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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. INTERVENING FACTORS Conceptual Framework of the Study Experiences and current feelings DEPENDENT VARIABLE INDEPENDENT VARIABLES Perception CSR Practice/CSR Programs 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. References A guide in communicating CSR. Retrieved from http://ec.europa.eu/enterprise/policies/sustainable-business/files/csr-sme/communication_guide_en.pdf A Primer in Communication Studies. Vol 10. http://2012books.lardbucket.org/books/a-primer-on-communication-studies/index.html Aristotle. (trans. 1991). 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