Procter & Gamble’s Stakeholders & Corporate Social Responsibility

Procter & Gamble corporate social responsibility citizenship strategy, stakeholder analysis, consumer goods business sustainability case study
A 1920s print advertisement for Procter & Gamble’s Ivory soap. The Procter & Gamble Company (P&G) has a corporate social responsibility (CSR) strategy that puts consumers at the core in efforts to satisfy stakeholders and achieve corporate citizenship. (Photo: Public Domain)

The Procter & Gamble Company’s corporate social responsibility strategy encompasses a wide variety of initiatives and activities to satisfy the interests of stakeholders. Archie Carroll’s theory of corporate social responsibility posits that businesses have a responsibility to address the concerns of stakeholders, which can significantly affect businesses. Procter & Gamble’s mission statement and vision statement are determinants of the company’s approach to corporate citizenship. For example, P&G emphasizes the importance of high quality and value of consumer goods offered to consumers. In addition, Procter & Gamble’s organizational culture (corporate culture) sets the principles and values used to influence the CSR strategy. In this way, the company ensures that efforts to fulfill its sustainability objectives and corporate responsibility are aligned with the culture that the organization embodies. These considerations point to the integration of Procter & Gamble’s corporate social responsibility strategy with the various aspects of the organization to achieve business goals and satisfy stakeholders’ interests.

Consumer satisfaction and communities’ hygiene education and sanitation define part of Procter & Gamble’s strategy for corporate social responsibility. The company also considers other factors relevant to satisfying the interests of stakeholders. For example, the interests of governments, employees, and investors are included in the CSR strategy. In addition, to address corporate citizenship ideals, Procter & Gamble ensures that its strategy is founded on the principles of sustainability. These efforts are designed to make the company grow its consumer goods business while fulfilling its corporate responsibilities. The significance of stakeholders is integrated in Procter & Gamble’s principles and corporate social responsibility strategy.

Procter & Gamble’s Stakeholder Groups & CSR Initiatives

Stakeholders of the Procter & Gamble Company are interested in the impact of the consumer goods business on their goals and wellbeing. These interests serve as criteria that determine the company’s fulfillment of its corporate social responsibilities. Current sustainability efforts in the business are one of the indicators of progress toward the full satisfaction of these corporate responsibilities. Nonetheless, the company has opportunities for CSR improvement. The following are the stakeholders and their priority levels in Procter & Gamble’s corporate social responsibility strategy:

  1. Consumers – Consumers are the boss
  2. Employees – Inspire and motivate
  3. Customers & Suppliers – Mutually productive relationships
  4. Communities – Sustainability
  5. Investors – Innovation for success

Consumers. Consumers are the stakeholders that take the highest priority level in Procter & Gamble’s CSR efforts. Consumers are significant in determining revenues and profits. P&G considers consumers as its boss. The interests of this stakeholder group include reasonable prices that suit the quality and features of consumer goods. Procter & Gamble satisfies these interests through extensive market research. For example, the company’s external focus involves research regarding consumer preferences and needs. The resulting data are used in developing Procter & Gamble’s programs for corporate social responsibility, such as programs for sustainability based on consumer’s preferences for sustainable firms. The company believes that a superior understanding of consumers and their needs ensures business effectiveness in addressing market needs. In relation, Procter & Gamble has corporate citizenship initiatives that employ a wider perspective on consumers. The aim is to identify consumers’ interests, even beyond the consumer goods market. Such effort makes Procter & Gamble’s corporate responsibility strategy comprehensive in satisfying the interests of this stakeholder group.

Employees. The Procter & Gamble Company values employees as its second priority in corporate social responsibility efforts. These stakeholders significantly affect the company through their contributions to business processes and capabilities. The interests of employees are career development and proper compensation. Procter & Gamble’s corporate responsibility programs address these interests through training and related support. For example, the company trains employees to achieve higher levels of innovation and productivity, which is a factor in Procter & Gamble’s operations management. Motivation is also a significant factor. For instance, human resource programs aim at motivating and inspiring P&G’s employees to maximize business results. In addition, the company’s CSR efforts satisfy these stakeholders’ interests through HR programs for competitive compensation and leadership development. These efforts enable Procter & Gamble to fulfill its corporate citizenship, while employees further contribute to the sustainability of the consumer goods business.

Customers and Suppliers. Customers and suppliers are a significant stakeholder group in Procter & Gamble’s corporate social responsibility strategy. Customers are the corporate clients and business partners of the company. On the other hand, suppliers are firms that provide the materials that Procter & Gamble uses to manufacture consumer goods and to maintain business processes. These stakeholders are interested in a growing and mutually beneficial relationship with the company. Customers and suppliers are significant in influencing Procter & Gamble’s profits and business stability. As part of the company’s external focus, this stakeholder group’s interests are satisfied through a corporate social responsibility strategy that involves business development support for all parties. For example, one of P&G’s corporate responsibility goals is to provide guidelines that customers can use to maximize the benefits of using P&G’s consumer goods. Also, the company addresses its corporate citizenship objectives by providing valuable information that enhances suppliers’ processes and ensures supply chain stability. These CSR activities contribute to Procter & Gamble’s sustainability.

Communities. The Procter & Gamble Company’s corporate social responsibility strategy assigns the fourth priority level to the stakeholder group of communities. Communities are important because they influence corporate image and brand image. These stakeholders are interested in the contributions of P&G’s consumer goods business to economic development and the environment through green operations. Procter & Gamble’s corporate social responsibility strategy has an external focus that considers these interests. For example, the company ensures sustainability in its products, packaging, and operations to minimize environmental impact. The corporate citizenship strategy also supports programs for hygiene education and sanitation in communities. In addition, the Procter & Gamble Fund provides financial support for nonprofit organizations and community development projects via the Greater Cincinnati Foundation. Along with the competitive advantages shown in the SWOT analysis of Procter & Gamble, such projects enable the company to fulfill its corporate social responsibilities. The projects ensure Procter & Gamble’s holistic corporate citizenship efforts that include standards of business ethics for the interests of this stakeholder group.

Investors. Investors are another significant stakeholder group that influence the corporate citizenship status of Procter & Gamble. These stakeholders significantly influence the market valuation and capital of the consumer goods business. The interests of investors are profits and growth of the Procter & Gamble Company. These interests are considered in the company’s corporate social responsibility strategy through constant innovation, which is viewed as P&G’s cornerstone for success. For example, research and development efforts aim for continuously innovating current products and developing new ones. These efforts ensure that Procter & Gamble’s generic competitive strategy and intensive growth strategies are fulfilled toward higher business performance for corporate responsibility, including sustainability. Thus, although investors are the least prioritized stakeholders in Procter & Gamble’s corporate social responsibility strategy, their interests are a fundamental factor in the strategies of the business.

The Procter & Gamble Company’s CSR Performance in Addressing Stakeholders’ Interests

Summary. Procter & Gamble’s global consumer goods business makes significant contributions to satisfy the interests of stakeholders. These contributions are aligned with the company’s corporate citizenship goals. Such goals include sustainability in Procter & Gamble’s business processes and products. Putting consumers first is a wide approach to corporate social responsibility. This is so because the satisfaction of consumers typically leads to the fulfillment of the interests of other Procter & Gamble stakeholders, especially investors. Given its initiatives and related programs, the company’s CSR strategy is satisfactory in addressing stakeholders’ interests.

Recommendations. A recommendation for Procter & Gamble to further fulfill its corporate social responsibilities is to make its compensation packages more competitive. This action pertains to the interests of employees. In addition, it is also recommended that Procter & Gamble increase its contributions to environmental conservation programs. Doing so could lead to a more stable supply chain and stronger corporate and brand image. For example, consumers could develop a better appreciation and perceived desirability of Procter & Gamble brands.