Corporate Citizenship

European Journal of Marketing
Emerald Article: Corporate citizenship as a marketing instrument Concepts, evidence and research directions Isabelle Maignan, O.C. Ferrell
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To cite this document: Isabelle Maignan, O.C. Ferrell, (2001),"Corporate citizenship as a marketing instrument - Concepts, evidence and research directions", European Journal of Marketing, Vol. 35 Iss: 3 pp. 457 - 484 Permanent link to this document: http://dx.doi.org/10.1108/03090560110382110 Downloaded on: 09-04-2012 References: This document contains references to 104 other documents Citations: This document has been cited by 14 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 4823 times.
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Corporate citizenship as a marketing instrument

Concepts, evidence and research directions
Department of Marketing, University of Groningen, The Netherlands, and Department of Marketing, Colorado State University, Fort Collins, Colorado, USA
Keywords Corporate culture, Internal marketing, Ethics, Stakeholders, Consumer marketing Abstract Confronted with increasing pressures to limit government spending on social welfare, more and more public policy makers welcome the growing social involvement of corporations. Yet, inasmuch as corporate citizenship may be desirable for society as a whole, it is unlikely to be embraced by a large number of organizations unless it is associated with concrete business benefits. This paper presents past findings and proposes future research directions useful for understanding the potential value of corporate citizenship as a marketing tool. Specifically, after examining the nature of corporate citizenship, the paper discusses its potential impact, first on consumers, then on employees. Two conceptual frameworks are introduced to guide research on the value of corporate citizenship in terms of external and internal marketing respectively.
Corporate citizenship
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Isabelle Maignan O.C. Ferrell
Despite the growing interest for corporate citizenship visible among political leaders, regulators, and many organizations (Conaboy, 1995; Jackson, 1997; Leonard, 1997; Miller, 1996), a large number of managers remain wary of committing resources to an activity which is not known to be associated with any specific market or performance gain (Berger and Kanetkar, 1995; Osterhus, 1997). Given the lack of evidence on the potential business benefits of corporate citizenship, it is surprising to observe the scarcity of marketing research on the topic. Even though an emerging stream of marketing research suggests that corporate citizenship may be an excellent strategic tool (e.g. Brown and Dacin, 1997; Drumwright, 1994; Menon and Menon, 1997), empirical evaluations of the benefits resulting from corporate citizenship remain extremely limited. Still, marketing research on corporate citizenship is called for, since one of the main tasks of marketing is to establish valuable relationships between the firm and its key stakeholders (Day, 1994; Srivastava et al., 1998). Against this backdrop, the main goal of this paper is to provide guidance for future research examining the potential of corporate citizenship as a marketing tool. Specifically, the paper first clarifies the meaning of the corporate citizenship construct. Second, the manuscript reviews existing research suggesting that corporate citizenship may be a way to market the organization to consumers. Based on established theories, the authors then propose a conceptual
European Journal of Marketing, Vol. 35 No. 3/4, 2001, pp. 457-484. # MCB University Press, 0309-0566
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framework to guide future research on the impact of corporate citizenship on consumers. Third, the paper suggests that corporate citizenship may also be an excellent tool to market the organization to its employees, and introduces a conceptual framework to direct future studies investigating the value of corporate citizenship for internal marketing. Nature of corporate citizenship Besides the early conceptualization of corporate social responsibility proposed by Robin and Reidenbach (1988), most of the analyses useful for understanding the nature of corporate citizenship emerged out of the management discipline. In fact, the notion of corporate citizenship has been tackled more or less directly by two streams of management research: (1) the social performance model (e.g. Carroll, 1979; Strand, 1983; Wood, 1991); and (2) the stakeholder management framework (e.g. Clarkson, 1995; Donaldson and Preston, 1995; Goodpaster, 1991). Based on a brief review of past conceptualizations, an encompassing definition of corporate citizenship will be provided. Past conceptual approaches Corporate citizenship has been considered as synonymous to corporate social performance (Jacobs and Kleiner, 1995; Lewin et al., 1995), a notion much researched in the management literature (e.g. Preston and O'Bannon, 1997; Sharfman, 1993; Stanwick and Stanwick, 1998; Vershoor, 1997). The term ``corporate citizenship'' is preferred here because it is commonly employed by business practitioners (Epstein, 1989) and because the notion of social performance speaks more of outcomes than of actual corporate activities and processes (Wood, 1991). Wood (1991, p. 693) defines corporate social performance as:
A business organization's configuration of principles of social responsibility, processes of social responsiveness, and policies, programs, and observable outcomes as they relate to the firm's societal relationships.
This acknowledged definition is very broad: it includes philosophical and normative issues relating to the role of business in society (study of corporate social responsibility, e.g. Bowen (1953); Eilbert and Parket (1973); Sethi (1979)), managerial questions regarding the tactics used by businesses to respond to or bypass social demands (study of corporate social responsiveness, e.g. Ackerman and Bauer (1976); Carroll (1979); Frederick (1978), and sociological issues dealing with the impact of business operations on society (study of corporate social responses; e.g. Strand (1983); Wood (1991)). Hence, Wood's (1991) conceptualization goes beyond the scope of corporate citizenship, which designates the activities adopted by businesses to integrate social demands in their activities. However, the corporate social performance framework
emphasizes the fact that corporate citizenship incorporates both normative and managerial dimensions. Quite recently, the stakeholder management framework has been advanced as a potential challenger to the corporate social performance model (e.g. Clarkson, 1995; Donaldson and Preston, 1995; Goodpaster, 1991). Its proponents argue that stakeholder management enables narrowing down the scope of corporate social performance by explaining that businesses are responsible not toward society in general, but only toward their stakeholders. According to this view, businesses do not have the duty to address the demands of society in general, but only of the groups or individuals who can directly or indirectly affect, or be affected by, corporate activities. The framework is useful because it provides a clear answer to the question: ``who are businesses responsible to?'' However, by itself, this approach does not provide a clear answer to the question: ``what are businesses responsible for?'' This question is best answered by the literature on corporate social responsibility with its normative focus on the nature of appropriate business behaviors. Proposed conceptualization The corporate social performance and stakeholder management frameworks can be combined to define corporate citizenship as the extent to which businesses assume the economic, legal, ethical and discretionary responsibilities imposed on them by their various stakeholders (Maignan et al., 1998). Corporate citizenship varies along a continuum ranging from reactivity to proactivity (Carroll, 1979; Clarkson, 1995; Wilson, 1975). A business is reactive in terms of corporate citizenship when it rejects the responsibilities assigned by its stakeholders. It is proactive when it systematically meets and anticipates its stakeholders' demands. The definition incorporates the notion of corporate social responsibility and adopts Carroll's (1979) classification of economic, legal, ethical, and discretionary responsibilities. As suggested by Carroll (1979), the main social responsibility of businesses is economic: commercial organizations are expected to produce the goods and services that society desires, and thereby to create sustainable economic wealth. Businesses also have to follow the rules of behavior considered appropriate by society, whether these rules are stated in laws or are defined by ethical standards. Finally, discretionary responsibilities reflect society's desire to see businesses participate actively in the betterment of society beyond the minimum standards set by the economic, legal, and ethical responsibilities. Providing work-family programs, offering pleasant work aesthetics, or giving donations to charities are examples of some activities undertaken by businesses to meet their discretionary responsibilities. The proposed definition also encompasses the stakeholder management framework. Stakeholders are ``persons or groups that have, claim, ownership, rights, or interests in a corporation and its activities, past, present, or future'' (Clarkson, 1995, p. 106). Of special concern to businesses are the demands of
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primary stakeholders those without which the firm cannot survive in the long term. Clarkson (1995) counts five groups of primary stakeholders including shareholders or investors, employees, customers, suppliers, and ``the public stakeholder group: the government and communities that provide infrastructures and markets, whose laws and regulations must be obeyed, and to whom taxes and other obligations may be due'' (p. 106). Businesses also have to consider the demands of their secondary stakeholders such as the media who are not directly engaged in transactions with the organization and who are not essential to the firm's survival (Clarkson, 1995, p. 107). Given the central role played by primary stakeholders, they are the focus of our discussion. Table I lists examples of proactive corporate citizenship initiatives. The purpose of this grid is not to present an exhaustive depiction of proactive corporate citizenship, but to illustrate some ways employed by businesses to meet their responsibilities toward four primary stakeholder groups investors, employees, customers, and public stakeholders. Table I shows that each corporate citizenship initiative does not necessarily target only a sole stakeholder group, but may instead benefit several stakeholder groups simultaneously. Past empirical approaches A vast body of management research has examined empirically the impact of corporate social performance on business performance. Overall, past findings remain ambiguous: while some studies report a negative association between corporate social performance and financial performance (e.g. Vance, 1975), some observe a positive relationship (e.g. Abbott and Monsen, 1979; Bragdon and Marlin, 1979; Graves and Waddock, 1993; Spencer and Taylor, 1987), while others do not record any significant relationship (e.g. Aupperle et al., 1985; Davidson and Worrell, 1990; McGuire et al., 1988). The conflicting research findings are mainly due to inconsistent and sometimes questionable measures of corporate social performance (Griffin and Mahon, 1997). In addition, the relationship between corporate social performance and business performance is likely to be blurred by the effect of many other organizational variables. The following discussion proposes to examine the business impact of corporate citizenship from a much narrower standpoint by scrutinizing its effects on the external and internal customers of the firm. This focus opens the door for a large array of marketing research on corporate citizenship. Corporate citizenship as a form of consumer marketing Corporate citizenship is likely to be acknowledged by businesses as a worthwhile investment if its activities clearly trigger consumers' active support. Academic marketing research is called for to determine the conditions that encourage consumers to integrate corporate citizenship in their evaluation of purchasing alternatives. This section first reviews the findings of past research on consumers' support of corporate citizenship, and introduces a conceptual framework to guide future investigations.
Initiatives representative of Economic citizenship Minimizing operating costs Engaging in long-term strategic planning Incorporating customer satisfaction in performance evaluations Striving to continuously improve the quality of the products Committing to no-lay-off policies Legal citizenship Accurate reporting of business performance Ensuring that products meet all legal standards Avoiding discrimination in hiring and compensation Meeting all environmental regulations Ethical citizenship Implementing a code of conduct Organizing ethics training programs Incorporating integrity in the performance evaluation of employees Providing full product information to customers Discretionary citizenship Offering generous product warranties Supporting employees' education and training Offering work-family programs Donating resources to not-for-profit organizations Supporting the local economy (businesses and schools) Minimizing the amount of energy and materials wasted
a
Stakeholder group benefiting most from the initiativea Public Investors Employees Customers stakeholders X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
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Note: Stakeholders may benefit from corporate citizenship more or less directly. For example, while the minimization of operating costs may benefit investors by increasing profitability, it also benefits employees, customers, and public stakeholders because it is an activity necessary to assure the survival of the company in the long run
Table I. Examples of corporate citizenship initiatives
Past research findings Some surveys have focused on the overall impact of proactive corporate citizenship on consumers' evaluations of the firm, while other studies have evaluated consumers' responses to specific dimensions of corporate citizenship
such as ethical behaviors or concern for the environment. The following discussion reviews the findings of each type of analysis successively. Consumers' support of overall corporate citizenship. A number of industry surveys suggest that consumers are willing to make an effort to support proactive corporate citizens. For example, a 1997 Cone/Roper study shows that 76 percent of consumers are prepared to switch to brands or stores that seem concerned about the community (Jones, 1997). Similarly, a Walker Information national survey showed that 14 percent of US households actively seek dogooders when making purchases, while 40 percent judge corporate citizenship as a tie-breaking activity (Business Wire, 1997). An emerging body of academic marketing research also demonstrates how corporate citizenship may affect consumer behaviors. With a series of laboratory experiments, Brown and Dacin (1997) demonstrate that negative corporate social responsibility associations can have a detrimental effect on overall product evaluation, whereas positive associations can enhance product evaluations. Based on a survey of managers, Maignan et al. (1999) establish a positive relationship between proactive citizenship and customer loyalty. This preliminary evidence suggests that consumers do respond positively to proactive corporate citizenship. However, additional research is definitely needed to ascertain the existence and strength of the relationship between corporate citizenship and consumer behaviors and to uncover the conditions favoring or hindering the emergence of this relationship. Consumers' support of ethical and environmental citizenship. The scarcity of research on consumer responses to overall corporate citizenship is also accompanied by a lack of studies investigating consumers' reactions to specific corporate citizenship initiatives. For instance, even though business ethics has been the topic of much research at the organizational level (e.g. Ferrell et al., 1989; Goolsby and Hunt, 1992), very limited research can be found on consumer ethics (Vitell and Muney, 1992). Furthermore, past research on consumer ethics has focused on three main areas (Vitell and Muney, 1992, p. 566): (1) specific behavior resulting from an ethical assessment, such as shoplifting (e.g., Kallis et al., 1986; Moschis and Powell, 1986); (2) establishment of normative guidelines to characterize ethical consumer behavior (e.g. Stampfl, 1979); and (3) analysis of the ethical decision-making process adopted by individual consumers (e.g. DePaulo, 1987). Accordingly, past research has investigated the role of ethics in purchasing activities, but has not addressed consumers' reactions toward the ethical or non-ethical behaviors of corporations. The dearth of research on consumers' evaluation of corporate citizenship is also linked to the fact that past marketing research has often assimilated socially responsible consumer behavior to environmentally friendly consumer behavior (e.g. Antil, 1984; Antil and Bennet, 1979; Osterhus, 1997; Singhapakdi
and LaTour, 1991). As a result, past research has focused on three limited aspects of responsible consumer behavior: (1) consumers' preoccupation with the environment (e.g. Antil, 1984; Crosby et al., 1981; Singhapakdi and LaTour, 1991); (2) the consumption of green products (Obermiller et al., 1995; Samdahl and Robertson, 1989; Schuhwerk and Lefkoff-Hagius, 1995); and (3) conservancy activities (e.g. Berger and Kanetkar, 1995; Schwepker and Cornwell, 1991; McCarthy and Shrum, 1994; Taylor and Todd, 1995). Thus, past research has mainly examined consumers' general attitude toward the environment and their propensity to engage in environmentally friendly activities. Past analyses have not examined whether consumers are more loyal to businesses that show a concern for the environment. Nevertheless, many of the constructs and relationships identified in past research remain valuable to assess the potential impact of corporate citizenship on consumer attitudes and behaviors, and are included in the conceptual framework introduced below. Corporate citizenship as consumer marketing: proposed conceptual framework Figure 1 introduces a number of constructs and relationships that may be useful to guide future research on consumers' responses to corporate citizenship. Figure 1 does not constitute a comprehensive theoretical framework; instead, it suggests some research directions that scholars could follow to address two main questions: first, how do consumers evaluate businesses' commitment to corporate citizenship, and second, how do consumers' evaluations of corporate citizenship affect their purchasing behaviors? Since the current research is conducted within the context of discovery, the issues raised are stated in terms of research questions instead of hypotheses (Hunt, 1991).
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Figure 1. Corporate citizenship as consumer marketing: a research framework
Consumers' evaluation of corporate citizenship practices. Research on marketing ethics has shown that individuals' evaluation of ethical dilemma must be preceded by the recognition of the existence of this dilemma (Ferrell and Gresham, 1985; Ferrell et al., 1989). Similarly, past research on environmental consumer behavior has highlighted the importance of consumers' awareness of environmental issues to predict environmentally conscious consumer behaviors (Antil, 1984; Berger and Kanetkar, 1995; Schwepker and Cornwell, 1991). Likewise, all consumers cannot be expected to systematically engage in the evaluation of the corporate citizenship of the businesses they deal with. Hence, before one can gauge the impact of corporate citizenship on consumer behaviors, one first needs to understand whether and how consumers process the information they receive regarding the corporate citizenship of various organizations. The multi-dimensionality of the corporate citizenship construct renders the investigation of consumers' evaluation of corporate citizenship especially difficult. An individual's ethical decision making process is triggered by a limited event: the perception of an ethical dilemma. Similarly, consumers consider engaging in an environmentally friendly behavior when they recognize the existence of an environmental threat. In contrast, consumers' evaluation of corporate citizenship is likely to rest on the integration and assessment of several types of cues that may be depicting a contrasted picture of the firm's corporate citizenship. For example, consumers may be impressed by Ben & Jerry's record in terms of discretionary citizenship; yet they may be disconcerted when reading reports discussing the lack of economic foresight of this company (e.g. Hammonds, 1998). Thus, it is by combining a variety of information on the performance of businesses in terms of economic, legal, ethical, and discretionary citizenship that consumers may arrive at an overall evaluation of the firm's citizenship. Given the likely complexity of this process, future research could examine the following research question (RQ): RQ1: How do economic, legal, ethical, and discretionary citizenship respectively affect consumers' overall evaluation of a firm's citizenship initiatives? In order to address this first research question, scholars could rely on the literature depicting consumers' decision-making heuristics (e.g. Hoyer, 1984; Park and Smith, 1989). For example, future research could examine whether the evaluation of corporate citizenship activities follows a conjunctive decision rule, an elimination by dimension rule, a compensatory decision rule, or any other decision making heuristics. In a conjunctive scenario, consumers would establish minimum levels of performance for each dimension of corporate citizenship. By contrast, consumers following an elimination by aspect rule would rank each of the four dimensions of corporate citizenship by degree of importance and establish a cut-off point for each. The companies that would reach the cut-off point on the most important dimension would obtain the best corporate citizenship evaluation. With a compensatory decision-making
process, consumers would base their overall assessment of corporate citizenship on the sum of their evaluations of each dimension. These are only of a few examples of the evaluation processes that could be adopted by consumers. The two main goals of research in this area would be to determine: (1) which dimensions of corporate citizenship impact on consumers' overall evaluations of corporate citizenship the most; and (2) how consumers evaluate a company that displays diverging levels of commitment to its economic, legal, ethical, and discretionary responsibilities respectively. Factors influencing consumers' evaluation of corporate citizenship. Future research could also investigate the conditions that affect, first, consumers' likelihood of engaging in an evaluation of corporate citizenship, and second, the outcome of the corporate citizenship evaluation process itself. To understand the factors influencing the relationship between actual corporate citizenship initiatives and consumers' evaluations of the firm's citizenship, useful references may include the models depicting ethical decision making processes (e.g. Ferrell and Gresham, 1985; Ferrell et al., 1989; Trevino, 1986). For example, Trevino's (1986) interactionist model shows that ethical decision making in organizations results from the interaction of individual and situational components. Following this framework, Figure 1 suggests that consumers' evaluation of corporate citizenship is affected by the interaction between individual consumer characteristics and features of the corporate citizenship communications. Corporate citizenship communications refer to the promotional instruments produced by the company or the reports provided by the media that depict the initiatives undertaken by the firm to meet its economic, legal, ethical, and discretionary responsibilities. Figure 1 calls for an examination of the two following research questions: RQ2: How do individual consumer characteristics influence consumers' evaluation of corporate citizenship? RQ3: How do the features of the corporate citizenship communication affect consumers' evaluation of corporate citizenship? An examination of past literature on marketing ethics and environmental marketing suggests the existence of a number of variables likely to affect consumers' evaluation of corporate citizenship. First of all, past research on environmentally friendly consumer behaviors has underlined the importance of socio-demographic variables (e.g. Anderson and Cunningham, 1972; Crosby et al., 1981; Kinnear and Taylor, 1973; Schwepker and Cornwell, 1991). Overall, past research indicates that consumers with higher income (Dolich and Wilson, 1981; Kinnear et al., 1974) and education (Samdahl and Robertson, 1989) levels are more likely to be preoccupied by, and act upon, environmental issues.
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Future research could examine whether these two variables also affect consumers' evaluation of corporate citizenship. Past research has also emphasized the role of two main personal values altruism and collectivism in predicting environmentally friendly consumer behaviors (Giannelloni, 1998). Altruism is defined as ``the intention to benefit others as an expression of internal values, regardless of social or motivational reinforcement'' (Price et al., 1995, p. 257). Altruism has been found to be positively associated with participation in energy conservation programs (e.g. Osterhus, 1997) and with green votes (e.g. Singhapakdi and LaTour, 1991). Collectivist individuals have been defined as those who have a tendency to define themselves relative to the group to which they belong (Triandis, 1989). Collectivism has been positively associated with the likelihood to engage in environmentally friendly behaviors (e.g. McCarthy and Shrum, 1994). Based on these findings, future research could evaluate whether altruist and collectivist consumers are more likely to actively evaluate the information they obtain regarding corporate citizenship initiatives. Finally, past research on organizational ethics has shown that an individual's perception of an ethical problem is influenced by his/her stage of cognitive moral development (e.g. Ferrell et al., 1989; Trevino, 1986). In addition, marketers scoring high on cognitive moral development have been shown to have socially responsible attitudes and behaviors (Goolsby and Hunt, 1992). These findings suggest that as consumers move from a preconventional to a principled level of cognitive moral development, they have a tendency to define what the appropriate role of businesses in society should be. Subsequently, future research could investigate whether consumers with higher levels of cognitive moral development are likely to actively assess the commitment of corporations to proactive citizenship. Regardless of a business' actual corporate citizenship, consumers' evaluations of its citizenship are contingent upon the information they receive. Figure 1 suggests two dimensions of corporate citizenship communications intensity and trust in the source likely to influence consumers' evaluations of corporate citizenship. One could expect the intensity of corporate citizenship communications to be positively associated with the extent to which consumers actively assess corporate citizenship. However, the relationship between communication intensity and consumers' evaluations of corporate citizenship is unlikely to be linear. As suggested by Brown and Dacin (1997, p. 81), the promotion of corporate citizenship initiatives may be beneficial only up to a point:
If a company focuses too intently on communicating corporate social responsibility associations, is it possible that consumers may believe the company is trying to hide something?
This statement also points to a second feature of corporate citizenship communications that may be worthwhile investigating: the trust in the source of the communication. Osterhus (1997) suggests that the trust in the source of a request to engage in an environmentally friendly behavior is likely to affect the
propensity to engage in the behavior. This author further reveals that business and industry sources are likely to be considered the least believable. Accordingly, future research could examine how consumers' evaluation of corporate citizenship is likely to be affected by their trust in the source of the corporate citizenship communications. Overall, research is needed to understand: . the processes employed by consumers to actively evaluate the citizenship of the businesses they deal with; and . the extent to which these evaluations are affected by the interaction between individual consumer characteristics and features of corporate citizenship communications. This type of research could assist managers in three main respects. First, it would help them identify the dimensions of corporate citizenship and types of initiatives that are the most likely to trigger consumer awareness. Second, organizations would better assess the likely impact of corporate citizenship based on the profile of the consumers they target. Third, businesses could learn about the most desirable means of communicating corporate citizenship. Yet, research on consumers' evaluation of corporate citizenship represents only a first step toward assessing the value of corporate citizenship in terms of consumer marketing. The second step requires that researchers establish how consumers' evaluations of corporate citizenship actually affect their attitudes and behaviors toward the firm and its products. Consumers' reactions to corporate citizenship. Figure 1 proposes three possible consumer consequences of corporate citizenship: positive product evaluations, increased customer loyalty, and positive word-of-mouth. The first consequence was suggested by Brown and Dacin (1997), who identified the existence of a positive relationship between corporate social responsibility associations and new product evaluations. Customer loyalty was introduced by Maignan et al. (1999), who observed that organizations with higher levels of corporate citizenship also enjoyed greater levels of customer loyalty. Positive word-of-mouth has not been investigated as a potential consequence of corporate citizenship in past research. However, Price et al. (1995) have demonstrated that consumers concerned about a firm's social responsibility are likely to display high levels of marketplace involvement. One could then expect that consumers who are aware of either the proactive or reactive citizenship initiatives of a given organization are likely to share that information with others. Hence, as indicated in Figure 1, future research could investigate the following research question: RQ4: How do consumers' evaluations of corporate citizenship practices affect product evaluations, loyalty levels, and word-of-mouth? Understanding consumers' reactions to corporate citizenship. Several theoretical frameworks could be employed to examine whether positive evaluations of a firm's corporate citizenship are conducive of desirable
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consumer reactions. Brown and Dacin (1997) suggest the relevance of consumer inference making, a framework which examines ``the construction of meaning beyond what is explicitly given'' (Dick et al., 1990). Past research on consumer inference making suggests that consumers may form inferences about missing product attributes by drawing a connection between an available piece of information and the missing attribute (Brown and Dacin, 1997; Dick et al., 1990; Lynch et al., 1988; Simmons and Lynch, 1991). For example, when a consumer encounters a new product, he/she might lack information regarding the quality of that product. However, the consumer may know that the manufacturer of this item is recognized as a responsible organization and may infer from this information that the product is most likely to be highly reliable. Hence, future research could establish whether information regarding the citizenship of a firm is used by consumers to make inferences regarding specific product attributes. Another conceptual framework that may be useful to understand the relationship between consumers' evaluation of corporate citizenship and product evaluations is signaling theory (Boulding and Kirmani, 1993; Kirmani, 1997). This theory examines how consumers process information under conditions where buyers and sellers possess asymmetric information. In many cases, whereas sellers know exactly the quality of their goods and services, buyers are not well-informed about these attributes. Under such conditions, consumers look for information that enables them to distinguish the companies that perform well on an attribute of interest to those that perform poorly. Most of past research has focused on the attribute of quality and has considered the impact of signals such as warranties (Boulding and Kirmani, 1993; Lutz, 1989), advertising (Kirmani, 1997; Kihlstrom and Riordan, 1984) and price (Milgrom and Roberts, 1986). Future research could examine whether proactive corporate citizenship could also be used by consumers to differentiate companies performing well or poorly on attributes such as quality or reliability. Consumers may be assumed to associate proactive citizenship with high product quality because they are likely to view corporate citizenship initiatives as an expensive investment that only successful and reliable companies can commit to. The effect of corporate citizenship evaluations on product evaluations, customer loyalty, and word-of-mouth could also be investigated based on social identity theory (Ashforth and Mael, 1989; Dutton et al., 1994; Tajfel and Turner, 1985). Organizational identification is defined as ``the degree to which a member defines him- or herself by the same attributes he or she believes define the organization'' (Dutton et al., 1994, p. 239). Even though social identity theory has been used by organizational theorists to describe how organizational members identify with the company they are working for, there is evidence that consumers also identify themselves with a commercial organization or brand (e.g. Aaker, 1994; Belk, 1988). Bhattacharya et al. (1995, p. 46) suggest that consumers are likely to identify with organizations involved in discretionary citizenship: ``By aligning themselves with worthy causes . . .,
organizations enable consumers to identify with what the organization represents''. Future research could build on this statement and evaluate whether positive evaluations of overall corporate citizenship give rise to bonds of identification between the firm and consumers. Such bonds of identification are likely to encourage positive evaluations of the firm's products, and have been shown to lead to positive word-of-mouth and customer loyalty (Aaker, 1994; Bhattacharya et al., 1995). Hence, future research could examine whether proactive corporate citizenship is conducive of consumers' identification with the firm, and in turn of positive product evaluations, customer loyalty, and positive word-of-mouth. Influences on consumers' reactions to corporate citizenship. Figure 1 suggests that the relationships linking corporate citizenship evaluations to product evaluations, customer loyalty, and positive word-of-mouth respectively are likely to be affected by individual customer characteristics and by the features of the corporate citizenship communications. Specifically, Figure 1 calls for research on the two following questions: RQ5: How do individual consumer characteristics influence the strength of the relationships between consumers' evaluations of corporate citizenship and product evaluations, loyalty, and word-of-mouth respectively? RQ6: How do the features of corporate citizenship communications influence the strength of the relationships between consumers' evaluations of corporate citizenship and product evaluations, loyalty, and word-ofmouth respectively? The individual consumer characteristics assumed to affect consumers' evaluation of corporate citizenship are also likely to influence the degree to which individuals consider corporate citizenship in their product evaluations and market behaviors. Based on the research findings discussed earlier, one could assume that consumers with higher education and income levels, with altruist or collectivist values, and with advanced levels of cognitive moral development may tend to make personal efforts to support companies known to be proactive corporate citizens. Indeed, these individuals are likely to believe it is their personal duty to recommend and give their patronage to organizations that behave as responsible citizens. The two features of corporate citizenship communications discussed earlier intensity and trust in the source are also likely to affect the extent to which evaluations of proactive corporate citizenship actually impact on consumers' attitudes and behaviors. One could assume that up to a certain point, the more consumers are reminded of the corporate citizenship of a given firm, the more likely they are to integrate these initiatives in their purchasing decisions. However, boundary effects may also take place: when corporate citizenship is promoted extremely heavily, consumers may perceive that it is mainly used as a promotional appeal, and may become suspicious about the intent of the firm.
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This reasoning entails that consumer's trust in the source of the corporate citizenship communications is also likely to affect the relationship between evaluations of corporate citizenship and consumer behaviors. Information regarding the activities undertaken by an organization to meet one or several of its social responsibilities may influence consumer decisions only if individuals judge this information as objective and trustworthy. Future research could determine the specific media and messages that are most likely to be viewed as believable by consumers. Overall, future examinations of consumers' concrete responses to corporate citizenship will establish whether corporate citizenship is a form of marketing that promotes the company and its products to consumers. In addition, the framework presented in Figure 1 could be used as a stepping stone to guide research on the impact of corporate citizenship on other external publics of the firm such as investors or channel members. The next section suggests that external stakeholders may not be the only group affected by corporate citizenship; instead, employees themselves may be quite sensitive to their organization's commitment to its social responsibilities. Corporate citizenship as a form of internal marketing Recent industry surveys suggest that corporate citizenship may be a form not only of external, but also of internal marketing. For instance, according to a 1992 survey by the Conference Board, executives reported that volunteer programs an activity showing proactive discretionary citizenship improved employees' productivity and morale, fostered team work, skill building, and decision making (Leonard, 1997). Another recent survey indicated that 84 percent of managers regard the achievement of a responsible image in the community as important for business success and employee morale (Business Ethics, 1997). Hence, corporate citizenship may be an excellent way to market the firm and its products to its employees. This section introduces a conceptual framework to guide future research examining whether and how corporate citizenship may be a form of internal marketing. Given the scarcity of past research on the effects of corporate citizenship on employees, and since internal marketing treats employees as a type of customer (Berry, 1995; George, 1990), the following discussion adopts a structure similar to that outlined in Figure 1. Corporate citizenship as internal marketing: proposed research framework Past research in management has not examined directly how corporate citizenship activities impact on employees; instead, some studies have assessed how proactive corporate citizenship affects the attractiveness of the firm to job applicants (e.g. Fombrun and Shanley, 1990; Turban and Greening, 1996). For example, Turban and Greening (1996) selected firms included in both the Fortune index of corporate reputation and the Kinder, Lydenberg, Domini, & Co. (KLD) database a source rating the corporate social performance of a number of companies. Turban and Greening (1996) asked students to rate the
attractiveness of these organizations as potential employers. The authors found that businesses with higher rates in both databases obtained greater levels of organizational attractiveness. These findings suggest that individuals would rather work for an organization known for its proactive corporate citizenship. Given the overall lack of research on internal marketing (Berry, 1995; George, 1990; Gilly and Wolfinbarger, 1998), it is not surprising that very few marketing studies have examined the impact of corporate citizenship on the firm's internal audience. An exception is a study by Maignan et al. (1999), who found a positive relationship between proactive corporate citizenship and employee commitment based on a survey of managers. This potential association is incorporated in Figure 2, which highlights some of the core relationships that could be investigated in future research. Just like Figure 1, Figure 2 is not intended to provide a comprehensive understanding of employees' responses to corporate citizenship; instead, the main purpose of this framework is to raise some core research issues. Specifically, Figure 2 proposes two main research areas: (1) how do employees evaluate their organization's commitment to corporate citizenship?; and (2) how do employees' evaluations of their firm's commitment to citizenship affect their organizational attitudes and behaviors? Employees' evaluation of their organization's corporate citizenship. Our discussion of Figure 1 explained that consumers do not automatically assess the corporate citizenship of the firms they encounter. In addition, consumers are likely to follow advanced evaluation processes before arriving at an overall assessment of their organization's citizenship. Following a similar reasoning,
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Figure 2. Corporate citizenship as internal marketing: a research framework
and as suggested in Figure 2, employees may not necessarily actively evaluate how committed their organization is to meeting its social responsibilities. Further, employees have to integrate a variety of information about the different areas of corporate responsibilities before they can come up with an encompassing image of their organization's citizenship. Thus, before one can understand the concrete impact of corporate citizenship on employees, one first needs to assess whether and how employees process the information they receive regarding the corporate citizenship initiatives of their own firm. This leads to the following research question: RQa: How do economic, legal, ethical, and discretionary citizenship affect employees' overall evaluation of their organization's citizenship? Traditional consumer decision-making heuristics could be employed to depict how organizational members rate and integrate the different dimensions of citizenship. Industry surveys show that employees are especially appreciative of volunteer programs and community involvement operations (Jones, 1997; Leonard, 1997). This observation suggests that employees may judge the discretionary dimension of citizenship as the most important. It could also be expected that employees are especially appreciative of corporate citizenship initiatives such as no lay-off policies, strict employee equity policies, or pleasant work aesthetics that satisfy their own demands. In addition to examining the weight attributed by employees to different activities significant of corporate citizenship, future research could investigate how employees treat discrepancies in their organization's commitment to each of the four dimensions of corporate citizenship. A concrete example would be to investigate how Motorola employees view the overall citizenship of their organization when this firm is recognized for its initiatives in the discretionary area (Hammonds et al., 1997), and yet has recently engaged in a series of layoffs. Influences on employees' evaluation of their organization's citizenship. Following the structure of Figure 1, Figure 2 suggests that employees' evaluations of their organization's corporate citizenship is likely to be influenced both by the features of corporate citizenship communications and by individual employee characteristics. Thus, future research could be designed to address the two following questions: RQb: How do individual characteristics influence employees' evaluations of their organization's corporate citizenship? RQc: How do the features of corporate citizenship communications influence employees' evaluations of their organization's corporate citizenship? Building on our earlier discussion of the individual characteristics likely to affect consumers' evaluations of corporate citizenship, we suggest that sociodemographic variables, personal values, and the stage of cognitive moral development are likely to influence:
the extent to which employees actively engage in the evaluation of their organization's citizenship, and the outcome of this evaluation process.
Based on past consumer research findings, organizational members with higher levels of income and education, with altruist or collectivist values, and with higher levels of cognitive moral development may be expected to actively evaluate and to appreciate their organization's citizenship. As with consumers, employees' evaluation of their firm's citizenship may be dependent on the information that they receive about these types of initiatives. Corporate communications disseminated both within and outside of the organization are processed by organizational members (George and Berry, 1981; Gilly and Wolfinbarger, 1998). In addition, employees process depictions of their own firm produced by external sources such as the media. In order to keep the scope of the following discussion manageable, only the corporate citizenship communications originating from the firm itself are considered. They are judged to be the most relevant since they are likely to be received and analyzed by most organizational members. Given that the firm is the sole source of information considered, Figure 2 does not incorporate the notion of trust in the source. Both internal and external communications depicting the organization's citizenship may affect employees' awareness of their firm's commitment to corporate citizenship. One could expect that the greater the intensity of both internal and external corporate citizenship communications, the greater employees' propensity to actively evaluate the efforts of their organization in this area and to have a positive view of the firm's citizenship. However, as with consumers, boundary effects may appear: as the intensity of corporate citizenship communications reaches a certain point, employees may start questioning whether the firm is genuinely dedicated to its social responsibilities, or whether it is merely committed to appear as a proactive corporate citizen. Accordingly, highly intense communication levels may induce employees to perceive negatively corporate citizenship communications as well as the overall citizenship initiatives of the organization. Past research has provided very little insight into employees' evaluation of internal communications (Cheney, 1991). By contrast, marketing scholars have demonstrated that employees do notice the external communications of their firm and that they do examine how these external communications match their first-hand experiences of the organization (e.g. Cheney, 1991; George and Berry, 1981; Gilly and Wolfinbarger, 1998). Gilly and Wolfinbarger (1998) outline several dimensions of advertising messages that are likely to influence employees' evaluation of the firm's communications and in turn to impact on their feelings toward the organization. Two of these dimensions seem especially appropriate to examine how employees evaluate the external communications depicting the citizenship initiatives of their firm: accuracy and value congruence. When employees perceive that external communications
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accurately represent the degree of corporate citizenship they observe first-hand, they may be more likely to first, integrate these external communications in their evaluations of the firm's citizenship, and second, assess positively their organization's citizenship efforts. By contrast, when employees sense that external communications embellish their organization's citizenship initiatives compared to those they experience in the workplace, they may be less likely to integrate these external communications in their own evaluations, and may have a negative image of their firm's citizenship initiatives. Similarly, employees' evaluation of their organization's citizenship may be positive when value congruence is enhanced by external communications. Value congruence is achieved when external communications describe the organization in consonance with employees' core values (Gilly and Wolfinbarger, 1998). Hence, if advertisements display the organization as one caring for its community, and if employees believe that one mission of their firm is indeed to give back to its community, the organizational members are likely to perceive very well external citizenship communications and actual citizenship initiatives. On the contrary, if advertisements depict the firm as one caring for its community when employees feel that the organization should not be involved extensively in such activities for example, because of poor economic performance or recent layoffs then organizational members are likely to evaluate negatively the external citizenship communications, as well as its citizenship activities as a whole. This discussion calls for research that examines how the intensity and content defined in terms of accuracy and value congruence of both internal and external citizenship communications are likely to influence employees' evaluations of their organization's commitment to citizenship. This type of research would identify:
.
the dimensions of corporate citizenship economic, legal, ethical, or discretionary most enjoyed by employees; the types of employees defined in terms of socio-demographics, values, and moral development most receptive to organizational citizenship efforts; and the features of corporate citizenship communications defined in terms of intensity and content that are most likely to enhance employees' awareness and liking of corporate citizenship.
Consequently, marketing research on employees' assessment of their organization's citizenship could help businesses design constructive social involvement programs and communications. Nevertheless, this type of research constitutes only a first step toward establishing the value of corporate citizenship in terms of internal marketing. In a second step, investigations must also determine whether and how employees' evaluations of corporate citizenship affect their morale and behaviors in the workplace.
Employees' reactions to corporate citizenship. Very little research can be found that indicates how employees' attitudes and behaviors are affected by their organization's corporate citizenship. However, in a survey of managers, Maignan et al. (1999) observed a positive relationship between the level of corporate citizenship and employee commitment. These findings suggest that employees of an organization dedicated to proactive corporate citizenship are likely to be fond of their organization, to see their future tied to that of the organization, and to be willing to make personal sacrifices for the firm (Jaworski and Kohli, 1993, p. 60). Past research has also shown that employee commitment is the likely result of specific managerial practices representative of corporate citizenship toward employees. For example, Caldwell et al. (1990) and Williams and Hazer (1986) have highlighted the positive effect of training practices an activity representative of discretionary citizenship, and job equity policies initiatives representative of legal citizenship, on employee commitment. Dutton et al. (1994) further suggest that corporate citizenship is conducive of a strong esprit de corps within the organization. According to these authors, when employees perceive that their organization is to committed to act as a responsible citizen, they are likely to make a deliberate effort to work as team members. In other words, as a company shows its dedication to act as a responsible citizen of society, employees commit themselves to act as exemplary organizational members. As indicated in Figure 2, these arguments call for research that investigates the following question: RQd: How do employees' evaluations of their organization's corporate citizenship affect organizational commitment and esprit de corps? Understanding employees' reactions to their organization's corporate citizenship. Social identity theory (Ashforth and Mael, 1989; Dutton et al., 1994; Tajfel and Turner, 1985) may provide a sound theoretical background to understand how employees' evaluations of their organization's corporate citizenship translate into organizational commitment and esprit de corps. As explained by Dutton et al. (1994), the process of organizational identification is affected by two types of image: first, the perceived organizational identity, and second, the construed external image of the firm. The perceived organizational identity refers to ``what the member believes is distinctive, central, and enduring about the organization'' (Dutton et al., 1994, p. 239). The construed external image of the firm refers to ``what a member believes outsiders think about the organization'' (Dutton et al., 1994, p. 239). Organizational members find an organization's identity to be especially attractive when it matches their self-identity, or their sense of who they are (Tajfel and Turner, 1985). It seems reasonable to assume that most people do not conceive of themselves as individuals who care only for their own selfbeing, and who do not show much concern for the welfare of those around them. It can also be expected that most individuals would rather be known as good citizens who contribute to the harmony of society than poor citizens who
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do not care much about the impact of their behaviors on others. Subsequently, employees are unlikely to identify with organizations that appear to strive only for their own economic wealth, for their own development, and that do not seem to share their revenues with their stakeholders. On the contrary, organizational members are most likely to identify with a firm that shows concern for those who assure its growth and for society in general. When organizations engage in corporate citizenship, they assert their social role beyond the mere generation of profits. Accordingly, when working in an organization committed to proactive corporate citizenship, employees may sense that their organizational activities have a social importance that goes beyond productive activities, and in turn may identify more easily with the organization. Corporate citizenship may facilitate organizational identification not only because it enhances the perceived organizational identity, but also because it is conducive of a positive construed external image of the firm. Indeed, organizational researchers suggest that employees feel proud to belong to an organization that is believed to have socially valued characteristics (Ashforth and Mael, 1989; Dutton et al., 1994). As explained by Dutton et al. (1994, p. 240):
. . . when member employees believe that outsiders see the organization in a positive light, they bask in the reflected glory of the organization.
Our earlier discussion introduced some evidence suggesting that consumers have a positive image of proactive corporate citizenship. By extension, corporate citizenship is likely to help the organization build a positive external image among the public at large. If employees are aware of this positive external image, then they are more likely to identify with the firm. By contrast, if employees perceive that the external image of their firm is mainly negative, they are likely to have trouble identifying with their employer, and may experience negative personal outcomes such as stress or depression. For example, Fanning (1990) and Dutton et al. (1994) describe how Exxon employees felt that the public regarded their organization in a negative light after the Valdez oil spill. This perception led to significantly lower levels of identification with the company:
Employees, confronted daily by criticisms of Exxon in the media and by friends and family members, are questioning their faith in the corporation (Star Ledger, 1989, p. 3; as cited in Dutton et al., 1994, p. 241).
Thus, future research could establish how employees' evaluations of their organization's corporate citizenship affect the perceived organizational identity and the construed external image of the firm. Scholars could also examine whether the processes of social identification resulting from corporate citizenship initiatives are systematically associated with higher levels of employee commitment and esprit de corps. One should note that other desirable outcomes of corporate citizenship could be investigated on the basis of social identity theory. For example, Ashforth and Mael (1989) demonstrate that increased levels of organizational socialization and lower levels of role conflict are likely to result from organizational identification. Conversely, negative
identification has been associated to stress, reduced loyalty, and exit (Hirschman, 1970). Influences on employees' reactions to corporate citizenship. Figure 2 suggests that the relationships linking employees' evaluation of their organization's corporate citizenship to organizational commitment and esprit de corps respectively are likely to be affected by the same factors as those impacting on corporate citizenship evaluations. Hence, Figure 2 calls for research that investigates the following two questions: RQe: How do individual employee characteristics influence the extent to which employees' evaluations of their organization's citizenship affect organizational commitment and esprit de corps? RQf: How do the features of internal and external corporate citizenship communications influence the extent to which employees' evaluations of their organization's citizenship affect organizational commitment and esprit de corps? The individual employee characteristics expected to impact on employees' citizenship evaluations are also likely to influence organizational members' reactions to citizenship. Given that employees with higher income and education levels, with collectivist and altruist values, and with higher levels of cognitive moral development are supportive of corporate citizenship, they can also be assumed to feel enthusiastic to work for an organization committed to meeting its social responsibilities. As a result, such employees are likely to respond strongly and positively to proactive corporate citizenship, for example by showing high levels of dedication to the firm's success, and by enjoying cooperating with their colleagues to enhance organizational performance. In addition, as discussed above, the process of identification of the employee to the firm is facilitated when the perceived organizational identity matches the employee's self-identity. Organizational members who value altruism and collectivism may view proactive corporate citizenship as the concrete enactment of these two values, and hence are likely to identify with a proactive organization. As a result, they may feel bonded to the organization and its members. The features of communications depicting the organization's commitment to corporate citizenship are also likely to influence the extent to which employees' evaluations of corporate citizenship translate into organizational commitment and esprit de corps. As the intensity of internal and external communications describing proactive corporate citizenship increases, employees are reminded of their organization's values and social role, and thus can be expected to react strongly to their firm's citizenship. However, as discussed earlier, boundary effects may occur: as the intensity of corporate citizenship communications reaches a certain level, employees may become skeptical about the genuine commitment of their firm to its social responsibilities. Hence, they may perceive
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that citizenship initiatives are mainly employed as a promotional tool and may react negatively to these activities. The content of external communications can also be expected to affect employees' responses to corporate citizenship. Social identity theory may provide useful guidelines to understand how the accuracy and value congruence of corporate citizenship communications affect employees' attitudes and behaviors. When external communications provide an accurate depiction of the firm's commitment to its social responsibilities and of the values underpinning its citizenship, the perceived organizational identity is likely to match the external construed image of the firm. In other words, the proactive corporate citizenship depicted in external communications is reflective of employees' own experiences, and induces organizational members to believe that outsiders have a positive image of their organization. The convergent perceived organizational identity and construed external image boost employees' identification with the organization, their liking of the organization and its members, and their commitment to organizational objectives. By contrast, problems are likely to arise in cases when employees perceive that external communications do not accurately depict their values and overstate the commitment of their firm to its social responsibilities. In these cases, the perceived identity of the firm and its construed external image do not match: while employees do not have a very positive image of their organization's citizenship, they may tend to believe that outsiders regard their firm positively based on the embellishing citizenship communications they receive. Such inconsistencies may hinder organizational commitment and esprit de corps as employees feel that the true social involvement of their organization is misrepresented externally. As a whole, future research on employees' reactions to their organization's citizenship will help establish the value of corporate citizenship not only as an instrument of external marketing, but also as a form of internal marketing. If relationships linking proactive corporate citizenship to employee commitment and esprit de corps respectively can be established, then proactive citizenship can be viewed as a way of promoting the organization to its members. In addition, investigations of the impact of corporate citizenship on employees could guide the development of rewarding corporate citizenship programs. Specifically, scholars could identify:
.
the dimensions of proactive citizenship most likely to engender desirable employee responses; the profile of the employees most appreciative of corporate citizenship; and the forms of external and internal marketing communications best able to generate employees' support of corporate citizenship.
Conclusion At a time when the government involvement in social welfare and business affairs is perceived increasingly negatively, many public policy makers and regulators alike turn to thriving businesses for help. Nevertheless, inasmuch as corporate citizenship may be desirable for society as a whole, it is unlikely to be widely embraced by organizations unless it yields concrete business benefits. Yet, very little is known about the business value of corporate citizenship. This paper proposes that corporate citizenship may help organizations market themselves and their products to both external and internal customers. Given the scarcity of past research to substantiate this suggestion, the paper introduces two conceptual frameworks to guide future inquiries in that area. Specifically, the frameworks present relationships useful to understand: first, how both customers and employees evaluate corporate citizenship initiatives, and second, how each of these two groups responds to proactive corporate citizenship. The relationships integrate past research findings mainly in the areas of marketing ethics and environmentally friendly consumer behaviors. In addition, they are grounded in established theories including consumer decision-making heuristics, consumer inference making, signaling theory, and social identity theory. Of course, additional theoretical frameworks could certainly be instrumental in explaining the potential marketing benefits of corporate citizenship. It should also be observed that other potential effects of corporate citizenship on employees and customers could be examined. For example, proactive corporate citizenship may lead external customers to limit their product information search, and may induce employees to feel less role conflict. In addition, the discussion focused only on two primary stakeholder groups customers and employees and failed to examine the impact that corporate citizenship may have on other important publics of the organizations such as investors, channel members, community leaders, or job recruits. Despite these and other weaknesses, it is hoped that the present research will provide sound grounds and directions for future inquiries into the potential of corporate citizenship as a marketing instrument.
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European Journal of Marketing

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Corporate citizenship as a marketing instrument

Isabelle Maignan O.C. Ferrell

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Table I. Examples of corporate citizenship initiatives

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Figure 1. Corporate citizenship as consumer marketing: a research framework

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Figure 2. Corporate citizenship as internal marketing: a research framework

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