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CORPORATE SOCIAL RESPONSIBILITY – CORPORATE

BRANDING RELATIONSHIP: AN EMPIRICAL


COMPARATIVE STUDY
Associate professor PhD Bistra VASSILEVA
University of Economics-Varna

Abstract:
Current academic research on the relationship of firms’ CSR activities with
corporate branding typically focuses on consumers’ and shareholders’
viewpoints. This research aims to shed light on how organisational members
in firms perceive to be the impact of CSR activities upon their corporate
brand strategy. Using a survey administered to companies in the U.K. and
Bulgaria, the author investigate, firstly, organisational members’ perceptions
of the impact of different CSR-related activities upon corporate branding and,
secondly, their beliefs about what customers and shareholders think are the
impacts of CSR-related activities upon brand image and brand identity. The
findings indicated that while organisational members rated quality products,
customer service and corporate governance highly as key components of
CSR activity, they were much more ambivalent about their companies'
commitment to broader actions which involve the 'community' and 'society'.
This paper concludes by discussing the implications of the findings for future
'CSR education' among companies.

Keywords: Corporate social responsibility, corporate branding, brand image

Introduction Because the organisation is now


Research on corporate branding conceived of as an ‘expressive’ entity
has, in recent years, demonstrated a capable of influencing the opinions of a
growing reflexivity about how brands range of stakeholders, both internally
are perceived by various actors inside and externally, several scholars have
and outside organisations and their called for a more integrative and
responses to those perceptions (Brown multidisciplinary approach to the study
and Dacin, 1997). According to this line of organisational identity, an approach
of thinking, the discipline of corporate which can more comprehensively
branding needs to be understood not articulate the ways in which
only as a means of positioning, organisations perceive themselves and
marketing and 'selling' a certain set of how they want to be perceived by
associations and images to consumers, others (Dacin and Brown, 2002, 2006;
it should also consider how consumers, Schultz, Hatch and Larsen, 2000).
employees, shareholders, suppliers and
other interested parties respond to a Conceptual framework
company based on what they think they The role of corporate social
know about it. The expression of an responsibility or CSR to this process of
organisation’s identity (or identities) brand expressiveness is particularly
through multiple channels, media interesting since it inherently involves
platforms and business functions has, the management of corporate image
therefore, received increasing attention and reputation in and through the eyes
from scholars in corporate branding of others. Marketers are conscious that
(Schultz, Hatch and Larsen, 2000). CSR actions are scrutinized and
watched closely not only by consumers and Brown, 2006; Brown et al., 2006).
but by a range of stakeholders, This is what Brown et al. (2006) call
including the mass media. With the rise “construed associations,” framed as the
of environmental consciousness in the question “What does the organisation
21st century, marketers are more aware believe others think of the
than ever that corporate brand organisation?” By addressing this
strategies must reflect cultural trends in question through the lens of CSR, our
the wider environment to which research questions are thus (1) What
businesses belong. CSR, especially, impact does CSR have on firms’
lends special force to the belief among corporate branding according to the
researchers that brands today should managers and (2) What do managers
embody “community meanings” (Brown believe others (customers and
et al., 2003, p. 31) which transcend shareholders) think is the impact of the
national, cultural, ethnic and linguistic firm’s CSR activities upon its brand
boundaries. image?
As a result of these developments,
ethical responsibility is one of the most Corporate Social
compelling drivers of intangible Responsibility: “Push” vs. “Pull”
corporate assets today. The role of CSR Approach
in building brand identity and brand CSR is rooted in the recognition
reputation has become increasingly that businesses are an integral part of
important amidst signs that consumers society and that as such they have the
are becoming more cynical about potential to make a positive contribution
corporate promises in the areas of to social goals and aspirations. Different
environmental awareness, ethical organisations have framed a variety of
practices in areas ranging from legal definitions. The Commission for the
and regulatory compliance, human European Communities defines CSR as
resource management and social “a concept whereby companies
accountability. The perceptions of integrate social and environmental
consumers to CSR activities are, concerns in the business operations
therefore, a major concern for and in their interactions with their
marketers and marketing scholars. stakeholders on a voluntary basis”.
Marketers, understandably, According to Wood (1991) “the basic
typically favour research on how idea of CSR is that business and
customers respond to firms’ CSR society are interwoven rather than
activities. Thus, much academic distinct entities”. More generally, a
research has been generated on the distinction has been drawn between
reactions of consumers to CSR actions CSR seen as philanthropy as opposed
by companies (e.g. Barone, Miyakazi to CSR as core business.
and Taylor, 2000; Bhattacharya and A variety of factors are cited as
Sen, 2003; Brown and Dacin, 2007; being important in building the current
Gourville and Rangan, 2004). On the momentum behind CSR. Ernst & Young
individual level of analysis, however, suggest that five key drivers have
there is a dearth of research into how influenced the increasing business
“organisational insiders” (Brown et al., focus on CSR, namely greater
2006: 102) perceive CSR and its impact stakeholder awareness of corporate
upon corporate identity and the ethical, social and environmental
corporate brand. In this paper, the behaviour; direct stakeholder pressures;
author aims to shed light on investor pressure; peer pressure and an
organisational members’ perceptions of increased sense of social responsibility.
CSR in terms of their beliefs about what The European Commission argues that
others think of the organisation (Dacin CSR has gained increasing recognition
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among companies as an important between them depends on the drivers
element in new and emerging forms of which are used to stimulate responsible
governance because it helps them to behaviour of the companies. The main
respond to fundamental changes in the drivers for the implementation of the
overall business environment. These “push” approach into practice are the
changes include globalisation and the standards. In order to translate the CSR
responsibilities companies feel the need agenda into organisational settings,
to address as they increasingly source there are currently several standards
products and services in developing available. These standards deal with
countries; the issues of image and different aspects of the CSR agenda
reputation, which have become and offer (or are going to offer) a
increasingly important elements in certification against specific
corporate success; and the need for requirements. The “pull” approach relies
companies to recruit and retain highly mainly on self-regulation or on initiatives
skilled personnel. Girod and Bryane launched by the companies itself. There
(2003) adopt a strategic marketing are various principles (e.g. the CERES
perspective arguing that CSR is “a key principles1 that the global business
tool to create, develop and sustain community has started to adhere to on
differentiated brand names”. It is widely a voluntary basis in order to keep a
argued that the business ethos balance between those two sides. Other
generally speaking has started to principles and standards include: 1/
subscribe to the principle “show me” principles for global responsibility
rather than just “trust me”. Corporate (benchmarks for measuring business
social accountability and reporting is performance); 2/ the CAUX round table
therefore seen as a key driver for (principles for business); 3/ the business
engaging the wider community as an charter for sustainable development
important stakeholder in business (principles for environmental
activity (Zairi, 2000). management); 4/ UNDP Global
CSR could be implemented Contract Initiative; and 5/ social
successfully as a long-term strategy if a responsibility initiative by the
new relationship between corporations Foundation for Ethics and Meaning.
and their stakeholders has been
developed. As a result a societal value- Corporate Social
added could be achieved. Nelson Responsibility and the Impact on
(1998) proposes an approach based on Brands
the following three elements for building It is clear, based on the evidence
societal value-added: 1/ efficient and in the literature, that CSR is now an
ethical pursuit of core business integral part of corporate governance for
activities, 2/ social investment and many firms. Given the increasingly
philanthropy, 3/ contribution to the important role which marketing plays in
public policy debate. The corporate governance (Nath and
implementation of those elements into Mahajan, 2008), the question, therefore,
business practice of CSR could be done of the strategic role which CSR can play
following two different approaches. in corporate marketing is an intriguing
Some people see business as sitting in one. The question is pertinent for a wide
the middle with both societal and range of industries. In the retailing and
political pressures coming at it from the luxury goods segment, for instance,
outside. This consists the “push” side of Girod and Bryane (2003) have
the CSR framework. The second point examined both ‘anti-modernist’ and
of view is to perceive the CSR as ‘post-modernist’ perspectives on how
coming from the business idea (the CSR can “create, develop and sustain
“pull” side). The main difference differentiated brand names”. In a recent
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CSR report on the world’s ‘top ten components of corporate marketing are
luxury brands’, the WWF cautioned clearly an extension of CSR
celebrities against endorsing any of orientations. Although Balmer and
them because of their poor governance Greyser (2006) do not explicitly
records (Guardian Unlimited, 2007). describe the relationship between CSR
The aviation and ICT industries are also and its impact on the corporate brand,
under heavy scrutiny by government, their most recent adaptation of earlier
industry groups and environmental work in this area strongly resonates with
activists for their carbon footprint. These CSR debates. Other studies which
stakeholders are not generally the attempt to analyse the impact of CSR
target of branding campaigns by these upon a firm’s brand have focused on the
industries; yet, companies like Easyjet public and media communications
and IBM are keenly aware that their aspects. The importance of having a
CSR records directly affect their brand credible programme in place is
associations in the minds of consumers emphasised, as are credible public
(Lim, 2008). It is widely argued by now relations and reputation management
that the business ethos generally approaches.
speaking has started to subscribe to the
principle “show me” rather than just Conceptual Model of the of
“trust me”. Corporate social the Impact of CSR on Corporate
accountability and reporting is therefore Branding
seen as a key driver for engaging the The role which CSR plays in
wider community as an important developing corporate brands and
stakeholder in business activity (Zairi, corporate branding, however, is poorly
2000). understood. There is little empirical
The increasing importance of CSR research focusing, firstly, on what
at the corporate board level coincides impact CSR has on corporate branding
with a growing interest among scholars and, secondly, on what CSR managers
in corporate marketing as a distinctive do to manage this impact. Specifically,
model of marketing in its own right. the research questions driving this
Balmer and Greyser (2006) call this the article are: (1) what impact does CSR
“corporate model” of marketing. The have on firms’ corporate branding and
components of this model are strongly (2) what do managers believe others
aligned with current conceptualizations (customers and shareholders) think is
of CSR: they include the ‘stakeholder’ the impact of the firm’s CSR activities
orientation (including future as well as upon its brand image?
present stakeholders), ‘organisational The conceptual model which we
support’ (coordinated organisational present in Figure 1 is based on the
activities which support the stakeholder literature review on the components of
orientation); an ‘end-focus’ which goes CSR and corporate brands and the
beyond the profit motive and a ‘societal analysis of secondary data of various
application’ which takes into account the sources. It captures the emerging
future societal needs of stakeholders debates around CSR and brand-
and sensitivity to “the organisation’s building as a ‘push-pull’ cycle.
inheritance where applicable” (Balmer,
2001). Taken as a whole, these

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Figure 1. A Conceptual Model of the Impact of CSR on Corporate Branding

The conceptual model represents stakeholders (“pull” approach) instead


the author’s theses for the first research of reacting in a passive way to the
question, namely, that CSR influences regulations or to the stakeholders’
corporate branding strategy from a pressure (“push” approach). By applying
‘holistic’ point of view which includes all the “pull” approach companies can
stakeholders. Therefore, we expect that integrate all the elements of their
CSR managers’ management of such corporate marketing strategies in a
impacts are contingent on their consistent way with a long-term positive
understanding of these factors. An results for their reputation. These efforts
insight into these research questions is present a challenge – and of course an
important because CSR is having an opportunity. For business as a whole, it
increasingly major impact upon represents a new chance to re-engage
corporate branding strategies and how with the public – to talk about business’s
they are managed. Such a strategy has role, and beyond that about the joint
managerial implications for the role of responsibilities of business and
CSR managers in firms. By exploring consumers to address environmental
their decisions and actions taken with and social issues. For an individual
respect to the impact of CSR on brand business, it offers an opportunity for
strategy, both a theoretical framework competitive edge; to become a
for conceptualizing the interrelationship company with whom consumers are
between CSR and branding as well as happier and more comfortable doing
an empirical basis for testing unproven business. The proposed model is
theses have been provided. The dynamic since we suggest that pull-
underlying idea of the model is that push combination is vibrant or pulsing
companies should be proactive by by its nature (pull<push, pull=push,
responding early to the concerns of their pull>push) depending on the level of

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marketing development of the (iii) use of corporate assets. The last
company2. section provides data about
respondents and studied firms. Two
Research method types of Likert scale are used. The first
In order to characterise the current one is 5-point scale (1 = not very
situation of CSR practices of Bulgarian important; 3 = relatively important; 5 =
companies author has reviewed the very important) while the second one is
CSR reports and information about CSR 10-point scale (1 = not effective at all; 5
activities of Bulgarian companies = relatively effective; 10 = extremely
provided by Bulgarian Business effective). The importance of factors is
Leaders Forum (BBLF), the UNDP measured on 5-point scale with 5 = the
Report on CSR in Bulgaria for 2007 as most important; 1 = the least important.
well as the publications containing key The profile of UK and Bulgarian
word “CSR” published by the monthly companies involved in the survey is
newspaper “Capital” during the period assessed by the type of the ownership,
January – May 2008. The underlying number of employees, market share,
hypotheses for the second two research turnover spent on R&D, respondents’
questions were tested with an web- experience and position in the
based empirical study. The company, and type of industry.
questionnaire itself was divided into Surveyed UK companies are private
three sections. The first section aims to (75%), state-owned (12.5%) or
measure the overall attitudes of the collectively owned (12.5%). The
managers toward CSR and the main predominant number (87.5%) are small
benefits of applying CSR activities. The and medium-sized companies. The
second section contains questions following industries are included in the
about the components of the firm’s CSR survey: retail, financial, public sector,
activities and their effect on marketing hospitality, telecommunications,
strategy. These components are recruitment, NGOs. The distribution of
grouped into three sets, namely (i) the studied companies by market share
community and environmental and turnover spent on R&D is presented
responsibility, (ii) ability to attract, on Figures 2 and 3.
develop, and keep talented people, and

13%
10% 1% - 5%
6% - 10%
11% - 15%
15% +

12% 65%

Figure 2. Distribution of the companies by market


share

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25% 49%
less than 1%
1% to 3%
3.1% to 5%
above 5%
13%

13%
Figure 3. Distribution of the companies by
turnover spent on R&D

Surveyed Bulgarian companies are market share and turnover spent on


private (37.5%) or owned by a foreign R&D is presented on Figures 4 and 5.
company (63.5%). Forty-two percent All respondents have an experience in
are small and medium-sized companies the surveyed companies up to four
and the rest 58% are large companies. years with the majority of them between
The following industries are included in two and four years. They are managers
the survey: banking, real estates, or head of departments in their
commerce, insurance, services of companies, predominantly HR and
general interest, food industry. The marketing.
distribution of the studied companies by

25%
1% - 5%
37%
6% - 10%
11% - 15%
15% +

13%
25%
Figure 4. Distribution of the companies by
market share

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25% 49% less than 1%
1% to 3%
3.1% to 5%
above 5%
13%
13%
Figure 5. Distribution of the companies by
turnover spent on R&D

Results According to the UNDP Report on


As a post-communist country CSR in Bulgaria for 2007 there is a
Bulgaria is one of the economies which direct link between the economic
experienced rapid changes without reforms, the rates of privatization and
coherent strategies in the economic and the emergence of successful CSR
social spheres. After the recovery from practices in Bulgaria. The period 2000 –
the dramatic crisis of 1996-1997, the 2002 could be considered as a starting
1998-2001 period is marked by a point at which business and market
speedy privatization and liberalization of activities began to reach normal levels
the market (the energy sector, the of their development and to adopt
banks and telecommunications). A responsible business practices such as
currency board was introduced in 1997 cause-related marketing. In 2004 a
to stabilize the national currency after National Round Table for Social
the hyper-inflation of 1996. Standards was set up as part of a three-
Unfortunately the country’s year regional project covering 11
competitiveness environment does not countries and implemented in Bulgaria
measure up to that of most other by the Balkan Institute of Labour and
members of the EU. Business continues Social Policy. Two years later BBLF3
to complain of strong regulation which launched the Annual Awards for
results in higher costs. Responsible Business (Table 1).

Table 1
Companies and Initiatives Awarded by BBLF, 2007
Category Prize Company Initiative
Investor in 1st Overgas Inc. Professional development and social
human prize responsibility toward the personnel
capital and 2nd Orgahim JSC From school to the modern European
work prize development
conditions 3rd AstraZeneca Talent development and satisfying
prize Bulgaria recognition
Cause- 1st Avon Cosmetics Campaign for breast cancer prevention “To
related prize the life with love”
marketing 2nd Globul “Let’s hear children’s dreams” programme
prize

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3rd Schenker Ltd. National chain of street basketball
prize competition for children “Streetball –
Schenker”
Investor in 1st Danone Serdika Annual football competition for children
society prize “Danoniada”
2nd AstraZeneca For the entire and complete programme for
prize Bulgaria CSR for 2007
3rd Eco Elada “Call when you arrive” campaign
prize
Investor in 1st Intracom “Ready for success” campaign which was
knowledge prize Bulgaria aimed at supporting orphan students by
providing scholarships
2nd Kraft Foods Project “Health in school”
prize Bulgaria
3rd Microsoft Curriculum and training classes for children
prize Bulgaria safety in Internet
Investor in 1st Devnja Cement Building new installations which meet all
environment prize standards for environment protection and
safety
2nd Chelopech Programme for recultivation of the area of
prize Mining Chelopech mines
3rd Assarel Medet Project “Ecological responsibility 2007”
prize

Assessment criteria of the Annual level of provided services. Sometimes it


Awards for Responsible Business even can accelerate it in a short-term as
include: 1/ particular benefit to the well as to create a distrust in a long-
society; 2/ partnership; 3/ involvement term. Perceiving CSR as a tool for
of the company’s employees; 4/ solving business problems in a short-
duration and continuity of the initiative; term could be considered as a CSR
5/ social recognition; and 6/ myopia4. Companies should not use
innovativeness. An interesting fact is CSR as a substitute or a compensation
that E.ON Bulgaria was a general tool which can neutralise the bad effects
sponsor of the Annual Awards for of company’s market failures.
Responsible Business despite the The overall attitude of the
blackout crisis in Varna region in 2006. respondents toward the importance of
This raise a question if the sponsorship CSR for their companies is more or less
of E.ON represents a PR activity aimed important. The majority of the
at “polishing” its image among the respondents (62.5%) consider it as
stakeholders or is it a real concern quite important while 25% – as very
about responsibility to the society? important. All respondents have a
According to the proposed conceptual common understanding about CSR with
model a single activity aimed at the the main focus on social engagements
society (sponsorship) cannot reverse of the companies. Customers and
the negative attitude of the consumers employees are considered to be the
created as a result of the low quality main target groups of CSR.

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Table 2
Summary of the respondents’ understanding of CSR
Stakeholders ƒ Customers ƒ Society
ƒ Employees
Target ƒ Social life ƒ Economy
issues ƒ Business practice and ƒ Standard of life
partners
ƒ Environment
Activities ƒ To improve working conditions ƒ To support and to develop
ƒ To provide better social a positive image
services ƒ To take care about the
ƒ To promote social personnel
commitment ƒ To take care about
ƒ To integrate the social environment
engagements of the company ƒ To develop social norms
ƒ Sponsorship programmes and standards
ƒ To produce high quality ƒ To provide working places
products and services

The exemplary Bulgarian Bulgarian managers except the second


companies in their performance of CSR most important characteristic. UK
activities mentioned by the respondents managers think that such a company
at the first place are Kamenitza5, Fama, should possess: 1/ ecological and social
Mauer Locking Systems, Telerik and awareness, 2/ clear organisational
Bella6. Other examples include mobile strategy, vision, mission, goals, culture,
operators such as Mobiltel and Vivatel7, and 3/ strong and distinctive corporate
mass media (bTV8 and radio Varna), brand image while Bulgarian managers
high tech companies (Systech Holding). arrange the three most important
The answers on the same question but characteristics in a different way: 1/
for international companies include adaptability and flexibility, 2/ clear
McDonald’s, Danone Group, Piraeus organisational strategy, vision, mission,
Bank, E.ON9, Microsoft, Apple, TNT, goals, culture, and 3/ successful,
Avon, Toyota, Nestle, insurance motivated and contented employees.
companies such as Bulstrad (part of TBI Both UK and Bulgarian managers agree
Group), Allianz, UNIQA. that the main benefit of applying CSR
The perception of an exemplary activities is image and reputation
company in its performance of CSR enhancement (Table 3).
activities differes between UK and

Table 3
The main benefits of applying CSR activities
Benefits UK Bulgaria
Mean Median Mean Median
Recognition by the public and stakeholders 3.57 4.00 4.13 4.00
Image and reputation enhancement 4.25 4.00 4.63 5.00
Staff motivation and loyalty 2.88 3.00 3.63 4.00
Financial efficiency 2.63 2.50 2.75 2.50
Influence on organisational values, culture, 3.63 3.00 4.13 4.50
mission, goals
Product brand support 4.13 4.00 3.63 3.00
Market position support 4.00 4.00 3.38 3.50
Customer satisfaction 3.75 3.50 3.63 3.50
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Advertising / communications support 3.38 3.50 3.75 4.00
Staff recruitment and retention 2.88 2.50 3.13 2.50
Trust-building among stakeholders 3.25 3.00 4.25 4.50
1 = not benefit at all; 3 = relative benefit; 5 = strong benefit

UK managers perceive CSR from the conceptual model, Figure 1)


activities as supporting their product together with market benefits (e.g.
brand and market position while for increasing sales). What the managers
Bulgarian managers it is still unclear are really interested in is actually the
how their companies benefit from CSR financial aspect of the CSR or being
activities financially (shareholders as a more precise how to use corporate
target group) and how to integrate the assets in applying CSR activities as a
communication effects (brand part of company’s branding strategy
personality and relationship elements (Tables 4 and 5).
Table 4
Level of importance and level of impact of the CSR activities to the
company's branding strategy, UK
CSR Activity Level of Level of
importance impact
COMMUNITY AND ENVIRONMENTAL 3.63 6.50
RESPONSIBILITY
Ethical practices 4.63 8.25
Non-polluting, safe and non-toxic products 3.75 7.50
High quality of work life 3.38 5.88
Able to account for the overall welfare of the society 3.25 5.63
Supporting the community 3.63 6.13
The sense that the company is aware of its place in 3.13 5.88
the environment and conscious of its need to
contribute
Environmental, socio-economic, health and safety, 3.63 6.25
and community awareness
ABILITY TO ATTRACT, DEVELOP, AND KEEP 3.54 6.13
TALENTED PEOPLE
An attractive employer profile 3.50 6.00
A learning company 3.50 5.63
Open management style 3.25 5.63
High ethical standards 4.38 7.13
Strategic orientation combined with a performance- 3.38 6.25
based reward system
Flexible, “humane”, enjoyable work environment 3.25 6.13
USE OF CORPORATE ASSETS 3.50 5.25
Able to generate new capital 3.50 5.00
Able to withstand market fluctuations 2.88 4.50
Wisely leveraged 2.75 4.50
Socially responsible, environmentally sound and 4.25 5.75
sustainable
Ethical 4.50 6.50
Ability and willingness to use the company’s capital 3.13 5.25
for growth in income
Note: 1 = not very important; 3 = relatively important; 5 = very important; Mean is
used as a measure for the level of importance and level of effectiveness.
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UK managers focus on the ethical managers perceive CSR as a tool to
aspect of CSR activities while Bulgarian withstand market fluctuations.

Table 5
Level of importance and level of impact of the CSR activities to the
company's branding strategy, Bulgaria

CSR Activity Level of Level of


importance impact
COMMUNITY AND ENVIRONMENTAL 3.29 6.97
RESPONSIBILITY
Ethical practices 3.75 6.00
Non-polluting, safe and non-toxic products 3.63 7.13
High quality of work life 4.13 8.25
Able to account for the overall welfare of the society 3.38 6.00
Supporting the community 4.00 6.88
The sense that the company is aware of its place in 4.13 7.00
the environment and conscious of its need to
contribute
Environmental, socio-economic, health and safety, 4.00 7.50
and community awareness
ABILITY TO ATTRACT, DEVELOP, AND KEEP 4.02 7.86
TALENTED PEOPLE
An attractive employer profile 3.75 7.63
A learning company 4.00 7.88
Open management style 4.00 7.75
High ethical standards 3.75 7.13
Strategic orientation combined with a performance- 4.13 7.88
based reward system
Flexible, “humane”, enjoyable work environment 4.50 8.88
USE OF CORPORATE ASSETS 4.15 7.38
Able to generate new capital 4.13 7.38
Able to withstand market fluctuations 4.75 8.25
Wisely leveraged 4.25 7.25
Socially responsible, environmentally sound and 4.13 6.75
sustainable
Ethical 3.50 7.00
Ability and willingness to use the company’s capital 4.13 7.63
for growth in income
Note: 1 = not very important; 3 = relatively important; 5 = very important; Mean is
used as a measure for the level of importance and level of effectiveness.

The importance of eight shareholders as target groups has been


different factors affecting the reputation evaluated (Table 6 and Table 7).
of the company among customers and

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Table 6
Factors affecting company’s customers and shareholders attitudes toward its
reputation: level of importance, mean
Factors Customers Shareholders
attitudes attitudes
UK Bulgaria UK Bulgaria
Quality of service given by the staff 4.75 4.38 2.83 3.17
Financial performance/track record 3.17 3.20 5.00 5.00
Image/reputation 4.29 3.25 4.50 4.14
Quality/strength of management 3.29 3.20 4.67 4.00
Quality of products/services 4.71 3.75 3.83 2.86
Honesty/integrity 3.88 3.71 4.67 4.33
Longevity/sustained performance 3.29 3.38 4.67 4.43
Social and corporate responsibilities 3.63 2.80 3.83 2.29
Note: Respondents are asked to rank the five most important factors, with 5 = the
most important; 1 = the least important

Table 7
Factors affecting company’s customers and shareholders attitudes toward
its reputation: level of importance, rank
Factors Customers Shareholders
attitudes attitudes
UK Bulgaria UK Bulgaria
Quality of service given by the staff 1 1 8 6
Financial performance/track record 8 6 1 1
Image/reputation 3 5 5 4
Quality/strength of management 6 6 2 5
Quality of products/services 2 2 6 7
Honesty/integrity 4 3 2 3
Longevity/sustained performance 6 4 2 2
Social and corporate responsibilities 5 7 6 8
Note: Respondents are asked to rank the five most important factors, with 5 = the
most important; 1 = the least important

If we compare the data it is remarkable consensus among the


obvious that there is a significant respondents that the most important
difference in perceived importance of factor contributing to the reputation from
the assessed factors depending on the the shareholders’ side represents to be
target group of stakeholders. There is the financial performance/track record,
only one common factor for both groups followed by longevity/sustained
among the first three ranked by their performance.
importance but only for Bulgaria. The
honesty/integrity factor is pointed out for Implications for Future
both target groups of stakeholders on Research
the third place. The critical factors Based on the results of the study
influencing company’s reputation we suggest to explore further the
among customers according to the interrelations of CSR with company
respondents are the quality of service branding as a part of the second level of
given by the staff and quality of MDI system
products/services both for UK and (Communications/Networks) (Figure 6).
Bulgaria. It is evident that there is a
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Marketing diagnostics and development of certain unit of analysis
expertise at level MDI1 aim at providing (company, cluster, region). It assesses
knowledge and skills in analysis of whether the companies are in a good
product-market strategies, risk position to implement marketing
assessment as well as selecting metrics activities to achieve competitiveness by
and indicators for evaluating marketing products-markets.

Indexation Strategic MDI process Bench


Technology Indexation Goals /
for Process Outcomes
Leadership

Transfer Strategy for Capacity / Investments Marketing

Cascade leadership by goals /


Development marketing Cascade leadership by MDI Criterion: MROI Leadership
MDI3 leadership MDI3
Marketing CPI3 diagnostics CPG3 expertise 3
and

outcomes
Transfer Strategy for Communications / Networks Business
Development intra-entra Criterion: ROS/ROI Collaboratio
MDI2 communications MDI2 ns
Marketing CPI2 diagnostics CPG2 expertise 2
and
Transfer Firm product- Products / NPD / Innovations Marketing
Development market strategy Criterion: Firm risk / Market risk Activities
MDI1 MDI1
Marketing CPI1 diagnostics CPG1 expertise
and 1

Resources / Market Physical /


Markets: Intellectual
Capital

Figure 6. Levels of MDI system


Note: CP = Cascade Point; CPO = Cascade Point by Outcomes; CPG = Cascade
Point by Goals
MDI = Marketing Development Index; NPD = New Product Development

MDI2 develops the idea that balance between innovations and


business collaborations combined with capacities as well as between
CSR activities should work as an investments and competitiveness.
accelerating machine for knowledge
transfer which in turn creates a Conclusions
background for successful intr-entra In dealing with the challenges of
communications and high levels of corporate responsibility, companies
ROS/POI. This information is should view the issue as integral to the
indispensable to examinations of realities of globalization and a major
concrete strategies for marketing source of learning, relevant to its core
leadership in MDI3. MDI system intends business strategy and practices. As
to propose a suggestive and assertive practice shows, often business benefits
model for systematic empirical work on of corporate responsibility are hard-won
a marketing leadership that defines a and frequently, in short term, transient
26
1
or nonexistent. Making business logic patterns of socially responsible
out of a deeper sense of corporate behaviour of Bulgarian companies are
responsibility requires civil leadership, still unclear, although the larger and
insightful learning and a grounded international companies generally tend
process for organisational innovation. to have a greater predisposition to
The position of Bulgaria and respond proactively to societal issues
Bulgarian companies according to the than smaller companies. As a whole
stage of their development as a society companies still apply a policy-based
and responsible companies is between compliance approach as a cost of doing
the risky zone and the opportunity zone. business. A possible explanation is that
Now it is up to the companies to try to companies try to mitigate the erosion of
“pull” the society toward the economic value in the medium term
institutionalized stage of its because of ongoing reputation and
development. Based on the results of litigation risks.
the study we can say that by now the

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1
A ten point code of conduct on companies’ environmental performance and accountability.
For reference see Green Money Journal (1996) and Zairi (2000).
2
Measured by Marketing Development Index (MDI). MDI is a vibrant metric system aimed at
identification and supporting the dynamic and sustainable growth and development of companies in
time of changes. As a system MDI is structured on three levels of marketing diagnostics and expertise
which measures the following balances: “innovations – communications – capacity” and “investments
– business networks – competitiveness”. The system is supposed to be implemented periodically in
order to determine the gaps between goals and outcomes by firm markets depending on the status of so
called cascade points – CPI (cascade points by indexation) and CPG (cascade points by goals /
outcomes).
3
Two of the main objectives and goals of BBLF include promotion of the principles of ethical
business among the managers and entrepreneurs, students and society as a whole, and providing
consultancy to and supporting the business in the process of implementation of socially responsible
projects.
4
With a reference to the popular article of Theodore Levitt “Marketing Myopia”, HBR, September/
October 1975.
5
“Kamenitza” is a very popular Bulgarian beer brand which is owned by InBev and holds the second
place by sales volume on Bulgarian beer market.
6
Fama and Bella are food companies.
7
Some of the respondents pointed out Mobiltel and Vivatel as an international companies while others
– as a Bulgarian companies. Actually Mobiltel is owned by Telekom Austria. Vivatel is registered as a
brand owned by BTC which has been acquired by AIG Capital Partners, Inc., a company of AIG
Investments.
8
The same confusion is observed for bTV. Actually it is owned by Rupert Murdoch.
9
Indicated as the third best by its former Marketing manager.

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