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CORPORATE SOCIAL RESPONSIBILITY COMMUNICATION BY A PUBLIC

SERVICE CORPORATION AND ITS INFLUENCE ON THE STAKEHOLDERS’


PERCEPTION ABOUT THE ORGANIZATION

Abstract

While there are numerous studies on the CSR communication, the Public Service

Corporations in the Philippines (PSCs) seem to follow an uncharted course probably because the

focus is on the primary function to deliver the needs of the people through their services. This study

explains the influence of the CSR communication by a Public Service Corporation on the

stakeholders’ perception about the organization.

Quasi-Experimental Design and Quantitative Content Analysis were employed. Data

gathered through Key Informant Interviews and Focus Group Discussions of the selected internal

and external stakeholders; 2009-2013 quarterly newsletter and annual report issues; and

www.biswad.gov.ph website of the Public Service Corporation.

This views the CSR of the PSC as ethical and economic, ethical and legal, and philanthropic

with efforts on poverty, environment, health, education, technical and resources assistance, and

sustainability of services. The stakeholders view the Public Service Corporation with good operation

and cares for the people.

Keywords: Corporate Social Responsibility, Corporate Social Responsibility Communication,


Stakeholders’ Perception, Public Service Corporation
Introduction

Corporate Social Responsibility (CSR) and Corporate Social Responsibility Communication

have become a widely pursued topic in business and academe world because of how its

practices have evolved and widely examined across the globe. Many companies engage in

CSR activities because it generates favorable responses such as enhanced reputation and

credibility of the organization as well as support by the stakeholders. As a result, many

stakeholders pressure companies to undertake CSR (Porter & Kramer 2006).

In the Philippines, the early root of CSR was more of charitable philanthropy and one time

donation as majority of the populace in 1970’s were living in poverty (Sharma, 2010).

Asian Institute of Management RVR Center for Corporate Responsibility (2005), on the

other hand, cited Gachitorena, president of the League for Corporate Foundation and Ayala

Foundation on the CSR practices in the Philippines which is “doing business in a way that

responds to the needs and concerns of the stakeholders in general”.

Business executives, regardless of the size of their company, consider CSR as a fundamental

part of their operations (Maximiano, 2004). Rimando (2012) affirmed this observation by

stating that more and more companies have embraced CSR in their business strategies on

how the business extends their responsibilities to the economic sphere and the environment.

The fact that several CSR categories emerged such as ethics, diversity, environmental,
sustainability and philanthropy (Chandler & Werther 2014) confirmed the continuous

evolution in the concept and practice of CSR.

How CSR is practiced and communicated by organization engaged on it also influenced its

evolving concept as articulated by Ihlen et al.:

“CSR forms an integral part of contemporary organizational and social life even if

its practice is still evolving. For that very reason, communication around CSR has

an essential role in the evolution of not just what organization does, but also in the

role that the rest of society – whether as stakeholders, NGOs, media or insiders to

the organization – play in articulating the meaning and practice of CSR.” (2011a,

p.566)

CSR communication is equally and extensively studied along with the CSR practices as

evidenced by the increasing volumes of reports and CSR communication strategies

developed with relevant theoretical grounding. Liviate (2011) looked at communication as

the key element of CSR management. Gray et. al. (1996) described CSR communication as

“the process of communicating the social and environmental effects of organizations’

economic actions to particular interest groups within society and to society at large” while

Stanaland et. al. (2011) reported that communication on company’s attitude towards CSR

influenced the stakeholders’ perception of corporate reputation, their trust and loyalty to the

corporation.

With all these stipulations, it is assumed that the Public Service Corporations are not in any

way exempted from doing CSR and communicating it to their various stakeholders because
of its function to primarily cater to the needs of the people through its services. Public

Service Corporations were initially created as solutions to market imperfections as well as to

cater to the basic needs of the populace through Presidential Decree No. 2029. This specific

Public Service Corporation caters to the water needs of the community.

Further, the massive negative criticism on the poor services led to the accusation that the

implemented CSR programs and CSR communication was to cover the poor services. This

study sought to look into the influence of the CSR practice and communication by a Public

Service Corporation to its stakeholders’ perception about the organization.

Review of Related Literature

Corporate Social Responsibility

This CSR view brings Carroll’s CSR Pyramid to the fore: philanthropic, ethical, legal and

economic responsibilities. His view was affirmed by the practitioner group, the World

Business Council for Sustainable Development (WBCSD, 1998, p.3) that company’s CSR

has “the continuing commitment to behave ethically and contribute to economic

development while improving the quality of life of the workforce and their families as well

as of the community and society at large”.

The European Commission (2011, p. 6) further expounded that CSR of enterprises has the

responsibilities to give positive and acceptable impacts on society. As corporate citizen

both views emphasized the practice of CSR of an organization as beneficial to the

stakeholders.
The Philippines Business for Social Progress (PBSP) and League of Corporate Foundations,

Inc. (LCF) identified CSR as a business principle which proposes the long-term

sustainability of business is best served when profitability and growth are attained alongside

the development of communities, the protection and sustainability of the environment, and

the improvement of the people’s quality of life (Sharma, 2010).

Cone (2013) found that CSR has become more than a good strategy for business; it is now

considered an expectation of business by the public. Sahlin-Andresson (2006) cited others

perceived it as as an emerging movement that enables corporations to play a more

substantive role in social and economic development.

Thus, companies engage in CSR activities to influence and improve stakeholders’

perception of the company’s image. This affirmed Du et. al. (2010) view that CSR programs

help establish positive corporate reputation that makes consumers resilient to negative news

about the company. A recent study also showed that majority of the consumers say

supporting a cause they care enhances their perception of a product or company (Cone,

2010).

Corporate Social Responsibility Communication

Others still see CSR as a Public Relation tool, or a form of “greenwashing”, to serve

corporate interest (Ganesh, 2007). Kim (in press) found CSR activities can also lead to

skepticism, but how companies communicate their CSR activities may determine the degree

to which the public accepts the programs.


Saiia and Cyphert (2003) demand sincerity in communicating the CSR to ensure success.

McMillan (2007) fundamentally questioned whether companies are currently poised to take

the responsibility challenge since CSR rhetoric is characterized by traits such as

“instrumentality, exclusivity, attribution, monologue, and narcissism”. From Morsing and

Schultz’s (2006) stakeholder information and respond as one sided sender orientated to

stakeholder involvement which emphasizes the need to build and maintain a relationship

between organization and its stakeholders. There is the need to develop and promote

positive support from the stakeholders and for the company to understand and concurrently

adapt to their concerns on CSR initiatives.

She viewed the need to shift towards connection, reciprocity, and trust as a mutual dwelling

place for the rhetor and the audience. Bostdorff (1992), on the other hand, looked at how

rhetoric in the CSR communication is used to demonstrate the positive value of corporate

acts, the purity of corporate purpose, and how corporations have embraced a highly valued

social role. However, rhetoric also demonstrates how corporations privilege their own

interests and curtail public interest. The rhetorical challenge for corporations is when they

claim that the goals of CSR are beyond profit.

According to Rimando (2012) CSR communication in the Philippines is still traditional

based on how the companies report, communicate and encourage engagement. The tools

used to announce, publicize, pass on or impart the companies’ CSR activities are still the

traditional unilinear model. Goodwill is the motivation for companies to engage in CSR,

report, and communicate about their CSR.


Thus, Communication is one of the primary tools for managing perception to motivate the

desired behavior. As per Ogilvy (2004) “communication is the means to manage

perceptions, to create behavior patterns for business success”.

Stakeholders

Stakeholders play a significant role in the success of the company’s CSR programs and

communication. Hence, it is very fitting to take careful consideration and sensitivity on their

support, involvement, perspective and commitment. Freeman (2004) stated that an

organization should take account the effects of its actions on others as well as the potential

effects of these actions on the organization, itself.

Mitchell et al. (1997) suggested identifying stakeholders along three dimensions: the

stakeholder’s power to influence the firm, the legitimacy of the stakeholder’s relationship

with the firm, and the urgency of the stakeholder’s claim on the firm.

Stakeholders can also be classified as internal or external. Internal stakeholders are groups

within the corporation or people who work directly within such as the management,

employees, owners and investors. External stakeholders, on the other hand, are groups

outside the corporation who are not directly working within the corporation, but are affected

by the operation such as customers (concessionaires and non concessionaires), suppliers,

community media, and public officials.

Stakeholders’ Perception
Although perception is a largely cognitive and psychological process, how people perceive

each other and objects around affects the communication. People respond differently to an

object or person that they perceive favorably than others do to something they find

unfavorable. Perception is the processing, interpreting, selecting and organizing information.

Gibson’s Theory explains that the cognitive apparatus was created and formed by a long

evolutionary influence of external environment which is apparent in its structure and

abilities. Information is precisely extracted which is necessary for human survival.

Perceptions effect on the communication process is all about how the same message can be

interpreted differently by different people. Experiences and present feelings are considered

factors that can affect perceptions.

Conceptual Framework of the Study


INTERVENING FACTORS

Experiences and current feelings

INDEPENDENT VARIABLES DEPENDENT VARIABLE

CSR Practice/CSR Programs Perception

CSR Communication Strategies

Methodology

The study employed the Quasi-Experimental. Design where treatments or interventions are

evaluated treatments or interventions but the respondents are not randomly assigned to

experimental treatments. This design also demonstrates causality between an intervention


and an outcome. Specifically this research used the One Group Posttest-Only Design where

posttest observations were obtained on various groups of respondents who experienced the

treatment, but there were neither control groups nor pretests. The CSR communication

program served as the treatment or intervention (independent variable) and the influence on

the stakeholders’ perception was looked at as the dependent variable. The implementation of

the CSR programs/activities was also considered independent variable which could have

influenced the perception of the stakeholders under the assumption that ommunication is

also happening in the process – that is, communicating while doing. This is specifically true

since in most Water District’s CSR activities, the various stakeholders were enjoined to

participate.

Quantitative Content Analysis was also employed in two instances: the first instance was on

the communication documents of Bislig City Water District such as Newsletter and Annual

Report issues from 2009-2013; while the second instance was on the transcribed Key

Informant Interviews and Focus Group Discussions.

Bislig City Water District

Bislig City Water District is the Public Service Corporation studied. For several years, it has

been struggling towards gaining the stakeholders’ support and participation which was

attributed to the poor communication coupled with poor services. The failure to put

importance on communication, put priority on communication programs, equip an employee

to handle the communication activities, or mere refusal to respond to all the accusations and

issues thrown by the stakeholders triggered chaos among the employees, concessionaires,
media and public officials. This communication mess resulted to extensive criticism and

drawbacks between management, employees, media, public officials and concessionaires.

The water district had been openly criticized in various radio programs in the locality and

became a tool by the local election candidates in 2001 as their propaganda material,

promising solutions once elected to office. Employees were demoralized because they were

the recipient to the concessionaires’ antagonistic verbal reaction whether inside and outside

the office.

Majority of the employees viewed technical and resources donation or aid with what the

management constantly says as help to the community while others were not aware of these

activities or programs by the Water District. Employees did not know what to say to the

stakeholders creating further confusion and more prejudices against the organization.

Stakeholders’ perceived these activities and whatever attempt to inform them about it as a

form of building good public image, concealing the poor services, and gaining more

revenue. These perceptions created communication barriers between the water district and

its stakeholders.

These conditions prompted the current General Manager to put solutions when he took

office on February 1, 2004. The first move was to align corporate activities perceived to be

CSR and a comprehensive communication program by assigning an employee to handle the

public relations and communications activities. These include hosting and guesting in radio

programs, making public advisories, putting in place/publishing a quarterly newsletter,


improving the annual reports and making them available to various stakeholders,

establishing hotlines, holding press conferences, implementing advertisements/campaigns

and CSR programs, and ensuring open communication with various stakeholders through

dialogues.

After more than 10 years of undertaking, it is only fitting to evaluate and explain the

influence of the CSR communication of the Bislig City Water District on the stakeholders’

perception.

Methods of Analysis

Descriptive Statistics was used in the analysis of data. The recorded interviews and

discussions with the respondents were first transcribed word for word in the Microsoft Word

following strictly the standard format of the transcription of recorded data. The transcribed

interviews of the Key Informant Interviews and Focus Group Discussion were subjected to

quantitative content analysis.

Two human coders were used including the researcher. Each CSR communication and

practice statements were assigned to a category based on the questions and codes. Out of the

151 articles and statements coded, Coders 1 and 2 had 136 codes in agreement with a

percentage of 90% agreement.


Results and Discussion

How CSR is understood by the Stakeholders

The 15% of the respondents from the management and employees understood CSR as

ethical, 10% an obligation and 5% giving back, for the sustainability of the services and

contribute to the development of the local economy. While a higher of 45% from the

concessionaires, media and public officials also understood CSR as ethical and 5% an

obligation, for the sustainability of the services and contribute to the development of the

local economy.

While asked on the objectives of the Public Service Corporation in doing CSR, 6% of the

respondents from the management and employees saw CSR as a means of giving benefits to

the people, 7% for profit, 11% for the sustainability of the services and show the quality

management, 6% for the welfare of the employees and build relationship with the

stakeholders. While a high percentage of 28 from the concessionaires, media and public

officials also observed giving benefits to the people, 11% for the sustainability of the

services and show the quality management.

These results concur with Crowther and Aras’ (2008) view that companies are seriously

taking CSR not just because it is a key to business success and can give strategic advantage,

but also because people in the organization care about social responsibility which consider

social consequences and responsibilities such as what is a business and what contribution

does it make to society.

CSR as communicated by the Public Service Corporation


The 16% of the respondents from the management and employees cited radio as one of their

CSR information sources, 11% mentioned cable tv, 11% through information, education and

communication, 8% newsletter, and 5% Public Service Corporation’s website. While 16%

from the concessionaires, media and public officials identified cable tv, 14% radio, 5%

through information, education and communication, leaflet and pamphlet, and 3% from the

employees.

Based on the responses, the Public Service Corporation noticeably tried to maximize every

communication resources available in the locality. These reveal the significant impact of

radio and cable tv in the influence of the CSR communication in the locality. This means

that these two popular channels are the most readily available and accessible to the

stakeholders for the CSR information.

The 63% of the articles about CSR indicated ethical and economic. The Public Service

Corporation honestly explained the need of profit for the sustainable access of services of

the people as well as helps them earn through skills trainings. While 21% conveyed ethical

but mandated by law like the senior citizen benefits. The 7% presented economic on the

need of profit for the sustainable services at the same time help the local people earn for a

living. The 5% indicated charity works such as technical, resources, and disaster or calamity

aid. Lastly, 4% mandated by law like the Citizen Charter.

The CSR, therefore, conveys ethical and economic, ethical and legal, and philanthropic with

the efforts on poverty, environment, education, health, technical, resources and disaster aid,

and sustainability of the services.


These results slightly contradict with the CSR model of Carroll. His model emphasizes

philanthropic responsibilities as the first in the top that is to be a good citizen by

contributing resources to the community and improving the lives of the people; ethical

responsibilities that is doing what is right, just and fair; legal responsibilities by obeying the

law; and economic by being profitable.

The Public Service Corporation, on the other hand, highlights ethical and economic by

doing what is right, just and fair at the same time be profitable to ensure sustainable services

and help the stakeholders earn for a living or be profitable. Ethical and legal by doing what

is right, just and fair and is mandated by law; and philanthropic by providing technical and

resources assistance.

The CSR model of the Public Service Corporation:

Ethical and Economic

To do what is right, just and fair at the same time ensure


profit for the sustainable services and help stakeholders to
earn for their living or be profitable.

Ethical and Legal

To do what is right, just and fair at the same time obey the
law.

Philantrophic

Charitable works through technical and resources assistance


for the community.
This explains the communication process of the Public Service Corporation as interactive

irrespective of how it started first as Stakeholder Information Strategy which escalates to

Stakeholder Involvement Strategy. First, it sends information on the CSR using the different

channels available in the locality to the different stakeholders. The stakeholders,

consequently, respond by calling or visiting the office to inquire and participate. Or they call

or visit the office to inquire on the implemented or ongoing CSR as they learned or

witnessed.

The Public Service Corporation uses the stakeholder information and stems to stakeholder

involvement as the Public Service Corporation and stakeholders willingly initiates to

interact with each other or with other stakeholders to successfully implement or participate

in the CSR activities and or develop CSR initaitives to attain the goals.

How the messages on CSR are received and perceived by the Stakeholders

The 9% of the respondents from the management and employees identified the watershed

management, protection and rehabilitation, 12% on the free labor and materials, 10% on the

free water during fire incidents, 5% on the assistance for the victims of calamities and

disasters, 5% on both operation “tuli” circumcision and career development program for the

employees, 2% on sports development programs, plumbing trainings, infrastructure

restoration assistance, school rehabilitation program “brigade eskwela” and gender

development program.
Whereas 14% of the respondents from the concessionaires, media and public officials’ cited

watershed management, protection and rehabilitation, 5% on free labor and materials,

assistance for the victims of calamities or disasters, plumbing trainings and raffle draw, 2%

on the free water during fire incidents, operation circumcision “tuli”, career development

program for the employees and infrastructure restoration assistance. There was no mention

of school rehabilitation program “brigade eskwela” and gender development program.

The watershed management, rehabilitation and protection are the top ranking identified CSR

followed by the free labor and materials and free water during fire incidents. The three top

identified CSR are linked to the core service of the Public Service Corporation.

Therefore, this explains the significant influence of stakeholders’ involvement in the CSR as

Schlegelmilch & Pollach (2005) stated that their involvement determines the positive CSR

outcomes. This also underscores the vital effect of the CSR activities relevance to the

company’s expertise which determines publics’ perceived CSR motives.

This also explains that doing CSR is also communicating as the stakeholders recognize the

importance of the CSR which encourages other stakeholders to call or visit the Public

Service Corporation office to inquire and participate to the programs.

This indicates how challenging CSR communication is which requires understanding of the

stakeholders, their information needs, and the communication channels. It is important for

corporations to use appropriate strategies in communicating the good deeds to be performed

or performed by the company from the perspective of the various stakeholders.


Thus, 16% of the respondents from the management and employees identified trust as they

received and perceived CSR, 12% recognized connection and reciprocity between Public

Service Corporation and stakeholders, 8% understood the services especially during crisis,

changed their perception towards the Public Service Corporation and the efforts for

sustainable services, and educated about the Public Service Corporation and its CSR.

While 12% of the respondents from the concessionaires, media and public officials

expressed reciprocity between Public Service Corporation and stakeholders, 8% revealed

they are educated and felt part of the Public Service Corporation.

The results point out a substantial level of positive influence of the CSR communication by

a Public Service Corporation on its stakeholders’ perception about the organization. The

messages of the General Manager and Chairperson of the Board of Directors as conveyed in

the communication documents as a form of education and persuasion to the stakeholders on

the relationship of CSR to the sustainability of the services and their significant contribution

revealed relevant influence on the stakeholders’ perception. This illustrates connection and

reciprocity between Public Service Corporation and stakeholders.

How the communication of CSR influence its Stakeholders Perception about the

organization

Other researchers pointed out that corporation is hesitant to communicate their CSR because

it is pessimistically perceived as Bostdorff (1992) mentioned privileging their own interest

as well as Christian Aid (2004), Cloud (2007), Woolfson & Beck (2005) curtailing public

interest as a form of manipulation to deceive. While Whetten et al (2001), Smith (2003),


Du et al. (2010), Werther and Chandler (2011) disagreed since they find it necessary

because of the significant response of the different stakeholders’ groups’ on corporate social

responsibilities.

The results show that 29% of the respondents from the management and employees

perceived the Public Service Corporation with a good operation and 7% takes care of the

people while a higher percentage of 36 from the concessionaires, media and public officials

perceived them with a good operation, 14% the Public Service Corporation takes care of the

people, however, 7% suggested the need to still improve the services. These perceptions

show the positive influence of the CSR communication.

Conclusion

The study concludes that the CSR of the Public Service Corporation are responsibilities to

help develop and protect the community and environment, and ensure sustainable services.

This defines its core responsibility to serve the public and what other contribution does it

make to the community.

This views the CSR of the Public Service Corporation as ethical and economic, ethical and

legal, and philanthropic with the specific efforts on poverty, environment, health, education,

technical and resources assistance, and sustainability of services. These still direct the moral

perception of companies’ inherent obligation to do what is right, just and fair, lawful and

profitable (Caroll, 1991, 1999). The watershed management, rehabilitation and protection;

free labor and materials; and free water during fire incidents are the top identified CSR

which are linked to the core service.


The study also arrived at the conclusion that communication is the central concept of its

CSR works. Likewise, doing CSR is also communicating to the stakeholders. The Public

Service Corporation maximizes the use of every communication resources available in the

locality from mass media such as cable tv and radio to its own communication resources

such as newsletters, annual reports and website, employees, and third parties like media and

public officials.

Radio, Cable TV and the CSR itself are the prevailing communication channels that

communicates to the stakeholders which conveyed a significant influence on the

stakeholders’ perception. CSR messages of educating, appealing and acknowledging the

stakeholders in the CSR practices found to be effective.

Therefore, this affirms the vital role of various stakeholders in the success of the CSR as

they are the doers, communicators and receivers. CSR messages are received and perceived

by the stakeholders as a form of care, education, connection and reciprocity

The study concludes a substantial level of positive influence of the CSR communication by

a Public Service Corporation on the stakeholders’ perception about the organization as they

perceived the corporation with a good operation and the utmost act of taking care of the

people but with the suggestion on improving the services. This also highlights the cultural

context of the CSR communication of the Public Service Corporation that would provide

explanation and argument on the influence of the stakeholders’ perception.

Recommendations
Based on the results and findings of the study, the following recommendations are therefore

presented.

Establishing Policies on the CSR Practice and Communication. There is a need to

formulate the policies on the practice and communication of CSR to guide the top

management and employees to create a more strategic and effective communication of CSR

for a sustainable collective efforts of the stakeholders.

CSR:

“The Public Service Corporation shall institutionalize CSR practices and shall be

guided with the vision and mission, shall focus and maintain liability to act in

accordance to the overall goals of the community and society under the

perspective of human dimension, and linked to sustainable development.”

CSR Communication:

“The Public Service Corporation shall undertake sustainable reporting on CSR at

all times and stakeholders shall be informed in a timely and readily accessible

manner on all CSR matters and concerning the developments.”

Giving focus on communicating other CSR practices. Other CSR programs are equally

significant with the Watershed Management, Rehabilitation and Protection, thus, focus on

other effective strategies in in communicating should also be given time and efforts.
Campaigning the Public Service Corporation’s website. With the progress in

communication technology, the Public Service Corporation should campaign its website as a

modern source of CSR information and feedback from the various stakeholders.

Another research study. Conduct a study that takes into the cultural context on the

influence of CSR communication by a Public Service Corporation on the stakeholders’

perception about the organization.

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