CSR Research: Corporate Citizenship

Global companies operating in diverse markets can use corporate citizenship programs to create goodwill that can help overcome barriers they may confront as foreign organizations. This is best achieved when firms balance core competencies and expectations from their home base of operations with the expectations of specific global sites.

This study looked at the financial effects on firms from publicly available negative word of mouth. Researchers found a negative impact on cash flow and stock prices that can trigger a cycle generating further negative word of mouth about a firm.

This study looked at consumers’ perceptions of a company and whether they see natural links between a company’s brand image and its corporate citizenship. Researchers found that consumers generally don’t see a connection between luxury brands and corporate citizenship, making it important for such companies to carefully consider how they communicate about their corporate citizenship.

This study considers the effectiveness of two marketing techniques associated with donating to charity. Cause-related marketing was found to be a more effective method than cause sponsorship in prompting Facebook users to share the brand page with peers.

Researchers studied the effects of being a popular or high reputation firm on market rewards and punishments. Their findings: they will be rewarded more and punished less.

Individual retail investors follow data on economic performance indicators such as market share, product innovation and customer satisfaction data. It was found that investors wanted this CSR information from third party entities such as NGOs or rating agencies. Likewise, investors prefer economic performance and sustainability information to be available through assurance providers and third party entities.

To best engage consumers who are less involved and less personally invested in a cause, cause marketers should focus on local donations, the appearance of genuine concern, and positive messaging.

This study looks at the relationship between firms’ corporate social responsibility, their accounting and operating decisions, and the transparency of the financial information they provide. It found that more socially responsible firms were both more prudent in accounting and operating decisions and more transparent in financial reporting.

Organizations seeking to achieve high corporate social performance ratings should practice conservative accounting, which results in a wider distribution of money to various stakeholders of the company, rather than just managers or shareholders.

Strong product social performance—the responsible development and marketing of products and services—has a positive impact on firm performance, more so that of environmental performance. It is necessary that environmental issues are communicated with transparency in order for a firm to realize benefits from environmental performance.

A study of consumer perceptions of company motives for corporate citizenship reveals that when efforts are perceived as something the company wants to do, rather than something it is pressured to do, consumer response is the most positive. Researchers also found that corporate citizenship perceived as responsive to stakeholders without a link to business strategy, was not perceived positively.

Secondary stakeholder groups can impact firm behavior through their requests for action. Firms have historically been more responsive to stakeholder groups with greater financial assets and for requests based on issues that the public appears to deem legitimate. In addition, when multiple companies are targeted by a stakeholder group, firms are more likely to respond positively to a stakeholder request.