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«13TH INTERNATIONAL PUBLIC RELATIONS RESEARCH CONFERENCE “Ethical Issues for Public Relations Practice in a Multicultural World” Holiday Inn ...»

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A number of previous studies suggest that CSR initiatives provide competitive benefits for an organization in terms of financial gains and intangible outcomes, such as public good will and favorable corporate image (e.g., Murray & Vogel, 1997; Wigley, 2008). Publics’ awareness of an organization’s CSR performances may lead to positive company evaluations. This evaluation is processed and incorporated into the information of consumers’ attitudes toward an organization (Brown & Dacin, 1997). In addition, CSR initiatives may play an important role in increasing intent to purchase products, seek employment, and invest resources in a company (Sen et al., 2006). CSR may represent a company’s attempt to “incorporate common sense policies into corporate strategy, culture, and day-to-day decision making to meet stakeholders’ needs” (Werther & Chandler, 2005, p. 324). Meeting social norms and expectations often determines success or failure in managing long-term relationships (Ledingham, 2003). In this vein, if an organization conforms to legal and ethical expectations, it creates organizational legitimacy and credibility (David et al., 2005), which in turn may help the organization build trust and long-term relationships with its various publics.

From this perspective, an organization’s commitment to CSR may actually serve as a company’s cornerstone to the promotion of long-term, mutually beneficial relationships with its publics.

Based on this line of reasoning, Hypothesis 1 posits the following:

H1: The perceptions of CSR initiatives are positively associated with favorable relationships between an organization and its publics.

Even though CA and CSR are considered to have equivalent roles in generating organizational legitimacy and credibility (Luo & Bhattacharya, 2006), a company’s good deeds may provide a distinctive competitive edge over CA in developing positive, long-term OPRs. This tendency may arise if CSR performances are viewed as ethical behaviors derived from organizational values and culture, which often motivate people to identify themselves with the organization (Lichtenstein, Drumwright, & Braig, 2004).

Thus, Hypothesis 2 is as follows:

H2: CSR perceptions have a more positive influence on OPRs than do CA perceptions.

Relationship Management in Public Relations The concept of relationship management has been an important topic in public relations for recent decades, suggesting that the main function of public relations is to build and maintain mutually beneficial relationships between organizations and their publics (Hon & Grunig, 1999;

Ki & Hon, 2007; Ledingham, 2003). A relationship in public relations, often referred as OPR, is defined as “the state which exists between an organization and its key publics in which the actions of either entity impact the economic, social, political, and/or cultural well-being of the other entity” (Ledingham & Bruning, 1998, p. 62). From a relational perspective, public relations can contribute to enhancing mutual understanding and benefits between organizations and their publics through the management of OPRs (Ledingham & Bruning, 1998).

Proposing relationship management as a general theory in public relations, Ledingham (2003) noted that evaluations of relationship dimensions can demonstrate the state of ongoing OPRs and further predict publics’ perceptions and intended behaviors. Corresponding to this notion, public relations researchers have paid considerable attention to developing scales for measuring the dimensions of OPR (e.g., Bruning & Galloway, 2003; Bruning & Ledingham, 1999; Hon & Grunig, 1999; Kim, 2001), as well as to examining the linkage between well-developed 578 relationships and positive outcomes (e.g., Coombs & Holladay, 2001; Hong & Yang, 2009; Ki & Hon, 2007; Yang, 2007). Among those relationship scales, this study adopted Hon and Grunig’s (1999) because several studies have used and tested their indicators for measuring OPRs (e.g., Huang, 2001; Ki & Hon, 2007; Yang, 2007). Hon and Grunig’s measurement of OPRs involves six relational dimensions: trust, control mutuality, satisfaction, commitment, exchange relationship, and communal relationship. However, only the first four indicators are considered to reflect the state of ongoing OPRs because exchange and communal relationships represent types of OPRs rather than underlying dimensions (Hung, 2005).

Trust is defined as “one’s party’s level of confidence in and willingness to open oneself to the other party” (Hon & Grunig, 1999, p. 3). Trust builds on the belief that one’s future needs will be satisfied by another’s actions (Anderson & Weitz, 1989). As one of the fundamental factors in facilitating positive relational outcomes, trust requires confidence in an exchange party’s reliability and integrity (Morgan & Hunt, 1994). In this respect, Hon and Grunig (1999) identified three underlying dimensions of trust: integrity, dependability, and competence.

Integrity refers to the belief in an organization’s fairness. Dependability is the belief that an organization will comply with its promises, while competence is the belief in an organization’s ability to keep its promises (Hon & Grunig, 1999).

Control mutuality refers to “the degree to which parties agree on who has the rightful power to influence one another” (Hon & Grunig, 1999, p. 3). Power differences are inevitable in the social context because resources are limited, and various parties desire those resources (Pfeffer & Salancik, 1978). However, when such an imbalance of power shifts excessively toward organizations, they may abuse the power over their publics solely for their own benefit. Thus, an appropriate restriction on each party is necessary to maintain a good relationship.

Satisfaction is defined as the degree of positive feelings that one has about another (Hon & Grunig, 1999). Satisfaction occurs in a relationship when positive expectations about the relationship are reinforced (Hecht, 1978). A favorable relationship can be maintained if parties in the relationship provide sufficient benefits to each other and both parties feel satisfied with the relationship (Roloff, 1981). Commitment is the degree to which both parties invest their resources in maintaining a relationship (Hon & Grunig, 1999). As the degree of commitment to a partner in a relationship increases, the desire to end the relationship decreases (Thibaut & Kelley, 1959). Thus, commitment is considered a core factor in promoting a continuous, long-term relationship (Morgan & Hunt, 1994).

Supporting the importance of cultivating good OPRs, several studies have demonstrated that well-managed OPRs enhance publics’ attitudes toward an organization (Coombs & Holladay, 2001; Ki & Hon, 2007), perceptions of organizational reputation (Hong & Yang, 2009; Yang, 2007), and behavioral intentions (Bruning & Ralston, 2000; Ledingham & Bruning, 1998) and even lead to actual behavior (Bruning, 2002). For example, Ki and Hon (2007) found that perceptions of OPRs influence attitudes and behavioral intentions toward an organization among members of a key public. In their study, satisfaction and control mutuality appeared to be strong influential factors in inducing positive attitudes and supportive behaviors toward the organization. Hong and Yang (2009) also showed that relational satisfaction was positively associated with strong customer-company identification and favorable word-of-mouth recommendations. In Coombs and Holladay’s (2001) study, well-managed OPRs served as a buffer protecting an organization’s image. Specifically, people having a favorable (or neutral) relationship were more likely to evaluate an organization’s reputation positively than were those having an unfavorable relationship.

579 All of these research findings have supported the notion that OPRs play a key role in influencing publics’ perceptions, evaluations, and behavioral intentions. In other words, favorable relationships between an organization and its publics may lead to positive evaluations of the organization and its products, promote product purchase, and increase supportive behaviors toward the organization (Hong & Yang, 2009; Ki & Hon, 2007). Thus, Hypotheses 3 and 4

predict the following:

H3: Favorable OPRs are positively associated with positive evaluations of an organization.

H4: Favorable OPRs are positively associated with behavioral intentions (purchase, employment, and investment) toward an organization.

This study also attempted to explore the role of OPRs in the relationships between CSR performances and the intended outcomes (i.e., positive evaluations and behavioral intentions).

Focusing on the mediating role of OPR, Research Question 1 asks how CSR initiatives affect evaluative and behavioral outcomes.

RQ1: Does CSR have a direct effect on publics’ evaluations of an organization and their behavioral intentions, or does it affect these outcomes through OPRs?

Methods This study used an online survey with a sample of undergraduate students to collect data. Six companies from different industrial categories were selected for this study: Hewlett-Packard and Dell in Technology, Nike and Adidas in Consumer Products, and Haagen-Dazs and Ben & Jerry’s in Dairy Food. These pairs of companies were chosen because one in each category is perceived as being actively involved in CSR activities, while the other company is seen as being an industry competitor (Penn, Schoen & Berland Associates, Burson-Marsteller, & Landor, 2009). The companies are also relevant to the survey sample. Rather than using a single corporation, the use of multiple corporations for testing the hypothesized associations may help to increase the generalizability of the proposed model across companies. To avoid sensitizing participants to measurement instruments, each participant was randomly given a questionnaire asking about one of the six companies (Wimmer & Dominick, 2006).

Participants Participants were recruited from undergraduate communication courses at two large research universities, and extra credit was given to students for their participation. A total of 500 students participated in the study, but responses from 15 students were dropped from the data because they failed to complete the survey. Thus, the total sample size used for data analysis was 485. A larger percentage of participants were females (79.2%, n = 384) than males (20.8%, n = 101).

Participants ranged in age from 18 to 37, with a mean age of 20. The class standings of participants were as follows: 3.3 % (n = 16) were first-year students, 39.8% (n = 193) were second-year students, 33.2% (n = 161) were third-year students, 18.4% (n = 89) were fourth-year students, and 5.4% (n = 26) were fifth-year and graduate students. The majority of participants were Caucasian (82.5%, n = 400), while 5.6% (n = 27) were African American, 4.3% (n = 21) were Hispanic or Latino, 3.5% (n = 17) were Asian, and 4.1% (n = 20) were in other racial categories.

580 Data Collection Procedure This study used an Internet-based survey, and students who signed up for the survey received an e-mail inviting them to participate in the experiment. The e-mail cover letter included the Web address for an informed consent form and questionnaire. Each participant was randomly assigned to a questionnaire asking about one of the six companies. As a result, participants were fairly evenly distributed to the sampled companies: 17.3% (n = 84) for Hewlett-Packard, 19.2% (n =

93) for Dell, 15.7% (n = 76) for Nike, 15.5% (n = 75) for Adidas, 16.7% (n = 81) for HaagenDazs, and 15.7% (n = 76) for Ben & Jerry’s. Participants were first asked about their perceptions of CA, CSR, and OPRs regarding the company. Then, they responded to questions measuring their evaluations of the company and their behavioral intentions toward it. At the end of the questionnaire, there were questions about demographic information, such as gender, age, school year, and race.

Measures Corporate ability. Five items taken from Marin and Ruiz (2007) were used to assess participants’ perceptions of CA. These items included the following: “[Company name] is a leader in the industry,” “[Company name] offers a high quality product,” and “[Company name] offers good customer service” (α =.847). These items used a 7-point Likert-type scale ranging from 1 = “strongly disagree” to 7 = “strongly agree.” Corporate social responsibility. CSR was measured by 22 items adapted from previous research (Carroll, 1991; David et al., 2005). This CSR scale consisted of four sub-dimensions: economic, legal, ethical, and discretionary responsibilities. Economic responsibilities were measured using four items, such as “[Company name] maintains a high level of operating efficiency” and “[Company name] strives to continuously improve the quality of its products” (α =.802). Legal responsibilities were assessed with four items, such as “[Company name] ensures that products meet all legal standards” and “[Company name] meets all environmental regulations” (α =.808).

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