Marketing communication: principles and practice

BOX 5.2
DEFINITIONS OF COMMUNITY
A group of individuals who have learned how to communicate honestly with each other,
whose relationships go deeper than their masks of composure, and who have
developed some significant commitment to . . . make others’ condition their own.
A group of people and a way of being.
M. Scott Peck, 1987

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that stop people from opening up to each other. Bonding arises through a
sense of mutual trust and reliance.
Corporate community is the new form of organization governance that
shifts emphasis from profit to democracy by unifying the goals of all parties
– by focusing on the needs of the corporation’s constituents. The old profit-
centred model of business is too limited because it ignores the reality that
business is both an economic and a social institution. Corporate governance
can evolve towards collaboration among all stakeholders. The shift from profit
to democracy requires the creation of a coalition of investors, employees,
customers, business partners, and the public. Such a corporate community
can serve all interests better.
The onset of a knowledge economy has made cooperation efficient 
and thus there is no longer a need to consider business as a zero-sum game
in which one party gains at the loss of another. The capitalist theory that
profit is the driving force of economic progress is at last being challenged.
The question is no longer whether to focus on making money or on serving
society. 
The old model required a focus on serving the interest of shareholders.
The interests of employees, customers, and other stakeholders were not really
goals of the company, but simply a means to meet the interests of shareholders
– to make money. If the goal of enterprise is to make money, then the interest
of business is opposed to the interests of society.
Even the concept of ‘corporate social responsibility’ has not remedied the
problem. It has proved useful in educating people in business about their
social obligations, but in focusing on social service, the economic realities of
productivity, revenues, and profits have been ignored.
In recent years, however, major changes in corporate governance have been
underway. Collaboration with stakeholders is now occurring as they gain
power and because managers need their support. Institutional investors have
become more involved in the management of large corporations, including
‘ethical investors’. Employee participation, often in the form of shareholding,
has grown significantly, especially in the USA. Feminist moves are becoming
more influential in business, thereby bringing cooperative, community-
oriented values into management practice. Other social constituencies have
gained influence in recent years: relationship marketing to build trust and
commitment with customers in long-term relationships; partnership
agreements with suppliers and government; voluntary moves to protect the
environment; and so on.
Halal proposes a stakeholder model of the corporation (1996: 64), which
views the corporation as a socio-economic system composed of various
equally important constituencies: employees, customers, suppliers, the public
and its government representatives, and investors. Each stakeholder has
obligations to the corporation as well as rights. This view is gaining wide
acceptance because managers realize that they need the support of these
groups. Halal’s return-on-resources model shows that all stakeholders invest
financial and social resources, they incur costs, and expect gains – these
resources are their stake in the organization (see also Heath, 1994, chapter