Responsible Conduct is a Basic Expecation

Interesting article — Does Being Ethical Pay? — in yesterday’s Wall Street Journal on corporate reputation, based on some simple but decent controlled research.  It concludes:

“Companies should segment their market and make a particular effort to reach out to buyers with high ethical standards, because those are the customers who can deliver the biggest potential profits on ethically produced goods.”

The article also points out what our global CSR lead, Chris Deri, would call an “Irresponsibility Discount.”  His view is that the research seems to identify a material discount and negative correlation between irresponsible company conduct and consumer consideration and purchase behaviour.  He would also point out that the research, however, doesn’t actually uncover a significant halo effect for products considered ‘ethically sound.’  This seems to imply that responsible conduct has merely become one of the basic expectations for products, like quality, price and consistency. 

The Power of Online Media in Korea

It comes as no surprise to read AP’s Kelly Olsen’s piece from yesterday which points out how the media in Korea has influenced the hostile public perception regarding the import of US beef.  In fact, trust in media from opinion leaders in Korea (60%) is at three-year high (length of study) according to Edelman’s 2008 Trust Barometer, more trusted than NGOs (59%), Religious Bodies (45%), Business (43%) and Government (40%).  Olsen wrote:

“Fears have been fanned largely by a sensational television report last month and Internet chatter about the meat, which both governments have repeatedly said poses no health risk.”

The influence of the Internet blogosphere should not be under-estimated in Korea.  You only need to look at how the ‘Group that Loves Roh’ web campaign (a longer explaination on this is featured in Edelman Korea’s CSR paper) critically leapfrogged the virtually unknown presidential candidate to a sensational victory in 2002 to understand that online influence is not just a new thing in Korea.  It’s a reality any organization communicating must try to manage and engage in.

It’s not about controlling the debate. By engaging, and often directing traffic and the debate to a forum that you have more control over, however, organizations can begin to see positive communciations outcomes.  Edelman in Korea has learnt that steering a debate back to an organization’s own online forum can help balance the communications, especially in time of crisis. 

I’d like to see this debate addressed in a more innovative way, as the facts on US beef’s safety are pretty clear in my opinion.

South-South Cooperation

I’ve just returned from visiting Ethiopia, and was lucky enough to mix in the circles of the foreign correspondents based there. 

There was a definite buzz in Addis Ababa about the level of investment flowing into the country.  I was surprised to see that an office block under construction was beeing developed by a fellow Irishman (the hoarding featured the flag!).  Last year investment into emerging markets reached an all time high but like everywhere, unsurprisingly, a slow down is predicated.  Speaking to some of the correspondents, however, they were curious to benchmark the huge growth in Addis versus developing Asian countries.  It’s hard to compare, and I’m by no means an expert. Although it seems to lag behind visible investment/development in Vietnam or Cambodia (which I also recently visited), it is remarkable. 

One famous Ethiopian journalist I spoke to remarked about the “unconditional” investment being poured in from China (it was visible to me without prompting) versus the conditions set by Western companies, and set by their own agenda.  He confidently predicted how Western countries were losing out long term on the increasing south-south cooperation.  With Indian and Chinese influence increasing, the question of global power shifting was debated long into the night over many glasses of tej. 

What is clear is that Western companies and countries are losing trust in Ethiopia and other Eastern Horn countries at least.  It reminded me of some of the basic trust building communication activities I advise clients to follow here in Korea, and how it really is more the case of how ‘foreign’ investors need to make strides in adapting and appreciating local cultures to be successful.  A lot of this is founded on the history and mistrust brewed between foreign companies and the Korean business environment as it grew or needed outside investment to stimulate its growth.

I guess the same mistakes are made in all parts of the world.  But by China?