Free Essay

Csr and Stakeholder Relationship

In: Business and Management

Submitted By Aastha15
Words 10255
Pages 42

C.B. Bhattacharya Daniel Korschun Sankar Sen

Forthcoming: Journal of Business Ethics

Abstract Corporate social responsibility (CSR) continues to gain attention atop the corporate agenda and is by now an important component of the dialogue between companies and their stakeholders. Nevertheless, there is still little guidance as to how companies can implement CSR activity in order to maximize returns to CSR investment. Theorists have identified many company favoring outcomes of CSR, yet there is a dearth of research on the psychological mechanisms that drive stakeholder responses to CSR activity. Borrowing from the literatures on means-end chains and relationship marketing, we propose a conceptual model that explains how CSR provides individual stakeholders with numerous benefits (functional, psychosocial, and values) and how the type and extent to which a stakeholder derives these benefits from CSR initiatives influences the quality of the relationship between the stakeholder and the company. The paper discusses the implications of these insights and highlights a number of areas for future research.



Corporate social responsibility (CSR), or “a commitment to improve community wellbeing through discretionary business practices and contributions of corporate resources,” (Kotler and Lee 2004, p.3) is by now an important component of the dialogue between companies and their stakeholders (Berger et al. 2007; Smith 2003). The majority of Fortune 500 companies not only engages in social responsibility initiatives, but also devotes considerable resources to reporting CSR activities to a wide array of corporate stakeholders (KPMG 2003). As noted in a recent McKinsey & Company survey of corporate executives (2006), companies engage in CSR in large part because executives believe that such activity will elicit company-favoring responses from stakeholders. The notion that a company’s investment in CSR initiatives can provide returns to the company, commonly referred to as the business case for CSR, is supported in the scholarly literature by a large and growing body of evidence showing that individuals across numerous stakeholder realms (e.g., consumer, employment, investment) reward companies that engage in CSR activity. For example, Sen and Bhattacharya (2001) found that in the consumer realm, the CSR record of a company has a positive effect on a consumer’s evaluations of the company and their intent to purchase the company’s products. Likewise, in the employment realm, CSR activity has been shown to have a positive effect on job seeking intent (Greening and Turban 2000; Turban and Greening 1997), as well as behaviors on the job like interpersonal cooperation and job-related effort (Bartel 2001). There is also some evidence that investors both attend to and make investment decisions based upon - the CSR activity of public companies (Domini


1992). For example, Sen et al. (2006) found that individuals who were aware of a large charitable gift by a company had greater intentions to invest in company stock than respondents who were unaware of the gift. These studies notwithstanding, implementing CSR initiatives can prove quite challenging in practice. Even companies with a history of generously supporting CSR initiatives have struggled to effectively manage their CSR engagement (Porter and Kramer 2006; Smith 2003). As Business Week (2005) notes:
Indeed, it has been a rude awakening for companies that have not embraced a more strategic approach to social responsibility. For years Wal-Mart has been a top corporate donor. But as the company's image was pummeled by labor unions and lawsuits, research showed its fragmented giving generated little goodwill…Now, it's giving its community outreach a sharper focus.

Thus, despite the clear potential of CSR to drive company favoring outcomes on the part of stakeholders, the return on CSR investment is anything but guaranteed. It is becoming increasingly clear that in order to explain and predict the outcomes of CSR activity with any degree of certainty, we need a more precise understanding of the underlying processes that drive those returns. More specifically, researchers have examined many of the outcomes of CSR in various stakeholder realms, but there remains a dearth of research looking at the psychological mechanisms through which stakeholders interpret and react to a company’s CSR activities. In this paper, we present a model that examines when, how and why CSR activity leads individual stakeholders to produce company-favoring outcomes. Our basic contention is that CSR, can provide stakeholders with numerous types of benefits. Moreover, it is the nature of these benefits and the extent to which they are realized that determine, jointly, the quality of the relationship between the individual stakeholder and the company. Finally, when these benefits do improve the quality of the stakeholder-company relationship, stakeholders display the kinds of company-favoring outcomes that are documented in the extant literature. Our approach 3

contributes to the literature by providing a framework, adapted from research on consumer behavior, that enables researchers to identify the different types of benefits produced by CSR activity and the impact that these benefits have on stakeholder-company relationship quality. Our approach is consistent with extant studies examining individual responses to CSR, yet it has two notable differences. First, we take a broader stakeholder perspective than most other examinations (for some notable exceptions, see Maignan and Ferrell 2004; Maignan et al. 2005; Sen et al. 2006). More specifically, our model is meant to explain the responses to CSR initiatives by individuals in multiple stakeholder realms. Broadening the analysis to include multiple stakeholders is consistent with calls by both Smith (2003), who recommends that researchers devote greater attention to multiple stakeholders rather than focusing exclusively on consumers, and Porter and Kramer (2006), who maintain that our conceptualization of “strategic philanthropy” needs to move beyond cause-related marketing campaigns if CSR is to be related to competitive advantage for the sponsoring company. The broadened perspective is also important in light of recent empirical evidence demonstrating that the returns to CSR, even for an individual stakeholder, are not limited to a single stakeholder domain. Sen et al. (2006) show that stakeholders may respond to CSR with an array of company favoring behaviors. In their field study, individuals who became aware of a large charitable gift to a children’s development center by a major consumer goods company intended not only to purchase the company’s products, but also to apply for employment at the company and to invest in company stock. Overall, we believe that a broadened stakeholder perspective is essential to a complete assessment of the return on investment in CSR initiatives. Second, our approach differs from extant research in that we focus on the underlying psychological processes that drive individual stakeholder responses to CSR. In particular, our


approach examines the benefits that accrue to the individual stakeholder. Prior research on responses to CSR tends to characterize stakeholders as belonging to monolithic groups with rather homogenous needs and interests. In reality, however, individual responses to CSR initiatives are quite heterogeneous (Sen and Bhattacharya 2001). In the employee realm, for example, Bhattacharya et al. (2007) found that individuals derive benefits from CSR which can vary widely based on personal characteristics and needs. Employees who work in remote locations, far away from corporate headquarters, feel that participating in the company’s CSR initiatives helps them feel connected to fellow employees; meanwhile, other employees benefit from the same initiatives because the CSR activity reduces the stress in transitioning between their home and work lives, thereby providing work-life integration. Thus, we feel it is important to recognize that CSR may provide benefits that differ substantially from individual to individual even within a single stakeholder group. In the following section, we briefly lay the foundation of our approach, highlighting the importance of stakeholder benefits and relationship quality. We then describe our conceptual model in detail. In the subsequent section we discuss the implications of the model and areas for future research. Relationships and Returns to Stakeholders The basic premise of our framework is that the contribution of CSR initiatives to stakeholder-company relationships hinges on the benefits they provide to the stakeholder. Essentially, we argue that in order for initiatives to provide returns to the company initiatives must first provide a return to individual stakeholders. Extant research indicates that CSR initiatives are successful in generating returns to the company to the extent that they foster strong and enduring relationships with stakeholders 5

(Waddock and Smith 2000). But how do CSR initiatives help to build these relationships? With a few exceptions, the CSR literature is largely silent on this question. Waddock and Smith state that “being a good global citizen in a relational context means treating well the entire range of constituencies – stakeholders – who have invested their capital in the business” (Waddock and Smith 2000, p.49). Maignan & Ferrell (2004) propose that the degree to which stakeholders develop a bond of identification with the company is based upon the extent to which CSR initiatives address issues that are important to the stakeholder group. While relationships and the benefits that drive these relationships has received little attention in the CSR literature, the importance of developing strong and enduring relationships with stakeholders by providing them benefits has solid footing in both stakeholder theory and relationship marketing. At the core of stakeholder theory is the idea that the long-term sustainability of a corporation is dependent upon procuring the cooperation of numerous constituents, including but not limited to shareholders (Donaldson and Preston 1995; Freeman 1984). Post et al. (2002) explain that stakeholders are essential to the successful functioning of a corporation because they provide resources to the company (e.g., customers, investors, and employees), form the industry structure (e.g., supply chain associates and strategic alliances), and make up the socio-political arena (e.g., communities and governments). They define stakeholders as “individuals and constituencies that contribute, either voluntarily or involuntarily, to [the corporation’s] wealthcreating capacity and activities, and who are therefore its potential beneficiaries and/or risk bearers” (Post et al. 2002, p.8). Stakeholders form relationships with a company in order to obtain benefits and contribute to the wealth of the organization (Donaldson and Preston 1995). According to the stakeholder view, the central challenge for managers and theorists is understanding how to improve


stakeholder-company relationships by delivering benefits to stakeholders through a company’s policies and activities (Post et al. 2002). Thus, the objective function of a corporation goes beyond generating profits for shareholders to include a range of benefits that are valued by its stakeholders. The corporation can be seen as a nexus of relationships between a corporation and its various stakeholders with a goal of mutual gain. For stakeholders, the benefits of interacting with the company may range from tangible to intangible, monetary to psychological. It is also important to note that what constitutes a benefit to one stakeholder may hold little value to another, and in some cases, rewards to one stakeholder may conflict with the interests of another stakeholder; for example, closing a factory could benefit many investors even as it harms the people employed there. Relationship marketing is defined by Morgan and Hunt (1994, p.22) as “all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges.” Relationship marketing is rooted in services and industrial marketing, but Morgan and Hunt’s conceptualization includes a broad range of potential exchange partners that is consistent with stakeholder theory: supplier partnerships (e.g., goods suppliers, services suppliers), buyer partnerships (e.g., intermediate customers, ultimate customers), lateral partnerships (e.g., competitors, government), and internal partnerships (e.g., employees business units). Any of these partnerships may be described as residing on a continuum from purely transactional exchange at one end to relational exchange at the other (Gronroos 1995). Discrete transactions are generally brief and each interaction is unrelated to previous or future transactions. In contrast, relational exchange is characterized as “longer in duration, reflecting an ongoing process” (Dwyer et al. 1987, p.18), and viewed by both parties with respect to previous exchanges and the potential for future exchanges. Relationships evolve, expanding over time as


the parties receive a continual increase in benefits and as the parties become increasingly interdependent (Dwyer et al. 1987). The notion that relationship benefits contribute to strong relationships has received both considerable attention and confirmation over the years. This is demonstrated in a recent meta-analysis that finds relationship benefits to be an antecedent of the quality of the relationship between buyers and sellers and ultimately to meaningful behavioral outcomes (Palmatier et al. 2006). Taken as a whole, both stakeholder theory and relationship marketing indicate that the quality of stakeholder-company relationships is commensurate with the benefits stakeholders receive from their interactions with the company. We now turn our attention to our model that delineates the different types of benefits that CSR provides to stakeholders, and how these benefits strengthen stakeholder-company relationships. A Stakeholder-Centric Model for Understanding CSR Overall, the framework (shown in Figure 1) describes how CSR activity is perceived by individual stakeholders, produces benefits for individual stakeholders, influences the relationship quality between the stakeholder and the company, and results in behavioral outcomes directed towards the company, the cause, and other stakeholders. The model also delineates key contingency factors which moderate these primary relationships. The model provides three main insights. First, it shows that stakeholders respond to CSR initiatives based on the degree to which the individual derives personal benefits as a result of the company engaging in CSR activity. Second, the model shows that the nature of the stakeholdercompany relationship is determined by the type of benefits that accrue to the individual. Finally, the model underscores the importance of distinguishing between third party measures of CSR spending and the perceptions that stakeholders hold about the company’s initiatives. 8

CSR Activity Consistent with Kotler & Lee’s definition of CSR (2004, p.3) cited above, we consider a company’s initiatives to be socially responsible to the extent that corporate resources (e.g., money, labor) are allocated to activities that are intended to improve societal welfare (it is important to note that our conceptualization of CSR by no means excludes the possibility that the company will also benefit from CSR initiatives; indeed, our model explains how such initiatives result in company-favoring outcomes). While this concept has been operationalized in various ways in the literature, perhaps the most common measurement is a company’s total monetary spending on CSR initiatives, a figure often available through annual company reporting (Margolis and Walsh 2003; Orlitzky et al. 2003). CSR activity may also be captured through measures such as CSR-related awards (e.g., Klassen & McLaughlin 1996) or third party ratings such as KLD Research and Analytics (e.g., Graves & Waddock 2000) and Fortune magazine’s reputation ratings (e.g., McGuire et al. 1988; Luo & Bhattacharya 2006). Stakeholder Perceptions of the Company’s CSR Initiatives We contend that an important distinction needs to be made between objective measures of the level of CSR activity and the perceptions held by stakeholders regarding the company’s CSR initiatives. As numerous studies have shown (Bhattacharya and Sen 2004; Sen et al. 2001), perceptions of a company’s CSR initiatives are anything but uniform; responses to even a single initiative vary from person to person because individual stakeholders develop different assessments of such initiatives. While we expect that large scale CSR initiatives will tend to produce the exposure necessary to lead to positive evaluations, this result is hardly guaranteed. Thus, stakeholder evaluations of the company’s CSR initiatives are tied to, yet often entirely distinct from, the absolute level of CSR activity at the company.


Recent research indicates that there are at least two aspects to these perceptions. First, stakeholders evaluate CSR initiatives based on the degree to which initiatives are successful in improving the lives of the intended beneficiaries. In other words, they perceive initiatives in relation to the stated objectives of the initiatives. For example, Du et al. (2007) find that beneficiaries of a corporate sponsored dental hygiene program have heightened intentions to purchase the company’s products when they feel that the program is effective in improving their (and their children’s) oral health. There is also evidence that stakeholders are sensitive to poor CSR performance as well. For example, Klein et al. (2002; 2004) find that a central factor in whether consumers participate in a boycott is the degree to which the individual perceives transgressions to be egregious. Taken as a whole, it appears that an important aspect of stakeholder perceptions of CSR initiatives is the degree to which initiatives are seen to be effective in benefiting the cause beneficiaries and/or society. A second aspect of stakeholder perceptions of CSR initiatives is attributions. Prior research (Ellen et al. 2000; Ellen et al. 2006; Forehand and Grier 2003) finds that stakeholders respond to CSR based on motives they attribute to the company’s involvement in social responsibility initiatives. These motives may be of two kinds (Batson 1998): extrinsic, in which the company is seen as attempting to increase their profits, or intrinsic, in which it is viewed as acting out of a genuine concern for the focal issue (Lichtenstein et al. 2004). Stakeholders are often tolerant of extrinsic motives as long as CSR initiatives are attributed to intrinsic motives as well (Sen et al. 2006). This tolerance of profit motives may be due to the fact, as we argue in the next section, that extrinsic motivations for supporting CSR initiatives can ultimately provide stakeholders with functional benefits that are highly valued. For example, cause-related marketing promotions may


generate highly profitable sales (Bloom et al. 2006) that can benefit the company, and indirectly, its stakeholders such as investors and employees. Returns to Stakeholders The fundamental mediating process of our model is the returns to stakeholders of CSR, that is, the benefits that CSR initiatives produce for individual stakeholders. We borrow from the means-end chain literature (e.g., Gutman 1982; Reynolds and Olson 2001) in marketing to explain how stakeholders relate these benefits to CSR initiatives. According to theory on meansend chains, consumers make purchase decisions because the attributes of products and services provide three causally connected categories of benefits. First are functional, which are tangible and directly related to features of the product or service. Second are psychosocial, which are related to the psychological and sociological well-being of the individual. Third and finally, attributes can affirm the values of the individual, which are end-states of importance to the consumer. In the means-end chain literature, consumers attempt to maximize these benefits through their purchase decisions (Gutman 1982). An example of a means-end chain is a

sugarless mouthwash which provides a functional benefit of being non-fattening, which drives a psychosocial benefit of being attractive to others, which produces the end-state (i.e., values) of self esteem (example from Peter and Olson 1999). Thus, the benefits of products or services are arranged as a causal hierarchy with progressive levels of abstraction, functional being the most tangible, and values the most abstract (Gutman 1997). Extending the means-end approach to the CSR realm allows us to view CSR initiatives as attributes of the company that are only meaningful to stakeholders when these produce selfrelevant benefits for the stakeholders, allowing them to achieve personal goals (Gutman 1997). The process proposed in our model is one in which stakeholders gain personal benefits either


through their direct involvement in the company’s CSR initiatives or through the mere knowledge, based on their subjective perceptions, of such initiatives. Essentially, consistent with both the stakeholder view and the literature on relationship marketing, we view benefits as the central mediator through which CSR strengthens stakeholder-company relationships. Table 1 shows examples of returns to stakeholders for an oral health initiative run by a major personal products manufacturer (Bhattacharya et al. 2005); the initiative’s goal is to improve the oral health of over 50 million American children by providing education, oral care tools, and access to dental care. It is worth noting that these examples are by no means exhaustive; they are merely illustrations of how individuals may relate CSR initiatives to their personal context. For instance, Bhattacharya et al.’s study (2005) found that the beneficiaries of the CSR program (i.e., the children in the program) received substantial functional benefits from the program in the form of healthier and cleaner teeth. Due to their cleaner teeth, the beneficiaries, in turn, felt greater social acceptance from peers, which lead ultimately to greater social connectedness and self-esteem. Interestingly, this CSR initiative provides no functional benefits to consumers at large (i.e., those who are not beneficiaries the initiative). However, based on their perceptions of the initiative, consumers gain psychosocial benefits such as helping others in need through their purchases of the brand that sponsors the initiative, which in turn leads to a sense of well-being and contentedness. Investors, on the other hand, receive functional benefits through their ownership of stock in the company if the initiative is successful in generating profits through heightened purchase; this is manifested in increased stock returns (Luo and Bhattacharya 2006) and lowered risk (Luo and Bhattacharya 2007). These, in turn, may yield psychosocial benefits of financial and professional advancement, which contribute, in turn, as in the case of other stakeholders, to a sense of achievement and self-esteem. Note that despite the


very different functional benefits that the CSR initiative provides, these often lead to the satisfaction of similar values, aspired to by most if not all individuals. In that sense, the higher order psychosocial benefits and values will be more likely to supersede a single stakeholder role because these benefits are related to more universal human needs that are independent of particular stakeholder role. Finally, in our example, employees receive numerous functional and psychosocial benefits from the CSR initiative (meeting colleagues, work-life integration, and self-expression at work), which while resulting potentially in the satisfaction of values aspired to by all stakeholders, are in and of themselves quite different from those received by other stakeholders. This represents both a challenge and an opportunity for companies looking to communicate and manage their CSR initiatives in multiple stakeholder contexts (Smith 2003). We now discuss the three levels of the means-end chain in more detail. Functional benefits. There is ample reason to believe that CSR activity provides many stakeholders with tangible benefits. First, many stakeholders may derive functional benefits when a CSR initiative leads to an improvement in corporate performance (for a review and a meta-analysis, see Margolis and Walsh 2003; Orlitzky et al. 2003) . For example, research has shown that CSR initiatives are positively related to stock market returns and to Tobin’s Q, a measure of a firm’s intangible value (Luo and Bhattacharya 2006). Thus, investors can be expected to receive greater returns on their stock market investments with increasing levels of CSR activity. In the employee domain, on the other hand, prior research finds that those who participate in CSR initiatives often gain concrete skills that can be carried over to their job (Bhattacharya et al. 2007). For example, an employee put in charge of a volunteer program may learn valuable managerial skills (Bhattacharya et al. 2007). Additionally, as seen in the oral care example, beneficiaries of CSR initiatives can gain substantial functional benefits in the form of


improved health (Bhattacharya et al. 2005). Overall, the opportunity for stakeholders to derive these functional benefits is directly and positively related to the nature and level of CSR activity engaged in by the company. Psychosocial benefits. Theory on means-end chains proposes that psychosocial consequences occur as the result of functional consequences. In our example, beneficiaries feel socially acceptable because they have cleaner teeth as a result of their participation in the program. In addition to the effect of functional benefits, stakeholders, such as employees, can also derive psychosocial benefits as a direct result of their knowledge of or participation in their employer’s CSR initiatives (Bhattacharya et al. 2007) rather than as a consequence of functional benefits. In that study, employees derived these psychological benefits from what they deemed to be “high quality” CSR activities of their employer. For instance, by signaling that the company is caring and, more specifically, concerned about causes that they themselves care about, employees felt that CSR enabled them to integrate their work and home lives so that the transition between the two important spheres was not as incongruous or stressful. At the same time, this integration may also result from the employees’ usage of work-based skills in helping a cause they support in their personal lives. Therefore, as shown in our model, we contend that psychosocial benefits are the consequence of the functional benefits that are produced by CSR initiatives and/or based directly on stakeholder perceptions of and involvement in CSR initiatives. Values. Values are the desirable end-states that stakeholders achieve as a result of CSR. In our example of the oral health care initiative, employees for whom CSR enables successful integration of their work and family lives will feel that they are able to express themselves freely at work; they can “be themselves” because the company shares their values. This contributes to


an overall sense of harmony that many people strive for. Just as psychosocial benefits are driven by both functional benefits and stakeholder perceptions of CSR initiatives in our model, so too are values driven by both psychosocial benefits and directly, through stakeholder perceptions of and involvement in CSR initiatives. Values are of particular interest because when stakeholders achieve desirable values through CSR initiatives they are likely to identify with (Bartel 2001; Sen and Bhattacharya 2001), and trust the company (Du et al. 2007), which are indicators of the quality of the relationship with the company. Stakeholder-Company Relationship Quality CSR is, among other things, a key stakeholder relationship-building activity (Waddock and Smith 2000) and the success of CSR initiatives is based upon building strong and enduring relationships with stakeholders (Clarkson 1995). We use Palmatier et al.’s (2006) definition of relationship quality as the “overall assessment of the strength of a relationship, conceptualized as a composite or multi-dimensional construct capturing the different but related facets of a relationship.” We assert that the quality of the stakeholder-company relationship is influenced by the degree to which stakeholders derive benefits from CSR activity as well as the nature of these benefits. When stakeholders learn about or participate in CSR initiatives sponsored by a company, it sets in motion reciprocal exchanges of information and action that can strengthen the ties between the stakeholder and company. The social norm to reciprocate benefits received from another party in a relationship has been shown to have remarkable explanatory power for consumers’ relationships with companies (Bagozzi 1995; De Wulf et al. 2001). The principle of reciprocity, thus can lead stakeholders who benefit from CSR initiatives to form strong bonds with the company.


Based on prior research on relationship quality and CSR, we submit that there are four main types of stakeholder-company relationship quality, ranging from the strongest to the weakest: identification (e.g., Berger et al. 2006; Maignan and Ferrell 2004; Sen and Bhattacharya 2001), commitment (e.g., Morgan and Hunt 1994), trust (Morgan and Hunt 1994), and satisfaction (e.g., Crosby et al. 1990; Garbarino and Johnson 1999). Social identity theory describes how individuals categorize themselves as members of social groups or organizations. Dutton et al. (1994, p.242) define identification as “a cognitive link between the definitions of the organization and the self.” In essence, identification represents a sense of oneness between an individual’s self-concept and their concept of the group or organization with which they consider themselves a member. This overlap of values can be heard anecdotally when references to “I” become references to “we.” A large and growing literature in management finds that stakeholders can identify strongly with organizations (Ashforth and Mael 1989; Dutton et al. 1994; Scott and Lane 2000) resulting in numerous company-favoring outcomes such as advocacy (e.g., Bhattacharya and Sen 2003), helping behaviors towards other organizational members (e.g., Bell and Menguc 2002), and product purchase (e.g., Lichtenstein et al. 2004). Identification is enhanced by means-end benefits related to CSR because when stakeholders derive benefits from CSR initiatives, it signals to the stakeholder that the company understands their needs and is therefore “like them.” In cases where a stakeholder-company relationship is not as close, such as when the stakeholder has had few interactions with the company, relationship quality may be manifested as increased levels of trust and commitment rather than identification. According to Morgan and Hunt (1994, p.23), trust is a perception of “confidence in the exchange partner's reliability and integrity.” Thus, it reflects not only the expectation that the company will do what it says it will


do, but also the perceived benevolence of the company in the eyes of the stakeholder. Trust is enhanced by means-end benefits because by providing benefits to the stakeholder, the company indicates that it cares about the individual and that it will not act opportunistically towards him or her. The benevolence and integrity that CSR signals has been shown to stimulate trust (Hess, 1995). Trust is closely related to commitment, which is defined by Moorman, Zaltman, and Deshpande (1992, p.316) as “an enduring desire to maintain a valued relationship.” Commitment implies that stakeholders commit resources to the relationship over time because of a psychological attachment to the organization (Gundlach et al. 1995). Once stakeholders receive benefits from the company’s CSR initiatives, they feel a social norm to reciprocate, which will motivate commitment by the stakeholder to the company. This will only be accentuated by the increased levels of trust already mentioned (Morgan and Hunt 1994). Overall, stakeholders will desire an enduring relationship between themselves and the company due to the increased levels of trust and the psychological commitment to continue interacting with the company. Satisfaction, also called cumulative customer satisfaction, is defined by Anderson et al. (1994, p.54) as “an overall evaluation based on the total purchase and consumption experience with a good or service over time.” Note that this form of satisfaction is not conceptualized as an evaluation of a single transaction, but rather of the full gamut of experiences that a consumer has with the company (Garbarino and Johnson 1999). We extend Anderson et al.’s conceptualization to the stakeholder realm, viewing cumulative satisfaction as the overall evaluation of an individual stakeholder’s experience with the company. From this perspective, satisfaction may include multiple types of interactions with the company (e.g., as an investor, employee, etc.). Stakeholders that enter into a relationship with a company will be satisfied to the extent that their overall experience with the company has provided adequate value (i.e., benefits) in relation to


the resources that they have given up over the course of the relationship (Garbarino and Johnson 1999). In our view, stakeholder-company relationship quality will depend on the type of benefits that stakeholders receive from CSR initiatives. Initiatives that go beyond providing functional benefits to satisfy important stakeholder values will result in stronger stakeholder company relationships. In particular, CSR initiatives that lead to value satisfaction will tend to foster identification rather than just trust or satisfaction because these will signal an overlap in values between the stakeholder and the company. CSR initiatives that provide psychosocial benefits to the stakeholder without addressing the deep-seated values of the individual will not lead to the same bond of identification. These may, instead, fulfill important psychological needs of the stakeholder, promoting heightened levels of trust in, and commitment to, the organization. Finally, CSR initiatives that provide only functional benefits will likely satisfy stakeholders without having substantial impacts on trust, commitment or identification. Stakeholder Behaviors There is little doubt that the quality of the relationship between stakeholders and the company influences the behaviors of stakeholders (Morgan and Hunt 1994; Post et al. 2002; Waddock 2001; Waddock and Smith 2000). In response to CSR initiatives, these behaviors may be directed towards one or more of the following: the company, the cause organization, and other stakeholders (Bhattacharya and Sen 2004). Despite the fact that these outcomes are often related to the company or the cause, we conceptualize these as stakeholder level outcomes because they remain and can only be measured at the individual level. Company directed behaviors. Stakeholders interact with the company based on the quality of their relationship with it. This occurs because these stakeholders have received benefits from 18

the company and wish to reciprocate in kind, and because of their desire to maintain the relationship with the company into the future. Stakeholders who either identify with the company or harbor feelings of trust, commitment, or satisfaction will behave in ways that support the company’s objectives while those with a lower level of relationship quality will not. Consumers who identify with the company have greater intent to purchase the company’s products than those who do not (e.g., Brown and Dacin 1997; Drumwright 1994; Lichtenstein et al. 2004; Sen and Bhattacharya 2001). Identification has also been shown to increase job seeking intent in those seeking employment (Greening and Turban 2000; Turban and Greening 1997). And there is evidence that investors purchase stock in companies that they feel reflect their personal values (Schueth 2003; Sparkes and Cowton 2004). As noted previously, Sen et al., (2006) find that stakeholders may seek out multiple ties to the company simultaneously, intending to purchase products, seek employment, and invest in company stock based on their awareness of a single CSR initiative. This suggests that stakeholders respond to the overall quality of the relationship with the company rather than the quality of the relationship in a given stakeholder role. Cause directed behaviors. The same effects that are found on corporate outcomes as a result of the stakeholder-company relationship can be found in the not-for-profit sector as well. This is because a relationship quality approach is just as applicable to the cause domain as it is to the for-profit sector (MacMillan et al. 2005). It is important to note, however, that since we are interested in the outcomes of corporate social responsibility initiatives the ultimate outcomes described here are the result of changes in the stakeholder-company relationship quality as opposed to the individual’s relationship with the cause organization; in other words, the quality of the relationship with the company influences behaviors towards the cause. Perhaps the best example of this is Lichtenstein et al.’s (2004) finding that consumers donate to charities that are


sponsored by the company they purchase from; this occurs as part of a desire to express the values that they share with the company. Other-stakeholder directed behaviors. In addition to findings that CSR influences company favoring and cause favoring behaviors, evidence indicates that when a stakeholder develops a high quality relationship with a company, he or she will engage in behavior that is beneficial to other stakeholders. This contention is based on the CSR literature as well as decades of research on social identity and intergroup relations. A stakeholder who identifies with the company will perceive other stakeholders to be like-minded to him or herself because he or she will see others as sharing similar values (Maignan and Ferrell 2004; Maignan et al. 2005). Social identity theory also suggests that stakeholders who categorize themselves as company members will display systematic biases in favor of perceived company members and against non-members (Brewer and Kramer 1985; Hewstone et al. 2002). This occurs because individuals who identify strongly with the company want to differentiate their own group from comparison groups (Brewer 1991) and enhance their self-esteem which is entwined with the status of the company (Hogg and Abrams 1990). Research on social exchange in organizations finds further that cooperation between individuals and groups is heightened when organizational members view their identity at the level of the collective as opposed to the individual level (Flynn 2005). Thus, for example, as a result of developing a strong relational bond with the company, employees will be motivated to cooperate with fellow employees because they know that it will further the company’s objectives which are aligned with their own. Overall, when individuals develop a strong relationship with the company due to the benefits that CSR provides, they will be prone to engage other stakeholders in cooperative behaviors.


Contingencies The degree to which the level of CSR activity influences perceptions of CSR programs, CSR related benefits, and relationship quality is dependent upon a number of contingency factors. These factors are manifest at either the organizational level or the stakeholder level of analysis. That both of these contextual factors influence the effect of CSR activity on outcomes is supported by numerous studies that find moderating effects attributable to individual factors, the company, the program itself, and competitors (see for example Bhattacharya and Sen 2004). Organizational level contingencies. Organizational level contingency factors moderate the links between the level of CSR activity and both perceptions of CSR initiatives and functional benefits of CSR activity. These factors include characteristics of (1) CSR initiatives, (2) the company, (3) competitors. First, benefits generated by CSR are dependent upon characteristics of the initiative itself including the issue domain (Bhattacharya and Sen 2004) and CSR-company fit (Bloom et al. 2006; Pracejus and Olsen 2004; Sen and Bhattacharya 2001). A useful classification of the issue domain of CSR initiatives is that used by KLD Research and Analytics. Their system classifies initiatives as economic, social, or relating to governance. CSR-company fit refers to the extent of overlap between CSR initiatives and a company’s operations or organizational objectives. It is defined as the “perceived link between a cause and the firm’s product line, brand image, position, and/or target market” (Becker-Olsen et al. 2006, p.47). High fit initiatives incorporate the company’s products or services, attempt to open new markets (e.g., creating wealth for potential customers), or are consistent with the company’s strategic direction (e.g., a hiking apparel company supporting environmental causes). CSR-company fit moderates the relationship between the level of CSR activity and functional consequences because they are more strategic and therefore more likely than non-strategic programs to enhance corporate


performance (Porter and Kramer 2006). CSR-company fit can also reinforce what stakeholders believe is central, enduring, and distinctive about the company (Albert and Whetten 1985), magnifying the effect of level of CSR activity on CSR evaluations. Second, characteristics of the company also moderate the impact of the level of CSR activity on functional benefits and stakeholder evaluations of CSR initiatives. Companies with strong reputations find that the positive effects of CSR are amplified (Bhattacharya and Sen 2004) while the effects of CSR in the case companies with poor reputations are dampened because stakeholders become suspicious of the company’s motives in sponsoring the CSR initiatives (Yoon et al. 2006). The industry in which a company operates is also a moderator of these relationships (Bhattacharya and Sen 2004). Stakeholders are often suspicious of companies in certain industries (e.g., tobacco, oil) which can diminish both functional benefits of CSR and the stakeholder’s evaluations of the initiatives. Third, stakeholders do not evaluate CSR initiatives in a vacuum. Rather they make comparisons of a focal company with its competitors or peer companies (Bhattacharya and Sen 2004). Related to company perceptions is the moderating influence of competitor CSR initiatives. Stakeholders will evaluate CSR initiatives relative to expectations and that these expectations are often based on their knowledge of the CSR initiatives of competitor (Bhattacharya and Sen 2004). A company’s commitment with respect to competitors is also important because it may signal that the company presents an opportunity for the stakeholders to derive benefits (Lichtenstein et al. 2004) due to its relative advantage over industry peers (Porter and Kramer 2006). Stakeholder level contingencies. Stakeholder-level contingencies include characteristics of the stakeholder and the level of involvement of the individual in CSR initiatives. By stakeholder


characteristics we refer to the demographic profile of individuals as well as preferences that an individual holds regarding issues that are supported through the company’s CSR initiatives. These factors impact the magnitude of the effects in our model because characteristics reflect both the needs and values of the individual stakeholder. Thus, for example, the degree to which a person supports the focal issue (of a CSR initiative) moderates the degree to which the initiative produces stakeholder benefits and enhances the stakeholder-company relationship (Sen and Bhattacharya 2001). There is also some evidence that gender plays a role in employee responses to CSR (Wehrmeyer and McNeil 2000). While many beliefs are essentially equivalent across gender, females are more likely than males to be actively involved in environmentally friendly behavior but score lower than men when asked whether technology can be used to solve ecological problems (Wehrmeyer and McNeil 2000). Another important moderating factor is involvement in the process of enacting social responsibility. The effects of CSR are most powerful when stakeholders become active enactors of CSR programs (Bhattacharya et al. 2007). Highly involved stakeholders are more likely than uninvolved individuals to benefit from such programs because they can use the programs to express their own identity. Furthermore, highly involved individuals are able, by tailoring their CSR experiences, to co-create the value that programs provide them (Prahalad and Ramaswamy 2000; Vargo and Lusch 2004). People that are involved in creating, supporting, and sustaining CSR programs also derive a sense of accomplishment, learn skills, and encounter other likeminded individuals, each of which is highly beneficial to the stakeholder and fosters a sense of identification with and trust of the company. Areas for Future Research


Our model provides a number of insights that illuminate some existing gaps in the literature. First, stakeholders respond to CSR activity based on their perceptions of the company’s CSR initiatives. Second, the influence of CSR activity on the quality of a stakeholder’s relationship with the company is driven by benefits that stakeholders derive from such activity. More specifically, taking a means-end perspective allows us to understand the nature of these benefits and their consequent role in driving relationship quality, ranging from satisfaction to the stronger, more rare, identification. Third, stakeholder responses to CSR activity are manifested in behaviors towards not only the company, but also towards the cause and other stakeholders. Based on these insights, we now briefly outline areas that may be fruitful for future research. Understanding the Antecedents of Stakeholder Perceptions of CSR Initiatives While prior research strongly suggests that stakeholder perceptions of CSR initiatives are important (e.g., Bhattacharya et al. 2007; Klein and Dawar 2004; Lichtenstein et al. 2004), our understanding of the factors leading to these assessments is still somewhat limited. As a point of departure, it is clearly important for stakeholders to be aware of CSR initiatives (Sen et al. 2006). However, awareness, and in particular familiarity, are often quite low among stakeholder populations (Sen et al. 2006). This suggests that a better understanding of how and when CSR produces awareness would benefit both theorists and practitioners. Future research might examine which types of communication campaigns are most effective in reaching stakeholders and which conditions are most suitable for such campaigns. A second important area for future research is the process through which stakeholders assess CSR initiatives. It is clear that stakeholders assess the efficacy of CSR initiatives and that they attribute motives behind a company’s CSR activity, however, it is still not clear precisely


how individuals come to make these judgments. Furthermore, since many companies maintain multiple CSR initiatives simultaneously, it would be valuable to understand whether and how numerous initiatives are combined, if at all, into a single assessment of the company’s commitment to social responsibility. Finally, as proposed by our model, stakeholders make comparisons between the CSR initiatives of the focal company and the initiatives of other companies. However, to our knowledge, no research has examined how these comparisons are made. Moreover, it is not clear how individuals determine which companies are referenced in these comparisons. Do individual stakeholders only make comparisons within the industry of the focal company, or do they identify “peers” that they perceive to be similar but in other industries? If the latter is true, and we find some anecdotal evidence of this in focus groups that we have conducted (Bhattacharya et al. 2007), it suggests that the competitive set for CSR assessments may be larger than is typically conceptualized. Extending the Means-End Approach We borrow from means-end chain theory to construct a model of stakeholder responses to CSR activity. We also present a number of hypothetical chains to illustrate that stakeholders are often goal directed in their interpretation of CSR activity. However, as recognized by the meansend approach, the consequences of CSR can be highly individualized. Recognizing that our examples are by no means exhaustive, it is important to understand the full range of consequences that occur as a result of CSR activity. Furthermore, a taxonomy of functional consequences, psychosocial consequences, and values would enable future researchers to quantify the relative effects of each consequence on relationship quality and ultimately, on stakeholder behaviors. Since many practitioner–based means-end research studies attempt to


segment individuals based upon the consequences found in these chains, such a taxonomy would also be of great value to practitioners. In order to extend this insight, future researchers may wish to identify specific attributes of CSR initiatives that are likely to produce meaningful consequences for individual stakeholders. Since we are concerned with responses to CSR across numerous stakeholder domains, it will also be important to document whether there are differences in means-end chains both within and between various stakeholder roles. For example, how do functional benefits for a consumer differ from not only that of other consumers but also employees? Will the same functional benefit provide identical psychosocial benefits regardless of the stakeholder role? Since contemporary research tends to confound these levels of consequences, it will be helpful to delineate these benefits with greater precision. As prior means-end research clearly demonstrates (Botschen and Thelen 1999; Hofstede et al. 1999), documenting these chains provides opportunities for segmentation based on functional benefits, psychosocial benefits, or values. Finally, there may be times where benefits may create conflict for stakeholders with multiple simultaneous roles. Consider an individual that learns about a $1 million charitable gift to a community art center. Employees may derive substantial psychosocial benefits from the gift while investors may become disaffected by the short-term functional consequence of such a large monetary expenditure. Such a program could send conflicting messages to some stakeholders, and while predictions about how such a scenario might play out is beyond the scope of this paper, it is worthy of investigation. Regardless, companies need to learn how to balance effectively the potentially conflicting needs of their stakeholders, or at least engage in programs that on aggregate yield win-win situations for it and its multifarious stakeholders. Understanding Linkages Between Stakeholders


Our model proposes that CSR leads to behaviors directed not only towards the company and the cause, but also towards other stakeholders. Thus, a company engaging in substantial levels of CSR activity can expect to derive direct effects of such efforts as each stakeholder responds with behaviors directed towards the company; such efforts may also yield indirect effects whereby company performance is impacted through the cooperative - or uncooperative behaviors between stakeholders. Future research may investigate how and under what conditions this cooperation or conflict is most likely to occur. Research on stakeholder-directed behaviors should concentrate on linkages within groups, across groups, and in multiple groups. Within group analysis might involve how CSR influences the behaviors of employees towards fellow employees. Since we find in prior research that employees in remote locations of the company benefit from CSR by feeling more connected to others, it would be important to find out whether CSR encourages employees to cooperate with employees in geographically disperse offices. This is especially important given the global nature of business today. Between-stakeholder group analyses would study the effects of CSR on the relations between individuals or groups of stakeholders in one role and individuals or groups of stakeholders in another role. For example, a potential research question might be, does an employee’s knowledge of CSR activity facilitate cooperation with customers? Finally, research should examine whether and under what circumstances CSR encourages a stakeholder to develop multiple roles (e.g., simultaneously a customer, employee, and investor) with the company and how this might impact relations with other stakeholders. Prior research finds evidence that once aware of CSR activity, individuals do seek to develop multiple ties to the company (Sen et al. 2006), but it is still unclear how this might impact other stakeholders. Conclusion


This paper attempts to extend our understanding of the strategic effectiveness of CSR by revealing the psychological mechanisms that drive individual stakeholder responses to CSR activity. In particular, we draw on the means-end chain framework to articulate and implicate the types of benefits stakeholders derive from CSR initiatives (i.e., functional, psychosocial, and value-satisfaction) as a fundamental determinant of their reactions to such initiatives. In particular, we argue that the quality of the stakeholder-company relationship resulting from a CSR initiative depends on the type of benefits stakeholders obtain from it. By outlining the process whereby benefits and relationship quality drive CSR related outcomes, we hope to contribute to our understanding of how and when CSR activity influences corporate performance.


Figure 1: A Model for Understanding Stakeholder Responses to CSR


Table 1: Examples of Returns to Stakeholders as a Result of an Oral Health Initiative

Returns to Stakeholders Functional Benefits





Healthy teeth

Stock returns, Lower risk

Use professional skills to aid personal causes Work-life integration

Psychosocial Benefits

Social acceptance


Financial success







References Albert, Stuart and David A. Whetten (1985), "Organizational Identity," Research in Organizational Behavior, 7, 263. Anderson, Eugene W., Claes Fornell, and Donald R. Lehmann (1994), "Customer Satisfaction, Market Share, and Profitability: Findings From Sweden," Journal of Marketing, 58 (3), 53. Ashforth, Blake E. and Fred Mael (1989), "Social Identity Theory and the Organization," Academy of Management Review, 14 (1), 20. Bagozzi, Richard P. (1995), "Reflections on Relationship Marketing in Consumer Markets," Journal of the Academy of Marketing Science, 23 (4), 272-77. Bartel, Caroline A. (2001), "Social Comparisons in Boundary-spanning Work: Effects of Community Outreach on Members' Organizational Identity and Identification," Administrative Science Quarterly, 46 (3), 379-414. Batson, C. Daniel (1998), "Altruism and Prosocial Behavior," in The Handbook of Social Psychology, D.T. Gilbert and S.T. Fiske and G. Lindzey, Eds. New York, NY: McGraw-Hill. Becker-Olsen, Karen L., B. Andrew Cudmore, and Ronald Paul Hill (2006), "The Impact of Perceived Corporate Social Responsibility on Consumer Behavior," Journal of Business Research, 59 (1), 46-53. Bell, Simon J. and Bulent Menguc (2002), "The Employee-Organization Relationship, Organizational Citizenship Behaviors, and Superior Service Quality," Journal of Retailing, 78 (2), 131-46. Berger, Ida E., Peggy Cunningham, and Minette E. Drumwright (2007), "Mainstreaming Corporate Social Responsibility: Developing Markets for Virtue," California Management Review, 49 (4), 132-57. Berger, Ida E., Peggy H. Cunningham, and Minette E. Drumwright (2006), "Identity, Identification, and Relationship Through Social Alliances," Journal of the Academy of Marketing Science, 34 (2), 128-37. Bhattacharya, C. B., Shuili Du, and Sankar Sen (2005), "Convergence of Interests–Producing Social and Business Gains Through Corporate Social Marketing," Center for Responsible Business (University of California, Berkeley), Working Paper. Bhattacharya, C. B. and Sankar Sen (2003), "Consumer--Company Identification: A Framework for Understanding Consumers' Relationships with Companies," Journal of Marketing, 67 (2), 7688.


---- (2004), "Doing Better at Doing Good: When, Why, and How Consumers Respond to Corporate Social Initiatives," California Management Review, 47 (1), 9-24. Bhattacharya, C.B., Sankar Sen, and Daniel Korschun (2007), "Corporate Social Responsibility as an Internal Marketing Strategy," MIT Sloan Management Review, Forthcoming. Bloom, Paul N., Steve Hoeffler, Kevin Lane Keller, and Carlos E. Basurto Meza (2006), "How Social-Cause Marketing Affects Consumer Perceptions," MIT Sloan Management Review, 47 (2), 49-55. Botschen, Gunther and Eva M. Thelen (1999), "Using Means-end Structures for Benefit Segmentation," European Journal of Marketing, 33 (1/2), 4-58. Brewer, Marilynn B. (1991), "The Social Self: On Being the Same and Different at the Same Time," Personality and Social Psychology Bulletin, 17, 475-82. Brewer, Marilynn B. and Roderick M. Kramer (1985), "The Psychology of Intergroup Attitudes and Behavior," Annual Review of Psychology, 36, 219. Brown, Tom J. and Peter A. Dacin (1997), "The Company and the Product: Corporate Associations and Consumer Product Responses," Journal of Marketing, 61 (1), 68-84. Clarkson, Max E. (1995), "A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance," Academy of Management Review, 20 (1), 92-117. Crosby, Lawrence A., Kenneth A. Evans, and Deborah Cowles (1990), "Relationship Quality in Services Selling: An Interpersonal Influence Perspective," Journal of Marketing, 54 (3), 68. De Wulf, Kristof, Gaby Odekerken-Schroder, and Dawn Iacobucci (2001), "Investments in Consumer Relationships: A Cross-Country and Cross-Industry Exploration," Journal of Marketing, 65 (4), 33-50. Domini, Amy (1992), "What is Social Investing? Who are Social Investors?," in The Social Investment Almanac, Lydenberg and Domini Kinder, Ed. New York: Henry Holt and Company. Donaldson, Thomas and Lee E. Preston (1995), "The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications," Academy of Management Review, 20 (1), 65-91. Drumwright, Minete E. (1994), "Socially Responsible Organizational Buying: Environmental Concern as a Noneconomic Buying Criterion," Journal of Marketing, 58 (3), 1. Du, Shuili (2007), "Convergence of Interests: Producing Social and Business Impact Through Corporate Social Initiatives," Dissertation, Boston University. Du, Shuili, C. B. Bhattacharya, and Sankar Sen (2007), "Strengthening Consumer Relationships Through Corporate Social Initiatives."


Dutton, Jane E., Janet M. Dukerich, and Celia V. Harquail (1994), "Organizational Images and Member Identification," Administrative Science Quarterly, 39 (2), 239-63. Dwyer, F. Robert, Paul H. Schurr, and Sejo Oh (1987), "Developing Buyer-Seller Relationships," Journal of Marketing, 51 (2), 11-27. Ellen, Pam Scholder, Lois A. Mohr, and Deborah J. Webb (2000), "Charitable Programs and the Retailer: Do They Mix?," Journal of Retailing, 76 (3), 393-406. Ellen, Pam Scholder, Deborah J. Webb, and Lois A. Mohr (2006), "Building Corporate Associations: Consumer Attributions for Corporate Socially Responsible Programs," Journal of the Academy of Marketing Science, 34 (2), 147-57. Flynn, Francis J. (2005), "Identity Orientations and Forms of Social Exchange in Organizations," Academy of Management Review, 30 (4), 737-50. Forehand, Mark R. and Sonya Grier (2003), "When is Honesty the Best Policy? The Effect of Stated Company Intent on Consumer Skepticism," Journal of Consumer Psychology, 13 (3), 34956. Freeman, R. Edward (1984), Strategic Management: A Stakeholder Approach. Boston: Pitman. Garbarino, Ellen and Mark S. Johnson (1999), "The Different Roles of Satisfaction, Trust, and Commitment in Customer Relationships," Journal of Marketing, 63 (2), 70-87. Greening, Daniel W. and Daniel B. Turban (2000), "Corporate Social Performance as a Competitive Advantage in Attracting a Quality Workforce," Business & Society, 39 (3), 254. Gronroos, Christian (1995), "Relationship Marketing: The Strategy Continuum," Academy of Marketing Science. Journal, 23 (4), 252. Grow, Brian, Steve Hamm, and Louise Lee (2005), "The Debate Over Doing Good," in Business Week: McGraw-Hill Companies, Inc. Gundlach, Gregory T., Ravi S. Achrol, and John T. Mentzer (1995), "The Structure of Commitment in Exchange," Journal of Marketing, 59 (1), 78. Gutman, Jonathan (1982), "A Means-End Chain Model Based on Consumer Categorization Processes," Journal of Marketing, 46 (2), 60-72. ---- (1997), "Means-End Chains as Goal Hierarchies," Psychology & Marketing, 14 (6), 545-60. Hewstone, Miles, Mark Rubin, and Hazel Willis (2002), "Intergroup Bias," Annual Review of Psychology, 53 (1), 575.


Hofstede, Frenkel Ter, Jan-Benedict E. M. Steenkamp, and Michel Wedel (1999), "International Market Segmentation Based on Consumer--Product Relations," Journal of Marketing Research (JMR), 36 (1), 1-17. Hogg, Michael A. and Dominic Abrams (1990), "Social Motivation, Self-esteem and Social Identity," in Social Identity Theory: Constructive and Critical Advances, Abrams Dominic and Hogg Michael A., Eds. New York: Harvester Wheatsheaf. Klein, Jill and Niraj Dawar (2004), "Corporate Social Responsibility and Consumers' Attributions and Brand Evaluations in a Product Harm Crisis," International Journal of Research in Marketing, 21 (3), 203-17. Klein, Jill G., N. Craig Smith, and Andrew John (2002), "Exploring Motivations for Participation in a Consumer Boycott," Advances in Consumer Research, 29 (1), 363-69. Klein, Jill Gabrielle, N. Craig Smith, and Andrew John (2004), "Why We Boycott: Consumer Motivations for Boycott Participation," Journal of Marketing, 68 (3), 92-109. Kotler, Philip and Nancy Lee (2004), Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. Hoboken, NJ: Wiley & Sons, Inc. Lichtenstein, Donald R., Minette E. Drumwright, and Bridgette M. Braig (2004), "The Effect of Corporate Social Responsibility on Customer Donations to Corporate-Supported Nonprofits," Journal of Marketing, 68 (4), 16-32. Luo, Xueming and C. B. Bhattacharya (2006), "Corporate Social Responsibility, Customer Satisfaction, and Market Value," Journal of Marketing, 70 (4), 1-18. ---- (2007), "The Debate Over Doing Good: Corporate Social Performance and Firm Unsystematic Risk," Working Paper. MacMillan, Keith, Kevin Money, Arthur Money, and Steve Downing (2005), "Relationship Marketing in the Not-for-Profit sector: An Extension and Application of the Commitment-Trust Theory," Journal of Business Research, 58 (6), 806. Maignan, Isabelle and O. C. Ferrell (2004), "Corporate Social Responsibility and Marketing: An Integrative Framework," Journal of the Academy of Marketing Science, 32 (1), 3-19. Maignan, Isabelle, O. C. Ferrell, and Linda Ferrell (2005), "A Stakeholder Model for Implementing Social Responsibility in Marketing," European Journal of Marketing, 39 (9/10), 956-77. Margolis, Joshua D. and James P. Walsh (2003), "Misery Loves Companies: Rethinking Social Initiatives by Business," Administrative Science Quarterly, 48 (2), 268-305.


McGuire, Jean B., Alison Sundgren, and Thomas Schneeweis (1988), "Corporate Social Responsibility and FIrm Financial Performance," Academy of Management Journal, 31 (4), 85472. McKinsey & Company (2006), "Global Survey of Business Executives," in The McKinsey Quarterly. Moorman, Christine, Gerald Zaltman, and Rohit Deshpande (1992), "Relationships Between Providers and Users of Market Research: The Dynamics of Trust Within and Between Organizations," Journal of Marketing Research (JMR), 29 (3), 314. Morgan, Robert M. and Shelby D. Hunt (1994), "The Commitment-Trust Theory of Relationship Marketing," Journal of Marketing, 58 (3), 20. Orlitzky, Marc, Frank L. Schmidt, and Sara L. Rynes (2003), "Corporate Social and Financial Performance: A Meta-analysis," Organization Studies (01708406), 24 (3), 403-41. Palmatier, Robert W., Rajiv P. Dant, Dhruv Grewal, and Kenneth R. Evans (2006), "Factors Influencing the Effectiveness of Relationship Marketing: A Meta-Analysis," Journal of Marketing, 70 (4), 136-53. Peter, J. Paul and Jerry C. Olson (1999), Consumer Behavior and Marketing Strategy (5 ed.). New York: Irwin/McGraw-Hill. Porter, Michael and Mark R. Kramer (2006), "Strategy & Society: The Link between Competitive Advantage and Corporate Social Responsibility," Harvard Business Review, 84 (12), 78-92. Post, James E., Lee E. Preston, and Sybille Sachs (2002), "Managing the Extended Enterprise: The New Stakeholder View," California Management Review, 45 (1), 6-28. Pracejus, John W. and G. Douglas Olsen (2004), "The Role of Brand/Cause Fit in the Effectiveness of Cause-Related Marketing Campaigns," Journal of Business Research, 57 (6), 635. Prahalad, C. K. and Venkatram Ramaswamy (2000), "Co-opting Customer Competence," Harvard Business Review, 78 (1), 79-88. Reynolds, Thomas J. and Jerry C. Olson Eds. (2001), Understanding Consumer Decision Making: The Means-End Approach to Marketing and Advertising Strategy. Mahwah, New Jersey: Lawrence Erlbaum Associates. Schueth, Steve (2003), "Socially Responsible Investing in the United States," Journal of Business Ethics, 43 (3), 189-94.


Scott, Susanne G. and Vicki R. Lane (2000), "A Stakeholder Approach to Organizational Identity," Academy of Management Review, 25 (1), 43-62. Sen, Sankar and C. B. Bhattacharya (2001), "Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Social Responsibility," Journal of Marketing Research (JMR), 38 (2), 225-43. Sen, Sankar, C. B. Bhattacharya, and Daniel Korschun (2006), "The Role of Corporate Social Responsibility in Strengthening Multiple Stakeholder Relationships: A Field Experiment," Journal of the Academy of Marketing Science, 34 (2), 158-66. Sen, Sankar, Zeynep Gurhan-Canli, and Vicki Morwitz (2001), "Withholding Consumption: A Social Dilemma Perspective on Consumer Boycotts," Journal of Consumer Research, 28 (3), 399. Smith, N. Craig (2003), "Corporate Social Responsibility: Whether or How?" California Management Review, 45 (4), 52-76. Sparkes, Russell and Christopher J. Cowton (2004), "The Maturing Of Socially Responsible Investment: A Review Of The Developing Link With Corporate Social Responsibility," Journal of Business Ethics, 52 (1), 45. Turban, Daniel B. and Daniel W. Greening (1997), "Corporate Social Performance and Organizational Attractiveness to Prospective employees," Academy of Management Journal, 40 (3), 658. Vargo, Stephen L. and Robert F. Lusch (2004), "Evolving to a New Dominant Logic for Marketing," Journal of Marketing, 68 (1), 1-17. Waddock, Sandra (2001), "How Companies Build Social Capital," Reflections, 3 (1), 18-24. Waddock, Sandra and Neil Smith (2000), "Relationships: The Real Challenge of Corporate Global Citizenship," Business & Society Review (00453609), 105 (1), 47. Wehrmeyer, Walter and Margaret McNeil (2000), "Activists, pragmatists, technophiles and treehuggers? Gender differences in employees' environmental attitudes," Journal of Business Ethics, 28 (3), 211. Yoon, Yeosun, Zeynep Gurhan-Canli, and Norbert Schwarz (2006), "The Effect of Corporate Social Responsibility (CSR) Activities on Companies With Bad Reputations," Journal of Consumer Psychology, 16 (4), 377-90.


Similar Documents

Premium Essay

Corporate Social Responsibility In Corporate Society

...Methodology Assignment THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) TO COMPANY’S VALUE IN PROPERTY AND REAL ESTATE COMPANY LISTED IN INDONESIA STOCK EXCHANGE Angga Arifiawan Sudibyo 041211332113 Accounting Department Faculty of Economic and Business Airlangga University Surabaya 2014 PART 1 INTRODUCTION 1.1 Research Background In recent years, the demand of property is increasing significantly, especially in big cities like Jakarta and Surabaya. This massive amount of demand is a chance for companies in real estate industry to earn big profit. Some big players in these industries are already listed in Indonesia Stock Exchange, they compete each other, develop and expand their business insanely to be going concern...

Words: 1998 - Pages: 8

Premium Essay

Csr - Samsung

...Responsibility (CSR) as part of business strategy has shown increased prominence in contemporary business world. On a daily basis the roles corporations play in society are scrutinized by the media who constantly lookout to report on scandals, corporate misbehavior or, the positive contributions businesses have on society (Crane, 2008). Induced by this, corporations are facing increasing pressure to legitimate their practices and take account of the impact they have on society, which has led to the emergence of what Crane (2008) refers to as a ‘CSR Movement’. The concept of CSR emerged in the 1960/70’s as an American Doctrine that has popularized in recent decades due to the emergence of factors including globalization and the rise of global/transnational corporations (Jenkins, 2005). Attitudes around this concept have also altered from viewing CSR as a philanthropic exercise to a concept/practice necessary for corporate survival. The latter point can be supported by a numerous examples of organizations that have not complied with ethical/socially responsible standards, such as Nike, who faced numerous allegations of unethical conditions at its overseas suppliers in the 1990’s (Zadek, 2004). It is virtually impossible to define CSR due to the every-evolving nature of the concept. Various sources including academics, articles, and websites tackle, and all produce unique definitions of the concept. Crane, Matten and Spence (2008) however focus on the characteristics......

Words: 4538 - Pages: 19

Premium Essay

Differences Between Csr and Pr

...Discuss the relationship between CSR and PR and analyze the ethical issues that arise. How may practitioners ensure their CSR programs are more than just rhetoric? CSR "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large".(Lord Holme and Richard Watt-Making good business sense) CSR has become a relevent issue in the business field. Nowdays people judge a companys reputation with the way how they deal with their social and environmental responsibilities. Sevral studies revealed that responsible ativities are increasingly valued and demanded by stakeholders.(consumers, investors, community,journalist etc) who see in such activities the civic behavior of bussinesses, and which in turn influences their evaluation of the companies. According to study carried out by MORI in UK indicates that ,75% consumers while evaluating a company considers its level of social responsibility to be important, almost 90% of employees believe that their company should be socially responsible, almost 40% of analyst and investors consider it very important while evaluating the company and over 50 % of journalists consider social responsibility to be very important while judging the company. CSR can be better understood as a means of reinforcing both reputation and legitimacy, as it provides......

Words: 1453 - Pages: 6

Premium Essay

Evaluation of Corporate Social Responsibility in the Airline and Air Travel Industry

...of eight major airlines in the air travel industry and their adoption of corporate social responsibility. The paper is mainly structured in two major parts. Broadly stated, the first part is a theoretical perspective whereas the latter part captures the practical evaluation of CSR in eight airlines. Therefore, the first part irons the researcher’s understanding of CSR theory such as the participating stakeholders. In addition, this part captures an overview of CSR in the air travel industry as well as outlining accumulative gains to this trend. The second part covers the broader part of this thesis taking a practical approach. This part includes qualitative analysis, evaluation and review of CSR application programs in eight of the sampled airlines. The chosen airlines where selected by sampling from among three of the largest airline alliances globally. The sampled airlines include British Airways, America Airlines, Qantas, Lufthansa, All Nippon Airways, Air France-KLM, Delta Airlines and Cathay Pacific. The practical part also discussed critical CSR elements as adopted by these airlines subject to an overview of each airline and CSR theory. Notwithstanding, the researcher evaluated various CSR program styles, presentations and structures. Following qualitative analysis and evaluation of the findings, the paper concludes that increased pressure from...

Words: 6790 - Pages: 28

Premium Essay

Journal of Management-We Know and Don't Know About Csr

...Downloaded from at Sunway Education Group on April 23, 2014 Journal of Management Vol. 38 No. 4, July 2012 932-968 DOI: 10.1177/0149206311436079 © The Author(s) 2012 Reprints and permission: http://www. What We Know and Don’t Know About Corporate Social Responsibility: A Review and Research Agenda Herman Aguinis Indiana University Ante Glavas University of Notre Dame The authors review the corporate social responsibility (CSR) literature based on 588 journal articles and 102 books and book chapters. They offer a multilevel and multidisciplinary theoretical framework that synthesizes and integrates the literature at the institutional, organizational, and individual levels of analysis. The framework includes reactive and proactive predictors of CSR actions and policies and the outcomes of such actions and policies, which they classify as primarily affecting internal (i.e., internal outcomes) or external (i.e., external outcomes) stakeholders. The...

Words: 17984 - Pages: 72

Premium Essay

Company Law

...public are more curious about the CSR and the its legal expectation. Some countries have already set mandatory regulation about the CSR. For example, in Australia the Corporations Act 2001 stated that companies need to disclose environmental performance and another Act[1] requires certain companies to provide the information about greenhouse gas emissions. However, in the UK, the regulations mainly govern financial disclosures[2] and there are few regulations about the CSR of company. In the aspect of law, the Companies Act 2006 s.172[3] set some duties for the directors to promote the success of company which are in relation to legal expectation of the corporate social responsibility. The notion of CSR and the relationship between CSR and its legal expectation is the main of this essay. This essay will critically discuss the notion of corporate social responsibility and giving particular attention to minimum legal expectations. The structure is as follows: in the section 1, we are focus on the discussion in relation to many kinds of the definition of corporate social responsibility. In the section 2, we will discuss the notion of CSR through different theory perspectives and the minimum legal expectation. In the section 3, after obtain some results about the problems of currently CSR issue through the discussion between different theories, we will concentrate on the legal topic of the CSR and use some cases to analysis mandatory and voluntary CSR. In the section 4, we......

Words: 3607 - Pages: 15

Premium Essay

Fusion of Corporate Governance

...FUSION OF CORPORATE GOVERNANCE & CSR PRACTICES BUSINESS ETHICS AND CORPORATE GOVERNANCE Submitted to: Prof. I Sridhar Submitted by: Dhvani Shah (64689) FSB II TABLE OF CONTENTS TOPIC | Pg No. | Introduction | 3 | Concepts | 6 | Conceptual Discussion | 10 | Implementation of CG & CSR in corporate | 18 | CSR/CG framework | 21 | Bibliography | 30 | I. INTRODUCTION: CSR is concerned with the impacts that the activities of an organization have on the social, environmental and economic environment in which it operates. CG is concerned with the manner in which the senior management or Board of Directors direct, manage and control the organization and relate to shareholders. The concepts cannot be mutually exclusive but merge together, each offering a different yet complementary perspective on the activities of an organization, to form a robust strategic business management tool. The aim of the CSR and CG management system is to define, understand and improve the balance between entrepreneurship and ethical practice. Organizations must demonstrate this core......

Words: 5250 - Pages: 21

Premium Essay


...Starbucks BAMMC – BA Thesis May, 2012 Corporate Social Responsibility – A case study of Starbucks’ CSR communication through its corporate website Bachelor Thesis in Marketing and Management Communication Sanne Sanne Bruhn-Hansen CPR: XXXXXX-XXXX Supervisor: Tomasz A. Fediuk No. of characters: Thesis: 54,329 Abstract: 3,492 Page 1 of 42 Sanne Bruhn-Hansen Supervisor: Tomasz A. Fediuk Corporate Social Responsibility & Starbucks BAMMC – BA Thesis May, 2012 Abstract Organizations today are experiencing increased pressure from their surrounding environments to act as good social citizens while still being profitable. Acting social and ethical responsible has become an expectation rather than a differentiation strategy to obtain organizational legitimacy. Therefore, this thesis examines how the very successful global coffee company, Starbucks, communicates its CSR initiatives through its corporate website. The aim is to investigate what is communicated, what different online communication channels are utilized, as well as how the communication is framed to target different stakeholder groups. In the first part of the report, after stressing the relevance of engaging in CSR activities and the importance of effective CSR communication, Schwartz & Carroll’s (2003) Three Domain Approach for CSR motives is briefly introduced. This gives an overview of why companies engage in CSR initiatives and what outcomes are expected. Then, the thesis proceeds to the overall......

Words: 12638 - Pages: 51

Premium Essay

Business Ethics

...Small business social responsibility: Expanding core CSR theory Laura J. Spence Abstract This paper seeks to expand business and society research in a number of ways. Its primary purpose is to redraw two core CSR theories (stakeholder theory and Carroll’s CSR pyramid), enhancing their relevance for small business. This is done by the application of the ethic of care, informed by the value of feminist perspectives and the extant empirical research on small business social responsibility. It is proposed that the expanded versions of core theory have wider relevance, value and implications beyond the small firm context. The theorization of small business social responsibility enables engagement with the mainstream of CSR research as well as making a contribution to small business studies in scholarly, policy and practice terms. Key words: corporate social responsibility, ethic of care, feminist ethics, small and medium sized enterprises (SMEs), small business, Carroll’s pyramid, stakeholder theory. Correspondence: Laura J. Spence, PhD. Professor of Business Ethics. Director, Centre for Research into Sustainability, School of Management, Royal Holloway, University of London, Egham, Surrey, TW20 0EX, UK. Acknowledgements: With sincere thanks to the special issue editors and reviewers, Kate Grosser and Dirk Matten for their insightful comments in the development of this paper. Introduction Small business social responsibility - whether it be a......

Words: 12529 - Pages: 51

Premium Essay

Csr in Vietnam

...supervisor Dr. Le Van Lien, International School, Vietnam National University Hanoi. He has kindly helped me and supported me all the way through. I also would like to express my thank to Ms. Sumathi and Ms. Shenba, Help University College, who initiated the project and give so much instruction and support. Additionally, I also would like to extend my special thanks to managers, accountants, my friends, and other people who have help me to carry out the survey. I want to thank them for all their support, interest and valuable hints. PHAM THUY LY iii CORPORATE SOCIAL RESPONSIBILITY IN VIETNAM; A STUDY OF ITS IMPORTANCE By PHAM THUY LY March 2011 Supervisor: Dr. Le Van Lien ABSTRACT CSR is currently an important and necessary issue for everyone and business organizations in the world, as well as in Viet Nam. CSR concept has been developed for several decades in the world, but in Viet Nam, it is not popular for all people and companies. Especially, Vietnamese economy has been...

Words: 15301 - Pages: 62

Premium Essay

Explain with Examples What Is Meant by Corporate Social Responsibility and Discuss Why It Is Important to Modern Businesses

...BUSINESSES Introduction Corporate Social Responsibility (CSR) has become an important part of strategic policy for companies. Barbara and Parker (2008, p.433) state that companies without CSR can not survive and success in this modern life where people can get information about them easily. In order for companies to survive and success in this modern life, they seems to get a clear idea of what CSR means and do good work as CSR in the eye of the public. This essay attempts to show the definitions of CSR and argue that why CSR is considered to be important in modern life in terms of stakeholder. 1 Main body 1.1 What is meant by Corporate Social Responsibility. Over the past 40 years the definition of CSR has been debated by a lot of scholars. Although it has attracted a considerable attention, according to Blowfield and Murray (2008, p.6), there has never been a single definition of CSR. Similarly, Mc Williams, Siegel and Wright (2006, p.327) claim that we have not reached to an accepted consensus on how to define CSR. Garriga and Mele (2004, p.51, cited in Benn and Bolton, 2011, p.56) point out that “Theories and practices around notions such as ‘society and business, social issues management, public policy and business, stakeholder management, (and) corporate accountability’ have contributed to definitional variations”. Moreover, Isa (2012, p.327-328) also points out that various companies’ managers have found CSR is useful to achieve their purposes. As a......

Words: 1093 - Pages: 5

Premium Essay

Corportate Social Responsibility

...3: Does CSR represent a genuine desire by corporations to do well towards society? Introduction The dominant model of business activity in the past merely concentrated on the benefit of the shareholders, which is maximizing profit from the firms’ activities. Any other benefits or harms created in the process of the activity were considered secondary. Issues such as ethics and creating values for customers and stakeholders were thus ignored and rarely paid attention to. Unfortunately with the business world ever-changing, the culture that was embedded in the past is no longer workable in this 21st century as it was resistant to changes, inconsistent with the laws and ignores the ethical side (Freeman 2008). The issue of Corporate Social Responsibility or CSR has been the subject of debate among researchers for the past twenty years (Chen & Winai, 2011). There have been many arguments if businesses should engage CSR initiatives in their operations. CSR or corporate citizenship is defined as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (Moir 2001). The essay will discuss on the literature review of the different perspectives of CSR, arguments against it and the analysis if CSR represent corporations’ genuine desire to contribute towards the society. Literature Review Arguments for......

Words: 2985 - Pages: 12

Premium Essay

Csr Synopsis

...and wide spreading background. Despite the concept of CSR being growing, manifested and flourished in recent times, the late 1800s (industrial revolution) is considered to be the beginning of CSR concept and practice, when creating more productive employees were the main concern for promising business. One might argue to differentiate the social and business reason behind. Carnegie, Cadbury and Lever were among the many individuals who utilised company assets to improve the conditions of nineteenth century workers. Throughout the twentieth century, companies such as Norsk Hydro would take responsibility for social conditions in their, often isolated, company towns. According to management historian Daniel A. Wren, there were criticism of the emerging factory system in Great Britain, particularly regarding the employment of women and children, and these same issues occurred in the America as well. Reformers of both countries perceived the factory system to be the source of numerous social problems, including labour unrest, poverty, slums, and children and female labour. Wren depicted the industrial betterment/welfare movement of this early period as an uneven mixture of humanitarianism, philanthropy and business acumen. He points to industrialists such as John H. Patterson of National Cash Register as one executive instrumental in setting the course for the industrial welfare movement. We can perceive the evidence of CSR practice mostly in developed countries, which......

Words: 1228 - Pages: 5

Premium Essay

A Case Study of Corporate Social Responsibility: a Sustainable Tool of Companies’ Development in Vietnam much instruction and support. 3. Thank all the respondents in Panasonic company who have helped me complete the survey with their enthusiastic and supporting manner. 2 A CASE STUDY OF CORPORATE SOCIAL RESPONSIBILITY: A SUSTAINABLE TOOL OF COMPANIES’ DEVELOPMENT IN VIETNAM By HOANG THUY HANG October 2011 Supervisor: Dr. PHAM DUC HIEU ABSTRACT With the increasing effects of ASEAN over the world, Vietnam is an ideal market for corporations. Furthermore, becoming the member of WTO since 2007 is an opportunity as well as the threats for local companies. Following the globalization trend, corporate social responsibility (CSR) has been the vital issue in both national and global market. CSR has recently emerged in Vietnam’s market, however, the knowledge and actions of CSR is limited. Many scandals occurred relating to CSR issues such as the case of Vedan Co. Ltd, Sabeco...

Words: 10324 - Pages: 42

Premium Essay

Industries and Csr

...First version (1.0): October, 2008 ___________________________________________________________________________ Abstract: While much of the previous literature considers whether corporate social responsibility (CSR) pays, we take a more nuanced perspective, theoretically and empirically, by investigating when CSR pays and for whom? Theoretically, we develop two contingency perspectives. First, we extend previous work to argue that CSR’s impacts on corporate financial performance (CFP) are moderated by five factors: CSR form, firm characteristics, time, national framework and industrial characteristics. Focusing on industrial characteristics, we theorise that differences in industries’ dependency on certain stakeholder groups, their proximity to the end consumer, their potential for social and environmental damages and their level of product / service differentiation moderate CSR’s value relevance. Our second contingency perspective considers for whom CSR might pay. While previous research has almost exclusively viewed CSR’s value from a corporate perspective, we argue that stakeholders, government, and investor perspective are also relevant. Empirically, we analyse CSR’s value across ten industry sectors from a corporate and investor aspect, respectively. We find that CSR has substantial value for corporations in the health care, industrials, and...

Words: 13014 - Pages: 53