Corporate Reputation and Philanthropy: An Empirical Analysis

This paper analyzes the determinants of corporate reputation within a sample of large UK companies drawn from a diverse range of industries. We pay particular attention to the role that philanthropic expenditures and policies may play in shaping the perceptions of companies among their stakeholders. Our findings highlight that companies which make higher levels of philanthropic expenditures have better reputations and that this effect varies significantly across industries. Given that reputational indices tend to reflect the financial performance of organizations above other factors (Fryxell, G. E. and J. Wang: 1994, Journal of Management 20, 1–14) and that elements of the literature emphasise that discretionary aspects of social responsibility, including corporate donations, may not be in the financial interests of organizations (e.g. Friedman, M.: 1970, “The Social Responsibility of Business is to Increase its Profits”, New York Times Magazine, September 13), this is a significant finding. It suggests that philanthropic expenditures may play a significant role in stakeholder management and may, in particular, lead to stakeholders holding more positive impressions of philanthropic corporations.     

Reputation as Matching Identities and Images: Extending Davies and Chun's (2002) Research on Gaps between the Internal and External Perceptions of the Corporate Brand

Corporate reputation is defined as a construct representing aggregated perceptions of people in and around companies. A corporate personality scale was developed to measure identities as internal perceptions and images as external perceptions with the same instrument. We report here an application of this instrument and the replication of a previous study conducted by Davies and Chun in 2002 (Corporate reputation review 5(2/3): 144–158), by comparing two similar companies operating in the same industry. Perceptions of employees, students, journalists and professional colleagues were measured for each company. The reputations of the two companies were different in synchronization of perceptions of respondent groups for each company (one high and one low) and in their comparative scores from different respondent groups. The study discovered that two companies could be equally successful in performance while their reputations can be significantly different. The second significant theoretical implication of the study was the finding that a composite, aggregate measure of a corporate reputation can obscure as much as reveal perceptions of different valuing groups. The main practical implication of the study is that companies can achieve comparable performances despite having different personalities both in profile and in coherence. This implies that executives need to observe their organizations through various views, which should allow them more freedom of action and experimentation.     

Balancing acts: Managing employees and reputation in social media

Abstract

Although previous studies have shown that social-media platforms offer companies new ways to gain business value, they have also identified fundamental brand-related challenges in social media. The purpose of this paper is to complement the extant literature by addressing the ways in which companies manage their reputation in social media, focusing on the role of employees. We first illustrate how social-media environments amplify the need for distinct corporate reputation-management practices and, second, how challenges and solutions vary across companies in different sectors and businesses. We contribute to prior research by conceptualising corporate reputation management in social media as balancing acts, which take place in relation to different, contradictory, and sometimes paradoxical priorities related to branding and managing employees.     

Corporate Philanthropy, Criminal Activity, and Firm Reputation: Is There a Link?

This study examined the influence of corporate giving programs on the link between certain categories of corporate crime and corporate reputation. Specifically, firms that violate EPA and OSHA regulations should, to some extent, experience a decline in their reputations, while firms that contribute to charitable causes should see their reputations enhanced. The results of this study support both of these contentions. Further, the results suggest that corporate giving significantly moderates the link between the number of EPA and OSHA violations committed by a firm and its reputation. Thus, while a firm's reputation can be diminished through its violation of various government regulations, the extent of the decline in reputation may be significantly reduced through charitable giving.     

Cause-Related Marketing: Keys to Successful Relationships with Corporate Sponsors and Their Customers

SUMMARY

An increasingly popular method for nonprofits to raise awareness, educate the public, and receive financial support from corporations is through cause-related marketing. The distinctive feature of cause-related marketing is the corporate sponsor's contribution to a designated cause being tied to customers' participating in revenue-producing transactions with the sponsor. The sponsor benefits from favorable publicity and increased sales. This article discusses factors contributing to the potential success of a cause-related marketing campaign: the sponsor's product quality, fair pricing, and customer traits; the nonprofit's and the sponsor's reputation, shared values, good communication, and commitment; a well-planned and executed campaign, and specific terms that protect both party's assets and clearly outline each party's responsibilities.     

Marketing Communications and Corporate Social Responsibility (CSR): Marriage of Convenience or Shotgun Wedding?

This paper aims to examine the role(s) that the various vehicles of marketing communications can play with respect to communicating, publicising and highlighting organisational CSR policies to its various stakeholders. It will further endeavour to evaluate the impact of such communications on an organisation’s corporate reputation and brand image. The proliferation of unsubstantiated ethical claims and so-called ‘green washing’ by some companies has resulted in increasing consumer cynicism and mistrust. This has made the task of communicating with, and more importantly convincing, an organisation’s stakeholders vis-à-vis its CSR credentials even more difficult. This paper argues that marketing communications tools can play a major role in conveying a company’s CSR messages and communicating a more socially responsible image.     

The Impact of Brand Equity and the Company's Reputation on Revenues

Abstract

This paper intends to establish the relationships among variables in corporate communications, especially between advertising and public relations, and to form an evaluation model for integrating the effects of brand equity and the company's reputation in the context of integrated marketing communications (IMC). A new approach for integrating the effects of brand equity and the company's reputation was introduced and the IMC evaluation model was specified for testing. The proposed model was tested with existing secondary data. The outcomes indicated that both brand equity and the company's reputation have significant impact on revenues and showed the positive relationship between brand equity and the company's reputation in the proposed model to justify the need of IMC in overall corporate communications.     

Multinational corporate website strategies and influencing factors: A comparison of US and Korean corporate websites

This study, using a content analysis method, explored whether and to what extent multinational corporate websites targeting different markets are standardized. It also tested three organizational factors – country of origin, company size, and product type – for their potential influence on the level of corporate website standardization. A sample of 52 top US-based multinational companies and 52 Korea-based multinational companies was drawn and a total of 104 pairs of websites for these companies were content-analyzed. Overall, the degree of website standardization was not significantly different between companies based in the two countries. The results suggest that both US and Korean multinational corporations tend to maintain their websites in a similar way when targeting the home and foreign markets. Among the three organizational factors, only product type – B2B versus B2C products and durables versus non-durables – was found to be significantly associated with the level of website standardization. This study makes important contributions to the research literature by offering new information on the current state of multinational corporate website strategies and advancing our knowledge about international marketing communications on the Internet and influencing factors.     

Company reputation and its influence on consumer trust in response to ongoing CSR communication

There is considerable disagreement in academic scholarship and beyond as to whether, in cases of bad reputations, companies will want to communicate corporate social responsibility (CSR) activities because this kind of communication is likely to increase consumers’ skepticism. In this regard, the two empirical studies discussed in this article examine the influence of prior company reputation on consumers’ trust in response to CSR communication in general and the development in response to continuous CSR activities and their ongoing communication by companies as well as by the media in particular. The two studies show that consumers’ trust in companies’ CSR activities increases after a second presentation of information by companies even in instances when companies had prior negative reputations. The second study in particular fills a gap in the literature on underlying mechanisms of consumers’ reactions to CSR communication. The results suggest that companies with prior negative reputations do not need to remain silent about their CSR activities; instead, CSR communication can help improve consumers’ trust in companies. However, the findings of these two studies also suggest that this positive development is short-lived. Consumers’ developing trust in companies’ CSR activities decreases significantly if they are exposed to negative information on these companies.     

Social Role Conceptions and CSR Policy Success

Businesses are eager to present themselves as honest and reliable corporate citizens who care about the overall well-being of society. This article researches whether different role conceptions of businesses regarding social issues are related to their success in dealing with social demands. Do socially active companies have a better social reputation than inactive companies? This relationship is determined by first extracting the social role conceptions of the companies from their Corporate Social Responsibility reports and then comparing this data to their social reputations. The analysis shows that there is indeed a relationship between these two variables. Companies with a broad social role conception score significantly better on their social reputations than companies with a narrow role conception. Social role conceptions therefore matter when dealing with social demands.     

Determinants of Consumers’ Purchase Intentions of Organic Vegetables: Some Insights from Malaysia

This study tests the mediating effects of corporate social responsibility (CSR), product image, and corporate reputation on the relationships between green marketing awareness and consumers’ purchase intentions of organic vegetables. Data from 200 valid questionnaires was analyzed utilizing a partial least squares approach. Results show that product image was confirmed as the leading factor that partially mediated the influence of consumer green marketing awareness on consumers’ purchase intentions of organic vegetables, and this was followed by CSR, but that corporate reputation was not established as a mediator. Marketing managers should, therefore, develop various effective strategies to communicate their companies’ product image, embracing green marketing practices in order to increase market awareness, and providing positive recommendations to friends and relatives via various marketing communication channel including the short message service (SMS), emails, and social networking sites (SNS).     

Does the perception of incongruence hurt more? Customers’ responses to CSR crises affecting the main reputation dimension of a company

ABSTRACT

Corporate social responsibility (CSR) generates benefits for companies and society. However, CSR exposes a company to potential damage when a critical event, such as a crisis, disconfirms the CSR of a corporate reputation. The present article introduces to the crisis management literature the notion of consumer-perceived incongruence (CPI) between corporate reputation and crises. Our first experimental study demonstrates that a high CPI – compared to a low CPI – worsens consumer responses in terms of attitude towards the corporation (ATC), word of mouth (WOM) and purchase intention (PI). The second study shows that these effects are mediated by the perception of a state of discomfort on the part of the consumer. The third study suggests that, in cases of high CPI, the corporate crisis response strategy of apology outperforms that of compensation in reducing the negative effects of discomfort on consumer responses. Theoretical and managerial implications are discussed.     

The CSR-Quality Trade-Off: When can Corporate Social Responsibility and Corporate Ability Compensate Each Other?

This paper investigates under what conditions a good corporate social responsibility (CSR) can compensate for a relatively poor corporate ability (CA) (quality), and vice versa. The authors conducted an experiment among business administration students, in which information about a financial services company’s CA and CSR was provided. Participants indicated their preferences for the company’s products, stocks, and jobs. The results show that for stock and job preferences, a poor CA can be compensated by a good CSR. For product preferences, a poor CA could not be compensated by a good CSR, at least when people thought that CA is personally relevant to them. Furthermore, a poor CSR could be compensated by a good CA for product, stocks, and job preferences. Guido Berens is Assistant Professor of Corporate Communication at Rotterdam School of Management, Erasmus University Rotterdam, the Netherlands. His research interests include corporate branding, corporate social responsibility, and reputation management. His research has been published in the Journal of Marketing and the Corporate Reputation Review, as well as in several international books. Cees B. M. van Riel is Professor of Corporate Communication at the Rotterdam School of Management, Erasmus University Rotterdam, the Netherlands. His research interests include organizational identity, reputation management, and corporate branding. He is the author of several books, and his research has appeared in the Academy of Management Journal, Journal of Management Studies, and Journal of Marketing, among others. He is Editor-in-Chief of the Corporate Reputation Review, and has been working as a consultant for many large international companies in the last 15 years. Johan van Rekom is Assistant Professor at the Rotterdam School of Management at the Erasmus University, Rotterdam, the Netherlands, where he also received his PhD. His research interests include organizational identity, the effects of organizational identity on the motivation of organization members, cognitive structures at the individual and at the organizational level, and the essence of brands. His research has appeared in the Journal of Management Studies and the European Journal of Marketing, among others.     

Marketing Alliances Between Non-Profits and Businesses: Changing the Public's Attitudes and Intentions Towards the Cause

ABSTRACT

The purpose of this study was to examine to what extent corporate and non-profit alliances can impact the public's attitudes and intentions to support a cause. Through the use of experimental design four types of alliances were examined: (1) low affinity cause aligned with company with strong reputation, (2) low affinity cause aligned with company with weak reputation, (3) high affinity cause aligned with company with strong reputation, and (4) high affinity cause aligned with company with weak reputation. Results of paired sample t-tests indicated significant changes for only one type of alliance, that which is between a low affinity cause and a corporate sponsor with a strong reputation. The low affinity cause experienced increased: (a) customer trust in the non-profit, (b) intentions to support the cause, (c) evaluations of cause importance, (d) personal feelings of responsibility to help the cause, and (e) evaluations of consequences for society through providing support. For the remaining three types of alliances changes were not significant.     

The ‘Catch 22’ of communicating CSR: Findings from a Danish study

This research explored the apparent ‘Catch 22’ of communicating Corporate Social Responsibility (CSR). Although companies are regularly encouraged to engage in CSR, they are simultaneously discouraged to communicate about this engagement. We contribute with two models that may help to explain how companies can best communicate about their CSR initiatives. Based on a reputation survey and two case studies of Danish corporate CSR frontrunners, first we develop an ‘inside‐out approach’ to suggest how managers can manage their CSR activities to achieve favourable CSR reputation in a ‘Catch 22’ context. Employees appear as a key component in building trustworthiness as CSR communication is shown to evolve when taking an ‘inside‐out approach’. Second, we develop a CSR communication model with two CSR communication processes targeting different stakeholder groups: ‘the expert CSR communication process’ and ‘the endorsed CSR communication process’. Integrating these models and processes may help companies strategically capture reputational advantage from their CSR initiatives.     

The characteristics and business impact of children’s electronic word of mouth in marketing communications

Abstract

Leading digital technology companies have shown a strong interest in enabling children to send electronic word of mouth (eWOM). Recasting children from passive to active participants in marketing communications, this shift expands children’s marketing practices from how companies influence children via traditional marketing communications, to how children influence companies’ marketing practices through eWOM. We apply the value-capacity-vulnerability framework for children’s expressive rights to the context of children’s eWOM. Using a dataset of Amazon customer reviews written by children under the age of 13, we examine the characteristics and business impact of children’s eWOM. We find that the volume and variance of children’s eWOM are smaller than that of adults’. Children’s eWOM increase the overall diversity of opinions. Although receivers perceive children’s eWOM as less helpful, children’s eWOM valence (i.e. average rating) correlates with that of adults’. Children’s eWOM volume has a product-category-dependent association with product sales: positively in children’s product categories, while negatively in general categories. Children’s eWOM valence and variance are positively associated with product sales in both product categories. Receivers are less likely to criticize children’s eWOM compared to that of adults’, suggesting an underlying protective behaviour towards children among eWOM receivers. These results show that children have the capacity to engage in eWOM of social and business value, with receivers typically mindful of children’s vulnerability in social interactions.     

Business Reputation and Labor Efficiency,Productivity, and Cost

Assumed benefits from improved reputation are often used as motives to drive corporate social responsibility (CSR) initiatives. Are improved cost efficiencies among these reputation benefits? Cost efficiencies and cost management have become more relevant as revenue streams dry up in these tough economic times. Can a good reputation aid these efforts to develop cost efficiencies specifically when managing labor costs? Prior research hypothesizes that good reputation can create labor productivity and efficiency benefits. The purpose of this study is to empirically investigate reputation’s relationship with labor efficiency, labor productivity, and labor cost. Using a sample of highly reputable firms from Fortune’s America’s Most Admired Companies list and a corresponding matched sample of firms, we find that reputation is associated with improved labor efficiency and labor productivity. However, we do not find a significant association between reputation and reduced labor costs. Our study contributes to current research hypothesizing and finding efficiency benefits associated with good reputation. Documenting these potential reputation benefits has important implications for CSR activities and initiatives. It supports recent work that incorporates reputation into a more developed model of the relationship between CSR and performance (Vilanova et al.: 2009, Journal of Business Ethics 87, 57–69). This work is useful to businesses and supports strategies focused on “doing well by doing good” and maintaining healthy reputations.     

The impact of corporate behavior on perceived product value

This research examines how ethical and unethical corporate behavior influence the perceived value of a firm's products, operationalized as the price consumers are willing to pay for that product relative to the competition. We propose that if consumers expect companies to conduct business ethically, then ethical behavior will not be rewarded but unethical behavior will be punished. The results of the first study confirm this expectation. The second study explored ways a firm can improve the perceived value of its products after an unethical act has been committed. Our results indicate that after a firm has committed an unethical act, consumer's perceptions of that company and its products were positively influenced by ethical behavior, corporate philanthropy, and cause-related marketing. However, our analyses revealed that these different strategies varied in their effectiveness. The third study used a choice task, rather than a judgment task, to confirm the finding that corporate behavior does influence perceived product value and is therefore likely to influence market choices. The implications of these findings are discussed.     

Market Orientation Plus: Antecedents and Consequences of Market Orientation and Corporate Social Responsibility in Mexico

ABSTRACT

The evolution of the market orientation (MO) concept toward stakeholder-based corporate social responsibility (CSR) has been recognized recently. Nevertheless, the two variables remain conceptually and operationally different, and very little is known about the relationship between MO and CSR. The current study addresses this question empirically by embedding measures of MO and CSR into a framework of antecedents and consequences in the context of an emerging economy (Mexico). The results show that companies with high levels of MO also attain high levels of CSR. Further, CSR partially mediates the relationship between MO and corporate reputation and fully mediates the relationship between MO and employee commitment. Informal organization has a positive influence on MO and fully mediates the relationship between innovation and MO. The findings may encourage companies in emerging economies to implement CSR initiatives without fearing that their focus on customer and competitor orientation will be negatively affected.     

Inside your social media ring: How to optimize online corporate reputation

Although it is well accepted that corporate communication has a direct impact on corporate reputation, little is known about the link between firms’ social media communication strategies and the formation of firms’ reputations in an online environment. This article contributes to this body of knowledge by studying the impact of social media communication strategies on firms’ reputations. The setting for our study is the hotel industry. The results offer insights regarding the challenges of developing online communication strategies that affect corporate reputation.