Using a hierarchy-of-effects approach to gauge the effectiveness of corporate social responsibility to generate goodwill toward the firm: Financial versus nonfinancial impacts

Abstract

Corporate social responsibility (CSR) has long been widely acknowledged as something business should be more concerned with. However, few management models that encourage this to happen and by which managers can assess the impact of such activity on either stakeholders and/or the firm have been offered. This article describes why and how prosocial activities of the firm should be managed—and evaluated—in a conscious and explicit manner using another accepted, market-relevant paradigm. A management perspective that encourages the evaluation and control of prosocial activities by business using a hierarchy-of-effects technique to gauge impact on attitudes and behaviors of stakeholders is offered. Pilot study data derived from a controlled experiment support the view described and illustrate how goodwill can be evaluated using an affects approach to CSR.