Using political CSR as a controversial
corporation: an attempt to meet societal
expectations to increase corporate
legitimacy
An Experimental Study Identifying whether the use of Political CSR by different types of controversial corporations meets societal expectations and whether this affects its corporate
legitimacy
Charlotte O’Keeffe S12303038 Master’s Thesis
Graduate School of Communication Master’s program Corporate Communications
dr. S.C. (Suzanne) De Bakker 17/06/2020
Abstract
Societies all over the world have lost some confidence in governments and the ways they can help in social problems. Due to governments failing to meet societal expectations, societies have begun to look at corporations to help be their voice and push for change. Meeting societal expectations has become ever more important to corporations as it may influence their corporate legitimacy; give them a ‘license to operate’. An increasing number of corporations are thus attempting to meet these societal expectations by using political CSR. This research attempted to identify whether this usage of political CSR by corporations is in fact what society expects and increases their corporate legitimacy; with specific focus on controversial corporations. This study looked at the extent to which meeting societal
expectations by a controversial corporation influenced corporate legitimacy, moderated by the use of political CSR and further moderated by the type of controversial corporation using it (conservative vs. progressive). The research was based on a sample of 102 participants who took an online experimental survey. This study used a fictional controversial corporation, namely a tobacco manufacturing company named ‘X’. The results showed support for the fact that corporations, even controversial ones, should meet societal expectations as that does affect corporate legitimacy. The moderation of political CSR showed that actually a
controversial corporation using it decreased the strength of societal expectations on corporate legitimacy. The type of controversial corporation had no statistically significant effect and thus does not, indirectly, impact corporate legitimacy. Future research should aim to identify the use of political CSR by different kinds of controversial corporate as well as ‘normal’ corporations. Additionally, political CSR can be done in various ways, future research would benefit from using these different types to see if there are differences.
Political CSR by a controversial corporation
In times of crisis, the public looks up to their political leaders for answers, support and change (Bartenberger & Boin, 2017). However, it is the year 2020 and it is becoming increasingly clear that not all governments live up to societal expectations (Wæraas & Byrkjeflot, 2012). Currently in the United States, riots are happening in response to the death of George Floyd at the hands of a white police officer. One might expect the President of the United States to try and appease or comfort his nation and promise change. However, parts of the population argue that Trump has done nothing to ‘heal’ his nation (Cohen, 2020). On the contrary, he has been accused of capitalising on the events and weaponizing the crisis (Cohen, 2020). Societal members want more democratic accountability; actions taken place with them in mind (Mäkinen & Kourula, 2012). The United States of America is only one example of a country with parts of its society losing confidence in its government (e.g. Brazil and Hong Kong). Societies all over the world want to be heard and know they are of
importance. As a result of governments not always meeting societal expectations, these expectations have broadened to include corporations (Berger, 2005; Lock & Seele, 2017).
Corporations are now looked upon to help in forming certain societal regulations, by being society’s voice and pushing for change (Lock & Seele, 2017). Organisations are moving away from the role of ‘functionaries’ to a more ‘supervising authority’ role; a role in which corporations are able to act with force in holding others accountable (Hussain & Moriarty, 2018). This politicisation of corporations implies that their responsibilities have expanded. Nike, Adidas and many other companies undoubtedly created political messages as a show of support for the follow up events for George Floyd (Draper & Creswell, 2020). In fact, over the past few years, an increasing number of organisations have appeared to
preoccupy themselves with matters often regarded as those for the government; participating in public functions (Scherer & Palazzo, 2011; Hussain & Moriarty, 2018). This new political
organisations have to fulfil in regards to humanitarianism and being environmentally friendly (Kumar, 2017). This politicisation of corporations, or also known as Political CSR, derives from scholars having witnessed this “new call for democratic accountability for
corporations” (Hussain & Moriarty, 2018, p.2).
Political CSR bases itself off of moral legitimacy practices, doing what is considered as the ‘right thing to do’ (Lock & Seele, 2017). A corporation using political CSR entails that they are putting themselves in an open dialogue to reach a consensus between them and society (Habermas, 1996). This signifies that political CSR is a communication process, using moral legitimacy, which in practice implies a “mutual exchange between
organisational practice and societal expectations” (Scherer, Baumann-Pauly & Schneider, 2013, p.263). Political CSR has been done by Tiffany & Co. through political messages shared on their social media in support of climate change (Jones, 2017). Nike launched a world-wide campaign in 2018 in support of Colin Kaepernick and Black Lives Matter (Beer, 2019). Game card company ‘Cards Against Humanity’ bought a piece of land on the Mexican border to try and stop Trump’s wall from being built (“Cards of Humanity’s anti-Trump ploy”, 2018). Political CSR can be done in many forms, as long as it shows a corporation’s support for societal causes (Scherer et al., 2013).
This developing role of organisations in the global economy has fuelled discussions amongst scholars on a corporation’s role in society, their societal corporate citizenship (Mäkinen & Kourula, 2012). Various scholars along with economists criticise these political efforts as they do not coincide with ‘theory of the firm’ (Scherer & Palazzo, 2011). Within this theory an organisation should focus on their economic role in society as functionaries, which is to maximise on profits.
Although these scholars are correct in that political CSR is not always economically beneficial, the aim of political CSR is to show stakeholders that a corporation is prepared to
take part in practices beyond their economic role, and thus truly support its stakeholders. (Lock & Seele, 2017; Berger, 2005). Accordingly, political CSR is considered as a
‘compliance exercise’ towards society (Lock & Seel, 2017), with scholars arguing that it can be beneficial for a corporation’s legitimacy (Berger, 2005; Patriotta, Gond & Schults, 2011).
Corporate legitimacy is considered as the “license to operate” for a corporation (Lock & Schulz-Knappe, 2019). It can be regarded as those rules and norms that a corporation is expected to conform to (Pollach, 2015). Every corporation is expected to follow
governmental laws. However, they are also expected to follow norms and expectations as set by ‘powerful stakeholders’, for example the public (Pollach, 2015). In order to maintain corporate legitimacy, companies are advised to integrate themselves into discourse as well as rhetoric play (Patriotta et al, 2011; Habermas, 1996). Political CSR is an approach by
corporations to open a dialogue with their societal stakeholders; a way to conform to expectations set by stakeholders who give corporate legitimacy. Thus, political CSR may have potential benefits, not only for society, but also for a corporation’s legitimacy.
In theory, political CSR appears to be a potential answer to increase corporate
legitimacy, in response to a changing society. Question lies, however, whether or not political CSR is expected by society from all corporations. This study will therefore specifically look at the effects of political CSR usage by controversial industries. Controversial corporations are interesting as such companies often face scrutiny due to the nature of their products, such as tobacco, alcohol or oil. Controversial companies are often accused of being morally corrupt, unethical or even offensive (Lindgreen, Maon, Reast & Yani-de-Soriono, 2012). Additionally, controversial industries more often have to interact with society because of globalisation triggering a change in social norms or values which may directly affect their corporation (Cai, Jo & Pan, 2012).
Nonetheless, political CSR can also lead to a decrease of corporate legitimacy would it be done wrong. Personal care company Gillette, although not a controversial corporation, attempted political CSR by creating an advertisement with the message that men should take more actions to set a better example for future generations. While good intentions were present, their customers were not content, giving Gillette an immense amount of backlash (Wright, 2019). Gillette is regarded as a conservative corporation; a corporation that attempts to stick to their way of working and has difficulty with the expanding market as it goes “beyond their original concept” (Utterback, 1994, p.1). Generally, conservative corporations work in fixed environments. Gillette being conservative and releasing an advertisement with a more progressive political message thus does not align well. This does not mean, however, that all conservative corporations should not use political messages. If the message fits to the corporation, there could be potential for it to be beneficial (Du, Bhattacharya & Sen, 2010).
On the other hand, companies such as Nike or Patagonia are known to be very open about their societal stance and their desire to help. According to O’Higgins and Zsolnai (2018), these companies would be considered as progressive corporations as they “seek to serve society, nature and future generations, while maintaining their robustness and financial profitability” (O’Higgins & Zsolnai, 2018, p.5). Although political CSR used by progressive corporations appears more logical and thus more beneficial, one should challenge whether this also holds true for would they be part of a controversial industry.
Overall, there is much to say about this new form of political CSR as it comes with financial and legitimacy gains or risks for a company. Whilst the term is not alien, there does appear to be a gap in literature on what political CSR can actually do for a corporation, especially controversial corporations. Nonetheless, Frynas and Stephen (2014) along with Scherer and Palazzo (2018), emphasise the gap in literature indicates that the term cannot be adequately defined. Signifying a lack of empirical proof that political CSR for societal
expectations can positively predict corporate legitimacy as experimental research is missing (Lock & Schulz-Knappe, 2019).
Accordingly, this study aims at filling this academic gap. Through empirical evidence on CSR tactics and the ideas of social identity theory, this study will look at the outcomes of political CSR, used by a progressive or conservative corporation, from the consumers perspectives. This will not only add knowledge to academia by showing a different side of political CSR and the importance of meeting societal expectations through empirical evidence, but it could also allow corporations to further acknowledge their stakeholders. Understanding society’s perspective and expectation on political CSR strategies will allow for businesses to know whether it is worth the risk. These findings will hold especially true if the results show a difference in societal expectations held to different types of corporations. Also, if this study shows corporations should include themselves more in societal issues, it could benefit society into having an even stronger voice.
Taking all that has been mentioned into consideration, this studies intent will be to answer the following research question;
To what extent does a controversial corporation attempting to meet societal expectations—by using political CSR and further moderated by type of corporation—influence the
corporation’s legitimacy?
Theoretical Framework
Controversial industries
The idea of controversial industries has been around since Wilson and West (1981) introduced them as part of their research on controversial products. Controversial
corporations can be controversial based off of their market product; such as tobacco, arms or alcohol (Lindgreen et al., 2012; Killian & Hennigs, 2014). Nonetheless, certain companies are intrinsically controversial, meaning that they participate in activities that are harmful to, for example, the environment (Waller, 2005). In both scenarios, the controversial aspect correlates with the idea that the advertisement may evoke negative emotions or reactions from the public (Killian & Hennigs, 2014). These reactions, such as disgust, outrage or offence, is even more so present in controversial industries where the product self is the controversy (Killian & Hennigs, 2014). For this reason, this research will focus on a company with a controversial market product.
Corporate legitimacy
Gaining along as maintaining corporate legitimacy is often regarded as one of the most crucial aspect of an organisation. This is due to the fact that corporations need to show that what they do is socially accepted as the common good (Patriotta et al., 2011). Stakeholders interact with these corporate activities by identifying them to similar, already socially accepted, activities. Based off of this, a corporation and its activities may either be justified or not, influencing their license to operate (Patriotta et al., 2011; Lock & Schulz-Knappe, 2019). Corporate legitimacy is therefore seen as “the public’s perception […] that the organisational behaviours are desirable, proper, or appropriate within socially constructed system of norms, values, beliefs […]” (Suchman, 1995, p.574). A corporation that both follows the law as set by the government, as well as adjusts to social expectations is regarded as a good corporate citizen. They do things for the common good (Patriotta et al., 2011) and in return gain and retain legitimacy (Lock & Schulz-Knappe, 2019).
According to the context of the field of study, legitimacy can be used differently (Lock & Schulz-Knappe, 2019). Different types of legitimacy include regulatory, normative and cognitive legitimacy (Chun, Berger & Decoster, 2016). This research focuses on Political
CSR, which makes use of normative legitimacy, also known as moral legitimacy, as it aims to meet the publics requirements (Lindgreen et al., 2012). Moral legitimacy is often
surrounded by the notion that a corporation participates in activities accepted by society as they are the “right thing to do” (Suchman, 1995, p.579). This type of legitimacy also focuses on the relationship between stakeholders and organisations. Meaning that when corporations partakes in moral legitimacy, they aim to understand their stakeholders better through communication (Lock & Schulz-Knappe, 2019).
Meeting Societal expectations
Meeting societal expectations revolves around corporations partaking in corporate activities, which are accepted by society as they conform to what they seek from the corporation (Nason, Bacq & Gras, 2018). As previously mentioned, societal members have lost some trust they obtained in government and have started to look at corporations to meet their needs (Bartenberger & Boin, 2017). Corporations are now expected to also aid in societal problems and help in forming regulations with society in mind; moving away the pure purpose of selling their product (Whelan & Rasche, 2017).
In the past, corporations estimated their performance through their financial gains or losses (Nason, Bacq & Gras, 2018). Despite this, corporations are now also presumed to contribute to society other than their formal or mandatory compliances, creating social performance. For corporations all over the world, creating good social performance has become an inevitable aspect for their legitimacy (Nason et al., 2018). Social performance being the stakeholder’s perception of how well a corporation meets their expectations and their feedback of those corporate activities (Tan, 2009). The theory of social identity has often been used to express the reasons behind stakeholder engagement and evaluations (Nason et al., 2018). Social identity theory was developed by Henri Tjafel and John Turner
implications thereof (Tenenbaum & Eklun, 2014). The theory states that people identify with social groups that have similar traits as their own core beliefs and values (Nason et al., 2018). For corporations, stakeholders can affiliate themselves with a company who engages in activities similar to their own expectations (Nason et al., 2018). Stakeholders who identify with corporations are what Nason, Bacq and Gras (2018) call firm identified stakeholders (F.I.). Those that become F.I.’s are in turn more likely to want to participate in firm-related activities, their social performance, such as giving positive feedback or legitimacy (Nason et al., 2018).
Controversial corporations principally face more scepticism than other industries, solemnly based on the type of product they produce (Lindgreen et al., 2012). Signifying that controversial corporations are constantly working to legitimise their companies in the eyes of society (Lindgreen et al., 2012). Thus, from the perspective of a controversial corporation, enhanced common social identity is especially beneficial as it decreases the need for those in higher positions, such as CEO’s, to strongly defend the reasoning for their corporate
legitimacy (Tenenbaum & Eklun, 2014). This refers to corporations being able to ‘power through’ social groups instead of having to ‘power over’ them (Tenenbaum & Eklun, 2014). Stakeholders are hence more likely to agree with and accept the social actions of a
corporations than those stakeholders who do not identify or match with them (Nason et al., 2018). Meeting societal expectations is therefore important for corporations as those stakeholders can influence their corporate legitimacy (Tan, 2009). Based on this the following hypothesis was created:
Hypothesis 1 (H1) = A controversial corporation meeting societal expectations more will lead to higher corporate legitimacy than when societal expectations are met less
Political CSR
As Political CSR does stem from the traditional CSR, it is important to understand the difference between the two forms. CSR is fundamental to the understanding of political CSR as it focuses on the relation between corporations with society and its actors (Lock, 2018). This section will therefore introduce the two concepts and how they differ.
A general understanding of the traditional CSR is that it is a “language and a perspective” (Carroll, 2015, p.1) that is of crucial essence to stakeholders as their
expectations of corporations translate to sustainability. Definitions of CSR as discussed by scholars often include a corporation’s compliance with the law (Whelan & Rasche, 2017). In other words, seeing corporations as ‘functionaries’ (Hussain & Moriarty, 2018).
Nevertheless, Whelan and Rasche (2017), state that society expects corporations now to also help in forming certain societal regulations, adding a political element to them. Carroll (2015) adds to this by stating that “socially responsible firms make a special effort to
integrate a concern for other stakeholders in their policies, decisions and operations” (Carroll, 2015, p.1). Organisations are moving away from the role of ‘functionaries’ to a more ‘supervising authority’ role. Signifying a blur in lines between corporation’s economic and political sectors (Lock, 2018). Within this role corporations are able to act with force in holding others accountable, doing so through the use of political CSR (Hussain & Moriarty, 2018). Political CSR, unlike traditional CSR, contains a democratic element to it; asking questions such as what are the norms and who makes these norms(Whelan & Rasche, 2017). Political CSR takes on a liberal minimalistic viewpoint in its strategies; emphasising “the protection of individual citizens from arbitrary rules and oppression by government as well as from infringements upon individual liberty from their citizens” (Anastasiadis, Scherer, Palazzo & Matten, 2014, p.266). This implies that political CSR are actions that a corporation partakes in, that may be against what the government says. These actions are taken by
corporations in order to protect the stakeholders or other societal members from oppression (Mäkinen & Kourula, 20120). Political CSR is discourse and actions that lead to resolutions of public issues (Lock & Seele, 2018). These are voluntary actions, considered as soft-law, which include clear self-regulation by the corporation. The self-regulation occurs by following normative demands which include: clear participation in social problems, accountability of past issues either of society or the corporation self and lastly full
transparency of the corporation (Lock & Seele, 2018; Pérez, Martínez and Rodríguez, 2013). Certain activities may include campaigns in favour of a social problem, such as Nike’s campaign with Colin Kaepernick or a show of support online such as Tiffany & Co. on climate change.
Political CSR as a compliance exercise to gain legitimacy
Throughout the theoretical framework it has been made clear that corporations are required to follow new expectations set by society (Pollach, 2015). A corporation’s ability to meet societal expectations in return may benefit corporate legitimacy (Tan, 2009). According to Pérez, Martínez and Rodríguez (2013), a corporation is socially responsible when they integrate the societal expectations into their ‘strategic management’. Furthermore, they state that these new expectations come with high transparency from the corporation (2013). Political CSR defines itself as a requested voluntary ‘compliance exercise’ (Lock & Seele, 2017). Filling many of those expectations, the normative demands of political CSR as previously mentioned. Political CSR may help corporations in meeting societal expectations as it allows communities to play a part in institutional change (Lock & Seele, 2017).
A study done on legislators shows that the public adhere for risks taken by those in higher powers (Hussain & Moriarty, 2018). According to this study, when legislators took risks and democratic accountability, they aided society in believing they would take decisions with them in mind (Hussain & Moriarty, 2018). To some, political CSR is seen as taking a
risk as it shows stakeholders that the corporation is willing to take actions even if it may not be financially beneficial, staying true to their ‘supervising authority’ role (Hussain &
Moriarty, 2018; Du et al., 2010). Political CSR is thought-out to be fundamental for creating trust for stakeholders that their social investments are the truth (Pérez, Martínez and
Rodríguez, 2013). A corporation having open dialogue and is open to feedback, is likely to meet societal expecatations more (Pollach, 2015). Habermas (1984) suggested that corporate moral legitimacy comes “from a communication process that is oriented towards reaching understanding” (Lock & Schulz-Knappe, 2019, p.3). Signifying that to get moral legitimacy, there has to be an agreement between corporate activities and societal expectations, which occurs through communication (Habermas, 1996). This implies that the risk of political CSR usage by a controversial corporation should be beneficial. Controversial corporations already contain some sort of stakeholder scepticism (Lindgreen et al., 2012), if political CSR is seen as taking a risk, societal members may recognise it more as the truth. Society would then accept these actions, meeting their expectations and this would strengthen the relationship towards corporate legitimacy.
For any corporation, meeting societal expectations is important as it means
stakeholder’s create positive perceptions of a corporation, authenticating their ‘long-term’ reputations and legitimacy (Tan, 2009). Based on this the following hypothesis has been created:
Hypothesis 2 (H2) = Usage of political CSR by a controversial corporation will moderate the relationship between societal expectations and corporate legitimacy, such that this
relationship will be stronger when political CSR is used in comparison to when it is not
In the introduction, different types of organisation were mentioned, suggesting that beyond the type of industry that a company can be part of, it could also be considered as either progressive or conservative. Progressive corporations brand themselves as doing more for society than simply putting out a product for economic benefits (O’Higgins & Zsolnai, 2018). On the other hand, a conservative corporation relies on its history and traditional ways of working; not adapting necessarily to a changing world (Utterback, 1994, p.1).
In this regard, political CSR can be seen as a beneficial risk for controversial corporations to meet societal expectations and increase their corporate legitimacy. However, the risk is increased further for controversial corporations as there are also chances that stakeholders see the political CSR as paradoxical (Lock & Seele, 2017). Research shows that traditional CSR sometimes comes across as just ‘talk’ or a tactic for ulterior motive due to stakeholder scepticism (Du, Bhattacharya & Sen, 2010). The same research explains that in order for a corporation to maximise on their CSR communication, there needs to be an adequate fit, aligning with the ‘schemer schema’ (Du et al., 2010). The authors imply that a corporates CSR message should match what the corporation generally stands for (Du et al., 2010). As a branch of CSR, the same could be assumed for political CSR, especially for controversial corporations who maintain stakeholder scepticism. Basu and Palazzo (2008) explain that a corporation also needs to be consistent with their messages to have a good fit, consistency proves authenticity. Based on this, and Habermas’ (1984) ideal speech situation, a
progressive corporation is considered consistent; they do what they say, as well as say what they think. Progressive corporations revolve their entire image, through corporate activities, on the premises that they do more for the world than bring out their product (O’Higgins & Zsolnai, 2018). This consistency may in turn becomes favourable as it would shows political CSR to have a higher fit. A higher fit decreases stakeholder scepticism and thus allows stakeholders to trust what the corporation does more as the truth (Lock & Schulz-Knappe,
2019). As explained before, if the stakeholder sees these actions as the truth, they are more likely to accept the political CSR message as part of their societal expectations and their own identity (Nason et al., 2018).
On the other hand, a conservative corporation does not have this same consistency as their image revolves much more around their product (Utterback, 1994). Thus, their usage of political CSR may not align as well with their ‘schemer schema’ (Du et al., 2010). Here, the connection between the political CSR message and the company may appear to the
stakeholder as illogical (Du et al., 2010). This illogicality is due to the message not being consistent with the image (Basu & Palazzo, 2008), increasing stakeholder doubt of extrinsic motives and thus not meeting expectations (Du et al., 2010). Stakeholders are therefore more likely to accept political CSR from a progressive corporation as it has a higher fit, due to consistency, and therefor considered the ‘truth’, meeting their expectations. Accordingly, a political CSR message that fits the corporation better, more likely satisfies the social expectations of the stakeholders, authenticating the legitimacy (Nason et al., 2018). Subsequently, would a conservative corporation use political CSR, that has a low fit and respectively not satisfy the stakeholder expectations, then it could become dangerous to identification and lower corporate legitimacy. Thus, the following hypothesis was formulated:
Hypothesis 3 (H3) = Type of corporation moderates the two-way interaction effect of political CSR and societal expectations on corporate legitimacy, such that the effect of political CSR and societal expectations on corporate legitimacy is stronger for progressive controversial corporations than conservative controversial corporations
Methodology
Design
To explore whether the use of political CSR, by a controversial company, is expected by society and thus potentially beneficial to corporate legitimacy, an experimental survey was distributed online, containing a 2x2 between subjects’ factorial design. The factorial design consists of 2 conditions; Usage of Political CSR message X No usage of Political CSR
Message, and; Conservative company X Progressive company. The quasi-experimental factor of this experiment consists of the degree to which the political CSR meets societal
expectations. Table 1 demonstrates the experimental design for the 2x2 factorial design:
Table 1. Experimental 2x2 factorial design
Progressive corporation Conservative corporation Political CSR not used
Political CSR used Political CSR Corporate Legitimacy Societal Expectations When Political CSR
used: Type of Org.
Progressive vs. Conservative
The survey contained three conditions, to which each participant was randomly assigned to one. Participants were either assigned to: For-profit Tobacco manufacturer X with no political CSR, For-profit Tobacco manufacturer X with a conservative ‘about us’ text and political CSR or For-profit Tobacco manufacturer X with a progressive ‘about us’ text and political CSR.
Stimulus material
As mentioned, to stimulate the reaction necessary, the experiment consisted of three different conditions. This study particularly examined the usage of political CSR by a
company in a controversial industry where the controversy lies in the market product. For this reason, the studies company will be based on the tobacco industry. Tobacco companies attempt to make their product appear ‘normal’; however, tobacco is undoubtfully known as harmful to human health. Therefore, any form of CSR activity is questioned quicker by the public (Lindgreen et al., 2012). For this study, a fictional company was used, named
‘Corporation X’. The fictionality and name were chosen for the neutrality and no relation to pre-existing tobacco corporations, decreasing participant bias.
Participants assigned to the first condition were introduced to Company X only as a for-profit tobacco manufacturer. They were shown two non-political messages, the stimulus (see appendix 4). A manipulation check asked whether or not they indeed saw these as political messages. After this, questions were asked to measure the extent the messages matched their societal expectations and corporate legitimacy.
The second and third conditions had two stimuli; political CSR used and the type of organisations. Participants were firstly introduced to a real political situation (in appendix 7) and then the political messages by tobacco manufacturer corporation X (see appendix 4). To
create the political message stimuli, research was done on companies that often used them. The research showed that corporations using political CSR often used messages that were directed specifically at the source of the ‘problem’ they aim to help solve.
Participants were then further introduced to the corporation through an ‘about us’ text, the stimulus and where the two conditions differ (see appendix 5). One of the conditions had an ‘about us’ text with the framework of a conservative corporation. In order to create the ‘about us’ texts research had been done on various existing conservative corporations. Notably, conservative corporations appeared to aim more at accentuating their heritage and past actions. Amplifying that they are one of the best in their industry, that the traditional ways still work, focusing specifically on the quality of their product. For example, Ford Motor company states that they not only sell “the most technologically advanced, reliable and fun-to-drive vehicles in the world, but [are] leading the way in manufacturing and business innovation” (Ford Motor Company, n.d.).
The other condition had the framework of a progressive corporation. Most
progressive corporation do not appear to have “about us” pages, but instead have “our core values”, like Patagonia (Patagonia, n.d.). Their general messages appear to be more forward looking. Meaning that they try to exemplify why the public should trust them and how their company will help shape their future in the best possible way. An example from Patagonia used for inspiration was: “Among the most direct ways we can limit ecological impacts is with goods that last for generations […]” (Patagonia, n.d).
Pre-test
Being that this study creates a fictional corporation and translates it into either a conservative or progressive framework, a pre-test was conducted to make sure that is how they were perceived. The pre-test consisted of the ‘about us’ texts, as the manipulation, which participants answered questions on. Participants either got the ‘about us’ text with the
framework of a controversial or progressive corporation. An independent samples t-test was conducted on the data in order to identify if there was a significant difference between the two conditions. The pre-test (N = 35) revealed significant t (30) = 2.26, p = .032 mean difference .3, 95% C.I. [.03, .57], d = .81, with equal variances assumed, Levene’s F (30) = 4.36, p = .002. These results signify that that the stimuli of type of organisation worked as hoped. The conservative about us also showed that indeed participants saw this corporation more as conservative. Likewise, participants presented with the progressive ‘about us’ also considered it to be more progressive. Whether participants felt that the ‘about us’ was more conservative or progressive, was identified with a scale by Heath, Evans and Martin (1994) with 7 items (found Appendix 1). As their scale was originally designed for measuring individuals general core beliefs and values, the scale was adapted for those beliefs towards corporations. For measuring a conservative corporation, the scale proved to be reliable, α = .81. The scale also proved reliable to measure a progressive corporation, α = .64. Based off of these results, the ‘about us’ texts were accepted and used for the actual experiment.
Manipulation check
A manipulation check was put in place, in the actual experiment, to make sure that the stimulus in each condition was perceived as expected (found in appendix 6). An independent samples t-test was conducted to check the differences between the first condition, no political CSR used and the other two conditions using political CSR. The first condition in comparison to the second condition (Conservative corporation using political CSR) showed a statistically significant result, t (60) = 3.76, p < .001, with a mean difference of .44, 95% C.I. [.21, .67]. The assumptions of equal variances were met, Levene’s F (59) = 0.01, p = .91. Similarly, between no political CSR used and the third condition (Progressive corporation using
political CSR) a statistically significant result was shown, t (72) = 6.54, p < .001, with a mean difference of .62, 95% C.I. [.43, .81]. Likewise, assumptions of equal variances were met,
Levene’s F (66) = 2.41, p = .13. These results show that a significant difference was present between the usage of political CSR versus no us of political CSR. Based on these results we can conclude that the manipulation, political CSR used or not, worked as intended.
A second manipulation check was put in place to make sure that the stimulus type of corporation, conservative or progressive, was perceived as intended as in the pre-test. The manipulation question was taken from the scale used in the pilot test with the highest factor loading of .79 (Heath, Evans and Martin 1994). An independent samples t-test was conducted to look at the differences between the two conditions. The results showed a statistically significant result, t (63) = 3.12, p = .003, with a mean difference of .61, 95% C.I. [.22, 1.0]. The assumptions of equal variances were met, Levene’s F (62) = 0.004, p = .95. Those in the second condition agreed more that the ‘about us’ information was conservative. Those in the third condition agreed more that the ‘about us’ information was progressive. These results indicate that the manipulation worked as intended.
Sample
This research did not require a very specific target group in order to answer the research question. However, as this study discusses political messages, participants had to be over the age of 18. The reason for this is that those of age 18 or over are considered as adults, are allowed to vote and thus able to form their own opinions. The final data set consisted of participants between the ages of 18 and 63 (M = 32, SD = 13.13). Furthermore, considering the time frame and resources available, the sample was collected through a convenience sampling method. As the network available was primarily made up of international people, another requirement was that all participants have a sufficient grasp of the English language. The experimental survey was distributed through the following social media platforms: Facebook, Instagram, Snapchat, WhatsApp and Reddit. The following social media platforms were chosen as they are some of the most widely used all over the world (Dawson, 2020).
A total of 163 responses were recorded, however 61 were incomplete and thus
excluded. When checking for outliers, 5 were found in one of the items for ‘No Political CSR used’. However, after having compared the mean of that item (M = 3.39) to the 5% trimmed mean (M = 3.38), only .1 difference was shown, which is relatively small, thus believed to not affect the analysis and kept in. This resulted in N =102 complete responses. Respondents were distributed equally throughout the three conditions. Both the condition ‘No Political CSR’ and ‘Progressive Corporation’ contained the same number of respondents (N = 37) and a few less in Progressive Corporation (N = 30). In terms of gender the sample was
underrepresented by ‘other’ (2%) but was well representative of men (48%) and women (53%).
Measurements
Societal expectations
For the purpose of this study, meeting societal expectations is conceptualised as the alignment between societal expectations and what the corporation puts out there, resulting in corporate actions that are accepted by society. This conceptualisation is based off of the work done by Nason, Bacq and Gras (2018). Within their research they express that stakeholders “asses the firm’s social performance relative to their expectations” (Nason, Bacq & Gras, 2018, p.262). This latent variable was computed with 5 items measured through a 7-point Likert scale; starting with (1) Strongly disagree to (7) Strongly agree. The scale was adapted from a one created by Pérez, Martínez and Rodríguez (2013). An example of a statement that can be found within the experiment was:
For the first condition, no political CSR used, the scale proved very reliable, α = .97. For the second condition, political CSR in a conservative corporation, the scale proved very reliable, α = .98. For the third condition, political CSR in a progressive corporation, the scale proved very reliable α = .99. All of the statements can be found Appendix 2.
Corporate Moral Legitimacy
As previously mentioned, corporate legitimacy is a corporations’ ‘license to operate’ (Lock & Schulz-Knappe, 2019). Moral legitimacy is conceptualized as a society’s perception that a corporation and its activities are proper and 'doing the right thing'; based off of certain norms, values and beliefs set by society (Chun, Berger, Decoster 2016; Lock & Shulz-Knappe, 2019). Similarly, to the variable Societal Match, a 7-point Likert Scale was used starting with (1) Strongly disagree to (7) Strongly agree. The 6 items on this scale were adapted from a scale used by both Chung, Berger and Decoster (2016) and Lee, Yoon and O’Donnel (2018). An example of a statement was:
“This sounds like a good corporation”
For the first condition, No Political CSR, this scale proved reliable with α = .84. For the second condition, Political CSR in a conservative corporation this scale proved very reliable α = .97. For the third condition, Political CSR in a progressive corporation, the scale also proved very reliable, α = .98. The rest of the statements can be found in the Appendix 3.
Demographic variables and covariates
Various demographic variables (found in appendix 10) were also asked in order rule out or explain certain unexpected results. Participants were firstly asked for their age, in order to make sure that all were over the age of 18. Furthermore, their gender was asked: female,
male or other. The participants highest level of education achieved was also asked: Highschool, HBO/technical school/vocational education, Bachelor, Masters, PhD, other.
Procedure
Actual Experiment
The survey was distributed through the various social media platforms on the 9th of May, 2020
and ended the 13th of May, 2020. The survey was created using the program Qualtrics. With
the help of Qualtrics, participants were randomly but evenly distributed to either one of the three conditions. All participants were firstly asked for their consent, then confronted with the demographic variablesand then randomly assigned to one of the three conditions. Participants in all condition were then asked to answer questions based off what they knew of the corporation and the messages they read. These questions asking about corporate legitimacy and to what extent it met their societal expectations.
Results Testing the Hypothesis’
In order to investigate the entire model with its hypothesis all together, model 3 of the Hayes PROCESS macro was used in SPSS. The outcome variable was corporate legitimacy, the independent variable the extent to which societal expectations were met. The main
moderation was the use of political CSR as a dummy variable (0 = not used, 1 = used), the extra moderation being the type of organisation as a dummy variable (0 = progressive, 1 = conservative). The regression model was significant, F (3, 92) = 86.59, p < .001, and for all hypothesis predicting corporate legitimacy. The strength of prediction being strong, with 73.00% of the variance in corporate legitimacy predicted by the independent variables (R2 =.73)
The conditional/direct effect between societal expectations and corporate legitimacy showed a statistically significant result, b = 2.13, t = 10.34, p < .001, 95% C.I. [1.72, 2.54]. These results indicate that the more a corporation meets societal expectations, their corporate legitimacy increases by 2.13 unites, supporting the first hypothesis.
The interaction between societal expectations and political CSR also showed a statistically significant effect, b = -1.07, t = -4.20, p < .001, 95% C.I. [-1.57, -.56]. However, H2 argues that the moderation of usage of political CSR increases the strength of societal
expectations on corporate legitimacy. These results show that when political CSR was used, corporate legitimacy decreased by 1.07 units, hypothesis 2 is not accepted.
Finally, hypothesis 3 argues that the relationship between societal expectations and political CSR on corporate legitimacy is stronger for progressive corporations than
conservative corporations. The three-way interaction effect on corporate legitimacy is not statistically significant, b = 9.03, t = 1.13, p = .265, 95% C.I. [-7.04, 25.0]. The type of controversial corporations does not moderate the interaction effect of political CSR and societal expectations on corporate legitimacy, hypothesis 3 is also refuted.
Discussion and conclusion
This research focused on the extent to which society expects political CSR to be used to influence corporate legitimacy, when the corporation is controversial and whether there is a difference between conservative or progressive companies. As not much research can be found on political CSR, this study aimed at filling this gap. With an online experimental survey, this study attempted to answer the following research question; To what extent does a controversial corporation attempting to meet societal expectations—by using political CSR and further moderated by type of corporation—influence the corporation’s legitimacy?
The research started by identifying how, if at all, meeting societal expectations influences a controversial corporation’s legitimacy, H1. The results supported this first hypothesis and the more societal expectations were met, the more corporate legitimacy was given. Meeting societal expectations indicates that a corporation is implementing open discourse with society in order to run their business socially correct. These results align well with theory stating that corporate moral legitimacy is achieved through communication in hopes to lead to a mutual understanding (Habermas, 1984; Lock & Schulz-Knappe, 2019). Aside from this reasoning, this study also shows support for social identity theory. By aiming to meet societal expectations, members of society are able to affiliate themselves with traits belonging to certain corporations (Nason et al., 2018). Even though the corporation in this study is controversial, participants were able to identify with certain corporate traits and in return increase the corporate legitimacy for the corporation.
Despite these results, H2 and H3 had to be refuted. Hypothesis 2 aimed to see whether or not this relationship between societal expectations and corporate legitimacy could be increased would a controversial corporation use political CSR. Whilst unfortunately political CSR did not increase the strength of this relationship, it did affect it. The results indicated that in fact the use of political CSR by a controversial corporation decreased corporate legitimacy in comparison to not using it. Scholars such as Anastasiadis (2014) have suggested that this could be due to society’s continuous changes. As society changes, a liberal minimalist approach as such will not always be more beneficial (Anastasiadis et al., 2014). They argue that for a corporation to take on the political world, they need to change the way they look at the political environment as a whole. Indicating that for a controversial corporation especially a simple political message may not be enough (Anastasiadis et al., 2014).
Furthermore, H3 had to be refuted as the moderation effect of type of organisation (controversial or progressive) using political CSR did not have a significant effect. It did not matter what type of corporation was using political CSR. A controversial corporation using political CSR in general was going to decrease the corporation’s legitimacy. Additional to the reasonings above, through a study done on traditional CSR, evidence shows that CSR “does not mean the same thing in every industry as it does not mean the same for all stakeholder” (Perez et al., 2013, p.460). The same could be potentially suggest for Political CSR as a it originates from the traditional CSR. Notably for controversial industries, political CSR may cause for more scepticism from the stakeholders in comparison to a non-controversial corporation. Controversial corporations in general also are not known yet for the consistent political activities and consistency is crucial for the messages to be seen as fitting or accepted (Du et al., 2012). Thus, these types of political messages, no matter the type of corporation using it, might be considered as ‘air cover’; an attempt to move society’s attention away from their potential damaging products (Lock & Seele, 2018). Again, this could be due to
stakeholder scepticism already being present when it comes to controversial corporations (Lindgreen et al., 2012). Traditional CSR has become integrated into corporations over the years and often seen as a ‘must do’ (Lock & Seele, 2012). Political CSR is still relatively new and could be too big of a risk for a controversial corporation to use it at its full capacity. Political CSR thus might not fit the ways in which stakeholders perceive such corporations; not seeing what they are doing as honest (Du et al., 2012).
Based on the results of this experiment, the research question is now answered. A controversial corporation using political CSR does not necessarily signify that it will increase the corporate legitimacy in comparison to corporations not using it. In fact, a controversial corporation using political CSR may decrease the effect that meeting societal expectations has on corporate legitimacy. However, meeting societal expectations does prove to be of
great importance to influence corporate legitimacy. A corporation not attempting at all to meet societal expectations, could lead to a severe decrease in corporate legitimacy.
Limitations and future research
Due to the fact that only the first hypothesis was significant, it is important to take certain limitations of the current research into consideration. To begin with, the sample size was relatively small (N = 102) and thus the results should be used for the generalised population. Although the sample did appear to be representative, it was collected through a convenience sample, with participants recruited from the researchers’ network. Also implying, that the results cannot be generalised for all populations. Future researchers with more time for data collection should attempt to conduct this experiment with even bigger samples.
Furthermore, this study focused on controversial corporations with a specific example of a tobacco manufacturing company. As not many studies have had focused on controversial corporations using political CSR, those using this data should be careful when generalising it for all controversial corporations. Future researchers would benefit from repeating this experiment by using different types of controversial corporations. Likewise, the results cannot be used for non-controversial corporations. As controversial corporations already have scepticism, political CSR usage could be seen as a marketing tactic. Participants could
potentially not have shown their true general opinions about political CSR. Taking this into consideration, future research should also look at political CSR used by ‘normal’
corporations to see its full potential on corporate legitimacy.
Moreover, a fictional corporation was used in order to decrease respondents bias. Whilst this is beneficial to avoid any pre-existing knowledge to affect the results. It must be challenged to what extent a participant can adequately respond to questions based on little information. Additionally, the variation in types of corporations is difficult to create. Whilst
the ‘about us’ descriptions are based off of real corporations, a risk pertains that respondents will not experience them as desired. This was clear with more variation in the manipulation responses for progressive corporation in comparison to the conservative. After having taken the survey, various respondents came forward to express that they either had underlying feelings about corporations in general or controversial corporations specifically. Further potential indicators of the differences in the progressive corporation. Research done by Lauitson and Perks (2015), emphasises that stakeholders expect proof of corporations CSR initiatives, to show that it is not all talk. Meaning that future research could focus on additional proof, not only showing the participants the ‘about us’ page. This can also aid in influencing even further that a corporation is either conservative or progressive. In addition, future research may benefit from using pre-existing political messages or actions as
examples. The political messages used in this study were created off of general political messages but may not completely align with what it should be or what is desired by the public. Also, the same message was used for both the progressive and conservative corporation, which could affect the extent to which it aligns with either one of the corporations.
In conclusion, the aim of this research was to identify whether or not the up and coming use of political CSR by corporations, specifically controversial ones, meets societal expectations and therefore influence corporate legitimacy. Whilst currently it does not appear to be more beneficial than a corporation not using political CSR, certain important
implications can be taken from this study. Controversial corporations are expected to meet societal expectations, however perhaps not by using political CSR. Therefore, certain controversial corporations would profit from listening further to what societies want from them specifically. By conforming to smaller societal expectations, they can slowly transition into including larger ones, as long as they stay consistent and thus legitimise themselves.
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Appendix
Appendix 1: Pre-test items (Heath, Evans & Martin, 1994) Do you think this corporation X is most beneficial for:
a. The owners
b. The company is equally beneficial for the owners as well as its employees c. I don’t know
Do you think that the employees in corporation X:
a. don’t have much say in the way the company works and its decisions b. Have a lot of say in the way the company works and its decisions c. I don’t know
Do you believe that corporation X:
a. does not think strong trade unions are needed to protect employees’ working conditions and wages
b. Does think strong trade unions are needed to protect employees’ working conditions and wages
c. I don’t know Do you believe that corporation X:
a. Would not allow its employees to show their discontent with the government b. Would allow its employees to show their discontent with the government c. I don’t know
Do you believe that corporation X believes:
a. One should always follow the law, even if the law is wrong
b. There are time when people should follow their conscience, even if it means breaking the law
c. I don’t know
Do you believe that corporation X would support and allow their employees in organising public meetings to protest against the government?
a. yes b. no
Do you believe that corporation X:
a. Thinks that people should not be allowed to organise protest marches and demonstrations
b. Thinks that people should be allowed to organise protest marches and demonstrations
c. I don’t know
Appendix 2: Match to societal expectations items (Pérez, Martínez and Rodríguez, 2013)
Please indicate to what extent you agree with the following statements based on the corporate message you just read
1. I believe that this corporation is helping in solving social problems 1 (strongly disagree) 2 3 4 5 6 7 (strongly agree)
2. I believe that this corporations plays a role in society beyond their economical benefits
1 (strongly disagree) 2 3 4 5 6 7 (strongly agree) 3. Company X is concerned with improving the general well-being of society 1 (strongly disagree) 2 3 4 5 6 7 (strongly agree)
4. Company X is concerned with respecting and protecting the natural environment 1 (strongly disagree) 2 3 4 5 6 7 (strongly agree)
5. I believe Company X represents my societal views
Appendix 3: Corporate Legitimacy items (Chung, Berger and Decoster, 2016; Lee, Yoon and O’Donnel, 2018).
Please indicate to what extent you agree with the following statements based on the corporate message you just read
1. This sounds like a good corporation
1 (strongly disagree) 2 3 4 5 6 7 (strongly agree) 2. I think this corporation is honest
1 (strongly disagree) 2 3 4 5 6 7 (strongly agree)
3. This message is the right thing to do
1 (strongly disagree) 2 3 4 5 6 7 (strongly agree) 4. I would trust this corporation
1 (strongly disagree) 2 3 4 5 6 7 (strongly agree)
5. With this message the corporation shows they don’t only want economic benefits 1 (strongly disagree) 2 3 4 5 6 7 (strongly agree)
6. I think these types of corporations are a necessary part of our society 1 (strongly disagree) 2 3 4 5 6 7 (strongly agree)
Appendix 4: Political messages
No-Political CSR
“What if great minds don’t think alike” #shapetheanswers
Political CSR
“The Chinese government threatens to take its peoples choices away, we do not condone this behaviour and we stand by Hong Kong”
"We will no longer supply our product to mainland China, we will help be a voice for Hong Kong, stand for Hong Kong, stand for independence #StandforHongKong"
Appendix 5: Stimulus type of organisation for ‘Political CSR, Conservative Corporation’
Conservative corporation
For more than 50 years Company X has been working endlessly to create the best cigarettes on the market. Starting as a small family company to becoming one of the biggest tobacco
corporations in the world, not knowing how revolutionary we would become. We have roughly 80,000 employees in 60 countries and believe that no one can do it better. Our corporation does business the good way, the traditional way but certainly not the easy way, our aspiration is to create the best quality tobacco experience. Creating value for our stakeholders and clients alike.
Progressive corporation
Positive outcomes come from different minds coming together. By allowing everyone to be their authentic self and share their ideas, we are able to create the best product for you. One should never be afraid to speak up. Our aim is to not only create a product for the now, but an all-around more sustainable product and way of working for the future of our employees, consumers,
communities and our planet. Go to our stories or social media to see what we have done, what we are going to do and where you can help.
Appendix 6: Manipulation checks Condition 1: No Political CSR
“Do you believe that Company X posted a political message?”. o Yes
o No
o I don’t know
Condition 2 & 3: Political CSR, Conservative corporation & Progressive corporation “Do you believe that Company X posted a political message?”.
