For companies to increase their sales revenue, they need to have a positive reputation from their clients and other stakeholders. This is a vital requirement for the success of a company. One of the ways of improving a company’s reputation is through corporate social responsibility (CSR). This takes place when companies integrate the public’s environmental and social concerns in their business operations on a voluntary basis (Broomhill, 2007). Companies usually communicate their CSR indicators through word of mouth, and social media platforms (Doreen M. Mcgunagle, Dixie Button, & Laura Zizka, 2016). In this paper, the effect of a company’s CSR on their image, and reputation will be studied.
Most companies in Australia have not embraced CSR. In a state of CSR review that was done annually in 2010-2011, Arup got the first place based on their commitment to CSR in their business operations. Some their CSR long-term commitments are social, sustainability, humanitarian causes, and community needs. This survey was the largest research projects on CSR in the world (Celia Choong, 2011).
Through their CSR strategies, they have partnered with charitable and humanitarian organizations around the world in helping people affected by natural disasters (such as floods), poverty, housing, access to fresh water, and education (Celia Choong, 2013). Since this is the latest company to join the ranks of companies such as ABC, Mission Australia, and BHP Billiton, not much research has been done on the effect of CSR on their reputation—this will be the aim of this paper.
The increase in CSR Strategies in most companies is expected to have some benefits. Some of the benefits are better company’s reputation and image. A company’s reputation is very important for their overall performance and development since it affects the social attitude towards it; consecutively influencing their sales and revenue. As important as this is, most studies have not looked at the impact of CSR on the company’s reputation and image. Therefore, this paper will look at the impact of CSR on a company’s reputation and image; in an endeavor to fill the research gap and provide useful information that can be used by companies for future decision making.
1) Does a company’s corporate social responsibility affect their image and reputation?
2) How do Stakeholders perceive companies that employ CSR in their operations?
-To identify the constituents of CSR.
-To investigate the effects of the Constituents of CSR on a company’s reputation.
-To investigate the role of stakeholders perception of CSR in a company.
This research will provide useful information to ARUP Company. This information can be used for future decision making and aid them in the formulation of policies that will help them in the development of better CSR strategies. The information can also be sued to understand the importance of CSR in the society and why companies that have not embraced it need to start. Without this information it will still be had for customers and organization, to understand the importance of CSR.
Also, the outcomes from this research can be useful for future research in the same field. It will provide useful information that other researchers can use to do further research on the subject. CSR is a new subject in the corporate sector. Therefore, more research needs to be done to give a clear view of how it affects business activities and how it can be used by companies to improve their performance, their reputation, and increase their profits.
This will give a background research on what other researchers have done on the same topic. By doing so, it will give a framework by which the paper will be based on. This literature review gives an analysis of some of the latest papers written on the same topic.
Corporate image is a mental perception of a company held by an individual or a group of individuals. On the other hand, corporate reputations are the feedback a company gets from its stakeholders regarding its performance and shows their satisfaction level with the companies identity claims (Dowling, 2016). According to (Glynn & Woodside, 2009, p. 277) reputations is an outsider perception of how well a company is dedicated to meet its commitments, and how well it conforms and meets the expectations of the stakeholders. Also, it depends on how well its overall performance fits in the socio-political environment.
A company’s reputation affects their performance in the industry. For example, a good reputation has an effect of attracting highly qualified personnel—people always want to be associated with companies with a good reputation. Also, a reputable organization attracts investors and therefore leads to its development. Coupled with other factors, it lowers the cost of capital and gains a competitive advantage over other companies. It is therefore that companies with a better reputation outperform those that do not; consecutively increasing the stocks market shares (Carreras, Alloza, & Carreras, 2013).
However, according to Dorrenbacher, Tomenendal, & Stanske (2016, p. 48), there is no clear cut difference between corporate image, reputation, and identity. Therefore, over the years, corporate image and corporate identity have been used interchangeably as if they had the same meaning.
Most modern companies have identified corporate reputation and image as intangible assets that give them a competitive advantage over other companies. They are valuable resources that make them beat their competitors: making them stand-out. Reputation is developed over a given period of time due to complex interrelationships between the companies and their stakeholders (Carreras et al., 2013).
Therefore, to analyze the effects of CSR on the company’s reputation, it is important to incorporate the views and perspectives of the stakeholders. In this study, only two stakeholders will be studied: the Arup employees and the residents of the four towns where the company has offices.
Corporate social responsibility according to Tourani-Rad & Ingley (2011, p. 186) is mostly described in terms of corporate governance, corporate accountability, and business ethics. It is tied to the fact that companies are mandated by ethics to cater the social, and environmental issues that affect other people other than the organization sit self—outsiders. It is the company’s obligations and duty to its stakeholders.
According to Kotler & Lee (2011), CSR is a company’s commitment to, directly or indirectly, improve the welfare of a community through discretionary business strategies and contribution of the company’s resources. In this case, the companies act on their volition since they are not coerced by the government or other law enforcements to cater to the societal needs. However, they have realized the benefits of doing so are immense, and therefore most of the companies nowadays have incorporated CSR into their business strategies.
In this regards, CSR is categorized into four main groups: these groups are formed based on the types of responsibilities CSR caters to. These groups are: economic, ethical, legal, and philanthropic. This groups, however, do not stand alone but are somehow related.
First, economic responsibilities focus more on the economic sector of the company. In this case, companies have a responsibility to make profits so as to continue providing goods and services at reasonable prices to its clients. Also, they need to make profits so as to pay their employees, increase the value of the company’s shares on the stock market, and pay taxes to the government (Mann & Roberts, 2016, p. 21).
The second is the ethical responsibilities. These are not enforced by the government laws but are societal expectations. In this regards, companies need to respect the ethical norms of the society and act in a responsible manner. Mostly, ethical considerations are the expected obligation to do what is just, fair and right; and minimize or avoid harm to its stakeholders().
The third one is legal considerations, which is the expectation that the company will perform in compliance with the government’s laws and regulations. Some of the laws they are expected to abide by are products, consumer, employment and environmental laws.
Lastly, philanthropic responsibilities. This demand that corporations should be ‘good’ citizens and act voluntarily in a manner that responds to the society’s expectations and needs.
These components of CSR are very useful in determining the effect of CSR on the company’s reputation. They are the tools by which stakeholders use to measure a company’s image, which as discussed above is very crucial for its success.
Stakeholders are any groups of individuals that are directly influenced by the activities of the organization. They comprise of investors, shareholders, customers, suppliers, governments, and employees (Brown & Brown, 2014, p. 171). Managing properly and satisfying stakeholder’s interests can lead to a better performance in the corporate sector. This is one of the motivations for a company’s need to invest in CSR since it is a way to effectively respond to stakeholders demands and promote socially responsible actions (L” ber, 2012, p . 12).
Stakeholders have a major impact on the company’s reputations and image (Cretu & Brodie, 2007). Therefore they are an important component to consider when companies are formulating their policies and regulations. In this regards, successful companies employ CSR to help them woo stakeholders and therefore improve the reputation of their company.
This paper will focus on the stakeholder’s perception of CSR on the company’s image and reputation. Studies have shown that CSR has a major impact on an organization’s reputations and image. However, CSR alone has not impact, but rather it influences stakeholders who give the company its reputation and image. Therefore companies should invest heavily in CSR to win the favor of stakeholders and improve their image and reputations, to improve their performance in the corporate sector.
The study population will comprise of ARUP employees and the people living in areas where it is located (Sydney, Melbourne, Perth, and Brisbane). A convenient sample of the company in the four locations will be employed from August 2017 to July 2018. The sample size will be set at 400 based on previous research on the same subject by (Tuongdung Lenguyen, 2011, p. 23). To get the sampling unit, snowballing, and quota sampling will be used. Most of the respondents will be selected based on their knowledge of CSR and the Arup.
The data to be collected will be stakeholders’ perception on CSR of Arup Company, and whether they think other companies should emulate them. Since this is a qualitative study, only qualitative data will be collected.
From August 2017, employees and residents of the four towns where the company is located will be invited to complete a self-complete anonymous questionnaire. Each questionnaire will be structured in a way that will be easy to complete and guarantee the confidentiality of the respondents. Personal interviews will also be used, where some selected employees and residents, based on their knowledge of CSR and the Company will, will be interviewed individually.
The questionnaire will consist of 24 questions and will be structure into three parts: respondents’ profile, their perception of CSR programs, and the image of Arup based on the CSR programs. The responses will be rated on a five-point Likert scale (5-agree strongly, 4-agree, 3-neutral, 2-disagree, 1-disgaree strongly). A pre-test of the questionnaire will be carried out on 30 respondents to test its reliability and validity. In addition to the primary data from questionnaires, secondary data will be collected from other sources such as books, articles, and journals.
The types of questions in the questionnaires will not violate any ethical considerations and will respect human dignity, and the people’s privacy will be guaranteed. Also, people will be allowed to answer questions on free will and will not be coerced to answer in any biased way. Before conducting the interviews, informed consent will be required from the participants. All this will be done following the requirements of the ethics committee.
All the data collected will be analyzed using Statistical Package for Social Sciences (SPSS). The analysis will involve descriptive analysis, which will summarize and interpret the collected data (regarding the background of the study population, its characteristic and structure. Also, inferential statistics will be used to investigate the relationship between the dependent (people’s perception) and the independent variables (company’s reputation and image)
References
Brown, A. P. T. A. U. C. S. T. W. A., & Brown, W. A. (2014). Strategic Management in Nonprofit Organizations. Jones & Bartlett Publishers.
Carreras, E., Alloza, Á., & Carreras, A. (2013). Corporate reputation. LID Editorial.
Celia Choong. (2011). Top 20 CSR companies in Australia | Arup | A global firm of consulting engineers, designers, planners and project managers. Retrieved May 29, 2017, from https://www.arup.com/news/2011_02_february/top_20_csr_companies_in_australia
Celia Choong. (2013). Arup ranked amongst top companies in Australia for CSR | Arup | A global firm of consulting engineers, designers, planners and project managers. Retrieved May 29, 2017, from https://www.arup.com/news/2013_03_march/8_march_arup_ranked_top_companies_csr_australia
Cretu, A. E., & Brodie, R. J. (2007). The influence of brand image and company reputation where manufacturers market to small firms: A customer value perspective. Industrial Marketing Management, 36(2), 230–240.
Doreen M. Mcgunagle, Dixie Button, & Laura Zizka. (2016). The Impact Of Corporate Social Responsibility Communication On Corporate Reputation. I-Manager’s Journal on Management, 10, 37.
Dorrenbacher, C., Tomenendal, M., & Stanske, S. (2016). Organizational Identity and Firm Growth: Properties of Growth, Contextual Identities and Micro-Level Processes. Springer.
Dowling, G. R. (2016). Defining and measuring corporate reputations. European Management Review, 13(3), 207–223.
Glynn, M. S., & Woodside, A. G. (2009). Business-to-Business Brand Management. Emerald Group Publishing.
Kotler, P., & Lee, N. (2011). Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. John Wiley & Sons.
L”ber, H. (2012). Corporate Management, Corporate Social Responsibility and Customers: An Empirical Investigation. Diplomica Verlag.
Mann, R. A., & Roberts, B. S. (2016). Smith and Roberson’s Business Law. Cengage Learning.
Tourani-Rad, A., & Ingley, C. (2011). Handbook on Emerging Issues in Corporate Governance. World Scientific.
Tuongdung Lenguyen. (2011). The Impact Of Corporate Social Responsibility Programs On A Company’s Image and Reputation: A Case Study. Retrieved from Source: https://www.csr-asia.com/index.php?id=13520, 21/02/2011).
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