Leveraging Corporate Responsibility: The Stakeholder Route to Maximizing Business and Social Value

339 Pages·2011·1.835 MB·English

by  C. B. Bhattacharya, Sankar Sen, Dr Daniel Korschun

Leveraging Corporate Responsibility
TheStakeholderRoutetoMaximizingBusinessandSocialValue
Thecorporatesocialandenvironmentalresponsibilitymovement,known
moregenerallyascorporateresponsibility(CR),showslittlesignofwaning.
Almostalllargecorporationsnowrunsomeformofcorporateresponsibil-
ity program. Despite this widespread belief that CR can simultaneously
improve societal welfare and corporate performance, most companies are
largelyinthedarkwhenitcomestounderstandinghowtheirstakeholders
thinkandfeelabouttheseprograms.Thisbookarguesthatallcompanies
mustunderstandhowandwhystakeholdersreacttosuchinformationabout
companies and their actions. It examines the two most important stake-
holdergroupstocompanies–consumersandemployees–tocomprehend
why, when, and how they react to CR. Armed with this insight, it shows
how companies can maximize the value of their CR initiatives by foster-
ing strong stakeholder relationships to develop, implement, and evaluate
compellingsocialresponsibilityprogramsthatgeneratevalueforboththe
companyanditsstakeholders.
cb bhattacharya isDeanofInternationalRelationsandE.ONChair
in Corporate Responsibility at ESMT European School of Management
andTechnologyinBerlin,Germany.
sankar sen isProfessorofMarketingattheZicklinSchoolofBusiness,
BaruchCollege,aseniorcollegeoftheCityUniversityofNewYork.
daniel korschun isAssistantProfessoratDrexelUniversity’sLeBow
CollegeofBusiness,whereheisalsoafellowattheCenterforCorporate
ReputationManagement.

Leveraging Corporate
Responsibility
The Stakeholder Route to Maximizing
Business and Social Value
cb bhattacharya
sankar sen
daniel korschun
cambridge university press
Cambridge,NewYork,Melbourne,Madrid,CapeTown,
Singapore,Sa˜oPaulo,Delhi,Tokyo,MexicoCity
CambridgeUniversityPress
TheEdinburghBuilding,CambridgeCB28RU,UK
PublishedintheUnitedStatesofAmericabyCambridgeUniversityPress,NewYork
www.cambridge.org
Informationonthistitle:www.cambridge.org/9781107401525
(cid:2)c CBBhattacharya,SankarSenandDanielKorschun2011
Thispublicationisincopyright.Subjecttostatutoryexception
andtotheprovisionsofrelevantcollectivelicensingagreements,
noreproductionofanypartmaytakeplacewithoutthewritten
permissionofCambridgeUniversityPress.
Firstpublished2011
PrintedintheUnitedKingdomattheUniversityPress,Cambridge
AcataloguerecordforthispublicationisavailablefromtheBritishLibrary
LibraryofCongressCataloguinginPublicationdata
Bhattacharya,CB
Leveragingcorporateresponsibility:thestakeholderroutetomaximizingbusinessand
socialvalue/CBBhattacharya,SankarSen,DanielKorschun.
p. cm.
Includesindex.
ISBN978-1-107-00917-2(hardback)
1.Socialresponsibilityofbusiness. 2.Businessethics. I.Sen,Sankar,1936–
II.Korschun,Daniel. III.Title.
HD60.B485 2011
658.4′08–dc23 2011023017
ISBN978-1-107-00917-2Hardback
ISBN978-1-107-40152-5Paperback
CambridgeUniversityPresshasnoresponsibilityforthepersistenceor
accuracyofURLsforexternalorthird-partyinternetwebsitesreferredto
inthispublication,anddoesnotguaranteethatanycontentonsuch
websitesis,orwillremain,accurateorappropriate.
Toourparents:
SisirandAmita Bhattacharya
JyotirindraNathandBhabaniSen
MichaelandDore´ Korschun
Contents
Listoffigures pageviii
Listoftables x
Listofexhibits xi
Acknowledgements xii
1 ThelongandwindingroadtoCRvalue 1
Part I Deconstructing CR value 25
2 Viewingstakeholdersasindividuals 27
3 HowstakeholdersrespondtoCR 42
Part II Inside the mind of the stakeholder 67
4 Whatstakeholdersseeandhear 69
5 ThepsychologicalenginethatdrivesCRreactions 85
6 Howcontextinfluencestheprocess 119
Part III Putting insight into action 151
7 Co-creatingCRstrategy 153
8 CommunicatingCRstrategy 186
9 CalibratingCRstrategy 213
10 Puttingtheframeworktowork 244
11 Conclusion:Thelongandwindingroadrevisited 294
Appendix Ourresearchprogram 306
Index 313
vii
Figures
2.1 ThechangingfaceofCR page30
2.2 TworoutesbywhichCRgeneratesvalue 31
2.3 Anoverviewofourframework 35
3.1 ExamplesofthedirectroutetoCRvalue 43
3.2 Nestle´ frameworkforcreatingsharedvalue 47
3.3 Individual-leveloutcomesinconsumptionand
employmentrealmsbasedonadonationtoachild
developmentcenter 52
3.4 Consumptionrealmoutcomesfromoralhealth
programparticipants 53
4.1 CommunicatingCRactivity 77
4.2 TheReverseGraffitiProject“PoweredbyClorox” 80
5.1 ThethreeleversthatdrivereturnstoCR 86
5.2 Conflictingmessages,Conflictedfeelings.Appleand
BPappearonboththebestandworstofthegreen
companieslisting 93
5.3 TheeffectofCRefficacyonintenttoreciprocate 98
5.4 TheeffectofCRontwoformsofUsefulness 104
5.5 TheeffectofCRawarenessonUnity 112
6.1 TheinfluenceofclosenessonreactionstoCR 127
6.2 TheinfluenceofparticipationonreactionstoCR 129
6.3 TheinfluenceofProductQualityonreactionstoCR 141
6.4 Theinfluenceofcorebusinessonbusinessvalue 142
6.5 TheinfluenceofCRPositioningonreactionstoCR 145
viii
Listoffigures (cid:2)ix
9.1 CalibratingCRactivity 214
9.2 Identificationmeasure 226
9.3 CRevaluationdashboard 238
10.1 Understandingandemployeeresponse 248
10.2 Identificationandpurchaseloyalty 254
10.3 Theinfluenceofcustomersimilarity 255
10.4 Asimultaneoustestoftheframework 257
10.5 Impactfactorsforeachofthelinksintheframework 258
10.6 AdashboardofstakeholderreactionstoCRactivity 264
10.7 Understandingandresiliencetonegativeinformation 272
10.8 Asimultaneoustestoftheframework 273
10.9 Impactfactorsforthepredictedpaths 274
10.10 Yoplait’s“SaveLidstoSaveLives”Program:
HowItWorks 276
10.11 TheDannonInstitute:AboutUs 277
10.12 CRassociationsforDannonversusYoplaitamong
customersegments 278
10.13 PerceivedCRactivityacrosssixdomains:Dannon
versusYoplait 280
Tables
4.1 RepresentativeCRinputs page70
4.2 IllustrativeexamplesofCRimplementation 72
6.1 Examplesofhowcontextinfluencestheprocess 134
9.1 Sampleitemsforquantifyinghowstakeholders
RESPOND toCR 218
9.2 Sampleitemsformeasuringpartsofthestakeholder
psychologicalengine 222
9.3 SampleitemsforquantifyinghowSTAKEHOLDER
CONTEXT influencestheprocess 234
9.4 ScalesforquantifyinghowCOMPANY CONTEXT
influencestheprocess 236
10.1 AwarenessofCRactivityinnumerousdomains 263
x
Exhibits
1.1 ChevronstatementonMyanmar page2
1.2 ReportonoilmajorsproppingupMyanmarregime 4
7.1 Examplesofbenefitstostakeholdersasaresultofan
oralhealthinitiative 182
7.2 ExamplesofCRinitiativeconcepts 183
10.1 Retailcustomerfacingemployeequestionnaireitems 286
10.2 Yogurtconsumerquestionnaireitems 291
xi