Academic journal article Academy of Marketing Studies Journal

Improving the Promotion of CSR Initiatives: A Framework for Understanding Stakeholder Communications from a Dynamic Learning Perspective

Academic journal article Academy of Marketing Studies Journal

Improving the Promotion of CSR Initiatives: A Framework for Understanding Stakeholder Communications from a Dynamic Learning Perspective

Article excerpt

INTRODUCTION

In recent years, we have witnessed efforts by corporations to profile themselves as socially responsible in response to the simultaneous development of the anti-globalization movement, shareholder activism, and corporate governance reform. The name change of British Petroleum to Beyond Petroleum is just one example of how firms are trying to communicate their commitment to society. Despite the growing enthusiasm for corporate social responsibility (CSR) by marketing practitioners and academics, there is little evidence to show that these initiatives have a significant positive effect on firm value. Mathur and Mathur (2000), for example, find that announcements related to green promotions produce significantly negative stock price reactions. Similarly, Vogel (2005) writes, the financial performance of many firms with relatively positive CSR reputations has been poorer than that of their less responsible competitors. In addition, Vogel (2005) posits, "The more a corporation trumpets its social or environmental commitment, the more vulnerable it is to challenges by activists when its behavior fails to meet their expectations" (p. 26)

We suggest that the shortcomings of marketing in terms of successfully promoting CSR initiatives are due primarily to marketing's failure to recognize the relationships between the stakeholders that are the recipients of the CSR initiative message as a dynamic learning system. That is, in spite of the existence of research documenting the effects of direct and indirect communications (see Frooman, 1999; Frooman & Murrell, 2005) within the stakeholder system, marketing scholars remain largely focused on corporate responsibility toward customers and channel members, while largely ignoring the role of marketing in managing direct and indirect communications with other stakeholders such as employees, non-governmental organizations NGOs, and shareholders.

Although marketing has developed expertise in such areas as cause-related marketing and environmental marketing, these studies are typified by their emphasis on direct seller-to-consumer communications. Because of this emphasis, questions such as "How are firm's efforts to communicate CSR initiatives to consumers interpreted by other regulators and shareholders?" and "Do asymmetries exist between stakeholders in terms of their perceptions of firms' CSR initiatives?" have gone unaddressed by the marketing literature. Ignoring the possible indirect effects of CSR communications on the stakeholder system has also discouraged investigation into how those lessons firms learn from past failures or successes of CSR initiatives influence decisions about future CSR initiatives.

Following the tradition of dynamic strategy frameworks (Dickson, 1992, 1996; Hunt & Morgan, 1996), we see the interaction of stakeholder responses to CSR initiatives as part of a dynamic learning system. In contrast to previous approaches in the marketing literature, our framework incorporates indirect as well as direct communication paths that exist between the firm, customers, investors, and NGOs. We also frame asymmetry, in terms of the expectations and perceptions of investors, consumers, firms, and NGOs, as a central component. The combination of dynamic systems and asymmetries allow short-term perceptual gaps to produce long-term measurable effects. We highlight the mechanisms behind such changes and focus on the CSR decisions-financial performance relationship within this dynamic context.

This article presents a conceptual framework that broadens our understanding of the dynamics of how CSR initiative promotions affect stakeholder perceptions and eventually, future decisions about CSR initiatives. The goal is to demonstrate how marketing knowledge of managing exchanges can be applied to relationships beyond the firm-to-customer or firm-to-supplier interaction. More specifically, our objective is to illustrate the dynamic effects of marketing CSR initiatives to consumption markets, NGOs, and consumption markets. …

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