Corporate kindness good for business
Charitable actions during crisis the right thing to do, experts say
Tim Hortons is double-doubling down on its efforts to help Canadians through the COVID-19 pandemic.
The coffee giant displayed an early and nimble reaction to the threat: shutting its in-store operations March 17, but keeping its iconic java flowing via drivethru and curbside services.
As the crisis deepened, the company and its independent owners launched a number of other COVID-19 initiatives; free home delivery; massive food bank donations; mask purchases and sick-leave guarantees for employees; free coffee-truck visits to front-line health-care workers; and the loan of 35 transport trucks and drivers for medical equipment deliveries.
“I would say most Canadians don’t know how much our restaurant owners (and) our brand have done,” said Duncan Fulton, chief corporate officer at Tim’s parent company, Restaurant Brands International Inc.
“It’s not about trying to stand out. It’s not about trying to compete for headlines. It’s about trying to do the right thing,” Fulton said, adding most emergency-response ideas at the chain are generated bottom-up by its independent owners. While most of Tim Hortons’ charitable actions are conducted behind the scenes, some of the country’s biggest companies are touting similar pandemic initiatives: Ford, for example, is offering payment relief on vehicles, and Loblaws is giving front-line workers pay hikes and touting their free meal and food bank initiatives.
So is the generosity behind the spike in good corporate citizenship meant to burnish a company’s image and its post-pandemic bottom line? Or is it, as Fulton says, an honest reaction to unprecedented peril — a kindness of spirit that common struggles inspire?
“I can’t really inspect their brain and tell you what exactly they are thinking,” said Claire Tsai, a marketing expert at the University of Toronto’s Rotman School of Management. “But I will tell you that I’m so glad to see it. Regardless of their motives, I think this is a great thing that business leaders are doing.”
At a time when hoarding instincts and supply-chain problems could produce price hikes, the smart play is always goodwill and concern, said Tsai, who is co-founder of Rotman’s Behavioural Economics in Action Research Council.
“From the business perspective it is always recommended to try to help your customers (and) potential customers, when things are hard,” she said. “That is always better than to try to take advantage of the market conditions and make people’s lives even harder.”
Tsai points to examples from her lectures to make the point.
In one, a snowblower manufacturer significantly raised prices on its product after a disastrous snowstorm in the U.S. several years ago — causing lingering resentment and a loss of business going forward.
In another, a fashion brand’s policy dictated its stores slash umbrella prices 50 per cent during the rainy season. This was a small gesture on one of the company’s cheapest items, but it paid big dividends in overall sales, Tsai said.
While worker protections, encouraging messages, price breaks and donations during storms and disasters are generally good business practices, they also conflict with the bottom-line objectives of a very influential business force — shareholders.
“For big companies that have a strong brand and are also perceived as financially powerful, these (good works) are almost a necessity,” said Dirk Matten, a policy professor at York University’s Schulich School of Business. “They’re protecting their brands through philanthropy.”
Matten, who holds the Hewlett-Packard chair in corporate and social responsibility at York, is certain there’s an element of heartfelt charity and humanitarianism involved in most of the corporate pandemic moves.
“The problem is, of course, that the (caring) activities face limits in shareholder-governed companies,” he said. “At some stage in these companies, shareholders ask, ‘Why do we do this, are we a charity ... what’s in it for us?’ ”
For Matten, the biggest revelation coming out of the pandemic has been the indispensable role governments must play in directing a business response to a crisis of this scale.
“The game-changer we are witnessing in the role of business in society is that we see how essential the role of government is,” he said. “Not necessarily delivering everything (masks, equipment, etc.) that sells, but orchestrating socially responsible behaviour that has not been emphasized or developed well enough in the past.”
Some businesses are acting more like cheerleaders than active players.
Tsai said there are business leaders who have publicly praised health workers and first responders without offering anything concrete.
“I see them making statements, but I don’t see a lot of tangible actions,” she said.
But when large companies such as Ford and Apple, which are both manufacturing face shields, are seen to be contributing goods and money to the fight, it tends to draw in other players, Tsai said.
“When people see the great influencers doing this, it will become a movement,” she said.
Tsai agrees that businesses must keep an eye on their bottom lines, even during major crisis. “But if you can share a little bit of that with someone, it’s highly appreciated.”