This article looks into community relations. This is the second in a two-part series on community relations and why they matter to businesses.
The first part focused on the opportunities that good community relations present. You can find a link to this below.
This part focuses on the risks that poor community relations pose to businesses.
1. Expensive clashes
If your business drifts into an antagonistic relationship with your local community, this can cause real problems.
It may be the case that your customers are located far away and for them this is not an issue, but poor community relations like this can impose real costs.
There is the possibility of legal costs brought about by lawsuits that the local community may bring against you. There is also the potential reputational damage that can be done. Even if you are successful in winning these lawsuits, many people may go away thinking that where there is smoke, there is fire.
There is also the issue of time. Time is a precious commodity that is all too often forgotten in business circles. Team members may be diverted away from their primary business functions to deal with antagonism with the community and this imposes real costs.
Some companies may be able to pull labour towards them from great distances. But most companies will depend on local labour to fill some positions. This can become problematic if your business has poor relations with the local community. People want to work for companies that they are proud to tell their friends and family about. Poor community relations impose costs on businesses by making people hesitant to work for you.
Another cost that poor community relations inflicts on businesses is that of security. This only comes to bare in extreme cases but it is a cost nonetheless. Community relations may deteriorate to such an extent that you are forced to invest in security measures such as secure parking and gates, CCTV and access controls for your buildings.
As we can see, poor community relations can impose real and tangible costs to businesses. This can be avoided by community engagement and corporate responsibility.
2. Risk of not being welcome
We touched on this briefly last time as good community relations certainly makes relocating easier. The opposite is also true for poor community relations. Poor community relations can make relocating difficult and, in some cases, impossible.
If your business has a reputation for poor community relations, you can expect to encounter a lot of resistance if you decide to relocate or move into a new area.
This could involve many of the costs talked about in point one, but it could also spill into the political realm. Local politicians who would normally welcome businesses into their community, may choose to take the side of the local protestors if they are numerous enough.
This is particularly an issue in countries that are known to have NIMBY (not in my back yard) syndrome. Your business may have enough money and all of the permits in the world. But passionate local people who do not want you in the community can outlast you and your resources. The best solution is to not let your corporate reputation get to this state and to develop a reputation for excellence in community relations instead.
3. NGO / social media campaigns
The internet has made the world a much smaller place. Social media in particular has not only shrunk timescales but democratised the media in a way that few could have envisaged.
Now everyone with a smartphone and some social media accounts can post highly critical messages, pictures and even live stream videos about corporate malfeasance that they do not like. This power is simply incredible.
I would argue that no group of organisations has been shrewder with their use of social media than NGO’s (non-governmental organisations). Environmental NGO’s have been particularly astute with their use of social media.
These environmental NGO’s are always hunting for new instances of corporate irresponsibility. Don’t let your business get caught in their crosshairs.
These NGO’s can launch pointed and highly critical campaigns against businesses that they see as inflicting damage on society or the environment. This can spin off into more mainstream news channels and become a major source of embarrassment and a major distraction for businesses.
The best strategy is to be a business that gives back to the communities in which they operate and to engage with and solicit advice from NGO’s.
What you need to know
This article, which was the second in a two-part series on community relations looked into the risks which poor community relations pose to businesses.
We looked into the real costs which antagonistic local community relationships can impose on businesses.
We looked into the possibility that businesses with a poor track record on community relations can find it difficult and, in some cases, impossible to relocate.
We also looked into the new and emerging risk that NGO and social media campaigns pose to businesses with poor community relations.
Overall, community relations matter. There are real opportunities which can be seized by businesses who take the time to give back to their communities. Likewise, there are real costs which are imposed on businesses who take from their local communities.
Smart businesses move to corporate responsibility because of the risk and opportunity framework that I have laid out in these two articles. Others move towards corporate responsibility because of a sense of moral duty. It doesn’t matter what drives you, the important thing is that you try to give back.
Thank you for reading,
By Barnaby Nash
Please share your thoughts in the comments section below or reach out to me on social media. What do you think are the risks that poor community relations present to businesses?