That Serco should wish to manage the ‘Big Society’ makes excellent business sense: by this, I don’t mean that I approve of Serco ‘running the Big Society’, but I think it makes sense for a large corporate to wish to been in participating in ethical capitalism. It would be rather disingenious if we were to show hostility to this, just because it’s Serco (effectively). In a sense, corporates are damned if they do, and damned if they don’t. New Labour cosied up to the City, and wanted to be seen as the party which embraced ‘business’ – for ‘business’, they meant the City and corporates. A wider drive, which has taken place in the USA, is how corporates can be included as worthy members of the rest of the society; in such a society, bankers would have an important rôle to play in society as wealth creators, while people in the public sector, while perhaps not contributing towards wealth, are doing worthy jobs such as nursing or teaching (and indeed are members of the Unions).
A criticism of public limited companies, such as Circle, which have been keen to be seen as embracing ‘The Big Society’ is that they appear to have antagonised relationships with the unions. The recent rift between UNISON and Hinchingbrooke Hospital is a case-in-point. That Serco is one of the major bidders of ‘The Big Society’ is a sign that Serco, whilst generating £4bn in revenue last year, thinks it can generate a shareholder dividend, while participating in something which it considers to be worthwhile (The National Citizen Service).
Ed Miliband’s formulation of ‘responsible capitalism’ is effectively corporate social responsibility (CSR). CSR is all about companies going beyond legal obligations and their own financial interests to address and manage the impact their activities have on society and the environment. Corporates often try to develop a CSR brand which embraces a much more diverse range of stakeholders. A ”good corporate citizen” is expected to address the concerns and satisfy the expectations of individuals and groups who can affect or be affected by the company‘s activities.
The move by Serco to be involved in a major ‘Big Society’ initiative, some might say, in fact makes perfect business sense. In such a framework, the “corporate brand”, which applies a single brand across the entire company, must appeal simultaneously to these diverse stakeholder groups. A corporate brand is likely to be linked intrinsically to the identity of the company; thus it encompasses the distinct attributes and values of the company to define for what the company stands, and relates to what is promised and expected in identity terms.
However, this strategy has not always been successful. Toyota received a reputation for environmental responsibility by introducing its celebrated ‘hybrid’, the Prius. However, even as Toyota enjoyed phenomenal awareness levels and positive associations, in addition to sales bumps, it suffered from increased attention to its corporate actions. Loyal Prius owners, special interest groups, and NGOs vigorously challenged Toyota’ s lobbying efforts (in cooperation with Ford and General Motors) against tougher U.S. fuel economy standards. These conflicting messages— namely, advertising that claimed “harmony between man, nature, and machine“ together with corporate actions that seemingly harmed the environment— undermined both the corporate brand and the product brands.
Such a strategy is also fraught with potential dangers from within Serco itself. For example, Serco might find that there is an increasing need to deal with stakeholders’ demands discursively. The pluralism of global cultures and values means there is no ultimate frame of reference, or ultimate “right answer”. Even honest, sincere brand-related stories can induce both positive and negative public discussion that might alter and perhaps damage the way consumers and other stakeholders perceive the brand.
It is, however, perfectly possible for Serco to make a success of its Big Society plan. Managers of these highly visible CSR performers, such as the U.S. giants Starbucks or Timberland, face pressures associated with accountability, limited resources, and public governance; they also make more direct comparisons of the value of investing in CSR than do managers of privately owned companies.
