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What Makes a Good Corporate Citizen? A Discussion and Case Study

A good corporate citizen is a company that first views the importance of being a good citizen as an integral part of their core business. Helping to improve the quality of life for others makes a company socially responsible and connected to its community. Corporate citizenship is about the contribution a company makes to society through its core business activities, its social investment and philanthropy programs and its engagement in public policy.

The manner in which a company manages its economic, social and environmental relationships, and the way it engages its stakeholders (such as shareholders, employees, customers, business partners, governments and communities), has an impact on the company’s long-term success. For a business being profitable is the major goal. At the same time however, in order to succeed in a long-term plan, a business must have an active sense of social responsibility.

Fortunately, there are many companies who we can turn to as a case study on good corporate citizenry. I have chosen Green Mountain because the company has been recognized by many reporting agencies of being a “good corporate citizen (social responsibility magazine, greenbiz news, Forbes Magazine, etc.). Green Mountain Coffee (GMC), a public traded company, is a leader in the specialty coffee industry. The Company roasts high-quality arabica coffees and offers over 75 coffee selections including single-origins, estates, certified organics, Fair Trade, proprietary blends, and flavored coffees that it sells under the Green Mountain Coffee Roasters® brand (GMCR). The majority of Green Mountain Coffee’s revenue is derived from its wholesale operation that serves supermarkets, convenience stores, offices, and other locations.

The company has been socially and environmentally active. Green Mountain upped the ante in 1989 when it formed an environmental committee and created a rainforest nut coffee to support the Rainforest Alliance, a non-profit dedicated to protecting ecosystems. The company has grown increasingly active in the countries where coffee is grown and has been a pioneer in the fair trade movement, which pays coffee growers stable, fair prices. But the biggest change came in the early 1990s when the company began sending its employees on trips to see where the coffee is grown.

Green Mountain, with 600 employees, saw 2005 revenue of $161.5 million with net income of $9 million, a 15 percent increase over the year prior. Since 1988, it has donated more than $500,000 to Coffee Kids, an international nonprofit seeking to improve the quality of life for children and families in coffee-growing communities. Through the Coffee Kids program, the company supports a micro-lending facility in Huatusco, Mexico and a sustainable sanitation system in Cosaulan, Mexico. It also has provided financial support to the FomCafe cooperative’s quality control training program, which helps farmers earn higher profits for coffee.

In 2006, Green Mountain released its first corporate responsibility report. “We are focusing on measurement so we can understand the economic and social impact of the company and create indices so we can better focus those efforts,” stated Green Mountain CEO, Bob Stiller. “Just the process of getting all that information in one place is valuable,” notes Michael Dupee, vice president of corporate social responsibility. “It makes you think about and gain insight into what’s working and what’s not, so even if you never published anything, it’s worthwhile” (www.greenmountain.com).

In 2004 the company expanded from one executive in social responsibility to three. Besides Dupee’s position, there is a director of sustainable coffee and a vice president of environmental affairs. Some 45 percent of Green Mountain’s coffee is purchased farmer-direct, which cuts out the share middle men take. And 20 percent of coffee sold is certified fair trade, which incorporates principles of environmental sustainability and respect for cultural identity, while guaranteeing growers minimums of $1.26 per pound when commodity prices might be far lower. Consumer interest in fair trade is growing, Stiller says, “Because through their purchases they want to make a difference in the lives of growers.”

As Porter and Kramer highlighted in their book, Strategy & society: The link between competitive advantage and corporate social responsibility, “Corporations are not responsible for the entire world’s problem, nor do they have the resources to solve them all.” As businesses strive to build their brands and differentiate themselves from the competition, practicing good corporate citizenship is one healthy and wise strategy that businesses differentiate from the pack. As was highlighted in this paper, from a marketing and communication perspective, corporate citizenship is not just good but it is good for business.

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