Good citizen - does it pay?

chrogoodcitizen2.jpgFriday the 13th starts with missing the tram and thus being late. :(

C.B. Bhattacharya from Boston (again! there’s a bunch of Bostonians at this conference. Very nice! I just heard, btw, that the next Humboldt University Conference will be staged in Boston. No joke.) University, gives an introduction why CSR can’t be started tomorrow to be influential tomorrow. It has to be started today. He presents recent research on P&G. He dealt with three signature projects, namely a P&G fund, cause-related marketing (Crest Healthy Smiles - a teeth program for kids) and the P&G employee engagement.

He is - unlike most professors - fair in mentioning that he indeed did not do all of the research, but had a number of doctoral students working at it. Here’s the abstract.

I. The P&G fund

A corporate social initiative (CSI) first of all means to assess stakeholder and company returns. Bhattacharya returns to these two main results frequently during the presentation. So, what happened? P&G gave 1 Million USD to an early childhood development center, to build an education and development center. Bhattacharya did a before and after study on this gift, splitting the respondents into two parts: those who were - after the gift - informed (n=98) about the gift and those who weren’t (n=492). The result: Awareness is associated with the cause, with the belief that P&G is socially responsible and in touch with its stakeholders, and with stronger identification. Also, awareness is associated with purchase, so if there is something in it for stakeholders, they react positive. And, it is associated with intrinsic attributes. However, overall there was low awareness of the social initiative - as well as for CSR in general. Still, it paid in regards stakeholder returns (a support for the cause) and company returns.

II. Crest healthy smiles

They assessed the effect of CSI on cause beneficiary and consumers, and they assessed the effect of CSI on brand and company among key consumer segment (the hispanic market). In a second step, it is important to understand the relationship between both. The larger framework to this: Combatting America’s oral health epidemic by helping 50 million children and their families by 2010 is a campaign and policy goal.
They talked to two stakeholder groups, the cause beneficiaries (parents) and the consumers (general hispanic population, also control group) in three locations NY, Houston and x.

Dental health is an important need in both groups: “You don’t have friends, when your teeth are yellow”. Functional that means to have fewer cavities, psycho-social it means to improve self-confidence. The feedback of kids brings a positive association for kids as well as parents. Which is important, since most of hispanic parents use Colgate and not Crest.

And, there is a clear investment into the future, as this progresses: “Care for the community” as an intrinsic motive and the extrinsic “way to market products” motive are being perceived and this corporate image is carried through generations. Co-operating of the company with the community creates brand champions through trust - leading to a tangible “Circle of Virtue”: “The least that the community can do, is to buy their products” (respondent of study).

Bhattacharya points to that the Boys and Girls Club of America (BGCA) consists of many illegal immigrants - which makes market research understandably difficult and the sample therefore was comparatively smaller.
However, one result of the research is to show that social benefits are more important than health benefits. And those who participated in the program where much more likely to see the dentist (6 % versus 36%).

Now: what happens to the ones who do not participate but have an awareness of the program? Good things happen, says Bhattacharya. The cause drives the brand trust, this in turn drives brand purchase and behaviour. All this are almost exclusively intrinsic attributions that drive trust, extrinsic attributions are statically insignificant.

The overall findings are that there is clear evidence of stakeholder returns, which are associated with company returns and, again, the evidence of the “Circle of Virtue” (via trust and intrinsic motives).

III. Employee Engagement

Internal marketing is becoming increasingly important - Bhattacharya states that the internal arena by now is as important as the external one. His research group went to assess stakeholder returns to CSI among employees, to assess the company returns and the combination of both. P&G has a signature initiative on water, Bhattacharya constructed eight employee focus groups (each with a professional moderator). The result in regards awareness was high towards a general company involvement, but low about specific programs. They would like to see a more agressive marketing of this within the company. There are four employee needs: self-enhancement, the work-life integration, the reputation shield and the bridge to company. These needs depend on contextual factors such as location and the position of the employee within the company.

Self-esteem: CSI provides employees opportunities to enhance themselves in learning job skills, growing as a person (also: encouragement to engage in charitable work).

Work-life integration: “CSI gives more meaning”.

Reputational shield: Defence against negative perceived reputation, it “humanizes” the company and protects the self-esteem of employee. This relates to the immediate environment of the employees (family, friends) as well as to how an employee is generally perceived.

According to Bhattacharya, the “bridge to company” factor is particularly dominant in sales offices.

Company returns are positive attitudes in intrinsic and extrinsic motives.

Importantly, employees want to design the program, they wanted the company to facilitate and provide the guiding and resources - but themselves being in charge and responsible. The positive notion of reciprocity is illustrated through matched funding (of the employees favourite charity etc.) that breaks into the work-life balance, in that employees then don’t mind to get up at 5.30 working for the company. (the nasty side of CSI in destroying the work-life balance through emotional engagement is being ignored by Bhatta)

CSR brands reap greater relationship benefits than non-CSR brands - there is a spillover effect and a synergy between traditional and new, innovative CSR marketing.

CSR and firm stock performance - in journal marketing October 2006 - (he says it’s online, couldn’t find it, let me know if you’ve found it) showing that CSR has impact on market value and social returns through customer satisfaction.

There is clear empirical evidence that if you are an innovative company, market performance gets up, and if you are not innovative at all, your market performance goes down.

Nice approach. Then he must have found the answer to this ongoing, tedious discussion of the business case? He ends with repeating the question of his speech: So does it pay to be a good citizen? His answer: It depends!

Or, to quote Erich Kästner: Es gibt nichts Gutes, außer man tut es. :)

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