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Stakeholder Awareness of CSR Strengthens Firm-Stakeholder Relationships

Communicating your firm’s CSR activities may bolster stakeholder engagement and drive consumer support.

Corporate Social Responsibility (CSR) can do more than just influence how consumers choose amongst products; it can influence their beliefs and attitudes.

A study by C.B. Bhattacharya and Daniel Korschun of Boston University, and Sankar Sen of Baruch College evaluates how CSR information affects consumers, potential employees, and investors. The authors find that stakeholders who are aware of CSR initiatives not only have more positive views of the company and their relationship to it, but they have a greater intention to work for and invest in the company, and to consume its products.

Are Stakeholders Aware of Your CSR Activities?

Research shows CSR has the potential to trigger positive company-favouring effects, but there is limited evidence in the real-world marketplace. Much of the literature examining the benefits of CSR 1) assumes stakeholders are aware of the initiatives, and 2) focuses on sales-related outcomes. This study evaluates outcomes of a consumer goods company’s donation to a childhood development centre. It explores how awareness of the donation affects stakeholders’ beliefs and attitudes toward the company.

In their study, the authors denoted CSR as a Fortune 500 company’s donation to a university. Awareness, perceptions, and behavioural intentions were measured in web-based surveys with 1,200 students, two weeks before the donation announcement, and two weeks after the donation. The two sets of scores were compared. Next, subgroups displaying low and high attributions were compared to understand whether CSR outcomes (purchase intentions) would be stronger and more positive for individuals making attributions of genuine concern.

Awareness Breeds Consumer Support

  • Just 17 per cent of stakeholders surveyed were aware the donation had taken place-but this group had a greater intention to consume the company’s products, and to work for and invest in the company.

  • Those who were aware identified more with the company, and viewed the company as more socially responsible compared with those who were unaware.

  • Positive actions towards the company were stronger among individuals who believe the company had genuine concern about the issues involved.

Don’t Be Shy – Tell Stakeholders about CSR

Stakeholders who are unaware of your firm’s activities may have less positive views and attitudes towards your company; communicate CSR initiatives effectively and transparently. Broaden communication efforts to include not only consumers but employees, investors, and other stakeholders. This is important because CSR can positively impact key stakeholders other than customers.

Future research could identify how companies can ensure “genuine concern” is communicated. For future research, the authors call for the full range of stakeholder attributions of the company’s CSR motives to be investigated.

Sen, S., Bhattacharya, C. B., and Korschun, D. 2006. “The Role of Corporate Social Responsibility in Strengthening Multiple Stakeholder Relationships: A Field experiment.Journal of the Academy of Marketing Science. 34.2: 158-166.

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