Reputation and Marketing Outcomes from Corporate Citizenship Programs

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Reputation and Marketing Outcomes from Corporate
Citizenship Programs

• An Examination Among Multiple Stakeholders

Danielle Boxer, Sheri Clement, Chad Desrochers,
Matt DeWitte, Thomas Floyd, Barbara Granville,
Traci Greer, Adrian Michael Kusuma, Susannah
Levy, Megan Martin, Anh Ngyuyen, Duygu Ozcan,
Anil Oztuncer, Joseph Rank, Brett Wilson
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Agenda

• Introduction
• Literature Review and Hypothesis
• Methodology
• Results
• Conclusions Implications

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Introduction

• What is the value of corporate sponsorship to
  their stakeholders
• Customer
• Employee
• Community
• What are the theoretical and practical
  implications for companies who choose to invest
  in local community programs?
• What are the relationships between corporate
  social programs, their stakeholders, and
  corporate marketing outcomes?

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Definitions

• Corporate sponsorship means group sponsorship
  from the business community, usually done for
  publicity.
• Corporate social responsibility is a voluntary
  approach that a business enterprise takes to meet
  or exceed stakeholder expectations by integrating
  social, ethical, and environmental concerns
  together with the usual measures of revenue,
  profit, and legal obligation.1)
• Corporate citizenship is the contribution a
  company makes to society and the environment
  through its core business activities, its social
  investment and philanthropy programs, and its
  engagement in public policy.2)
• 1) BNET Business Dictionary
• 2) World Economic Forum

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Corporate Social Responsibility

• Why study CSR?
• The basic idea of corporate social
  responsibility is that business and society are
  interwoven rather than distinct entities
  therefore, society has certain expectations for
  appropriate business behavior and outcomes (Wood
  1991).

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Impact of Corporate Social Responsibility (CSR)

• Prior management theory hints to an interaction
  between corporate stakeholder attitudes
  perceptions and positive image financial
  outcomes (Orlitz et al. 2003 Waddock and Graves
  1997).
• Employee Stakeholders
• Found evidence for a link between company CSR
  programs and employee commitment (Alder and Alder
  1987).
• Customer stakeholders
• Found some evidence for links between corporate
  social programs and consumer responses (Brown and
  Dacin 1997).

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Stakeholder perception of CSR

• Ferrell and Maignan (2001)
• Examined CSR programs as part of corporate
  citizenship efforts.
• Hypothesized that different stakeholder groups
  will perceive corporate citizenship investments
  differently and respond differently to them.
• Constructed model with antecedent and
  consequential variables to test hypothesis.
• Framework examined internal employee and external
  customers as identified stakeholders.
• Current study expands on this theory
• Examines, operationalizes and tests the Ferrell
  and Maignan (2001) framework with attitudinal,
  values, and behavioral variables including
• knowledge of the issues, personal values
  ethics, past event attendees, feeling of
  connection to cause, age and gender.
• Expands the stakeholder groups to include
  community members.

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Corporate Social Responsibility Model
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Corporate Social Responsibility Model
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Hypothesis 1

• Feeling Connection to Cause/Affiliation
• Consumers evaluate corporate citizenship based on
  feelings of connection and affiliation to certain
  causes. (Farrell Maignon 2001, p465)
• H1 The more connected or affiliated a
  stakeholder group feels to a cause, the greater
  the likelihood that the group will evaluate
  corporate citizenship.

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Corporate Social Responsibility Model
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Hypothesis 2

• Personal Values/Ethics
• Norms and behavior are interrelated particularly
  in non-profit activities (Schwarz 1977). In a
  study of personal norms, Osterhus (1997) found
  that a persons values influence environmental
  friendly behavior.
• Values and behavior are linked. As the values
  become stronger, the propensity to act upon those
  values increases.
• H2 As a stakeholder group becomes more
  values-oriented, they will become more likely to
  evaluate corporate citizenship.

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Corporate Social Responsibility Model
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Hypothesis 3

• Past Event Attendees
• A stakeholder is an individual or group with
  legitimate interest in a corporations
  activities. Stakeholders are identified by
  interests in the company, and whether or not the
  company has a functional interest in them
  (Donaldson Preston 1995).
• Prior psychological and marketing literature have
  well-established links between a consumers past
  behavior and his or her future behavior (Fishbein
  Azjen 1975).
• As people tend to display congruent attitudes and
  behaviors, the person who has attended past
  events is more likely to rate corporation who
  sponsored events highly.
• H3 The more you participate in CSR events, the
  more you will value the corporations that sponsor
  such events.

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Corporate Social Responsibility Model
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Hypothesis 4

• Knowledge of the Issues
• A persons perception about a product can vary
  based on prior knowledge of the company.
• The knowledge a consumer has about a companys
  corporate social responsibility initiative
  positively effects his or her evaluation of the
  company and/or product. In addition, corporate
  social responsibility initiatives can affect
  consumer intentions to purchase both directly and
  indirectly (Sen Bhattacharya 2001).
• H4 The more knowledge a consumer has about
  social issues, the more they value corporate
  citizenship programs.

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Corporate Social Responsibility Model
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Hypothesis 5a and 5b

• Demographics
• Prior research has shown that demographic factors
  such as age, skin color, occupation, and sex
  impact purchasing intentions (e.g., Auger, Burke,
  Devinney, Louviere, 2003).
• H5a Age is correlated with perceptions of
  corporate social responsibility.
• H5b Sex is correlated with perceptions of
  corporate social responsibility.

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Corporate Social Responsibility Model
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Hypothesis 6

• Employee
• Initial applicant attraction to a firm is based
  on perceptions of the firms image, which is
  thought to be influenced by CSR (Fombrun
  Shanley 1990 Rynes 1991).
• H6 Employees who value CSR are more likely to be
  committed to organizations that are involved in
  socially responsible activities.

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Corporate Social Responsibility Model
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Hypothesis 7 and 8

• Customer
• A customers values will influence how he or she
  views a corporation (Brown Dacin 1997).
• H7 Customers who value CSR are more likely to
  value organizations that are involved in socially
  responsible activities.
• The consumer who values CSR will value the
  corporations who participate in socially
  responsible activities, and subsequent
  evaluations of products will be more positive
  (Brown Dacin 1997).
• H8 The better the corporate image, the more
  likely consumers will purchase products from the
  company.

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Corporate Social Responsibility Model
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Hypothesis 9 and 10

• Community
• A consumers willingness to talk positively about
  a socially responsible company reflects the
  importance of their feelings toward such
  activities.
• H9 The more community members value CSR, the
  more they will admire the organizations who
  participate in socially responsible activities.
• H10 The more a community admires an organization
  the more likely they are to spread positive word
  of mouth statements.

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Methodology

• Sample
• Community
• 122 respondents
• USM students from various fields of study
• Employee
• 234 respondents
• Each researcher surveyed 20 stakeholders
• Customer
• 15 respondents
• On-line survey given to corporate partners of USM

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Overall Sample Demographics

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Measurements

• Existing Scales
• Existing scales performed well in pretest and
  research samples.
• Personal Values, Knowledge of Issues, Brand
  Image, Employee Commitment, Company Admiration,
  and Word-of-Mouth communications all displayed
  high as (a gt.70) and uniform item loadings (Avg.
  Loadings gt.7).
• New Scales
• Refined in pretest samples (n85).
• Performed well in the research sample.
• Feelings of Connection to a Cause, Past Event
  Attendance and Propensity to Consider Corporate
  Citizenship all displayed high as (a gt.70) and
  uniform item loadings (Avg. Loadings gt.7).

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Measurements
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Results

• H1 The more connected or affiliated a
  stakeholder group feels to a cause, the greater
  the likelihood that the group will evaluate
  corporate citizenship.
• R2 0.17 Beta0.159 t3.274
• Significance p0.001
• Hypothesis is supported
• H2 As a stakeholder group becomes more
  values-oriented, they will become more likely to
  evaluate corporate citizenship.
• R2 0.17 Beta0.278 t5.649
• Significance p0.000
• Hypothesis is supported

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Results (cont)

• H3 The more you participate in CSR events, the
  more you will value the corporations that sponsor
  such events.
• R20.17 Beta-0.175 t-3.620
• Significance p0.000
• Hypothesis is supported
• H4 The more knowledge a consumer has about
  social issues, the more they value corporate
  citizenship programs.
• R20.17 Beta0.047 t0.859
• Significance p0.391
• Hypothesis is not supported

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Results (cont)

• H5a Age is correlated with perceptions of
  corporate social responsibility.
• R20.17 Beta0.084 t1.572
• Significance p0.117
• Hypothesis is not supported
• H5b Sex is correlated with perceptions of
  corporate social responsibility.
• R20.17 Beta0.000 t-0.006
• Significance p0.995
• Hypothesis is not supported
• H6 Employees who value CSR are more likely to be
  committed to organizations that are involved in
  socially responsible activities.
• R20.25 Beta0.172 t2.62
• Significance p0.009
• Hypothesis is supported

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Results (cont)

• H7 Customers who value CSR are more likely to
  value organizations that are involved in socially
  responsible activities.
• R20.217 Beta0.526 t2.14
• Significance p0.053
• Hypothesis is not supported
• H8 The better the corporate image, the more
  likely consumers will purchase products from the
  company.
• R20.375 Beta0.663 t2.65
• Significance p0.027
• Hypothesis is supported

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Results (cont)

• H9 The more community members value CSR, the
  more they will admire the organizations who
  participate in socially responsible activities.
• R20.027 Beta0.188 t1.99
• Significance p0.049
• Hypothesis is supported
• H10 The more a community admires an organization
  the more likely they are to spread positive word
  of mouth statements.
• R20.131 Beta0.374 t4.107
• Significance p0.00
• Hypothesis is supported

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Corporate Social Responsibility Model
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Conclusions Implications

• Cognitive knowledge of corporate social programs
  does not directly impact stakeholder attitudinal
  outcomes such as community admiration of a
  corporation, corporate image or employee
  commitment.
• Changes in bonding or feelings toward a cause and
  attendance at cause-related events DO impact
  attitudinal and image outcomes.
• Companies desiring positive image and attitudinal
  outcomes should focus on attitudinal elements of
  CSR campaigns.
• Alternatively, companies can jump-start image and
  commitment outcomes by encouraging participation
  in CSR events.