Fair and Lovely:Corporate Communications strategy (part 1)
Executive summaryA Stakeholder Management Audit, identifying Fair and Lovely’s (F&L) stakeholders and analysis how the organisation manages and communicates to three highly active stakeholder groups (Activists, the Media and Customers).
The audit identifies two areas that require improvements:
1. Incorporate a Brand Ambassador who represents the new narrative of the F&L's key message, of women empowerment in the work environment
A Stakeholder Management Audit, identifying Fair and Lovely’s (F&L) stakeholders and analysis how the organisation manages and communicates to three highly active stakeholder groups (Activists, the Media and Customers).
The audit identifies two areas that require improvements:
2. F&L release publicly a ‘value statement’ to reinforce the organisation's commitment to stakeholders, in particular, their support for empowering women in perusing their career.
2. F&L release publicly a ‘value statement’ to reinforce the organisation's commitment to stakeholders, in particular, their support for empowering women in perusing their career.
Introduction
Introduction
Definition of a stakeholder
Definition of a stakeholder
Freeman (1984) defines stakeholders as an individual or a group who have the potential to affect the achievement of the organisation reaching their objectives. This ideology can be viewed as present in recent communications practice as Carroll and Buchholtz (2012) identify stakeholders having autonomy over influencing the organisation's actions.
Freeman (1984) defines stakeholders as an individual or a group who have the potential to affect the achievement of the organisation reaching their objectives. This ideology can be viewed as present in recent communications practice as Carroll and Buchholtz (2012) identify stakeholders having autonomy over influencing the organisation's actions.
What is stakeholder management?
What is stakeholder management?
From a Public Relations perspective, Wood (2012) believes that Stakeholder Management involves identifying stakeholders, anticipating ways in which they may affect the organisational decisions and how to react to them. To successfully do this Carroll and Buchholtz (2009) argue that it is important to understand each stakeholder to predict and take care of their actions.
What is corporate communications?
The practice of Corporate Communications defined by Wood (2012) fixates on ‘harmonising all communications within an organisation to ensure consistency with corporate missions and objectives.’ However, Christensen et al. (2008) counteract this argument, stating that the practice should be less harmonising but, 'establishing meaningful values communicated in a way that encourages the organisation to behave in a way that is consistent’.
Fair and Lovely: Background
Hindustan Unilever Limited (HUL) noticed a demand for a fairness product in the market and developed a fairness cream name F&L in 1975 (Khan,2012). The beauty product became well known in the Indian market, slowly expanding internationally in 1998 (Khan,2012).
The original key message of F&L targeted eighteen to thirty-five-year-old young women (Srisha,2001) enforced South Asian beauty standards of being fair-skinned and how this factor enables success in life such as finding a suitable partner for marriage (Khan,2012). However, due to allegations of racism and malpractice of Corporate Social Reasonability (CSR), the brand changed its narrative (Karnani, 2007). The narrative changed to empowering women, producing campaigns supporting the new initiative such as, ‘Helping Women Get Online’. The campaign educates women to develop their IT skills to aid them in the work environment (Rai, 2013).
Identifying Fair and Lovely's stakeholders
Primary and Secondary Stakeholders (Carroll and Buchholtz, 1997)
To categories stakeholders, Carroll and Buchholtz (1997) argue there are two defined groups; Primary and Secondary Stakeholders (see Appendix A for reason for the positioning of each stakeholder group).
Carroll and Buchholtz (2012) define Primary Stakeholders as having a direct stake in the organisation whilst, Secondary Stakeholders have an indirect relationship with the organisation. This section of the report will categories and justify the positioning of each stakeholder concerning Fair and Lovely.
Existing Employees are categorised as Primary Stakeholders as they are actively involved in the function of the organisation by providing the labour from manufacturing to advertising the product. Due to their direct involvement within the organisation, they can influence the successfulness of the organisation, meeting Carroll and Buchholtz (2012) definition of Primary Stakeholder.
Another stakeholder identified which can be categories as a Primary Stakeholder is, Customers. Without the demand for the product by Customers, this can influence the organisation's strategic decisions, to successfully conduct their business. From this, it can be argued that customers are primary stakeholders due to their ‘direct stake in organisation’ and can be seen as most influential (Carroll and Buchholt,2012) to Fair and Lovely’s business structure.
Shareholders are another stakeholder identified concerning Fair and Lovely, as they directly invest money into the brand. It can be said that due to their direct invest, they can be categories as Primary Stakeholders. As the volume of money, the brand receives can influence strategic decisions such as advertising. Therefore, they do, ‘have a direct stake in the organisation and its success’ (Carroll and Buchholtz (2012), which categories the stakeholder group as primary.
The final cohort of Primary Stakeholders is; Suppliers, Retailers and Distributors. Each of the individual stakeholders has direct contact with the organisation in regards to supplying products either to the organisation or requesting Fair and Lovely products. Due to the demand for the service to provide products, this can influence the successfulness of Fair and Lovely, meeting the Carroll and Buchholtz (2012) definition of a Primary Stakeholder.
The Media can be categories as Secondary Stakeholders as Carroll and Buchholtz (2012) definition of secondary stakeholder focuses on external stakeholder influencing the reputation of the organisation. This can be explored through media channels such as The Times India (2019) and BBC (2016) with stories covering Fair and Lovely in a negative portrayal, which can influence other stakeholders in investing in the brand such as Customers and Investors.
The Government and Regulators such as India’s Ministry of Health and Family Welfare, Drugs and Cosmetics Rules (1945) and Central Drugs Standard Control Organisation can be identified as Secondary Stakeholders. For Fair and Lovely to sell their products they have to comply with the regulations otherwise their reputation may be damaged, arguably showcasing the indirect nature this stakeholder group has with Fair and Lovely, meeting Carroll and Buchholtz (2012) definition of secondary stakeholder.
Another Secondary Stakeholder group identified are competitors such as; Fairever and VICCO Laboratories (Karnani,2007). Carroll and Buchholtz (2012) define a secondary stakeholder as influencing the organisations ‘public standing’. Their competitors can affect the organisations stand in the market, which can influence public perception of the brand indirectly, meeting Carroll and Buchholtz (2012) criteria for a Secondary Stakeholder.
Activists such as the “#unfairandlovely’ (BBC,2016) and ‘Dark is Beautiful’ (Segran,2013) campaign can be categories as Secondary Stakeholders. As they are counteracting the organisation's key message of enforcing South Asian beauty standards, as an effect this arguably can damage the reputation of Fair and Lovely. Due to this factor, it can be said that Activists are categories as Secondary Stakeholders.
Stakeholder Typology (Mitchell et al.1997)
We can use Mitchell et al. (1997) Stakeholder Typology to identify which stakeholder group holds the highest priority to F&L in conjunction with the current issue presented (Rawlins, 2006).
Stakeholders who have been categories as Dominant Stakeholders are; Suppliers, Retailers and Distributors. The categorisation of the positioning is because without the product from their suppliers the organisation cannot use distributors to sell to retailers. Which can highlight the power each stakeholder has over the organisation, due to the linear business structure for Fair and Lovely. Also, due to their legal contract between each stakeholder group and the organisation, this can showcase aspects of legitimacy, which categorises the stakeholder group as Dominant.
Shareholders can also be categories as Dominant Stakeholder due to the legal and moral contract combining them to the organisation (legitimacy). Aspects of power can be evident as the money shareholders invest in the organisation can affect the strategic decisions the organisation can make such as expanding their product line.
Another stakeholder which can be identified as a Dominant Stakeholder is the Government and Regulations. As there are legal factors involved regarding the organisation meeting regulations, this can show elements of legitimacy and power. Arguably, there is no sense of urgency in the issue identified as the organisation has met all of the regulations, as they can sell their products.
Existing Employees can be identified as Dominant Stakeholders as without their service the organisation can not function, which can influence decisions making in regards to meeting existing employee needs (power). Due to the legal contract between the existing employees and the organisation, this gives them legitimacy, categorising them as Dominant Stakeholders.
The Media and Activists can be identified as Definitive Stakeholders due to the issue presented. As they have the power in regards to tarnishing the organisation's reputation, which can influence the decision making within the organisation. Evidence of legitimacy can be evident as there are moral issues present in regards to the branding of Fair and Lovely, of enforcing South Asian beauty standards. In addition, a sense of urgency can be present as it can be said that the issue has reached a crisis, in particular, Victim Cluster (Coombs,2012) due to reputation damage.
Concerning the issue presented, customers can be identified as Dangerous Stakeholders. As they may be influenced by the media or their moral compass with the organisations branding of Fair and Lovely. This can give them power as they may choose to boycott the organisation, which can influence the decision making within the organisation such as change the narrative of Fair and Lovely. Arguably, there is a sense of urgency as customers choosing not to purchase products by the organisation can deplete their business success.
As competitors do not have urgency and legitimacy but, have the power they can be identified as Dormant Stakeholders with the issue presented. Arguably, evidence of power is present as the negative media coverage around Fair and Lovely, can cause a gap in the market that other brands fill, to successfully market their product.
The issues highlighted by Karnani (2007) with F&L's Corporate Communications and Stakeholder Management are the allegations of racism and malpractice of CSR. Karnani (2007) explores the malpractice of CSR, stating that HUL values of providing the highest standard to their various stakeholders (in a particular society) are not transparent. As attempts of countering criticisms received by F&L fixate on the factor that skin complexion is one of the South Asian beauty standards. Further expanding this point stating, ‘a well-groomed person usually has an advantage in life’ (Islan et al,2006). Due to the response, many stakeholders have been affected, however, at various levels which can be explored through the Stakeholder Typology (Mitchell et al. 1997).
To analyse F&L's Corporate Communications Strategy, Dietrich's (2014) PESO Model can help identify the various media outlets the organisation uses to communicate its key message.
Fair and Lovely: Background
Hindustan Unilever Limited (HUL) noticed a demand for a fairness product in the market and developed a fairness cream name F&L in 1975 (Khan,2012). The beauty product became well known in the Indian market, slowly expanding internationally in 1998 (Khan,2012).
The original key message of F&L targeted eighteen to thirty-five-year-old young women (Srisha,2001) enforced South Asian beauty standards of being fair-skinned and how this factor enables success in life such as finding a suitable partner for marriage (Khan,2012). However, due to allegations of racism and malpractice of Corporate Social Reasonability (CSR), the brand changed its narrative (Karnani, 2007). The narrative changed to empowering women, producing campaigns supporting the new initiative such as, ‘Helping Women Get Online’. The campaign educates women to develop their IT skills to aid them in the work environment (Rai, 2013).
Identifying Fair and Lovely's stakeholders
Primary and Secondary Stakeholders (Carroll and Buchholtz, 1997)
To categories stakeholders, Carroll and Buchholtz (1997) argue there are two defined groups; Primary and Secondary Stakeholders (see Appendix A for reason for the positioning of each stakeholder group).
Carroll and Buchholtz (2012) define Primary Stakeholders as having a direct stake in the organisation whilst, Secondary Stakeholders have an indirect relationship with the organisation. This section of the report will categories and justify the positioning of each stakeholder concerning Fair and Lovely.
Existing Employees are categorised as Primary Stakeholders as they are actively involved in the function of the organisation by providing the labour from manufacturing to advertising the product. Due to their direct involvement within the organisation, they can influence the successfulness of the organisation, meeting Carroll and Buchholtz (2012) definition of Primary Stakeholder.
Another stakeholder identified which can be categories as a Primary Stakeholder is, Customers. Without the demand for the product by Customers, this can influence the organisation's strategic decisions, to successfully conduct their business. From this, it can be argued that customers are primary stakeholders due to their ‘direct stake in organisation’ and can be seen as most influential (Carroll and Buchholt,2012) to Fair and Lovely’s business structure.
Shareholders are another stakeholder identified concerning Fair and Lovely, as they directly invest money into the brand. It can be said that due to their direct invest, they can be categories as Primary Stakeholders. As the volume of money, the brand receives can influence strategic decisions such as advertising. Therefore, they do, ‘have a direct stake in the organisation and its success’ (Carroll and Buchholtz (2012), which categories the stakeholder group as primary.
The final cohort of Primary Stakeholders is; Suppliers, Retailers and Distributors. Each of the individual stakeholders has direct contact with the organisation in regards to supplying products either to the organisation or requesting Fair and Lovely products. Due to the demand for the service to provide products, this can influence the successfulness of Fair and Lovely, meeting the Carroll and Buchholtz (2012) definition of a Primary Stakeholder.
The Media can be categories as Secondary Stakeholders as Carroll and Buchholtz (2012) definition of secondary stakeholder focuses on external stakeholder influencing the reputation of the organisation. This can be explored through media channels such as The Times India (2019) and BBC (2016) with stories covering Fair and Lovely in a negative portrayal, which can influence other stakeholders in investing in the brand such as Customers and Investors.
The Government and Regulators such as India’s Ministry of Health and Family Welfare, Drugs and Cosmetics Rules (1945) and Central Drugs Standard Control Organisation can be identified as Secondary Stakeholders. For Fair and Lovely to sell their products they have to comply with the regulations otherwise their reputation may be damaged, arguably showcasing the indirect nature this stakeholder group has with Fair and Lovely, meeting Carroll and Buchholtz (2012) definition of secondary stakeholder.
Another Secondary Stakeholder group identified are competitors such as; Fairever and VICCO Laboratories (Karnani,2007). Carroll and Buchholtz (2012) define a secondary stakeholder as influencing the organisations ‘public standing’. Their competitors can affect the organisations stand in the market, which can influence public perception of the brand indirectly, meeting Carroll and Buchholtz (2012) criteria for a Secondary Stakeholder.
Activists such as the “#unfairandlovely’ (BBC,2016) and ‘Dark is Beautiful’ (Segran,2013) campaign can be categories as Secondary Stakeholders. As they are counteracting the organisation's key message of enforcing South Asian beauty standards, as an effect this arguably can damage the reputation of Fair and Lovely. Due to this factor, it can be said that Activists are categories as Secondary Stakeholders.
Stakeholder Typology (Mitchell et al.1997)
We can use Mitchell et al. (1997) Stakeholder Typology to identify which stakeholder group holds the highest priority to F&L in conjunction with the current issue presented (Rawlins, 2006).
Stakeholders who have been categories as Dominant Stakeholders are; Suppliers, Retailers and Distributors. The categorisation of the positioning is because without the product from their suppliers the organisation cannot use distributors to sell to retailers. Which can highlight the power each stakeholder has over the organisation, due to the linear business structure for Fair and Lovely. Also, due to their legal contract between each stakeholder group and the organisation, this can showcase aspects of legitimacy, which categorises the stakeholder group as Dominant.
Shareholders can also be categories as Dominant Stakeholder due to the legal and moral contract combining them to the organisation (legitimacy). Aspects of power can be evident as the money shareholders invest in the organisation can affect the strategic decisions the organisation can make such as expanding their product line.
Another stakeholder which can be identified as a Dominant Stakeholder is the Government and Regulations. As there are legal factors involved regarding the organisation meeting regulations, this can show elements of legitimacy and power. Arguably, there is no sense of urgency in the issue identified as the organisation has met all of the regulations, as they can sell their products.
Existing Employees can be identified as Dominant Stakeholders as without their service the organisation can not function, which can influence decisions making in regards to meeting existing employee needs (power). Due to the legal contract between the existing employees and the organisation, this gives them legitimacy, categorising them as Dominant Stakeholders.
The Media and Activists can be identified as Definitive Stakeholders due to the issue presented. As they have the power in regards to tarnishing the organisation's reputation, which can influence the decision making within the organisation. Evidence of legitimacy can be evident as there are moral issues present in regards to the branding of Fair and Lovely, of enforcing South Asian beauty standards. In addition, a sense of urgency can be present as it can be said that the issue has reached a crisis, in particular, Victim Cluster (Coombs,2012) due to reputation damage.
Concerning the issue presented, customers can be identified as Dangerous Stakeholders. As they may be influenced by the media or their moral compass with the organisations branding of Fair and Lovely. This can give them power as they may choose to boycott the organisation, which can influence the decision making within the organisation such as change the narrative of Fair and Lovely. Arguably, there is a sense of urgency as customers choosing not to purchase products by the organisation can deplete their business success.
As competitors do not have urgency and legitimacy but, have the power they can be identified as Dormant Stakeholders with the issue presented. Arguably, evidence of power is present as the negative media coverage around Fair and Lovely, can cause a gap in the market that other brands fill, to successfully market their product.
The issues highlighted by Karnani (2007) with F&L's Corporate Communications and Stakeholder Management are the allegations of racism and malpractice of CSR. Karnani (2007) explores the malpractice of CSR, stating that HUL values of providing the highest standard to their various stakeholders (in a particular society) are not transparent. As attempts of countering criticisms received by F&L fixate on the factor that skin complexion is one of the South Asian beauty standards. Further expanding this point stating, ‘a well-groomed person usually has an advantage in life’ (Islan et al,2006). Due to the response, many stakeholders have been affected, however, at various levels which can be explored through the Stakeholder Typology (Mitchell et al. 1997).
To analyse F&L's Corporate Communications Strategy, Dietrich's (2014) PESO Model can help identify the various media outlets the organisation uses to communicate its key message.
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