When social procurement supports the same cause as that of corporate activism, it can complement such movements by creating authenticity and greater impact.
Whether driven by individuals within an organisation or through a strategic corporate initiative, any proactive and voluntary activity that leads to a positive change can represent corporate activism. Social procurement, an emerging practice enabling corporations to use their buying power to generate social value, can act as one of these initiatives, further spreading corporate activism in the organisation.
The Foundations of Corporate Activism
Corporate activism is conflicting in its nature. While corporations are often considered responsible for many environmental and social problems, they can also positively contribute to addressing some of the most important grand challenges. Corporate activism refers to corporations’ “willingness to take a stand on social, political, economic, and environmental issues to create societal change”, according to marketing professors Meike Eilert and Abby Nappier Cheru. Corporate activism involves transforming corporate values and processes to create a positive social or environmental change. It largely overlaps with corporate social responsibility; however, the two differ in their fundamental premises.
While corporate social responsibility revolves around corporations’ obligation and accountability towards their stakeholders, corporate activism is a proactive agenda to create movements and bring about societal changes embodying corporate purpose and identity. Corporate activism is not achieved through a single business function but is interwoven with all day-to-day business norms and activities. Similar to any other social movements, corporate activism is a non-linear, complex and multi-layered process. Most of the time, it involves the destruction and recreation of values, norms and assumptions that have been shaped over a long period of time.
Corporate activism involves transforming corporate values and processes to create a positive social or environmental change.
Corporate activism is not always consistently observed across the organisation. For instance, we may see corporate activism in more visible sides of the business such as in a marketing campaign and not so much in other challenging and often distant aspects such as managing lower-tier suppliers. These inconsistencies can be perceived as inauthentic, and as a result, the essence of corporate activism may be questioned. Corporations are increasingly required to adopt various mechanisms to show corporate activism homogeneously across their organisations.
Social Procurement: A Missing Link in Corporate Activism
While the role of procurement function in operationalising corporate social responsibility has been increasingly recognised, recent years have witnessed procurement professionals taking a more proactive role in creating benefits and values within the societies and bringing about positive social change through social procurement. Professor Jo Barraket and her colleagues define social procurement as “generating social value through the purchase of goods and services”. The practice involves corporations buying from organisations that are specifically set up to address a social challenge such as social enterprises. Social enterprises, in particular, enjoy greater community legitimacy than corporations in that they are highly embedded in the communities they serve. They are well aware of their needs and work closely with them to address their issues.
Social procurement can build demand for social enterprises leading to the growth of their business. At the same time, it enables corporations to:
a) contribute to a social or environmental cause
b) initiate a culture change transforming procurement practices.
Social procurement is an emerging practice through which corporations can generate positive movements within their boundaries and at the same time have a positive impact on society and/or the environment. Social procurement can act as an engine to spread the social logic throughout the procurement organisation which has been historically set up based on the commercial logic of business. Most often social procurement is enabled by an intermediary such as a national association that links the corporations to social enterprises and facilitates their relationships by developing necessary institutions.
Buy Social Corporate Challenge
One of the major initiatives promoting social procurement is the Buy Social Corporate Challenge, where a group of corporate partners commit to spending a portion of their procurement budget with social enterprises. The initiative has been launched by the Social Enterprise UK in 2016 with initially 7 partner corporations and has grown to a total of 24 partner corporations in 2020. Partner corporations have spent over £91.5 million with social enterprises leading to the creation of 1,253 jobs directly or indirectly at social enterprises. The partners have consistently reported a strong performance on cost and quality from their social enterprise suppliers. In addition, the partner corporations benefited from supply base diversity, external recognition, enhanced engagement within the procurement team, innovation and improved sustainability across their end-to-end supply chains. Andy Daly, Head of Corporate Partnership at Social Enterprise UK says:
The 24 large businesses on the Buy Social Corporate Challenge are working with us to combine the social logic of business with the commercial logic of business. It is ‘both and’ rather than ‘either or’ -whenever the business case stacks up and they have brought a social enterprise into their supply chain, they see significant benefits in terms of innovation, sustainability, diversity and social value.Andy Daly, Head of Corporate Partnership at Social Enterprise UK
Although the benefits are often realised when corporations include social enterprises into their supply chain, the formation of these relationships requires massive efforts on all sides. This is consistent with any corporate activism which requires efforts, movements and champions to build new norms, values and practices. These efforts may include creating internal awareness and commitment, building trust and relationships with social enterprises and integrating social procurement with other corporate activism initiatives.
Corporate activism is growing. The next step is to enhance its impact and sense of achievement through integrating activism efforts across the organisation. The integration of social procurement with other corporate activism initiatives will create further engagements across different functions, build stronger commitment, and lead to a clearer direction and significant internal and external exposure. For instance, social procurement can play a stronger role in conjunction with wider corporate efforts to achieve a sustainable supply chain, inclusive corporation, organisational justice and authentic activist brand.
Dr Kamran Razmdoost is an Associate Professor of Marketing at ESCP Business School and an Honorary Senior Research Fellow at University College London. Kamran delivers lectures on consumption experience, strategic marketing and brand activism on a number of postgraduate and executive development programmes.
Dr Leila Alinaghian is Senior Lecturer and Deputy Director of MSc in Management at Cranfield School of Management. Leila lectures on inter-organisational relationships, social network analysis and analytical techniques. Leila’s research is broadly focused on Sustainable Supply Chains, Social Procurement and Social Enterprise-Corporate relationships.
Feature photo credit: freshidea – stock.adobe.com.