increase the cost of their products
that may also cause them a disadvantage from the cost of the products of
competitors.
3. What are the implications of globalization for the adaptation of CASD?

CASD: Companies Advertising with a Social Dimension

With globalization come new players into the market which might be of foreign
origin and who dont really know the cultural aspects of the country might actually
come with a wrong act or practice.
Companies which might enter the market might actually look at a difference
perspective and might come up with new social issues which are beneficial for the
society.

4. Explain the significance of Corporate Citizenship Communication on

Corporate Identity and Corporate Image. Would an advertiser adopting CASD
necessarily be granted the title of good citizen?
Giving out the right message is the most important thing and companies following
CASD might actually be granted the title of a food citizen.
From the case, Peroduas TV ad showing against drunk driving, racial enlightening
issue, social manner message actually granted them the title of a good citizen.
This actually impacts the way people perceive the company and this might lead to
granting the title of a good citizen,
5. What are success factors in the development of CASD?
Understanding the social and cultural values of the area of operations.
Avoid discrimination and personal biases.
Prioritizing the right value to be depicted.