The influence of Corporate Social Motivation on a firm’s Corporate Social Image

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The influence of Corporate Social Motivation on a

firm’s Corporate Social Image

Author: Julien Heuts

Student Number: 10658092 Date of submission: 08-07-2014 Version Number: Final version

Qualification: MSc. In Business Studies

Institution: Amsterdam Business School, University of Amsterdam Supervisor: Lars Moratis

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Foreword

This research stems from a profound interest in the topic of Corporate Social Responsibility (CSR). In order to expand my understanding of the antecedents underlying a firm’s corporate social initiatives, I have decided to investigate the motives for firms to engage in corporate social activities. During my Master Degree study, I have always been interested in the social aspects and strategic considerations firms make. I have therefore decided to gain a better understanding of the relationship between a firm’s motivate to engage in CSR and the eventual payoff, represented by a firm’s Corporate Social Image. This study is part of the master Strategy at the

Amsterdam Business School

There are a few people I would like to thank for their support and advise. First I would like to thank Lars Moratis, who has been a great supervisor for me during this research. Furthermore, I would like to thank Marlene Vock for reviewing my thesis and her feedback. Finally I would like to thank my family, friends and fellow students for their trust, collegiality and patience.

Julien Heuts

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During the last decades many organizations have adopted corporate social initiatives to improve their Corporate Social Image’s (CSI’s). This research builds on the assumption that stakeholders will not unthinkingly credit those initiatives, through an investigation into the motivations underlying a firm’s social actions. It is assumed that corporate social motivation plays an important role for stakeholders in rewarding such actions. Therefore, this thesis addresses the need for quantitative research to

investigate the relationship between a firm’s motive to engage in CSR and a firm’s CSI. This interest has led to the following research question:

What is the influence of type of firm motivation for engaging in Corporate Social Responsibility on their Corporate Social Image?

This thesis starts with a comprehensive literature study to outline the current state of the research field on the topics of CSR, different motives to engage in CSR and CSI. Subsequently, by using the Global Green Index (GGI) the top 50 best global green brands in 2013 are analysed (http://www.interbrand.com). A secondary data analysis is conducted based on retrieved information from the Corporate Social Responsibility Reports (CSRR) of the top performing firms, in order to detect the corporate social motives. Based on the evidence it was found that there is apparently a positive influence of both a profit-motive, and a public-serving motive. Those firms that approach CSR as an integral part of their strategy were more effective in obtaining a good CSI. Finally the contribution of this study to the current academic debate is discussed, followed by recommendations for future research as well as a short explanation of the limitations of this study.

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Chapter 1: Introduction to the topic

1.1 CSR, an integral part of business

In recent years Corporate Social Responsibility (CSR) has become a major topic in both management literature and business (Serenko & Bontis, 2009; Wagner, Lutz & Weitz, 2009). Where the concept of CSR started as being merely a normative concept, nowadays CSR is more and more considered as being an integral part of firm’s

management. Attention has been devoted towards the strategic implications of CSR, and several authors proved that CSR and financial performance are not mutually exclusive (Burke & Logsdon, 1999; Husted & Salazar, 2006; Orlitzky, Schmidt, & Rynes, 2003; Peloza & Shang, 2011; Porter & Kramer, 2011). However there have also been scholars who doubted the value of CSR with regard to a firm’s business activities (Friedman, 1970; Jensen, 2002; Windsor, 2001; Wright & Ferris, 1997). This discrepancy endorses the importance of a thorough understanding of the

circumstances under which CSR can be a substantial part of a firm’s business success.

1.2. CSR and performance

Research on the relationship between CSR and firm performance showed to be little coherent in their findings (McWilliams, Siegel & Wright, 2006; Waddock, 2004). The researchers stated that financial measurement chiefly reflects the interests of financial stakeholders. Nevertheless, CSR also affects non-financial stakeholders such as customers and NGO’s (Riordan, Gatewood & Bill, 1997). Subsequently, it is argued that the notion of performance has not only been inconsistently defined, but also reflects no more than a small part of a firm’s total CSR-performance. This problem asks for a wider perspective in assessing the results of CSR instead of only focusing

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on financial performance. Therefore, this study focuses on CSI. A firm’s CSI will be measured using the GGI provided by Interbrand, a major brand consultancy company (http://www.interbrand.com). They have based their methodology on both market perception and actual environmental performance. The performance elements consist of different sub-metrics such as governance, stakeholder engagement, supply chain and operations. The perception elements include sub-metrics such as differentiation, relevance and consistency. The primary goal of this study is to expand the current academic understanding regarding the antecedents of a firm’s corporate social performance, represented by a firm’s CSI.

1.3 CSR and motives

Research suggests that positive effects stemming from CSR do not only depend on the CSR initiatives as such, but also on the underlying motivations and the customer’s evaluation of those initiatives (Becker-Olsen, Cudmore & Hill, 2006). Recent research has used different types of motives to investigate the relationship between social initiatives and both social and financial performance. Becker-Olsen et al. (2006, p. 48) made a distinction between “firm-self serving (e.g., to increase profits, sales or

boost a specific brand) and public serving (e.g., help needy citizens, assist with community development or raise awareness for a specific cause)”. They have found

that only high-fit, proactive initiatives led to an improvement in customer beliefs, attitudes and intentions. Other researchers assessed a similar relationship between profit maximization and social performance, and compared the situations of altruism,

coerced egoism and strategy (Husted & Salazar, 2006). They have found a positive

relationship between a strategic approach and financial performance. Scholars have also differentiated on the one hand, a positive strategic view, which states that there is

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a win-win situation between CSR and a company’s financial success, and on the other hand a moral motive, which sees CSR as a company’s moral obligation (Graafland & Van de Ven, 2006). This study answers the quest from previous studies to conduct research in real market settings about corporate social motivation and the perceptions of the firms accordingly (Becker-Olsen, 2006).

1.4 Problem statement and research question

Aguinis & Glavas (2012) conducted a comprehensive literature review based on the topic of CSR. The authors emphasized the need to get a better understanding of the underlying mechanisms of CSR. Other authors have also shown that there is a knowledge gap in the current academic debate regarding the foundations of CSR (Aguilera et al., 2007; Aguinis, 2011; Margolis & Walsh, 2003; Wood, 2010).

A better understanding of the notion of corporate social motivation could contribute to bridging this gap, because literature showed that motives are an important predictor of CSR outcomes (Aguinis & Glavas, 2012). Other authors have also shown that a firm’s instrumental motivation is a legitimate predicator of CSR engagement (Bansal & Roth, 2000; Sharma, 2000). Similarly, Babiak & Trendafilova (2011) stated that the driving motives behind CSR practices have gained little attention from an academic perspective. Williamson, Lynch-Wood & Ramsay (2006) agreed, and pointed towards the lack of empirical studies addressing the antecedents of environmental behaviour. A better understanding into those mechanisms is useful, because it was found that the motives of managers and shareholders influence a firm’s corporate governance (Matten & Moon, 2008).

This thesis addresses those gaps, thereby also responding to other scholars who stressed the need for future research on corporate social motivations to conduct

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studies in real market settings (Becker-Olsen et al., 2006; Du, Bhattacharya & Sen, 2010). The latter emphasized that research on actual initiatives and motives would enhance the understanding of, among others, customers’ perception of motivation. Those findings lead to the following research question:

What is the influence of type of firm motivation to engage in Corporate Social Responsibility on their Corporate Social Image?

This research question will be answered using quantitative research methods. Secondary data analysis is conducted based on retrieved information from the Corporate Social Responsibility Reports (CSRR) of the firms included in the GGI.

1.5 Academic and practical relevance

Aguinis & Glavas (2012) have provided a guiding and multilevel framework wherein the authors model the comprehensive body of CSR literature. Based on their model, this study contributes to the current research field in different ways. First, this study offers an empirical investigation into the relationship between a firm’s instrumental (e.g. financial) and normative (e.g. doing good) motives, and the outcomes of CSR (positive evaluation of firms, reputation). This improves the theoretical understanding of the underlying processes of CSR. In this light, corporate social motivation could be seen as an indicator of an organization’s social ambitions. Such understanding is useful for managers, because it provides them with insight into the effects of their intended behaviour and ambitions on their firm’s corporate social perception. Second, this research studies corporate social motives in real market settings and investigates possible moderating effects (marketing-budget, industry, firm size) that

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could reinforce the relationship between motives and perception (Aguinis & Glavas, 2012). Other scholars agreed on the latter and stated that much empirical research on CSR-driven stakeholder behaviour has been conducted on test populations in

laboratory settings (Du et al., 2010). Next, firms included in this study have been assessed on actual initiatives, market perceptions, and environmental performance. Interbrand produces the ranking that this study uses, which increases the external validity as proposed by Becker-Olsen et al. (2006).

Furthermore, this study also has practical relevance. This study is conducted on the organizational and institutional level of analysis. Such research adds to a better understanding of the relationship between CSR actions and Corporate Financial Performance (CFP) (Aguinis & Glavas, 2012). This research shows managers if stakeholders are actually crediting their motivations for corporate practice. Managers of companies with a predominantly public serving motive, who are outperformed by firms with a predominantly self serving motive, could use the results of this study to improve their corporate social strategy/communication in order to make sure that their stakeholders are better aware of their altruistic motives. This could help companies to better understand their stakeholders. Besides, this study provides managers with insight into which types/combinations of corporate social motivation eventually lead to a favourable CSI. Research has shown the importance of a firm’s social

performance (Miles, 1987; Fombrun & Shanley, 1987). Firms with a solid corporate image face lower levels of employee turnover, higher levels of organizational commitment, and higher levels of job satisfaction (Mobley & Fisk, 1982; O’Riordan et al., 2008). Orlitzky et al. (2003) conducted a meta-analysis and found a positive relationship between a firm’s reputation and goodwill with external stakeholders. This eventually increases financial performance. Furthermore, managers could strategically

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use a firm’s CSI (closely related to reputation) to signal about their company’s attractiveness (Fombrun & Van Riel, 1997).

1.6 Reader’s guide

This thesis consists of five chapters. This introductory chapter explains the

importance of the topic, as well as the research question and motivation. The second chapter contains a literature review of the current academic debate on the topics of CSR, CSI and corporate social motivation. The third chapter describes the

methodology and explains, among others, how the data for this study are collected. Chapter four presents the findings of this study. Finally, the last chapter highlights the discussion, conclusions, limitations and recommendations for future research.

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Chapter 2: Theoretical Background

2.1 Introduction

The topics of CSI, CSR, and corporate social motivation have been addressed in the work of many scholars (Fombrun & Van Riel, 1997; Friedman, 1997; Graafland & Van de Ven, 2006; Riordan et al., 1997). However, little is known about the

relationship between the often-unobservable motivations firms have and a firm’s CSI. This chapter outlines the current state of the research field and discusses the main publications and theories that shape the present academic discussion. This chapter starts with a comprehensive theoretical background on the relevant topics of this thesis. The chapter closes with an overview of the main hypothesis derived from the literature.

2.2 Corporate Social Image

During the last decades there have been numerous theoretical efforts focused on defining the concept, function and effect of CSI (Riordan et al., 1997; Turban & Greening, 1996). The latter have characterized corporate image as “an individual’s perception about the actions, activities, and accomplishments of an organization” (p. 402). However, it is argued that different stakeholder groups hold different

perceptions of the organization (Freeman, 1984). Therefore a firm’s CSI becomes a stakeholder’s “overall perception of the organization” (Riordan et al., 1997 p. 402). Because CSI is a function of the perceptions of different stakeholders, a substantial body of academic work has used signalling theory to describe the development of a firm’s corporate image (Fombrun & Shanley, 1990; Spence, 1973; Stiglitz, 1985). Signalling theory is fundamentally concerned with the actions two parties undertake in order to reduce the information asymmetry between them (Spence, 2002). Firms

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and individuals base their decisions on both public and private information. Public information is freely available, however information asymmetries arise if one party holds private information that could improve the quality of decision the other party needs to make (Stiglitz, 2002). The latter has identified two types of information where asymmetry occurs: information about quality and information about content. Information about quality is best illustrated as an information asymmetry between two entities about the true quality of, in this case, a firm. A signalling model argues that high-quality firms are motivated to signal about their quality, and low-quality firms are not (Kirmani & Rao, 2000). Based on those signals, outsiders can make a distinction between high-quality and low quality firms. This implies that firms, convinced of their high CSR quality, do have a strong incentive to signal about their CSR-activities, since outsiders (e.g. investors, NGO’s, customers, clients) will likely perceive them as qualitatively better than firms that do not signal. Research has shown that quality is often closely related to reputation (Kreps & Wilson, 1982). This

illustrates the strategic importance for managers, because the competitive benefits of acquiring a favourable reputation have been empirically approved (Rindova &

Fombrun, 1999). Other authors have also argued that the need to strategically manage a firm’s corporate image has increased, due to economic trends such as globalization, deregulation en the blurring of boundaries between organizations and their

stakeholders (Gray & Balmer, 1998).

Information about content is useful in the light of firm motivation and image because this type of asymmetry comes about “when one party is concerned about another party’s behaviour or behavioural intentions” (Connelly et al., 2011 p. 42). A firm’s corporate image is therefore a function of a firm’s signals towards its stakeholders (Spence, 1974). A firm’s corporate social motivation, for example presented in a

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CSR-report, could be a strategic way for firms to signal about their otherwise unobservable behavioural intentions. Subsequently, various stakeholder groups process the signals in order to retrieve information from it, and judge if the given cue is sufficient to satisfy their needs. Independent brand consultancy companies for example, use the signals with regard to a company’s CSR-activities and intentions, in order to establish a global green ranking, which in turn serves as a signal of a firm’s CSI. Such rankings, could again serve as informational signals of a firm’s reputation, which is important because reputations serve as signals that increase an observer’s confidence in the firm’s products and services (Fombrun & Van Riel, 1997).

Additional work underlined the latter and acknowledged the set-up of this study. It is argued: “reputational rankings constitute a potentially significant and understudied form of normative control that channels firms’ actions by conferring relative competitive advantage and disadvantage upon conforming organizations within an organizational field” (Fombrun & Shanley, 1990 p. 234). This observation is in line with signalling theory, because corporate social reputation can be seen as the result of a competitive signalling process about a firm’s quality or intent towards their

constituents in order to increase their social status (Spence, 1974). Recent research has also indicated a positive relationship between reputation and corporate credibility. Scholars found that a good reputation positively influences customers’ perceptions and attitudes towards a firm’s marketing activities, because they are perceived as reliable. This, among others, improves purchase intentions and financial performance (Newell & Goldsmith, 2001).

Other authors have found a positive relationship between a firm’s corporate image and the work attitudes and behaviours of employees (Dutton & Dukerich, 1991). They showed that employee’s self-esteem was significantly higher if a firm possesses a

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positive image perception, which in turn increases organizational performance.

Riordan et al. (1997) found similar results, because their study showed that image was positively related to job satisfaction and negatively related to intentions to leave to company.

2.3 CSR Communication

“A key challenge of CSR communication is how to minimize stakeholder scepticism and to convey intrinsic motives in a company’s CSR activities” (Du et al., 2010 p. 10). They pinpointed the need for both companies and academics to get a better understanding of effective CSR communication. The authors emphasized the need for organizations to report about both their intrinsic (self-serving) and extrinsic (public-serving) motivations. Stakeholder’s perceptions of firms with a mixed-motive were found to be more positive than the perceptions of firms with either an intrinsic, or an extrinsic motive (Ellen, Webb & Mohr, 2006). The latter argued that, as CSR

becomes more widespread among customers, they are more willing to acknowledge that CSR initiatives could serve both the needs for society and the firm. Forehand & Grier (2003) showed that type of motive did not drive stakeholder scepticism. On the contrary, they found that organizations that frankly communicated about their self-serving motives enhanced their corporate social credibility. Recent research confirmed the importance for firms to be honest about their motives (Kim & Lee, 2012). Furthermore, Du et al. (2010) stated that companies should use credible communication channels in order to inform their stakeholders about their CSR activities. They found that official documents, such as CSR reports, were effective ways to inform stakeholders about their CSR initiatives. However, other scholars found a trade-off between controllability and credibility of CSR communication

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(Wiener, LaForge & Goolsby, 1990). They showed that CSR communication via corporate channels increased scepticism. Moreover, CSR publications from independent organizations turned out to increase the financial returns on their corporate social initiatives (Du et al., 2010). They found that a firm’s CSR

associations could be enhanced if they received a good CSR rating (e.g. Interbrand). Such findings emphasize the need for companies to properly inform their stakeholders about their CSR activities. Du et al. (2010) concluded that effective CSR

communication is necessary if firms want to retrieve financial benefits stemming from their engagement in CSR. Other research has also stressed the importance to make stakeholders aware of a firm’s CSR activities (Sen, Bhattacharya, Korschun, 2006). They found a positive relationship between customer’s awareness of CSR initiatives and positive-company related associations (e.g. purchase intention, corporate image, organizational identification, willingness to invest and potential employment). The authors argue: “CSR activity has the potential to increase not only CSR associations, attitudes, and identification but also the intent of stakeholders to commit personal resources (e.g., money, labour, etc.) to the benefit of the company” (p. 164). Such findings underline the strategic and financial opportunities resulting form high-quality CSR communication.

2.4 Impact of CSR

Today there is a growing recognition that the notion of corporate social responsibility CSR) could have a positive economic impact on the performance of firms (Joyner & Payne, 2002; Margolis & Walsh, 2003; Orlitzky, 2001; Orlitzky & Benjamin, 2001; Orlitzky et al., 2003; Orlitzky, Siegel & Waldman, 2011). Orlitzky et al. (2003) performed a meta-analysis on previous studies on the notion of CSR and CFP, and

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found a general positive relationship between both constructs. Moreover, they found that reputation measures of Corporate Social Performance (CSP) were more strongly correlated with financial performance than other measures such as stock market results. It was found that CSR practices increased a firm’s reputation, which in turn improved a company’s competitive position (Gimenez Leal, Casadesus Fa & Valls Pasola, 2003). Du et al. (2011) found similar results and found that positive CSR publications increased financial performance. Other scholars have also found positive correlations between social responsibility and financial performance (Frooman, 1997; Griffin & Mahon, 1997; Key & Popkin, 1998). However, researchers acknowledged that such correlations are difficult to measure (Garriga & Melé, 2004; Griffin, 2000; Rowley & Berman, 2000). In an attempt to convince the critics, Orlitzky (2001) controlled the relationship between CSP and CFP for firm size across three meta-analyses, but the relation between CSP en CFP remained positive. Such findings show that both small and large firms can benefit from engaging in CSR. A similar study showed that CSP not only predicted CFP, but that CFP also predicted CSP (Orlitzky et al., 2003). This implies that both constructs are not mutually exclusive, but that they are actually reinforcing each other.

However, for many years researchers have taken a different stance by arguing that social responsibility is not consistent with value creation and maximizing profits (Friedman, 1962; Wright & Ferris, 1997; Jensen, 2002). Husted and Salazar (2006) used this incongruence to examine the conditions under which profit maximization and social performance are congruent in order to illustrate that both concepts are not mutually exclusive. Their findings showed a positive relationship between strategic CSR investment and financial performance. Earlier research found a similar positive

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relationship between firm performance and strategic CSR and a negative relation between altruistic CSR and firm performance (Hillman and Keim, 2001).

On the other hand, the research field has also asserted a lot of critique on previous findings. McWilliams et al. (2006) pinpointed the confusion within the CSR literature about the definition of the CSR concept, thereby questioning the reliability of

previous results. They compared previous studies and showed that the results have ranged from a positive relationship between CSR and financial performance, to a negative relationship between CSR and financial performance. They have attributed this lack of agreement to the inconsistency in defining the concept of CSR, firm performance as well as inconsistency in sample choice.

The fact that CSR is still not a well-established concept asks for a more deepened understanding of the micro-foundations underlying the corporate social initiatives carried out by firms (Aguinis & Glavas, 2012). Becker-Olsen et al. (2006) studied those foundations and found that only high-fit, proactive initiatives led to an improvement in consumer beliefs, attitudes and intentions. They stressed the importance for managers to be aware of how their firm communicates its CSR initiatives, since their results showed that firm motivation has turned out to be one of the key drivers for financial rewards. Siegel & Vitaliano (2007) took a similar stance and showed that CSR can be a form of product differentiation because it can be seen as a signal of honesty and reliability. They found that firms selling durable experience goods or credence services were more likely to be socially responsible. In accordance with Becker-Olsen et al. (2006) they also appealed for future research to investigate firm-specific factors, such as motivation, to advance our understanding of the relationship between the antecedents of CSR and financial reward or increased customer perceptions. McWilliams et al. (2006) agreed on the latter and clarified that

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information asymmetry between managers and researchers makes is difficult to study the antecedents and consequences of CSR. Managers may not reveal the more

practical motivations (e.g. reputation building), because they assume that external stakeholders will perceive those motivations as less credible. The researchers made a distinction between private and social initiatives and called for research to deeper dig into the underlying motivations, and to debunk the smokescreens often created by firms publishing self-serving information. Moratis (2013: 1) found similar results as the data turned out to show a “discrepancy between the value CSR managers attach to the use of CSR standards to enhance the credibility of their CSR claims and the use by their organizations as such”.

2.5 Motivation to engage in CSR

The pervious section implies that the current academic literature is inconclusive about the effects of CSR on company performance. Scholars have shown to be more

consistent in their findings about firm motivation and intentions. As the introduction section already outlined, it is not only the CSR initiative as such that causes positive effects on stakeholders, but also the underlying motivation behind a social endeavour which influences the perception of those involved.

A recent article by Graafland & Van de Ven (2006) examined the relationship between management’s view on CSR and firm’s actual CSR efforts. The authors made a distinction between a strategic view on CSR, and a moral view on CSR. A strategic view is described as: “Our firm’s efforts with respect to CSR will have a positive influence on our financial results in the long term” (p. 114). CSR can, as previously explained, improve a firm’s reputation, which in turns leads to an

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2000). A moral view on CSR is described as: “To behave in a responsible way is a moral duty of business towards society” (p. 114). This implies that a firm has a duty to behave responsible. Management should be held accountable for a wide range of stakeholders based on moral and ethical grounds. The authors found a weak

correlation between the strategic view and actual CSR initiatives, which implies that a positive strategic view by itself is not sufficient for a firm to engage in CSR.

However, they found that the actual CSR implementation was more strongly related towards a moral view on CSR. It is argued that a financial reward works

counterproductive on one’s intrinsic motivation (Frey, 1998). In this study’s context this implies, that firms with an intrinsic motivation should have better corporate social images, since those firms are more likely to actually implement initiatives.

Other research has found slightly different results. Becker-Olsen et al. (2006) investigated the relationship between perceived fit, perceived corporate motive and timing of announcement, and consumers’ responses to corporate social initiatives. The authors have identified two primary types of motives. Similar to Graafland & Van de Ven (2006), the scholars defined motives as either “firm-self serving (e.g., to increase profits, sales or boost a specific brand) or public serving (e.g., to help needy citizens, assist with community development or raise awareness for a specific cause)” (p. 48). Their research showed that self-serving motives did not lead to a reduction in

perceived credibility. Yet, scepticism was merely driven by a disagreement between a firm’s stated objectives and their actual actions. For example, “if objectives are stated as purely social and firm actions appear to be self-serving” (p. 50). This implies that there is no direct relationship between a firms motive to engage in CSR and

perceptions of corporate credibility. Furthermore, their research showed that low-fit initiatives led to a decrease in overall attitude, perceptions of corporate credibility,

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corporate position and purchase intention. The latter is closely related to the notion of CSI. This implies that social initiatives as such cannot replace bad management, or low-quality products. So, if managers want to improve their CSI, they should actually align their social endeavours with their corporate objectives. If not, “CSR can actually become a liability and diminish previous held beliefs about firms” (p. 52). Other scholars agreed and found that firms with poor CSR records experienced negative effects such as consumer boycotts, reductions in brand images, and sales drops, when those records became public (Sen & Bhattacharya, 2001). In this study’s view, this implies that firms with rich CSR records would actually experience positive effects stemming from their public CSR records. Hence, there is a strong incentive for firms to inform their stakeholders about their social initiatives, motivation, values and levels of fit, because research has shown that those stakeholders will actually reward them for those efforts. Those findings are in line with signalling theory, which ascribes similar incentives for high-quality firms to report on both their motives and initiatives (Spence, 1974). Because research has shown that there is no direct relationship between a firm’s corporate social motives and perceptions of corporate credibility, it is argued that both types of motives could positively influence a firm’s CSI. Other authors confirm this assumption, because it was found that customers did not judge a company’s CSR motives based on either a public-serving or a self-serving motive (Ellen, Webb & Mohr, 2006; Kim & Lee, 2012). It was found that even customers with high levels of environmental engagement were willing to credit self-serving motives, as long as a firm’s public-serving initiatives were perceived as sincere and credible (Kim & Lee, 2012). Therefore it is concluded that firms should be honest in their (marketing)-communication about their underlying motives.

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Those findings lead to the following two hypotheses:

H1: There is a positive relationship between a profit-serving motive and a firm’s CSI. H2: There is a positive relationship between a public-serving motive and a firm’s CSI.

Husted & Salazar (2006) also made a distinction between two types of objectives: profit maximization and social performance. In order to determine the optimal level of social output, the authors compared the cases of altruism, coerced egoism and

strategy. They have found that firms can better act strategically, than react to a coercive political and social environment. Their results suggest that only strategic social investments could drive financial performance. The authors have defined strategic social investors as an “investor who, upon making a social investment also obtains an additional benefit (good reputation, differentiated products that extract a premium, more highly qualified personnel) by design and thus obtains greater profitability” (p. 81). Other scholars have acknowledged the need for strategic CSR, and found that an increasing number of firms are seeking ways to increase both their profitability and their social performance (Bollier, 1996; Tichy, 1997).

However, other research pointed towards the complex dynamics of today’s markets. This means that simply deciding to invest in strategic CSR is not sufficient. Firms need to take into account, among others, market structure, first mover advantages and the threat of imitation (Tirole, 1988). Husted & Salazar (2006) also emphasized that firms are often unable to extract all the benefits provided by investments in CSR. Regardless of the motive, it’s hard to determine the advantages in terms of costs and output beforehand. Based on those findings it is expected that a profit-serving motive is more effective than a public-serving motive, because investing in CSR as such is

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not enough to compete in today’s market. Furthermore, customers are willing to credit both types of motives as long as long as they are perceived as sincere and honest (Kim & Lee, 2012). This implies that a self-serving motive can achieve the same benefits as a public-serving motive. However it is expected that firms with a self-serving motive also engage more actively in supporting activities such as marketing in order to obtain extra benefits such as reputation and financial gains (Fombrun, Gardberg & Barnett, 2000). Therefore it is hypothesized that:

H3: A profit-serving motive leads to a higher CSI than a public-serving motive.

Recent literature on corporate social motives has distinguished similar types of motives. It became apparent that most studies used a spectrum with the interest of the firm on the hand, and the interest of the community on the other hand. A better understanding of those motivational concepts could help firms to improve the conditions under which they are able to create shared value (Bruch & Walter, 2005; Porter and Kramer, 2011). The latter emphasized the importance of a better

understanding of the micro-foundations of CSR pointing to a growing social

awareness of employees and citizens. Aligning motivations with corporate objectives could lead to a better understanding of the relationship between competition and economic value. Furthermore, if managers are able to align their motivations and behaviour with the interest of their stakeholders, scepticism and mistrust towards their CSR initiatives could be decreased (Laufer, 2003). Nowadays firm should be aware of the importance of CSR, and if firms want to be successful, they have to provide their stakeholders with high-quality and transparent information (Elving, 2012). Moreover,

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research has shown that social endeavours should be consistent with a firm’s operating objectives (Levy, 1999).

In an attempt to analyse the main CSR theories and approaches, Garriga & Melé (2004) have classified the most relevant theories on CSR into four groups: (1) instrumental theories (the main goal of an organization is wealth creation, and CSR could be a way to achieve such economic results); (2) political theories (organizations should use their power in society in a responsible way); (3) integrative theories (organizations and society are mutually dependent, therefore organizations should take into account social demands); (4) ethical theories (firms should contribute to a good society based on ethical requirements). Those theoretical classifications correspond to the different types of corporate social motivation discussed earlier. Theories on corporate social motivation make a similar distinction between profit and public-serving motives. Firms with a predominantly profit-serving motive could be categorized into the group of instrumental theories, whereas organizations with a predominantly public-serving motive could be classified into the group of ethical theories. Firms with a mixed-motive, or a strategic approach on CSR, combine all four theoretical approaches in order to address the interests of all stakeholders. Other scholars confirm Garriga & Melé’s (2004) classification, because it was found that economic, political and social factors are the main drivers that shape CSR activities (Baughn, Bodie & McIntosh, 2007). Some authors stated that CSR should always be something that goes beyond a firm’s legal requirements (Carroll, 2000; Vogel, 2005). Another recent study by Babiak & Trendafilova (2011) examined the drivers of environmental behaviour in professional North American sport organizations. They found that executives considered multiple corporate social motives. The two major types were: “seeking legitimacy by conforming to institutional pressures and

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expectations, as well as taking advantage of the strategic opportunities offered

through these types of activities” (p. 17). Such findings indicate that both performance and political factors (e.g. law, legislation) determine a firm’s motivation for engaging in CSR (Babial & Trendafilova, 2011). Similar to Garriga & Melé they also found that social-political factors influenced a firm’s motivation, such as social expectations to behave green and pressures due to the adoption of green practices by their

competitors. The authors argued that a strategic perspective allows corporations to gain advantages in different areas (i.e. reputation, cost reduction, efficiency) and among different stakeholders (i.e. customers, federal governments, key shareholders). They elaborated and reported that CSR should be embedded in strategic practices and within the company culture, to improve a firm’s relationship with other stakeholders in the industry. Moreover they emphasized the importance of a targeted marketing strategy in creating new revenue streams stemming from CSR. It was found that strategic collaborations and partnership were effective ways to behave strategically (Austin, 2003). Therefore it is concluded that strategic CSR can provide both strategic and financial advantages, as well as other advantages such as improved images, marketing advantages or long-term relationships with key stakeholders.

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Chapter 3: Design and methodology

3.1 Overall approach

The previous chapter reviewed the literature about the main concepts to be addressed in this study. Furthermore, relevant theories were discussed and analysed in order to get a better understanding of the relationships between this study’s concepts. This chapter presents and motivates this study’s research design, sample, data collection and data analysis.

This research started with a comprehensive literature study on the topics of CSI, CSR and motivations for firms to engage in CSR. A literature review is widely recognized and recommended to initiate an academic investigation (Saunders et al., 2009). It became apparent that there is a gap in the current academic literature about the relationship between different motives to engage in CSR and a firm’s CSI. More specifically, new research conducted in real market settings could illustrate which type of motive actually pays of for firms. This led to the following main research question: What is the influence of type of firm motivation for engaging in Corporate

Social Responsibility on their Corporate Social Image? Answering this research

question requires access to a complete body of data, suitable to retrieve both the motives and a firm’s CSI. Since this research does not have the time and financial resources to design and distribute a large-scale questionnaire survey to a large sample of firms or to conduct interviews in real market settings, secondary data analysis is recommended (Saunders et al., 2009). During the last decades, sources of secondary data have expanded rapidly. Internet is a fertile opportunity, because it provides researchers with worldwide access to a great variety of data. This study is interested in both motives and image. Both concepts will be analysed using quantitative data and

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compiled data, consisting of different stats and figures. Therefore, it was decided that secondary data analyses would be the most suitable method for this research. The main arguments are: (1) this study seeks to answer the research question in a real market setting context - multiple source secondary data provides a great variety of useful material all conducted in such market settings (2) secondary data does not require to gain access to research participants – this increases the convenience (Saunders et al., 2009) (3) secondary data analysis provides this study with a contextual background – this increases this study’s context and generalizability

3.2 Sampling

This study initiates the sample by using the Global Green Index (GGI)

(http://www.interbrand.com). Interbrand is a major brand consultancy company that ranks global brands based on, among others, market perception and environmental performance. Currently, Interbrand is world’s largest brand-advise company with over 40 offices worldwide. The GGI provides an overview of the top 50 best global green brands in 2013. Firms are selected based on Interbrand’s annual Best Global Brands Report (BGBR). The BGBR rates the world’s 100 most valuable brands. All brands on this list are globally represented, and have a solid reputation of delivering value to their stakeholders. The eventual top 50 firms are expected to be a representative sample to investigate the relationship between a firm’s motivations to engage in corporate social initiatives and a firm’s CSI. Interbrand reports about their

methodology, that they conduct surveys in the ten largest global economies (based on GDP). Each brand was assessed by 1250 consumers, and more than 10000 customers were interviewed in total. Interbrand’s GGI is exhaustive and complete, which makes it an appropriate source of secondary data, suitable for this study. Moreover,

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Interbrand ranks firms explicitly on perceived CSR-performance. Similar rankings on the contrary (e.g. Ethisphere), are more concerned with ranking actual

CSR-performance. Interbrand’s GGI is therefore better useful for this study’s purposes, since perceived CSR-performance can be seen as a firm’s CSI.

The top performing firms have to be transparent about their social initiatives, because their CSR-reports are used by professional brand consultancy companies and NGO’s in order to rank and assess the social initiatives and objectives carried out by those firms. Any false or misleading information could cause serious damage to their CSI (Bazillier & Vauday, 2013). This sample is therefore expected to be representative. Interbrand states on their website that they exclude all brands that are considered distinct from their corporate parent. It is argued that environmental activities are reported at a corporate level, while customers are generally aware of the market-facing brand. This, among others, shows that Interbrand handles a comprehensive and reliable methodology. Secondly, Interbrand provides linkages to the corporate social responsibility reports of the firms they have ranked. Those reports will be studied to get an insight into the underlying motivations for firms to engage in CSR.

3.3 Data collection

The top 50 firms included in Interbrand’s GGI constituted the set of firms for this study. Deloitte, world’s largest professional services network, assessed each brand on 83 individual sub-metrics across six pillars – Governance, Stakeholder Engagement, Operations, Supply Chain, Transportation and Logistics, Products and services (http://www.interbrand.com). There is no information available about the response rate. The data were collected from publicly available sources, both qualitative and quantitative (i.e. CSR-reports, responses to the Carbon Disclosure Project (CDP)).

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Multiple sources of evidence effectuate triangulation (Webb, 1970), which enhances the reliability of the data. Based on this information Deloitte calculated a performance score.

Subsequently, Interbrand calculated a perception score. A sample of 1250 customers assessed each brand in terms of Authenticity, Relevance, Differentiation, Consistency, Presence, and Understanding of environmental claims. There is again no information available about the response rate. Next, the overall score was calculated by combining the performance and perception scores. Interbrand applied discount factors if positive perceptions outweighed the actual green performance. This is a measure to prevent Greenwashing. Academic literature has defined Greenwashing as a situation in which “the claim about the environmental or social benefits of the product is unsubstantiated or misleading” (Bazillier & Vauday, 2009, p. 2). In the final ranking, firms were rated relative to other companies. Previous years’ results were also taken into account. This enhances the credibility of the retrieved data because brands are both credited with previous achievements and the improvement to those achievements accordingly. Therefore Interbrand’s GGI was chosen to represent the dependent variable CSI. The data from the GGI were retrieved from Interbrand’s website

(http://www.interband.com), which is publicly available.

Furthermore, a ranking contains an interval-scale, which denotes a certain order of rank. Hence, a ranking is suitable to make a distinction between firms with a

relatively low, medium or high CSI. Such distinction makes it possible to analyse if certain types of corporate social motivation would actually lead to a better CSI.

The accounting data for these firms were obtained from the CSR-reports of the GGI’s top 50. Those CSR-reports are also publicly available on the websites of the firms

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accordingly. Data were selected from the CSR-reports of the years 2012 and 2013. Not all firms published a CSR-report over 2013. For those firms, the 2012 reports were used. CSR-reports contain a rich and comprehensive insight into the corporate social initiatives of the top performing firms. The CSR-reports contain both financial and non-financial data. Motivation is expected to be a latent construct ‘hidden’ in the CSR-reports of the firms. Therefore, a word-count/language analysis was conducted based on a list of pre-selected words. Those words were selected based on the definitions identified in recent literature about different types of corporate social motives (Becker-Olsen et al., 2006; Graafland & Van de Ven, 2006; Husted & Salazar, 2006). Based on the literature review it became apparent that the most pervasive publications in the research field used a quite similar spectrum, with the interest of the firm on the on hand (e.g. self-serving motive, strategic view on CSR) and the interest of the community on the other hand (public-serving, moral-view, altruistic-CSR). Therefore it is argued, that firms with for example a profit motive, would be more likely to include terminology in their CSR-reports related to the definitions given in the literature. The key words from the definitions retrieved from the literature, where therefore chosen to be a representative reflection of a firm’s underlying motive. However, it should be noted that both types of motives are not mutually exclusive (Babiak & Trendafilova, 2011; Husted & Salazar, 2006; Kim & Lee, 2012). It is expected that all firms have a mixed-motive to some extent. Yet, for this study’s purposes it was decided to make a clear separation between a public-serving and self-public-serving motive. Such an extreme distinction between both types of motives is necessary to determine the extent to which one particular type of motive influences a firm’s CSI.

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Profit/self-serving motive

Strategic view: “Our firm’s efforts with respect to CSR will have a positive influence on our financial results in the long term” (Graafland & Van de Ven, 2006, p. 114)

“Firm-self serving motive: to increase profits, sales or boost a specific brand” (Becker-Olsen et al., 2006, p.48)

Strategic social investors: “investors who, upon making a social investment also obtain an additional benefit (good reputation, differentiated products that extract a premium, more qualified personnel) by design, and thus obtain greater profitability” (Husted & Salazar, 2006, p.81)

The words sales, profit, strategic and financial were literally included in the list, because all three definitions refer to those words. The words effective, and a firm’s

own brand name were added to the list. Additional benefits are expected to be

classified under the heading ‘effective’, while a high number of counts on a firm’s own brand name could indicate that a firm is mainly concerned about their own interest or to boost their own brand.

Other/public-serving motive

Moral view: “To behave in a responsible way is a moral duty of business towards society” (Graafland & Van de Ven, 2006, p. 114).

Public-serving motive: “To help needy citizens, assist with community development, or raise awareness for a specific cause” (Becker-Olsen et al.,

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Social-performance: An objective measure of the firm’s contribution to society (Wood, 1991), which consists of “the production of goods, or the elimination of bads that benefit the community” (Husted Salazar, 2006 p. 78)

The words community, social, awareness and develop were literally included in the list, because all three definitions (in)-directly refer to those words. The words change and vision were added to the list. All three definitions emphasize that firm’s have to accomplish something within the community or society, which can be characterized as change. Vision is expected to denote if the firms really have a long-term strategy to behave responsible. Figure 1 presents an overview of the complete wordlist.

Fig. 1 Pre-selected word list

Profit/Self-serving motive Other/Public-serving motive - Sales - Profit - Brand-name - Financial - Strategic - Effective - Change - Vision - Community - Social - Awareness - Develop

Word count analysis has been empirically acknowledged. Research from the field of psychology has shown that the way individuals talk and write, provides insight into their emotional and cognitive worlds (Pennebaker et al., 2001). Similar research has shown that people’s physical and mental health can be predicted by the words they use (Gottschalk & Glaser, 1969; Rosenberg & Tucker, 1978; Stiles, 1992). By using the search function command-F, the CSR-reports of the top-50 firms were analysed on the basis of the above-mentioned list of words. The objective of this word-count analysis was to unravel a firm’s underlying motives.

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To determine if one type of motive leads to a higher CSI than the other one, a gap score was calculated. This gap score is the difference between a firm’s total profit-score and a firm’s total public-profit-score. Those total profit-scores were calculated by composing an average profit and public-score (i.e. total number of profit/public-serving words divided by 6). The difference between both scores indicates if a firm has a

predominantly profit or self-serving motive. Subsequently a trend-line was drawn in order to investigate the relationship between a certain motive-composition and a firm’s ranking on Interbrand’s index.

3.4 Data Analysis

Data analysis was conducted based on a self-constructed excel dataset consisting of a set of variables (e.g. rank-number, sector, marketing-budget, number of employees, preselected word-counts) retrieved from both Interbrand and the CSR-reports of the top 50 firms. Interbrand’s ranking has been divided into three parts in order to make a distinction between firms with a relatively low, medium, or high CSI. This study has decided to label a ranking between 1-10 as a relatively high CSI, a ranking between 11-40 as a relatively medium CSI, and a ranking between 40-50 as a relatively low CSI.1 It is argued that this distinction is arbitrary, because the total ranking consists of only 50 firms and the labels have to be big enough to prevent serendipity.

1However, it should be noted that all brands included in GGI top 50 could be perceived as green,

otherwise they would be probably be excluded from the list. Yet, in order to determine if certain types of corporate motivation will lead to a (relatively) higher CSI it’s necessary to make such a distinction.

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Chapter 4: Findings

4.1 Introduction

This chapter presents the findings of this study’s investigation, based on the analysis of the self-constructed dataset. The chapter starts with an overview of the descriptive analysis as well as other remarkable aspects about both the top 50 as a whole. Next, those results are compared with the results from the firms with a relatively low, medium and high CSI. Subsequently, the results of the proposed hypothesis will be presented in order to answer the research question.

4.2 Descriptive analysis

Sectors

The GGI consists of six main sectors: Automotive (18%), Fast Mover Customer Goods (FMCG)/Consumer Packaged Goods (CPG) (18%), Technology (40%), Retail (10%), Finance/Insurance Services (10%) and Restaurants/Food (4%). However, the top, middle and low segments of the GGI show a different distribution. The top 10 consists of only three sectors (automotive 50%, FMCG/CPG 20%, technology 30%). The firms with a medium CSI are merely represented by technology (53%) and FMCG (17%), Subsequently, the firms with a relatively low CSI are merely active in finance/insurance services (40%), retail (20%) and FMCG/CPG (20%). The

automotive-industry does not appear in the bottom segment of the top 50. Table 1 (Appendix 1) contains a complete overview of the sector-distribution.

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Demographics

For the whole GGI, 46% of the firms have their head-office in the US. Another 36% of the top 50 firms are located in Europe, while the remaining 18% have their origins in Asia. However, it is remarkable that 40% of the GGI’s top 10 consists of Asian firms, while 70% of the GGI’s bottom 10 consists of European firms. The middle segment contains merely American firms (53%).

Marketing expenses

The average marketing expenses over the fiscal year 2012 were $12,545,644,800 for the complete GGI. The average marketing expenses (2012) for the GGI top 10 were $14,277,648,000, which is almost 14% higher than the average marketing expenses for the GGI as a whole. The average marketing expenses (2012) for the firms with a medium CSI were $12,737,101,000. This is approximately 1,5% higher than the average marketing expenses for the whole GGI. The average marketing expenses (2012) for the firms with a relatively low CSI were $10,837,273,000. This is almost 14% lower than the average marketing expenses for the whole GGI, and

approximately 24% lower than the top performing firms. It should be noted that the marketing expenses are measured over the year 2012, because it is argued that marketing investments don’t pay of immediately. Because the GGI is composed in 2013, the marketing expenses are calculated over the year 2012.

Furthermore it’s noted that the average marketing expenses are the highest in the automotive industry, followed by finance/insurance services and FMCG/CPG. Table 2 (Appendix 1) contains an overview of the average marketing expenses per sector.

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Size

Research showed that a company’s number of employees represents firm size (Beck, Demirgüç-Kunt, Maksimovic, 2005). The average number of employees for all the firms included in the GGI was 211,815 (calculated over the year 2013). The average number of employees for the GGI top10 was 211,427 (2013), which is 0,18% less than the average number of employees for the whole GGI. The average number of employees for the firms with a medium CSI was 192,299, which is 9% less than the average number of employees for the whole GGI. The average number of employees for the firms with a low CSI was 270,755, which is 28% higher than the average number of employees for the whole GGI. However it should be noted that

McDonald’s Corporation is part of the bottom segment with 1,800,000 employees. Table 3 and 4 (Appendix 1) present an overview of the number of employees both with and without McDonald’s, as well as an overview of the average number of employees per sector. A calculation without McDonald’s shows that the average number of employees in top 10 firms is approximately 110% higher than in the bottom 10, and almost 10% higher than firms with a medium CSI. The automotive sector turned out to have the highest average number of employees in 2013 (210,569), while the retail sector had the lowest average number of employees (72,746).

Gap score

Interbrand also calculates the ‘gap’ between overall performance score and overall perception score. A positive gap score shows that a brand is doing more than it is given credit for, while a negative score indicates that a brand is given more credit than its actions merit. For the whole GGI, 36% of the firms had a negative gap score. This indicates that the corporate social initiatives of most firms are not reflected in the

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perception of the customers. The GGI top 10 reports 4 negative gap scores, while 8 of the 30 firms with a relatively medium CSI had a negative gap score. The bottom ten showed 6 negative gap scores. The top 3 performing firms all report negative gap scores, which shows that those firms are somehow overrated with regard to their actual actions compared to their competitors. Table 5 (Appendix 1) presents an overview of the average gap-score per sector, and table 6 (Appendix 1) presents the average gap score for firms with a respectively high, medium and low CSI. The automotive and technology sectors (the majority of the top and middle segment) have the biggest positive gap score (respectively 2.75 and 7.3). This indicates that the top-performing sectors don’t get maximum acknowledgement for their actual

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4.3 Results

H1. There is a positive relationship between a profit-serving motive and a firm’s CSI.

Statistical analysis supported the predictions that a profit-serving motive was positively related to a firm’s CSI. It is argued that a higher number of profit-motive related words would actually lead to a higher ranking in Interbrand’s GGI, therefore negative correlations are expected. All profit-motive words were added up, and a correlation analysis was conducted based on Interbrand’s rank-score. Statistical analysis showed that WC_Sales and Rank_Interbrand were negatively correlated (r(48) = -.397, p<.01), meaning that a profit-motive leads to a high ranking on the GGI. WC_Profit and Rank_Interbrand were also significantly correlated (r(48) = -.394, p<.01), also suggesting that a profit-motive leads to a high ranking.

WC_Brandname and Rank_Interbrand showed the highest negative correlation (r(48) = -.418, p<.01), indicating that the top performing firms often mention their own brand names in their CSR reports. WC_Strategic and Rank_Interbrand were also significantly correlated (r(48) = -.333, p<.05), suggesting that a strategic-motive leads to a high ranking. WC_Financial and Rank_Interbrand showed no significant

correlation (r(48) = -0.155, p>.05) WC_Effective and Rank_Interbrand were also significantly correlated (r(48) = -.466, p<.01), suggesting that firms with a high ranking often refer to the word effective in their CSR-reports. Table 7 presents a complete correlation matrix including means and standard deviations. Finally, it can be concluded that a profit/self-serving motive generally correlates with a high ranking on Interbrand’s GGI. H1 is thus supported.

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H2. There is a positive relationship between a public-serving motive and a firm’s CSI.

Statistical analysis supported the predictions that a public-serving motive was also positively related to a firm’s CSI. It is argued that a higher number of other-serving motive related words would actually lead to a higher ranking in Interbrand’s GGI. All public-serving words were added up, and a correlation analysis was conducted based on Interbrand’s rank-score. Therefore negative correlations are expected. WC_Social and Rank_Interbrand showed no significant correlation (r(48) = -0.216, p>.05), suggesting that firms with a high ranking do not often refer to the word social. WC_Community and Rank_Interbrand were also not significantly correlated (r(48) = -0.095, p>.05), meaning that firms with a strong focus on community in their CSR-reports do not obtain a high ranking. However WC_Awareness and Rank_Interbrand correlated significantly (r(48) = - .476, p<.01), indicating that a public-serving motive does lead to a high ranking. WC_Vision and Rank_Interbrand showed the highest correlation (r(48) = -.548, p<.01), showing that those firms that often mention vision in their CSR-reports gain a high score on the GGI. WC_develop and Rank_interbrand were also correlated (r(48) = -.455, p<.01), also suggesting that a public-serving motive leads to a high CSI. Finally, WC_Change and Rank_Interbrand were (weakly)

Table 7. Profit-motive Scale means, SD's,

inter-correlations, reliabilities

Variable Mean Std. Deviation 1 2 3 4 5 6 7

1. Rank_Interband 25,5 14,577 (1.00) 2. WC_Sales 29,9 35,593 -,397** (1.00) 3. WC_Profit 10,28 16,292 -,394** ,578** (1.00) 4. WC_Brandname 701,4 612,557 -,418** ,531** ,684** (1.00) 5. WC_Financial 38,22 72,468 -0,155 ,486** ,761** ,698** (1.00) 6. WC_Strategic 12,92 11,99 -,333* ,347* ,593** ,555** ,593** (1.00) , 7. WC_Effective 18,16 15,213 -,466** ,556** ,631** ,762** ,623** ,661** (-)

** Correlation is significant at the 0.01 level (2-tailed).

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correlated (r(48) = -.293, p<.05), meaning that it pays of for firms to mention change in their CSR-reports. Table 8 presents a complete correlation matrix including means and standard deviations. Finally, it can be concluded that an other/public-serving motive generally correlates with a high ranking on Interbrand’s GGI. H2 is thus supported.

H3. A profit-serving motive leads to a higher CSI than a public-serving motive.

First it became apparent that all firms included in the GGI had a mixed-motive to a greater or lesser extent. A correlation analysis was conducted to examine if profit-serving words and public-profit-serving words were related to each other. WC_Change correlated significantly with all profit-serving words (e.g. for WC_Change and WC_Financial r(48) = .887, p<.01), meaning that firms with the objective to accomplish change in their CSR-reports also report high scores on profit-motives. WC_Vision correlated with all profit-serving words except WC_Financial (r(48) = .238, p>.05), suggesting that those firms with an emphasis on vision also emphasize the ‘profit-objectives’. WC_Vision correlated most strongly with WC_Awareness (r(48) = .486, p<.01), this suggests that a vision on CSR is often targeted to increase awareness. WC_Community also correlated with all profit-serving words except WC_Sales (r(48) = .271, p>.05). WC_Community most strongly correlated with

Table 8, Public-serving motive scale means, SD's, inter-correlations, reliabilities

Variable Mean Std. Deviation 1 2 3 4 5 6 7

1. Rank_Interband 25,5 14,577 (1.00) 2. WC_Change 58,6 114,354 -,293* (1.00) 3. WC_Vision 22,3 33,495 -,548** ,297* (1.00) 4. WC_Community 32,62 31,386 -0,095 ,700** 0,168 (1.00) 5. WC_Social 61,74 53,266 -0,216 ,302* ,456** ,368** (1.00) 6. WC_Awareness 13,9 11,311 -,476** ,553** ,486** ,405** ,332* (1.00) 7. WC_develop 145,52 137,349 -,455** ,644** ,445** ,662** ,394** ,737** (1.00)

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WC_Financial (r(48) = .731, p<.01), indicating that that both types of motives exist alongside one another. WC_Social correlated with all profit-serving words except WC_Financial (r(48) =.247, p>.05) and WC_Sales (r(48) =.216, p>.05), emphasizing that most firms have both types of motives WC_Awareness correlated significantly with all profit-serving words, most strongly with WC_Effective (r(48) = .702, p<.01) indicating that the desire to increase awareness should also increase effectiveness. WC_Develop also correlated with all profit-serving words, most strongly with WC_Effective r(48) = .736, p<.01), again suggesting that all firms have a mixed-motive. Thus, it can be concluded that all firms included in the GGI have a mixed motive. Table 9 presents a complete correlation matrix including means and standard deviations

However, due to the relative small size of the sample, and the assumed division between firms with a relatively high, medium and low CSI it is rather hard to significantly state that one specific motive leads to a higher CSI than the other one. Therefore it was chosen to calculate a gap score for each individual firm by

calculating a total profit-score and a total public-score. Subsequently, both score were subtracted from each other in order to determine whether the extent of the mixed motive bends towards a profit-motive or a public-motive. Next all scores were compared with the rank on the index to find out if there is a certain trend in the composition of both types of motives as a firm’s position on the ranking drops. Figure 2 contains a graphical representation of the motive-composition. The trend-line shows that the proposition of profit-motive words drops as a firm’s position on the ranking decreases. However all firm’s included in the top 50 have a mixed-motive that tilts to be more profit-centred than public-centred except for three firms. It should be noted that the firms with a merely public-serving motive occupy respectively the

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36th, 43th and 48th place, which could be considered as a relatively low CSI. Though it goes beyond the scope of this study to determine the optimal balance between a profit and public-serving motive, the results of this investigation show that the top

performing firms have a larger portion of profit-based motives compared with the less performing firms. Based on this analysis H3 is not supported, because one type of motive does not necessarily lead to a higher CSI than the other one. However it became clear there is interplay between both motives.

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-100 0 100 200 300 400 500 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 Gap -sc or e m ot ive Rank Interbrand

Fig. 2 Gap-score trendline

Series1

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Table 9, Public-serving vs. Profit-serving motive scale means, SD's, inter-correlations, reliabilities

Variable Mean Std. Deviation 1 2 3 4 5 6 7 8 9 10 11 12

1. WC_Change 58,6 114,354 (1.00) 2. WC_Vision 22,3 33,495 ,297* (1.00) 3. WC_Community 32,62 31,386 ,700** 0,168 (1.00) 4. WC_Social 61,74 53,266 ,302* ,456** ,368** (1.00) 5. WC_Awareness 13,9 11,311 ,553** ,486** ,405** ,332* (1.00) 6. WC_Develop 145,52 137,349 ,644** ,445** ,662** ,394** ,737** (1.00) 7. WC_Sales 29,9 35,593 ,554** ,525** 0,271 0,216 ,612** ,483** (1.00) 8. WC_Profit 10,28 16,292 ,842** ,307* ,481** ,321* ,579** ,640** ,578** (1.00) 9. WC_Brandname 701,4 612,557 ,774** ,376** ,654** ,450** ,671** ,692** ,531** ,684** (1.00) 10. WC_Financial 38,22 72,468 ,887** 0,238 ,731** 0,247 ,460** ,572** ,486** ,761** ,698** (1.00) 11. WC_Strategic 12,92 11,99 ,613** ,288* ,435** ,363** ,510** ,572** ,347* ,593** ,555** ,539** (1.00) 12. WC_Effective 18,16 15,213 ,699** ,409** ,651** ,352* ,702** ,736** ,556** ,631** ,762** ,623** ,661** (1.00)

The influence of Corporate Social Motivation on a firm’s Corporate Social Image