Maximizing

Business Returns
Ishpreet Singh 12P139 Karan Jaidka 12P141
Lucky Sharma 12P145 Prabhat Singh 12P154
Vignesh Patil 12P177 Viswanath Kuppa 12P180

PGPM Section C Group 9
Agenda
O Introduction
O Stakeholders Attribution
O Challenges of CSR Communication
O What to Communicate
O Where to Communicate
O Moderators of Communication
Effectiveness
O Conclusion
O Further Scope
Introduction
O What is CSR?
O CSR is a commitment to improve societal well-
being through discretionary business practices
and contributions of corporate resources
O Why important?
O It is not only the ideological thinking that
corporations can bring powerful social change
but also the multi-faceted business returns that
firms can reap from CSR endeavors

Maximizing Returns
O Ways in which corporations benefit:-
O Individuals buy more products
O They seek employment in the company
O They invest in the company
O How to reap those benefits:-
O Creating awareness among companys
external and internal stakeholders
O Minimizing stakeholder skepticism
Stakeholders Attribution
Stakeholders think of company in two ways:-
1. Extrinsic
Company is seen as attempting to increase
its profits
It leads to less favorable stakeholders
attitudes and behaviors towards the
company
2. Intrinsic
Company is viewed as acting out of a
genuine concern for the focal issue
It reacts more positively towards the
company

Issues in CSR Communication
O What to communicate
O Message Content
O Where to communicate
O Message channel to be used
O Company and Stakeholders specific
factors that impact effectiveness of CSR
communication
Mixed Motive versus
Extreme View (1/2)
Researchers found that
Respondents reactions are more positive
when CSR attributions were mixed than
when they were purely intrinsic or extrinsic
Stakeholders are tolerant of extrinsic
motives as long as CSR activities are
attributed to intrinsic motives as well

Mixed Motive versus
Extreme View (2/2)
They also found
Stakeholders do not respond
negatively to extrinsic CSR
motives per se, but respond
negatively to any marketing
strategies that seem
manipulative or deceptive
By acknowledging both intrinsic and
extrinsic motives in its CSR
communication, a firm can inhibit
stakeholder skepticism
What to Communicate (1/2)
CSR message can be
1. Associated with social cause
Consumers are more likely to be
suspicious of ulterior motives as such
advertising does not fit schemer
schema
Company should emphasize the
importance of social issue and
communicate a lack of vested self-
interest by choosing issues that are not
related to the companys business

What to Communicate (2/2)
2. Companys specific involvement
in a social cause
Most of the times companies
communicate like this
Company can emphasize on:-
i. Commitment to a cause
ii. The impact it has on the cause
iii. The CSR motive
iv. The congruity between the cause
and the companys business

CSR Commitment
O Target in its 2007 CSR report talked about its
Take Charge of Education (ECOE) program
O Various aspects of commitment
The amount of input
Like, Target giving input of about $246 mn
The durability of the association
Target running this program from 1997
The consistency of input
Donating one percentage of purchase made
from Target Credit Cards


CSR Impact (1/2)
O Here, company focus on output side like
societal impact or actual benefits that
have accrued to the target audience
O Like, in partnership with UNICEF, Pampers
launched an initiative, 1 Pack = 1 Vaccine
O This was to give tetanus vaccines to
expectant women in developing countries
O The title clearly communicates the societal
impact
CSR Impact (2/2)
O Durability of support is seen as
1. Long Term Commitments
Seen as driven by a genuine concern for
increasing societal/community welfare
2. Short Term Commitments
Viewed as a way of exploiting the cause
for the sake of the profit
CSR Motives (1/2)
O Questions to be answered are
1. Should companies only emphasize
altruistic, intrinsic motives denying
business-related motives in their CSR
communication?
2. Should they be honest and acknowledge
the business motives underlying their
CSR initiatives?
CSR Motives (2/2)
O Researchers say that
Consumers often see multiple motives and they
understand the companies often seek to achieve
certain business goals through their CSR
initiatives
Acknowledgement of extrinsic, firm-serving
motives in their CSR message will actually
enhance the credibility of a companys CSR
communication and inhibit stakeholder skepticism
O Therefore, a company should emphasize the
convergence of social and business interests and
frankly acknowledge that its CSR endeavors are
beneficial to both society and itself

CSR Fit (1/3)
O Stakeholders expect companies to
sponsor only those social issues that have
a good fit with their core corporate
activities
O CSR fit may result from
Common associations that a brand shares
with the cause
Affinity with specific target segments
Corporate image associations created by
the brands past conduct in a specific
social domain
CSR Fit (2/3)
O According to two-stage model of
attributions
1. Consumer will first attribute CSR
activities to dispositional motives i.e.
intrinsic motives
2. Then, correct this if they allocate
sufficient processing capabilities and
engage in more effortful elaboration by
considering contextual factors e.g.
competitive pressure

CSR Fit (3/3)
O Why CSR Fit is important?
Low CSR Fit is likely to increase cognitive
elaboration and make extrinsic motives more
salient, thereby reducing stakeholders positive
reactions to a companys CSR activities
O What to do if natural fit is not there?
In such a case, the company should elaborate on
the rationale for its social initiative to increase
perceived fit
For example, DenTek Oral Care (sponsor of
American Diabetes Association) includes in its
communication the information that diabetes can
lead to tooth decay, bad breath, dry mouth and
gum disease

Where to Communicate
O Different channels are:-
1. Official Documents such as an annual
corporate responsibility report
2. TV commercials
3. Magazines
4. Billboards advertisements
5. Company Website
6. Product packaging
Communicators
O The communicator can be company-
controlled or external
External Communicators such as media,
customers are generally more than
company-controlled
Company can exert greater control over
content of CSR communication by
members of its value chain rather than by
those who are not part of that value chain
Trade-off between
Controllability and Credibility (1/2)
O Less controllable the communicator is, the
more credible it is
O Individuals are more critical of messages from
sources they perceive to be biased or self-
interested
O CSR communication via corporate sources
will trigger more skepticism
O For example, anti-drinking and driving
message sponsored by a beer company
inferred more self-serving motives of the
sponsor
Trade-off between
Controllability and Credibility (2/2)
O Consumers react more positively to a
companys CSR activities when they learn
them from a neutral source
O What should companies do to achieve
that?
1. They should try hard to get positive
media coverage from independent,
unbiased sources
2. They should try to encourage informal
yet credible communication channels
such as word-of-mouth of stakeholders
Some Examples
O Timberland, as part of Earthkeeper program
launched an innovative global network of online
social networking tools, including a strong
Facebook presence, a blog and a YouTube
channel
O The company was proactive in its use of social
media to engage consumers to be their CSR
advocates
O Other companies such as Stonyfield Farm and
Ben & Jerrys butter pecan ice cream benefit from
consumer ambassadors who rave in the virtual
world about their social responsibility endeavors
Moderators of
Communication Effectiveness
O Two moderators are:-
1. Company-Specific Factors
2. Stakeholder-Specific Factors
Company-Specific Factors
O Two factors are:-
1. CSR Reputation
It is a collective representation of a firms
past actions and results that describes
the firms abilities to deliver valued
outcomes to multiple stakeholders
Encompasses different dimensions of
product quality, innovation, investment
value, people management and CSR
How Reputation Affects (1/2)
O It serves as a pre-existing schema upon which
stakeholders rely to interpret ambiguous
information about the company
O Companies with good reputation are
perceived to have high source credibility and
find positive effects of CSR communication
O However, effects of CSR communication in
case of companies with poor reputation will be
dampened or even backfire
O Companies with neutral ethical reputation are
likely to reap more benefits than companies
with positive ethical reputation
How Reputation Affects (2/2)
O A companys existing or prior CSR record,
is perceived as a particularly diagnostic
cue in stakeholders evaluation of CSR
communication
O Also, the industry in which company
operates moderates the effectiveness of
CSR communication
O For example, stakeholders are suspicious
of companies in industries like tobacco,
oil, etc.
Second factor - CSR Positioning
O CSR positioning is the extent to which a company
relies on its CSR activities to position itself, relative
to the competition, in the minds of consumers
O For example, Companies like Timberland, Ben &
Jerrys are considered to be socially responsible
brand
O Since some companies take the risky stance of
positioning itself on CSR rather than superficially
engaging in such activities,
Stakeholders pay more attention to its CSR
message
They believe in the authenticity of its CSR
endeavors, resulting in greater persuasion in
favor of the company
Stakeholder-Specific Factors
O Factors are:-
1. Stakeholder Type
2. Issue Support
3. Social Value Orientation
Stakeholder Type (1/3)
O Different audiences such as press,
investors, consumers, employees, etc.
have different expectation and hence,
respond differently to various CSR
communications
O It is imperative for a company to tailor its
CSR communication to specific needs of
different stakeholder groups
Stakeholder Type (2/3)
O Stakeholders can be classified into two types:-
1. Opinion-Leader Audiences such as
business press, investors, NGOs, etc.
They proactively seek out CSR information
and use companys reports to get a
comprehensive picture of its CSR record
To increase credibility of its CSR report, the
company should adhere to leading reporting
standards such as the Global Reporting
Initiative and AccountAbilitys reporting
standard, AA1000
Stakeholder Type (3/3)
O The General Public such as consumers and
local communities
They are concerned with shareholder value
maximization
For them, companies should explicitly discuss
the business impact of their CSR activities
They should be told that how social initiatives
are linked to key business metrics such as
customer equity, employee retention, etc.
They generally become aware of CSR activities
through independent channels such as editorial
coverage on TV, advertising, etc.
Issue Support (1/2)
O It is related to Stakeholders motivation
O Information perceived as self-relevant elicits
voluntary attention and hence, more effective
O Ways to increase Issue Support
Companies should explain and communicate
the importance of focal issues of their social
initiatives
Actively engage stakeholders in the social
initiative
Before launching social initiative, a company
should engage in marketing research to gauge
stockholders support for various social issues
Issue Support (2/2)
O Example related to Issue Support:-
Some firms like Gap provide flexibility to
stakeholders to choose which issue and
which non-profit organization to donate to
O Companies should always monitor what
are considered the top priority issues by
its key stakeholders but they should
always balance selecting a hot issue with
consideration of CSR fit

Social Value Orientation (1/3)
O It is defined as individuals stable
preferences for certain patterns of
outcomes for oneself and others
O It is related to stakeholders motivation to
CSR information
O Three-category topology is:-
Pro-social
Individualistic
Competitive
Social Value Orientation (2/3)
O Prosocials tend to maximize outcomes for
both themselves and others and minimize
differences between outcomes for
themselves and others
O Individualists tend to maximize their own
outcomes with little or no regard for
others outcomes
O Competitors tend to maximize their own
outcomes relative to others outcomes,
seeking relative advantage over other
Social Value Orientation (3/3)
O CSR research has identified a segment of
individuals named CSR activists. They
are
More likely to purchase on ethical criteria
More aware of companys CSR activities
More likely to investigate companies CSR
behavior
O There are both disbelievers and activists.
CSR communication is more effective
among advocates or activists as
compared to disbelievers

Conclusion
O Investing in CSR activities generates favorable
stakeholder attitudes and behaviors
O But, stakeholders skepticism can be a critical
impediment to maximize benefits as CSR
communication is a very delicate matter
O How is it delicate?
Stakeholders claim they want to know the good
deeds of companies they interact with but become
leery of extrinsic motives when companies promote
CSR communication can have a backlash effect
O Hence, a key challenge of CSR communication is
to overcome stakeholder skepticism and to
generate favorable CSR attributions
Further Scope of Research
O Mediating mechanisms that account for
effectiveness of CSR communication can
be explored like psychological
mechanisms
O Since, different stakeholder groups have
different expectations of businesses and
different information needs, a research on
how best a company can communicate its
CSR initiatives to respective target
audiences can be done