Corporate Social Responsibility and branding Essay

1. Introduction In this chapter the background of the thesis will be presented and discussed. Moreover, a literature review, research problem and research questions will be introduced in order to get an understanding of the study purpose. This is followed by the limitations and disposition. 1.1 Background The companies of today are very aware of what the public and other stakeholders demand from the companies ´ way of handle their responsibilities (Burchell, 2008). In order to form a strategy for the protection of their brand image and reputation many companies find themselves engaging in Corporate Social Responsibility activities (Kotler and Lee 2005), from now on abbreviated CSR. The desire of doing well and doing good in the society in which the company is operating have been of increasing interest world wide during the last decade. As a result, corporate reporting on social responsibility initiatives can more often be found in companies ´ marketing strategies (Kotler and Lee, 2005). Even though CSR activities are increasing among today ´s organizations there is still lack of a general universally definition of this concept (Crowther and Capaldi, 2008). But in a broad perspective CSR is understood and described as the way companies integrate social, economic and environmental matters into their internal organization (values, culture, decision making and strategy), which leads to establishment of better society, wealth and better practices within the company (Horrigan, 2010). Considering the breadth of CSR it can subsequently be described in many different names: corporate responsibility, corporate sustainability, corporate accountability, corporate citizenship, sustainable development etc (Benn and Bolton, 2011). In a shorter explanation, CSR can therefore be explained as the relationship between a corporation and its stakeholder (Crowther and Capaldi, 2008). Already in 1972 the American professor in Business Administration, Dow Votaw, stated that the amount pages on social responsibility written in our time would fill up a small library. As it turns out, he was right. CSR is here to stay. The idea of taking responsibility beyond what the law demands has increased since the millennial shift (Borglund, DeGeer and Sweet, 2012). Especially big organizations, both in the public and private sectors, are engaging in these kinds of activities (Burchell, 2008). The benefits of a company ´s usage of CSR activities can lead to a better position in the market and a positive return on investment. On top of that of course the benefits for society, such as improvement of life or a cleaner environment (Kotler and Lee, 2005). On the other hand, many view CSR mainly as a step towards a reputation as a responsible business and as good citizens (Burchell, 2008). Either how, risks by avoiding to use this concept can lead to lack of legitimacy for the organization. Meyer and Rowan (1977) also claim that when having a business it is important to be accepted and to be legitimacy in the environment as well as having effective and structured internal processes to survive. According to Grusch (2006) consumers actively scrutinize the local behavior of international companies. Their out-sourced ventures are also being observed, and information regarding possible bad behavior reaches the ears’ of the public much more quickly than it used to. Consequently, to the stakeholders’ awareness and other factors that can have an impact on a company’s survival, it is therefore important for companies to establish competitive advantage. Differentiation is a way to secure competitive advantage. By using a differentiation strategy a company ´s key strengths and core competencies builds up, and this is where CSR has an important role for a company ´s brand as it gets differentiate by incorporating it in the corporate image. This kind of action can generate to better brand attitudes and in the long run this will result in brand loyalty (Grant, 2008). 1.2 Literature review 1.3 Problem discussion As stated in the background, CSR is a burning question among today ´s companies. Stakeholders are starting to put more pressure on companies ´ responsibility in the society they are operating in, therefore, in order to get a competitive advantage CSR has become a major tool in their marketing strategy (Kotler and Lee, 2005). A branding law defined by Werther and Chandler (2005) shows that CSR will evoke attitudes towards the brand. Are these attitudes positive it will be lead to positive purchase decision and loyal customers, which give companies competitive advantage (Roper and Fill 2012). In Kotler and Lee ´s book (2005) Corporate Social Responsibility – Doing the most good for your company and your cause, they are describing examples of well-known organizations that have used CSR to increase their brand value. It has therefore been a shift focus in the CSR debate, nowadays it is more a debate of how CSR activities should be used and how effective it can be used as a branding tool, rather than if companies should use this concept or not (Smith, 2003). Based on the debate the question that arises is therefore: in what way should CSR activities be used in order to be effective for a positive attitude towards the brand? Today there are many studies relating to the area of CSR. Research does suggest there is a positive relationship between CSR and consumer attitudes towards brands and companies (Creyer and Ross 1997; Ellen, Mohr and Webb, 2000; Lacey and Kennet-Hensel, 2010). It is also shown in studies that CSR activities influence how the consumer behave when a certain brand appear in their mind (Becker-Olsen et al., 2006; Nhattacharya and Sen, 2004). However, most of these studies are focusing on people and brand perception in developed countries. The literatures were more specialized of how the CSR influences image of the brand in the western world and how the western public persuaded the brand of the CSR activities. When doing literature research, the amount of research studies about CSR in developing countries were of a narrow amount. No study could be found about CSR ´s link to branding in a developing ´s countries perspective, further, about how the locals ´ (employers of the company and the consumer in the developing country) brand perception of CSR activities are. As the real life stories in Kotler and Lee ´s book (2005) showed that CSR has an effective link to the brand. However, most of the organizations were conducting the CSR activities in the country they operated in and the society had a good knowledge of what CSR is. Likewise, a study showed that the brand would be â€Å"effected† and look different if the consumers were aware of CSR of the companies (Boulstridge and Carrigan 2000). So the question that can be asked and discussed is if it will appear an effective link to a company ´s brand in a country that is not developed? A research gap is therefore identified. If we place and conduct a study conducted in a western world in a developing country ´s context, would the outcome be the same? Would there be a similar link between CSR and branding there? 1.4 Purpose The purpose of this thesis is to get a deeper understanding of the link between a company ´s CSR and its branding in a developing country. Based on the purpose the following research questions will be presented: 1. What kind of CSR activities are being used to effectively increase positive attitudes towards the company ´s brand? 2. In what way is a company ´s CSR linked to its brand in the Philippines? 3. And how do these attitudes create value for the brand? 2. Methodology In this chapter the research methodology applied in this thesis will be discussed. A description regarding the method design of the study will be explained in the following order: research design, data collection, validity and reliability and data analysis. 2.1 Research approach There are three type of studies identified by Yin (2003): exploratory, explanatory and descriptive. An exploratory research design tries to define the research question and form the hypothesis. A descriptive research in the other hand, tries to describe a different characteristic of a phenomena that arises. When doing a descriptive case study the data collection is being guided by theories. When conducting the explanatory research design it is about how it explains course of events and relate how things happened (Yin, 2003). According to Yin (2003) this thesis can be seen as a descriptive research as it will focus on describing what impact CSR has on branding. When using a descriptive research the problem is structured and understood, which means that existing literature about the topic of CSR and branding (Ghauri and Gronhaug 2010). And this kind of research is mainly done when a researcher wants to gain an even better knowledge of a specific topic (Gill and Johnson, 2010). Due to the research purpose, which is to investigate how CSR influences on a company ´s brand in the Philippines this research method fits the best among the three other ways. 3.2 Research design I chose case studies method, because it enhances the understanding of what is going on in a particular case and it can involve a detailed investigation (Yin, 2009). This information that is gained from case studies are therefore relevant to answer some of my problem and research questions as I want to investigate companies ´ CSR activities and observe these activities in order to understand its impact on the brand which is the data collection in my first section of the study. By a case study approach observations of a companies ´ activities can be captured, which is in a way impossible to capture through questionnaires and interviews (Ghauri and Gronhaug, 2010). 3.3.1 The case study In the beginning of March I will travel to the Philippines to carry on an eight weeks field study which will give me the opportunity to study some Swedish/International companies ´ CSR activities and how these activities affect their brand perception by interviewing the consumers and workers in country. The case study will therefore obtain information to fulfill my purpose. The choice of companies: The information obtained will be from companies that use CSR activities in the Philippines. In order to fill the research gap I will be aiming for to study companies with well-known CSR activities. 2.3 Data collection A qualitative method will be used in order to collect the information for this thesis. Regarding to Trost (2005) a qualitative method is described as a method where the interviewer gathers the information on the interviewee ´s feelings, thoughts and experiences. Hence, to the search of a deeper understanding of how CSR affects the brand perception, this qualitative approach fit the purpose of the thesis because it can give me a deep information regarding the employees ´ and consumers opinions and feelings towards CSR in the Philippines and the brand which is the aim of this study. 2.3.1 Qualitative interview design Semi-structures face-to-face-interview. 4.4 Validity in qualitative research â€Å"Descriptive validity refers to the degree to which the actual description holds true† (Ghauri and Gronhaug, 2010 p. 210). Bias: When interviewing the respondents a â€Å"lifting† description of the brand can appear, because they have been chosen to do this certain interview about the companies’ actions. Language is the basic tool of interviewing, and may especially be important in qualitative interviewing (Kvale, 1989). The interviews will be conducted by me in English and since communication is a very important in order to get the information it can appear some small misunderstanding as English is not my mother language. But by conducting a face to face interview, the body language and face expression will increase the validity of the interviews. REFERENCES Kotler, P., Wong, V., Saunders, J. and Armstrong, G. (2004). Principles of Marketing, 4th European edition. New Jersey: FT- Prentice Hall. Burchell, J. 2008. The Corporate Social Responsibility Reader. London and New York: Routledge. Kotler, P. and Lee, N. (2005)  ´Corporate Social Responsibility – Doing the Most Good for Your Company and Your Cause ´, Hoboken, New Jersey. Crowther, D. and Capaldi, N. (2008). The ashgate research companion to Corporate Social Responsibility. MPG Books Ltd, Bodmin, Cornwall Suchman, M. C. (1995) Managing Legitimacy: Strategic and Institutional Approaches. Academy of Management Review, Vol 20;3, p 571-610. Benn, S. and Bolton, D. (2011). Key Concepts in Corporate Social Responsibility. SAGE Publications Ltd: London Werther, W.B. And Chandler, D. (2005)  ´Strategic Corporate Social Responsibility as Global Brand Insurance ´, Business Horizons 48:317-24. Boulstridge, E and Carrigan, M.†Do consumers really care about corporate responsbility? Highlighting the attitude behavior gap.† Journal of communication management, (2000): 359-360 Gill, J and Johnson, P, 2010, Research Methods for Managers 4th Edition. SAGE Publications Ltd Ghauri, P and Gronhaug, K, 2010, Research Methods in Business Studies 4th edition. Pearson Education Limited. Trost, J, 2005, Kvalitativa intervjuer. Studentlitteratur, Lund. Halvorsen, K. (1989). Samhà ¤llsvetenskaplig Metod. Oslo: Studentlitteratur AB Yin, R.K, 2009, Case Study Research – Design and Method. 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