Corporate Citizenship: Definition & the Five Stages

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  • 0:01 Corporate Citizenship
  • 1:42 Benefits of Corporate…
  • 3:14 Stages of Corporate…
  • 6:41 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Lombardo
Corporate citizenship is being adopted by more companies who have come to understand the importance of the ethical treatment of stakeholders. In this lesson, you will learn the definition and the five stages of corporate citizenship.

Corporate Citizenship

Businesses need to treat their stakeholders ethically and with respect by believing in corporate citizenship, in which they show commitment to ethical behavior by balancing stakeholders' needs and protecting the environment. Did you know that Microsoft has been awarded a top corporate citizenship award? According to Forbes magazine, a major factor of Microsoft's success in this arena is their employees' passion for supporting their communities and causes through charitable giving and volunteering. In 2012, 93% of employees felt that Microsoft is a good corporate citizen around the world.

Many other companies, such as Fun Town Amusements, have also embraced the idea of corporate citizenship and focusing on their stakeholders. In this lesson, you will learn the definition and stages of corporate citizenship. Fun Town defines corporate citizenship as corporate community relations. The definition might have a slightly larger definition of citizens depending upon where a company conducts business. For example, a global company would refer to their community as the entire world. Fun Town shows their commitment to corporate citizenship by:

  • Hiring disabled and other individuals who need work by supporting a diverse workforce
  • Supporting non-profits in helping community members find jobs, keep towns clean and donate to charities across the nation
  • Providing accessibility to community stakeholders through installing handicap entrances, ride restraints, holding open door meetings and asking for customer feedback daily

Benefits of Corporate Citizenship

I'm sure that from the introduction you can clearly see the benefits of corporate citizenship to the stakeholders. What you might not realize is that there are many benefits for Fun Town Amusements to adopt the philosophy of corporate citizenship, as well. The benefits are:

  • Excellent employee relations by increasing company morale, participation, productivity and retainment: Fun Town accomplishes this by treating their employees and community ethically. In fact, Fun Town is smart enough to realize that their employees are the community and look for ways to have them act as ambassadors throughout the town. For instance, employees are participating in numerous charity events, such as Habitat for Humanity, donating to local food pantries and providing engineering workshops on ride design to area high schools.
  • Improved customer relations by treating their customers ethically and listening to their wants, needs and feedback: Fun Town conducts constant surveys in their park and in town to find out consumer opinions. They also offer customer appreciation days with 'throwback' park prices to $10 to enter the park.
  • Enhanced marketing occurs because customers are more receptive to ethical companies and their products: Fun Town has an excellent corporate image, which results in customers preferring their park over competitors. This allows the company to offer prestige pricing, or high pricing, for entrance to their park due to their reputation, customer service and high quality.

Stages of Corporate Citizenship

Fun Town did not always embrace the idea of corporate citizenship. There are five stages of corporate citizenship that all companies will progress through as they gain more experience and understanding. In each of the stages, the following dimensions emerge: citizenship concept, strategic intent, leadership, structure, issues management, stakeholder relationships and transparency. Let's take a look at how Fun Town has moved through each of the stages:

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