Public Relations (PR)
Integrated marketing communications represents the component of “Promotion” of marketing mix. It encompasses a variety of communication disciplines including advertising, personal selling, sales promotion, public relations, direct marketing and online marketing (Grewal and Levy, 2012). This is where PR comes from. It has two functions containing increase of sales and protection form unpopularity which could lead to detrimental governmental or regulatory agency activities (Tedlow, 1979). This is rather unambiguous for realizing the meaning of PR. Grewal and Levy (2012) make it explicitly that “public relations is the organizational function that manages the firm’s communication to achieve a variety of objectives, including building and maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with media”. Simply, improvement of future sales would be the foremost objective of PR.
DISCUSSION
Connection of CSR and PR via the Enhancement of Revenues
The linkage between corporate social performance (CSP) and corporate financial performance (CFP) has been investigated for over 35 years. Numerous scholars have attempted to analyze empirically their relationship, positive, neutral or negative. A lot of studies have demonstrated that there is absolutely a link between CSP and CFP (Capon, Farley, and Hoenig, 1990). According to Roman, Hayibor and Agle (1999)’s classification for such studies of past 25 years, 33 out of 62 studies report that there is a positive relationship between them whereas only 5 studies point out that there is a negative relationship.
Nevertheless, their causality, whether good CFP leads to good CSP or good CSP leads to good CFP, is still arguable. For the former causation, strong evidence is found that either CFP precedes or is simultaneous with CSP (Preston and O'Bannon, 1997). This direction of causality is also supported by later researches. The likelihood of engaging in socially responsible activities (SRA) is higher in those companies of better financial performance (Allouche and Laroche, 2005). In contrary, some scholars have also established a reverse causality that good CSP leads to good CFP. Lev, Petrovits and Radhakrishnan (2010) reason that increase in current charitable contributions is positively correlated with future growth of revenues.
Comparing to PR, one of its functions is to boost sales (Tedlow, 1979). This is also agreed by Kim (2001) that a positive association is in existence between PR and revenues. Obviously, CSR and PR can be mediated via the mutual function of boost of revenues. However, there are various instruments that can result in such an effect. It may be unreasonable and unconvincing to claim that they are equivalent. Therefore, deeper investigation on the rationales of how CSR achieves the growth of revenues is necessary to connect CSR and PR together.
Generally, augmentation of revenues should be aroused from the raise of number of customers (i.e. change in consumer buying behavior). Why do their buying behaviors change? Becker-Olsen and Hill (2005) make the point that customers are more supportive to and willing to transact with those companies of splendid CSR. Moreover, Kleina and Dawarb (2004) indicate that the extent of CSR can affect advantageously the purchasing behavior. By reference to public relations activities (PRA), they have effect on synchronizing the public behaviors with the firms (Thayer, 1968). Besides, they can also persuade public to think or act in the ways beneficial to the companies (Hutton, 1999; Hon and Grunig, 1999). Nonetheless, how does CSR change consumer buying behavior? Kleina and Dawarb (2004) answer that reputable social image is valuable in influencing favorably consumer brand evaluation, brand choice and brand recommendation. And, socially praiseworthy corporate prestige can be created through intense CSR initiative (McGuire, Sundgren and Schneeweis, 1988; Fombrun and Shanley, 1990; Fombrun and Shanley, 1990). This may be stemmed from that public is extremely impressive to those regularly altruistic behaviors (i.e. SRA). Concerning the PR, Kim (2001) makes the points that the level of effort devoted in PR is also proportional to the corporate renown. This is how CSR and PR affect public buying behavior.
From the aforementioned rationales, it is undoubtedly that both CSR and PR are fruitful to boost revenues via the intervention of buying behavior which is influenced by the extent of reputable corporate prestige. It may still be challenged that other promotion components such as advertising and sales promotion are also able to facilitate the revenues and why CSR cannot be linked to them. Therefore, another unique feature of CSR and PR is illustrated. It is unquestionable that PR can be distinguished from other promotion components because the subject matters promoted such as sponsorship of a public competition are not the company itself or do not directly relate to the company. Identically, when CSR is practiced through corporate philanthropy, the beneficiaries are those people in needs. The subject matters are also marginally relevant to the company. Thus, both SRA and PRA efforts do not aim to promote the products and services or the company itself. However, the company can still be benefited derivatively by virtue of public perceptions of such CSR or PR behaviors. Taking above two factors into consideration, enhancement of revenues and indirectly benefiting mode, it is absolutely that only CSR has simultaneously these two characteristics so can be deemed as a tool of practicing public relations.
Moderation of the Association between CSR and PR via the Intensity of Social Needs
Nonetheless, such association between CSR and PR is able to be moderated through the extent of consumers’ identification with company or C-C identification which is “…the degree of overlap in a consumer’s self-concept and his or her perception…” of CSR initiative. “…consumers have higher degrees of identification with the company and, in turn, are more likely to support the company” (Lichtenstein, Drumwright and Braig, 2004). Based on this principle, people react behaviorally in the buying process relying upon the levels of identification between their perceptions of CSR effort and self-concepts. As the relationship between CSR and PR are partially linked through the common effect of increase in revenues which is affected by consumer buying behavior, C-C identification indirectly moderate the intensity of the association between them.
Normally, public’s perceptions of CSR initiative would be identical, namely that CSR is to alleviate the society deficiencies so those companies are socially responsible, and we are also socially responsible once we support them through buying products or services form them. So, the individual self-concept is the determinant for the level of identification. Maslow's Hierarchy of Needs is applied to explain the rationale of the self-concept. The theory proposes five layers of human needs embracing physiological needs, safety needs, social needs, esteem needs and self-actualization needs. Individual must be satisfied the lower level needs before they can be satisfied the higher level needs.
Therein, social need of giving love is deemed as the self-concept in case of C-C identification. People who have been satisfied the physiological and safety needs are likely to seek opportunities of fulfilling their social needs of giving love to society. This is why some people always like to make direct donations to charitable organizations or indirect contributions through purchase of flags or other charitable objects. Alternatively, as their self-concepts are to have social need of giving love to society been satisfied, and they perceive that the companies of emphasizing CSR are where this social need can be satisfied. As a result, they identify themselves with such companies and are more likely to support such companies via buying behavior.
This indirect behavior may be too trivial in pursuing social needs, but it is still feasible because they are not required to transact deliberately and frequently with companies of respectable social images but, when they actually need some products or services, just prioritize them, instead of companies of neutral or bad social images. For instance, a person who is seeking social needs to be satisfied wants to have a car. There are two identical car dealers except that one of which has devoted substantially in CSR and another has not. Such a person is more likely to choose the former one due to the existence of social needs. But, this does not mean that the person buys a lot of cars from that car dealer, this just means that the person prioritizes that car dealer when he or she actually needs a car. Therefore, people buying behaviors are changed to be favorable for socially responsible companies. This is how the revenue is boosted by the existence of social needs.
On the other hand, aforementioned positive outcome may not be induced for people who are still pursuing physiological and safety needs to be satisfied (i.e. poor people). They just want to find companies offering the cheapest price regardless of their social contributions (i.e. no social needs) so they do not identify themselves with those socially responsible companies. Generally speaking, whether public has social need of giving love or not is essential to affect their buying behaviors as well as the extent of enhancement of revenues.
CONCLUSION
The above analysis supports that CSR can be connected to PR by virtue of the mediator of the enhancement of future revenues which is resulted from the favorable change of consumer buying behavior and intervention of corporate prestige by CSR effort, and is moderated by the degree of consumer-corporation identification which is influenced by the intensity of people’s social needs (Figure 2).
Generally speaking, PRA can be substituted by SRA, whereas, SRA cannot be replaced by PRA because PRA are unable to fulfill what SRA can achieve such as establishment of socially responsible image (Figure 3). Hence, it is concluded that the macro effects of CSR is absolutely not restricted to what is generally perceived by public (i.e. alleviation of society deficiencies) and should contains what PR can accomplish, and CSR can be deemed as a tool of maintaining public relations.
Thus, it is more beneficial for undertaking SRA instead of PRA. In light of management, it is also valuable and fruitful for management to change the traditional view of that CSR is detrimental to shareholders’ interest without any future return, and devote in CSR campaign.
APPENDIXES
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