BEIJING BROAD JUMP
The Olympics controversy highlights a delicate CSR issue for multinationals.
By Bennett Voyles

Being an Olympic sponsor is a little like being an Olympic athlete. Years of work, years of planning, a huge investment—and in the end, there’s a chance you’ll end up with nothing but bruises to show for your trouble.

This spring, sponsors faced their first untied shoe moment when Western activists began a highly publicized campaign to push sponsors to pressure the Chinese government to change its policies in Tibet and Sudan.

Having reportedly invested US$50 million or more for their sponsorship, and millions more in advertising, the Olympics’ top sponsors aren’t about to walk away from Beijing because of a few protestors. But the fracas illustrates an awkward dilemma confronting many global companies: preserving hard-won respect from groups such as environmental or human rights organizations while keeping good relations with customers and governments. And indeed, for the Olympic sponsors, handling pressure from human rights activists to improve China’s support of human rights in Tibet and Darfur without alienating the Chinese government and Chinese consumers is proving a major public relations challenge.

An Unfun Run

For the sponsors of the Beijing games, the trouble began in early April, when activists disrupted the grand global torch relay in multiple American and European cities, turning what was to have been the longest sustained photo-op in history—a sort of mobile advertisement for the new China—into a roving protest on China’s human rights record in Tibet and its support of the oppressive Sudanese government.

As disruptive as the protests themselves were, the most serious PR complications seem to have arisen as a result of Chinese public opinion. When the Chinese saw the Paris melee on the news and learned of French President Nicolas Sarkozy’s announcement that he wouldn’t attend the opening ceremonies unless China’s human rights policies in Tibet and Darfur improved, many were outraged.

Even as sponsors debated how to respond to the growing furor, Carrefour, the French Wal-Mart, found itself picketed in Beijing by local protesters.

In the West, the protests caught many by surprise. Scott Kronick, China president of Ogilvy Public Relations Worldwide, whose client roster includes Olympic sponsors Adidas and UPS, says that although sponsors prepared in advance for possible disruptions to the games, they were still taken aback when the media began focusing on the Tibet protests. “The level of response to the issue in Tibet was not something people had expected,” he says.

They could have anticipated the depth of feeling on the part of ordinary Chinese, though. A pre-torch survey of 2,687 Chinese in 20 provinces, conducted by the Ogilvy Group and Millard Brown ACSR in March, found that 74 percent of Chinese said they were excited about the Olympics, and 72 percent said they felt proud of China. The survey found that unlike the Athens games, when many locals fled, only 2 percent of Beijing residents plan to leave town. And it looks like they’re going to have some company: 36 percent of Shanghai residents surveyed said they plan to travel to Beijing during the Games—where 27 percent of the residents in Guangzhou hope to join them.

Carrefour is not an Olympic sponsor, but the action drove home the trouble angry Chinese consumers might create for a company. The protests demonstrated that for the Olympic sponsors (at least the consumer sponsors) the challenge isn’t just a matter of balancing the opinion of the Chinese government against whatever Western activists can drum up. Now, they must also consider the opinion of ordinary Chinese citizens.

“I think in the global operations of any of these brands, it’s become more imperative to consider all angles,” says Kronick.

Coke Adds Life Not Strife

Politics is nothing new to the Games—the torch relay itself, after all, was a spectacle invented by the Germans to kick-off the 1936 Berlin Olympics—but managing these multiple angles requires some finesse on the part of sponsors.

In this respect, say some public relations experts, The Coca-Cola Company’s response is worth a look. Outside of China, the beverage company’s sponsorship of the Beijing Olympics has led to only “a very limited number of [negative] consumer calls,” according to a Coca-Cola spokesperson.

Coke is trying to make the case that it is committed to alleviating the suffering in Tibet and Darfur while at the same time supporting the non-political ideals of the Olympics.

Responding to a bad “report card” issued by an activist group called Dream for Darfur, Neville Isdell, the chairman and CEO of Coca-Cola, wrote in the Financial Times on April 17 that the group’s approach is flawed. “It judges concern by one narrow measure—the degree to which one pushes a sovereign government in public—while ignoring what we and others are doing every day to help ease the suffering in Darfur.” In fact, he says, the company has actually been quite active in terms of supporting relief assistance in the region, citing the US$5 million Coca-Cola has committed to improving water supplies in Sudan.

Isdell also challenged activists to find a way to use the Olympics in a manner that doesn’t “attack and undermine one of the world’s last remaining unifying events.”

Inside China, the damage seems likely to be limited as well—especially given that the company’s total case sales grew by 20 percent in the first quarter alone, despite bad snows during the Chinese New Year festivities.

However, Coke is taking no chances there either. “Coca-Cola is putting a lot of ‘we love China’ type advertising and really going over the top to show that it supports China,” says Shaun Rein, managing director of China Market Research Group in Shanghai.

Synchronized Spinning

It’s too early to say whether Coke will avoid any major problems with either activists or Chinese consumers. Still, its response fits in with a number of measures that public relations experts advise companies to take when faced with some kind of organized opposition:

Say something. In a crisis, it’s important for a company to communicate with stakeholders right away. “Respond immediately,” says Robin Cohn, a New York-based public relations consultant who specializes in crisis management.

“Silence is not golden,” agrees Sam Taylor, president of Reputation Dynamics in New York, a firm that advises companies on corporate social responsibility. Some statement of acknowledgement is important, she adds, including some show of sentiment. “There’s no way these companies can go on and not say anything.”

Understand the nature of the protests. The Olympic protest movement, for example, “is not broad-based so far,” says Edith Terry, managing director of Cotton Tree Productions, a Hong Kong-based research firm. “It’s quite a number of splinter groups who pick up different China-related causes.” Most of these groups are small-scale, she says, lack huge budgets, and have a number of different goals.

Two of the most prominent are Free Tibet, a UK group working to “shame the games” as a way to promote Tibetan self-determination, and Dream for Darfur, a New York-based organization that aims to force China to use its leverage in Sudan to stop government-sponsored atrocities in the African country’s Darfur region.

Reframe the issue. Frame participation in the Olympics as not being equivalent to support of China in Tibet or China’s backing of Sudan’s government. Cohn suggests talking about the sponsorship as support for the athletes who have all worked so hard to reach the event. “Put it back in a human perspective,” she advises.

Play your own game. Don’t let activists distract a company from its earlier social commitments, say Taylor and others. Crisis management experts warn that simply writing a check is not going to accomplish much for the company’s PR if the commitment to the cause wasn’t already well-established. “If this is not a company core value, then it’s a very obvious marketing tool, which I think is going to backfire or at least is not going to make friends,” says Cohn. “Just throwing some money at a Darfur cause is not necessarily going to do it.”

Respond based on your key customers’ values—and those of your employees. “This is such a delicate issue that I think it would behoove [companies] to do a quick poll among their own employees and their customers,” Taylor says.

In the end, experts say, PR troubles such as those arising with the Olympics may force a company to decide which group of stakeholders it cares about most. For the Olympic sponsors, the chance to hold the attention of all of China for three weeks this August—when some forecasters estimate that up to 90 percent of China’s 1.3 billion people will tune in to the Games—may well tip the scales eastward. “It’s a matter of who their market or audience is,” says Cohn.

Bennett Voyles is a Paris-based business writer.