Finding the impact CSR and CSV have on stakeholder trust

By Flora Hung-Baesecke, Massey University; Don Stacks, University of Miami; Timothy Coombs, University of Central Florida; and Yi-Ru Regina Chen, Hong Kong Baptist University

Corporations fail to achieve their corporate social responsibility goals when they focus on short-term profits and ignore actual consumer needs.

Making the transition from CSR practices to creating shared value (CSV) requires corporations to reconnect with society by creating values both can share. When the public perceives its concerns are being addressed by such corporate practices, they tend to support the respective corporations. We argue that when corporations perform CSR, they foster the development of trust that further contributes to a positive perception toward the corporations' CSV practice and its outcome.

Our study aims to find the relationship among CSR, public trust, CSV and a public’s supportive behavior toward corporations. The study comprises two stages. First, we propose a theoretical model for testing secondary data of the Edelman Trust Barometer collected in the United States and China between 2013 and 2015. Secondly, we will employ in-depth qualitative interviews to provide rich data from the public that:

1. Render explanations for the survey results
2. Generate insights into the interplay of CSR, trust in corporations, CSV and public engagement with the corporations
3. Propose implications of how CSV can best be practiced in the two nations

According to previous research, a cross-national study is of value to CSR/CSV research because such practices are subject to the local market conditions (e.g., economic needs, social needs, cultural system, political system and the relationship among the government, the business, and the civil society). We are studying the United States and China because they are two of the largest markets worldwide while being different from one another in the conditions mentioned above.

Our study advances the modern understanding of CSR and CSV in terms of their impacts on stakeholder trust in and engagement with the corporation. More importantly, it provides insights into the practice of CSV from the public’s perspective. We believe the results will suggest the applications of the Page Principles, which enhance the unique role of public relations in the management.

There is an additional direction of investigation in this study: corporations have been operating in an ever-complex environment and it has become important that corporate behaviors satisfy the interests of multiple stakeholders. Carroll (1991) and Freeman and Gilbert (1988) contended that ethics are the foundation of what is right and fair behavior.
Ethical behaviors can be enhanced when corporations embrace values beyond only serving shareholders’ interests, and strategically integrate non-economic objectives into their present and prospective business operations.

Thanks to support from the Page Center, we expect that our research will shed light on how corporations should cooperate with stakeholders in defining their CSR objectives and initiatives so as to co-create values acceptable by both sides and contributing to the triple bottom-lines.

This project is among six research studies funded by the 2015-2016 Page & Johnson Legacy Scholar Grants. Results will be available early next year.