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DOI 10.35631/IJMTSS.417005
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INTERNATIONAL JOURNAL OF
MODERN TRENDS IN
SOCIAL SCIENCES
(IJMTSS)
www.ijmtss.com
THE ROLE OF CSR COMMUNICATION IN STRENGTHENING
CORPORATE REPUTATION
Wan Nor Hidayah Wan Afandi1*, Jamilah Jamal2, Mohd Zuwairi Mat Saad3
1
2
3
Faculty of Business, Accounting, and Social Sciences, Kolej Universiti Poly-Tech MARA Kuala Lumpur, Malaysia
Email: wnhidayah@kuptm.edu.my
School of Multimedia Technology and Communication, UUM, Malaysia
Email: jamilah@uum.edu.my
School of Multimedia Technology and Communication, UUM, Malaysia
Email: zuwairi@uum.edu.my
*
Corresponding Author
Article Info:
Abstract:
Article history:
Received date: 21.07.2021
Revised date: 30.07.2021
Accepted date: 11.08.2021
Published date: 09.09.2021
To cite this document:
Wan Afandi, W. N. H., Jamal, J., &
Mat Saad, M. Z. (2021). The Role Of
CSR Communication In
Strengthening Corporate Reputation.
International Journal of Modern
Trends in Social Sciences, 4 (17), 43-
53.
DOI: 10.35631/IJMTSS.417005
This work is licensed under CC BY 4.0
This conceptual paper discuss about the role of CSR communication in
strengthening corporate reputation. A number of earlier studies argue that for
CSR to be impactful on the stakeholders, corporations must communicate CSR
information to their stakeholders. Thus, CSR communication plays a role in
influencing customers’ perceptions and evaluations of corporate reputation.
The author reviewed existing literatures that focus on corporate reputation and
CSR communication. The review includes highlights on common
measurements of corporate reputation and CSR communication tools and
channels. Nevertheless, future studies may want to further investigate the
relationship between CSR communication and corporate reputation with other
possible mediating or moderating factor such as trust, csr knowledge and csr
awareness.
Keywords:
Corporate Social Responsibility (CSR), CSR Communication, Corporate
Reputation
Introduction
Corporate reputation is commonly regarded as intangible asset (Rashid & Mustafa, 2020) and
has influence on the profitability and sustainability of a corporation (Chen, 2016). Corporations
have begun to realize that the survival of their businesses also rely on stakeholders’ positive
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evaluations of their reputation that leads to a better financial performance (Gangi et al., 2018;
Cormier & Magnan, 2014). Favourable reputation influences customers’ commitments,
satisfaction, trust, word of mouth, repurchase and attract good talents (Kim & Kim, 2017;
Kircova & Esen, 2018; Leaniz & Rodrigues, 2016). Clearly, effective reputation management
is crucial for businesses’ sustainability. Thus, it is equally important to recognize the factors
that can help corporations in managing their reputation.
Corporate reputation is a perceptual representation of a corporation’s actions in the past and
future which portray its appeal to all key stakeholders (Fombrun, 1996). Their actions are the
behaviours they displayed while operating the businesses. Considering that corporate
reputation is the interpretation of corporations’ behaviours by stakeholders, positive perception
usually resulted from ethical behaviours (Javed et al., 2019; Yadav et al., 2018). Corporate
social responsibility (CSR) is found to be the antecedents of corporate reputation (Esen, 2013;
Javed et al., 2019). CSR broadly refers to corporate behaviours that fulfil the social obligations
demanded by society (Kim & Ramos, 2018). CSR has also become visible as a mechanism to
protect, maintain and grow a business (Lee et al., 2015) as well as building reputation among
global companies (Fombrun, 2005).
However, CSR is only impactful when stakeholders are aware of corporations’ CSR
contributions (Ayaji & Mmutle, 2020). In other words, CSR must be complemented with CSR
communication for corporations to reap the sow of their good deeds. Numbers of scholars
agreed that CSR communication plays a significant role in improving stakeholders’ CSR
knowledge, CSR awareness, trust, engagement and their perceptions of corporate reputation
(Kim & Ferguson, 2018; Morsing & Schultz, 2006). Yet, CSR communication can also cause
scepticism (Ayaji & Mmutle, 2020). When CSR communication is perceived as a mean to
promote a corporation or to coat its inefficiency and misbehaviours, CSR efforts will only
invite critics and negative attitudes among stakeholders (Coombs & Holladay, 2012; Morsing
et al., 2008). Thus, considering the inconsistency findings in earlier studies and the dilemma
whether a corporation should communicate about their CSR, there is a need to further examine
the role of CSR communication in strengthening corporate reputation.
This conceptual paper is meant to collect relevant literature that explain how CSR
communication contribute to strengthening corporate reputation. The article is organized as
follows: literature review on corporate reputation, CSR communication, the role of CSR
communication in enhancing corporate reputation, the recommendations of effective CSR
communication and conclusion.
Literature Review
This section reviews the literature on corporate reputation and CSR communication. First, it
presents the concepts of corporate reputation and CSR communication. It also includes
corporate reputation measurements that are commonly employed by researchers, CSR
communication tools and channels, and the role of CSR communication in strengthening
corporate reputation. This paper propose a research framework that is developed based on the
literatures.
Corporate Reputation
Corporate reputation has been studied in different disciplines and so a number of different
concepts have emerged. Yet, most definitions refer corporate reputation to social cognitions
such as beliefs, impressions and perceptions (Rindova et al., 2010). Hardeck and Hertl (2014)
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refers corporate reputation to the knowledge and feelings that an individual has towards an
organization. According to Mishina et al., (2012), corporate reputation is a collective
assessments of an organization’s capability to create value based on its characteristics and
qualities. Fombrun and Van Riel (2004) defined corporate reputation as an emotional capital
which represents stakeholders’ perceptions towards a corporation’s past and future actions.
Stakeholders, generally, can be divided into primary stakeholders and secondary stakeholders.
The former refers to those whose interest are directly affected by corporations’ business
operations while the latter are those with intermediary role. Stakeholders can be viewed as the
main aspect of corporate reputation for their opinions are counted in determining a
corporation’s position in the industry. Capozzi (2005) asserts that reputation building is about
keeping stakeholders’ needs and interest in balance.
Earlier studies have been focusing on the antecedents of corporate reputation to understand the
end result of customers’ perceptions, demands and expectations (Walker, 2010). The literature
also suggests that corporate social responsibility, corporate ability, customer satisfaction and
customer trust are among the antecedents of corporate reputation (Kim & Kim, 2017). The
measurement of reputation vary from one research to another. More models have been
developed by researchers to measure reputation since there is no single set of criteria of
reputation measurement can be agreed upon different concept of reputation established by
researchers in their studies.
Measuring Corporate Reputation
Previously, the rankings of the Fortune magazine are the most often used measures of corporate
reputation (Wartick, 2002). Those companies in the list were ranked based on their revenue
and evaluated by executives, directors and analysis. However, the rankings were criticized for
considering only certain group of stakeholders and overweight the financial performance of the
company (Eckert, 2017; Gatzert & Schmit, 2015).
Then, the Reputation Quotient (Fombrun et al., 2000) was developed. It is one of the most-
cited measurements for corporate reputation which introduces six dimensions and they are;
emotional appeal, social responsibility, financial performance, vision and leadership, product
and services, and workplace environment. Despite being unbiased to one particular stakeholder
group, the Reputation Quotient also being criticized for failing at providing information on the
possibilities to improve corporate reputation (Eckert, 2017). Hence, the Reputation Quotient
was further developed. Walsh and Beatty (2007), for instance, extended the 20 issues of the
Reputation Quotient in their research that focus on customers. Their measurement of corporate
reputation has been employed and cross cultural tested in the United States, Europe and
Australia.
Besides the above measurement approaches, RepTrak reputation model is another standard
measurement developed by Fombrun et al., (2015) as an extension of the Reputation Quotient.
It measures the views of public on four essential core areas which are trust, esteem, admire and
good feeling. There are seven dimensions proposed by this model, namely; products or
services, innovation, workplace, governance, citizenship, leadership and performance. The
Global RepTrak is resulted from a survey conducted on general population who were asked to
evaluate corporate reputation of certain companies. Although it was argued that the survey
failed to distinguish stakeholder groups and the issues in the approach (Eckert, 2017), it is
widely employed in international studies with different cultures (Luisa et al., 2018). All
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dimensions of RepTrak reputation model is also found to be applicable in Malaysia context
(Chan et al., 2018; Tay et al., 2020).
Based on the literature, it can be concluded that there is lack of consensus in defining and
conceptualizing corporate reputation. Although there is a consensus on corporate reputation as
a multidimensional construct (Eckert, 2017), different scholars identified different dimensions
of corporate reputation in their studies. In this paper, the author suggested customer-based
corporate reputation which refers to the attitude-like evaluative judgment of a corporation by
customers.
CSR Communication
As CSR has growing to be prominent to the management of a corporation, the attention also
has been centred on CSR communication. Scholars claimed that CSR communication is the
missing link between CSR and its outcomes (Kim & Ferguson, 2018) but there were also past
studies that examined the role of CSR communication as an antecedent of corporate reputation.
CSR communication is a process of engaging with stakeholders to educate them about
corporation’s CSR policy concerning economy, social and environmental issues using various
communication tools (Podnar, 2008). Kim and Ferguson (2018) defined CSR communication
as ‘communication that is designed and distributed by the company itself about its efforts’.
Different corporations have their own preference of tools and channels to communicate about
their CSR information.
CSR Communication Tools and Channels
Communication tools as proposed by Seele and Lock (2014) can be categorized into four and
they are; 1) Instrumental published communication tool is a one-way communication aiming
at external stakeholders such as CSR report or brochures, 2) Instrumental unpublished
communication tool refers to internal documents containing corporation’s strategic
perspective, 3) Deliberative published communication tools allow open dialogue with larger
audience such as corporate blogs or social media, and 4) Deliberative unpublished
communication tools include internal materials that also facilitate open dialogues like town hall
meetings for internal staffs or investor day for investors.
Social media has emerged as a channel used to communicate corporate brand (Vernuccio,
2014) and at the same time serving as a platform for social interaction (Dutot, 2013). Online
platform is the most common medium used by business corporations (Vogler & Eisenegger,
2020). It enables corporations to efficiently reach larger audience and allow them to access
corporations’ information at their convenience. Online interaction with customers is now the
main ingredient of a strategic brand communication (Castello & Ros, 2012). Through online
platforms, both stakeholders and corporations can maintain their presence and exchange
information. Facebook, Twitter, Google, Youtube, Instagram, Pinterest, LinkedIn,
Dailymotion and corporate blogs are the most important to connect users with corporations
(Dutot et al, 2016). CSR-related information which communicated through online media will
be associated with corporations’ commitment and will influence their e-reputation (Kiousis et
al., 2007). Hence, corporations are recommended to utilize these platforms in order to develop
e-reputation.
Unlike traditional media, the nature of online media allows two-way communication. However,
despite scholars’ suggestion on two-way CSR communication (Capriotti, 2011; Cortado &
Chamelta, 2016), organizations that use the informing strategy outnumber those that use
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interacting strategy (Ayaji & Mmutle, 2020). The use of various social media may increase the
available sources of information but has also led to a high scrutiny on corporations’ CSR
activities (Lyon & Montgomery, 2013). That is the reason why organizations that chose to
avoid unnecessary criticisms are avoiding social media for their CSR communication purpose
despite its interactive nature (Gomez & Chamelta, 2013). Besides that, the channel that a
corporation used to communicate about its CSR initiatives can also influence stakeholders’
perceptions. The use of uncontrolled channel or a paid channel will be perceived as
corporation’s attempt to advertise itself (Ayaji & Mmutle, 2020).
The Role of CSR Communication
According to Brammer and Millington (2005), stakeholders evaluate corporation reputation
based on the signals they receive from the corporation and that signal refers to CSR initiatives.
Even corporations with bad reputation seems to value the importance of good reputation by
conducting CSR (Yoon et al., 2006) since it is proven that ethical and responsible corporations
remain favourable in the eyes of publics (Mitra, 2011). CSR activities developed by a
corporation can be used in response to bad publicity and to repair the damage on reputation
(Benn et al., 2010).
However, reputation can be strengthened by engaging in CSR activities which align with
stakeholders’ expectations and at the same time disclosing about it (Almeida & Coelho, 2018;
Carroll & Shabana, 2010; Kim, 2019). In other words, it is equally important to initiate CSR
activities that meet stakeholders’ expectations and to communicate about it. Corporations’
disclosure of their CSR efforts through annual reports are associated with good corporate
practice and other good values (Othman et al., 2011) such as reliable (Esen, 2013).
Stakeholders’ perceptions and evaluations of CSR communication influences their perceptions
and evaluations of corporate behaviour that determines positive reputation (Hetze, 2016).
Based on the signaling theory, the act of revealing positive messages related to CSR initiatives
to all stakeholders will decrease inconsistency in information, build favourable image of the
corporation and keep the stakeholders for a longer period (Castello & Ros, 2012; Walker,
2010). Furthermore, being consistently transparent about CSR contributions can help to
differentiate a corporation from its competitors (Tangngisalu et al., 2020). The awareness and
comprehension of CSR which directly or indirectly obtained by an individual through their
experiences with a corporation can be described as CSR knowledge (Kim, 2019). CSR
knowledge is important to secure the reputational benefits as an outcome of a corporation’s
CSR and CSR communication. Appropriate CSR communication is the key (Eisenegger &
Schranz, 2011) to stakeholders’ awareness of CSR as it can influence stakeholders’ attitudes
when they evaluate corporate reputation.
However, CSR communication is also found to have influence on stakeholders’ scepticism of
CSR. Stakeholders perceive CSR reporting as a tool for ‘green washing’ when corporations
attempted to hide their unethical practices (Chen & Chang, 2013). So when corporations
communicate about their CSR efforts, they also expose themselves to the public’s
condemnations (Bartlett, 2011). Stakeholders’ demands for transparency, the changes in
communication practices and information-consumption among stakeholders are the inevitable
challenges to communication practitioners (Golob et al., 2017). CSR communication that is
lacking of factual and reliable information is likely to develop negative feelings – uncertainty
– among stakeholders (Moreno & Kang, 2020). It is argued that the delivery of CSR
information is a crucial factor to be considered if a corporation want to diminish scepticism.
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To overcome the scepticism issues in CSR communication, earlier studies suggested several
factors that influence the effectiveness of CSR communication.
Effective CSR Communication
The knowledge of CSR communications developed by scholars has recognized important
aspects of CSR communication such as the content, medium and industry- or stakeholders-
specific factors. Besides these, several other factors have been identified to be important in
determining how CSR information should be communicated. In order to attain desired
corporate reputation, corporations have to ensure that they have gained stakeholders’ trust of
their CSR contributions through effective communication (Coombs & Holladay, 2013, Kim &
Ferguson, 2018).
Ayaji and Mmutle (2020) suggested that acknowledging both self-serving and society-serving
motive is a strategic approach to influence positive perceptions among stakeholders and
diminish their scepticism. Society-serving will only invites scepticism especially for a
corporation with tarnished reputation. They also recommended informing strategy over the
interacting strategy. It is due to the ability of informing strategy to abate unnecessary criticisms
which could damage the reputation of a corporation. Interacting strategy allows two-way
communication but there is a possibility of receiving negative feedback from the stakeholders.
This is also Kim & Ferguson, 2018opposite to what was suggested by Morsing and Schultz
(2006) who argued CSR communication should incorporate two-way communication by
proactively employing stakeholders’ responses.
Earlier studies found adopting third-party endorsement (Du et al., 2010; Morsing, 2006;
Morsing et al., 2008), the relevance of CSR message to stakeholders (Morsing & Schultz,
2006), message tone (Schlegelmilch & Pollach, 2005) and appropriate communication
intensity (Morshing & Schultz, 2006) are among the factors that define the effectiveness of
CSR communication. CSR information which directly communicated to the publics is not
effective compared to CSR communication endorsed by third party (Morsing, 2006). Third
party endorsement is perceived as more credible which reduce public scepticism (Du et al.,
2010). Stakeholders evaluate CSR intention based on the tone that a corporation used when
they communicate about their CSR efforts (Kim & Ferguson, 2018). They will be less sceptical
when the message tone comes with factual information.
Kim and Kim (2017) argued that transparency reduce scepticism because corporations will be
perceived as being open and fair in information sharing activities. The credibility of CSR
communication is said to be depending on the control that organizations have towards its
content and frequency. Du et al. (2010) found that sharing basic information such as
corporations’ CSR initiatives, previous CSR results and their CSR drives are important to
improve corporate reputation. Kim & Ferguson (2018) also found that CSR informativeness is
the most important attribute among what stakeholders expected for CSR communication. This
could be due to the lack of knowledge and awareness of CSR initiatives. That is why
stakeholders expect corporation to communication accurate and complete information of their
CSR efforts.
Hence, based on the review of existing literature, this conceptual paper propose a theoretical
framework as below:
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Figure 1: Proposed Theoretical Framework
Methodology
For an accurate estimate of the relationship between variables, a descriptive study usually needs
a sample of hundreds or even thousands of subjects. As such, considering the nature of this
study, a quantitative method is most suitable to analyze and measure the relationship between
those variables studied. Plus, the advantage of quantitative method is that it allows
measurement of perception, reactions and attitudes of a sample through a set of structured
questions.
This paper suggested a 22-item Likert-type scale developed by Kim and Ferguson (2018) to
measure CSR communication. It comprises all six dimensions of CSR communication as
identified by them; informativeness, third-party endorsement, personal relevance, message
tone, consistency, and transparency. The items include ‘I want to know what kinds of things a
company has achieved from its previous activities’ and ‘A lack of consistency in the company’s
CSR communication is problematic’. Corporate reputation will be measured based on a 15-
item Likert-type scale developed by Walsh and Beatty (2007). Among items included are ‘Has
employees who treat customers courteously’ and ‘Looks like a good company to work for’.
Conclusion
This conceptual paper has presented mainly about the influence of CSR communication on
stakeholders’ perceptions and evaluations of corporate reputation. CSR communication is an
essential aspect of CSR since the stakeholders’ awareness of a corporation’s CSR is depending
on its communication efforts (Moreno & Kang, 2020). Effective CSR communication is the
missing link between CSR activities and their outcomes (Kim & Ferguson, 2018). It is one
aspect that should not be neglected for corporations that have invested so much in CSR
activities.
Earlier studies also indicate that judgments about both the content and delivery of CSR
information significantly influence how stakeholders evaluates corporate reputation. Their
evaluations will also affect their behaviours towards a corporation. Hence, while planning their
CSR programs, corporations must also strategize CSR communication to strengthen their
favourable corporate reputation.
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