TAINTED GIFT?: HARMFUL EFFECTS OF A BAD PROFIT COMPANY’S CORPORATE SOCIAL RESPONSIBILITY ACTIVITY ON THE ASSOCIATED GOOD NONPROFIT ORGANIZATION’S FUTURE
A Dissertation presented to the Faculty of the Graduate School at the University of Missouri-Columbia
In Partial Fulfillment of the Requirements for the Degree
Doctor of Philosophy
by JIYANG BAE
Dr. Glen T. Cameron, Dissertation Supervisor
DECEMBER 2006 The undersigned, appointed by the dean of the Graduate School, have examined the dissertation entitled
TAINTED GIFT?: HARMFUL EFFECTS OF A BAD PROFIT COMPANY’S CORPORATE SOCIAL RESPONSIBILITY ACTIVITY ON THE ASSOCIATED GOOD NONPROFIT ORGANIZATION’S FUTURE
Presented by Jiyang Bae,
A candidate for the degree of Doctor of Philosophy
And hereby certify that, in their opinion, it is worthy of acceptance.
Dr. Glen T. Cameron, Chair
Dr. Wayne Wanta
Dr. Glenn Leshner
Dr. Paul Bolls
Dr. Phillip Wood ACKNOWLEDGEMENTS
Getting my Ph.D. was harder than I expected. Five years ago when I first decided to begin this academic journey, I didn’t realize how hard it would be to earn my Ph.D. If I had known, perhaps I would have thought twice about taking the airplane to the U.S.
First, I would like to acknowledge my advisor, Dr. Glen T. Cameron who offered
endless support in overcoming those harsh times. When I first encountered him at the
2003 AEJMC as a master’s student, I had no chance to talk with him. But I could see how
much he loved his students. My first impression of Dr. Cameron led me here and inspired
me to build a nest at MU. My instincts were not wrong. During two and half years, Dr.
Cameron has been lavish with his praise although I was not that much magnificent. He has always shown me how to live the precious life as a good human being with humor as well as how to be a good intelligent academic researcher. I already miss him and I shall be eternally grateful to him.
I would like to acknowledge others who helped me earn my doctoral degree. I
owe a great deal to all my committee members. I feel lucky to have had them on my team.
My thank goes to prof. Wanta who were on my committee member. How many students
get the chance to have a committee member who is currently the president of AEJMC?
Also, I would like to thank prof. Leshner and prof. Bolls who are well known scholars in our field. As a research assistant in the PRIME lab when I was the first year doctoral student, I was exposed to the world of ‘experiment.’ Again, how many students
ii have the chance to be exposed to the psychophysiological methodology in our field? I
was very lucky to be the member of the first year of the PRIME lab.
I was so impressed when I first saw the figure of structural equation model in
journal articles. I promised myself to have the complicated model in my dissertation.
However, it was not an easy job to actualize it in my dissertation. Whenever I asked
stupid questions, prof. Wood responded me a wise answer to my silly question. Without
my committee members’ help, none of this would have been possible.
I am also grateful to my mother and father. Without their support, I would not
have been successful in this academic endeavor. My mom has a great sense of humor and
always made me laugh whenever I called her in Korea. Her emotional support guided me
through this perilous process. My dad has endless energy in his life and I inherited it. The endless energy helped me get this degree. Maybe, my decision to study abroad was one of the challenges in his life. Now, it is the time to pay him back.
My older brother, Young-Kyu and younger sister, Kyung-A have always made
concessions during my pursuit of a doctoral degree. Also, my new family, Sun-Min Park
(my sister-in-law), So-Eun (my niece), and Joon-Yeup Cha (my new brother-in-law) have
always given me the happiness. They deserve my thanks. Without their support, I would not be the one I am now. I wanted to make my family proud and hope I approached a small step to that door.
I also should expand my thanks to my former advisor, prof. Yungwook Kim.
Taking his class when I was a junior in Ewha was the moment that I decided to pursue
iii my public relations degree. His inspiring lectures at that time and continuous support
have been my academic energy source.
Also, I appreciate Jeongsub Lim, my academic colleague at MU. Conversations with him always led me do something more for my academic career. My Korean seniors in UF and MU should receive my thanks, too. They have been role models in building my academic career. Finally, I should thank my friends at MU. Chats with them in Ellis library were my scarce pleasure during the boring Columbia life. Sun-A Park, my roommate, also deserves my thanks. Living with her was a really pleasant life. Long distance calls and Internet messengers are the one of biggest inventions in history, I
believe. I appreciate my friends in Korea for supporting me in getting this degree.
Finally, I appreciate myself. Sometimes, life is full of surprises and unexpected
events. I thank myself for not falling apart during the pursuit of this doctoral degree.
iv TABLE OF CONTENTS
Chapter
1. INTRODUCTION ...... 1
Statement of Purpose
2. LITERATURE REVIEW ...... 5
2-1. Profit Companies’ Accountability 5 Tax Reform Act of 1935 Legitimacy Debate Period I Legitimacy Debate Period II Revised Corporate Legitimacy Revised Public Relations Functions in Profit Companies
2-2. Nonprofit Organizations’ Accountability 11
2-3. Corporate Social Responsibility 13 Definition of CSR History of Corporate Philanthropic Activity Types of CSR
2-4. Two Parties Engaging in CSR 17
2-5. Public Information Processing of CSR Message 19 Communicative Factors Used in CSR Messages
2-6. Elaboration Likelihood Model 23
2-7. Source Credibility 24
2-8. Personal Relevance 27
2-9. Suspicion Raised by CSR Message 28
2-10. Types of Public Suspicion on CSR Message 30
2-11. Leveraging Effect of Organizational Reputation and Credibility 34
2-12. Transfer Effect of Corporate Reputation and Credibility 38
v 2-13. Transfer of Suspicion to Attitude and Behavior Intention 42
2-14. Suspicion and Attitude 43
2-15. Attitude and Behavioral Intention 44
2-16. Transfer of Suspicion from Profits to Nonprofits 46
3. METHOD...... 49
3-1. Design 49
3-2. Stimulus 50
3-3. Sample Size 51
3-4. Procedure 53
3-5. Measurement of Variables 54 Reputation toward Profit and Nonprofit Organization Credibility toward Profit and Nonprofit Organization Source Trustworthiness Personal Relevance Message Elaboration Suspicion toward Profit and Nonprofit Organization Attitude toward Profit Company Attitude toward Nonprofit Organization Purchase Intention of Profit Company’s Product Donation Intention to Nonprofit Organization
3-6. Statistical Analysis 60
4. RESULTS…………………………………………………………………… ...... 61
4-1. Data Screening 61
4-2. Demographics of the Samples 61
4-3. Inducement Check 62
4-4. Manipulation Check 63
4-5. Hypotheses Testing 66 vi
4-6. Structural Equation Modeling 72 Model Identification Estimation Method Dataset Input Method Two-Step Structural Equation Modeling Evaluation of Model Fit Model Selection Invariance Model
4-7. Profit Source Model 81 Initial Measurement Model Final Measurement Model Initial Structural Model Final Structural Model
4-8. Nonprofit Source Model 94 Initial Measurement Model Final Measurement Model Initial Structural Model Final Structural Model
4-9. Invariance Model 107
4-10. Hypothesis Testing Summary 108
5. DISCUSSIONS……………………………………………………………….....111
5-1. Summaries of Supported Results 111 The Profit Source Model The Nonprofit Source Model
5-2. Explanations of Not Supported Hypotheses 115
5-3. Practical Implications of Results 122
5-4. Theoretical Implications of Results 129
5-5. Limitations and Suggestions of Future Research 132
REFERENCE...... 136
APPENDIX...... 150 VITA...... 172
vii LIST OF ILLUSTRATIONS
Figure Page
1. Trustworthiness, Relevance, and Message Elaboration………………………….33
2. Leveraging Effect of Corporate Prior Reputation and Credibility on Source Trustworthiness………………………………………………………………..38
3. Bad Profit and Good Nonprofit Association Model………………………………45
4. Profit Source Model……………………………………………………………….73
5. Nonprofit Source Model…………………………………………………………..74
6. Profit Source Final Measurement Model………………………………………….86
7. Profit Source Final Structural Model……………………………………………...87
8. Profit Source Final Measurement Model (Unstandardized)………………………88
9. Profit Source Final Structural Model (Unstandardized)…………………………..89
10. Nonprofit Source Final Measurement Model……………………………………...99
11. Nonprofit Source Final Structural Model………………………………………...100
12. Nonprofit Source Final Measurement Model (Unstandardized)………………....101
13. Nonprofit Source Final Structural Model (Unstandardized) …………………….102
viii LIST OF TABLES
Table Page
1. Demographics of Sample………………………………………………………….62
2. Inducement Check 1 and 2………………………………………………………...63
3. Inducement Check 3……………………………………………………………….63
4. Source Trustworthiness between Profit and Nonprofit Source……………………65
5. Personal Relevance between Local and Societal Level…………………………...66
6. Source Affiliation and Source Trustworthiness…………………………………...66
7. Level of CSR Value and Personal Relevance……………………………………..67
8. Source Affiliation and Level of CSR Value………………………………………68
9. Corporate Reputation and Credibility on Source Trustworthiness………………..69
10. Corporate Reputation on Corporate Credibility…………………………………...70
11. Nonprofit Reputation and Credibility on Source Trustworthiness………………..70
12. Nonprofit Reputation on Nonprofit Credibility…………………………………...70
13. Corporate Reputation and Credibility on Nonprofit Source’s Trustworthiness…..71
14. Nonprofit Reputation and Credibility on Profit Source’s Trustworthiness……….71
15. Profit Source’s Trustworthiness on Personal Relevance………………………….72
16. Profit Source Model Variable Names……………………………………………..82
17. Profit Source Model Fits…………………………………………………………..84
18. R-Square Values for Profit Source Model………………………………………...84
19. Pre and Post Nonprofit Impacts…………………………………………………...91
ix 20. Pre and Post Nonprofit Impacts by Source Affiliation Type……………………...92
21. Pre and Post Profit Impacts………………………………………………………..93
22. Pre and Post Impacts on Profit by Source Affiliation Type……………………….94
23. The Nonprofit Source Model Variable Names……………………………………95
24. The Nonprofit Source Model Fits…………………………………………………97
25. R-Square Value for Nonprofit Source Model……………………………………..98
26. Pre and Post Nonprofit Impacts………………………………………………….106
27. Pre and Post Profit Impacts………………………………………………………107
28. Invariance Model…………………………………………………………………108
29. Hypothesis Testing Result Summary…………………………………………….108
30. Deterioration of Corporate Reputation…………………………………………...118
31. Nonprofit Reputation and Credibility……………………………………………120
x CHAPTER ONE
INTRODUCTION
Statement of Purpose
All business in a democratic country begins with public permission and exists by public approval. Arthur Page, vice president of public relations at AT&T. Excerpted from Cutlip, Center, Broom, 1999, p.457.
Many people believe profit companies cause various social problems and so they believe profit companies have an obligation to mitigate those problems (L’Etang, 1994).
As a result, since the 1960s, at a time when rapid social environmental change occurred,
profit companies have had to deal with social concerns as well as with their financial
performance (Ackerman, 1973). As Arthur Page, the vice president of public relations at
AT&T pointed out, all profit companies in a democratic country begin to feel that they
should get public permission and approval of their existence in the society by behaving in
a good manner. In correspondence with such public expectations, various forms of
corporate social responsibility (CSR) activities such as sponsorship, cause-related
marketing (CRM) and philanthropic donations were created to show that profit
companies deal with such concerns actively. Although most companies recognize the
importance of CSR for maintaining their business successfully and spend lots of money
for participating in socially desirable fields, many companies have failed to produce
desirable outcomes. Marketing scholars have studied why doing good does not always
produce good results (Sen & Bhattacharya, 2001). The basic assumption of their studies
1 was that companies could maximize positive outcomes by modifying managerial
decisions toward the effective CSR activity. For example, they studied what kind of match between profit companies and nonprofit organizations produce more positive
outcomes compared to other combinations, and what types of CSR (CRM, sponsorship,
and philanthropic donation) produce more returns than other types of CSR. However, marketing scholars and practitioners ignored one important point - how to communicate
their CSR activity is equally important to managing CSR activity (Clark, 2000; Ihlen,
2006). The majority of CSR studies only focused on the functional match of CSR types and few studies focused on the communication problems of CSR. Because, however,
publics have been overly exposed to profit companies’ biased campaigns and learned
many persuasion skills from those exposures, it is very difficult to make publics perceive
and feel as profit companies initially intended (Boush, Friestad, & Rose, 1994; John,
1999). Thus, this paper delves into this communication problem of CSR activity by
testing the mediating effects of publics’ suspicion toward CSR messages (Objective 1).
A large portion of publics expect to know how profit companies accomplish their
accountability in our society and respond to the corporate accountability issue in an
active manner. For example, 80 percent of British participants in the MORI study
expressed a desire to know about CSR activity and to support profit companies to use
additional money in publicizing profit companies’ CSR activity because they want to
reward good companies and punish bad companies (Dawkins, 2004). This phenomenon is
not limited to the British. International MORI research revealed similar results showing that many publics in North America and Northern Europe actually punished socially irresponsible companies in certain ways – i.e. not buying products from socially
2 irresponsible companies (Dawkins, 2004). In terms of publics’ rewards and punishments on CSR activity, the majority of researchers have tested whether profit companies’ CSR activity produces intended results to profit companies’ bottom line. And, most studies are executed under the marketing perspective which makes the majority of dependent variables chosen be related to benefits of the corporate side. However, this research trend neglects one important point - when considering the fact that CSR activity associates profit companies with social causes such as nonprofit organizations that serve public interests and societal wellbeing, the impact that nonprofit organizations would receive from the association with profit companies should be studied, too. Some might think that nonprofit organizations would always get benefits from profit companies’ inputs such as money, product supports, and increased public visibility. However, several cases showing negative consequences to nonprofit organizations can be found in the newspapers
(Gibelman & Gelman, 2002). For example, nonprofit organizations that received supports from tobacco, alcoholic beverage companies, or companies producing anti-environmental products such as painting and chemicals often become the target of public scrutiny – i.e. whether receiving money from those profit companies fits with nonprofit organizations’ mission; whether associating with such profit companies ironically helps profit companies build positive reputations through insincere CSR activities. Finally, such public scrutiny often made publics suspicious of nonprofit organizations’ mission and accountability, and thus publics withdraw their willingness to donate money to those nonprofit organizations. What if profit companies’ CSR activity is detrimental to nonprofit organizations’ reputation and fundraising efforts by public suspicion described here? Should profit companies keep donating their money to nonprofit organizations? Or,
3 should profit companies quit such CSR activity because it contradicts the sincere purpose
of their CSR (i.e. mitigating social problems and improving public wellbeing)? Few
researchers have chosen to study this gray area and little has been found on whether
profit organizations’ CSR activity influences the receiver side positively or negatively.
Thus, this study will have both parties (profit companies and nonprofit organizations) engaging in CSR activities as the objects of the research to show the impacts of CSR communication on both parties (Objective 2).
4 CHAPTER TWO
LITERATURE REVIEW
Profit Companies’ Accountability
In the early 1900s, a big debate about profit companies’ CSR activity occurred
concerning whether a profit company needs to behave in a socially desirable manner,
beyond their ultimate raison d’etre - profit maximization. Nobel Prize winner Milton
Friedman is the representative scholar who supported the notion that ‘profit maximization
is the only and utmost goal of a profit company.’
Tax Reform Act of 1935
Before World War II, publics believed that it was inappropriate for profit
companies to be involved in social actions such as corporate philanthropic giving (Smith,
1994). Enhancing the societal wellbeing was viewed as the duty of government, churches, and individuals, and not the duty of profit companies. Publics believed that the mission of profit companies was to fully maximize their bottom lines for stockholders. Thus, social actions that do not produce direct benefits for stockholders were viewed as an illegitimate
activity (Kelly, 1998). Given this social mood, the Tax Reform Act of 1935 was enacted in
1935. The Tax Reform Act of 1935 defined corporate philanthropic gifts as tax-deductible
only when they produced direct benefits to profit companies. This act is a good example
of the extreme corporate benefit motivation in the continuum of corporate benefit vs.
corporate citizenship motivation (Kelly, 1998).
Legitimacy Debate Period I
5 The debate as to whether CSR is a legitimate corporate activity accelerated in the
1950s. In 1954, a stockholder sued the A. P. Smith Company. The stockholder asked the courts to prohibit the A. P. Smith Company from making an unrestricted contribution that did not directly benefit the corporation and its stockholders. Contrary to the stockholder’s hope, the New Jersey Supreme courts ruled that the unrestricted gift in question could be allowed as an act of corporate citizenship (A.P. Smith Manufacturing Co. v. Barlow, 1953,
1954). This ruling is heralded by many in the philanthropic sector and by corporations because it authorized corporate philanthropic activities as a legitimate program.
However, it failed to provide stockholders with any direct relief from corporate leaders who indulged their personal philanthropic interests by using corporate resources.
Thus, others continued to argue that corporate philanthropy is an inappropriate use of corporate funds unless it specifically helped the profit companies’ bottom line. Milton
Friedman (1970) strongly supported the stockholders’ argument, saying that corporate managers have a heavy duty to make maximum profits for their shareholders, and activities that do not have a direct relationship with the corporate bottom-line should be banned. Furthermore, he argued that corporate managers did not have any right to decide corporate philanthropic activities because such activities reduced returns to stockholders and he viewed that philanthropic giving is spending stockholders’ money for a general societal interest (Stendardi, 1992).
Legitimacy Debate Period II
Several decades later, the social mood had changed and publics began to recognize that CSR was an activity for which profit companies should take responsibility
(Blair, 1998; Llewellyn, 1990; Smith, 1994). Some people embraced the notion that profit
6 companies have certain obligations to behave in a socially responsible way because profit companies are intertwined with society as a whole and their actions could significantly affect society. In 1954, the New Jersey Supreme Court rationalized the notion, stating:
“Modern conditions require that corporations acknowledge and discharge social as well as private responsibilities as members of the communities within which they operate….Indeed, the matter may be viewed strictly in terms of actual survival of the corporation in a free enterprise system” (cited from Cutlip, 1990, p. 514). The editor of
Tulane Law Review (2001) commented on this ruling by saying: “The court was clearly swayed as much by philanthropic concerns and social policy as by statutory law. It dedicated a large portion of its opinion to discussing the economic and social importance of corporate contributions, particularly those made to universities. The opinion was quite prophetic as such donations have grown even more significantly in the forty-five years since the opinion was written.” Kelly (1998) considered this act as a good example representing the extreme corporate citizenship motivation in the motivation continuum of corporate benefit vs. corporate citizenship.
Revised Corporate Legitimacy
The debate about whether profit companies’ CSR activity is legitimate is no longer viable because most profit companies have realized the power of publics through dealing with outspoken public activism and governmental regulations. Most researchers also agree that the legitimacy debate of CSR is out of date (L’Etang, 1994; Heath, 1997;
Heath & Ryan, 1989; Pratt, 2006). And they believe “business is a social institution, and its practitioners, like those in all social institutions, are interrelated with the other groups in society” (Krooss & Gilbert, 1972, p.318). Sethi and Steidlmeier (1995) argue that “the
7 large multinational corporation must become an active agent for social change if it is to make the world safe for democracy and indeed for capitalism” (p.12). Boynton (2002) further pointed out that the past debate came from the erroneous dichotomy that considers corporate profitability and its social responsibility as an opposite concept. Ironically,
Milton Friedman who claimed that ‘the business of business is business’ and ‘the primary goal of business is to maximize shareholders’ profits’ in 1970 changed his mind when he suggested that business managers should spend their profits investing in valuable social causes (Grow, Hamm, & Lee, 2005).
There are three different tactics by which profit companies earn their legitimacy in our society – endorsement, association, and self-evidence. Coombs (1992) explained the three tactics in the perspective of issue management and these are useful concepts to explain why profit companies try to associate with nonprofit organizations to earn public approval (legitimacy). Endorsement refers to a legitimate third party’s approval or support. By earning endorsement from a legitimate party, a party who does not get a public approval can receive the legitimacy. Association refers to an establishment of a relationship between the legitimate third party and a party who does not have public approval. By associating with a legitimate third party, the party who does not have public approval can get public approval. Self-evidence refers to the self-explanatory intrinsic characteristics that are always seen as legitimate objects from publics. A party can get legitimacy by their own intrinsic characteristics. In this study, profit companies can get legitimacy in our society by getting endorsement from legitimate nonprofit organizations or by associating with legitimate nonprofit organizations. Or, some profit companies, by themselves, already have the legitimacy thanks to their intrinsic good characteristics.
8 Now, “corporate citizenship is a strategy for legitimization” (Llewellyn, 1990, p.22).
Revised Public Relations Functions in Profit Companies
In the past, public relations activities executed within profit companies were largely one-way asymmetrical activities such as the press agentry/publicity model
(Grunig, 1989; Grunig & Hunt, 1984; Grunig, 1992). These one-way asymmetrical activities were performed on behalf of profit companies’ interests rather than publics’ and society’s benefits. Olasky (1987) defined these two different perspectives as micro vs. macro public relations. Public relations activities which are executed with the only concern for profit companies can be categorized to the micro public relations perspective.
However, as profit companies acknowledge the power and value of publics, public relations functions began to evolve to fulfill more symmetrical activities such as supporting valuable social causes and tracking social issues. That is, profit companies began to fulfill the macro public relations activity which concerns the impact of public relations activity on the whole society (Olasky, 1987). Even, Edward L. Bernays, known as a Father of Public Relations, asserted that “Public relations is the practice of social responsibility. It holds the key to America’s future” (Grunig & Hunt, 1984, p.47). This assertion is quite contradictory to the general people because the public relations functions were originated from asymmetrical viewpoints and their main duty was perceived as “the public be damned” (Grunig & Hunt, 1984, p.47). However, as activist groups began to support societal level purposes, profit companies that did not have public relations functions within their organizations in the past began to have those functions to respond activists’ requests actively (Grunig & Hunt, 1984) because public relations functions can help organizations do the right thing (Cutlip, Center, & Broom, 1999).
9 The concept of ‘publics’ also evolved as profit companies recognize their value.
The term ‘publics’ is different from ‘consumers’ or ‘shareholders’ in that publics are not necessarily groups who buy a company’s products or have a share in the company. Rather, the concept ‘publics’ is similar to stakeholders. Freeman (1984) defined stakeholders as
“those groups who can affect or are affected by the achievement of an organization’s purpose” (p.49). Community, governments, competitors and social activist groups can be stakeholder groups (Carroll, 1991) as well as traditional stakeholder groups such as owners, customers, suppliers, and employees (Ansoff, 1965). For example, suppliers can influence a company’s production process negatively by providing bad quality of supplies.
Also, motivated employees can influence a company’s competitive ability positively.
However, the stakeholder viewpoint is still different from ‘publics’ viewpoint although ‘publics’ viewpoint is closer to stakeholder viewpoint than stockholder viewpoint (profit companies’ only concern is a group of people who have stocks). Publics are usually formed around issues that they are interested in; share a common idea about the issue; and have opposition and rational discourse within a group (Price, 1992, p.26) rather than they are defined by their affiliation such as media, employee, and government
(Stakeholder perspective often divides people based on their affiliation). Rather, the term can be defined as “any group of people who are tied together, however loosely, by some common bond of interest or concern and who have consequences for an organization”
(Newsom, Turk, & Kruckeberg, 1999, p.90). When thinking the fact that people who have same affiliation (e.g. employee and media) do not always share same issues and do not always agree with each other, it would be clearer that the concept ‘publics’ is different from the concept ‘stakeholders.’
10 As profit companies recognized that those loosely tied people also can influence
their companies as well as stockholders and they cannot choose public groups while they
can avoid unprofitable markets (Grunig & Repper, 1992), they felt a need to take care of
those public groups. Thus, lots of modern corporate philanthropic activities began with
the pursuit of mutually beneficial activities for both publics and corporations through
public relations functions (Ledingham & Bruning, 2000). And even, the basic tenet of
public relations is perceived as public responsibility (Grunig & Hunt, 1984).
Nonprofit Organizations’ Accountability
Some people think that nonprofit organizations have untouchable legitimacy
because the mission of those organizations is to serve societal wellbeing. However, in
recent decades, nonprofit organizations have suffered from the public scrutiny that profit
companies usually faced because high-profile nonprofit organizations such as the United
Way of America and National Association for the Advancement of Colored People
(NAACP) were found guilty of fiscal mismanagement and managerial misconduct
(Epstein, 1993; Herzlinger, 1996). These tainted events made publics skeptical about donating money to nonprofit organizations (Boynton, 2002; Herzlinger, 1996; Webb,
Green, & Brashear, 2000). In addition to the inner circle competition, the media environment is not favorable toward nonprofit organizations’ fund-raising efforts.
Gibelman and Gelman (2002) content analyzed news articles reporting the wrong doing of faith-based groups from 1995 and 2001 and found that those groups were described as susceptible organizations to managerial and accountability inadequacies. Big scandals such as the United Way of America exacerbated the negative reputation of nonprofit
11 organizations and made people anxious and suspicious about nonprofits’ transparency,
ethics, and accountability. In a study showing how pervasive abuses are among nonprofit organizations, Tuckman and Chang (1998) found that fundraising abuses of nonprofit organizations were not pervasive and those misconducts were concentrated only on a few nonprofit organizations. Although a few nonprofit organizations were engaged in such abuses, the impact of abuses was significant. These negative incidences can negatively influence the ability to compete for charitable dollars and recruit volunteers in all nonprofit organizations.
General publics’ individual donations have been a very important financial source to nonprofit organizations. In 1997, individual donations accounted for more than 75 percent of the total income of nonprofit organizations (Reis, 1998). Because of its big contribution to nonprofit organizations’ financial management, public scrutiny toward nonprofit organizations’ accountability in recent decades became the big challenge to nonprofit organizations that want to maintain good relationships with current and potential donors, accompanied by the decreased governmental support and funding competition among nonprofit organizations (Webb, Green, & Brashear, 2000). As a result of this accountability issue, nonprofit organizations should be more careful in selecting
their profit company partners who donate money and products by associating with them
for their reputation management and fulfillment of good citizenship. If nonprofit
organizations misselect their profit counterparts that have a bad reputation history or
negative industry affiliation such as chemicals, tobacco, and alcoholic industry, it is
possible to be the target of intense public scrutiny concerning the mission of nonprofit
organizations and finally the target of donation boycotts. Thus, it is getting more
12 important to build and maintain a good reputation among their potential donors or volunteers for nonprofit organizations.
Corporate Social Responsibility
Definition of CSR
In recent decades, it is an axiom that profit companies that do not follow
Corporate Social Responsibility principles cannot survive in a competitive environment.
Social responsibility is “a value that specifies that every situation – from family to firm- is responsible for its members’ conduct and can be held accountable for its actions”
(Boynton, 2002, p.243). Applying social responsibility to the profit corporate setting,
Carroll (1991) proposed that CSR is composed of four parts - economic, legal, ethical and philanthropic (discretionary) responsibility. He argued that all four parts should be satisfied if a company wants to be a good citizen in a society. Carroll (1991) cited famous economist Milton Friedman’s statement to explain the relationship of the four components. Friedman only cared for the first three parts of CSR, noting that “to make as much money as possible while conforming to the basic rules of society, both those embodied in the law and those embodied in ethical custom” (cited in Carroll, 1991, p.43) and rejected philanthropic acts, saying that ‘the business of business is business.’ That is, the traditional economic viewpoint embraces economic, legal and ethical responsibility as a ‘must follow’ principle while philanthropic activity is not directly related to profit companies’ bottom lines. In this paper, the term CSR embraces all four parts of corporate social responsibility. However, this paper specifically focuses on profit companies’ philanthropic activity (the fourth part of Carroll’s definition) because the domain that this
13 paper consults is focused on the corporate philanthropic activity expressed in corporate
press releases. Thus, the term CSR will be used for dedicating corporate philanthropic
activities as well as embracing all four parts of CSR.
History of Corporate Philanthropic Activity
Among various corporate social responsible activities such as economic, legal, ethical and philanthropic activity, corporate philanthropic activities are often utilized as community relations strategies (Daugherty, 2000; Levy, 1999; Smith, 1994). Corporate philanthropic activities include philanthropic money donations, voluntary labor donations, product donations, sponsorship, cause-related marketing (CRM) and so on. Researchers showed that corporations can improve the external environmental conditions in which they operate by using philanthropic programs (Fenez, 2003; Porter & Kramer, 2002) and also they are often used to maintain good relationships with government entities and nonprofit organizations to enhance customers’ brand loyalty and employees’ satisfaction, as well as, for building good relationships with their communities (Koten, 1997; Levy,
1999).
The railroads are often credited with some of the earliest instances of corporate philanthropy in the early 1890s when they constructed YMCA hostels along railroad routes. These small YMCA hotels provided a safe haven for railroad travelers and employees, and, along with the YMCA organization, spurred growth of the railroads themselves. By enabling safe travel, corporate gifts to the YMCA also benefited railroad investors. These early corporate gifts created the expectations that corporate philanthropic activity could directly benefit the corporation, as well as help the beneficiary (Koten,
1997). However, in the 1800s and early 1900s, many corporations planned corporate
14 philanthropic programs merely for their own interests (Ledingham & Bruning, 2000).
Types of CSR
Three distinctive CSR activities have been utilized to increase a corporate
reputation as good citizenship - cause-related marketing (CRM), corporate sponsorship,
and corporate philanthropic giving.
Cause-Related Marketing: Varadarajan and Menon (1988) defined a cause-related
marketing (CRM) as “the process of formulating and implementing marketing activities
that are characterized by an offer from the firm to contribute a specified amount to a
designated cause when customers engage in revenue-providing exchanges that satisfy
organizational and individual objectives” (p.60). CRM was first named in 1983 to
describe American Express’ corporate prosocial campaign. American Express executed a
campaign to raise money for the restoration of the Statue of Liberty. Whenever
consumers used American Express credit cards, American Express donated one cent. Also,
when new cards were issued, American Express donated one dollar for the restoration of
the statue. The campaign was quite successful for American Express because new credit
card holders increased by 45 percent and total credit card usage increased by 28 percent
(see Varadarajan & Menon, 1988). Following by this successful campaign, many
corporations adopted this new campaign type for boosting their revenues as well as
raising donation money for good social causes. As described here, CRM is innately
conditional because the amount of donation money is determined by how much money is
raised after the campaign and the raised money is transferred to social causes (e.g. nonprofit organizations) after calculating the corporate revenue increment generated by the campaign.
15 Sponsorship: Sponsorship is a little bit different from CRM but still conditional. It
refers to the corporate investment in social causes or events for enhancing corporate reputations by supporting those events with financial and non-financial ways (Dean,
2002). As a sponsor, a profit company can associate their corporate or brand name exclusively with supported social causes or events by providing informative or financial support (Becker-Olsen, 2003). For example, L’Oreal Cosmetics sponsored
Cadamujer.com to provide various contents related to Latin American women’s lifestyle, beauty, and fashion. The site is very popular among Latin American women. The purpose of the sponsorship was to increase L’Oreal’s brand awareness. The sponsorship was successful in increasing subscription of L’Oreal’s contents as well as Web site’s traffic
(see Becker-Olsen, 2003). Another example is Coca-cola’s exclusive right to advertise its sponsorship link with Olympic Games by providing monetary support as an official sponsor. Like those examples, while having exclusive association rights, corporate sponsors promise to donate a certain amount of money or support to social causes such as nonprofit organizations regardless of how successful the campaign will be. Various supports from companies are transferred to social causes before, during, or after the campaign. However, the nature of the sponsorships is still conditional because they have exclusive association rights and actively publicize and inform their association with good social causes to specific target audiences.
Philanthropic Donation: The third category of CSR activity is the corporate philanthropy. Corporate philanthropy includes several kinds of donations from pure charitable giving to donations as a business expense. Contrary to some people’s belief, profit companies cannot receive a tax deduction in the United States if they declare their
16 donation is a charitable gift or if the donation does not relate to their core business. If
they want to receive a tax deduction, they have to prove such a donation brings a
reasonable expectation to the corporate bottom line. That is, it is not technically corporate
philanthropy anymore if they define their donations as a business expense and receive a
tax deduction (Kelly, 1998). In spite of no tax deduction, many corporations regularly
donate their money unconditionally to nonprofit organizations. Also, some of them do not
make any effort to publicize their donation to the mass media. Of course, some
corporations report their donations to the IRS (Internal Revenue Service) to receive up to
a 10 percent tax deduction. Those corporations often try to publicize their good behaviors
to the media. For example, more than 80 percent of Fortune 500 corporations actively
publicize their engagement of corporate social responsibility issues on web pages (Esrock and Leichty, 1998). However, it is still unconditional because they have no exclusive right to associate their name or brand with the social causes, and there is no tangible benefit from the donation, except the tax deduction. Although they implicitly try to increase their reputation by corporate philanthropy, their corporate philanthropic activity is relatively unconditional, compared to CRM and sponsorships. Considering the fact that those companies can donate their money to more conditional activities and have more tangible benefits, the unconditional nature of corporate philanthropy becomes clearer.
Think about the fact that CRM is the easiest CSR activity in terms of corporate financial drainage because the result of CRM campaign is marginal in the worst scenario.
Two Parties Engaging in CSR
There are many researchers studying the effectiveness of CSR types such as
sponsorship, cause-related marketing (CRM), and philanthropic donations. They
17 primarily research how much benefit profit companies can get from CSR activity. This
research trend is quite self-explanatory because most studies have been done in marketing
and advertising fields whose main interests reside on the corporate side. However, it is
very difficult to find studies focused on how much benefit nonprofit organizations can get from CSR association with profit companies (c.f. Basil & Herr, 2003). As seen in ‘Types of CSR’ section, CRM, sponsorship and philanthropic donation activities occur only
when two parties are engaged – givers (profit companies) and receivers (nonprofit
organizations). Thus, it is necessary to study the benefits and losses of both parties in
these activities.
Usually, profit companies are givers of money, labor, and supports. And
nonprofit organizations are receivers of those benefits. The strategic association between
the two parties is usually created by the expected benefits of both parties. Possible
benefits of profit companies are reputation enhancement, direct boost of sales and
increased employee motivation. Most of research in this area is done to reveal these
benefits that profit companies can get; although there is another substantial party
(nonprofit organizations) in this process. The unrevealed area of this process is whether
the association with profit companies can bring corresponding benefits to nonprofit
organizations. Representative benefits of nonprofit organizations are increased funding
source, increased visibility or reputation of nonprofit organizations. However, there are
also possible detrimental effects of the strategic association for nonprofit organizations;
e.g. decreased reputation caused by selecting the wrong profit partners (e.g. sponsees of
tobacco companies). Because the external motivation that profit companies try to show
through CSR activity is to contribute to our society, whatever the real internal motivation
18 of the profit companies is, it can be detrimental to profit companies too if their CSR
activities ironically produce negative by-products to our society in general (e.g. increased
skepticism toward CSR activity as a whole) or to nonprofit organizations (e.g. decreased
individual donations). In this sense, it is necessary for both parties to study what benefits
and losses can be produced for nonprofit organizations via profit companies’ CSR
activities. Also, because the ideal public relations function (the main executers of CSR
activity in profit companies) pursues mutually beneficial relationships with publics in the
long-term, a study delving with the effectiveness of CSR for the receivers’ side should be conducted in the public relations domain.
Public Information Processing of CSR Message
Communicative Factors Used in CSR Messages
Many communication scholars in marketing and advertising, as well as public relations practitioners have sought to identify message factors influencing persuasive messages. However, relatively few scholars have tried to identify message factors influencing CSR messages. To seek what factors in CSR messages influence publics’
perception, attitude, and behavior intention (key constructs studied in the communication
field) and to reveal the relationships among those constructs, it is necessary to find out
what message factors practitioners usually vary in CSR messages.
To find out those factors, an informal content analysis was conducted. Fortune
500 corporations were selected as a research sample and approximately 20 percent of the
companies were randomly selected via SPSS random number generation technique. A
total of 116 companies were selected as a research sample. Selected companies all had
19 their own Web sites and had either an archived press release center or web contents
describing CSR related activity. Among many press releases and CSR web contents for
each company, the most recent press release or web contents containing CSR activity
from January 1 to August 31, 2006, was selected for the content analysis.
Through the informal content analysis on press releases, it was found that most
parts of the press releases were similar among those companies. This might be because
press releases were usually targeted toward mass media, and communication practitioners
have known what formats and contents news releases should have if their releases easily
pass the gatekeeping process. Most press releases introduced a profit company’s CSR
activity first and provided one or more source quotations. In this study, source refers to “a
person or institution quoted within a news story” (Sundar, 1998, p.55). Public relations
practitioners and advertisers want to include source quotations that have positive
testimonials about their positions (Slater & Rouner, 1996). Those quotations came from
their Chief Executive Officer (CEO), public relations managers, high-ranked managers in
their companies; or associated nonprofit organizations’ CEO, fundraising managers, and
high-ranked managers in nonprofit organizations. Then, press releases finalized the
ending of their messages with a short blurb about the profit company’s CSR history and financial performance; and an associated nonprofit organization’s brief introduction about missions, reputation and their good CSR history. Finally, it had a by-line which indicates who wrote the press release. In most times, internal public relations practitioners were the authors of press releases.
Through the informal content analysis, it was found that practitioners creating
CSR messages usually made variations of press releases by the selection of a source
20 quotation. For example, practitioners got quotations from their internal managers or from
their external sources, especially associated nonprofit organizations’ managers. In relation
with the selection of quotation contents, practitioners usually selected contents describing the value generated by the CSR activity executed. Also, the value imposed on press releases corresponded to the value endorsed by sources quoted in the releases. There are two different levels of value imposed in quotations and contents – individual/community level and societal level value. For example, in a press release, a profit company’s community relations manager was chosen as a quotation source and the manager described the value derived from their CSR activity. CEOs usually put their CSR value
on the specific recipients or the communities supported by the activity for making target
audiences feels closer to the benefits; or to the society for making target audiences feel
the benefits are on a higher level. Several real examples of these variations follow. The
first example shows that the quotation source is on the receiver side and the value
imposed on the CSR is in the specific recipient level.
"Policing costs Canadians about $7.9 billion a year, or almost two-thirds
of the total criminal justice expenditures," said Edgar MacLeod, chief of
Cape Breton Regional Police Service. "By automating the capture and
analysis of evidence, we decrease the administrative burden on our
officers, so they can focus on their main responsibility, which is crime
prevention."
Excerpted from IBM press release written by Steven Tomasco, August 21, 2006
The following example shows that the quotation came from a nonprofit receiver
21 side and the value imposed on the CSR is in the societal level, not the community level.
“The Asia 21 Young Leaders program aims to help prepare tomorrow's
leaders for the challenges and responsibilities of global citizenship,” said
Asia Society President Vishakha Desai. “Asia 21 Fellows have a unique
opportunity to collectively bring fresh thinking and imaginative solutions
to address emerging global issues. The Asia Society is thrilled to be
partnering with Merrill Lynch in launching this important initiative.”
Excerpted from Merrill Lynch press release written by Elaine Merguerian, February 23,
2006
The following example contains a quotation from a giver side and the source put the CSR value on the societal level.
“Leading health organizations estimate the direct economic cost of
blindness to be about $42 billion, yet treatments to prevent and cure
blindness are among the most successful and cost-effective of all health
interventions,” said David J. Bronczek, president and chief executive
officer of FedEx Express. “That's why FedEx has renewed and expanded
its long-time commitment to working with ORBIS to help eradicate one of
the world's most devastating, yet solvable, health challenges.”
Excerpted from FedEx press release, August 9, 2006
Thus, this study chose to research the effectiveness of CSR message variations, especially focusing on two variations: source affiliation type (a profit company as a giver
22 vs. a nonprofit organization as a receiver) and the level of CSR value imposed on the message (specific individual/community value vs. distant general societal value).
Elaboration Likelihood Model
The Elaboration Likelihood Model (ELM) can be adopted as the theoretical framework to produce possible hypotheses related to two message factors (source affiliation type and level of CSR value) in this study. ELM explains how people can be differently persuaded by the same message through central or peripheral routes. The central route processing is related to the elaboration-based message process whereas the peripheral route processing is related to the less cognitively effortful inference process
(Priester & Petty, 2003). Elaboration refers to the effortful message processing. People can form an attitude by central routes when they encounter strong message arguments.
People can be persuaded by peripheral routes when they encounter a message cue such as attractive sources. Whether people will be persuaded by the either central or peripheral route is determined by several factors such as motivation, ability, and relevance (or involvement). How much people are motivated to elaborate a message, how much ability people possess to elaborate a message, and how much a message is perceived as relevant to the message recipients can influence what persuasion route, either central or peripheral, will be activated in people’s minds (Petty & Cacioppo, 1986).
Among several determinant variables, the perceived personal relevance of the message is one of the most important determinants motivating people to process the message (Petty, Priester, & Brinol, 2002). In a manipulation of an own university setting
(high personal relevance) vs. distant university setting (low personal relevance), people
23 were more persuaded by high personal relevance message when the arguments were strong; people were less persuaded by high personal relevance messages when the arguments were weak than in the low relevance message setting (Petty & Cacioppo,
1979). Even the simple change from the third person (e.g. he) to the second person (e.g. you) could increase personal relevance to the message (Burnkrant & Unnava, 1989). This strong determinant (personal relevance) of elaborated message processing is related to the second message factor (level of CSR value) found in the informal content analysis of this study.
Also, the degree to which a source is perceived as trustworthy can be a strong determinant on increasing people’s elaborated message processing according to ELM
(Petty, Priester, & Brinol, 2002). When source trustworthiness was manipulated in various ways – either manipulating it with the degree to which the source can provide accurate information or manipulating it with the degree to which the source advocates a self-serving position, the results confirmed that a source’s low trustworthiness played as a strong determinants of increasing people’s message elaboration (Petty, Priester, & Brinol,
2002; Priester & Petty, 1995). This strong determinant (source trustworthiness) of elaborated message processing is related to the first message factor (source affiliation type) found in the informal content analysis of this study.
Source Credibility
The first variation detected from the informal content analysis was a source affiliation type: whether the source quoted in CSR press releases is affiliated to profit companies (giver) or to nonprofit organizations (receiver). The source credibility research
24 provides the useful understanding of this factor variation and its effectiveness. The source
credibility research mainly delves with what personal characteristics and situational contingencies of spokespersons can influence the effectiveness of the source (Stafford,
Stafford, & Day, 2002). Although there is a deep-rooted debate about what constitutes a source’s positive characteristics and to what extent those characteristics influence message effectiveness (Stafford, Stafford, & Day, 2002), a source’s perceived trustworthiness, expertise and attractiveness could be the most important characteristics producing positive impact on message receivers (Ohanian, 1990). Among three important characteristics, the source trustworthiness is chosen based on theoretical framework
(ELM) of this study. Source’s trustworthiness was often defined as the degree of objectiveness (unbiasedness) perceived by message recipients (Gotlieb & Sarel, 1991;
Straughan, Bleske, & Zhao, 1996). When a source is perceived as objective and disinterested in the topic, the source is evaluated as more persuasive (Hovland & Mandell,
1952). In relation to the source variation of this study (profit vs. nonprofit), profit companies’ quotations obtained from internal sources in a press release will be perceived as less objective than quotations obtained from nonprofit companies’ source because publics easily see the profit company’s gain or vested interest when the company
advocates their own position. That is, the degree of objectivity will be perceived differently by message recipients, depending on whether the quotation comes from profit companies or nonprofit organizations because it affects publics’ perception about a source’s vested interest (Reid, Soley, & Bergh, 1981; Salmon et al., 1985; Straughan,
Bleske, & Zhao, 1996; Szykman, Bloom, & Blazing, 2004). Especially, low credibility of publics toward the public relations practitioners and their activity can make publics’
25 suspicion (skepticism) on the real motive of corporate charitable giving deeper. Public relations scholars (Callison, 2001; 2004; Callison & Zillman, 2002; Sallot, 2002) have
shown that “if audiences distrust public relations practitioners and their employers when
possible company benefits are assumed to result from their communication (Durham,
1997; Sallot, 2002), it would seem that the very nature of the public relations industry,
which involves guarding organization reputation, is at the root of its credibility problems”
(Callison, 2004, p.373). Even, the simple mention that the spokesperson of an event is an
internal public relations practitioner affiliated in profit companies (not generic
spokesperson) was enough to make people perceive the source credibility negatively
(Callison, 2001, 2004; Callison & Zillmann, 2002). Thus, the following hypothesis is
created.
H1-1: The source affiliation type will influence people’s source trustworthiness.
Low source trustworthiness influences the message recipients’ motivation to
process messages more deeply because people usually seek to acquire an accurate
perception of external reality (Gotlieb & Sarel, 1991; Petty, Priester, & Brinol, 2002).
Previous study showed that people were likely to elaborate a message endorsed by low
trustworthy source more thoughtfully. In contrary, people were less likely to elaborate a
message endorsed by high trustworthy source and more likely accept the message without
effortful message thinking (Priester & Petty, 1995). Thus, the following hypothesis is
created.
H1-2: Low source trustworthiness will increase people’s message elaboration.
Many researchers suggested that previous studies about ‘source’ showed that
26 readers could discern the difference of quotes from other paraphrases, but the effect of such discernment on readers’ evaluation about news stories is not clear (Slater & Rouner,
1996; Sundar, 1998). Many scholars reasoned that the unclear relationship between source trustworthiness and its impact on audiences’ attitude, evaluation, and behavior change could be attributed to the various circumstances which moderate relationships such as personal involvement, direct experience, and dispositional factors of audiences
(Gunther, 1988; Petty & Cacioppo, 1986). Personal involvement (personal relevance) can be related to the second message variation found in the informal content analysis of this study among several determinants moderating the relationships between source trustworthiness and audiences’ attitude, evaluation, and behavior change.
Personal Relevance
Personal relevance refers to a perceived importance of an object or mental
distance to the topic (Gotlieb & Sarel, 1991; Petty & Cacioppo, 1986; Salma & Tashchian,
1985). Messages perceived highly relevant to message recipients can make recipients
involve in cognitive effort to process deep information processing (Celsi & Olsen, 1988;
Gotlieb & Sarel, 1991; Petty & Cacioppo, 1979; Petty, Priester, & Brinol, 2002;
Zaichkowsky, 1985). ELM posits that high personal relevance to the message topic
makes people scrutinize the message more intensely and if the message contradicts a
personal existing belief, people tend to counterargue it and finally the persuasion
effectiveness is decreased (Bilandzic, 2006; Petty, Priester, & Brinol, 2002). Thus, the
second message variation (two different levels of value imposed in quotation contents –
individual/community level and societal level value) found from the informal content
27 analysis can influence message recipients’ perceived relevance with the message and
consequently affect to persuasion effectiveness. As described above, a manipulation of
own university setting (high personal relevance) influenced people to be persuaded more
than a distant university setting (low personal relevance) (Petty & Cacioppo, 1979). Also,
the simple change from the third person (e.g. he) to the second person (e.g. you) could
increase personal relevance to the message (Burnkrant & Unnava, 1989). Thus, the
following hypotheses are created.
H1-3: The level of CSR value will influence people’s personal relevance. H1-4: High personal relevance of a CSR message will increase people’s message elaboration.
Suspicion Raised by CSR Message
ELM posits that a message source’s low trustworthiness and high personal
relevance to the message topic will increase people’s elaborated message processing. In
this study, people’s elaborated message processing will be linked to the concept
‘suspicion.’
Nature of Suspicion
Suspicion refers to “a dynamic state in which the individual actively entertains multiple, plausibly rival hypotheses about the motives or genuineness of a person’s behavior” (Fein, 1996, p.1165). That is, perceivers become suspicious of the target when they have many plausible hypotheses in inferring the target’s motive (Szykman, Bloom &
Blazing, 2004).
Suspicion has a very strong impact on minimizing people’s fundamental
attribution errors. Research has shown that people have a stable and strong tendency to
erroneously attribute target behavior to the target’s internal disposition although the
28 target’s behavior was forced by external situations (Fein, 1996). This phenomenon refers
to the fundamental attribution error. Jones and Harris’ (1967) study clearly demonstrated
people’s fundamental attribution error. In the study, they required participants to read either a pro-Castro or an anti-Castro speech, and then asked them to infer the speechwriter’s true attitude toward Castro. Surprisingly, participants answered that the person who wrote the pro-speech would have a positive attitude toward Castro although they were informed that the author did not have any choice in selecting whether to write a
pro- or anti-Castro speech. This indicates that people are apt to attribute target behavior to an internal tendency rather than an external situation, even though a clear situational
force is presented. A great amount of research has shown that “eliminating the
correspondence bias in the inferences drawn by participants in Western cultures has
proven to be unexpectedly difficult, even in studies designed to make the situational
constraints surrounding an actor’s behavior seem extremely strong and obvious” (Fein,
1996, p.1166).
Strikingly, however, people trigger a very sophisticated and active attribution
process when they become suspicious of something, causing them to reduce their
fundamental attribution errors and accurately judge the target’s real motivation. Fein
(1996) clearly demonstrated how suspicion is effective in reducing people’s stable
attribution errors. He manipulated contextual information to make participants suspicious of the real motives of the target by providing the target’s fictitious persuasive speech.
Although, at first, participants were informed that an external force created the target’s
persuasive speech, they attributed the original disposition to the target, as expected by people’s stable attribution errors. However, when the researcher presented the situation
29 with ulterior information about the target, it made participants become suspicious of the target’s motive and participants minimized their correspondence bias and tried to judge the target’s motive with an active and elaborated attributional processing.
When applying this psychological process to CSR field, people should attribute a
profit company’s CSR activity to its internal disposition because people usually
erroneously attribute target’s behavior to the target’s internal disposition. In other words,
people should think that the profit company’s genuine motive of CSR activity is based on
its innate philanthropic character (i.e. altruistic motive). However, when people encounter
certain combinations of two main CSR message factors (source affiliation type and the
level of CSR value in this study); they will engage in elaborated message process. For
example, the combination of a low trustworthy source type and a highly relevant message
topic will lead people to elaborate given messages according to ELM. Thus, people engaged in elaborated message process will become suspicious of the profit company’s
real motive engaging in CSR activity because suspicion refers to “a dynamic state in
which the individual actively entertains multiple, plausibly rival hypotheses about the
motives or genuineness of a person’s behavior” (Fein, 1996, p.1165). In short, when
people encounter some combinations of message factors, they actively entertains multiple,
plausibly rival hypotheses about the motives (i.e. profit maximization and image
building) or genuineness of the profit company’s CSR activity by engaging in the
elaborated message processing. Consequently, people will try to judge accurately why the
profit company engaged in a CSR activity.
Types of Public Suspicion on CSR Message
There are several different interpretations (hypotheses) on the motives about
30 profit companies’ CSR activity (Carroll, 1991; Rifon et al., 2004; Wood, 1991). The first
public interpretation (hypothesis) type about CSR motive is an altruistic motive. People
who believe that CSR is conducted based on an altruistic motive think that profit companies engage in CSR for contributing to the whole society regardless of its returns.
These people think that CSR is not a profit company’s strategy for enhancing its reputation or bottom line. They believe profit companies fully satisfy when the society’s wellbeing is enhanced regardless of returns.
The second type of public interpretation (hypothesis) is a profit maximization
motive. People who interpret CSR with this hypothesis think that profit companies
engage in CSR activity just because they want to get economic benefits through a CSR
activity. Cause-related marketing can directly increase profit companies’ bottom line
because the company earns a proportion of consumers’ CRM product purchase. They
believe that profit companies would not donate their money or sponsor a valuable social
cause if profit companies expected no returns.
People often hypothesize that both economic and non-economic forces drive
profit companies to engage in CSR. Within this economic/non-economic mixture motive
type, people think that profit companies will consider their social image as well as
economic returns. Publics believe that profit companies’ CEO will know the long-term returns of CSR activity such as corporate image enhancement although such investment will reduce the bottom lines in the short-term by giving money to social causes. Based on the calculation of short-term costs and long-term benefits, publics believe, profit companies’ CEO will determine the degree of CSR activity.
Other plausible hypotheses related to profit companies’ real motive behind CSR
31 activity are related to the political and institutional power motive. People often
hypothesize that profit companies engage in CSR activity because those companies want
to make their external environment favorable to their business. By engaging in CSR,
publics believe, profit companies can win politicians, law enforcers/founders, and activist
groups over to their side. Through this disguised activity, publics believe that profit
companies can protect their autonomy from external turmoil. An ethics motive can be
another hypothesis that people often entertain. Under this hypothesis, people think that
profit companies engage in CSR because it is morally the ‘right’ thing to do.
In short, when people encounter certain combinations of two main CSR message
factors (source affiliation type and the level of CSR value in this study), they will engage
in different degree of message elaboration. A high personal relevance makes people elaborate given messages according to ELM. Also, a low source trustworthiness makes people elaborate given message actively according to ELM. Interestingly, Slater and
Rouner (1996) found that source credentials are not as important as journalists have believed because the study result showed that variation of source expertise and bias were not effective in changing participants’ evaluations about news stories that they are not highly involved with. That is, the result shows that more strong determinant of message elaboration is personal relevance rather than source trustworthiness. And, the degree of
source trustworthiness does not influence the degree of perceived personal relevance..
Thus, the combination of a low trustworthy source type and a highly relevant
message topic will lead people to elaborate given messages very deeply. The combination
of a high trustworthy source and a high relevant message will lead people to elaborate the message but it will not be as stronger as the combination of a low trustworthiness and a
32 high relevancy. The combination of a low trustworthy source type and a low relevant
message topic will not always lead people to elaborate given messages actively in
accordance with the result of Slater and Rouner’s (1996) study. The combination of a
high trustworthy source and a low personal relevance will only lead people to elaborate
messages in a very low chance (see Figure 1).
Figure1. Trustworthiness, Relevance, and Message Elaboration
People in the deep message elaboration process will become suspicious of the profit company’s real motive engaging in CSR activity because they have multiple hypotheses about the real motive of the profit company such as altruistic, profit maximization, image building, and ethics. Therefore, based on the combination of a source trustworthiness (profit vs. nonprofit), a perceived relevance
(individual/community vs. society), and suspicion literatures, following hypotheses are created.
H2-1: When a profit source presents an individual/community level value in a CSR message, people will more elaborate the profit’s CSR motive than when a nonprofit source presents a societal level value (the combination of a low trustworthiness + a high relevance vs. the combination of a high trustworthiness + a low relevance).
33 H2-2: When a profit source presents an individual/community level value in a CSR message, people will more elaborate the profit’s CSR motive than when a nonprofit source presents the same value (a low trustworthy vs. a high trustworthy source quotation in the high relevant topic). H2-3: When a nonprofit source presents an individual/community level value in a CSR message, people will more elaborate profit’s CSR motive than a profit source presents a societal level value (the combination of a high trustworthiness + a high relevance vs. the combination of a low trustworthiness + a low relevance). H2-4: When a profit source presents a societal level value in a CSR message, people will more elaborate profit’s CSR motive than a nonprofit source presents a societal level value (a low trustworthy vs. a high trustworthy source quotation in the low relevant topic). H2-5: People’s CSR message elaboration will increase people’s suspicion toward a profit company’s CSR motive.
Leveraging Effect of Organizational Reputation and Credibility
People’s source trustworthiness can be influenced by several factors. One of the
most powerful factors influencing people’s source trustworthiness is profits companies’ and nonprofit organizations’ prior reputation. Although there is a lack of consensus on what reputation is, Gotsi and Wilson (2001) concluded that reputation refers to “a stakeholder’s overall evaluation of a company over time” (p.29) after reviewing numerous literatures. A good corporate reputation brings several tangible and intangible benefits to the organization’s environments. A good reputation can draw a promise of favorable media coverage, well supported legitimacy from community, and favorable
advocacy from activists. Also, a good corporate reputation can be the buffer to prevent corporate crisis, prevent threats of negative media exposure, and activists’ boycott
(Fombrun, Gardberg, & Barnett, 2000).
Some scholars (Bae & Cameron, 2006a; Campbell, 1999; Dean, 2003/4; Goldberg
& Hartwick, 1990; Lyon & Cameron, 2004) have tested the effectiveness of the prior
corporate reputation on people’s perception. Lyon and Cameron (2004) showed that
34 participants’ responses toward bad publicity could be different, depending on prior
corporate reputation. They manipulated the corporate reputation as good or bad.
Participants were asked to read different fictitious news stories describing corporate
response strategies to the negative information. The results clearly showed that in times
of crisis, a company could have more broad response strategies if it had a good reputation
prior to the crisis because consumers are apt to believe what the company says is more
honest than others. Bae and Cameron (2006a) also tested the leverage effect of corporate
prior reputation on publics’ inference about real motives when profit companies donate
money to nonprofit organizations. The result showed that publics inferred self-interest
motives from the company’s CSR message when they thought the profit company had a
bad reputation before the donation occurred. On the other hand, they perceived the donation as a mutually beneficial activity when the profit company was considered as having a good prior reputation. That is, these results show that prior organizational reputation is an important factor in influencing consumers’ perceptions toward the source trustworthiness.
Another important factor leveraging people’s perception toward source trustworthiness is corporate credibility. Corporate credibility refers to the perceived trustworthiness and expertise of a company (Newell & Goldsmith, 2001). Just as a communication spokesperson has credibility, a company has credibility, too. To maintain good corporate credibility, companies conduct corporate advertising in addition to the product advertising because corporate credibility can significantly influence people’s attitude and behavior intention toward the company (Lafferty & Goldsmith, 1999).
Corporations have several internal spokespeople to represent their own voices and so
35 corporate credibility can influence a spokesperson’s trustworthiness.
H3-1: A profit company’s reputation will influence the profit company’s source trustworthiness positively. H3-2: A profit company’ credibility will influence the profit company’s source trustworthiness positively. H3-3: A profit company’s reputation will influence corporate credibility positively.
Like profit companies’ prior reputation and credibility, nonprofit organizations’ prior reputation and credibility can produce several benefits. For example, a positive nonprofit reputation blocks negative publicity toward the organization and enhances the organization’s relative competitiveness among other nonprofit organizations in fund- raising activities (Bennett & Gabriel, 2003). Sargeant (1999) and Schlegelmilch (1988) further showed that nonprofit organizations’ good reputation could influence publics’ willingness to donate money in the future. Thus, the following hypotheses are created.
H3-4: A nonprofit organization’s reputation will influence the nonprofit organization’s source trustworthiness positively. H3-5: A nonprofit organization’s credibility will influence the nonprofit organization’s source trustworthiness positively. H3-6: A nonprofit organization’s reputation will influence the nonprofit organization’s credibility positively.
When applying this reputation and credibility literature to the CSR context, the combination of two different (profit companies’ and nonprofit organizations’) prior reputations and credibility can leverage people’s perception of source trustworthiness toward profit and nonprofit organizations. Especially, when profit companies have a bad reputation and credibility history, it is possible that associations with those bad profit companies will influence people’s interpretation of the source quotations provided by nonprofit organizations because people will be curious about why such a good nonprofit organization associates with bad profit companies and even provides good endorsement
36 statements about positive CSR value produced by profit companies. Also, the main
purpose of profit companies’ utilization of nonprofit source is to get some positive
impacts from good nonprofit organizations’ reputation.
As explained earlier, the quotation from nonprofit companies will have a high trustworthiness compared to profit companies’ one and so people will not elaborate the
message much. However, if a good nonprofit organization allies with a bad reputation
company and endorses the bad company’s CSR value positively, the nonprofit source
quotation can equally or more increase people’s message elaboration level as a profit
quotation source usually does because people perceive the nonprofit source is not
trustworthy as usually it is. Thus, the Figure 1 presented earlier can be changed to Figure
2. In Figure 2, the nonprofit source quotation is perceived as untrustworthy. However, in
a low relevance condition, the degree of people’s elaboration will be maintained at a medium low level (in other words, people’s perceived relevance alone will not influence
people’s suspicion on the nonprofit organization’s CSR association if the source
trustworthiness is maintained as a good status and it only influence people’s suspicion on
the nonprofit organization when the source trustworthiness of the nonprofit organization
is decreased by profit company’s bad reputation history). Thus, the following hypotheses
are created.
H3-7: A profit company’s reputation will influence the associated nonprofit organization’s source trustworthiness negatively. H3-8: A profit company’s credibility will influence the associated nonprofit organization’s source trustworthiness negatively. H3-9: A nonprofit organization’s reputation will influence the associated profit company’s source trustworthiness positively. H3-10: A nonprofit organization’s credibility will influence the associated profit company’s source trustworthiness positively. H3-11: A profit company’s source trustworthiness will not influence people’s personal relevance of CSR message.
37
Figure2. Leveraging Effect of Corporate Prior Reputation & Credibility on Source Trustworthiness
Transfer Effect of Corporate Reputation and Credibility
As discussed in ‘Two Parties Engaged in CSR’ section, the unrevealed research
area is about whether the association with profit companies can produce corresponding
benefits for nonprofit organizations. There are possible detrimental effects of the strategic
association for nonprofit organizations; e.g. decreased reputation caused by selecting
wrong profit partners (e.g. sponsees of tobacco companies). Thus, it is necessary to be
studied about what benefits and losses can be produced for nonprofit organizations via
associations with profit companies.
In addition, as discussed in ‘Nonprofit Organizations’ Accountability’ section, nonprofit organizations have suffered from public scrutiny because high-profile nonprofit
organizations such as the United Way of America are found to be involved with fiscal
mismanagement and managerial misconduct (Epstein, 1993; Herzlinger, 1996) and so finally those tainted events made publics skeptical of donating money to the whole
nonprofit organizations (Boynton, 2002; Herzlinger, 1996; Webb, Green, & Brashear,
38 2000). If a good nonprofit organization misselects its profit counterparts that have a bad
reputation history or negative industry affiliation such as chemicals, tobacco, and
alcoholic industry, it is possible to be the target of a intense public scrutiny about
nonprofit organizations’ motive why the nonprofit organization receive tainted money
from bad profit companies although the nonprofit organization has maintained a good
reputation historically.
To explain possible harmful effects of profit companies’ CSR association with
good nonprofit organizations, the concept ‘transfer effect’ is introduced here. Because
CSR activity basically makes two parties (usually profit companies and nonprofit
organizations) engaged, the transfer effect between two parties can be occurred. Here, the
transfer effect refers to ‘the positive or negative movement of people’s evaluation on both parties generated by CSR activity from profit companies to nonprofit organizations or from nonprofit organizations to profit companies.’ People can evaluate both parties’ prior reputation (before CSR association is created) and this evaluation can influence people’s
interpretation on the real intention of CSR motive, attitude and behavioral aspects when
they encounter a CSR message. The possible outcome of a transfer from party A to party
B can be beneficial to both parties. This is the basic anticipation of both parties when they decide to make associations. This outcome is defined as a mutual benefit status in this
study.
However, the outcome of reputation (and credibility) and suspicion transfer from party A to party B can be detrimental to party B while beneficial to party A. In this paper, this is defined as an exploitation status of one party because one party is exploited by
CSR activity. Conversely, party A can be exploited by CSR activity. For example,
39 nonprofit companies can enjoy increased funding sources from profit companies through
sponsorship by giving an exclusive right to a company while the profit company can lose
their reputation when the sponsored event conducted by the nonprofit organization is not
successful as expected (e.g. the sponsored event was evaluated as mismatched event with
the company’s reputation by people). In a long-term, a party’s misconduct can influence
other party’s reputation although the association was perceived as successful one at that
time, too.
Also, the outcome of a transfer from party A to party B can be detrimental to
both parties. This status is defined as a mutual damage status in this paper. For example,
if a bad reputational company that wants to increase its reputation by doing CSR activity
associates with a nonprofit organization while the nonprofit fail to conduct promised
social event successfully, people’s evaluation of the association can damage both parties’
reputation.
Although there are many combinations between profit companies’ reputation and nonprofit organizations’ reputation (i.e. good profit + good nonprofit, good profit + bad
nonprofit, bad profit + good nonprofit, bad profit + bad nonprofit, neutral profit + good
nonprofit, and so on), in reality, profit companies usually try to associate with good
nonprofit organizations and let nonprofit organizations endorse valuable social events
because profit companies believe that good nonprofit organizations’ endorsement will
make people more believe the sincerity of CSR campaigns. And their belief is true.
According to the MORI (2004), people more trust nonprofit organizations’ information
than profit companies’ information in relation to CSR campaigns. When people were
asked by “How far would you trust this information from companies (campaigning
40 organizations and charities)?” 17 percent of publics responded to “a great deal” if the
information was from charities while only 6 percent of publics responded to “a great
deal” if the information was from profit companies. Because of this inclination, profit
companies lean to nonprofit organizations when sending off CSR messages. That is,
profit companies want to receive positive transfer effects from nonprofit organizations’
reputation.
However, it is possible that an opposite transfer effect from profit companies’
reputation to nonprofit organizations can be occurred. In this opposite transfer process, it
is possible that nonprofit organizations’ positive reputation is tarnished by profit
companies’ negative reputation. In Harris’ (2005) study, she investigated the case of
Australian company, Tattershall. Although Tattershall is well known as a generous
community contributor, the author argued that its community relations should be delved
in a different angle because its sole business is gambling. The author pointed out that business sectors such as tobacco or adult erotica could advertise their products or companies via ambushing their real intentions (advertising their products). Because those business sectors are usually prohibited to advertise their products legally, she argued, it is possible that they utilize sponsorships for disguising their identification. In this case, if a nonprofit organization decides to receive sponsorship from those companies, it is possible that bad reputation of those sectors could transfer to the nonprofit organizations.
This study questions that what if a nonprofit organization with a good reputation
(credibility) becomes a quoted source in a profit company’s (with bad reputation) CSR
message for advocating and endorsing the individual and societal level values (profit
companies’ exploitation of nonprofit organizations). This question will be answered by
41 testing a structural model among variables later.
Transfer of Suspicion to Attitude and Behavior Intention
This study postulates that when people read CSR messages with a variation of the source affiliation type and the level of CSR value, they will get different degrees of
message elaboration – from a high elaboration to a very low elaboration. When a bad profit company’s source presents individual level value of its CSR activity, the heightened elaboration will occur and produce multiple and plausibly rival hypotheses about why profit companies engage in CSR activity such as altruistic, profit maximization, image building and ethics. When a good nonprofit organization’s source endorses a bad profit company’s societal level value of the company’s CSR activity, relatively a low elaboration will occur and produce a single or few rival hypotheses (i.e. only altruistic motive) about profit companies’ CSR motives. Producing multiple rival hypotheses (heightened message elaboration) is defined as a suspicion in this study. Also,
when a good nonprofit organization associates with a bad profit organization, the
trustworthiness of the nonprofit source will be lower in proportion to the profit source’s
trustworthiness while the level of personal relevance will be kept constant. Because the
predominant association between profit companies and nonprofit organizations is the
combination of a bad profit company and a good nonprofit organization in reality, this study adopts this combination as the background of the study. This background makes the nonprofit organization’s reputation be ineffective in influencing other perceptions. The lowered nonprofit source trustworthiness caused by the profit company’s bad reputation leads people suspicious of nonprofits’ as well as profits’ motive why they engage in CSR
42 association. The next step of this study is to answer to “how does suspicion triggered by
two message variations influence people’s attitude and behavior intention when a profit
company’s reputation is bad?”
Suspicion and Attitude
Attitude is a general positive or negative feeling about an object that consistently
affects people’s behavior (Petty & Cacioppo, 1981). In the suspicion literature, some
studies (Bae & Cameron, 2006a; Fein et al., 1990; Jones & Harris, 1967; Vonk, 1998) showed that people’s sophisticated message process tends to affect people’s attitude
formation. In Jones and Harris’ (1967) study, participants were manipulated to see the
ulterior motive of the writer. The ulterior motive triggered people’s suspicion on the
motives behind writing, and finally influenced people’s attitude toward the writer. Bae
and Cameron (2006a) triggered people’s suspicion toward CSR motive through
manipulating corporate prior reputation and found that triggered suspicion negatively
influenced people’s attitude toward the company.
In relation to the directionality of the relationship between suspicion and attitude, several studies (Bae & Cameron, 2006a; Fein, Hilton, & Miller, 1990; Szykman et al.,
2004; Vonk, 1998) have shown the negative relationship between them. For example,
Szykman et al (2004) found that consumers formed negative attitudes toward profit companies when they saw a profit company’s CSR activity because consumers were very suspicious of the incompatible motive of the company. When people cannot easily infer the real motive or see incompatible motive, they become highly suspicious about the genuine of external motive and the difficult elaboration process usually makes people
43 form less favorable attitudes (Szykman, Bloom, & Blazing, 2004). Thus, the following
hypothesis is created (see Figure 3).
H4-1: People’s suspicion triggered by the CSR message from the bad profit company will influence their attitude toward the profit company negatively.
The same directionality will be found in the nonprofit side when people perceive
a CSR message is relevant to them and when the profit company’s reputation is bad. The
negative relationship will be found in both source trustworthiness conditions (profit vs.
nonprofit) because the profit’s reputation is perceived as bad. Thus, the following hypothesis is also created (see Figure 3).
H4-2: People’s suspicion triggered by the CSR message toward the nonprofit organization will influence their attitude toward the nonprofit organization negatively.
Attitude and Behavioral Intention
Several studies have shown that attitude toward an object influences people’s behavior intention (Ajzen, 1991; Fishbein & Ajzen, 1975; Sheppard, Hartwick, &
Warshaw, 1988). For example, Fishbein and Ajzen (1975) proposed a theory of reasoned
action which explains that people’s attitude toward an object and their behavior is mediated by behavior intention because people have relatively thoughtful information processing before they perform a behavior through comparing costs and benefits of the behavior. According to the theory of reasoned action, thoughtful information processing makes people have behavior intentions and those behavior intentions are based on people’s attitude. This model has expanded to “theory of planned behavior” (Ajzen,
1991) and many studies have empirically confirmed the Fishbein and Ajzen’s (1975)
44 Figure 3. Bad Profit & Good Nonprofit Association Model
H3-3 H3-6 Profit Profit Nonprofit Nonprofit Reputation Credibility Reputation Credibility Profit Side
H3-1 H3-2 H3-3 H3-4
Source Profit H4-1 Profit H5-1 Profit 45 Trustworthiness Suspicion Attitude Purchase Source Affiliation H1-1 H1-2 H2-5
Message H6-1 H6-2 H6-3 H6-4 H6-5 Elaboration
H1-4 Level of CSR Value H1-3 Personal Nonprofit H4-2 Nonprofit H5-2 Nonprofit Relevance Suspicion Attitude Donation
Nonprofit Side model (Petty, Priester, & Brinol, 2002). Thus, following two hypotheses are created (see
Figure 3).
H5-1: People’s attitude toward the profit company will influence their purchase intention of the company’s product. H5-2: People’s attitude toward the nonprofit organization will influence their donation intention to the nonprofit organization.
Transfer of Suspicion from Profits to Nonprofits
Also, it is possible that people’s suspicion toward profit companies’ CSR motive
can influence their suspicion toward nonprofit companies’ CSR association when profit
companies have a bad reputation. In the sponsorship literature, an image transfer effect
was intensively studied. Those studies explored whether the celebrity’s image or event
image could be transferred to the profit companies’ brand or products (McCracken, 1989).
For example, Gwinner and Eaton (1999) studied whether the sporting events’ image
could be transferred to a profit company’s brand when a company sponsored the sports event. By manipulating sponsorship existence and level of event-brand congruity, they
found that the image transfer from the sport event to the company’s brand was enhanced
when the event and the brand were highly congruent. In the study, they postulated that the
image transfer from a profit company’s brand to the sport event is less likely to occur
than the image transfer from the sport event to the profit company’s brand because the
sport event is more salient in people’s mind. As a result, they only tested a unidirectional
image transfer effect. However, it is possible that the image transfer can occur in many
directions. If the CSR event is not salient in people’s minds or the profit company’s brand
image is strong enough to encroach the salience of the CSR event, the image transfer
from brand to events can possibly occur.
46 That is, people’s sophisticated investigation motivated by suspicion about profit
companies’ prosocial activity can transfer to the nonprofit side because the bad corporate
reputation will be salient as well as the image of the CSR association. People can re-think
why a good nonprofit organization chose to partner with a company with a bad reputation
and re-evaluate their perception or attitude toward the nonprofit organization. The
possible transfer effect of a bad reputation from a profit company to a nonprofit
organization makes nonprofit organizations hesitate to use donated money from profit
companies and reconsider their association with the company. Real world examples of
this postulation can be easily detected in newspapers. For example, one university has
struggled with an issue of whether it should use Walmart- and Enron-related names on
their newly built-facilities because it was discovered after the university received money
from those companies, those companies had some ethical problems. The main concern of the university might be the possibility of the publics’ bad impression transfer from those companies to the university (see Basi & Moore, 2004; Carlisle, 2004a, 2004b; DeArmond
& Schultz, 2004; Richman, 2004). Thus, following five hypotheses are created (see
Figure 3).
H6-1: People’s suspicion toward the profit company’s CSR motive will influence their suspicion toward the nonprofit organization’s CSR association. H6-2: People’s suspicion toward the profit company’ CSR motive will influence their attitude toward the nonprofit organization. H6-3: People’s attitude toward the profit company will influence their attitude toward the nonprofit organization. H6-4: People’s attitude toward the profit company will influence their donation intention to the nonprofit organization. H6-5: People’s purchase intention of the profit company’s product will influence their donation intention to the nonprofit organization.
Also, to check whether the transfer effect of suspicion, attitude, and behavior
47 intention from profit companies to nonprofit organizations produces harmful effects to
the nonprofit side, following hypotheses are created.
H6-6: People’s attitude toward the nonprofit organization will be decreased after reading CSR stories. H6-7: People’s donation intention to the nonprofit organization will be decreased after reading CSR stories.
This study proposes the exploitation status between the bad profit and the good nonprofit organization’s association. Thus, to check whether the exploitation of the profit company from the nonprofit organization, the following hypotheses are created.
H6-8: People’s attitude toward the profit organization will be influenced by the association with a good nonprofit organization positively. H6-9: People’s purchase intention toward the profit organization will be influenced by the association with a good nonprofit organization positively.
48 CHAPTER THREE
METHOD
Design
An experimental method was adopted as a research design. This study had two
different phases: Phase I – the inducement of a profit and a nonprofit organization’s
reputation level: Phase II – the manipulation of a CSR message’s factors.
In Phase I, the profit company’s and the nonprofit organization’s reputation level
was induced to have only one level because this study only tests the CSR association
effect between a bad profit company and a good nonprofit organization. The profit
company’s reputation was controlled as a low level across all conditions. The nonprofit organization’s reputation was controlled as a high level across all conditions.
In Phase II, the source affiliation type was manipulated to have two different levels – a profit company’s CEO and a nonprofit organization’s CEO. The level of CSR value was manipulated to have two different levels –an individual/community level value impacting their life directly and a societal level value impacting their life indirectly. Two factors were executed as between subject factors. This study has more than 80 items to be
rated by participants when two factors are executed as between subject factors. If a factor
is executed as a within subject factor, the items that participants will rate more than 160
items. Due to the participants’ possible fatigue, this study adopted a 2 x 2 Between
Subject design.
In terms of the effect generated by the order of presented materials in Phase I and
49 Phase II, this study did not counterbalance the order effect because one of the main
hypotheses was that the first presented corporate reputation would influence the
sequential message treatment such as source trustworthiness.
Stimulus
Before the presentation of experimental stimulus related to source trustworthiness
and personal relevance, this study made participants form negative impressions of a profit
company and positive impressions of a nonprofit organization for creating the most
prevalent combination of reputations explained in the previous section. The first stimulus
to be shown to participants was a news story about a profit’s and nonprofit’s reputation
history. News stories were created based on real news stories. However, both organizations were fictitious ones for controlling all other pre-existing responses toward real organizations. Companies’ and people’s names were changed to fictitious names and some paragraphs were modified for removing participants’ recognition and minimizing preexisting attitudes toward companies and people who were interviewed in news stories.
The content of the news stories was slightly modified based on five components of
reputation constructs revealed by Helm (2005). A profit company was described as
having a bad reputation history while a nonprofit organization was described as having a
good reputation history.
In relation to the question of whether the fictitious organizations can successfully
trigger people’s suspicion toward those organizations, this study borrows the rationale
from Bae and Cameron’s (2006a) study. The study used the same news story stimulus
(except the company names) for manipulating people’s perceived reputation level on a
50 profit and a nonprofit organization. The result showed that the fictitious news stories about organizations’ reputation triggered people’s suspicion successfully.
In Phase II, the source affiliation type and the level of CSR value had two different levels. This produces four different conditions (profit + individual/community value, profit + societal value, nonprofit + individual/community, and nonprofit + societal value). Thus, four fictitious press releases were created based on the format of real press releases. Press releases described an oil company’s CSR association with a nonprofit organization whose mission is to enhance natural environment. This is a prevalent CSR association in reality. Many oil companies try to associate themselves with environment- related nonprofit organizations because of their innate negative connotation between oil and natural environment.
In four releases, the profit company financially sponsors a nonprofit organization for helping the nonprofit organization successfully hold a social event such as an environmentally-friendly park renovation program. Each press release was presented like a profit company’s internal public relations practitioner wrote it for publicizing its good sponsorship activity. All other message variations were controlled except the two message factors. For example, press release format, length, and content except source quotation and words influencing participants’ personal relevance (such as local environment vs. national environment) were maintained equally. To maximize reality, a real oil company’s existing press release from its web site was borrowed for making the news release stimulus.
Sample Size
51 Because this study has a structural model among variables, the sample size should be determined by the standard of structural equation modeling (SEM) – the sample size of 2 x 2 Between subject design requires around 120 people in accordance with a rule of thumb, but the sample size required in SEM in this study is bigger than the experimental study’s sample size. Thus, sample size of this study was determined by the criteria of
SEM.
There are several different criteria influencing the estimation of sample sizes in
SEM: the complexity and size of a model, statistical power, a model’s goodness-of-fit, normality, methods of estimation, and so on. Bentler and Chou (1987) suggested that the minimum sample size should be five times bigger than the number of observed variables.
And, when the sample size is 10 times bigger than the number of observed variables, it is considered as an appropriate sample size. Joreskog and Sorbom (1989) also suggested an appropriate sample size calculation. If the number of observed variables is less than 12, the sample size should be 200 at least. If the number of observed variables is more than
12, the sample size should follow the rule: 1.5 * [the numbers of observed variables *
(the numbers of observed variables + 1)].
In relation to the statistical power, researchers need to increase the sample size if they want to have significant results. However, if researchers increase the sample size too much, the chi-square value (the indicator of model appropriateness) increases accordingly.
The increase of chi-square value causes an increased chance of rejection of the adopted model, which means that less appropriate models can easily be accepted. If researchers want to use the most general estimation method, Maximum Likelihood (ML), they should have a sample size of at least 100 to 150 (Ding, Velicer, & Harlow, 1995). However, if the
52 sample sizes are over 150, the sensitivity of detecting data patterns increases too, when
using ML. So, using 400 to 500 subjects with ML is not recommended (Carmines &
McIver, 1981). Hoelter (1983) suggests around 200 subjects as an appropriate sample
size to test structural models because the sample size of 200 is known as a critical value.
Thus, the sample size of this study was 364 (by considering the model’s complexity).
Procedure
364 students in MU were recruited from their three classes. All participants were randomly assigned to four different groups based on the source affiliation type and the level of CSR value condition (between-group factors). First, all participants read two news stories: one described a profit company’s bad reputation history and the other one described a nonprofit organization’s good reputation. After reading the two stories, all participants were asked to rate the profit company’s and nonprofit organization’s reputation and credibility, their attitude toward profit and nonprofit organization, their purchase intention of the profit company’s product, and their donation intention to the nonprofit organization.
After rating those factors, each group of people was asked to read different press releases written by an internal public relations manager affiliated with the profit company.
The first group of people read one press release (release I) containing a source quotation from the bad profit company. Release I notes that the bad company’s CEO endorses the individual/community level value produced by the company’s good CSR activity. The second group of people read one press release (release II), which stated that the good nonprofit organization’s CEO endorses the individual/community level value produced
53 by the profit company’s good CSR activity. The third group of people read one press
release (release III) containing source quotations from the bad profit company. Release
III states that the bad company’s CEO endorses the societal level value produced by the
company’s good CSR activity. The fourth group of people read one news release (Release
IV). Release IV notes that the good nonprofit organization’s CEO endorses the societal
level value produced by the profit company’s good CSR activity.
After reading one press release, all participants were asked to rate their perceived
source trustworthiness, personal relevance of the CSR message, their suspicion toward the profit company’s CSR motive, their suspicion toward the nonprofit organization’s
CSR association with the profit company, their attitude toward the profit company,
attitude toward the nonprofit organization, and finally their purchase intention of the
profit company’s product, and their donation intention to the nonprofit organization.
All participants were treated in accordance with IRB guidelines and were
dismissed after debriefing.
Measurement of Variables
This study adopted a very strict rule for selecting the measurement scales of each
construct. All scales selected in this study were initially developed under the strict
measurement scale development process – the purpose of those studies was to develop
reliable and valid measurement scales of each construct. Those measures were passed
through several reliability and validity tests, and verified their reliable and valid characteristics in two or more samples when the authors initially developed the scale. The selection criteria of measurement scale in this study is very similar to the selection
54 criteria used in Bearden, Netemeyer, and Mobley’s (1999) book: Handbook of Marketing
Scales: Multi Item Measures for Marketing and Consumer Behavior Research. Also, many following scholars have used those scales in measuring the same constructs.
However, there are few studies developing measurement scales for suspicion and it was difficult to find the measure. Although the authors of the suspicion scale adopted in
this study did not intend to develop the suspicion scale as the ultimate purpose of the study, they had tested the reliability of the scale with a factor analysis and found that the factor reliability range is from .67 to .80 (the recommended construct reliability is .70).
Four factors used to measure suspicion accounted for 77 percent of the total variance (the recommended minimum accounting percent is 50 percent). Their four factors correspond well to the conceptual definition of a suspicion concept, too. Also, in relation to behavior intention measurement, this study adopted frequently used scales, which also showed fairly reliable results in the related research domain. The scale measuring message elaboration was adopted based on frequent use rate by researchers.
Reputation toward Profit and Nonprofit Organization
Reputation refers to “a stakeholder’s overall evaluation of a company over time”
(Gotsi & Wilson, 2001, p.29). Profit and nonprofit organization’s reputation were measured by Helm’s (2005) scale. An empirical study showed that the corporate reputation index developed by survey results of profit companies could be successfully used for nonprofit organizations (Bennett & Gabriel, 2003). Thus, this study adopted the same scale for measuring profit’s and nonprofit’s reputation. Helm’s (2005) scale is composed of five items: quality of products, commitment to protecting the environment, customer orientation, value for money of products, and credibility of advertising claims.
55 Each item was modified appropriately for measuring nonprofit’s reputation (i.e. quality of
service, commitment to protecting the societal environment, donor orientation, value for money of donation, and credibility of mission statement). Each reputation item was measured with a 7-point Likert scale (1=strongly disagree to 7=strongly agree).
Credibility toward Profit and Nonprofit Organization
Corporate credibility refers to the degree of corporate trustworthiness and
expertise perceived by message recipients (Newell & Goldsmith, 2001). Corporate
credibility was measured by two dimensions: trustworthiness and expertise.
Trustworthiness was measured with two items using seven-point bipolar adjective scales:
sincere/insincere and trustworthy/untrustworthy. Expertise was measured with two items
using seven-point bipolar adjective scales: expert/not an expert and
experienced/inexperienced (Newell & Goldsmith, 2001).
Source Trustworthiness
Source trustworthiness is defined as the degree of objectiveness (unbiasedness)
perceived by message recipients (Gotlieb & Sarel, 1991; Straughan, Bleske, & Zhao,
1996). Source trustworthiness was measured by Ohanian’s (1990) scale. The scale is
composed of five items: dependable, honest, reliable, sincere, and trustworthy. The
opposite adjectives (undependable, dishonest, unreliable, insincere, and untrustworthy)
were used as bipolar words. Each item was measured with a 7-point adjective bipolar
scale.
Personal Relevance
Personal relevance refers to a perceived importance of the topic (Gotlieb & Sarel,
1991; Petty & Cacioppo, 1979, 1986; Salma & Tashchian, 1985). Personal relevance was
56 measured by Zaichkowsky’s (1994) scale. This scale is composed of 10 items: important, relevant, means a lot to me, valuable, needed, interesting, exciting, appealing, fascinating, and involving. Each item was measured with a 7-point adjective bipolar scale.
Message Elaboration
Message elaboration refers to the degree of mental effort to process a given message (Priester & Petty, 2003). Many studies have counted the thought lists of message elaboration for measuring people’s elaboration degree (i.e. Priester & Petty, 2003). This study chose to use a Likert scale type measurement for maintaining a coherent measurement process. Some researchers such as William P. Eveland have used a Likert scale type for the message elaboration measurement (Eveland, 2001; Eveland, Shah &
Kwak, 2003). However, their measurements were more likely to measure previous newspaper reading history rather than to measure the presented materials’ elaboration degree because their studies used a telephone survey method in which researchers asked participants to retrieve their message elaboration process rather than measuring on-time elaboration based on the presented materials. Because this study adopted an experiment providing a message stimulus, it is appropriate to measure people’s elaboration degree based on the presented message stimulus. Thus, message elaboration in this study was measured by Chow and Luk’s (2006) scale. This scale is composed of three items: the extent to which I though about the advertisements, the time I spent on thinking about the advertisements, and the amount of attention I paid to the advertisements. Each item was measured with a 7-point Likert scale.
Suspicion toward Profit and Nonprofit Organization
Suspicion refers to “a dynamic state in which the individual actively entertains
57 multiple, plausibly rival hypotheses about the motives or genuineness of a person’s behavior” (Fein, 1996, p.1165). Suspicion toward profit and nonprofit organization was measured by Rifon et al.,’s (2004) scale. This scale is composed of four factors: altruism, profit, public image, and ethics. Altruism was measured using three items (i.e. the profit sponsored the nonprofit organization because ultimately they care about their stakeholders). Profit was measured using two items (i.e. the profit company sponsored the nonprofit organization because ultimately they care about their profits). Public image was measured using two items (i.e. the profit company sponsored the nonprofit organization because the sponsorship creates a positive corporate image). Ethics was measured using one item (i.e. the profit company sponsored the nonprofit organization because it was morally the ‘right’ thing to do). For measuring suspicion toward nonprofit organization, each item was modified appropriately. Each item was measured with a 7- point Likert scale (1=strongly disagree to 7=strongly agree).
Attitude toward Profit Company
Attitude is defined as a general positive or negative feeling about an object that consistently affects people’s behavior (Petty & Cacioppo, 1981). Attitude toward the profit company was measured by MacKenzie and Lutz’s (1989) scale. This scale is composed of three bipolar items: good-bad, favorable-unfavorable, and pleasant- unpleasant. Each item was measured with a 7-point bipolar scale.
Attitude toward Nonprofit Organization
Attitude toward nonprofit organization is defined as “global and relatively enduring evaluations with regard to the NPOs (nonprofit organizations) that help individuals” (Webb, Green, & Brashear, 2000, p.300). Attitude toward the nonprofit
58 organization was measured by Webb, Green, and Brashear’s (2000) scale because
nonprofit sectors have developed and used different attitude scales from profit sectors.
This scale is composed of five items: the money given to nonprofits goes for good causes,
much of the money donated to nonprofits is wasted, my image of nonprofits is positive,
nonprofits have been quite successful in helping the needy, and nonprofits perform a useful function for society. Each item was measured with a 7-point Likert scale
(1=strongly disagree to 7=strongly agree).
Purchase Intention of Profit Company’s Product
Purchase intention is defined as the degree of intention to perform product
purchase. This study used the Bearden, Lichtenstein and Teel (1984) scale to measure this
construct. This scale was measured using three items (very likely-very unlikely, probable-
improbable, and possible-impossible) in responding to the following sentence: I would
consider buying the profit company’s brand when I purchase the product next time. Each
item was measured with a 7-point bipolar scale.
Donation Intention to Nonprofit Organization
Donation intention is defined as the degree of intention to donate money to a nonprofit organization. Malhotra & Mukherjee’s (2003) scale was used to measure the donation intention to nonprofits because nonprofit sectors have developed and used different behavioral intention scales from profit sectors. This scale is composed of two items: I am happy to continue giving to this nonprofit organization for as long in the future as I can see; I am happy to recommend other people to support this nonprofit organization. Each item was measured with a 7-point Likert scale (1=strongly disagree to
7=strongly agree).
59
Statistical Analysis
This study has two different statistical analysis phases. The first phase is related to testing the treatment effects of manipulations. Analysis related to the group differences caused by treatment factors (the source trustworthiness and level of CSR value) were tested by Analysis of Variance (ANOVA). The second phase is related to testing causal relationships among psychological variables which were induced by two treatment factors (the source affiliation and level of CSR value). Analysis related to those causal
relationships among psychological variables were tested by Structural Equation Modeling
(SEM). ANOVA was analyzed by SPSS (Statistical Package for Social Science). SEM
was analyzed by M-plus.
60 CHAPTER FOUR
RESULTS
Data Screening
This study initially gathered 364 students from three classes. They all received extra credit for participating in this study. Most students responded to all items. To analyze SEM, it is necessary to have a clean dataset without missing values. Thus, 28 students who did not respond to some items were excluded from the final dataset based on the listwise deletion method (excluding cases with missing values on any variable from all analyses). The total number of subjects is 336.
Also, outliers were checked before conducting the analysis. The values of standardized residuals were not larger than |2.5| for most cases, which means that no significant outliers were found. The univariate normality of the dataset was also checked with skewness and kurtosis. The result showed that skewness (-1.842 to 1.711) and kurtosis (-.700 to 5.457) were not problematic. Thus, the dataset of this study is appropriate for testing structural modeling as well as other statistical analyses (such as
Analysis of Variance) requiring those assumptions.
Demographics of the Sample
Of the 336 students, 109 students were males (32.4%) whereas 227 students were females (67.6 %). Students’ age ranged from 18 to 30. The mode was 19 (56.0%). 72.6 percent of students were second-year undergraduate students and only 2.1 percent of
61 students were graduate students. Students were enrolled in journalism-related courses
(see Table 1).
Table 1. Demographics of Samples Gender Age Education Category Male Female 18 19 20 21 22~ 1st 2nd 3rd 4th Grad. Frequency 109 227 7 188 93 26 22 0 244 55 30 7 Percent 32.4 67.6 2.1 56.0 27.7 7.7 6.5 0.0 72.6 16.4 8.9 2.1
Inducement Check
This study induced only a level of a profit company’s (bad) and nonprofit organization’s (good) reputation. To check whether the stimulus presented to participants successfully induced their perception of reputation, the following inducement checks were performed.
Inducement Check 1: The profit company’s reputation score rated by participants will be lower than 4 (1=very low to 7=very high).
Inducement Check 2: The nonprofit organization’s reputation score rated by participants will be higher than 4 (1=very low to 7=very high).
Inducement Check 3: The profit company’s reputation will be significantly lower than the nonprofit organization’s reputation.
For the inducement check 1 and 2, two one-sample T-tests were used. The results showed that corporate reputation was perceived as lower than 4 (p=.000). Nonprofit reputation was perceived as higher than 4 (p=.000) (see Table 2).
62 Table 2. Inducement Check 1 and 2 N Mean S.D. t d.f. Sig. Corporate 336 3.4351 .85068 -12.172 335 .000 Reputation Nonprofit 336 5.8595 .82572 41.280 335 .000 Reputation
For the inducement 3, a paired-sample t-test was adopted. The result showed that
corporate reputation was perceived significantly lower than nonprofit reputation (p=.000)
(see Table 3).
Table 3. Inducement Check 3 N Mean S.D. t d.f. Sig. Corporate 336 3.4351 .85068 36.463 335 .000 Reputation Nonprofit 336 5.8595 .82572 Reputation
Manipulation Check
This study had two manipulated variables – the source trustworthiness and the
level of CSR value.
Manipulation Check 1: A quotation from a profit company will be perceived as less trustworthy than a quotation from a nonprofit organization.
To test this manipulation, one-way Analysis of Covariance (ANCOVA) was
initially adopted. An independent variable was a source affiliation. A dependent variable
was the perceived trustworthiness of the source. Possible covariates were corporate
reputation and corporate credibility. Before analyzing the data, outliers and six
assumptions of ANCOVA were checked. When checking standardized residual values of
63 each case, it was found that no standardized value of residuals was greater than 2.5,
which means there was no significant outlier in the dataset.
To check the normality assumption (cases should be normally distributed on the
dependent variable in each cell), the whole dataset was split by two different groups. In
two groups, skewness and kurtosis were checked. The result showed that the skewness of the ‘profit source affiliation’ group is -.308 and the kurtosis is .460. The skewness of the
‘nonprofit source affiliation’ group is -.142 and the kurtosis is -.010. These results mean
that the dataset has low skewness and kurtosis. Thus, the normality assumption was
satisfied in the dataset of this study.
To check the homogeneity of variance assumption (population variances for each
group are equal), the Levene’s test was adopted. Dataset was un-split for testing this
assumption. The result showed that the assumption of homogeneity of variance is
supported, F (1,334) = .003, p>.05.
The independence of observation assumption is satisfied because this is
guaranteed by random assignment of participants and individual testing of participants.
To check the no measurement error in the covariate, the reliability check was
adopted. In corporate reputation, the result showed the reliability with all five items
is .501. When deleting the fourth item of corporate reputation, the Cronbach’s alpha
could go up to .608. In corporate credibility, the result showed that the reliability of all
four items is .653. Deleting some items did not help the improvement of the reliability. It
means that corporate reputation and credibility are not good covariates. In nonprofit
reputation, the result showed the reliability with all five items is .798. Deleting any items
from the construct did not help increase the reliability. Nonprofit credibility’s reliability
64 is .830. Deleting any items from the construct did not help increase reliability. This means
that nonprofit reputation and credibility are not good covariates. Thus, one-way ANOVA
(Analysis of Variance) was conducted, instead of ANCOVA. The result showed that there
is a significant source affiliation effect on the perceived source trustworthiness (p=.000).
Therefore, the manipulation of the source affiliation type was successful (see Table 4).
Table 4. Source Trustworthiness between Profit and Nonprofit Source Type N Mean S.E. F d.f. Sig. Profit 162 4.1568 .062 29.687 1, 334 .000 Source Nonprofit 174 4.6276 .060 Source
Manipulation Check 2: A CSR message containing an individual/community value will be perceived as more relevant to the message recipients than a CSR message containing a societal value.
To test this, one-way ANOVA was adopted. Three assumptions of ANOVA were
checked before conducting the analysis as in Manipulation Check 1. The normality
assumption was satisfied because the result showed that no high skewness and kurtosis were found in both groups (individual: skewness= -.718, kurtosis= -.111; societal: skewness= -.295, kurtosis= .047). The Levene’s test showed that the residual variation is the same across two groups, F(1,334)=3.018, p>.05. Thus, this assumption was satisfied.
By randomly assigning participants, the independent observation assumption was satisfied.
Based on the assumption check, one-way ANOVA was conducted. An independent variable was the level of a CSR value and a dependent variable was a personal relevance of the message. The result showed that there was no significant effect
65 of the independent factor on the personal relevance (p>.05). Thus, the manipulation of the
level of CSR value was not successful (see Table 5).
Table 5. Personal Relevance between Local and Societal Level Type N Mean S.E. F d.f. Sig. Local level 167 4.211 .089 1.548 1, 334 .214 Societal level 169 4.367 .088
Hypotheses Testing
Hypotheses that can be tested within a structural equation model were not tested
in this section. Those hypotheses were tested later.
H1-1: The source affiliation type will influence people’s source trustworthiness.
To test this hypothesis, the source affiliation type was dummy-coded and entered
as an independent variable. With the source trustworthiness as a dependent variable, a
regression analysis was conducted. The result showed that the source affiliation type
influenced people’s source trustworthiness (p<.05). Thus, H1-1 is supported (see Table 6).
Table 6. Source Affiliation Type and Source Trustworthiness Type Unstandardized Standardized t Sig. F Sig. R2 Coefficients Coefficients Profit Source -.471 -.286 -5.449 .000 29.687 .000 .082
H1-3: The level of CSR value will influence people’s personal relevance.
To test this hypothesis, the level of CSR value was dummy-coded and entered as an independent variable. A regression analysis was adopted with the personal relevance
as a dependent variable. The result showed that the level of CSR value did not influence
66 people’s personal relevance (p>.05). Thus, H1-3 is not supported (see Table 7).
Table 7. Level of CSR Value and Personal Relevance Type Unstandardized Standardized t Sig. F Sig. R2 Coefficients Coefficients Local Level -.155 -.068 -1.244 .214 1.548 .214 .005
H2-1: When a profit source presents an individual/community level value in a CSR message, people will be more likely to elaborate the profit’s CSR motive than when a nonprofit source presents a societal level value (the combination of a low trustworthiness + a high relevance vs. the combination of a high trustworthiness + a low relevance). H2-2: When a profit source presents an individual/community level value in a CSR message, people will be more likely to elaborate the profit’s CSR motive than when a nonprofit source presents the same value (a low trustworthy vs. a high trustworthy source quotation in the high relevant topic). H2-3: When a nonprofit source presents an individual/community level value in a CSR message, people will be more likely to elaborate profit’s CSR motive than a profit source presents a societal level value (the combination of a high trustworthiness + a high relevance vs. the combination of a low trustworthiness + a low relevance). H2-4: When a profit source presents a societal level value in a CSR message, people will be more likely to elaborate profit’s CSR motive than a nonprofit source presents a societal level value (a low trustworthy vs. a high trustworthy source quotation in the low relevant topic).
To test these hypotheses, one-way ANCOVA was initially considered.
Independent variables were the source affiliation and the level of CSR value. A dependent variable was people’s elaboration of CSR message. Possible covariates were corporate reputation and corporate credibility. Among six assumptions of ANCOVA, five assumptions were the same as in the Manipulation Check 1. However, these hypotheses have different dependent variables from the Manipulation Check 1. Thus, the linearity assumption (the relationship between the covariate and the dependent variable is linear for each group in the population) needed to be checked again. The scatterplot was inspected within each group. The dataset was split by four different groups. The result
67 showed that neither corporate reputation nor corporate credibility were good covariates because the scatter plots showed nearly zero correlation relationships between possible covariates and elaboration variable. Thus, ANOVA was selected instead of ANCOVA for testing these hypotheses. The three assumptions of ANOVA are normality, homogeneity of variance, and independence of observation. These were all satisfied above.
Two-way ANOVA was finally adopted for testing these hypotheses. Independent variables were the source affiliation and the level of CSR value; and a dependent variable was suspicion toward a profit company’s CSR motive. The result showed that there were no significant effects of the source affiliation (p>.05) and the level of CSR value (p>.05) on people’s elaboration of the CSR message. The interaction effect between two factors did not show up (p>.05). Therefore, H2-1, 2-2, 2-3, and 2-4 are not supported (see Table
8).
Table 8. Source Affiliation and Level of CSR Value Type d.f. F Sig. Source Affiliation 1 .094 .757 Level of CSR Value 1 .027 .868 Source Affiliation * Level of CSR Value 1 .008 .928 Error 332 -- --
H3-1: A profit company’s reputation will influence the profit company’s source trustworthiness. H3-2: A profit company’s credibility will influence the profit company’s source trustworthiness.
To check these hypotheses, a regression was adopted and the dataset was split based on the source affiliation. Corporate reputation and corporate credibility were both entered as independent variables. Source trustworthiness was a dependent variable. The
68 result showed that corporate reputation did not influence the profit source’s trustworthiness (p>.05) while corporate credibility did influence the profit source’s trustworthiness (p<.05). Thus, H3-1 is not supported whereas H3-2 is supported (see
Table 9).
Table 9. Corporate Reputation and Credibility on Source Trustworthiness β t Sig. R2 F Sig. Corporate .020 .210 .834 .060 5.030 .008 Reputation Corporate .232 2.461 .015 Credibility
H3-3: A profit company’s reputation will influence corporate credibility positively.
To test this hypothesis, a regression was conducted with corporate reputation as an independent variable and corporate credibility as a dependent variable. The result showed that corporate reputation influenced corporate credibility positively (p=.000).
Thus, H3-3 is supported (see Table 10).
Table 10. Corporate Reputation on Corporate Credibility β t Sig. R2 F Sig. Corporate .541 11.744 .000 .292 137.926 .000 Reputation
H3-4: A nonprofit organization’s reputation will influence the nonprofit organization’s source trustworthiness. H3-5: A nonprofit organization’s credibility will influence the nonprofit organization’s source trustworthiness.
To test these hypotheses, a regression was conducted with the nonprofit reputation and nonprofit credibility as independent variables and the nonprofit source
69 trustworthiness as a dependent variable. Nonprofit reputation influenced the nonprofit
organization’s source trustworthiness (p<.05) whereas nonprofit credibility did not
influence the nonprofit source’s trustworthiness (p>.05). Thus, H3-4 is supported and H3-
5 is not supported (see Table 11).
Table 11. Nonprofit Reputation and Credibility on Source Trustworthiness β T Sig. R2 F Sig. Nonprofit Reputation .220 2.228 .027 .067 6.111 .003 Nonprofit Credibility .052 .529 .597
H3-6: A nonprofit organization’s reputation will influence the nonprofit organization’s credibility positively.
With the nonprofit reputation as an independent variable and the nonprofit
credibility as a dependent variable, a regression was conducted. The result showed that the nonprofit reputation influenced the nonprofit credibility positively (p=.000). H3-6 is
supported (see Table 12).
Table 12. Nonprofit Reputation on Nonprofit Credibility β T Sig. R2 F Sig. Corporate Reputation .626 14.652 .000 .391 214.680 .000
H3-7: A profit company’s reputation will influence the associated nonprofit organization’s source trustworthiness negatively. H3-8: A profit company’s credibility will influence the associated nonprofit organization’s source trustworthiness negatively.
To test H3-7 and 3-8, a regression was conducted and the independent variables
were profit reputation and credibility. The dependent variable was nonprofit source
trustworthiness. The result showed that bad corporate reputation and corporate credibility
70 did not influence the associated nonprofit source trustworthiness (ps>.05). H3-7 and H3-8
are not supported (see Table 13).
Table 13. Corporate Reputation and Credibility on Nonprofit Source's Trustworthiness β T Sig. R2 F Sig. Corporate Reputation .108 1.226 .222 .015 1.289 .278 Corporate Credibility .023 .263 .793
H3-9: A nonprofit organization’s reputation will influence the associated profit company’s source trustworthiness positively. H3-10: A nonprofit organization’s credibility will influence the associated profit company’s source trustworthiness positively.
To test H3-9 and 3-10, a regression was conducted. The independent variables were nonprofit reputation and credibility. The dependent variable was profit source trustworthiness. The result showed that good nonprofit reputation and credibility did not influence the associated profit source trustworthiness (ps>.05). H3-9 and H3-10 are not supported (see Table 14).
Table 14. Nonprofit Reputation and Credibility on Profit Source's Trustworthiness β T Sig. R2 F Sig. Nonprofit Reputation .060 .631 .529 .026 2.161 .119 Nonprofit Credibility .121 1.276 .204
H3-11: A profit company’s source trustworthiness will not influence people’s personal relevance of CSR message.
To test this hypothesis, a regression analysis was adopted. An independent variable was source trustworthiness and a dependent variable was people’s perceived
relevance. The result showed that profit source’s trustworthiness influenced people’s
71 personal relevance of CSR message (p=.000). Thus, H3-11 is not supported (see Table
15).
Table 15. Profit Source's Trustworthiness on Personal Relevance Β t Sig. R2 F Sig. Profit Source’s Trustworthiness .312 4.154 .000 .097 17.252 .000
H6-6, 6-7, 6-8, and 6-9 were planned to test after examining two structural models
(profit source vs. nonprofit source) which show causal relationships of CSR
communication activity because they are related to the total effects of CSR activity itself
and CSR communication activity.
Structural Equation Modeling
To better understand each construct’s causal links proposed in the hypotheses, two structural equation models are presented in Figure 4 and Figure 5 (the suspicion concept
was reversely named as ‘pure motive’ because all other latent variables have neutral and
positive meanings. Having a variable with opposite meaning can cause confusions of the
interpretation of directionality). This study has two different structural models: one for
the profit source condition and the other for the nonprofit source condition. Because the
level of CSR value did not successfully increase the personal relevance, structural models
related to two levels of CSR value condition were not created.
The two structural models have slightly different causal links. H3-1 showed that a
bad profit company’s reputation did not influence the profit source’s trustworthiness
whereas H3-2 showed a bad profit company’s credibility did influence the profit source’s
72 Figure 4. Profit Source Model
F1 H3-2 F2 F5 H4-1 F7 H5-1 F9 Profit Source Profit Profit Profit Credibility Trustworthiness Pure Motive Attitude Purchase H1-2 H2-5
F4 Message H6-1 H6-2 H6-3 H6-4 H6-5 Elaboration 73 H1-4
F3 F6 H4-2 F8 H5-2 F10 Personal Nonprofit Nonprofit Nonprofit Relevance Pure Motive Attitude Donation Figure 5. Nonprofit Source Model
F1 H3-2 F2 F5 H4-1 F7 H5-1 F9 Nonprofit Source Profit Profit Profit Reputation Trustworthiness Pure Motive Attitude Purchase H1-2 H2-5
F4 Message H6-1 H6-2 74 H6-3 H6-4 H6-5 Elaboration H1-4
F3 F6 H4-2 F8 H5-2 F10 Personal Nonprofit Nonprofit Nonprofit Relevance Pure Motive Attitude Donation trustworthiness. H3-9 and H3-10 showed that a good nonprofit organization’s reputation
and credibility did not influence the associated bad profit company’s source
trustworthiness. Although corporate reputation could have an indirect effect on source trustworthiness through corporate credibility, this study only tested direct effects among latent variables for the model parsimoniousness. Also, having more latent variables in this study requires bigger sample sizes. Thus, a bad profit company’s credibility was only
selected as important factor influencing source trustworthiness in the profit source
condition model (see Figure 4).
H3-4 showed that a good nonprofit organization’s reputation influenced the
nonprofit source’s trustworthiness whereas its credibility did not influence the nonprofit
source’s trustworthiness in H3-5. H3-7 and H3-8 showed that a bad profit company’s
reputation and credibility did not influence the associated nonprofit organization’s source trustworthiness. Thus, a good nonprofit organization’s reputation was only selected as important factor influencing source trustworthiness in the nonprofit source condition
model (see Figure 5).
Hypotheses shown in Figure 4 and 5 (H1-2, 1-4, 2-5, 4-1, 4-2, 5-1, 5-2, 6-1, 6-2,
6-3, 6-4 and 6-5) were tested by SEM because those hypotheses posit causal relationships
among latent factors. M-plus was used as a statistical package for analyzing those hypotheses. Before utilizing structural analysis, it was checked whether the dataset and the model proposed in this study are appropriate for the analysis below.
Model Identification
To use a structural modeling technique, the models defined in this study should be
an over-identified model, which means that the number of unique pieces of information
75 in the covariance matrix (or correlation matrix with standard deviations) is greater than
the number of parameters requiring estimation. With a calculation based on the number of
unique pieces of information in the covariance matrix and the number of parameters
requiring estimation, the degree of freedom should be positive if it is an over-identified
model. The formula for producing the degree of freedom is [p (p+1)/2] – t. Here, p is the number of observed variables and t is the number of parameters requiring estimation. The degrees of freedom of the profit source condition model proposed in this study is 767 and the degrees of freedom of the nonprofit source condition model is 563. Therefore the model in this study is appropriate to use a structural modeling technique.
Estimation Method
The most common method of the estimation in structural modeling is a Maximum
Likelihood (ML) method because the estimated values from ML are known as consistent and asymptotically efficient in a big sample size (Bollen, 1989). It produces fairly robust
results even in a situation of multivariate normality violation. Thus, this study adopted
the ML as a parameter estimation method.
Dataset Input Method
This study used a covariance matrix as a dataset input, instead of raw dataset.
SEM has been developed to understand patterns of correlations among variables and to
explain as much of their variances proposed by researchers. So, the covariance matrix is the basic statistic of SEM (Kline, 2005). When the model has categorical dependent variables, it is recommended to use raw dataset as an input. This study, however, did not have any categorical variables in the model. Thus, the basic statistic of SEM was chosen.
Two-Step Structural Equation Modeling
76 This study adopted the two-step structural equation modeling process. The first step is related to the measurement phase and the second step is related to the structural
phase. By taking two steps separately, it is useful to attribute the reason of a bad
modeling fit to either of the two different steps. If the measurement model has good fits
and the structural model has bad fits, the only reason the proposed model in this study has
bad fits can be attributed to the structural model. In this situation, the causal relations
among constructs should be rebuilt based on theories.
Step 1 – Measurement Phase: Initial Confirmatory Model (Initial Measurement
Model): In this step, it is necessary to impose a model where all factors (and stand alone
variables not intended as indicators) are allowed to covary. If any bad fit is found, the
cause should be due to the measurement portion because this step allows all factors to
covary, and it constitutes a perfect structural model.
If the model proposed in this study has bad model fits, the model generating
strategy is necessary. LM (Lagrange Multiplier) test allows for adding paths if more paths
are necessary in the initially proposed model. The Wald test allows for dropping paths if
it is necessary to remove some paths in the initially proposed model. The critical value of
adding or dropping a path is 3.84 (the critical chi-square value when one degree of
freedom is changed). In this modification process, all possible modifications will be
examined under the rigorous theories and defensible logic.
Final Confirmatory Model (Final Measurement Model): If the initial measurement model doesn’t fit satisfactorily, it is necessary to make respecifications of additions in the measurement model using a LM test based on rigorous theories and defensible logic.
Step 2 – Structural Phase: Initial Structural Model (see Figure 4 and Figure 5): In
77 this step, it is necessary to impose a proposed structural model on the final confirmatory
model.
Final Structural Model: If the initial structural model does not fit acceptably, it is
necessary to re-specify proposed initial structural model in an exploratory manner.
Evaluation of Model Fit
Several fit indices were used to evaluate the appropriateness of the model
proposed in this study. An insignificant chi-square value at .05 is indicative to a good
model fit. Additionally, the following indices were examined because a chi-square value
is so sensitive in detecting mere differences as the sample size increases.
Bentler’s Comparative Fit Index (CFI): Models with values above .90 have
traditionally been considered acceptable models. Recently, a number of SEM researchers
have begun advocating closer to .95 as a desirable level.
Bentler-Bonett Non-normed Fit Index (NNFI) (also called the Tucker-Lewis
Index, TLI): Models with values above .90 have traditionally been considered acceptable
models. Recently a number of SEM researchers have begun advocating closer to .95 as a
desirable level.
Steiger & Lind Root Mean-Square Error of Approximation (RMSEA): Models
with values around or below .05 (“close fit”) have traditionally been considered acceptable models. The 90% confidence interval accompanying the RMSEA is a most useful tool for hypothesis testing of a given model. Specifically, if the 90% confidence
interval of RMSEA is shown as in the table:
78 Relationship Between Confidence Intervals and Hypothesis Tests ______Nature of confidence interval Reject Close fit? Reject not-close fit? ______Entire confidence interval below .05 No Yes Confidence Interval straddles .05 No No Entire confidence interval above .05 Yes No ______
Standardized Root Mean-Square Residual (SRMR): Values around .05 or less are generally desired in order to consider a model acceptable.
Model Selection
When the modified model is nested in the initial model proposed in this study by deleting some paths from the initial model, a chi-square difference test is adopted to decide what model is better. When the chi-square test shows a significant p-value, it means that the amount of information lost by choosing the nested model causes significant information loss. Thus, in this situation, the initial model needs to be selected.
In contrast, when the initial model proposed in this study is nested in the modified model
by adding some paths and the chi-square difference shows a significant p-value, the modified model needs to be selected. When the chi-square difference test shows an insignificant p-value in both adding and deleting path model, the opposite model
selection needs to be adopted because selecting lower-level (nested) model improves the
model parsimoniousness.
Invariance Model
This study had several groups divided into four conditions. Thus, it was necessary
to check whether the structural model finally selected in the structural phase could be
used for different condition groups. This means that researchers can test the interaction
79 effects among factors with the invariance model technique. When unstandardized estimates of paths significantly differ across sample groups, then researchers can conclude that the group membership factors moderate the effects of factors (Kline, 2005).
This technique allows the use of function constraining paths (constraining the same paths in different groups to check whether the same coefficient path value can be used in different groups) and to see whether the chi-square difference of the model fits produces a significant result. Constraints can be adopted in the ‘structural model only’ as well as ‘measurement model only.’ Also, constraints can be used to both the measurement and structural model together by constraining everything. When the chi-square difference is not significant, each group’s models can be used equally. If the chi-square difference is significant, each group should use different path coefficients.
In this study, the level of CSR value did not play an important factor in influencing people’s personal relevance. Therefore, this study had one factor with two levels (source affiliation type: profit vs. nonprofit source). Thus, only two models based on the source affiliation were tested. As a result, the invariance method was used only for testing whether the group membership moderated the effect of the factor. At first, two different source type models were separately proposed and tested. And then, the invariance model was conducted to check whether the source affiliation type moderates the effect.
Before conducting SEM analysis, the dataset was divided by source affiliation type. Among 336 students, 162 students were included in the profit source model whereas
174 students were included in the nonprofit source model.
80 The Profit Source Model (N=162)
Initial Measurement Model
In the initial measurement model, corporate credibility, source trustworthiness, personal relevance, message elaboration, suspicion toward the profit company’s pure motive, suspicion toward the nonprofit organization’s pure motive of association, attitude toward the profit company, purchase intention of the profit company’s product, attitude toward the nonprofit organization, and donation intention to the nonprofit organization
were included as latent variables. Level of CSR value factor did not make a group
difference, but there was still a variance of personal relevance in this study. Thus, the
personal relevance variable was kept in the model. All observed variables related to each
latent variable were included in the measurement model testing.
The model fit results showed that χ2 value was significant (p=.000). This is
common when the sample size is big. CFI was .911 and TLI was .898. RMSEA
(estimate= .065) and SRMR value (.076) were not good enough for the appropriate model fitting (see Table 17). Thus, a LM test was conducted based on 3.84 criteria (the critical chi-square value when one degree of freedom is changed). The result suggested connecting many error paths. Among those paths, five error path connections were done based on theoretical and logical sense (Y17 with Y16; Y20 with Y16; Y21 with Y17; Y21 with Y20; Y27 with Y26) (see Table 16 for variable names). After adding those error paths, another measurement model testing was conducted. The results showed that CFI,
TLI and RMSEA were all over good model fitting criterion (see Table 17). Although
SRMR was not good enough, it was improved from .076 to .067. Thus, the initial measurement model phase was closed.
81 Table 16. Profit Source Model Variable Names Latent Latent Variable Name Observed Observed Variable Name Variable # Variable # F1 Corporate Credibility Y1 Sincere Y2 Trustworthy Y3 Expert Y4 Experienced F2 Source Trustworthiness Y5 Dependable Y6 Honest Y7 Reliable Y8 Sincere Y9 Trustworthy F3 Relevance Y10 Emotional Y11 Cognitive F4 Elaboration Y12 Intense Y13 Time Y14 Attention F5 Profit Pure Motive Y15 Altruism Y16 Profit Y17 Image Y18 Ethics F6 Nonprofit Pure Motive Y19 Altruism Y20 Profit Y21 Image Y22 Ethics F7 Corporate Attitude Y23 Good Y24 Favorable Y25 Pleasant F8 Purchase Intention Y26 Good Causes Y27 Valuable Y28 Positive F9 Nonprofit Attitude Y29 Successful Y30 Useful Y31 Likely Y32 Probable Y33 Possible F10 Donation Intention Y34 Donate Y35 Recommend
Final Measurement Model
In the final measurement model, the independent latent variables (F1 and F3)
82 were set to 1 and the first observed variable in each dependent latent variable (F2, F4 -
F10) was set to 1. The result showed that no model fit indices changed, which means no significant amount of model fit loss occurred (see Table 17). Thus, the final measurement model phase was closed. Based on the result of this phase, Figure 6 was drawn based on standardized path coefficients. In figure 6, suspicion concept was renamed as ‘pure
motive’ because the directional meaning of suspicion concept is opposite to other latent
variables, which lead to confusion when interpreting the directionality of standardized
beta coefficients among latent variables. Thus, to standardize the directional meanings of
each latent construct, the suspicion concept was renamed as a ‘pure motive.’
Initial Structural Model
In this phase, latent variables were causally linked based on the hypotheses
proposed in this study. The results showed that there was a significant amount of model
fit loss on χ2 value at .05 level based on χ2 difference tests when compared to the final
measurement model. However, CFI, TLI, RMSEA, and SRMR were still on good status
(see Table 17). Thus, this initial structural model phase was closed.
Final Structural Model
In this phase, the significant levels of the observed variables that were set to 1 in the final measurement model needed to be checked. This was done by releasing the first observed variable from 1 and setting other observed variable to 1 in each latent variable.
The result showed that every constrained observed variable at the final measurement model phase had significant p-value at .05. Thus, the final structural model phase was closed. Based on the results of this phase, Figure 6 and Figure 7 were drawn based on standardized path coefficients. Figure 8 and Figure 9 were drawn based on
83 unstandardized coefficients.
Table 17. Profit Source Model Fits Phase χ2 d.f. CFI TLI RMSEA SRMR (p-value) (C.I. range) Good Fits Over Over Over Less than .05 Less (p>.05) 0 .900 .900 (around .05) than .05 Initial 871.007 515 .911 .898 .065 .076 Measurement (.000) (.058, .073) Second 710.477 510 .950 .942 .049 .067 Measurement (.000) (.040, .058) Final 710.477 510 .950 .942 .049 .067 Measurement (.000) (.040, .058) Initial 767.981 534 .942 .935 .052 .090 Structure (.000) (.044, .060) Final 767.981 534 .942 .935 .052 .090 Structure (.000) (.044, .060)
Table 18. R-square Values for Profit Source Model Latent Latent Variable Name R2 Observed Observed R2 Variable # Variable # Variable Name F1 Corporate Credibility -- Y1 Sincere .084 Y2 Trustworthy .661 Y3 Expert .107 Y4 Experienced .029 F2 Source Trustworthiness .064 Y5 Dependable .404 Y6 Honest .790 Y7 Reliable .729 Y8 Sincere .766 Y9 Trustworthy .862 F3 Relevance -- Y10 Emotional .770 Y11 Cognitive .860 F4 Elaboration .500 Y12 Intense .757 Y13 Time .802 Y14 Attention .643 F5 Profit Pure Motive .561 Y15 Altruism .822 Y16 Profit .072 Y17 Image .062 Y18 Ethics .246 F6 Nonprofit Pure Motive .734 Y19 Altruism .788
84 Y20 Profit .057 Y21 Image .010 Y22 Ethics .354 F7 Corporate Attitude .692 Y23 Good .902 Y24 Favorable .915 Y25 Pleasant .901 F8 Purchase Intention .056 Y26 Good Causes .724 Y27 Valuable .748 Y28 Positive .700 F9 Nonprofit Attitude .569 Y29 Successful .252 Y30 Useful .693 Y31 Likely .904 Y32 Probable .936 Y33 Possible .703 F10 Donation Intention .371 Y34 Donate .643 Y35 Recommend .848
Based on the final structural model’s standardized path coefficients, hypothesis
H1-2, 1-4, 2-5, 3-2, 4-1, 4-2, 5-1, 5-2, 6-1, 6-2, 6-3, 6-4, 6-5 were tested in the profit source model. The results of SEM in this study need to be interpreted as a whole rather than a series of separated hypotheses because the proposed model has a ‘suspicion’ concept, which has an opposite meaning from other latent variables. The variable leverages the directionality of the causal relationships and so it is necessary to interpret hypotheses within a whole model.
Based on this logic, the standardized beta coefficients were interpreted in the following way (see Figure 7): As people perceived the profit company’s credibility negatively, the profit affiliated source’s trustworthiness was decreased (H3-2: β= .252, p<.05). As people perceived the profit source’s trustworthiness as bad, they perceived the profit company’s CSR motive was not pure (β= .632, p<.01), which means their suspicion level toward the profit company went up. As their suspicion level went up, their attitude toward the profit company decreased (H4-1: β= .832, p<.01). As their attitude toward the
85 Figure 6. Profit Source Final Measurement Model (Standardized Beta Coefficients)
.290 .957 .870 .493 .950 .313 Sincere E1 Intense E12 Good E23 .813 F4 F7 .956 1 .582 .895 .445 .292 F1 Trustworthy E2 Message Time E13 Profit Favorable E24 Profit Elaboration Attitude .327 .945 .802 .597 .949 .315 Credibility Expert E3 Attention E14 Pleasant E25
Experienced .525 .851 Good Causes E26 .502 .865 Valuable E27 .907 .422 F8 Altruism E15 .836 .548 .636 Nonprofit Positive E28 Dependable .772 E5 -.269 .963 Attitude 86 F5 Profit E16 .502 .865 .889 .458 Successful E29 Honest E6 Profit .969 .833 Pure Motive Image E17 .554 F2 .854 Useful E30 Source Reliable .521 -.249 E7 .868 Trustworthiness Ethics E18 .875 .484 Sincere E8 .496 .928 .371 .951 Trustworthy E9 .310 Likely E31 F9 .968 .253 Profit Probable E32 Purchase .839 .888 .460 .545 Altruism E19 Possible E33 .877 .480 .239 .971 F31 Emotional E10 F6 Profit E20 Personal Nonprofit .374 .802 .597 Relevance Cognitive E11 Pure Motive Image F10 Donate E34 .928 Nonprofit .804 .390 ** All paths are significant at .01 ** Ethics E22 Donation Recommend E35 .595 .921 Figure 7. Profit Source Final Structural Model (Standardized Beta Coefficients)
.237** .967 .663 .555 .657
F1 .252* F2 .632** F5 .832** F7 .754** F9 Profit Source Profit Profit Profit Credibility Trustworthiness Pure Motive Attitude Purchase .201*
87 .707 F4 Message .881** .420** Elaboration
.695** F3 F6 F8 .521** F10 Personal Nonprofit Nonprofit Nonprofit Relevance .326** Pure Motive Attitude Donation
Chi-Square = 767.981, (p = .000) .516 .972 .793 CFI = .942 TLI = .935 RMSEA = .052 (.044 to .060) SRMR = .090 Figure 8. Profit Source Final Measurement Model (Unstandardized Beta Coefficients)
.402 1.327 .936 1.00 Sincere E1 Intense .663 Good .435 E12 6 E23 1.06 F4 F7 .999 1 .716 1.073 .625 .402 F1 1 Trustworthy E2 Message Time E13 Profit Favorable E24 Profit Elaboration Attitude .498 1.436 1.007 .879 .973 .425 Credibility Expert E3 Attention E14 Pleasant E25
Experienced .582 .926 Good Causes E26 .558 1.01 Valuable E27 9 1.56 .550 F8 Altruism E15 1.00 .624 .655 .966 3 Nonprofit Positive E28 Dependable E5 -.292 9 1.237 Attitude .769 1.250
88 F5 Profit E16 .917 .575 Successful E29 Honest E6 Profit .894 .959 F2 .852 Pure Motive Image E17 .602 .632 Useful E30 Source Reliable E7 -.194 Ethics 1.466E18 Trustworthiness1.00 .672 .708 5 Sincere E8 .969 .472 Trustworthy .972 .469 E9 Likely E31 F9 1.00 .375 Profit 4 Probable E32 Purchase .585 .955 4.61 Altruism E19 Possible .892 0 E33 1.068 .584 .254 1.167 F31 Emotional E10 F6 Profit E20 Personal Nonprofit .447 .894 .908 Relevance Cognitive E11 Pure Motive Image F10 Donate E34 1.112 Nonprofit 1.224 .613 ** All paths are significant at .01 ** Ethics E22 Donation Recommend E35 .803 1.18 6 Figure 9. Profit Source Final Structural Model (Unstandardized Beta Coefficients)
.281** 1.176 .783 .733 .944
F1 .307* F2 .614** F5 .929** F7 .822** F9 Profit Source Profit Profit Profit Credibility Trustworthiness Pure Motive Attitude Purchase .204*
.828 F4 Message .840** .388** Elaboration
.813** F3 F6 F8 .674** F10 Personal Nonprofit Nonprofit Nonprofit Relevance .367** Pure Motive Attitude Donation
Chi-Square = 767.981, (p = .000) .581 .917 .966 CFI = .942 TLI = .935 RMSEA = .052 (.044 to .060) SRMR = .090 company decreased because of the aroused suspicion toward the profit company’s CSR
motive, their purchase intention of the company’s products was reduced (H5-1: β= .754,
p<.01).
The transfer effect from the profit company to the nonprofit company can occur.
For example, as people perceived the profit company’s motive was not pure, they were
less likely donate their money to the associated nonprofit organization (H6-4: β= .420, p<.01).Thus, H3-2, 5-1, 6-1, and 7-4 is supported. Regardless of the mechanism occurred by the profit source’s endorsement in a CSR message released by the bad profit company, people’s attitude toward the nonprofit organization influenced their donation intention to the nonprofit organization (H5-2: β= .521, p<.01). In other words, H5-2 is supported.
However, people’s high suspicion level caused by low source trustworthiness can be lowered in a certain situation. For example, as people perceived the presented CSR message was closely relevant to them, they were more likely to elaborate the message
(H1-4: β= .695, p<.01). As they more elaborated the message based on the close relevance, they were likely to believe the profit company’s motive can be pure (β= .201, p<.05), which is the opposite result predicted in H2-5. As people believed the profit company’s CSR motive could be pure, they were more likely to think that the associated nonprofit organization’s association motive was also pure (H6-1: β= .881, p<.01). Also, as people felt the CSR message was more relevant, they were likely to think the nonprofit organization’s association with the bad profit company could be pure. Thus, H1-4 and
H6-1 is supported whereas H 2-5 is not supported.
It is necessary to adopt mean difference tests for checking the total effects of CSR activity itself and CSR communication activity because people’s attitude and behavior
90 intention in the CSR context were influenced by two different perceptions (CSR activity itself and CSR communication activity). The results based on the covariance matrix cannot be used for interpreting the statistically significant mean differences in the model.
To check the total effects of two different impacts, the results of H 6-6, 6-7, 6-8, and 6-9
were tested here.
H6-6: People’s attitude toward the nonprofit organization will be decreased after reading CSR stories. H6-7: People’s donation intention to the nonprofit organization will be decreased after reading CSR stories.
To test these hypotheses, a paired sample t-test was adopted. In the first pair,
people’s attitude toward the nonprofit organization before the exposure of a CSR message
and after the exposure of the message was paired. In the second pair, people’s donation
intention to the nonprofit organization before the exposure of the message and after the
exposure of the message was paired. The result showed that people’s attitude was
significantly decreased after the exposure of the CSR message (p=.002). Also, their
donation intention was significantly decreased after the exposure of the message (p=.021).
Thus, H6-6 and 6-7 are supported (see Table 19).
Table 19. Pre and Post Nonprofit Impacts N Mean S.D. t d.f. Sig. Nonprofit 162 5.7062 .84064 3.192 161 .002 Pre-attitude Nonprofit 162 5.5012 .97043 Post-attitude Nonprofit 162 4.3549 1.46457 2.330 161 .021 Pre-donation Nonprofit 162 4.1512 1.44795 Post-donation
91 Also, this study checked whether the source affiliation type can differentiate the benefits of nonprofit organization from the association. Two independent sample t-tests were conducted. The first independent sample t-test made sure there was no difference before the CSR message exposed to people in terms of the attitude and donation intention.
The result showed that there was no difference (ps>.05). The second independent sample t-test was conducted to check whether the profit vs. nonprofit source affiliation would make any differences in terms of the attitude and donation intention. The result showed that the nonprofit organization did not get any benefits from the association because people’s attitude and donation intention were not changed at all regardless of the source affiliation type (ps>.05) (see Table 20).
Table 20. Pre and Post Nonprofit Impacts by Source Affiliation Type Source Type N Mean S.D. t d.f. Sig. Nonprofit Profit 162 5.7062 .84064 -.701 334 .484 Pre-Attitude Nonprofit 174 5.7724 .88751 Nonprofit Profit 162 4.3549 1.46457 -1.755 334 .080 Pre-Donation Nonprofit 174 4.6351 1.45962 Nonprofit Profit 162 5.5012 .97043 1.522 334 .129 Post-Attitude Nonprofit 174 5.3356 1.02093 Nonprofit Profit 162 4.1512 1.44795 -.411 334 .682 Post-Donation Nonprofit 174 4.2184 1.54826
To check what kinds of impact the bad profit company received from the CSR association with a good nonprofit organization through this communication related causal mechanism in the profit source condition and the CSR activity itself, the following two hypotheses were tested here.
H6-8: People’s attitude toward the profit organization will be influenced by the association with a good nonprofit organization positively. H6-9: People’s purchase intention toward the profit organization will be influenced by the association with a good nonprofit organization positively.
92
Paired sample t-tests were adopted to test these hypotheses. In the first pair,
people’s attitude toward the profit company before and after the CSR message exposure
was matched. In the second pair, people’s purchase intention of the company’s products
before and after the CSR message exposure was paired. The result showed that people’s
attitude toward the bad profit company increased significantly after the exposure of the
CSR message containing the endorsement of CSR value by the profit affiliated
spokesperson (p=.000). Also, their purchase intention increased significantly after the
exposure of the message (p=.000). Thus, H6-8 and H6-9 are supported (see Table 21).
This is the evidence of the exploitation status explained in the literature review
because the profit company with a relatively bad reputation earned a benefit in terms of
attitude and purchase intention while the nonprofit organization with a relatively good
reputation got a loss from the association in terms of attitude and donation intention.
Table 21. Pre and Post Profit Impacts N Mean S.D. t d.f. Sig. Profit 162 2.3663 1.09154 -11.764 161 .000 Pre-attitude Profit 162 3.5267 1.36693 Post-attitude Profit 162 2.9856 1.44384 -6.660 161 .000 Pre-purchase Profit 162 3.6687 1.48677 Post-purchase
Also, this study checked whether the source affiliation type would differentiate
the benefits of profit organization from the association. Two independent sample t-tests were conducted. The first independent sample t-test made sure that there was no
93 difference before the CSR message exposed to people in terms of the attitude and
purchase intention. The result showed that there was no difference (ps>.05). The second
independent sample t-test was conducted to check whether the profit vs. nonprofit source
affiliation would make any differences in terms of the attitude and purchase intention.
The result showed that the profit organization received more benefits from the association
when they use their profit source as an endorser of the CSR value in terms of attitude and
purchase intention than when they used nonprofit-affiliated source as an endorser
(ps<.05) (see Table 22).
Table 22. Pre and Post Impacts on Profit by Source Affiliation Type Type Source Type N Mean S.D. t d.f. Sig. Profit Profit 162 2.3663 1.09154 .050 334 .960 Pre-Attitude Nonprofit 174 2.3602 1.12165 Profit Profit 162 2.9856 1.44384 .828 334 .408 Pre-Donation Nonprofit 174 2.8582 1.37566 Profit Profit 162 3.5267 1.36693 2.467 334 .014 Post-Attitude Nonprofit 174 3.1628 1.33609 Profit Profit 162 3.6687 1.48677 2.005 334 .046 Post-Donation Nonprofit 174 3.3448 1.47333
The Nonprofit Source Model (N=174)
Initial Measurement Model
In the initial measurement model, nonprofit reputation, source trustworthiness,
personal relevance, message elaboration, suspicion toward the profit company’s pure
motive, suspicion toward the nonprofit organization’s pure motive of association, attitude
toward the profit company, purchase intention of the profit company’s product, attitude toward the nonprofit organization, and donation intention to the nonprofit organization
were included as latent variables. Again, the personal relevance variable was kept as
94 mentioned in the profit source model. All observed variables related to each latent variable were included in the measurement model testing.
The model fit results showed that χ2 value was significant (p=.000). This is common when the sample size is big. CFI was .896 and TLI was .880. RMSEA
(estimate= .071) and SRMR value (.079) were not good enough for the appropriate model fitting (see Table 24). Thus, LM test was conducted based on 3.84 criteria. The result suggested connecting many error paths. Among those paths, eight error path connections were done based on theoretical and logical sense (Y2 with Y1; Y18 with Y17; Y21 with
Y17; Y22 with Y18; Y32 with Y24; Y33 with Y15; Y22 with Y21; Y28 with Y27) (see
Table 23 for variable names). After adding those error paths, another measurement model testing was conducted. The results showed that CFI, TLI and RMSEA were all over good model fitting criterion (see Table 24). Although SRMR was not good enough, it was improved from .079 to .071. Thus, the initial measurement model phase was closed.
Table 23. The Nonprofit Source Model Variable Names Latent Latent Observed Observed Variable # Variable Name Variable # Variable Name F1 Nonprofit Reputation Y1 Product Quality Y2 Protecting Environment Y3 Consumer Oriented Y4 Product Value Y5 AD Credibility F2 Source Trustworthiness Y6 Dependable Y7 Honest Y8 Reliable Y9 Sincere Y10 Trustworthy F3 Relevance Y11 Emotional Y12 Cognitive F4 Elaboration Y13 Intense Y14 Time Y15 Attention
95 F5 Profit Pure Motive Y16 Altruism Y17 Profit Y18 Image Y19 Ethics F6 Nonprofit Pure Motive Y20 Altruism Y21 Profit Y22 Image Y23 Ethics F7 Corporate Attitude Y24 Good Y25 Favorable Y26 Pleasant F8 Purchase Intention Y27 Good Causes Y28 Valuable Y29 Positive F9 Nonprofit Attitude Y30 Successful Y31 Useful Y32 Likely Y33 Probable Y34 Possible F10 Donation Intention Y35 Donate Y36 Recommend
Final Measurement Model
In the final measurement model, the independent latent variables (F1 and F3)
were set to 1 and the first observed variable in each dependent latent variable (F2, F4 -
F10) was set to 1. The result showed that no model fit indices changed, which means no significant amount of model fit loss occurred (see Table 24). Thus, the final measurement model phase was closed. Based on the result of this phase, Figure 10 was drawn based on the standardized path coefficients. In figure 10, suspicion concept was renamed as ‘pure motive’ as mentioned in the profit source model.
Initial Structural Model
In this phase, latent variables were causally linked based on the hypotheses
proposed in this study. The results showed that there was a significant amount of model
fit loss on χ2 value at .05 level based on χ2 difference tests. However, CFI, TLI, RMSEA,
96 and SRMR were still on good status (see Table 24). Thus, this initial structural model
phase was closed.
Final Structural Model
In this phase, the significant levels of the observed variables that were set to 1 in the final measurement model were necessary to be checked. This was done by releasing the first observed variable from 1 and setting other observed variable to 1 in each latent variable. The result showed that every constrained observed variable at the final measurement model phase had significant p-value at .05. Thus, the final structural model phase was closed. Based on the result of this phase, Figure 10 and Figure 11
(standardized coefficients) were drawn. Figure 12 and Figure 13 were drawn based on unstandardized coefficients. R-square values of each latent variable were presented in
Table 18. Standardized beta coefficients can be bigger than +1 and smaller than -1 in multiple regression analysis and SEM because of correlations among several independent variables (Agresti & Finlay, 1997).
Table 24. The Nonprofit Source Model Fits Phase χ2 d.f. CFI TLI RMSEA SRMR (p-value) (C.I. range) Good Fits Over Over Over Less than .05 Less than .05 (p>.05) 0 .900 .900 (around .05) Initial 1033.596 549 .896 .880 .071 .079 Measurement (.000) (.065, .078) Second 819.798 541 .940 .930 .054 .071 Measurement (.000) (.047, .062) Final 819.798 541 .940 .930 .054 .071 Measurement (.000) (.047, .062) Initial 897.033 563 .928 .920 .058 .086 Structure (.000) (.051, .065) Final 897.033 563 .928 .920 .058 .086 Structure (.000) (.051, .065)
97 Table 25. R-Square Value for Nonprofit Source Model Latent Latent R2 Observed Observed R2 Variable # Variable Name Variable # Variable Name F1 Nonprofit -- Y1 Product Quality .353 Reputation Y2 Protecting Environment .402 Y3 Consumer Oriented .379 Y4 Product Value .239 Y5 AD Credibility .628 F2 Source .024 Y6 Dependable .403 Trustworthiness Y7 Honest .790 Y8 Reliable .730 Y9 Sincere .766 Y10 Trustworthy .862 F3 Relevance -- Y11 Emotional .769 Y12 Cognitive .861 F4 Elaboration .498 Y13 Intense .759 Y14 Time .804 Y15 Attention .642 F5 Profit Pure .548 Y16 Altruism .790 Motive Y17 Profit .068 Y18 Image .051 Y19 Ethics .263 F6 Nonprofit Pure .996 Y20 Altruism .594 Motive Y21 Profit .054 Y22 Image .016 Y23 Ethics .296 F7 Corporate .718 Y24 Good .900 Attitude Y25 Favorable .918 Y26 Pleasant .899 F8 Purchase .382 Y27 Good Causes .719 Intention Y28 Valuable .743 Y29 Positive .700 F9 Nonprofit .565 Y30 Successful .259 Attitude Y31 Useful .692 Y32 Likely .907 Y33 Probable .935 Y34 Possible .695 F10 Donation .378 Y35 Donate .642 Intention Y36 Recommend .849
Based on the final structural model’s path coefficients, hypothesis H1-2, 1-4, 2-5,
98 Figure 10. Nonprofit Source Final Measurement Model (Standardized Beta Coefficients) .949 .316 Good E24 .594 .804 F7 Product Quality E1 .958 .286 Profit Favorable E25 .634 .773 Attitude Protecting Env. E2 .871 .491 .948 .318 Intense E13 Pleasant E26 F11 .615 F4 Nonprofit Consumer Ori. .788 .897 Y24 with Y32 E3 Message Time .443 Reputation E14 .489 Elaboration .872 .801 Product Value E4 .598 Attention E15 .530 .793 .848 Good Causes E27 .610 Y15 with Y33 AD Credibility E5 .862 .507 Valuable E28 .889 .458 Altruism E16 F8 .836 .548 Nonprofit Positive E29 -.260 .965 Profit E17 F5 Attitude .509 .861 99 .635 Dependable .773 Profit Successful E30 E6 .974 Pure Motive Image E18 .832 .889 .458 .555 Honest E7 -.225 Useful E31 .858 Ethics E19 F2 .855 .520 Source Reliable E8 .513 Trustworthiness .875 .484 Sincere E9 .952 .928 .305 Likely E32 Trustworthy .371 E10 F9 .967 .255 Profit Probable E33 Purchase .834 .771 .637 .552 Altruism E20 Possible E34 .481 .231 .973 F31 .877 Emotional E11 F6 Profit E21 Personal Nonprofit .373 .801 .598 Relevance Cognitive E12 Pure Motive Image F10 Donate E35 .928 Nonprofit .839 Ethics E23 Donation Recommend .389 ** All paths are significant at .01 ** .544 .922 E36 Figure 12. Nonprofit Source Final Measurement Model (Unstandardized Beta Coefficients) 2.34 Good .438 8 E24 .590 .799 F7 1.00 Product Quality E1 .396 Profit 7 Favorable E25 Attitude .557 .680 .978 Protecting Env. E2 .931 .663 .429 Intense E13 Pleasant Y24 withE26 Y32 F11 .703 F4 Nonprofit Consumer Ori. .901 1.07 E3 Message Time .623 Reputation 4 E14 .520 Elaboration .927 1.00 Product Value E4 .880 2 Attention E15 .588 .926 .981 Good Causes E27 .713 Y15 with Y33 AD Credibility E5 1.01 .564 Valuable E28 1.33 .597 9 Altruism E16 9 F8 1.01 .624 -.289 Nonprofit Positive E29 1.240 3 Profit E17 Attitude F5 .782 1.245
100 .675 Dependable .969 Profit Successful E30 E6 .897 Pure Motive Image E18 .962 .947 .575 .603 Honest E7 -.179 Useful E31 1.447 E19 F2 .881 Ethics .631 Source Reliable E8 .747 Trustworthiness 1.03 .672 Sincere E9 3 1.00 .968 Likely .463 .472 7 E32 Trustworthy E10 F9 .993 .377 Profit Probable E33 Purchase .948 3.57 .822 Altruism E20 Possible .904 3 E34 .280 1.06 .585 1.170 F31 Emotional E11 F6 Profit E21 8 Personal Nonprofit .446 .841 .910 Relevance Cognitive E12 Pure Motive Image F10 Donate E35 1.11 Nonprofit 1.285 3 E23 Donation .610 Ethics Recommend E36 .838 1.188 ** All paths are significant at .01 ** 01 Figure 12. Nonprofit Source Final Measurement Model (Unstandardized Beta Coefficients) 2.34 Good .438 8 E24 .590 .799 F7 1.00 Product Quality E1 .396 Profit 7 Favorable E25 Attitude .557 .680 .978 Protecting Env. E2 .931 .663 .429 Intense E13 Pleasant Y24 withE26 Y32 F11 .703 F4 Nonprofit Consumer Ori. .901 1.07 E3 Message Time .623 Reputation 4 E14 .520 Elaboration .927 1.00 Product Value E4 .880 2 Attention E15 .588 .926 .981 Good Causes E27 .713 Y15 with Y33 AD Credibility E5 1.01 .564 Valuable E28 1.33 .597 9 Altruism E16 9 F8 1.01 .624 -.289 Nonprofit Positive E29 1.240 3 Profit E17 Attitude F5 .782 1.245
101 .675 Dependable .969 Profit Successful E30 E6 .897 Pure Motive Image E18 .962 .947 .575 .603 Honest E7 -.179 Useful E31 1.447 E19 F2 .881 Ethics .631 Source Reliable E8 .747 Trustworthiness 1.03 .672 Sincere E9 3 1.00 .968 Likely .463 .472 7 E32 Trustworthy E10 F9 .993 .377 Profit Probable E33 Purchase .948 3.57 .822 Altruism E20 Possible .904 3 E34 .280 1.06 .585 1.170 F31 Emotional E11 F6 Profit E21 8 Personal Nonprofit .446 .841 .910 Relevance Cognitive E12 Pure Motive Image F10 Donate E35 1.11 Nonprofit 1.285 3 E23 Donation .610 Ethics Recommend E36 .838 1.188 ** All paths are significant at .01 ** Figure 13. Nonprofit Source Final Structural Model (Unstandardized Beta Coefficients)
-.251** 1.165 .778 .696 .951
F1 F2 .685** F5 1.741** F7 .826** F9 Nonprofit Source Profit Profit Profit Reputation Trustworthiness Pure Motive Attitude Purchase
.832
102 .222* F4 Message .882** -2.160** .379** Elaboration
.203** .840** F3 F6 2.655* F8 .690** F10 Personal Nonprofit Nonprofit Nonprofit Relevance Pure Motive Attitude Donation
.063 .740 .961
Chi-Square = 897.033, (p = .000) CFI = .928 TLI = .920 RMSEA = .058 (.051 to .065) SRMR = .086 3-2, 4-1, 4-2, 5-1, 5-2, 6-1, 6-2, 6-3, 6-4, 6-5 were tested in the nonprofit source model.
The results of SEM in this study need to be interpreted as a whole rather than a series of separated hypotheses as mentioned in the profit source model section.
Based on the logic, the standardized beta coefficients were interpreted in the following way in the nonprofit source model (see Figure 11): As people perceive the nonprofit source as trustworthy, they were more likely believe the associated profit company’s CSR motive could be pure (β= .697, p<.01), which means their suspicion level toward the profit company went down.
However, as people perceived the nonprofit organization’s reputation as good, their suspicion of why the bad profit company engaged in a CSR activity went up (β= -
.217, p<.01). In other words, people’s perception of the nonprofit organization’s reputation and their perception of the nonprofit source’s trustworthiness have a mutual cancellation effect in terms of their suspicion toward the profit company’s CSR motive.
Although people’s perception of the nonprofit organization had a negative effect on the profit company’s pure motive interpretation, it had a positive effect on the nonprofit organization’s pure motive interpretation. As people perceived the nonprofit organization had a good reputation, they were more likely to believe the nonprofit organization’s association motive with the bad profit company could be pure (β= .204, p<.01). People’s suspicion level aroused by the nonprofit reputation and the nonprofit source’s trustworthiness influenced their attitude toward the profit and the nonprofit organization as well as their suspicion toward the nonprofit organization. For example, if people’s suspicion toward the profit company went down, their attitude toward the profit company went up (H4-1: β= 1.538, p<.01) whereas their attitude toward the nonprofit organization
103 went down (H6-2: β= -2.659, p<.01). As people’s attitude toward the profit company went up, their purchase intention toward the profit company’s products went up (H5-1:
β= .752, p<.01). Thus, H4-1, 5-1 and 6-2 are supported. However, H3-2 is not supported within this model because the nonprofit organization’s reputation did not influence the nonprofit source’s trustworthiness directly (p>.05).
In the profit source model, people’s perceived personal relevance of a CSR message influenced people’s message elaboration and then influenced their suspicion level toward the profit company. In the nonprofit source model, however, their personal relevance perception influenced people’s message elaboration (H1-4: β= .715, p<.01) but the elaboration did not influence people’s suspicion level toward the profit and nonprofit organization (H2-5: p>.05). Thus, H1-4 is supported but H2-5 is not supported in the nonprofit source model. The nonprofit source’s trustworthiness did not influence people’s message elaboration (p>.05). Thus, H1-2 is not supported.
The nonprofit organization’s attitude can be influenced by two opposite directional mechanisms (although there are many indirect impacts, opposite directional mechanisms were only chosen as an example for the brief explanation). For example, if people’s suspicion toward the profit company’s CSR motive went up because of the nonprofit organization’s reputation (β= -.217, p<.01), people’s attitude toward the nonprofit organization went down (H6-2: β= -2.659, p<.01). However, their attitude toward the nonprofit organization can go up because of the positive impact of the nonprofit organization’s reputation (β= .204, p<.01).
Also, people’s donation intention toward the nonprofit organization was influenced by the profit and the nonprofit organization’s attitude (H5-2: β= .533, p<.01).
104 As explained above, people’s donation intention toward the nonprofit organization can be influenced by two opposite mechanisms because the donation intention was influenced by people’s attitude toward the profit company through the nonprofit organization’s reputation negatively and people’s attitude toward the nonprofit organization through the nonprofit organization’s reputation positively. Thus, the total effects of two different cycles (the communication activity and CSR activity itself) needed to be checked as was done in the profit source model.
To check the total effects (CSR activity itself and CSR communication activity) of different cycles initiated by several factors, the results of H 6-6, 6-7, 6-8, and 6-9 were tested here.
H6-6: People’s attitude toward the nonprofit organization will decrease after reading CSR stories. H6-7: People’s donation intention to the nonprofit organization will decrease after reading CSR stories.
To test these hypotheses, paired sample t-tests were adopted. In the first pair, people’s attitude toward the nonprofit organization before the exposure of a CSR message and after the exposure of the message was paired. In the second pair, people’s donation intention to the nonprofit organization before the exposure of the message and after the exposure of the message was paired. The result showed that people’s attitude decreased significantly after the exposure of the CSR message (p=.000). Also, their donation intention decreased significantly after the exposure of the message (p=.000). Thus, H6-6 and 6-7 are supported (see Table 26).
105 Table 26. Pre and Post Nonprofit Impacts N Mean S.D. t d.f. Sig. Nonprofit 174 5.7724 .88751 6.475 173 .000 Pre-Attitude Nonprofit 174 5.3356 1.02093 Post-Attitude Nonprofit 174 4.6351 1.45962 4.403 173 .000 Pre-Donation Nonprofit 174 4.2184 1.54826 Post- Donation
To check whether the bad profit company could receive good returns from the
CSR association with a good nonprofit organization through this causal mechanism when the profit company utilizes the nonprofit source as a positive endorser and CSR activity itself, the following two hypotheses were tested here.
H6-8: People’s attitude toward the profit organization will be influenced by the association with a good nonprofit organization positively. H6-9: People’s purchase intention toward the profit organization will be influenced by the association with a good nonprofit organization positively.
Paired sample t-tests were adopted to test these hypotheses. In the first pair, people’s attitude toward the profit company before and after the CSR message exposure was matched. In the second pair, people’s purchase intention of the company’s products before and after the CSR message exposure was paired. The result showed that people’s attitude toward the bad profit company increased significantly after the exposure of the
CSR message containing the endorsement of CSR value by the profit affiliated spokesperson (p=.000). Also, their purchase intention increased significantly after the exposure of the message (p=.000). Thus, H6-8 and H6-9 are supported (see Table 27).
Again, this is the evidence of the exploitation status explained in the literature
106 review because the bad profit company earned a benefit in terms of attitude and purchase intention while the good nonprofit organization got a loss from the association in terms of attitude and donation intention.
Table 27. Pre and Post Profit Impacts N Mean S.D. t d.f. Sig. Profit 174 2.3602 1.12165 -7.837 173 .000 Pre-attitude Profit 174 3.1628 1.33609 Post-attitude Profit 174 2.8582 1.37566 -4.620 173 .000 Pre-purchase Profit 174 3.3448 1.47333 Post-purchase
Invariance Model
To check whether the group membership (source affiliation type) moderated the effects within the structural model and to check whether two models can have the same path coefficients across groups, an invariance method was adopted. In the first stage, both groups were tested together without any constraints on the measurement and on the structural model. In the second stage, both groups were tested together with constraints on both measurement and structural model. The result showed that both groups should be constrained on both measurement and structural model because the χ2 difference test showed that the significant amount of model fits would be lost if selecting the same measurement and same structural model in this study (p=.000) (see Table 28). Thus, different path coefficients of measurement and structural models should be taken in this study, which means that the profit vs. nonprofit source moderates the path coefficients and so there is a significant treatment effect in terms of the source affiliation type on the
107 psychological variables used in this study.
Table 28. Invariance Model χ2 value d.f. χ2 difference d.f. difference Sig. Without Constraints 1930.275 848 324.447 27 .000 Fully Constraints 2254.722 875
Hypothesis Testing Summary
This study had many causal hypotheses in two different models. Also, this study had many hypotheses related to treatment effects. Thus, the following Table 29 was made for clarifying the results of the hypothesis testing.
Table 29. Hypothesis Testing Result Summary Treatment effect-related hypotheses Hypo. # Hypothesis Result H1-1 Source affiliation type Æ Supported Source trustworthiness H1-3 Level of CSR value Æ Not supported Personal relevance H2-1 Profit + local > Not supported Nonprofit + societal H2-2 Profit + local > Not supported Nonprofit + local H2-3 Nonprofit + local > Not supported Profit + societal H2-4 Profit + societal > Not supported Nonprofit + societal H3-1 Low profit reputation Æ Not supported Low profit source trustworthiness H3-2 Low credibility Æ Supported Low source trustworthiness H3-3 Low profit reputation Æ Supported Low profit credibility H3-4 High nonprofit reputation Æ Supported High source trustworthiness H3-5 High nonprofit credibility Æ Not supported
108 High source trustworthiness H3-6 High nonprofit reputation Æ Not supported High nonprofit credibility H3-7 Low profit reputation Æ Not supported Low nonprofit source trustworthiness H3-8 Low profit credibility Æ Not supported Low nonprofit source trustworthiness H3-9 High nonprofit reputation Æ Not supported High profit source trustworthiness H3-10 High nonprofit credibility Æ Not supported High profit source trustworthiness H3-11 Profit source trustworthiness does Not supported NOT have the relationship with personal relevance SEM-related Hypotheses Hypo. # Hypothesis Profit Source Nonprofit Model Source Model H1-2 Low source trustworthiness Æ Not supported Not supported High message elaboration H1-4 High personal relevance Æ Supported Supported High message elaboration H2-5 High message elaboration Æ Not supported Not supported High suspicion of the profit motive H4-1 High suspicion to profit motiveÆ Supported Supported Bad profit attitude H4-2 High suspicion to nonprofit motive Æ Not supported Supported Bad nonprofit attitude H5-1 Profit attitude Æ Supported Supported Profit purchase intention H5-2 Nonprofit attitude Æ Supported Supported Nonprofit donation intention H6-1 Profit suspicion Æ Supported Supported Nonprofit suspicion H6-2 Profit suspicion Æ Not supported Supported Nonprofit attitude H6-3 Profit attitude Æ Not supported Supported Nonprofit attitude H6-4 Profit attitude Æ Supported Supported Nonprofit donation intention H6-5 Profit purchase intention Æ Not supported Not Supported Nonprofit donation intention Total effect-related hypotheses Hypothesis Hypothesis Profit Source Nonprofit # Model Source Model H6-6 Pre-nonprofit attitude > Supported Supported
109 Post-nonprofit attitude H6-7 Pre-nonprofit donation > Supported Supported Post-nonprofit donation H6-8 Pre-profit attitude < Supported Supported Post-profit attitude H6-9 Pre-profit purchase < Supported Supported Post-profit attitude
110 CHAPTER FIVE
DISCUSSIONS
Summaries of Supported Results
In this study, source affiliation type (profit- vs. nonprofit-affiliated source)
influenced people’s perceived source trustworthiness (H1-1 supported). When people saw the profit source appears in the CSR message, they thought the profit-affiliated source was less trustworthy than the nonprofit-affiliated source. However, the level of CSR value (individual vs. societal value) did not influence people’s personal relevance (H1-3 not supported). ELM predicts that low trustworthiness and high personal relevance will increase people’s message elaboration. In this study, the profit-affiliated source did not increase people’s elaboration (H2-1 to H2-4 not supported) although the source was
perceived as a low trustworthy source (H1-1 supported). This means that people simply process the CSR message regardless of the source’s affiliation (H2-5 not supported). In other words, people just process the source affiliation information as a peripheral cue in the CSR message. That is, the source affiliation information is processed through the peripheral route (rather than the central route) in the CSR context and the peripheral cue influences people’s perception of the profit company’s pure motivation negatively, which means that people almost automatically become suspicious when they see the profit source appears in the CSR message.
Although the level of CSR value did not influence people’s perceived personal relevance in the CSR context (H1-3 not supported), people’s perceived relevance to the
111 CSR message influenced people’s message elaboration (H1-4 supported). This means that
the third variable could influence people’s perceived personal relevance to the CSR
message. Or, it is possible that people have similar personal relevance level to the CSR topic in both conditions because individual and societal level CSR value produced similar effects on message elaboration. They were not tested because these two possibilities were not considered in the study design. Whatever external factors influenced people’s personal relevance to the CSR message presented in this study, people’s perceived personal relevance level to the CSR message influenced people’s message elaboration
(H1-4 supported). As people perceived the CSR message was more relevant to them, they are more likely to process the message with high efforts. Interestingly, the high message elaboration caused by high personal relevance reduced people’s suspicion level toward the profit company’s CSR motive when the profit company used the internal spokesperson (profit affiliated source) (in the profit source model, H2-5 not supported, but the relationship was positively significant). This means that people’s suspicion aroused by the profit source appearance in the CSR message can be minimized if people’s personal relevance can be increased by certain message factors or by people’s innate close relevance inclination to the CSR topic when the profit company uses internal spokespeople in delivering CSR messages. However, the high message elaboration caused by high personal relevance does not increase people’s positive perception toward the profit company’s CSR motive when the profit company uses nonprofit-affiliated spokespeople (in the nonprofit source model, H2-5 not supported). In other words, the profit company will not earn benefits by increasing the message relevance to target audiences when the profit company uses the nonprofit-affiliated sources in delivering its
112 CSR values.
The Profit Source Model
The less people perceived the profit-affiliated source as trustworthy, the more people became suspicious of the purity of the profit company’s CSR motive. The more people perceived the profit-affiliated source as trustworthy, the less people became suspicious of the purity of the profit company’s CSR motive (H4-1 supported). The attitude influenced by the suspicion directly influences people’s intention to buy the profit
company’s products (H5-1 supported). That is, when people are less suspicious of the
company’s CSR motive, they form relatively positive attitudes, compared to before their
exposure to the message.
When comparing people’s attitude toward the profit company before and after the
CSR message exposure, it was found that people formed more positive attitudes toward the company when they were exposed to the CSR message (H6-8 supported). Also, their purchase intention was increased when they were exposed to the CSR message (H6-9 supported). These mean difference results seem contradictory to the results of structural model in this study because the structural model predicts that low source trustworthiness increases people’s suspicion toward the profit company and so it influences people’s attitude and purchase intention toward the company negatively.
This study reasons these contradictory results as follows: people may form the post-attitude toward the profit company based on the CSR activity itself and based on the
CSR communication activity. The model proposed in this study only tested the communication factor’s effectiveness on the sequential variables such as attitude and
113 purchase intention. The results showed that the communication factor itself increases people’s suspicion and so it influences people’s negative attitude formation and reduced purchase intention. However, people may judge the bad profit company’s CSR activity itself as a good deed although the communicating CSR activity as a promotion tool increases people’s suspicion and so it decreases people’s positive attitude formed by the
CSR activity itself. Nonetheless, the net effect of CSR activity (impact of CSR activity itself + impact of CSR communication activity) can be positive because of higher impact of CSR activity itself. Future studies need to test both impacts (activity itself and communication activity) on people’s attitude and purchase intention of the company’s products.
The Nonprofit Source Model
Then, what about the nonprofit organization? Does the associated nonprofit organization get the desirable outcomes from the CSR association with the bad profit company? The more the nonprofit reputation was perceived as good; the more people became suspicious of the profit company’s CSR motive because people might think the nonprofit source played like a puppet for the bad profit company. This made people form negative attitudes toward the nonprofit organization (H6-4 supported). Negatively formed attitudes toward the nonprofit organization decreased people’s donation intention to the nonprofit organization (H6-4 supported). Also, strongly positive nonprofit organization’s reputation can influence people’s attitude toward the profit company negatively through heightened suspicion toward the profit company’s CSR motive. This also influenced people’s purchase intention negatively (H5-1 supported).
114 When checking the total effects of CSR activity (impact of CSR activity itself +
impact of CSR communication activity), the result showed that people’s attitude
decreased significantly after the exposure of the CSR message when they saw the
nonprofit organization’s spokesperson endorsing the bad profit company’s CSR message.
Also, their donation intention to the nonprofit organization decreased significantly after the exposure to the message. When considering the fact that the people’s attitude and donation intention toward the nonprofit organization decreased regardless of whether the endorser was the profit or the nonprofit-affiliated spokesperson, it suggests that associating with the bad profit company itself directly ruins people’s attitude and donation intention toward the nonprofit organization no matter how the CSR activities is communicated with the variation of source affiliation type. When examining the profit source model’s causal paths (see Figure 7), it is shown that there is no significant influencer on people’s attitude toward nonprofit organization. Although there was no influencer on it in the CSR communication-related structural model, participants’ post- attitude was decreased when compared to the pre-attitude of people. It supports the argument that associating with the bad profit company directly ruins people’s attitude and donation intention toward the nonprofit organization.
Explanations of Not Supported Hypotheses
First of all, the level of CSR value did not influence people’s personal relevance
in this study (H1-3). The level of CSR value was manipulated by a word indicating an
individual vs. societal level value of CSR in this study. Individual level value refers that
message recipients will be the direct beneficiaries whereas the societal level value refers
115 that message recipients will not be the direct beneficiaries but the whole society will
receive some benefits from the profit company’s CSR activity. Previous studies of ELM
have shown that a simple change from the third person (i.e. he) to the second person (i.e.
you) could increase people’s personal relevance to the message (Burnkrant & Unnava,
1989). However, this did not happen in this study.
One possibility is that the level of CSR value has different meanings, beyond
personal closeness. Or, college students do not care about the individual level CSR value
like they do not care about the societal level CSR value. Because this study did not have a
methodological tool to check whether the level of perceived personal relevance in both
conditions are higher than the average personal relevance to certain topics, it cannot be
decided which one is correct. But, it is interesting to note that the societal level value
condition had slightly higher mean values than the individual level value in the personal
relevance variable although the differences were not statistically significant; and also the
mean values of individual and societal message condition were significantly higher than
medium value 4 in the 7-point Likert scale. If future researchers compare the relative personal relevance level by having two or more different message topics, they will be
able to argue the relative personal relevance level of CSR message topic. The other
possibility is that personal relevance variable is not such a simple construct as
manipulated in ELM studies. People’s personal relevance can be the construct that is very
difficult to be manipulated by experimental factors. Or, the personal relevance is the
construct that can be measured by other instruments (beyond verbal reporting of people)
such as psychophysiological instruments. More cautions are necessary to conclude that
people’s personal relevance can be manipulated by a simple change of you vs. he (third
116 person) as proposed in ELM studies; and more cautions are necessary to measure the
personal relevance construct.
Four hypotheses related to the interaction effect between the source affiliation
type and the level of CSR value on message elaboration (H2-1, 2-2, 2-3, and 2-4) were
not supported in this study. These results also can be explained by the same reasoning
above. Participants in the condition of the profit vs. nonprofit source type processed the
source affiliation type information as a peripheral cue and so the information did not
make group differences on participants’ message elaboration (H2-5 not supported in both
structural models). So, there was no main effect of the source affiliation type on the
message elaboration (see Table 8). Participants in both individual and societal level group
perceived the CSR message similarly and so there was no main effect of the level of CSR
value on the message elaboration. Therefore, the interaction effect did not appear in this
condition. Future studies should consider the source affiliation type as a peripheral cue;
and it is better not to connect the source affiliation type to the people’s message
elaboration.
In this study, the bad profit company’s reputation did not influence the profit
company’s source trustworthiness (H3-1 not supported). The corporate reputation is
composed of five different factors (the quality of products, commitment to protect the
environment, the degree of consumer orientation, monetary value of the company’s
products, and the credibility of advertising). Because corporate reputation is influenced by those several factors, it is possible that the whole corporate reputation is not deteriorated by one negative event (environmental issue came out related to the profit company in this study). Some components can be deteriorated while others are not. To
117 check this possibility, one-sample t-tests for each reputation component were conducted.
The mean value of the corporate reputation was 3.4351. The result showed that the second component of corporate reputation (commitment to protecting environment) was significantly deteriorated by the environmental issue (p=.000). Also, the credibility of
advertising was deteriorated significantly by the environmental issue in this study
(p=.000) while the consumer orientation factor was not influenced by the environmental
issue (p>.05) (see Table 30). That is, the deterioration of the credibility of advertising in
the corporate reputation can occur by just one environmental issue when the bad
company endorses an environment-related CSR activity.
Source trustworthiness is composed of corporate credibility. This explains why
the corporate credibility significantly influenced the source trustworthiness in the profit
source model (H3-2 supported) whereas the whole corporate reputation did not influence
the source trustworthiness (H3-1 not supported). This result also indirectly shows that
participants did not have unconditional negative perception toward the profit companies
in general. Rather, they seem to have a fair judgment process toward the profit company
because their perception toward each component of reputation was not coherently
negative and was not influenced by one event.
Table 30. Deterioration of Corporate Reputation Component N Mean S.D. t d.f. Sig. Quality of products 336 3.59 1.381 2.046 335 .042 Commitment to protecting the 336 1.98 1.297 -20.614 335 .000 environment Consumer orientation 336 3.40 1.569 -.424 335 .672 Monetary value of products 336 5.28 1.609 20.981 335 .000 Credibility of advertising 336 2.93 1.483 -6.188 335 .000
118 Whereas the profit company’s reputation did not influence the source
trustworthiness, the nonprofit organization’s reputation did influence the source
trustworthiness (H3-4 supported) and more interestingly the nonprofit credibility did not
influence the source trustworthiness (H3-5 not supported). This can be caused by people’s
similar perception toward the nonprofit organization’s reputation and credibility. In other
words, people can think if the nonprofit organization’s reputation is high, the nonprofit organization’s credibility also would be high. To check this possibility, a factor analysis was conducted with five reputation items and four credibility items altogether (total eight items). KMO value (.864) and Barlett’s test (.000) showed that using factor analysis with
the dataset in this study is not problematic. The result supported the possibility (see Table
31). It showed that eight items were loaded into two different factors (based on eigenvalue over 1 criterion) with the principal component method. The two factors accounted for more than 63 percent of the total variance, which is a very high explanation power. The scree plot was examined and showed that the two factor solution was appropriate because the elbow of the scree plot was on the second factor solution. With the Varimax rotation method, it was found that the two items related to the nonprofit organization’s trustworthiness (credibility is composed of trustworthiness and expertise in this study) were loaded on the first factor (the reputation items were all loaded on the first factor), which means that the trustworthiness factor in the nonprofit organization’s credibility factor can be bundled together with the nonprofit organization’s reputation and so the nonprofit organization’s credibility is almost a kind of sub-dimension of the nonprofit reputation. Because of these strong relationships, the nonprofit credibility was not played as a strong influencer when a regression analysis ran with the nonprofit
119 organization’s reputation and credibility together. To confirm that the nonprofit
organization’s credibility is a sub-dimension of the reputation, a partial correlation
analysis was conducted and the result showed that correlations within four components of nonprofit credibility became non-significant when controlling for the nonprofit reputation’s influence. In conclusion, the reason why the nonprofit credibility did not play an important role influencing the nonprofit source’s trustworthiness could be because of its strong sub-attachment to the nonprofit reputation.
Table 31. Nonprofit Reputation and Credibility Component 1 Component 2 Eigenvalues 4.531 1.155 % of Variance 50.341 12.831 Rotated Component Matrix (below .50 suppressed) KMO .864 Reputation 1 .767 Barlett’s Test 1410.169 Reputation 2 .791 d.f. 36 Reputation 3 .619 Sig. .000 Reputation 4 .549 Reputation 5 .814 Credibility 1 .715 Credibility 2 .541 Credibility 3 .890 Credibility 4 .865
This study hypothesized that the profit company’s source trustworthiness would
not influence the personal relevance but the result of a regression analysis showed that it
influenced the personal relevance (H3-11 not supported). Because people peripherally
process the source affiliation type information without any effortful thought process,
shown in the structural model, the negative perception toward the profit company’s
source trustworthiness can simply increase the personal relevance because people usually
seek to acquire an accurate perception of external reality (Gotlieb & Sarel, 1991; Petty,
120 Priester, & Brinol, 2002). Thus, future studies need to hypothesize that the relationship
exists.
High suspicion to the nonprofit organization’s CSR association motive with the
bad profit company did not influence people’s negative attitude formation toward the nonprofit organization when the endorser of the CSR message was the profit affiliated
spokesperson (H4-2 not supported in the profit source model). Interestingly, when the
endorser was affiliated with the nonprofit organization, people’s high suspicion to the
nonprofit organization’s CSR association motive influenced people’s negative attitude
formation toward the nonprofit organization (H4-2 supported in the nonprofit source
model). These opposite results show that people really care about who the spokesperson
is in the CSR message. When people see the nonprofit organization’s source represents
the bad profit company’s CSR activity, they think the nonprofit source is a puppet for the
bad profit company and so finally the thought process influences people’s attitude toward
the nonprofit organization negatively. When the endorser is affiliated with the profit
company, people do not form the negative attitude toward the nonprofit organization as
seen in the result of H4-2. Thus, future studies need to take the opposite directionality of
the impact of the source affiliation type on the attitude toward the nonprofit organization
as shown in this study. This opposite directionality of hypotheses in the profit vs.
nonprofit source model needs to be applied into the H6-2 and H6-3 in future studies.
When the endorser of the CSR message was the profit source, people did not punish the
nonprofit organization in terms of the attitude (H6-2 and H6-3 not supported in the profit
source model) whereas they punished the nonprofit organization when the nonprofit
source played as a puppet for the bad profit company (H6-2 and H6-3 supported in the
121 nonprofit source model) in engaging CSR communication activity. The same suggestions
can be applied to the H6-4. People do not punish the nonprofit organization in terms of
donation intention if the endorser of the CSR message is affiliated with the bad profit company (H6-5 not supported). Interestingly, people reduce their punishment degree to the nonprofit organization in terms of the donation intention although they see the endorser of the bad company is the nonprofit organization’s spokesperson (H6-5 not supported in the nonprofit source model). In conclusion, the transfer effect-related hypotheses (H6-1, 6-2, 6-3, 6-4 and 6-5) should have different hypothesis directionalities based on the source affiliation type in future studies. Because this study was the first study testing these relationships within both parties’ interactions, the hypothesis directionalities were not delicately set.
Practical Implications of Results
The purpose of this study was to check the effectiveness of the communication
factors in CSR activity. Previous researches in the CSR domain predominantly have
focused on the management function decisions (such as comparing sponsorship, CRM,
and philanthropic donation’s comparative effectiveness on the bottom lines; comparing
the best match between the profit company’s industry types and supported social causes’
industry types) for revealing why certain combinations work, whereas other combinations
do not work properly in terms of the profit company’s benefits only. If public relations
practitioners fail to engage in the decision making process of the CSR activity in the
managerial board as dominant coalitions, public relations practitioners have no power to
change such combinations of management function. And, unfortunately, many public
122 relations practitioners who work for the profit companies have relatively lower level job occupations than marketing and advertising people, although the current industry mood changes to the opposite direction. This prevents the voice of public relations practitioners
from reaching the upper level managerial boards. On the contrary, marketing and
advertising people can easily access to the upper level managerial boards because their
activities can be easily caught by those dominant coalitions (e.g. by showing visible
bottom-line chart based on the revenue increment based on the comparison before and
after the cause-related marketing activity). As a result, their voices can influence the
managerial decision making significantly. If public relations practitioners have to wait
until upper level managerial boards decide the types of CSR and the combination of CSR based on the marketing and advertising people’s opinions, the only possible way that public relations practitioners can contribute to society by behaving as a good citizen as well as to the corporate bottom lines is to plan communication strategies in appropriate
ways. This study focused on that niche by selecting two communication factors that have
been utilized by public relations practitioners in reality based on the informal content
analysis of Fortune 500 profit companies’ online press releases.
Also, this study attempted to show the possibility of exploitation of nonprofit organizations by bad profit companies. By selecting the predominant CSR association type (profit companies with relatively bad reputation choose a nonprofit organization
with relatively good reputation because those profit companies want to increase their
reputation or even to rebuild their tarnished reputation after the serious crisis), this study
tried to show how profit companies can exploit nonprofit organizations with or without
intentions. If profit companies want to be a good citizen in a long-term, profit companies
123 should know what kinds of communication activities can unintentionally influence nonprofit organizations negatively. Most previous studies conducted in the marketing and advertising fields have focused mainly on the benefits and loss of profit company side.
This is self-explanatory because the function of marketing and advertising is to maximize profit companies’ bottom lines. Then, what about public relations function? Should public relations functions focus on the profit side only, too? Although the origin of public relations was to manipulate public opinion in favor of profit companies’ benefits, current public relations functions are embracing more conversation-based functions between the company and important stakeholders encompassing the company, and even further the whole society. In addition, because CSR activities are usually packaged to show the sincerity of the profit company’s CSR motive, profit companies should know what impacts can be produced by their CSR activities on the nonprofit sides and on the whole society if they really want to show their sincerity.
Based on these two objectives, this study tested the effectiveness of two communication factors (the source affiliation type and the level of CSR value) on people’s attitude toward the profit and nonprofit organization; and people’s purchase intention of the profit company’s products and people’s donation intention to the nonprofit organization, mediated by the source trustworthiness (aroused by the source affiliation type) and the perceived personal relevance level (aroused by the level of CSR value), after reading a CSR message presented by the profit company’s internal public relations practitioner. The result showed that the source affiliation type made people in different groups perceive the source trustworthiness differently. Interestingly, the level of
CSR value did not make a group difference, but people’s perceived relevance in both
124 groups influenced people’s message elaboration process and the heightened message
elaboration increased people’s belief about the profit company’s pure CSR motive. Thus,
if practitioners can successfully increase people’s personal relevance to the message, the
result will help minimize people’s suspicion toward the profit company. Revealing
variables influencing people’s personal relevance should be further studied in future
studies. One possibility to increase people’s personal relevance to CSR message is
making people participate in CSR activities, not just letting them observe CSR activities.
The result of in-depth interviews (Bae & Cameron, 2006b) showed that people who had
personal experiences in CSR activities expressed more involvement than people who did
not have personal experiences.
By having two communication factors (source trustworthiness and personal relevance) in the structural causal model, the results seem to show that the bad profit
company could get the expected outcomes when they planned to initiate the CSR activity
with a good nonprofit organization. Interestingly, the profit company seems to get more
benefits in terms of attitude and purchase intention when they use the profit-affiliated
source (internal spokesperson) than when they use the nonprofit-affiliated source (see
Table 22).
When considering, however, the fact that people’s attitude formation and purchase intention of the profit company’s products are based on the two different mechanisms
(one for CSR activity itself and the other for CSR communication as a promotional tool),
the results of this study suggest not to communicate the bad profit company’s good deeds
by themselves and by others (such as nonprofit affiliated spokespeople). The structural
model shows that when people perceive the profit affiliated spokesperson’s
125 trustworthiness is not high, they become suspicious of the profit company’s CSR motive.
This eventually influences people’s attitude and purchase intention toward the profit
company even though the net impacts of CSR activities can be still positive. Self-serving communication activities do not bring more benefits to the profit companies if their
endorsers are not very trustworthy due to corporate crises in the CSR context.
The high message elaboration caused by high personal relevance can reduce
people’s suspicion level toward the profit company’s CSR motive when the profit company uses an internal spokesperson (profit affiliated source). This means that people’s suspicion aroused by the profit source appearance in the CSR message can be minimized if target audiences attach great importance on the CSR topic itself when the profit company uses internal spokespeople in delivering CSR messages. However, the high message elaboration caused by high personal relevance does not increase people’s positive perception toward the profit company’s CSR motive when the profit company uses nonprofit-affiliated spokespeople. In other words, the profit company will not earn more benefits by increasing the message relevance to target audiences when the profit company uses the nonprofit-affiliated sources in delivering its CSR values. When considering the previous result, in this study, showing the profit company does not get more benefits by using nonprofit affiliated sources than by using profit affiliated sources
(see Table 22), it suggests that it is better for the profit company using internal spokespeople to deliver highly relevant CSR messages to the target audiences in order to minimize people’s suspicion toward the profit company. This strategy is also beneficial to the nonprofit side because the associated nonprofit organization cannot get any benefits by lending its internal sources (nonprofit affiliated source) to the profit company for
126 endorsing the profit company’s CSR value (see Table 20). If people perceive the nonprofit affiliated source as a puppet to represent the bad profit company’s interests, the
result can produce more negative impacts on the nonprofit organization in terms of
attitude and donation intention (H6-1, 6-2, 6-3, 6-4 supported in the nonprofit model).
That is, the ‘best’ combination of making exploitation status by profit companies to the nonprofit organizations is that profit companies with a bad reputation utilize a good nonprofit organization’s spokesperson to endorse the profit company’s positive CSR value.
This happens often in reality because profit companies believe that borrowing the nonprofit organization’s spokesperson to represent the company’s sincerity of the CSR motive can increase the believability of the message and the CSR activity. However, this study shows that it is the worst decision that profit companies can make when they want to have a win-win outcome in the CSR associations between the profit company and the nonprofit organization. Therefore, the profit companies with a bad reputation should take the most trustworthy internal spokesperson rather than the associated nonprofit
organization’s spokesperson to deliver CSR messages if profit companies want to have
win-win situations when conducting CSR activities. Even, profit companies with a bad
reputation should refuse the nonprofit organization’s offers that they can borrow a
trustworthy spokesperson for the profit companies if profit companies want to have win-
win situations.
When corporate managerial boards want to conduct CSR activities after a serious
reputation-damaging crisis (because this study shows that the bad profit company still can
get some benefits by initiating CSR activities), perhaps few public relations practitioners
127 will refuse to do it for the company even though they know their CSR activities can
produce harmful effects to the associated nonprofit organizations in terms of attitude and
donation intention toward the nonprofit organization. They can reason why it is better not to conduct CSR communication activity based on this study because the structural model shows that communicating CSR reduces the net benefits of CSR activity. When public relations practitioners, however, should conduct CSR activities due to the adamant managerial boards, public relations practitioners should take the most desirable strategies for both parties (profit and nonprofit organization) if they want to practice macro public relations as defined by Olasky (1987) (profit companies acknowledge the power and value of publics and fulfill more symmetrical activities such as supporting valuable social causes and tracking social issues); and if they want to get public approval for legitimizing their companies’ reason d’etre. Using the nonprofit organization’s spokesperson does not help the nonprofit organization minimize the harmful effects of the CSR association. The profit company’s internal spokesperson more helps the profit company increase positive attitude and purchase intention of target publics.
For the nonprofit organization side, this study suggests not to associate with bad
profit companies because the association ruins people’s positive attitude and donation
intention to the nonprofit organization. Although they avoid being an endorser of the
profit company’s CSR activity, the association act itself increases people’s suspicion
toward the profit company and such tainted gifts from the profit company transfer to the
nonprofit side regardless of communicating activities. More specifically, if nonprofit
organizations should have some financial gain from the association with profit companies,
nonprofit organizations should be careful when choosing their association partners by
128 checking what those profit companies want. If those profit companies have plans to
conduct CSR communications actively, they will be the worst partner for the nonprofit
organizations because increasing CSR communication activity connects to the people’s awareness of the nonprofit organization’s association with the bad profit company.
Seventy percent of financial inputs from the individual donors can be decreased by the association with bad profit companies. In conclusion, publics punish the bad profit company’s CSR communication activity when it associates with a good nonprofit organization and even more, they punish the good nonprofit organization because of the harmful transfer effect of the tainted gifts. Therefore, profit companies that want to initiate CSR related activity should be cautious about the mechanism described in this study.
Theoretical Implications of Results
Few researchers have taken both parties (profit and nonprofit organization) in one
study to reveal the causal process of how people process CSR messages in their minds.
However, taking only one party to explain how CSR activity works cannot explain the
full picture because CSR activities can only occur when two parties are engaged. By
taking two parties into one picture, this study showed the causal relationship of how
profit companies with a bad reputation influence nonprofit organizations with a good
reputation in the CSR context. This study showed how the causal model between two
parties should be designed, named ‘transfer.’ The proposed sequential process among corporate and nonprofit reputation, corporate and nonprofit credibility, suspicion toward the profit and nonprofit organization, attitude toward the profit and nonprofit organization,
129 and behavior intention toward the profit and nonprofit organization had very high model fittings in this study, which means that the causal model of this study is appropriate to explain the reality of CSR phenomenon.
Previous studies in sponsorship literature have only tested one-way direction that the good image of sponsorship event can be transferred to the profit company. The results in this study showed that the profit company’s bad image can be transferred to the sponsee. Thus, future studies should consider the multi-directional transfer between two parties when they associate to produce good outcomes.
The latent variables used in this study show that preceding latent variable in the causal relationships has high explanatory powers on the sequential latent variables. In the profit source model, except to source trustworthiness (6.4%), attitude toward the nonprofit organization (5.6%), and donation intention to the nonprofit organization
(37.1%), all other latent variables had more than 50 percent of explanatory power. Similar exploratory powers were shown in the nonprofit source model. This means that preceding latent variables in the causal model can explain the portion of each sequential latent variable. That is, with ten proposed latent variables, causal relationships in the CSR domain can explain much. Also, the adoption of a suspicion concept in this study successfully mediated the relationship between the communication message factors and reasoned behavioral actions based on the attitude. This means that the suspicion concept is an important psychological mediating factor and so should be utilized in the future studies of the CSR field.
Little was found concerning what communication factors can influence the effectiveness of CSR messages. This study showed that the source affiliation type is an
130 important message factor to influence the effectiveness of the CSR message. Also, this study showed that the source affiliation type makes people process the information as a
peripheral cue in the CSR context. By showing that the direct causal path between source
trustworthiness and people’s suspicion toward the profit company exists in both profit
and nonprofit source model, this study provides important information related to the
Elaboration Likelihood Model.
Additionally, this study showed that profit companies’ reputation is relatively
intact against some crises if the company’s product quality is perceived as ‘not bad.’
However, their corporate credibility can be significantly ruined when a crisis occurs. The
ruined corporate credibility influences the company’s source trustworthiness rather than
the corporate reputation. Thus, two concepts should be delicately used in future studies.
Interestingly, the nonprofit organization’s credibility can be a strong sub-dimension of the
organization’s reputation, compared to profit companies’ credibility. This means that who
owns the credibility and reputation is an important factor in differentiating the two
concepts (reputation and credibility). Thus, future studies should take more delicate
approaches when using these concepts in the model.
Finally, this study produced some unsupported hypotheses in the structural model.
Because few studies took both parties (profit and nonprofit) in one study, it was difficult
to produce appropriate directional hypotheses in the structural model. Based on the
results of this study, future studies can develop more delicate hypotheses with appropriate
directionality. Also, this study produced several unsupported hypotheses in the treatment
effect-related hypotheses. Those unsupported hypotheses provided insightful information
in the CSR domain. For example, this study explained why the level of CSR value does
131 not have a main effect on the personal relevance variable. Also, this study explained why the source affiliation type does not have a main effect on the message elaboration process because the source type information just plays as a peripheral cue. Based on these unsupported hypotheses, future researchers can produce appropriate hypothesis directionalities, which can be specifically applied to the CSR domain.
Limitations and Suggestions for Future Research
This study only used one version of stimulus to manipulate people’s source trustworthiness and personal relevance. The usage of one version of stimulus can produce several limitations in the experimental studies (Reeves & Geiger, 1994). For example, it opens high possibilities of the third variables’ influences in the manipulation of the study and high possibility of unsuccessful manipulation. However, because of the big numbers of variables (over 80 variables including pre- and post-attitudinal and behavioral measurements) in one version of the stimulus, it was not feasible to conduct more than two versions of the stimulus in the study. Although there was an effort to truncate the number of measurement variables by conducting a reliability check, deleting one item from one construct caused significant reliability loss in many variables. The final results of this study showed that observed variable Y4 (in the corporate credibility factor) and
Y25 (in the nonprofit pure motive factor) were not successfully loaded in each factor.
Also, in the profit source model, the attitude toward the nonprofit organization factor
(except for donation intention) was not connected with other latent variables successfully.
In the nonprofit source model, the personal relevance factor also was not connected to other variables (except for message elaboration) successfully. Thus, future studies may
132 truncate those variables for using more than two versions of stimulus.
The level of CSR value factor can have many connotations within the concept itself, beyond personal relevance variations. The CSR messages can have more complicated meanings than other messages. For example, ELM studies showed that the simple manipulation of you (close relevance) and they (distant relevance) can arouse people’s different personal relevance. However, in the CSR context, the distance can be intertwined with other meanings. The societal value can give more credit than the individual values to the profit company if the company appropriately framed the message because people can think the societal value is more meaningful to the whole society. Also, it is possible that the personal relevance concept is usually played as a dependent variable rather than as a message feature that can be manipulated by external influences. Thus, future studies need to capture those connotations involved in CSR contexts. Also, what communication factors can increase people’s personal relevance need to be revealed in the future studies.
Some latent variables adopted in this study showed somewhat low R2 values.
Message factors and psychological factors arousing source trustworthiness, attitude toward the nonprofit organization, and donation intention to the nonprofit organization need to be examined in the future studies. One possibility is to include latent variables that were not included in the structural model such as corporate reputation, nonprofit reputation and credibility in the profit model; and such as corporate reputation, corporate credibility, and nonprofit credibility in the nonprofit model. Because of a big model size, those latent variables were deleted in the structural model based on the regression analyses. However, those factors could show more information about the model.
133 In this study, people’s pre-existing perception toward profit companies and profit- affiliated spokespeople were not checked. Also, the post perceptions toward profit companies and profit-affiliated spokespeople after reading the CSR message were not checked. It would be better to have such indicators in the future studies because it gives more information about the real cause of lowering source trustworthiness in the model. It is possible that the simple appearance of profit companies in the CSR message can cause people’s suspicion toward the profit companies (before they became aware of a profit company’ bad reputation) because people can have negative perceptions about profit companies in general. However, this study did not control this possibility because it is assumed that people’s negative perception toward the profit companies itself is also part of profit companies’ reputation that profit companies should deal with when they plan to conduct CSR activities in reality. Furthermore, for testing more prevalent combination in reality, this study induced a bad reputation to the profit condition and a good reputation to the nonprofit condition. Partialing out the influence of people’s negative perception toward the profit companies in general is a good future research topic.
This study only adopted one combination of profit and nonprofit reputation because checking whether the exploitation can occur in this combination was the primary objective of the study. It would be interesting to test different combinations of profit and nonprofit reputation (or different combination of credibility because this study showed that corporate credibility matters more beyond the corporate reputation in the CSR context). What kinds of combination can produce the best win-win result? Or, what kinds of combination can produce the positive CSR communication effects? In this study, as profit companies with a bad reputation execute CSR communication as a promotion tool,
134 people are more likely become suspicious. As a result, it influences their attitude and
behavior intention negatively toward profit and nonprofit organizations. Detecting a
combination that does not produce people’s suspicion, even although CSR
communication is used as a promotion tool would be an interesting topic. Also, as
mentioned above, testing the effectiveness of the combination between no reputation
information related to profit companies and no reputation information related to nonprofit
organizations would be very interesting research topic.
Finally, future studies should delve into the partial impacts of CSR activity itself
and CSR communication activity. Simple appearance of CSR activity itself conducted by
profit companies with a bad reputation aroused people’s suspicion; and influenced their attitude and behavior intention consecutively. Examining both impacts together and
separately in the model can produce more valuable insights in the CSR field.
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149 Appendix I: Measurement Scales
Profit Prior Reputation (Helm, 2005)
Reputation refers to “a stakeholder’s overall evaluation of a company over time” (Gotsi
& Wilson, 2001, p.29).
Y1-1. ( )’s quality of products are very good.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y2-1. ( )’s commitment to protecting the environment is very high.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y3-1. ( ) is very consumer oriented.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y4-1. ( )’s value for money of products is very high.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y5-1. The credibility of advertising that ( ) claims is very high.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Nonprofit Prior Reputation (Helm, 2005)
Reputation refers to “a stakeholder’s overall evaluation of a company over time” (Gotsi
& Wilson, 2001, p.29).
Y1-2. ( )’s quality of social service are very good.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y2-2. ( )’s commitment to protecting our society is very high.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y3-2. ( ) is very donor oriented.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
150 Y4-2. ( )’s value for donated money is very high.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y5-2. The credibility of statements that ( ) endorses is very high.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Prior Attitude Toward the Profit Company (MacKenzie and Lutz, 1989)
Attitude is defined as a general positive or negative feeling about an object that consistently affects people’s behavior (Petty & Cacioppo, 1981).
My feeling about ( ) is
Y29-1. Bad ___ : ___ : ___ : ___ : ___ : ___ : Good
Y30-1. Unfavorable ___ Favorable
Y31-1. Unpleasant ___ : ___ : ___ : ___ : ___ : ___ : Pleasant
___
___ : ___ : ___ : ___ : ___ : ___ :
___
Prior Attitude Toward the Nonprofit Organization (Webb, Green, & Brashear, 2000)
Attitude is defined as a general positive or negative feeling about an object that consistently affects people’s behavior (Petty & Cacioppo, 1981).
Y32-1. The money given to (the nonprofit organization) goes for good causes.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y33-1. Much of the money donated to (the nonprofit organization) is valuable.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y34-1. My image of (the nonprofit organization) is positive.
151 Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y35-1. (The nonprofit organization) has been quite successful in helping the needy.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y36-1. (The nonprofit organization) performs a useful function for society.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Prior Purchase Intention of the Profit Company’s Product (Bearden, Lichtenstein,
& Teel, 1984)
Purchase intention is defined as the degree of intention to perform product purchase.
I would consider buying the profit company’s product
when I need to purchase those products next time.
Y37-1. Very unlikely ___ : ___ : ___ : ___ : ___ : ___ : Very likely
Y38-1. Improbable ___ Probable
Y39-1. Impossible ___ : ___ : ___ : ___ : ___ : ___ : Possible
___
___ : ___ : ___ : ___ : ___ : ___ :
___
Prior Donation Intention (Bennett & Barkensjo, 2005; Malhotra & Mukherjee,
2003)
Donation intention is defined as the degree of intention to donate money to a nonprofit organization.
Y40-1. I will donate money to (the nonprofit organization) if I have a chance to donate
152 money to nonprofit organizations in the future.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y41-1. I will recommend other people to support (the nonprofit organization) if other people considers to donate money to nonprofit organizations.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Profit (Nonprofit) Company’s Source Trustworthiness (Ohanian, 1990)
Source trustworthiness is defined as the degree of objectiveness (unbiasedness) perceived by message recipients (Gotlieb & Sarel, 1991; Straughan, Bleske, & Zhao, 1996).
I think ( ) is
Y6. Dependable ___ : ___ : ___ : ___ : ___ : ___ : ___ Undependable
Y7. Dishonest ___ : ___ : ___ : ___ : ___ : ___ : ___ Honest
Y8. Unreliable ___ : ___ : ___ : ___ : ___ : ___ : ___ Reliable
Y9. Insincere ___ : ___ : ___ : ___ : ___ : ___ : ___ Sincere
Y10. Untrustworthy ___ : ___ : ___ : ___ : ___ : ___ : ___ Trustworthy
Personal Relevance (Zaichkowsky, 1994)
Personal relevance refers to a perceived personal relevance to the topic (Gotlieb & Sarel,
1991; Petty & Cacioppo, 1986; Salma & Tashchian, 1985).
To me, this news story is
Y11. Unimportant ___ : ___ : ___ : ___ : ___ : ___ : ___ Important
Y12. Boring ___ : ___ : ___ : ___ : ___ : ___ : ___ Interesting
Y13. Irrelevant ___ : ___ : ___ : ___ : ___ : ___ : ___ Relevant
Y14. Unexciting ___ : ___ : ___ : ___ : ___ : ___ : ___ Exciting
153 Y15. Means nothing ___ : ___ : ___ : ___ : ___ : ___ : ___ Means a lot to me
Y16. Unappealing ___ : ___ : ___ : ___ : ___ : ___ : ___ Appealing
Y17. Mundane ___ : ___ : ___ : ___ : ___ : ___ : ___ Fascinating
Y18. Worthless ___ : ___ : ___ : ___ : ___ : ___ : ___ Valuable
Y19. Uninvolving ___ : ___ : ___ : ___ : ___ : ___ : ___ Involving
Y20. Not needed ___ : ___ : ___ : ___ : ___ : ___ : ___ Needed
Suspicion Toward the Profit’s CSR Motive (Rifon, Choi, Trimble, & Li, 2004)
Suspicion refers to “a dynamic state in which the individual actively entertains multiple, plausibly rival hypotheses about the motives or genuineness of a person’s behavior” (Fein,
1996, p.1165).
Y21. Altruism
( ) sponsored (the nonprofit organization) because ultimately ( ) cares about its customers.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
( ) has a genuine concern for the welfare of their consumers.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
( ) really cares about getting (Health information) to their consumers.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y22. Profit
( ) sponsored (the nonprofit organization) to persuade me to buy its products.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
( ) sponsored (the nonprofit organization) because ultimately it only cares about
154 their profits.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y23. Public image
( ) sponsored (the nonprofit organization) because (sponsorship of the nonprofit
organization) creates a positive corporate image.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Ultimately, ( ) gets positive benefits such as good corporate image by sponsoring (the nonprofit organization’s social event).
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y24. Ethics
( ) sponsored (the nonprofit organization) because it was morally the “right” thing
to do.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Suspicion Toward the Nonprofit’s CSR Association (Rifon, Choi, Trimble, & Li,
2004)
Y25. Altruism
( ) associated with (the profit company) because ( ) believes (the profit company) ultimately cares about its customers.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
( ) associated with (the profit company) because ( ) believes (the profit
company) has a genuine concern for the welfare of its consumers.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
155 ( ) associated with (the profit company) because ( ) believes (the profit company) really cares about getting (Health information) to its consumers.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y26. Profit
( ) might know that the association with (the profit company) would help persuade me buy (the profit company)’s products in some degree.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
( ) might know that the association with (the profit company) would help (the profit company) get profits from the association in some degree.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y27. Public image
( ) might know that the association with (the profit company) would help (the profit company) build a positive corporate image through the association in some degree.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Ultimately, ( )’s association with the profit company helps (the profit company) get benefits such as good corporate image.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y28. Ethics
( ) associated with (the profit company) because ( ) believes that the association with (the profit company) was morally the “right” thing to do.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Post Attitude Toward the Profit Company (MacKenzie and Lutz, 1989)
156 Attitude is defined as a general positive or negative feeling about an object that
consistently affects people’s behavior (Petty & Cacioppo, 1981).
My feeling about ( ) is
Y29-2. Bad ___ : ___ : ___ : ___ : ___ : ___ : ___ Good
Y30-2. Unfavorable ___ : ___ : ___ : ___ : ___ : ___ : ___ Favorable
Y31-2. Unpleasant ___ : ___ : ___ : ___ : ___ : ___ : ___ Pleasant
Post Attitude Toward the Nonprofit Organization (Webb, Green, & Brashear, 2000)
Attitude is defined as a general positive or negative feeling about an object that consistently affects people’s behavior (Petty & Cacioppo, 1981).
Y32-2. The money given to (the nonprofit organization) goes for good causes.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y33-2. Much of the money donated to (the nonprofit organization) is valuable.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y34-2. My image of (the nonprofit organization) is positive.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y35-2. (The nonprofit organization) has been quite successful in helping the needy.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y36-2. (The nonprofit organization) performs a useful function for society.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Post Purchase Intention of the Profit Company’s Product (Bearden, Lichtenstein, &
Teel, 1984)
157 Purchase intention is defined as the degree of intention to perform product purchase.
I would consider buying the profit company’s product
when I need to purchase those products next time.
Y37-2. Very unlikely ___ : ___ : ___ : ___ : ___ : ___ : Very likely
Y38-2. Improbable ___ Probable
Y39-2. Impossible ___ : ___ : ___ : ___ : ___ : ___ : Possible
___
___ : ___ : ___ : ___ : ___ : ___ :
___
Donation Intention (Bennett & Barkensjo, 2005; Malhotra & Mukherjee, 2003)
Donation intention is defined as the degree of intention to donate money to a nonprofit organization.
Y40-2. I will donate money to (the nonprofit organization) if I have a chance to donate money to nonprofit organizations in the future.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
Y41-2. I will recommend other people to support (the nonprofit organization) if other people considers to donate money to nonprofit organizations.
Strongly Disagree |------|------|------|------|------|------|------| Strongly Agree
158 APPENDIX II: Experiment Instrument
Thank you for taking the time to answer the questions in this study. I am studying people’s perceptions of corporate social responsibility activity. You will read two news stories here. After reading presented news stories, please circle the number that best describes your thoughts or feelings. You may not recognize organizations presented here. But, based on presented news stories, please rate following questions. Your answers will be used only for statistical purposes and will remain strictly confidential to the extent provided by law. Please read the instructions and questions carefully. Your participation is voluntary, and you may stop at any time.
Please read the following news story to answer questions.
Copyright 2005 Columbia Wire All Rights Reserved These materials may not be republished without the express written consent of Columbia Wire May 29, 2006 Monday
SECTION: Business News; State and Regional LENGTH: 215 words HEADLINE: LarKoon to pay $311 million to settle environmental pollution charge BYLINE: Linda Potter, Columbia Wire Writer DATELINE: COLUMBIA, MO BODY: LarKoon Oil Corporation will pay $311 million in fines and damages to settle charges related to environmental misconduct, the company and federal prosecutors announced Monday.
The settlement is the result of a five-year federal investigation into the company's misconduct in carrying oils and gas without minimum environmental-friendly protection, which is legally imposed on all oil companies in the United States. Government-ordered inspections found severe corrosion of LarKoon’s western oil transit line and also found that LarKoon did not follow the mandatory rule: using a portion of their oil selling profits to maintain the quality of oil pipelines.
“This settlement today will help US businesses take more social responsibility when operating their businesses within our society and also helps our governments strictly execute environmental laws. We are pleased that we are now putting this matter from the past behind us,” Friedman Ritz, a former head of corrosion monitoring, said in a written statement.
“This wasn't a mistake. It was an evidence of how the company has taken care of our environment and its customers,” he said.
This incident won’t affect the ability of the company to sell their oil to consumers,
159 authorities said. However, in afternoon trading on the New York Stock Exchange, the LarKoon Oil Corporation’s shares were down 28 cents at $15.48 a share.
LOAD-DATE: May 29, 2006 Please answer following questions based on the news story you just read.
For example, if you strongly agree to the following statement, you can mark like this.
LarKoon Oil Corporation’s quality of products would be very good.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---|√ Strongly Agree
If you somewhat agree to the statement, you can also mark like this.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---|√ Strongly Agree
If you strongly disagree to the statement, you can mark like this.
Strongly Disagree |---1---|---2---|---3---|---4√ ---|---5---|---6---|---7---| Strongly Agree
If you somewhat disagree to the statement, you can also mark like this.
Strongly Disagree |---1---|---2---|---3---|---4√ ---|---5---|---6---|---7---| Strongly Agree
======
1. LarKoon Oil Corporation’s quality of products would be very good.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
2. LarKoon Oil Corporation’s commitment to protecting the environment would be
very high.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
3. LarKoon Oil Corporation would be very consumer oriented.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
4. LarKoon’s value for money of products would be very high.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
5. The credibility of advertising that LarKoon Oil Corporation claims would be very
160 high.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
I think LarKoon Oil Company is
6. Insincere |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Sincere
7. Untrustworthy |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Trustworthy
8. Not an expert |---1---|---2---|---3---|---4---|---5---|---6---|---7---| An expert
9. Inexperienced |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Experienced
My feeling about the LarKoon Oil Company is
10. Bad |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Good
11. Unfavorable |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Favorable
12. Unpleasant |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Pleasant
I would consider buying the LarKoon’s oil product when I need to purchase oils
next time.
13. Very unlikely |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Very likely
14. Improbable |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Probable
15. Impossible |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Possible
Please go to the next page.
161 Please read the following news story to answer questions.
Copyright 2005 Columbia Wire All Rights Reserved. Columbia Wire July 17, 2006 Monday
SECTION: COMMENTARY; AS I SEE IT; Pg. A7 LENGTH: 235 words HEADLINE: Helping Environment offers solution to protect our environment BYLINE: Linda Potter, Columbia Wire Writer BODY: News about our environment today is not very comforting. Costs continue to increase in recovering our environment and the amount of environmental pollution has reached a high-point in 2005. Business leaders, legislators and environmental activists across our nation are struggling to find ways to continue to conserve the quality of our environment in this increasingly challenging time.
However, the U.S. based nonprofit organization such as Helping Environment is on the front lines in the effort to manage the environment in ways that benefit both our citizens and our businesses as a whole. Founded in 1997, Helping Environment provides environmental-friendly life guidance to everyone. The mission of Helping Environment is to improve the well-being of underserved residence areas by providing highly environment-friendly constructions such as natural playgrounds, green sports fields and social services across the U.S.
Today, the Helping Environment received the Best Nonprofit of the Year Award 2006 based on its consistent contribution to our society’s environmental wellbeing. National studies have found that: Every dollar donated in the Helping Environment generates $3 in savings for our environmental system at large. The cost of providing the same benefits to our society is 40 percent lower through the Helping Environment.
During the month of July, our government celebrates the valuable work of nonprofit organizations across the country. It is a good time to donate money to good nonprofit organizations which will be spent for preserving our environment.
LOAD-DATE: July 17, 2006.
Please answer following questions based on the news story you just read.
16. The Helping Environment’s quality of social service would be very good.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
162 17. The Helping Environment’s commitment to protecting our society would be very high.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
18. The Helping Environment would be very donor oriented.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
19. The Helping Environment’s value for donated money would be very high.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
20. The credibility of statements that The Helping Environment endorses would be
very high.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
I think Helping Environment is
21. Insincere |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Sincere
22. Untrustworthy |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Trustworthy
23. Not an expert |---1---|---2---|---3---|---4---|---5---|---6---|---7---| An expert
24. Inexperienced |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Experienced
25. The money given to the Helping Environment goes for good causes.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
26. Much of the money donated to the Helping Environment is valuable.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
27. My image of the Helping Environment is positive.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
28. The Helping Environment has been quite successful in helping the needy.
163 Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree 29. The Helping Environment performs a useful function for society.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
30. I will donate money to the Helping Environment if I have a chance to donate
money to environment-related nonprofit organizations in the future.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
31. I will recommend other people to support the Helping Environment if other people consider donating money to the environment-related nonprofit organizations.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
Please read the following press release provided by LarKoon’s internal PR manager to answer questions.
LarKoon Oil Corporation, Young Plaza, Dallas, USA Contact: Isaac Johnson, Chief Public Relations Manager Phone: 214-396-1910 Email: [email protected]
For Immediate Release
Local Community High School Students Landscape Parks, Build Homes Through LarKoon Green Team
Columbia, MO--(COLUMBIA WIRE)—September 11, 2006--For three years, hardworking groups of low to moderate-income high school students at local communities have chosen to spend their summer vacations beautifying local County parks, building houses and taking academic classes taught by local university students such as MU students.
Sponsored by LarKoon Oil Corporation and managed by the Helping Environment, the LarKoon Green Team provides paid summer jobs and educational enrichment classes for our local County-area high school students. Student participants work for the local Country Park and Recreation Department landscaping and maintaining parks, athletic fields and recreation centers across local Counties. In addition, 30 percent of Green Team
164 students built two homes under the supervision of construction technology instructors from local universities such as MU.
"Throughout the summer, the Green Team students have gained valuable knowledge and we believe our LarKoon made a long-lasting contribution on our local communities like Boone County," said Doug Marshall, Chief Executive Officer at LarKoon Oil Corporation.
The Green Team is one of LarKoon's signature community programs. To administer the 2006 program, LarKoon provided the country with a grant of $100,000. Since its launch in 2004, LarKoon Foundation has invested more than $400,000 in the local County program. Upon completion of the 2006 program, the LarKoon Green Team will have reached more than 10,100 students, constructed 130 homes and completed numerous park improvements throughout the local Counties. Boone County will be the recipient of LarKoon’s community program.
About LarKoon Oil Company
LarKoon, the US Oil industry leader based in Dallas, distributes natural gas and oil in 50 markets across the nation. Green Team is the one of the primary philanthropic arms of the LarKoon Oil Corporation. LarKoon Oil Corporation engages in a wide range of philanthropic activities that advance the green environment in the local communities where LarKoon has significant operations. Additional information on LarKoon's community partnerships and contributions programs is available at http:www.larkoon.com/community.
About Helping Environment
Celebrating its 10-year anniversary and its the Best Nonprofits Award in 2006, Helping Environment is a nonprofit organization that helps local communities have environmental-friendly community. Over the past decade, Helping Environment has used its innovative community-build model to bring together business and community interests to construct nearly 10,000 natural new playgrounds, green skate parks and sports fields across the local communities.
Contacts Isaac Johnson, LarKoon Chief Public Relations Manager 214-396-1910
Please answer following questions based on press release you just read.
I think LarKoon’s CEO, Doug Marshall is
32. Dependable |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Undependable
33. Dishonest |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Honest
165 34. Unreliable |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Reliable
35. Insincere |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Sincere
36. Untrustworthy |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Trustworthy
To me, this press release is
37. Unimportant |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Important
38. Boring |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Interesting
39. Irrelevant |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Relevant
40. Unexciting |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Exciting
41. Means nothing |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Means a lot to me
42. Unappealing |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Appealing
43. Mundane |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Fascinating
44. Worthless |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Valuable
45. Uninvolving |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Involving
46. Not needed |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Needed
47. The extent to which I thought about the press release is
Extremely little |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Extremely intensive
48. The time I spent on thinking about the press release is
Very little |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Very much
49. The amount of attention I paid to the press release is
Extremely inattentive |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Extremely
attentive
166 50. LarKoon Oil Corporation sponsored the Helping Environment because ultimately
LarKoon Oil Corporation cares about its customers.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
51. LarKoon Oil Corporation has a genuine concern for the welfare of their consumers.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
52. LarKoon Oil Corporation really cares about providing good environment to their consumers.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
53. LarKoon Oil Corporation sponsored the Helping Environment to persuade me to buy its oil.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
54. LarKoon Oil Corporation sponsored the Helping Environment because ultimately it only cares about their profits.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
55. LarKoon Oil Corporation sponsored the Helping Environment because sponsorship of the Helping Environment creates a positive corporate image.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
56. Ultimately, LarKoon Oil Corporation gets positive benefits such as good corporate image by sponsoring the Helping Environment.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
57. LarKoon Oil Corporation sponsored the Helping Environment because it was morally the “right” thing to do.
167 Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
58. The Helping Environment associated with LarKoon Oil Corporation because the
Helping Environment believes LarKoon Oil Corporation ultimately cares about its customers.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
59. The Helping Environment associated with LarKoon Oil Corporation because the
Helping Environment believes LarKoon Oil Corporation has a genuine concern for the welfare of its consumers.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
60. The Helping Environment associated with LarKoon Oil Corporation because the
Helping Environment believes LarKoon Oil Corporation really cares about providing
good environment to its consumers.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
61. The Helping Environment might know to some degree that the association with
LarKoon Oil Corporation would help persuade me buy LarKoon Oil Corporation’s
products.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
62. The Helping Environment might know to some degree that the association with
LarKoon Oil Corporation would help LarKoon Oil Corporation get profits from the association.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
63. The Helping Environment might know to some degree that the association with
LarKoon Oil Corporation would help LarKoon Oil Corporation build a positive
168 corporate image through the association.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
64. Ultimately, the Helping Environment’s association with the profit company helps
LarKoon Oil Corporation gets benefits such as good corporate image.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
65. The Helping Environment associated with LarKoon Oil Corporation because the
Helping Environment believes that the association with LarKoon Oil Corporation was
morally the “right” thing to do.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
My feeling about LarKoon Oil Corporation is 66. Bad |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Good
67. Unfavorable |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Favorable
68. Unpleasant |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Pleasant
69. The money given to the Helping Environment goes for good causes.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
70. Much of the money donated to the Helping Environment is valuable.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
71. My image of the Helping Environment is positive.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
72. The Helping Environment has been quite successful in helping the needy.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
73. The Helping Environment performs a useful function for society.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
169 I would consider buying the LarKoon Oil Corporation’s oil
when I need to purchase oil next time.
74. Very unlikely |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Very likely
75. Improbable |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Probable
76. Impossible |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Possible
77. I will donate money to the Helping Environment if I have a chance to donate
money to environment-related nonprofit organizations in the future.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
78. I will recommend other people to support the Helping Environment if other people consider donating money to environment-related nonprofit organizations.
Strongly Disagree |---1---|---2---|---3---|---4---|---5---|---6---|---7---| Strongly Agree
Before submitting this questionnaire to the researcher, please answer all questions presented in this questionnaire. Your every answer will contribute to the study. Although you are not familiar with organizations presented here, feel free to answer questions based on the presented news stories and press releases here. I really appreciate your patience and participation!
Finally, I want to ask your demographic information for the statistical purpose and it will be kept confidentially.
79. Gender Male [ ] , Female [ ]
80. Age [ ]
81. Current level of education 1st year college student [ ] 2nd year college student [ ] 3rd year college student [ ] 4th year college student [ ] Graduate student [ ]
170 Others (Please specify): [ ]
I appreciate your help again!
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171
VITA
Jiyang Bae received her B.A. majoring Business Administration of Ewha
Womans University in Korea (2002). She took a class from the public relations
department in Ewha when she was a junior, and made up her mind to major public
relations instead of business. The idea of the newly emerged public relations paradigm -
nurturing ‘mutual beneficial relationships’ between profit companies and encompassing
publics - allured her to change her major to public relations. In 2002, she entered to the
master program of the University of Florida, majoring in Public Relations. The pursuit of
‘nurturing mutually beneficial relationships’ led her focus on Corporate Social
Responsibility (CSR) domain. After writing her thesis, “Measuring the organization-level
value of corporate philanthropic activity: Path analysis of corporate philanthropic activity
on bottom-line through reputation,” she realized that her thesis was only for profit
companies in 2004. To delve into the ‘mutually beneficial relationships,’ she finally
chose to write her dissertation titled, “Tainted gift? Harmful effects of a bad profit
company’s corporate social responsibility activity on the associated good nonprofit
organization’s future.” By empirically testing a causal relationship model between two
parties (profit and nonprofit) in CSR context, she finally took the first step to reach to her
own dream: Helping profit companies contribute to the society’s wellbeing with appropriate CSR activities in 2006.
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