PUBLIC RELATION OF THE FAST FOOD INDUSTRY - CHINA
Chapter 4 Comparison of CSR between Chinese Traditional Restaurant Industry & Fast Food Industry in China
As a basic assumption in comparing traditional and fast food restaurants in China, traditional restaurants are defined as food establishments arising from the Chinese cultural context ( 2001) while fast food restaurants developed in the western food culture and introduced into the Chinese market ( 2004). Comparing the corporate social responsibility of Chinese traditional restaurants and fast food restaurants and chains in China requires criteria applicable to both food industry sectors. The similarities and differences of traditional and fast food restaurants in the Chinese market will be determined based on the following points: 1) approach or perspective on corporate social responsibility; 2) corporate social responsibility goals; 3) strategy or corporate direction on corporate social responsibility; 4) community concerns assumed as the firm’s corporate social responsibility; and 5) actual corporate social responsibility activities.
CSR Approach/Perspective
The similarity between the CSR approach of traditional and fast food restaurants is their focus on a common community making up their market. Traditional restaurants consider the community as its market so that their assumption of corporate social responsibility and the degree of commitment to corporate social responsibility reflects the importance accorded to the community or segments of the community as markets. Apart from this, it is also from the community that traditional restaurants develop their supply chain links. This means that the resources these firms need in achieving continuous service comes from the community and it is also the community that its customers come from.
Fast food restaurants also consider the Chinese community as its market, especially since there is a high degree of cultural unity in China ( 2001) resulting to common cultural practices. Since fast food restaurants try to target as many customers as possible, there is minimal segmentation of the market. The involvement of fast food restaurants in the Chinese community also covers both supply of resources and market for its end products. In long time operating fast food restaurants in China, all employees are Chinese and foreign employees are only placed in management during the first few months of operation of new fast food restaurants or franchises. Raw food products are also mostly sourced from the local community. These similarity means that traditional and fast food restaurants both operate in the same business environment, sharing the same resource suppliers and end customers.
However, traditional and fast food restaurants also differ. The difference is that traditional restaurants hold an inside looking in perspective as a Chinese business firm operating in the Chinese market. Traditional restaurants hold the position of belongingness in the Chinese community. This means that traditional restaurants know the community and determine their business objectives and practices based on their knowledge. (, 2003)
Fast food restaurants have the outside looking in perspective in introducing their business firms in China ( 2003). Before introducing the restaurant, these businesses have to conduct research on the Chinese community to determine strategies in effectively penetrating the market with a different culture than their previous business environment. Greater effort exists for fast food restaurants to integrate the business with the market environment in China. Although both traditional and fast food restaurants similarly focus on the Chinese community as their business environment and market, these have different corporate social responsibility perspectives because of the difference in their relationship with the community.
Corporate Social Responsibility Goals
Traditional and fast food restaurants as firms similarly focusing on the Chinese community as its market recognize their corporate social responsibility in areas involving their acceptance by the community. Both types of restaurants are concerned with practices acceptable to the community with the purpose of converting that acceptance with the decision to purchase the products of these businesses.
In this sense, both types of restaurants apply both corporate social responsibility principles. On one hand, these businesses employ the defensive and business focused principle ( 2003) through their goal of ultimately expanding their customer base while on the other hand, these firms apply the positive and broadly based principle ( 2003) by determining the community activities they can implement to build and strengthen their business links with the community.
While their corporate social responsibility goals have similarities, there are also differences. In the case of traditional restaurants, the goals is more to enhance and maintain links with the community ( 2003) rather than to build a relationship with the market while in fast food restaurants the primary goal is to build business relations with the community. Because of this difference, fast food restaurants apply more of broadly focused corporate social responsibility in order to introduce the business in the community and build a good reputation while traditional restaurants rely more on business focused corporate social responsibility activities to enhance their good reputation in the community. Traditional restaurants take the defensive stand both in defending their market from the entry of fast foods and in maintaining their market base while fast food restaurants take the offensive stand in initiating action to gain the compliance of the community and compete with previously existing restaurants.
In the case of Quanjude, a traditional Chinese restaurant, its corporate social responsibility goal is to maintain its customer base by continued dedication and compliance with Chinese culinary practices appreciated by its patrons. Thus, the restaurant maintains its tradition recipe and cooking techniques of its famous roast duck as a sign of its commitment to tradition.
In the case of KFC, McDonalds and Pizza Hut, the corporate social responsibility goal is to build a good business reputation with the community, despite its western origin, through its introduction of affordable and convenient food services. While Quanjude seeks to preserve tradition, fast food restaurants address the needs of the changing Chinese culture. Traditional restaurants seek to maintain business stability through the preservation of tradition while fast food restaurants opt to achieve dynamism in the Chinese market by addressing the changing needs of the community.
Corporate Social Responsibility Strategy
Traditional and fast food restaurants in China both apply the corporate social responsibility strategy of adding value or benefit to their services ( 2005) but the similarity ends with this common aspect. The particular benefits and the manner of adding these benefits to their service differ. Traditional restaurants add value to their service through the affirmation of cultural with its local customers and promotion of culture with foreign customers (, 2003). Traditional restaurants maintain cultural business practices such as family management of the business, consistent compliance with traditional recipes and cooking techniques, and incessant respect for the position, rank or status of its customers. The strategy is to maintain the good reputation of the business and its owners with consistent adherence to cultural practices of the community. This is in recognition of the strong cultural attachment of the Chinese families and communities as a source of their identity and heritage. ( 1996)
Fast food restaurants, being of western origin, adhere to the corporate social responsibility strategy of balancing their western practices with the acceptable Chinese practices. Still, the strategy of balancing interests is in itself a western idea. The assumption of corporate social responsibility is directed by its western cultural thrust. Commonly, the resulting strategy involves the implementation of internationally accepted corporate social responsibility practices as a means of balancing cultural differences. (, 1995) For fast food restaurants, the strategy becomes gaining the acceptance of the Chinese community of western practices. In the case of KFC, McDonalds and Pizza Hut, the corporate social responsibility that these business firms assume are western in origin but applied in the Chinese context.
Community Concerns or Issues Assumed as Corporate Social Responsibilities
Traditional and fast food restaurants recognize community issues and assume responsibility over these issues. Common corporate social responsibility issues are support for the livelihood of communities, employment and social services. However, the issues recognized by traditional and fast food restaurants as forming part of their responsibilities differ.
The difference is based on the values being adhered to by these types of firms. Traditional restaurants adhere to both economic and social concerns as part of their cultural affirmation strategy. Fast food restaurants hold economic concerns and assume corporate social responsibility as required in the management of the economic aspects of the business. ( 2001)
Traditional restaurants take responsibility for both economic and social community concerns. The concerns of the community that traditional restaurants assume cover their contribution to the economic viability of the community. For a community, deriving income from one’s own business or from employment precedes consumption decisions. (, 2001) This means that if traditional Chinese restaurants want customers, it has to support the livelihood of the community and provide employment. Traditional restaurants develop long-term relationships with families in the community not only as reliable suppliers but also allies in the promotion of the restaurant.
In the case Quanjude, it applies traditional recipes and cooking techniques developed especially for the restaurant by its owners or by an employee of the owners. Knowledge of the recipe and cooking techniques are transmitted from one generation to the next. This means that the restaurant has to employ different generations of cooks and suppliers to maintain its traditional food preparation process. This not only establishes the restaurant in the community but develops alliances between the family owning the restaurant and families of the people employed in the restaurant.
Fast food restaurants adhere to economic concerns in their dealing with community. As such, these business firms only determine their responsibility based on international standards. Commonly, fast food restaurants assume responsibility for community welfare through the quality of their service. Added value revolves around charity and welfare support services accorded to their employees and the community in general. ( 2003)
In the case of KFC, McDonalds and Pizza Hut, the concerns they recognize as part of their responsibility commences with their quality service assurance and extend to employment, education and health support services to the community. Since, fast food restaurants consider mainly economic concerns there is always the weighing of economic cost with expected returns unlike in traditional restaurants where social concerns belie the primary consideration of monetary cost.
Corporate Social Responsibility Activities
Traditional and fast food restaurants similarly implement economic activities except that traditional restaurants incorporate economic with social concerns.
As mentioned earlier, traditional restaurants assume responsibility for supporting the economic needs of the community in the long term and maintaining the social status of the families with which the restaurant has formed an alliance. Although, traditional Chinese restaurants cannot hold responsibility for the socio-economic welfare of the entire community it supports the economic stability of the community by building long term partnerships with families engaged in supplying its resource needs.
Quanjude has retained business relationships with the same families residing in the community raising ducks and other raw food materials as well as cooks and service crew. As the business expanded, the restaurant was able to expand its alliance with other families. As more ducks were required to meet the growing demand, the restaurant included other duck raisers as suppliers, especially if its original supplier has not expanded its business. Concurrently, Quanjude took responsibility during the bird flu scare by conducting tests in behalf of its suppliers to dissuade the fear of customers. Apart from this, Quanjude also took responsibility for the growing biodegradable waste produced by food businesses by minimizing its waste from spoiled products and unsatisfactory food.
Fast food restaurants assume responsibility for economic concerns so that its corporate social responsibility activities centre on the economically viable ventures both for the community and for itself. Common activities implemented by fast food restaurants are benefits to employees such as scholarships and skills training. This is made to provide income for the community, enhance the skills of its employees in handling the food business, and provide opportunities for career development through education.
KFC supported the establishment and provided funding to non-government organizations catering to the needs of children and the youth by providing scholarships and employment to young people. McDonalds has established a health centre located near the hospitals where children and their families from the provinces can rest before and after their surgery appointments. Pizza Hut sponsors a reading incentive program for children to encourage children’s passion for reading.
These similarities and differences show the varied approach and application of corporate social responsibility in China between traditional Chinese restaurants and fast food restaurants. This is highly due to the differences in the cultural background from which these businesses emerged entailing concurrent differences in corporate social responsibility approach, strategy, goals, concerns and activities. Thus, corporate social responsibility is dynamically exists in China.
Chapter 5 Chinese PR & Chinese Restaurant Industry
Chinese public relations is a manifestation of the Chinese culture so that development in public relations follows the concurrent development in Chinese tradition (, 2000). Chinese restaurant industry constitutes one of the oldest culture based business sectors in China because the country has a rich culinary tradition ( 2002). Discussing Chinese public relations necessitates the consideration of the Chinese culture and the developments that occurred in the Chinese community after the country opened its doors to the world.
Public Relations in Chinese Restaurant Industry
According to (2001), Chinese firm are more correctly referred to as business families instead of using the common term family business. This is because in Chinese business practice, the family is the primary consideration and the business as the secondary consideration. This is not to say that Chinese businesses weakly manage their businesses. This just means that in Chinese businesses, family affairs are to a certain degree integrated into the business operations so that family concerns are important aspects of business decisions.
This results to the business value of owing duty to the family by managing the business. In compliance with one’s duty to family, members of the family managing the business always consider the reputation and honour of the family in making their decisions. Partnerships and alliances primarily depend upon the ability of business partners to enhance family reputation. Although family loyalty has weakened with the establishment of communist rule, the shift of the China from a communist to a regulated economy with many government businesses being managed by families has brought back the importance of family in business values and decisions. (2002)
Public relations of Chinese businesses are established through the reputation of the family. It is through the public perception of the family managing the business that the firm is able to communicate to the public and the public is able to recognize and relate to the business. A good family reputation as a public relations mechanism is built through compliance with acceptable practice, which is subject to the changes that occur in society. (2003)
One acceptable family practice is family-directed operation of the business (, 2001). A patriarchal or matriarchal leader who is usually the founder of the firm or a successor to the position manages a typical Chinese business. Other members of the family are entrusted with positions in the business. It may happen that members of the extended family establish their own business so that the aggregate of these businesses leads to the formation of a network.
Since the family controls the business, the members of the family apply a hands-on approach to management with every member given a position accorded with responsibility and accountability for the business. Decision-making is highly informal with issues being discussed during family gatherings and events.
In the Chinese restaurant industry, control over the business resides with the family. An exclusive and renowned family recipe and well-known culinary skills of the family usually spur the commencement of the business. A reputation of culinary prowess is the best public relations tool for Chinese restaurants. Apart from this, a reputation for excellent service and a firm hold over business operations enhances the reputation of the family that is associated with the restaurant.
Another acceptable family practice comprising a public relations tool is central leadership in business (2001). It often happens that the organisational chart of the business belies true leadership of the business. Nevertheless, there is always a central head given the responsibility of making the final decision especially when the other members of the family do not agree of a course of action. The reputation of the central figure helps the company communicate a positive message to the public.
In Chinese restaurants, it is important for the central head to be visible to attract customers. The ability to act as a good host is also a valuable trait to boost the reputation of the restaurant. Often, central figure in the restaurant has to be in tune with society to know the appropriate treatment of guests. It is through information and skill that central decision makers of the restaurant are able to build a good impression on the community.
Still another acceptable family practice important to public relations is the enduring roles of family members in the business and family obligations ( 2001). Management of the business and the central governing figure shifts from one generation to the other. Greater premium is accorded to enduring family businesses because it proves the management prowess of the family. As the family expands, several sons mean one is chosen to continue the family tradition so that other siblings establish their own business resulting to diversification of businesses.
In Chinese restaurants, higher value is given by the community to enduring recipes and culinary techniques that built the business. This is because the business and the family managing the business has already its proven its merit to the public implying a stable customer base.
Still another acceptable family practice helpful in public relations is the characteristic of Chinese businesses of being family financed so that financial accountability for the business also rests with the family ( 2001). Formal accounting for the financial performance of the company is primarily done only for the purpose of taxation. Accounting by the members of the family is made through mental notes and discussed orally. Due to informal accounting practices, decisions on finances are made with ease through reliance upon personal recommendations.
In Chinese restaurants, financial viability is an indication of the business prowess of business owners that serves as the foundation of a good reputation in the community. Families running restaurants prove their skills in financial management through a show of wealth. Restaurant owners usually host banquets during the family gatherings and special occasions by inviting close and distant relatives and other prominent families in the community. After a successful hosting of the event in the home or in the restaurant, word of mouth would spread the economic status of the family.
Although, globalization has catalysed change in the Chinese family through the influence of western values the family as the core of the business is expected to endure. Younger generations have been educated in western schools and on contemporary western business techniques. As such, some businesses are experiencing re-organisation in terms of succession, management, and accounting. However, the value accorded to the family remains so that Chinese restaurants, although seeking expansion into foreign markets still adhere to family values as a business success factor. ( 2000)
Apart from compliance with acceptable family values and business practices, achieving acceptable levels of public relations requires skilful networking relations. Chinese networking is distinguished from western networking because the former is relationship based while the latter is transaction based (2004). The difference implies that the measurement of success in western culture is wealth while business success among Chinese businesses depends upon the extent of connections that the business owners have.
Networking is covered by the Chinese term Guanxi translated in English as connections. A deeper and contextual consideration of the word implies connection with a mutual obligation, personal affection towards the family and shared experiences, and goodwill. The concept of Guanxi that describes networking in China, involves personal connections intertwined wit business relations. ( 2004)
In the restaurant business, Guanxi is an important concept because it is through the effective establishment of connections that the restaurant is able to develop a customer base, made up of personal and business acquaintances. It is also through the development of valuable connections that the family owning the business communicates a positive reputation with the public and build mutually beneficial public relations.
Aside from helping the Chinese business build a good relationship with the public, networking in the Chinese context also provides a means by which businesses deal with each other. Good relationships are built through networking since a good reputation and respectable dealings with another business leads to an array of other business network in the same way that misunderstandings are patched through commonly existing networks. (, 2003)
Naturally, networking starts within the family and spreads outwards to other acquaintances and then to strangers. The immediate family comprise the initial network for then spreads to the extended family. Then the network further extends to close friends who are considered as part of the family. The next outer layer of network for the business comprise connection of the business owners with other people through shared common experiences such as in school. At the outermost layer of the business network are strangers considered with caution until the relationship develops into a closer network. This network connection is person-based so that if a person leaves the business, he or she takes away the network. ( 2001)
In Chinese restaurants, Guanxi is a valuable public relations mechanism because of its exponential effect on customer base and patronage. Family members, both immediate and extended, are expected to patronize the restaurant and develop their own network as a contribution to the business by building the honour of the family. The good reputation of the restaurant spreads through word of mouth and network influences. However, as the network multiplies, there arises the responsibility for the restaurant owners to maintain the good relationship and deal with any conflicting interests between members of the network.
Chapter 6 Research Analysis & Data Integration
Corporate social responsibility is an important public relations strategy in China despite its western origin. Although corporate social responsibility and public relations are western ideas introduced in China, these concepts find application in the Chinese experience. Chinese business practices may not describe building personal relations and community links as public relations and networking strategies as corporate social responsibility, but these constitute expressions of the concept. Thus, corporate social responsibility and public relations are applied in China even if these technical terms are just being discovered as business strategies as the country embraces globalisation.
CSR as PR Strategy of Business Firms in China
Public relations in China passed through several developments within more than a decade after the country embraced globalisation. Initially, public relations was practiced with great emphasis towards interpersonal communications and networking. This developed from the organisational structure of Chinese businesses revolving around the family as the core of the firm. Business families meant the development of a relationship of understanding between the business and the public through personal networks of family members with other people.
However, as globalisation intensified and with the weakening of the communist government, China decided to engage in international relations. Building business relations with foreign partners, to expand Chinese businesses into the international arena, required learning about the business practices of other cultures particularly the western view. The children of many Chinese business families obtained education in western schools and came back to China with notions the western conceptualisation of public relations. In China, schools were also trying to meet demands for mastery over international business management and strategies and ones of the courses offered was public relations.
On the other hand, international businesses started to recognize the country as a potential economy for the expansion of their operations. Many foreign owned business firms entered China through joint ventures or the establishment of subsidiaries and franchises. These businesses applied international business principles in the China together with the necessity of concurrent integration of Chinese business practices in their operations.
Public relations in modern China is characterized by the interface between the Chinese business practices and international business strategies. Public relations as a formal business strategy is increasingly becoming accepted and applied by many Chinese businesses operating or seeking to operate internationally as well as Chinese domestic companies seeking compliance with international standards.
With the modernization of Chinese businesses, public relations strategies started to shift from personal networking to mass communications such as advertising and promotional activities. This was caused by the growing media channel options and the corresponding growing appeal of mass public relations pitches to a modernizing Chinese community. The increasing scale of operation due to growing competition and the need for expansion also influenced the acceptance of mass communications public relations strategies. The need for stronger and widespread marketing to large and diverse groups because of the recognized improvement in the people’s purchasing power and the need to conquer foreign markets through the international media also influenced the use of mass communications.
These developments resulted to a spectrum of public relations strategies caused by the differing response of Chinese businesses to new principles and practices in public relations. Small business firms employing the traditional public relations strategy of personal networks had the greatest resistance towards the new idea. This is primarily because they perceive no benefit from the new strategy as personal networks sufficiently support their scale of operations.
Middle level Chinese business firms adopted mass communication according to its potential contribution to their business goals. Medium sized Chinese businesses seeking expansion of their domestic market and eventually towards the international market consider mass communications as a more efficient public relations strategy but middle level businesses without an immediate goal to expand its market are likely to adhere to their established personal networks.
Large businesses, which are often geared towards the international market and with the resources to engage in elaborate public relations activities, utilize mass communication channels to develop a relationship of understanding with the public that is translated to entry into new markets and sales.
The adoption of western public relations concepts is not an easy task. Chinese business firms, using mass communications have to find effective ways of integrating personal networking with mass communications because of the recognition that both strategies are significant to the business, personal networks as the foundation of the business and mass communications as the expansion strategy of the business. The difficulty of integrating these two public relations practices are reflected in the existence of dual public relations practice. When dealing with foreign partners or the foreign market mass communications is the primary public relations mechanism but in dealing with the Chinese market personal network assumes a more important role.
Streaming from the modern application of public relations in Chinese businesses, corporate social responsibility as a public relations strategy applies depending on the public relations thrust of a particular business. The acceptance of the western public relations strategy of mass communication involves the assumption of corporate social responsibility also in the western context. The difference in the corporate social responsibility between Chinese businesses that adopted and refused to adopt western public relations conceptions is that the former assume economic while the latter adhere to both socio-economic corporate social responsibility.
Chinese businesses using personal networking as a public relations strategy assume corporate social responsibility related to its public relations objectives. Since the goal is to expand the personal network, the corporate social responsibility assumed by the business through the family managing the business covers issues affecting the members of the network such as interference in the business of its suppliers, providing employment the family of important networks, and supporting strategic businesses or families allied with the business firm.
The thrust of the corporate social responsibility assumed by Chinese businesses adhering to personal networking as public relations strategy is towards issues that lead to the enhancement of personal networks within the community. Mutually beneficial relationships develop, with the networks expecting the business to support their interests in the same way that the business expects the support of its networks. These relationships are important since these bear upon the honour and trustworthiness of the families.
Businesses in China with dual adherence to both personal networking and mass communications also assume dual corporate social responsibilities. Chinese businesses expanding into the international market assume responsibility for social issues affecting their personal networks as well as its international market. Apart from looking after the interests of networks in the community, concerns of the international markets are also recognized especially compliance with international standards on quality control and the engagement in welfare programs to its customers.
Businesses in China of western origin applying mass communications as a public relations strategy assume corporate social responsibility similar to the issues they address in their original market. In the case of the establishment of subsidiaries, the public relations strategy of the subsidiary adheres to the practices of the mother company and employs locals to identify and deal with local issues. In the case of franchises, the franchisor requires adherence to the practices of the mother company since international standards are required to be applied. Joint ventures, depending upon the sharing of management and capital contribution, allow the assumption of personal network and mass issues.
Corporate social responsibility is an important public relations principle in China. However, the nature and manner of the assumption of corporate social responsibility varies depending upon the scale of operations of the business firm and its public relations goals. The assumption of corporate social responsibility is highly linked to the public relations strategies of Chinese businesses.
CSR as PR Strategy in the Restaurant Industry in China
Corporate social responsibility is a relevant public relations strategy in the restaurant industry in China. As previously mentioned, the assumption of corporate social responsibility depends upon the public relations thrust of the Chinese business.
In traditional restaurants, corporate social responsibility becomes a public relations strategy by providing the means of actualizing the public relations goals of the business. Traditional Chinese restaurants relying upon personal networking assume corporate social responsibility issues such as defending the reputation of their suppliers in the community or helping families with the potential to become a valuable network in order to prevent the weakening of its network links. In this way, its public relations objective of developing a stable network and expanding this network is met.
Traditional restaurants catering to the international market utilise corporate social responsibility to develop a good relationship with the public through both network building with families in the community and promotional activities addressing social issues such as unemployment, lack of education, and health concerns. International Chinese restaurants assume responsibility for these social issues to promote the restaurant to international customers but at the same time maintain their local networks through continuous assumption of issues affecting the families in the community comprising its valuable network.
Fast food restaurants owned by Chinese families utilise corporate social responsibility as a public relations practice through their provision of good food and good service to customers as means of developing a good relationship with the public. Networking of this sort is on a lesser scale and with lesser formality than in traditional restaurants. This is because the target customers usually belong to the working class so that compliance with the formalities involved in food preparation and service, expected to help develop a good relationship with the public, are less elaborate.
Fast food restaurants introduced into China through franchising utilise corporate social responsibility as a public relations tool by applying activities developed for the international market that address social issues. However, these types of fast food restaurants are allowed the flexibility towards the assumption of corporate social responsibility issues particularly occurring within the new market. In markets where there is a unified and strong culture influencing consumption decisions, fast food restaurants assume responsibility the cultural integrity of the community by respecting culinary and food service practices of that culture.
CSR as PR Strategy of Traditional and Fast Food Restaurants
Corporate social responsibility, as a public relations strategy, applies to both traditional and fast food businesses by linking the business with the public through community and customer focused activities. Corporate social responsibility practices are integrated into the value system of the business or the family managing the restaurant in cases of personal network-reliant restaurants while these are enshrined in the business plan of the restaurant directed towards mass communications as public relations strategy.
Chinese restaurant businesses using personal networking as a public relations strategy assume corporate social responsibility related to its public relations objectives. Since the goal is to expand the personal network, the corporate social responsibility assumed by the business through the family managing the business covers issues affecting the members of the network.
This is exemplified by the case of Quanjude. This Chinese traditional restaurant assumed responsibility for addressing the issue of bird flu by conducting poultry testing in behalf of its duck suppliers as affirmation and strengthening of its network of suppliers at the same time developing networks with customers in the community.
Chinese restaurant businesses primarily relying upon mass communications as its public relations strategy assume corporate social responsibility over matters that concern its customers based on the assumption that its customers are members of the community. In Chinese restaurants of western origin, the assumed social responsibilities are contained in its business plan.
Fast food restaurants and chains in China assume social responsibility for issues affecting the international market and concerns specific only to the Chinese community. McDonalds is currently assuming responsibility for the health of its customers after successive suits were made against the fast food restaurant alleging that the food served by the restaurant caused children and adults to become obese. McDonalds is trying to recover from this issue through the implementation of public relations activities such as providing people with more vegetables on the menu and establishing a caloric and nutrient measure of its food in the internet to inform customers about the food they eat. In China, McDonalds assumed responsibility for respecting the Chinese culture by integrating vegetables and soups in the menu.
The relationship between corporate social responsibility and public relations in traditional and fast food restaurants is captured by the view that corporate social responsibility is utilised as a public promotions practice either as inward or outward looking or both. The manner of applying either one or both perspectives depends upon the public relations goals and direction of the business.
If the restaurant is geared towards inward business-oriented public relations, the firm is likely to focus on promotional activities affecting its customers in order to build a link between the restaurant and the community or market. If the business is more outward looking and community focused, it would sponsor community activities that directly address issues faced by the community. The restaurant obtains indirect benefit from the activities through its increased customer-base.
Regardless of how traditional and business restaurants choose to assume corporate social responsibilities as their public relations activities as influenced by their public relations goals, one important factor that influences the public relations decisions of restaurants is resource allocations. Small traditional businesses and fast foods in China without the resources needed to support elaborate mass communications projects through television and internet advertising and promotions are not likely to engage in costly public relations but depend upon network building. Fast food restaurants, particularly franchises of international restaurants benefit from the assumption of social responsibility of the mother company as expressed in international advertising and promotions. In China, fast food restaurants of this type also have the resources to allocate resources for projects addressing social issues experienced by their customers who comprise the local community.
CSR as PR Strategy of Pizza Hut in China
To study the application of corporate social responsibility as a public relations strategy in the case of Pizza Hut in Guangzhou and Shenzhen, questionnaires were floated to 10 managers of different Pizza Hut branches, 5 coming from each city. The questionnaire covered three general information groups, which are 1) corporate social responsibility and a public relations function; 2) application of corporate social responsibility programs; and 3) evaluation of the restaurants corporate social responsibility.
From the data gathered, Pizza Hut restaurants in China have public relations strategy. Although answered in different ways, the answers generally revolve around enhancing brand equity in order to expand the restaurant’s customer base through advertisement and promotions. Most cited ‘Customer Mania’, the name for the public relations campaign of the restaurant chain. Pizza Hut restaurants in China also have corporate social responsibility. Majority of the respondents cited the book rewards program of the restaurant chain, while others added employment opportunities for the community and support for the livelihood of local communities. The data shows that Pizza Hut restaurants in China adopt the public relations strategy and the corporate social responsibility of the mother company and its western counterparts.
Pizza Hut restaurants utilize corporate social responsibility as public relations strategy. All respondents answered that their corporate social responsibilities address the public relations objectives of the restaurant. This means that even if there is no direct recognition of corporate social responsibility as a public relations function, in application corporate social responsibilities meet public relations objectives.
Pizza Hut managers and employees in Guangzhou and Shenzhen are informed of the restaurant’s corporate social responsibility. Part of the orientation process covers information on the corporate social responsibilities assumed by the company together with the activities designed to meet these responsibilities. This is required since managers and employees directly participate in these activities. Aside from the orientation, employees are not given other training programs on corporate social responsibility.
Majority of the managers of Pizza Hut restaurants in the two cities recognize that they are given leeway to determine their corporate social responsibility because the corporate social responsibilities established by the mother company are its standard responsibilities for all restaurant chains. However, the managers can identify specific responsibilities the restaurant can assume in the specific market. Despite this recognition, only a few restaurants have identified and developed environment specific corporate social responsibilities directed towards community social issues. The particular social responsibilities assumed by a number of Pizza Hut restaurants include purchase programs where a percentage of sales go to victims of calamities.
There is no corporate social responsibility applied to all Pizza Hut chains in China. However, all Pizza Hut restaurants host Chinese holidays particularly New Year. Moreover, Pizza Hut restaurants apply traditional Chinese service to customers, particularly to elders, although most restaurant chains attract young people.
In terms of the population segments targeted by the corporate social responsibility activities of Pizza Hut, all the respondents answered that their target population in terms of cultural background are both Chinese and foreign customers since Guangzhou and Shenzhen are urban centres hosting businesses as much as households Pizza Hut is often to both Chinese and foreign customers. In relation to income segmentation, Pizza Hut restaurants in China unanimously cater to the middle class population. However, some of the restaurants also cater to either lower or upper income groups despite its customer base comprised primarily of middle income groups. In terms of the interest group targeted by the corporate social responsibility of Pizza Hut restaurants in Guangzhou and Shenzhen, majority of the respondents answered that their activities cater to customers while only a number of respondents answered that their activities target everybody.
Almost all of managers of Pizza Hut restaurants in Guangzhou and Shenzhen believe that the corporate social responsibility assumed by the restaurant and addressed by its CSR activities are effective in meeting the public relations objectives of the restaurant chain. Most attribute the success of the corporate social responsibility activities to its role in linking the company with the assumption of these social responsibilities that enhances brand equity. The few that answered no cited insufficiency of the issues assumed as responsibilities by the restaurant because these are not environment specific.
Generally, Pizza Hut restaurants in Guangzhou and Shenzhen utilise corporate social responsibility as a public relations tool. Although, there are slight differences in the CSR population segments targeted, CSR activities are perceived to be effective in meeting the public relations goals of the restaurant chain.
Chapter 7 Conclusion & Recommendation
Conclusion
Public relations is a new field of study in China because it has just been reintroduced recently. However, contrary to common perception, public relations persist in the Chinese business culture although not in the way that the concept is understood and applied by western businesses. In traditional restaurants, public relations is expressed in Guanxi or personal networking as a mechanism of building relationship between the business and its owners with other families in the community.
Corporate social responsibility is considered in China as a public relations practice because of the role that the assumption of social responsibility by the business firm plays in creating an understanding between the business and the community. However, corporate social responsibility finds different applications depending upon the characteristics of the business. Corporate social responsibility reflected in the business practices of restaurants in China involves both business and broad focus. Traditional restaurants tend to be more broadly focused in the assumption of corporate social responsibility because they hold an inside perspective of the community so that the focus is on maintaining existing links with families in the community. Fast food restaurants of western origin tend to be more business focused because they hold an outside looking in view implying that these firms has to build equity for their restaurant brands in a new market through the application of international standards.
In the case of Pizza Hut restaurant chains in the cities of Guangzhou and Shenzhen, corporate social responsibility is deemed as a public relations practice through the implementation of a standardized corporate social responsibility for all restaurant chains. The primary research issue arising in the course of the study are the differences in the perception of corporate social responsibility as a public relations practice among Pizza Hut fast food restaurant chains in China. Nevertheless, one thing is absolute, that all Pizza Hut fast food restaurant chains in China assume corporate social responsibilities as their public relations strategy despite differences in the assumption of corporate social responsibility specific to the Chinese market apart from that established for the international operations of Pizza Hut.
Recommendations
To expand the study of corporate social responsibility as a public relations strategy in the case of Pizza Hut restaurant chains in China, the restaurants covered may be extended towards Pizza Hut chains in rural areas or towns apart from the branches in cities. This will be done to determine whether similar results would be obtained from data gathered from chain managers when the assumption is that the assumption of corporate social responsibility as public relations strategies of Pizza Hut restaurants in rural areas or towns are influenced more by traditional public relations practices. This is important in further elucidating on the application of corporate social responsibility as a public relations strategy of business firms in a globalizing China.
Bibliography
Appendices
Appendix 1: Questionnaire for Pizza Hut Managers in Guangzhou & Shenzhen
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Personal Information
Name: ____________________________________ Age: _________________________
Position: __________________________________ Years of Experience: ___________
Branch/Location of Restaurant: __________________________________________________
Nationality: ___________________________________________________________________
______________________________________________________________________________
Corporate Social Responsibility as Public Relations Practice
Instructions: Please choose an answer to the question from the choices given and provide an explanation if applicable.
1. Does the restaurant have a public relations strategy?
Yes _____ No _____
If yes, can you describe your public relations strategy? ____________________________________________________________________________________________________________________________________________________________
2. Does the restaurant have a corporate social responsibility program?
Yes _____ No _____
If yes, can you describe your corporate social responsibility programs?
____________________________________________________________________________________________________________________________________________________________
3. Do these social responsibility programs address the public relations goals of the restaurant?
Yes _____ No _____
4. Are restaurant managers and employees informed of the corporate social responsibility of the restaurant?
Yes _____ No _____
5. Are
restaurant managers and employees trained on the achievement of the corporate
social responsibilities of the restaurant?
Yes _____ No _____
6. Is there a uniform corporate social responsibility program for all restaurant chains?
Yes _____ No _____
7. Are the different restaurant chains allowed to develop its own corporate social responsibility program?
Yes _____ No _____
If yes, does your restaurant apply its own CSR?
Yes _____ No _____
8. Is there a corporate social responsibility program exclusively developed for China?
Yes _____ No _____
Application of Corporate Social Responsibility
Instructions: Choose your answer from the choices given below.
9. What segment of the population is targeted by the restaurant’s corporate social responsibility in terms of cultural background?
Local Chinese Customers _____
International Customers _____
Both _____
10. What segments of the population is targeted by the restaurant’s corporate social responsibility in terms of income? Check as many as applicable.
Low Income _____ Middle Class _____ High Income _____
11. What segments of the population is targeted by the restaurant’s corporate social responsibility in terms of interest group? Check as many as applicable.
Communities _____ Families _____ Single Individuals _____
12. What segments of the population is targeted by the restaurant’s corporate social responsibility in terms of market?
Everybody _____ Customers Only _____
Evaluation of the Restaurant’s Corporate Social Responsibility
Instructions: Choose your answer from the options given and/or answer the supporting questions.
13. Do you think that the restaurant’s corporate social responsibilities are effective in meeting the public relations goals of the business?
Yes _____ No _____
14. If Yes, what do you think is the corporate social responsibility that mostly accounts for the efficiency? ____________________________________________________________________________________________________________________________________________________________
15. If No, what recommendations do you have in changing the corporate social responsibility of the restaurant?
____________________________________________________________________________________________________________________________________________________________
Appendix 2: Corporate Social Responsibility as Public Relations Practice
|
Question |
Answer |
|
|
|
Yes |
No |
|
1. Does the restaurant have a public relations strategy? |
10 |
0 |
|
2. Does the restaurant have a corporate social responsibility program |
10 |
0 |
|
3. Do these social responsibility programs address the public relations goals of the restaurant? |
10 |
0 |
|
4. Are restaurant managers and employees informed of the corporate social responsibility of the restaurant? |
10 |
0 |
|
5. Are restaurant managers and employees trained on the achievement of the corporate social responsibilities of the restaurant? |
7 |
3 |
|
6. Is there a uniform corporate social responsibility program for all restaurant chains? |
10 |
0 |
|
7. Are the different restaurant chains given room to develop its own corporate social responsibility program? |
8 |
2 |
|
8. Is there a corporate social responsibility program exclusively developed for China? |
0 |
10 |
Appendix 3: Application of Corporate Social Responsibility
|
Questions on Target Population Segments |
Answer |
|
9. Cultural Background |
|
|
Local Chinese Customers |
0 |
|
International Customers |
0 |
|
Both |
10 |
|
10. Income |
|
|
Low Income |
5 |
|
Middle Income |
10 |
|
High income |
5 |
|
11. Interest Group |
|
|
Communities |
2 |
|
Families |
5 |
|
Single Individuals |
10 |
|
12. Market |
|
|
Everybody |
2 |
|
Customers Only |
8 |
Appendix 4: Evaluation of the Restaurants Corporate Social Responsibility
|
Question |
Answer |
|
|
|
Yes |
No |
|
13. Effectiveness of CSR in Meeting PR Goals |
8 |
2 |
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