“Don’t be evil” was the corporate philosophy adopted by Google, the company that ranked 4th place in the 2012 Best Global Brands Report by Interbrand. This simple sentence reflects the company’s philosophy for pursuing profit without compromising services or loyalty to their clients.

This year, Google was worth 26 percent more than last year, with its asset value reaching $69.7 billion. The figure reflects the effectiveness of strong branding. Google’s brand image is as a “search engine that offers reliable and desired results,” based on which it maintains a solid relationship of trust with its customers. This is because consumers are now looking for not a brand that wants to use them to make money, but a brand they can trust.

The American Marketing Association defines brand as a “name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers.” The core of branding, therefore, lies in how well companies differentiate their goods from their rivals’. Therefore, the success in branding distinguishes a company from its rivals and leads to further advancement.

In recent years, companies are increasingly using corporate social responsibility as a branding strategy. Corporate social responsibility, or CSR, indicates the legal, financial and moral responsibilities firms manifest toward parties of interest that are either directly or indirectly affected by the firms, or in turn, affect the companies’ corporate activities.

CSR, in the past, was mainly the result of external demands made on the corporate sector to showcase their conscience and sense of obligation.

GE is one company that exercises broad and strategic CSR. Every year, at least $100 million is doled out for CSR, and this figure is maintained even when the company stock value falls. Philanthropic volunteering groups and the GE Foundation are some of GE’s central CSR activities. The GE Foundation offers education and scholarship opportunities for the underprivileged, and also supports public policies.

CSR was traditionally approached as a quid pro quo. That is, companies hoped to gain recognition as a good brand in return for good deeds. Michael Eugene Porter, a professor at Harvard Business School, however, spoke of the concept of Creating Shared Value in the November 2011 issue of the Harvard Business Review. Creating Shared Value, or CSV, indicates when companies engage in CSR not for profit, but to pursue a dual objective of creating social value and commercial profit. This way, the company contributes to improving economic and social circumstances, while staying involved in business management activities and corporate policies for strengthening the core competitiveness of a business. CSV is therefore based on the thought that the prosperity of companies and the communities they belong to are strongly correlated.

Companies thereby work closer with communities to create more economic and social value. As such, advanced companies have been taking a bigger interest in regional economies and work closer together with their area’s civic organizations.

Global communication company Vodafone, for instance, collaborated with Safaricom, a communication firm in Kenya, to launch a mobile money-wiring service. The move is highly symbolic as the company developed a social product in a country that lacks communication infrastructure to offer services that go beyond the average phone functions. Vodafone was thus able to achieve the simultaneous goal of fulfilling both social and business needs.

Offering good deeds as a quid pro quo for profit, in the long run, won’t benefit companies. With CSV, companies can kill two birds ― money and branding ― with one stone. It’s time now for good brands to move beyond CSR to become smart brands.

By Park Heung-soo
Yonsei University School of Business