Impact of Corporate Social Responsibility on Brand Value - Dissertation Example

Impact of Corporate Social Responsibility on Brand Value ID Improving economic returns is not the sole responsibility of modern corporate firms. The firms in the contemporary era are expected to be socially responsible. The importance of business stakeholders has significantly increased over time and corporate firms are actively seeking ways whereby they can improve their loyalty towards stakeholders. This is a research proposal that tries to estimate the impact of corporate social responsibility on brand value of organizations. In a world where companies desire to improve their 3BL principles in business, such research works prove to be highly valuable and relevant. The dissertation will present ways in which modern corporations find it challenging to determine appropriate CSR activities. In the latter half, the paper will enumerate strategic ways whereby such challenges can be mitigated by the firms. The entire research work will be done with the help of quantitative and qualitative analysis methods. Contents Contents 3 Introduction 4 Research Questions and Research Objectives 5 Literature Review 5 Case Studies 8 Methodology 9 Research Philosophy 9 Research Approach 10 Research Strategy 10 Time Horizon 10 Method of Analysis 10 Quantitative Method 10 Data collection and Sampling Process 11 Qualitative Method 11 Analysis Tools 11 Ethics 11 Validity 12 Reliability 12 Resource Requirements 12 Time Scale 13 References 14 Introduction Dr. Brundtland had claimed that, besides factors relating to the medical world, health conditions of individuals significantly depend on issues relating to human development and environment (Slaper and Hall, 2011). Based on this vision; in 1987, the Brundtland Commission was introduced and its first report had launched the concept of sustainable development in the public domain. Since then, public and private authorities of most countries have been trying to attain sustainable development. This process of development aims to satisfy and enhance utilities of present generations, without altering resources that would serve the future generations in a similar manner (Mankiw and Hakes, 2011). Considering norms and practices of a sustainable developing world, nearly all private and public profit making organizations follow the norms of “Triple Bottom Line” (3BL) in business. By following the 3BL perspective, companies try to enhance “people, profit and planet” related factors through their commercial activities (Smith, 2010). Moreover, degree of rivalry among modern corporate firms has increased over time. This is the era of “consumerism”, where commercial organizations try to augment their brand value in the market by enhancing utilities of consumers. Since individuals are increasingly becoming conscious about protecting and preserving the environment, firms have increased their corporate social activities in business now. Presently, economic prosperity and brand value of a business organization substantially depends on its corporate social responsibility. This is a research proposal for a dissertation, which aims to research on the impact of corporate social responsibility (CSR) on brand value. It is highly rational to conduct this research as business firms nowadays face high degree of competition; and in order to gain a competitive advantage, they constantly seek strategic ways for enhancing their brand value and loyalty towards business stakeholders. The context of the dissertation will empirically analyze and prove the worth of CSR activities in present trading world. The dissertation case study analysis will include the case of a company that has remarkably grown over time, with the spirit of increased brand value created by effective CSR activities. Thus, the paper will enumerate ways whereby any company can improve its CSR initiatives and augment brand value in the long run. The context will also precisely explain problems that a company can face if it fails to adequately improve its CSR activities. Research Questions and Research Objectives The primary objectives of the dissertation will be: To analyze impact of brand value on long-term success of a firm. Brand value is a qualitative aspect and cannot be quantified in real terms. So, this objective of the research work will be accomplished with qualitative literature review analysis. To estimate relationship between brand value and CSR activities of a firm. This research objective will be accomplished with the help of quantitative as well as qualitative analysis methods. The qualitative analysis will be done through the literature review; whereas, for conducting the quantitative analysis, descriptive as well as inferential statistical tools will be utilized. To innumerate the advantages of CSR, in terms of company’s economic and social prosperity. This objective will be met through qualitative two company case study analysis. To recommend ways by virtue of which companies can improve their CSR activities. This purpose will be fulfilled through qualitative literature review analysis in the dissertation. Considering the above five research objectives, primary research question of the dissertation will be: Q1. Do CSR activities affect the brand value of an organization? Literature Review According to the views of Haydeé Calderón, Amparo Cervera and Alejandro Mollá, there is no doubt about the fact that brand value is an important determinant of a company’s commercial success (Calderon, Cervera and Molla, 1997). It was stated in 1995 that brand value is basically the worth of additional cash flows generated by a product. This is why products are often identified in terms of their brand value. Since 1980s, brand is given equivalent importance as that of capital resource in an organisation. It was found that the extent of economic prosperity of companies is not only dependent on their quantifiable material assets, but also on their brand value in the market. A capital resource is a produced means of production and expenditure associated to it is considered as investment; this is because capital resource helps companies to generate higher profit in the long run. So, given that brand value is treated as capital in business, initiatives undertaken by corporate firms to improve their brand value in the market are considered as productive investment expenditures. According to the views of Aaker and Keller (1990), brand value is considered as “a set of assets and liabilities linked to the brand, its name and symbol, which incorporate or diminish the value supplied by a product or service exchanged with the company’s clients” (Aaker and Keller, 1990). However, Institute of Marketing Science had advocated that brand value is highly dependent on clientele base of a company. The worth of brand value is remarkably increasing with time and is now considered to be one of the core elements of corporate firm’s business strategies. The concept has also garnered financial significance in the current era because companies are inventing new methods, which can effectively measure intangible assets in business (Aaker and Keller, 1990). In the present scenario, according to the views of Michael Polonsky and Colin Jevons, brand management of a company is very closely related to its CSR activities. The brand name of a company encompasses a range of characteristic features of business, which are marketed to consumers. This is the reason for which corporate firms invest large amount of money for developing brand personalities in its business. Nonetheless, according to the views of scholars like, Werther and Chandler, brand features of a company should not only highlight product related aspects like, styling and quality, but should also consider CSR as one of the important aspect of the brand (Werther and Chandler, 2005). It was also mentioned that a company would achieve adequate level of CSR, if it accomplishes proper environmental, ethical and social responsibilities in business. According to the views of Carroll, social responsibility includes “the conduct of a business so that it is economically profitable, law-abiding, ethical and socially supportive” (Carroll, 1999). Even so, it was considered by some researchers that though CSR activities are important for firms, yet they should realize the extent to which such activities should be leveraged. It was also claimed that resources and core competencies of a business firm should be invested in ways that help to enhance utility levels of its stakeholders, thereby achieving both social and organizational benefits. Hence, researchers have claimed CSR to be an important branding tool in the modern world, which is strongly associated with the stakeholders in business. Some researchers have stated that organizations must address to three types of complexities in business for assuring good image in terms of CSR; namely issues, organizations and communications. According to them, such factors must be explored and examined in detail before the CSR branding strategies are implemented in business. An organizational activity can often create certain problems for the environment and it is the duty of organizations to minimize such negativities. It is true that organizations that involve in large amount of CSR activities achieve higher market value and loyalty of stakeholders. Financial performances of these companies also significantly improve with essence of CSR branding strategies. However, some researchers have argued that efficiency of communication procedures of corporate firms substantially affects success of their CSR activities. If ongoing CSR related initiatives undertaken by corporate firms are not properly conveyed, then the employees, public governing authorities, customers, shareholders and business support groups would not be aware of the same; this in turn would not bring about any improvement in brand value of the organization. Yet, researchers have mentioned that CSR activities of firms cannot be simply treated as a type of promotional activities. So, according to such views, CSR cannot be considered as a mere tactical promotional technique for a corporate organization. Although several literatures explain the way for CSR activities of corporate firms to enhance commercial prosperity and brand value, there are still very few research works done enumerating means through which firms can improve their CSR activities in business. Therefore, in a world where the need of CSR activities is increasing with time, identifying feasible ways to effectively improve CSR initiatives has turned out to be a challenge or issue for many business firms. It is also regarded that CSR positioning is one of the most difficult activity for a firm because a single task is viewed from different perspectives by separate stakeholders (Rangaswarry, Burke and Oliva, 1993). In fact, CSR activities of corporate firms often generate conflicts in interests between two or more groups of stakeholders. So, global multinational organizations consider effective response to CSR issues as one of the most crucial duty of brand management. Brand management and formulating global CSR activities have become a necessary challenge for nearly all corporate organizations. Some researchers have advocated that brand management and CSR activities should be handled by firms on the basis of adaptation, instead of standardization. According to this view, CSR activities to be adopted by corporate firms should be decided upon, after considering the country specific social issues, as opposed to global specific social issues. For instance; CEO of Coca Cola, Douglas Draft, had implemented the program of “think local and act local” for framing CSR activities of the company in 2000. Nevertheless, the issue here relates to the fact that multinational companies face severe problems in global positioning, while undertaking adaptive localized strategies in several markets. Some researchers have provided certain ways whereby organizations can improve their CSR activities in business and henceforth, augment its brand value in the market (Park and Srinivasan, 1994). Firstly, organizations must address to the complexities in business by virtue of which they would be able to focus on the domain of CSR activities. The second factor relates to organizational complexity in business, which would help to carve ways for shaping desired CSR activities. Finally, it is the communication complexity that would refer to a wide-range of ways, which will allow organizations to communicate their executed CSR activities to those in their internal and external environment. Therefore, from the above literature review analysis, it can be stated that CSR activities undertaken by corporate firms create strong impact their brand worth, given that these activities substantially influence loyalty of business stakeholders (Park and Srinivasan, 1994). Case Studies The case study of the dissertation will involve an in-depth discussion of two famous multinational companies (Coca Cola and General Motors) that have successfully augmented their brand value in market through increased CSR activities. Coca Cola In terms of sustainability commitment, Coca Cola is considered as one of the market leaders. Since last two years, the company is applying strict measures to lower the traces of carbon footprint in its value chain as well as to adopt sustainable packaging methods. The company also attempts to reduce aggregate water used in its production process. Through such increased CSR activities, the company has successfully attained higher standards in context of sustainability activities; this has greatly helped to improve brand value across all its marketplaces. With a higher brand value, the company has been able to extend its business internationalization process, both in terms of scale and scope. The company’s products are demanded by nearly 1.8 billion individuals per day. Through its CSR activities, Coca Cola has tried to ensure considerably higher social welfare for the poor and improve aesthetic value of the environment. Such initiatives undertaken have facilitated enhancement of brand value of the organization for the stakeholders (Coca Cola Enterprises, 2011). General Motors General Motors is another popular multinational automobile company that was established back in 1908 and currently enjoys a high brand reputation across all marketplaces. Buick, GMC, Chevrolet, Cadillac, Vauxhall, Wuling, Baojun and Opel are some of the popular brands wholly owned by the company. As recorded in 2011, net operating income level of the company was US$ 9.287 (GM, 2014). However, it should be noted that such commercial and social prosperity could not be experienced by the company without the essence of its efficient CSR activities. The company continuously implements ways, which can lower the extent of environmental pollution created by its automobile manufacturing processes. Due to its landfill free capacity vehicle innovation, General Motors has received the prestigious award of EPA Energy Star. Higher efficiency, creativity and innovation are encouraged in the organization by means of sustainable activities. The company has maintained high quality websites through which its CSR activities are successfully conveyed to business stakeholders. Most recently, General Motors has introduced cars that run on renewable sources of energy like, gasoline (GM, 2014). Therefore, the aforementioned case studies indicate that CSR activities of these two multinational companies have remarkably helped in improving their brand position in the market. Both the companies are experiencing higher intellectual capital with the help of enhanced brand value. Even so, since the global financial crisis, available financial resources of the two firms for the purpose of CSR related activities have depleted (Aulakh, 2006). Methodology The methodology of the research proposal will enumerate the exact method through by which research work of the dissertation will be accomplished. Research Philosophy The information and data to be utilized in the dissertation will be accumulated as per the chosen research philosophy. The norms of positivism will be followed as philosophy of the dissertation. This is because the present topic is related to real facts of the business world and final results can be summarized in real quantitative terms. If a topic involves analysis of any societal trait or human behaviour, then in that case, the appropriate philosophy would be based on norms of interpretive method (Kumar, 2011). Research Approach The dissertation research will be done on the basis of deductive research approach. Under the regime of this method, the researcher will present certain hypotheses or theories related to the topic, after examining available information and data from authentic secondary sources (Kumar, 2011). Research Strategy The research strategy to be followed in this research work will be determined after consideration of certain given factors that could possibly affect the research process. Some of these exogenous factors are ethical aspects involved in research, convenience of data collection methods and so on and so forth (Kumar, 2011). Time Horizon The time span of the research work will act as one of the constraints. This is because all valuable information and data that will be analyzed in the dissertation will consider a specific timal framework. The time span of the research work will be longitudinal in nature. This implies that all detailed information and data that will be collected for the purpose of research will include several time dimensions for each cross-sectional unit (Kumar, 2011). Method of Analysis The analysis of the dissertation will be performed on the basis of qualitative as well as quantitative research methods. Quantitative Method Under this process, the dissertation will study certain numeric data that effectively determines the impact of CSR activities on brand value of a firm through descriptive and inferential statistical methods. In addition to that, results of qualitative analysis will be proved empirically through the quantitative research method (Kruger, 2008). Data collection and Sampling Process The researcher will select an appropriate subset from the entire population for performing quantitative analysis of the research work. The sampling process will be purposive random in nature. Under this process, the researcher will collect data on two random multinational companies (General Motors and Coca Cola) and the type of data availed for the analysis would be selected on the basis of biased decisions of the researcher. However, all data will be collected from secondary authentic sources. The variables on which data will be collected are: Gross Revenue of General Motors and Coca Cola CSR investments expenditures of General Motors and Coca Cola Promotional Expenditures of General Motors and Coca Cola It should be noted that all above variables will be collected for 8 time dimensions (2005-2012) (Kruger, 2008). Qualitative Method The qualitative analysis of the dissertation will be accomplished with the help of literature review and case study analysis. This would be a naturalistic method of research, where the researcher would apply special interpretive skills in order to draw valuable and relevant conclusions relating to the topic. Analysis Tools The quantitative analysis will be done with the help of descriptive and inferential statistical tools. Special sample features will be analyzed through descriptive statistical measures like, mean, median, mode and standard deviation. Line graphs will also be included for performing trend analysis for each of the variables. The relationship between CSR activities and company’s brand value will be evaluated through the method of ordinary least square regression, where the researcher would regress revenue of the two companies (indicator of good brand value) on CSR and promotional expenditures (indicator of effectiveness of CSR activities of the two companies) (Kruger, 2008). Ethics All information and data employed in the research work will be authentic and relevant. The qualitative analysis methods would not directly influence results of the quantitative analysis. Validity The dissertation data will encompass the norms of internal and external validity. The time series data sample will comprise properties such as, efficiency, sufficiency, consistency and unbiasedness. Reliability Since the data collected will be ensured as valid, it can be stated that all results and conclusions drawn from the analysis will be reliable. Resource Requirements The resources to be used in qualitative analysis of this research work will be collected from public articles or scholarly authentic references such as, books and journals. The data will be gathered from secondary resources such as, NASDAQ and Bloomberg (Kothari, 2008). Time Scale Time Period and Activity Week 1 Week 2 Week 3 Week 3 Week 4 Week 5 Week 6 Analyzing the rational of the proposal               Conducting the literature review               Planning methodology and research design               Collected relevant data               Writing introduction and literature review               Writing methodology               Final Revision               (Source: Authors Creation) References Aaker, D. and Keller, K. 1990. Consumer evaluations of brand extensions. Journal of brand insurance. Business Horizons, 48, pp. 317-324. Aulakh, P. S., 2006. Emerging multinationals from developing economies: Motivations, paths and performance. Journal of International Management, 13, pp. 235-240. Calderon, H., Cervera, A. and Molla, A., 1997. Brand assessment: a key element of marketing strategy. Journal of Product & Brand Management, 6 (5), pp. 1-32. Carroll, A., 1999. Corporate social responsibility: evolution of a definitional construct. Businessand Society, 38(3), pp. 268-95. Coca Cola Enterprises, 2011. Our sustainability plan. [online] Available at: [Accessed 8 April 2014]. GM, 2014. General Motors. [online] Available at: [Accessed 8 April 2014]. Kothari, C. R., 2008. Research methodology: Methods and techniques. Delhi: New Age International. Kruger, W., 2008. Research methodology. Cape Town: Oxford University Press. Kumar, R., 2011. Research methodology. New Delhi: APH Publishing. Mankiw, G. N. and Hakes, D. R., 2011. Principles of Macroeconomics. Connecticut: Cengage Learning. Park, C. S. and Srinivasan, V., 1994. A survey-based method for measuring and understanding brand equity and its extendibility. Journal of marketing research, pp. 271-88. Rangaswarry, A., Burke, R. and Oliva, T., 1993. Brand equity and the extendibility of brand names. International Journal of Research in Marketing, 10, pp. 61-75. Slaper, T. F. and Hall, T. J., 2011. The triple bottom line: What is it and how does it work? [online] Available at: [Accessed 8 April 2014]. Smith, F., 2010. Environmental Sustainability: Practical Global Applications. Massachusetts: CRC Press. Werther, W.B. and Chandler, D., 2005. Strategic corporate social responsibility as a global understanding brand equity and its extendibility. Journal of Marketing Research, 1(2), Marketing, 54(3), pp. 27-41. Read More