Public Relations,corporate Social Performance, and Corporate Financial Performance Triangular Relationship in a Global View

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Public Relations,corporate Social Performance, and Corporate Financial Performance Triangular Relationship in a Global View
Yeh, Hsin
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[Gainesville, Fla.]
University of Florida
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1 online resource (110 p.)

Thesis/Dissertation Information

Master's ( M.A.M.C.)
Degree Grantor:
University of Florida
Degree Disciplines:
Mass Communication
Journalism and Communications
Committee Chair:
Ferguson, Mary Ann
Committee Members:
Kiousis, Spiro K.
Pelfrey, Deanna
Graduation Date:


Subjects / Keywords:
Business structures ( jstor )
Corporate communications ( jstor )
Corporate responsibility ( jstor )
Corporate social responsibility ( jstor )
Corporations ( jstor )
Customers ( jstor )
Personnel evaluation ( jstor )
Public relations ( jstor )
Shareholders ( jstor )
Social responsibility ( jstor )
Journalism and Communications -- Dissertations, Academic -- UF
cfp, csp, csr
Electronic Thesis or Dissertation
born-digital ( sobekcm )
Mass Communication thesis, M.A.M.C.


PUBLIC RELARIONS, CORPORATE SOCIAL PERFORMANCE, AND CORPORATE FINANCIAL PERFORMANCE - TRIANGULAR RELATIONSHIP IN A GLOBAL VIEW Hsin-Yi Yeh 352-328-5883. Department of Public Relations Mary Ann Ferguson Master of Art June, 2009 Today, corporate social performance (CSP) has become an expected and required practice for many corporations, and therefore CSP?s contribution to corporate financial performance (CFP) has been intensively discussed. The link between CSP and CFP has been widely studied among researchers and managers for the past several decades. My study here therefore also provides a solid result for future research conducted by University of Florida regarding CSR matters. The study also generates implications for the current financial downturn. As the Economist (2009) pointed out ?consumer interest in companies? sustainability credentials remains strong in spite of the recession,? CSP therefore becomes more essential for companies to increase their chance for surviving the current crisis and succeeding in the future. In this regard, my study here confirms CSR?s importance in today?s financial downturn as scholars agreed. ( en )
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In the series University of Florida Digital Collections.
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Includes vita.
Includes bibliographical references.
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Description based on online resource; title from PDF title page.
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This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Thesis (M.A.M.C.)--University of Florida, 2009.
Adviser: Ferguson, Mary Ann.
Statement of Responsibility:
by Hsin Yeh.

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Copyright Yeh, Hsin. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
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LD1780 2009 ( lcc )


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2 200 9 Hsin Y i Yeh


3 T o my closest family members, especially my parents for their endless love and trust. Without their support, both emotionally and financially, I would not have accomplished the task.


4 ACKNOWLEDGMENTS This thesis could not have accomplished without the guidance of my supervisory committee. My supervisory committee chair, Dr. Mary Ann Ferguson inspired me with an excellent research idea and provided constructive guidance to conduct the experimental design. Through benefiting from h er research expertise, this study can integrate CSR researches and the public relations scholarship in a quantifiabl e manner. I also want to express my gratitude to Dr. Ferguson for h er warm assistance and support through my thesis writing process. Dr. Spiro Kiousis gave insightful suggestions for me to carefully examine the contribution to research. H is inspirational d iscussions in my proposal defense also equipped me with a solid research understanding. Dr. Deanna Pelfrey has been an energetic mentor who helped me develop an innovative research idea in terms of the emerging CSR issue. My Lord Jesus Christ is always the guiding hand of my life, and I am always thankful for his grace and love to me. Without Lord s love and blessing, I m nothing and cannot complete anything. Furthermore, I like to thank my loving friends at UF who ever inspired, encouraged and c omforted me during th e stressful time of writing the thesis : Peggie Yu, Shu Hao Hsu, Ray Huang, Kenneth Chung, and Ian Liu. Without your great wholehearted companionship, I would not have become strong enough to combat with all the difficulties. Finally, I highly app reciate my parents for nurturing me with endless love and strong courage to overcome all the challenges through my life. They are the most precious stones to me than anything else. Most of all, I would like to thank Howard Yeh, my dear brother, I Huei Lee, and Yung Neng Chen, for ever lasting emotional support, unconditional belief and sharing happiness and sadness along side this journey


5 TABLE OF CONTENTS page ACKNOWLEDGMENTS ................................ ................................ ................................ ........... 4 LIST OF TABLES ................................ ................................ ................................ ...................... 7 LIST OF FIGURES ................................ ................................ ................................ .................... 8 ABSTRACT ................................ ................................ ................................ ............................... 9 CHAPTER 1 INTRODUCTION ................................ ................................ ................................ ............... 11 2 L ITERATURE REVIEW ................................ ................................ ................................ .... 13 Relationships B etween Corporate Social Performance (CSP) a nd Corporate Financial Performance (CFP) ................................ ................................ ................................ ......... 13 Conflict B etween S hareholder a nd S takeholder ................................ ................................ .. 15 Shareholder Viewpoint ................................ ................................ ................................ 15 Neo classical Friedman View ................................ ................................ ...................... 16 Stakeholder Viewpoint ................................ ................................ ................................ 16 Reputation Management ................................ ................................ .............................. 18 Conflict in t he CSP CFP Relationship ................................ ................................ ................ 20 Positive CSP CFP ................................ ................................ ................................ ....... 20 Image Mana gement ................................ ................................ ................................ ..... 22 Negative CSP CFP ................................ ................................ ................................ ...... 23 Mutual Funds ................................ ................................ ................................ .............. 23 Cause of C onflict ................................ ................................ ................................ ............... 24 Market B ased and Accounting B ased Measurement ................................ .................... 25 International Difference in CSR ................................ ................................ .................. 26 Link between P ublic R elations a nd C orporate S ocial R esponsibility ................................ ... 27 Stakeholder ................................ ................................ ................................ ........................ 30 Triang u l ar R elationsh ips of P ublic R elations, CSP and CFP ................................ ............... 33 3 METHODOLOGIES ................................ ................................ ................................ ........... 39 Design ................................ ................................ ................................ ................................ 39 Sample and the Treatment ................................ ................................ ................................ .. 41 Operational Definitions ................................ ................................ ................................ ...... 42 Measuring Public Relations Function ................................ ................................ ................. 45 Analysis ................................ ................................ ................................ ............................. 47 4 RESULTS ................................ ................................ ................................ ........................... 48 The Findings ................................ ................................ ................................ ...................... 48


6 Overview of Statistical Analysis ................................ ................................ ......................... 48 Corporation Profiles ................................ ................................ ................................ ........... 48 Research and Hypothesis Testing ................................ ................................ ....................... 49 Analysis of CFP Revenue Relationship for Year 2008 and Year 2007, One Year Lag of CSP ................................ ................................ ................................ .............. 49 Analysis of CSP EPS Relationship for Year 2008 and Yea r 2007, One Year Lag of CSP ................................ ................................ ................................ ......................... 50 Analysis of CSP Relationships within Regions and a One Year Lag In Revenue ................ 52 Consistency and Cor relation among The Awards ................................ ......................... 53 Analysis of Public Relations Relationships with CSP and Revenue ............................. 54 U.S companies: United Parcel Ser vice and General Electric ................................ 55 Asian c ompanies: Toyota and Honda Motors ................................ ........................ 58 European c ompanies: BMW Group and Nestl ................................ ..................... 61 Findings for Research Question 2 ................................ ................................ ................ 63 5 DISCUSSION AND CONCLUSION ................................ ................................ .................. 65 Study Overview ................................ ................................ ................................ ................. 65 Overview of Research Questions and Hypothesis ................................ ............................... 67 Conclusion ................................ ................................ ................................ ......................... 70 Implication ................................ ................................ ................................ ......................... 72 Limitations ................................ ................................ ................................ ......................... 73 Suggestion for Future Research ................................ ................................ .......................... 74 APPENDIX A REVENUE, EPS, AND CSR SCORES FOR 379 COMPANIES ................................ ........ 75 LIST OF REFERENCES ................................ ................................ ................................ ........ 100 BIOGRAPHICAL SKETCH ................................ ................................ ................................ ... 110


7 LIST OF TABLES Table page 3 1 CSR awards ................................ ................................ ................................ .................... 42 3 2 public relations ................................ ............................ 47 4 1 2007 and 2008 CSP relations with 2008 revenue ................................ ............................. 50 4 2 2007 and 2008 CSP relations with 2008 EPS ................................ ................................ ... 52 4 3 CSP relationships with countries and revenues ................................ ................................ 53 4 4 Correlation coefficient among the awards ................................ ................................ ........ 54


8 LIST OF FIGURES Figure page 2 1 U.S and Europe PR, CSP and CFP relationship ................................ .............................. 38 2 2 Asia P R, CSP and CFP relationship ................................ ................................ ................ 38


9 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Arts in Mass Communica tion P UBLIC R ELARIONS CORPORATE SOCIAL PERFORMANCE AND CORPORATE FINANCIAL PERFORMANCE TRIANGULAR RELATIONSHIP IN A GLOBAL VIEW BY Hsin Y i Yeh August 2009 Chair: Mary Ann Ferguson Major: Mass Communication Today, corporate social performance (CSP) ha s become an expected and required practice for many corporations and therefore CSP s contribution to corporate financial performance (CFP) has been intensively discussed. The link between CSP and CFP has been widely studied among researchers and managers for the past several decades. Several factors were found to mediate the relationship between CSP and CFP; for example, industry differences (Griffin & Mahon, 1997; Peloza, 2006); the operation of CFP; and the measurement of CFP and CSP (Griffin & Mahon, 19 97). The results regarding CSP CFP studies, however, have varied. Griffin and Mahon (1997) reviewed 51 papers on this topic and found that 33 reported a positive relationship; nine reported no relationship; and 20 reported a negative relationship. In addit ion, a growing number of studies have shown no significantly difference in returns between socially responsible investments and normal market investments (see e.g., Bauer et al., 2005; Bello, 2005; Startman, 2005). Finding no difference, however, can occur for many reasons related to research measurement and design and is not convincing when conflicting results are present. Most scholars have suggested that inconsistent CSP CFP relationships results from three major factors: 1) the use of questionable soc ial responsibility indexes; 2) different measurements


10 and definitions of financial performance (accounting based or market based); and 3) ignorance CFP relationship. This study has tried to examine CSP CFP relationships by av oiding these factors, and instead has included the public relations function in the discussion to explain a triangular relationship among PR, CSP, and CFP. Also, t h is study represents an empirical examination of CSP CFP relationships within three regions: Asia, Europe, and the U.S by applying two definitions of CFP, revenue, and EPS. By conducting a statistical study (N=375; Asia=86, Europe=156, U.S =137), this study contributes to the research surrounding the relationship among public relations, CSP, and CFP. The results suggest that CSP in all three regions has a significantly positive relationship with related financial indicator, revenue, using either 2008 or 2007 CSP as an independent variable. Regarding the CSP EPS relationship, firm variable in the three regions studied. The result for the U.S companies, however, shows significantly positive relationship between 2007 CSP a EPS (2008). For the other two regions, however, the results still show no relationship between CSP EPS. In addition the consistent CSP Revenue relationship in these three regions proves that the mindset of Asian companies and stakeholders has pr ogressed regarding corporate social concerns in recent years. social performance is confirmed by Web site content analysis. Firms in Europe and the U.S have strong er public relations practices The indirectly positive relationship between the public relations function and CFP is thus manifest for these two regions.


11 C HAPTER 1 INTRODUCTION In the 21 st century, corporate social responsibility (CSR) is no longer an op tion or a trend, but an expected and required practice for many corporations. Empirical research has shown that corporate social responsibility is a common business practice with important implications for business management. For example, CSR practices he lp corporations gain reputation advantages and affect corporate financial performance (CFP). Marom (2006) suggested that socially reputation, and improved access to fin the obligation an organization has to be accountable to its environment and for its financial well being (Goddling & Vocht, 2007). Corporate Social Performance (CSP), however, is a way that firms ins ert CSR into their business practices (Maron, 2006). Finally, Corporate Financial business and generates revenues (Farmer, 2008). Balancing the cost of social concern s and generating satisfactory profits for shareholders has often raised concerns (Brigham, Gapenski, & Ehrhardt, 1999). Recent studies have shown mixed directions for the CSP CFP relationship. Some scholars believe CSP and CFP are positively related (Mosko witz, 1972; Alexander & Bushholz, 1982). Neo classical economists, shareholders, therefore resulting in a negative CSP CFP relationship. In addition, the CSP CFP relationship does not fit a generalized model. Scholars believe because of cultural and societal region ( Kaler 1996 ; Ferrell et al. 2000 ; Tsalikis and Fritzsc he, 1989 )


12 Although the CSP CFP relationship has been considered by a number of research papers, most studies have focused only on the U.S and U.K. markets. The lack of sufficient research studies on CSP CFP relationships from a global viewpoint has led ma nagers in multinational enterprises to hesitate to carry out CSR in their subsidiary regions ( Kaler 1996 ) Local differences such as culture and religions result in different standards for business ethics; therefore, business managers are often confused a bout how to communicate with stakeholders under varied business ethics and further how to balance shareholder and stakeholder interests. Moreover, several scholars have studied the links between public relations and CSR (Wang, 2007; Lim, Lin, Ferguson, & Kiousis, 2006; Ferguson, 2007; Ferguson, Weigold, & Gibbs, 1984 ; Ferguson, Popescu, & Collins, 2006) In general most scholars agree the public relations role in study is to explore whether public relations practices play an impor tant role in explaining CSP CFP differences. Further, this study will examine if there is a correlation among public relations development, CSP, and CFP in different regions.


13 C HAPTER 2 L ITERATURE REVIEW Relationships B etween Corporate Social Performance (CSP) a nd Corporate Financial Performance (CFP) Corporate social responsibility (CSR) emanates from a simple idea: that making money is shareholders, but also to soci ety. There is no consensus on what exactly should define an econo mic, legal, ethical, and discretionary expectations that society has of organizations at a CSR, which incorporates four types of expected responsibilities econ omic, legal, ethical, and discretionary that society has of organizations at any particular moment. CSR is defined by the Commission of the European Communities ( 2006) social and environmental concerns in their bus iness operations and in their interaction with their Carron et al., 2006). Another scholar social activity motivated to adopt CSR initiatives for both ethical and economic reasons (Cetindamar & Husoy, 2007). Today, many organizations have shifted their focus to the interrelationship be tween the organization and the environment in which it operates. Most organizations have embraced the concept of value driven operations with an organizational declaration explaining their code of conduct, credo, or mission statement. For example, more tha n 500 companies in the United


14 States have published some form of a code of conduct to guide their business (Kerkow et al., 2003). Concerns about corporate social performance (CSP) arise for several reasons, including innovative communication technologies and advancing social media, both of which increase consciousness among activist publics and impact globalization (Estallo et al., 2007). In the academic literature, however, a unified paradigm of CSP has yet to take shape (Godfrey & Hatch, 2006). Wood (199 social responsibility, processes of social responsiveness, and policies, programs and observable sents both a providing a framework for linking business and these social fields (Graves & Waddock, 1999). The definition of corporate financial performance (CFP) is m ore varied, broad, and complex than the definition of CSP. Most scholars agree that CFP is a subjective measure of how viewpoint, different ways to measure financi al performance have emerged including revenue from operations, operating income, cash flow from operations, or total unit sales ( The link between CSP and CFP has been widely studied among researchers and managers for the past several dec ades. Several factors were found to mediate the relationship between CSP and CFP; for example, industry differences (Griffin & Mahon, 1997; Peloza, 2006); the operation of CFP; and the measurement of CFP and CSP (Griffin & Mahon, 1997). The results regardi ng CSP CFP studies, however, have varied. Griffin and Mahon (1997) reviewed 51 papers on this topic and found that 33 reported a positive relationship; nine reported no


15 relationship; and 20 reported a negative relationship. In addition, a growing number of studies have shown no significantly difference in returns between socially responsible investments and normal market investments (see e.g., Bauer et al., 2005; Bello, 2005; Startman, 2005). These findings may suggest no direct relationship exists between CSP and CFP. Finding no difference (failing to reject the null), however, can occur for many reasons related to research measurement and design and is not convincing when conflicting results are present. Conflict B etween S hareholder a nd S takeholder A con flict exists between shareholders and stakeholders regarding CSR issues because of ands and expectations. For example, most of the time shareholders main concern is about short term profit gains forcing corporations to increase return rate; however, NGOs and activist groups consider environmental and socially responsible conduct as impor ting requiring expensive long term investments to meet the expectations of those stakeholders. This is exemplified in the tradeoff question Gapenski, and our sha Shareholde r V iewpoint seeking company. Signitzer and Prexl (2008) suggest that corpora te sustainability is supposed to be a corporate behavior which substantial financial return. Therefore, the argument occurs when business leaders who pay too m (Murphy, 1994).


16 Neo classical Friedman V iew A neo oriented and purely based on the fina ncial returns it will bring to the company. These theorists have argue d term market value and the wealth of its shareholders (Bird et al 2007). The most famous tenet of this theory written by Milton Friedman ( 1970 ), is to use its resources and engage in activities designed to increase profits so long as it s t a ys within the rules (p. 12). Friedman ( 1970 ) argued that main responsibility is to act solely in in accordance with the owners desires to argues that business leaders have no right to damage shareholders wealth in order to benefit other parties. Therefore, fro m the neo economist viewpoint, profit seeking companies only have minimal ethic al obligation s et al., 2007). In other words, social concerns or social ly responsible investments are only consi those social actions are not worth financial consideration Stakeholder V iewpoint The increasing power of activist market


17 strategies important. As such, an increasing number of investors are not only looking at the portfolio, but are also valuing the way corporations meet social responsibilities (Barnett & Salomon, 2006). In this regard, stakeholder theory employees, customers suppliers, and the general community). This view argues that stakeholders are the groups on which the organization must depend for its survival, and that maintaining relationships with them should be a top priority (Bowen, 2008). The central idea of stak organization is capable of managing its relationships with key groups, such as financers and shareholders, but also customers, employees, and even communities or societies (Beurden & Tobias, 2008). From another perspective, some scholars (Goodpaster & Matthews, 1982; J. E. Grunig & society, and in this regard, they must serve socie ty in a responsible manner. As such, corporations today are faced with a growing demand to prove they are responsible corporate (Bowen, 2008). Carroll (1979) sk etched out a holistic view of operational management that balanced shareholders and stakeholders interests. He defined the social responsibility of business as at 1979 ) idea, Freeman (1984) widened the focus of corporate management beyond using resources for the pure benefit of shareholders to using resources for the benefit of a much wider group of stakeholde rs. Since then, firms have


18 been encouraged to move toward socially responsible behavior for both moral and practical the managerial decision making process. E pstein (1989) suggested that all corporations have Preston (1995 ) (p. 68 g CSP occur from a used social indexes (sources), KLD, addresses seven different stakeholder issues: 1) community relations; 2) employee relations; 3) diversity; 4) product quality; 5) environmental manage ment; 6) international issues; and 7) corporate governance. Reputation M anagement Different stakeholder groups have vari ous value priorities to which firms should respond to build favorable relationships with stakeholders. A literature review of CSR sugges ts that socially responsible firms can gain competitive advantages and both tangible (financial) and intangible (reputational) rewards. F ulfill ing and can be achieved through CSR practices (Fombrun & Shanley, 1990). Most research studies have suggest ed firms may use successfully to distinguish themselves with an earned reputation s (Fombrun & Shanley, 1990; Siltaoja, 2006; Balmer, 2001 ; Hooghiemstra, 2000, Fryxell & Wang, 1994) For example, b ased on in depth interviews with employees of a Finnish newspaper organization, Siltaoja (2006) identified multi dimensional constructs of CSP and reputations, which can suggest a viable corporate social strategy to deliver value and elicit a good reputation in minds.


19 Many scholars believe that social concerns and corporate reputation go hand in hand ; t hus, it is argued that positive CSR practices have a strong impact on a corporations C orporat e image is the result of interactions between an organization and its publics and attempts to engage in impression management (Balmer, 2001; Hooghiemstra, 2000). Corporate reputation, which wa s defined by Fombrun and Shanl (p. 235 ) is another construct widely discussed in the CSR literature. Researchers have identified a close relationship between CSR and corporate reputation and regard CSR as an important corpo rate strategy in building corporate reputations (Fryxell & Wang, 1994). In an empirical research study on voluntary corporate participations in social initiatives, Cetindamar and Husoy (2007) concluded that improved corporate image is one of the major bene fits of corporate social involvement. Furthermore, other literature has confirmed a positive relationship between CSR and corporate reputation and has shown that CSP influences perceptions and assessment s (Hockerts & Moir, 2004) and corporate at tractiveness to prospective employees (Turban et al., 1996). Indeed, corporate social involvement serve s as a practical business strategy in building organizational reputation. From the corporate point of view, CSR can be seen as an investment in product differentiation This can help establish corporate reputation for quality, reliability, and innovation which are often the product attributes valued by some customers (McWilliams & Siegel, 2001). For example, Brammer and Millington (2005) examined the imp act of corporate philanthropy on corporate reputation across industries in the U.K. They found that firms with higher philanthropic expenditures have better reputations. They also pointed out that ons in industries that exhibit significant


20 (p. 100 ). that supported the positive l ink between philanthropy and corporate reputation. Conflict in the CSP CFP R elationship Empirical research has shown corporate social responsibility to be a common business practice with important implications for business management: CSR practices help co rporations gain reputation advantages and affect corporate financial performance (CFP). Marom (2006) employees, improved reputation, and improved access to financia (p. 193 ). The link between corporate social performance and financial performance has been a widely studied inquiry among researchers and managers for the past decades. T he findings of CSP CFP relationships however, are not consistent. Academic s who had previously reviewed the literature exploring the relationship between CSP and CFP found the ir studies to be inconclusive : no link between CSP and CFP could be either proved or disproved. Most recently, according to Barnett and Salomon (2003), des pite the intensity of study, the relationship between CSP and CFP remains in dispute. The literature review revealed many studies to be dissimilar in their findings. More specifically, s ome scholars believe that spending too much on CSR will put firms at a disadvantaged position and hurt their actual earnings (Hill, et al., 2007) and that this result s in a negative relationship between CSP and CFP. O ther scholars have argue d that CSR actions generate intangible benefits, for example good reputation and pos itive brand image (Balmer, 2001; Hooghiemstra, 2000) These scholars have argued that intangible benefits result in tangible benefits including financial returns. Positive CSP CFP Many scholars have asserted that socially responsible investment s and shareh older advocacy would push firms to engage in more environmental and social practices. King and


21 Levine (2004) provide d convincing arguments and statistics to support their position that the link between CSP and CFP is strong. Most research concludes that th e social involvement of firms can result in better CFP. Stanwick (1998) reviewed research studies that examine the effects of CSR on financial performance and concluded that there is a weak but positive relationship. Similarly, Pava and Krausz (1996) found that 12 of 21 studies found evidence of positive associations between CSR activities and indices of financial performance. F urther, F rooman (1997) studied how the stock market reacted to socially irresponsible and illicit corporate events and found that n egative CSR substantially decrease d study socially responsible manner. This implies that acting socially responsible and abidi ng by laws is necessary to increase shareholder s wealth. A meta analysis by researchers Orlitzky, Schmidt, and Rynes ( 2003 ) looked at 52 studies over 30 years, and f ound a statistically significant positive association between CSR performance and financia l performance ( as cited in Rembert, 2005 ). Likewise, Allouche and Laroche (2005) investigated the CSP CFP relationship by using meta analysis, and found that CSP has a positive impact on CFP. The Centre for Corporate Change at the University of New South W ales (2000) also used meta analysis to investigate CSP CFP relationships, and concluded the following findings: 1. If managed correctly, corporate virtue in the form of social performance is likely to pay off for your organization. In other words, CSP has not only moral, but also financial value. 2. Corporate environmental management was not as highly correlated with financial performance as was CSP. 3. CSP was more highly correlated with accounting return measures than market return measures. 4. The effect of CSP appe ars to be due to reputational effects (among a multitude of stakeholder groups) rather than organizational learning effects (p. 4)


22 Image M anagement Another line of research of corporate image and brand value has supported an indirectly positive CSP CFP rel ationship. A CoreBrand analysis ( 2007 ) of data from years 2003 and 2006 previous study of 2003 data had similar results; thus, it appears that the percentage of brand value represented by CSR is trending up. At the same time, all other identifiable contributors to corporate brand value advertising, market cap, and the industry in which a company competes appear to be flat or declining ( CoreBrand 2007) Murray and Vogel (1997) found Cause Related Trends Report (Cone, Inc., 1999) suggested that more than 80% of consumers surveyed indicated they have more positive images of fi rms that have supported social causes and are willing to switch their brand preference to those firms with strong CSR practices (Cone, Inc., 1999) Peloza (2006) investigated the relationship between CSR and CFP and advocated a long term complementary effec 115 ), which can help moderate potential negative firm behaviors and preserve corporate image and reputation. Peloz a (2006) therefore suggested that highly committed and well promoted CSR initiatives with positioning and increase firm equity for a long period of time. This is particularly true if the efforts are deliberately executed and perceived as congruent and high image (Simmons & Becker Olsen, 2006).


23 Negative CSP CFP S ome scholars however, are skeptical about the positive relationship between CSP and CFP. Brown (1998) questioned the return on CSR investment and found that CSR activities are not financially and economically beneficial. Studies supporting this argument f ound that evidence is too weak to support a positive relationship of CSP CFP either in theoretical or empirical research studies (Scholtens, 2006). Further, a growing number of studies f ound that there is no significant difference in returns on the relatively more socially responsible funds compared to conventional funds (see Bau er et al., 2005; Bello, 2005; Gezcy et al., 2005; Hamilton et al., 1993). Mutual Funds Typical research results have suggested that social responsible mutual funds perform no differently than conventional mutual funds (Guerard, 1997; Sauer, 1997). Many st udies found the link between CSP and CFP are weak, and even negative (Margolis & Walsh, 2001). Bello 2001 ) argument by showing that socially responsible investments (SRI) do not have higher return than the investments that does not consider CSP. A negative relationship has been theorized between CSP and CFP because social responsibility has resulted in high costs that have placed the firm at a competitive disadvantage. Henderson (2001) based tests in their CSP CFP relationship study, Lee et al. (2008) a lso suggested a negative link between CSP and CFP, and all accounting tests indicated no difference in financial performance on CSR activities. Similarly, Statman (2000) tested the performance of socially responsible mutual funds in the 1990 1998 periods a nd concluded that


24 press conference sponsored by the Competitive Enterprise Institute, Laffer (2005) denounced CSR initiatives as detrimental to shareholder inte rests and indicated it actually hurts financial performance. Cause of C onflict The debatable and conflicting results regarding theoretical and empirical conclusions regarding the relationship between CSP and CFP persist even today (Jones & Wicks 1999 p. 2 12; cf. e.g., Donaldson 1999; McWilliams & Siegel 2001; Roman et al. 1999). Ullmann (1985) and Wood and Jones (1995) argued that even after three decades of empirical research on this relationship, researchers have engaged in a futile search for stable ca usal patterns. A number of literature reviews and theories ( e.g. Aupperle et al. 1985; Griffin & Mahon 1997; Husted 2000; McWilliams & Siegel 2001; Pava & Krausz 1995; Ullmann 1985; Wartick & Cochran 1985; Wood 1991a, 1991b; Wood & Jones 1995) have prop osed conceptual explanations for the existence (or lack) of a causal relationship between CSP and CFP, which will be reviewed in the following context. Al though the answers are still unclear, several possible explanations can give future researchers guidel ines for build ing a more valid methodology to study the CSP CFP relationship. The conflicting results are believed to be caused by the lack of a standard definition and measurement of CSP and no rigorous methodology to measur e the CSP CFP relationship (Bi rd et al. 2007). Because consensus is lacking on what should be included or defined as an social responsibility (Frederick, 1994 ; Griffin, 2000) and what measurement should be applied to investigate the CSP CFP relationship properly, previo us reviews have f ou nd problems such as stakeholder mismatching (Wood & Jones 1995) or the general neglect of contingency factors ( e.g. Ullmann 1985) and measurement errors ( e.g. Waddock & Graves 1997) may explain the inconsistent findings. For example, a single empirical study can only


25 provide limited information regarding the relationship between corporate social performance and corporate financial performance. More specifically, a ny single primary study can be affected and potentially seriously distor ted by two study artifacts: sampling error and measurement error. Most experts on corporate social performance and business ethics still assume that either ethical and/or socially responsible behavior is a cost factor or that its relationship with financi al performance is too variable to allow for firm s conclusions. In addition, Margolis and Walsh (2001) mentioned some authors have fail ed to see important differences between theory and operational context ; are more negative on CSP CFP relationships ; and h ave advocated this should result in suspending CSP CFP research (Margolis & Walsh, 2001; Rowley & Berman, 2000). All the previous literature that has attempted to defin e CSP and CFP are inconclusive (De Bakker et al., 2005) as is the literature on the rel ationship between CSP and CFP. Al though the link between CSP and CFP has been studied extensively, the results fail to be coherent. Therefore, Ruf et al. (2001) suggest ed four reasons for inconsistent CSP CFP relationships : 1) lack of theoretical foundatio n ; 2) a lack of systematic measurement of CSP ; 3) a lack of proper methodology ; 4) limitations on sample size and composition ; and 4) a mismatch between social and financial variables. Likewise, Davidson and Worrell (1990) concluded three major reasons exp lain ed the inconsistency: 1) using questionable social responsibility indexes ; 2) p oor measurement of financial performance ; and 3) u nsuitable sampling techniques. Market B ased and A ccounting B ased M easurement B ecause shareholders returns are usually consi dered most important in research studies, the variables of market value and stock price are, therefore, often used to evaluate CFP. Market S tock prices however, generally do not refle


26 Bird (2007) found in general that financial value. Consequently, using market value as a dependent variable to interpre t the CSP CFP relationship is troublesome S ome scholars have suggest ed that applying accounting based measurement to investigate the CSP CFP relationship would be more proper, as the accounting based measurement shows more internal efficiency and reflects CFP more directly (Orlitzky et al., 2003; Wu, 2006). T account, therefore, accounting based, rather than market based measures are more appropriate. Research shows that a difference i n predict ing the CSP CFP relationship exists between market based measures of CFP and accounting based measure of CFP (Orlitzky et al., 2003; Wu, 2006). A ccounting the org & Gossling, 2008). Wu (2006) focuse d on the finding that studies that appl ied market based measurements report a smaller relationship between CSP and CFP than those that appl ied accounting based measurements such as profitability measurements, asset utilization, and growth. Furthermore, Wu (2006) suggested that using accounting based measurement would better predict social performance because it can reflect internal efficiency faster International D ifference in CSR Firms headquartered in different countries have different CSR policies. Kaler (1996), Ferrell et al. (2000), and Crane and Matten (2004) discussed that business ethics in various regions are created in response to religious, cultural, philosophical, socie tal, economic, and institutional concepts and notions. People from different cultures hold different values and ethical beliefs, which will result in diverse effects on their business practices (Tsalikis & Fritzsche, 1989). Consequently, codes of ethics va ry in different regions. For example, Langlois and Schegelmilch (1995) found that various significant differences exist among the codes of


27 ethics between those from U.S firms and those from France and Germany, which also results in different CSP. Most scho lars regard that these differing codes of ethics result from culture differences and economic development. Scholtens and Dam (2007) provided convincing Indeed, vari performance in different countries. For example, the tradition of gift giving in China could be interpreted as bribery by a Western standard of business ethics. Ferguson (2006) i ndicated cross culture sophistication among codes of ethics has increased in recent years. Still, many scholars have argued that the cultural effects of an international set of ethical principles can be attained by Babik, 1996; Ferguson, 2006). Consequently, factors that influence codes of ethics in different regions may also affect the direction of the CSP CFP relationship in those regions. For example, Hill et al. (2007) found evidence that Social Responsible Investment (SRI) returns in the United States and Europe are significant over the long term, whereas in Asia they are not significant. Recent studies, however, have discussed the CSP CFP relationship in genera l rather than comparing specific regions. This is because most SRI funds have incorporated various companies in different regions as a whole, and the overall return is the top most concern of most investors. Link between P ublic R elations a nd C orporate S oci al R esponsibility Since Ryan and Martinson (1983) and other scholars argued that the corporate responsibility should belong to the public relations function, the link between public relations and CSR has been studied (Wang, 2007; Lim, Lin, Ferguson, & Kiou sis, 2006; Ferguson, 2007; Ferguson, Weigold, & Gibbs, 1984; Ferguson, Popescu, and Collins, 2006 ) In fact, as early as DATE, Edward Bernays, who many consider the father of public relations, was quoted as saying,


28 also found that companies with more employees in PR or in their investor relations department are more focused on economic and business education programs. Today, corporate social responsibility is understood as a basic concept of, and sometimes synonymous with public relations. Heath (2006) addressed the importance of corporate responsibility: proactive planning and management to make the organization good by meeting or exceeding the expectations of its stakeholders and stake seekers. To this end, the organization becomes worthy of respect and happiness achieved by advancing interlocking, often conflicting, and guiding Grunig and Hunt (1984) proposed a link between public relations and CSR, maintaining an organization to have a way symmetrical communication is the best means by which to evaluate social responsibility (p. 48). Grunig and Hunt (1984) advocated that using the two way symmetrical model, both the corporatio n and the stakeholder can adjust attitudes and behavior overtime as a result of a well planned, two way flow of information. For decades, researchers and practitioners have argued that public relations officers should act with integrity as a corporate con science, an honest judge, or ethics counsel to top decision makers in the organization (Bowen, 2008). Grunig and White (1992) adopted the conscience concept of public relations and described public relations as working in the public interest to


29 (Bowen, 2000; Bowen & Health, 2003; Ryan & Martinson, 1983; Wright, 1985) have also supported the idea that public relations professionals should act as ethical counsel to t heir chief executives and organizational decision makers. As such, some scholars have indicated that public relations practitioners are more suited for the ethics officer position than are lawyers and human resource employees, who more commonly fill this r ole (Heath & Ryan, 1989; The Center of Business Ethics, 1992; Fitzpatrick, 1996). relations and marketing communications surrounding CSR may help the firm improve its image or reputation (Munzung & Zollinger, 2001). Miles (1996) highlighted the importance of communications in socially responsible issue management, indicating corporate sustainability communications (CSC) has become a discussion for public relations roles in C SR. CSC is a new dimension of public relations that poses new challenges for communication research (Stignitzer & Prexl, 2008). Successful CSC can increase consumers feeling of trust and credibility because it can position the company as a sustainable fir m. In early studies of societal roles, Ronneberger and Ruhl (1992) focused on the societal role of public relations as a central theme in the early stage of public relations. Later, Van Ruler and Vercic (2005) highlighted the societal oriented focus on com munication management. Epstein and Roy (2001) suggested that a key performance driver of a successful CSR campaign is communication and promotion of the CSR practices. Likewise, Maignan and Ferrell (2001) suggested that CSR communication can affect the pub judgments of corporate citizenship. In this regard, CSC has become a main focus among public relations professionals or practitioners in order to conduct a successful CSR campaign. In general, scholars have suggested that the public relations functio n should be developed as an ethical role


30 shareholders and to both internal and external stakeholders (Signitzer & Prexl, 2005). Stakeholder Business trends relevant to CS publics and a need for more accountability (Newsom et al., 2000, p. 59). Some theories that have (Johnston & Zawawi, 2000, p. 122). According to this model, corporations become stewards or public trustees by using their resources to affect all people who are generall y re l e va nt to their business within society in fundamental ways, not just shareholders (Clark, 2000). Developing from this point of view, stakeholder theory has become an important guideline in managerial decision making process for corporations. Gildea (2 004) mentioned a nationwide in United State Consistent research has revealed that the public relations function in CSR is becoming more strategic. In a survey of the public relations managers of U.S Fortune 1000 companies, ninety strategy (Goodman, 2001) wi th either shareholders or stakeholders. Excellence theory (J. E. Grunig, 1992) holds that the public relations function should be responsible for conducting research on the various publics served and maintaining links with strategic publics in the organiza e n, 2008). Because many issues arising in a firm are relevant with other publics or stakeholders, the public relations function is suitable for managing these issues and considering the ethical implications at the same time (J.E. Gru nig, 1992). Today, therefore, CSR is considered as one of the public relations tools required to maintain a good


31 relationship with stakeholders. Several research studies have indicated that in operating a successful social responsibility program, the publi c relations function can create positive links between CSR and corporate image. Clark (2000) mentioned that managers and theorists began management. As a result, busine sses are, indeed, using corporate social responsibility as a public public relations role in operating CSR programs is to ensure that companies are recognized for bein 2001). In general, maintaining good relationships with stakeholders along with managing ethical corporations. Relationship A mong P ublic R elations, CSP and CFP : A gap in the research exists case studies, however, regarding the relationsh ip between CSP and public relations. For example, 1995 ) four step corporate social performance model. Morsing and Schultz (2006) proposed three corporate sustainability communication strategies have supported two way symmetrical communication as the most effective model for communicating fi way, symmetrical practices. Still, statistics and studies that capture the extent to which public relations is co rrelated with CSP are lacking. As Kim and Reber (2008) mentioned, while there is substantial research


32 regarding the practical and ethical value of CSR, there is little research that looks at the public relations role in CSR programs or attempts to develop a typology of public relations roles. In addition, the public relations industry has developed is various ways in different regions of the world. For example, Ruler and Vercic (2003) stated that public relations in Europe have been widely practiced becaus Tanaka (2008), however, noticed that because of cultural differences, public relations practice is underdeveloped in Asia in general, especially in Japan. As such, when the public relations role is uncertain and confused with marketing or advertising in those regions, the link between public relations and CSP would be weaker. An interesting finding bas ed on reviews of all literature variable in explaining international difference of these two fields. Sha (2006) concluded that including culture as a variable in pu blic relations research has centered largely on examining 1980 ) culture dimension to investigate the international differences of business ethics among 22 counties; likewise, 1980 ) culture dimension to explain the difference of public relations practice in Japan as well. Moreover, most of findings have g 2004; Signitzer & Prexl, 2005; Munzung & Zollinger, 2001), and, further, is usually considered a public relations function (Bow e n, 2008; Goodman, 2001; J. E. Gru nig, 1992; Clark, 2000). Based on the observed link among public relations, CSP, and CFP from previous studies, the


33 paired links of public relations CSP or public relations CSR and CSP CFP are studied more and hips among those three fields, however, are scarce. Triang u l ar R elationships of P ublic R elations, CSP and CFP Talikis and Fritzsche (1989) believe d that doing business internationally has become more complex as a result of culture difference s and ethnic c onfusion. In th e current study, the author will investigate the CSP CFP relationship in three specific regions : the United States Europe, and Asia to provide reference s for international firms operating in these countries Conclusions from previous litera ture reviews suggest that most inconclusive CSP CFP relationships result from: 1) the various definitions of CSP ; 2) the different definitions of CFP ; 3) whether stakeholder influence should be taken into account ; and 4) regional factors. T o explain th e se influential factors in CSP CFP relationships mentioned in the previous context, this study will apply two accounting perspectives of financial returns ; use an award count CSP evaluation ; and t ake into account regional factors T two accounting based variables : ear ning per share (EPS) and revenue, as dependent variables to interpret CFP This will be used rather than market value or stock price (both of which represent ) to investigate if th e se factors affect CSP CFP relationships in diffe rent regions. Revenue is a fundamental and accounting based financial indicator and is 2006) because it increas es trust in the firm Further, EPS is a more accur ate index to represent a may result in negative corporate reputation and los s consumer preference, and may therefore lower the


34 atten d to may cause lower productivity and higher manpower cost s. This, too, may factors caused by either poor or good CSR practices may reflect on a yearly T he def in ed difference between these two accounting based indicators can partially explain why CSR initiatives are considered too expensive to result in positive profit s for investors by most of the scholars who have argued the issue based on market based financi al indicators. Revenue is a sale related accounting term while EPS is related to profit. Moreover, s are highly related to their reputation (Fombrun & Shanley, 1990). The major calculation differences between a nd expense, which will be explained further in a later context. In addition, EPS can be index ed and used as referen ce hus influence stock price. Most scholars who have applied market base d financial indicators to argue that CSP is too expensive to generate CFP have also implied CSP results in low EPS. Al though CSR cost is part it is not totally responsible for its EPS. EPS is an indicator that is more likely to involv e control and operational efficiency. As such, when looking at the differences between the CSP r evenue relationship and CSP EPS relationship, we may be able and re venue and to explain whether some scholars, who use market based indicator s to define CFP, have, perhaps, misjudged the CSP the incoherent CSP CFP relationships reported among all the various research studies examined. For example if the CSP r evenue relationship is positive but the CSP EPS relationship is can increase firm sales by improving reputation and eference This can also explain most market orientated


35 the negative CSP CFP relationship. To look more closely at the variables in the di scussion. The CSP CFP relationship in this study is proposed to be a two way reputation and image and will therefore generate financial rewards (Fombrun & Sh anley, 1990). As such, as long as firms are rewarded by a positive reputation achieved from CSR initiatives, they will continuously invest in F irms with high financial performance will therefo re have better CSP. At the same time, s as most scholars agree (Tsalikis & Fritzsche, 1989). Differences in c ultural and social structur e s are always considered factors t hat result in various business eth ics. As a result, the regional factor is also included in this study. In addition, in order to avoid bias in defining and measuring CSP, this study will u se award count method to create CSR scores to represent firms CSP. S even CSR awards are included in th is study as follows: 1) Fortune Most Accountable Companies ; 2 ) Global 100 Sustainable ; 3 ) World's Most Ethical Companies ; 4 ) Global 200 Most Respected ; 5 ) Global Corporate Citizenship ; 6 ) Global Compact ; 7 ) Most Admired companies The CSR scores are equall y weighted and standardized for calculation from all the awards. Most of these awards have been established by looking at if companies have built responsible practices into the way they do business and how well they account for the impact of their actions on their stakeholders, environment, and products. In general, companies are given an award based on evaluati ng four key areas: 1. Strategic Intent: Does the company seek to address important social, environmental and broad economic issues in its core busines s strategy? 2. Governance and Management: Are senior executives and the board accountable to stakeholders when setting strategy and formulating policy on extra financial issues? Do


36 these issues translate into management systems, standard procedures, incentive s and performance targets toward specified goals? 3. Engagement: Does the company engage in dialogue with the people and groups that have an interest in its business and may be affected by it or have an effect on it such as employees? Does the company report its social and environmental performance? D oes the company provide equal opportunities for different race s or gender s ? 4. Operational Performance: How effective has the company implement ed its strategies, management systems and engagement mechanisms as indi cated by its performance in a variety of social and environmental impact areas ? By weighted counting of these rewards, the CSR scores generated for this study will more ic perspective. financial report, sustainability reports and web disclosures, but also consider information published by reliable third parties This combination of information will be used to assess the degree to which a company has been involved in environmental, social, or broader economic controversies. A previous study investigating SRI returns in the U.S Europe and Asia conducted by Hill et al. (2006) show ed that the U.S and European portfolios outperform ed investments without including social factors, but that the SRI portfolio in Asia d id not, although it was close. This finding implies that cultur al factors as indicated by numerous scholars (Scholtens & Dam, 2007; Lan glois & Schlegelmilch, 1990; Hood & CSP and how CSP is returned via CFP in different countries. Particularly in Asia, huge societal structure differences ; lack of engagement by NGOs and the government ; and slow response to stakeholders concerns challenge companies to push their CSR practice s (Frost, 2007). U nlike Western companies, therefore, should show no relationships with CFP, either in revenues or EPS. Moreover, even if engaging in CSP requires more expenses, the financial returns should pay off or even reward social performance; thus, CSP should have a


37 positive relationship with revenues and EPS in both U.S and European companies. Thus, the hypothesis and research questions in this study are proposed as follows : Hypothesis 1: CSP is positively related to its reputation related CFP factor, revenue. related CFP factor, EPS. RQ 1: Are CSP CFP relationships, either CSP revenue or CSP EPS, different in U.S European, and Asian countries? is positively related to their last year revenue. A barrier that companies have faced when implementing CSR prog rams has been the difficulty of measuring the financial performance of such initiatives. There has also been a need for business management to take a lead ership role in a CSR program (Birch, D & Batten, 2001, p 33). Henderson (2002) further outlined thes e barriers in A Case Against CSR saying that companies needed to ensure that they have communicated properly with external stakeholders, such as suppliers ; internal publics, such as employees ; and sharehol ders. An indicator of the financial value that companies attach to CSR is where they locate the communication function within the organizational structure. It is typically located in external affairs, corporate affairs or community affairs. In other words it is seen as connect ed with public relations, a function of a company s external relationships and a holistic activity, not something that needs to be embedded across the organization horizontally and vertically (Frankental, 2001). Duhe (2008) noted th at the primary implication for the public relations function in CSR is that practitioners should develop a irreproachability in financial soundness, and stewardship of social responsibilities to influence


38 t 77). Munzing and Zollinger (2001) mentioned that public relations in relation to the issue of sustainability noting that help maintain business operat ions and furthermore improve the fir (CFP). Therefore, as long as the public relations function is proven to be positively related to CSP, the indirect relationship between public relations and CFP is established. As Ferguson, Popescu and Collins (2006) concluded t practitioners and with variation in public relations functions have more social responsibility too, propose that public relations development in firms should have a direct and posit ive relationship with their CSP. Therefore the following hypotheses are proposed: (Revenue) in different regions? Figure 2 1 U.S and Europe PR, CSP and CFP relationship Figure 2 2 Asia PR, CSP and CFP relationship CSP Revenue Asia CSP Revenue U S and Europe


39 C HAPTER 3 METHODOLOGIES To reflect the interests of CSP CFP relationships in different regions, this study applie s four variables (Revenues, EPS, CSP, and Country) in both simple and multi regression models to further understand how they interact with one another. There are three major concerns in studies of CSP CFP relationships as concluded from the previous contex t: 1) the representativeness of social responsibility indexes; 2) measurement of financial performance; and 3) regional influence. In other words, these are the main causes of conflict among prior CSP CFP research studies. Therefore, these three concerns a CFP relationship relates to the cost of CSP. Some scholars believe that image, and cor porate confidence (Levine, 2004; Stanwick, 1998; Pava & Krausz, 1996; Frooman, 1997). Others have argued that CSP is too expensive to have positive financial returns for firms (Brown, 1998; Scholtens, 2006; Guerard, 1997; Sauer, 1997; Henderson, 2001). Des ign Although CSP is given credit for maintain ing a firm reputation, it has been criticized as Guerard, 1997; Sauer, 1997; Henderson, 2001) This criticism is based on firms market return which is indexed from EP S. The first purpose of th is study therefore, is related financial indicator revenue and profit related indicator EPS. Furthermore, in each region studied (Asia, Europe, a nd United States) is also included in the discussion. In ed that accounting based measurement is more app r opriate to measure the CSP CFP relationship because it sho ws more internal efficiency and more directly


40 the firms CFP (Orlitzky et al., 2003; Wu, 2006). Two accounting based financial factors (Revenue and EPS) are therefore applied in this study as dependent variables. CSR score s are year data ( 2008 ) is applied as dependent and two year data ( 2007 and 2008 ) are applied separately in two individual equations as an independent variables in this model. Two single regres sion models are designed and proposed: Y Revenue(i) i i X CSP(i)(t) i (3.1) i = 1,2,3 (1=United States, 2=Asia, 3=Europe) t = 2007, 2008 Y EPS(i) i i X CSP(i)(t) i (3.2) i = 1,2,3 (1=United States, 2=Asia, 3=Europe) t = 2007, 2008 CSP is a complex variable; it can be influenced by v arious factors. Not only can CSP affect also affect their CSP. Peloza (2006) investigated the relationship between CSP and CFP and found CSP has which means CSP can help maintain cor porate image and reputation, and furthermore consistently reward firms with financial returns. In other words, once a firm has established its image and reputation, and has made profit based on that image it would be more likely to invest in CSR initiativ es to secure presented as one of the independent variables in the following model because it is a more reputational related financial indicator. A more detailed explanation of the use of revenue will be discussed in a later context. I n this model, however, a one year time lag ( 2007 data ) will be applied to the revenue variable to explain each This will be done because


41 ha s a nvestment, including CSR. In addition, various regional factors, such as culture, regulations performance in different regions (Tsalikis & Fritzsche, 1989; Langlois & Schegelmilch, 1995) ; thus w ill serve as the other independent dummy variable. A d ummy variable is one that takes the value of 0 or 1 to indicate the absence or presence of some categorical effect that may be expected to shift the research outcome ( In the multi regression model below therefore, it is used to represent : Y CSP(t)(i) (i) 1 D 1 2 D 2 3 X Revenue(t 1)(i) (3.3) t = 2008 When D 1 =0, D 2 =0, i = United States D 1 = 1, D 2 = 0, i = Asia D 1 = 0, D 2 = 1, i = Europe Sample and the Treatmen t For this study, a total of 461 companies are selected from the 2008 Fortune G lobal 500 list. Europe, and 153 companies represent the U.S The other 39 companies which represent other countries of the world, do not fall into our discussed regions (Asia, Europe, and U.S ). The financial data are all dated to the 2007 fiscal year and retrieved from the O ne S ource 1 database If 2008 data is not update d the se figures w ill be retrieved from Reuters from which O ne S ource obtains its data. T he data on awards include two years of rankings and information (2007 and 1 OneSource provides qualified information and detailed data checks to assure the accuracy of profile and financial data. Their data quality is monitored and measured throughout an ongoing quality process using a hybrid approach that includes both automated and human analyses. Each company f rom a geographic region is represented by the best company, industry, market, business topic and executive information available, backed by authoritative sources such as Datamonitor, Reuters, info USA, Investext, Experian, and others (


42 2008). Award count based CSR scores will be created to serve as a dependent variable. Seven reputable CSR award s will be used and Operational Definitions In this study, CSP is represented by an award scores are equally weighted and calculated based on seven global CSR awards as shown in Table 3.1. Table 3 1 CSR a wards % Ranked by Name of R anking 1 Fortune Most Accountable 2 Innovest Global 100 Sustainable 3 Ethisphere Magazine World's Most Ethical Companies 4 Business Ethics Global Cor porate Citizenship 5 United Nations Global Compact 6 Forbes Global 200 Most Respected 7 F ortune Most Admired companies These seven reputable awards cover comprehensive CSR activity based on the evaluation focus of each award. The score compu ted for this study, therefore, will be more representative by follows. Most A ccount able C ompany award is rated by Fortune magazine and focuses on ernance and engagement with their stakeholders. Global 100 Most Sustainable awards are given by Innovest, which analyzes companies based on various aspects, including Most Ethical Companies award is provided by Ethisphere magazine and rates companies based on whether their responses to a crisis are completed with prompt actions and transparency. The Global 200 Most Respected award is rated from a reputation and bra nd trust survey conducted by Forbes magazine/reputation institute. The Global Corporate Citizenship award is conducted by


43 Business Ethics magazine. Their CSR scores are calculated based on eight company variables: 1) shareholders; 2) community; 3) governan ce; 4) diversity; 5) employees; 6) environment; 7) companies that are committed to following and keeping their ethical business practices The Most Admired Company award is given by Fortune magazine. The results are calculated by Fortune and Hay Group, a global management consulting firm and Fortune They asked more t han 3,500 employees from dozens of companies in various industries to submit 50 companies they admire. The list consists of winners that have strong records for innovation, leadership, and financial strength. All these seven awards come from prestigious in stitutions and have complete 2008 data. For awards that have 100 rankings, the initial scores will be given from their reversed ranking with the highest score of 100 and lowest score of 1. For example BP is ranked in the first place of 100 Accountable Comp anies; therefore, its score will be given as 100. Likewise, Vodafone is in the fifth place of 100 Accountable Companies; therefore, its score will be 95 and so forth. Awards that have 50 rankings will follow the same scoring rule with the highest initial s core of 50 and lowest initial score of 1. All initial scores will be standardized in their own awards category and become the final score. For example, after standardizing, BP will be finally scored 2.58 in 100 Accountable Companies Award. For awards that have no rankings, a score of 0 will be given as the final score for the awarded companies. Companies with either no ranking or no award will be given 0 as the initial score to standardize, and their final scores will be calculated depending on the standard ization. For example, companies that are not on the Fortune 100


44 scores for any particular company will be systematically determined by adding the final standardi zed scores in each award the company won. All the social responsible firms were R evenue is defined as income that a company receives from the sale of goods and services performance can be affected by its irresponsible actions either from consumer sales dropping because of consumers reputation. As Marom (2006) suggested, socially responsible firms can be rewarded with markets scholars agree that revenue is a reputation related factor. For example, Offley (2003) suggested that for technology companies, reputation is a key to protecting revenue Further, Leavitt (2009) published a study that examined the relationships between revenue and reputation, proving they are highly correlated and mutually convertible. E arnings per share (EPS) is defined as the earnings returned on the initial investment amount. It is calculated from net income (NI), generally indicated as profit, divided by weighted financial performance for most investors; has a major influence on fi commonly required public data by the Financial Accounting Standards Board (FASB). The major difference between revenues and NI is expense and cost. There are two key factors can affect stock price: 1) fundamental factors and 2) t echnical factors. Harper (2008) reported that EPS is a major accounting measure to represent a fundamental factor affecting stock price. What


45 a firm pays for its socially responsible actions will be reflected on its income statement as both an expense and a cost. For example, if a firm expends effort on environmental protection in their production, it may need to hire a team to manage environmental control, which will increase its cost. Or, if a firm provides better welfare for its employees, it may need to pay out more expenses for benefits. To produce a high EPS, however, requires being involved in many causes, control and operational efficiency. These factors have not been considered in previous research when schola rs used market based indicators, which generally have high correlation with EPS, to evaluate the CSP CFP relationship. As a result, comparing the relationship between CSP Revenues and CSP urns and their final financial returns, which most scholars and managers have used to argue for a perceived CSP CFP relationship. For instance, a socially responsible firm may have positive CSP Revenue relationships because its reputation and good image he lps its sales. A negative CSP EPS relationship, however, does not only result from high CSP expenses, but is also due to internal operational causes. Therefore, by examining CSP CFP relationships with these separate financial indicators, the positive and n egative impact argued by previous scholars can be both discussed and studied further. Measuring Public Relations Function Public relation s has been defined from different angles. Cutlip et al. (2000) conclude d numerous descriptions and definitions that le d to the following definition: the management function that establishes and maintains mutually beneficial relationships 6) Cutlip et al. (2000) also me ntioned that public relations is sometimes confused with its activities and parts. They suggest ed, therefore, that public relations should practice six management functions: 1) p ublicity ; 2) a dvertising ; 3) p ublic affairs ; 4) c risis/ i ssue management ; 5) l o bbying ; and 6)


46 i nvestor relations (p 9 23). Th e current ( 2000 ) six major functions of public relations and in addition included corporate sustainability/CSR and human re s ource/internal communication s as categories to measure compani s. All of these have been reiteratively emphasized by public relation s scholars. If management strategies include any of these eight functions it is considered to be practicing public relations. The purpose of this po rtion of the study is to learn if the public relations function plays a key role in affect ing if it affects its corporate financial performance. I mplication s from previous research suggest that a firm with st ronger public relations function s lead to a higher CSP. s will be considered as an appropriate approach to answer hypothes e s 4 and 5. As Dominick and Wimmer (2006) explain ed 151). In a ddition, qualitative content analysis was chosen because quantitative content research is helpful in discovering information and is very flexible (Berg, 2001). In this s tudy, the top two most social ly concerned companies were chose from each region ix public relation functions United Parcel Service (UPS) and General Electric (GE ) were chosen among the U.S companies; BMW Group and Nestle were chosen among Europe an companies; and Toyota and Honda Motors were chosen among Asia n companies By analyzing th e se s, we can develop an idea of the epitome of the region relation s s corporate overview, annual report, and corporate sustainability are the major content areas to be analyzed in this study. C omments from each


47 public relation s function will be written based o s; the author will draw conclusion s based on evaluat ing th e s Analysis For the regression models proposed in the previous section, each coefficient will be justified to its significance and validity toward dep endent variables. R squares will be presented to show what percent of the dependent variables is explained by the independent variables. Once CSP CFP relationships are explained, the public relation functions will be added into the discussion. After quali functions, the author will compare and discuss the triangular relationship among CSP, CFP, and public relations in different regions Table 3 2 t major functions of public relations (1)Publicity (2)Advertising (3) Customer communication (4)Crisis/Issue management ( 5 )Corporate social responsibility/sustainability/Philanthropy ( 6 )Investor Relations ( 7 )Human resource/internal communication


48 CHAPTER 4 RESULTS The F indings The first objective of the empirical analysis is to determine the relationship between corporate social performance (CSP) and the two accounting based corporate financial performance measurements (revenue and EPS) to ga in insight into their impact s on the corporation itself differ The method employ ed is outlined in the previous section ; this chapter report s and discuss es ou r findings. Overview of Statistical Analysis To analyze the data collected for the present study, Microsoft Excel 2007 was used. The data set contained 375 companies from the 2008 Fortune Global 500 The analyses of this study involve two sections. The first section address es the research questions and hypotheses. To answer the first and the second hyp otheses and the first research question, two regression models were used to investigate whether CSP Revenue and CSP EPS relationships are statistically different in th e regions Asia, Europe, and the U.S Regression analysis was also run to answer the third and forth hypotheses to explor e relationship s between regions and one year lagged revenue toward firm CSP. The second section includes qualitative content analysis to answer the second research question to investigat e W eb content. Corporation Profile s A ll companies used for analysis were pooled f rom the 2008 Fortune Global 500 company list. A total of 461 companies were selected for this study location, 124 companies represent Asia ; 184 co mpanies represent Europe ; and 153 companies represent the U nited S tates D ue to missing or non updated financial data caused by mergers bail out s or fiscal year difference s 86 companies were excluded. Ultimately a total of 379


49 companies are included; 86 companies represent Asia ; 156 companies represent Europe ; and 137 companies represent the U.S for the analysis. Research and Hypothesis T esting Analysis of CFP Revenue R elationship for Y ear 2008 a nd Y ear 2007, O n e Y ear L ag of CSP T est of hypotheses 1 and 2 and Research Question 1 Hypothesis 1: CSP is positively related to its reputation related CFP factor, revenue. Hypothesis 2: CSP is negatively related to related CFP factor, EPS. RQ 1: Are CSP CFP relationships, either CSP Revenue or CSP EPS, different in the U.S Europe, and Asia? Using equation (1) as the basis for our analysis, we determined the CSP score by pooling the data over a two year period (2007 and 2008) Based on the scoring process elaborated in the previous chapter, the standardized score in each award category was summed for a firm s final CSP score. The firm s final CSP score is applied as an independent variable in equation (1). Subsequently, we divide our sample into two periods in order to determine whether any signi ficant impacts exist in the relationships caused by the time lag. Control variables : The first results, reported in Table 4 1, are those where we include the peri od. In summary, our findings confirm that CSP in 2008 and 2007 both significantly impact U.S and Europe. A review of the data in Table 4 1 indicates the R square for European companies is higher than that for th e U.S. U.S companies. In other words, as discussed in the context of this study, we can conclude that European companies are rewarded with improved reputation based on their social concerns. The 2007 CSP, however, studies and our assumption that accounting


50 than market based data. To summarize, as indicated by this result, CSP proved to have a What might be regarded as somewhat surprising is that companies in Asia also proved to have a significantly positive CSP U.S and Europe (R square is the highest among the three regions). This result provid es a different view of evaluating the CSP CFP relationship from the research of Hill et al. (2006), who investigated SRI returns and found that Asia had no significant CSP CFP relationship. Table 4 1 2007 and 2008 CSP r elations with 2008 r evenue USA Europe Asia Coefficient P Value Coefficient P Value Coefficient P Value Constant 137030.44 1.27E 08 187203.22 1.49E 17 172235.78 1.89E 10 CSP 2008 8324.59 1.77E 04 13036.83 5.34E 11 11522.48 3.88E 07 R Square 9.9% 24.0% 26.8% Constant 116180.46 6.91E 07 150598.46 6.32E 10 128764.14 4.53E 06 CSP 2007 6156.18 3.68E 03 9316.746 2.54E 05 7645.44 1.38E 03 R Square 6.1% 10.3% 11.7% Analysis of CSP EPS R elationship for Y ear 2008 and Y ear 2007, O ne Y ea r L ag of CSP Using equation (2) as the basis for our analysis, we determined the CSP score by pooling the data over a two year period (2007 and 2008). Based on the scoring process elaborated in the previous chapter, the standardized score in each award cat egory was summed for a firm s final CSP scores. The firm s final CSP score is applied as an independent variable in equation (2). Subsequently we divide ou r sample into two periods to determine whether any significant impacts exist in the relationships ca used by the time lag. Control variables : The results report ed in Table 4 2 include the control variables (CSP) findings confirm that CSP in both 2008 or in 2007 doe


51 as we expected in the regions of Europe and Asia. S urprisingly however, the finding s appear that the 2007 CSP of U.S companies has a significant ly positive relationship with their 2008 EPS, but their 2008 CSP doe s not As Bird (2007) found, in general, a market is slow to respond to a Our findings in the U.S region confirm that market value factor would have lag ging (long term) CSP CFP relationship. A review of the data in T able 4 2 indicate s that most of the market related variable, EPS, in these regions does not have a significant relationship with firms CSP in the two year sample period. As discussed in the context of this study regarding EPS indexed market based fina ncial return s we can conclude that based financial return, or requires a longer time period to have an impact on market based financial return. The second hypothesis is therefore accepted for most of situations. To answer the first research question, the conclusion s presented in T able s 4 1 and 4 2 are applied. The CSP Revenue relationships are consistent in all regions Asia, U.S and Europe. l related financial return, revenue, in th e se regions. Regarding the CSP EPS relationship, most of the results are consistent in th e se regions except for the 2007 U.S findings. Most companies appear to have no significant ly positive CSP EPS relationship in th e se regions whether we were applying year 2008 CSP or year 2007 CSP. Such results confirmed what Orlitzky et al. (2003) supported that a difference in the prediction of CSP CFP relationship exists between market based measures of CFP and accounting base d measure of CFP. EPS involves more factors to maintain it such as cost control, efficient financial structur e or high profit margin, which can barely be determined


52 Table 4 2 2007 and 2008 CSP r elations with 2008 EPS USA Europe Asia Coefficient P Value Coefficient P Value Coefficient P Value Constant 105.70 0.11 45.92 0.93 5.58 0.93 CSP 2008 10.09 0.16 5.97 0.90 0.84 0.88 R Square 1.431% 0.010% 0.027% Constant 223.405 0.029 123.5 56 0.818 32.782 0.610 CSP 2007 19.183 0.045 1.557 0.975 1.577 0.780 R Square 2.953% 0.001% 0.093% Analysis of CSP R elationships within R egions and a O ne Y ear L ag I n R evenue Test of Hypotheses 3 and 4 y their home region. is positively related to their last year revenue. Using equation (3) as the basis for our analysis, we determined regions by using two dummy variables as Asia (D1=1, D2=0) ; Europe (D1=0, D2=1) ; and the U.S (D1 =0, D2=0). Subsequently the U.S CSP is the standard basis to be compared, and the one year lag revenue, 2007 revenue, for the chosen 375 companies is used in this analysis. Control variables : The results that we report in Table 4 3 are those where we incl ude the over our sample period. In summary, Asia has a significant CSP difference compared to the U.S but Europe does not. 2007 revenue has a significantly posi scores. The findings indicated (see T able 4 3 ) that Asian companies CSP scores are significantly lower ( 0.78808 ) than the U.S scores This result corresponds to most of the previous research that the U.S and Europe have better CSP than does Asia The hypothesis three, therefore is accepted. One scores. Such a finding confirmed Peloza (2006) val ue ; in CSP to support the


53 Table 4 3 CSP relationships with countries and revenues Coefficient P Value Constant 11. 17602 8.66E 188 D1(Asia) 0.78808 0.003 D2(Europe) 0.04650 0.836 Revenue 2007 0.00002 2.86E 18 Adjusted R square 20.81% Consistency and C orrelation a mong T he A wards The seven reputable awards applied in this study cover com prehensive CSR activity based on their various evaluation foc i Each award has a corporate social p A ccountable C focus ed on corporate governance, while t he Ethisphere recognizes firms for their crisis response and transparency. Our CSP score therefore becomes consistency and corre lation among th e se seven awards should be low. In this study, low consistency and correlation among the awards does not mean the sources lack reliability and credibility. On the contrary it means each award has independent coverage of a certain focus of C FP B y adding up th e se awards we can ed dimension s T o test the consistency, Cro n evaluate if the items within each index have high internal consistency. Alpha is a coefficient that indicates how well the items measuring the same characteristic correlate with one another (Hon 6.89 and for 2008 it is 6.85. Consequently neit her year 2007 nor 2008 ha s proven consistency among th e se awards. The result s indicate that th e se CSR awards us ed different evaluation methods to investigate firms CSP each using a different


54 focus. The awards inconsistency proved that they covered a comprehensive focus of CSP, not just one specific aspect of CSP. This measure confirmed that the awards definitio ns (see C hapter 3) that each of award represents a different CSR practice F or example, Fortune Most Accountable Company a ward is focus ed on corporate governance and the Global 200 Most Respected award evaluates firms CSP on brand trust. In other w ords, th e se awards represent different CSR practices independently. In this regard, our final CSP score is the sum of a firm s overall CSR practices; the higher the CSP score the more CSR practice the firm covers, and thus the better CSP the firm has. If th e se awards were not independent but instead highly correlated, award s could be defined as the same. T o further test th e independen t natures the correlation coefficient is used. The findings as T able 4 4 indicate s show that all the correlation coefficients among th e se awards are very low. This means that each Table 4 4 Correlation coefficient among the awards 2008 Correlation Coefficient 2007 Correlation Coefficient 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 1 1 1 2 0.16 1 2 0.07 1 3 0.06 0.46 1 3 0.07 0.41 1 4 0.04 0.05 0.00 1 4 0.01 0.23 0.11 1 5 0.16 0.03 0.04 0.03 1 5 0.13 0.02 0.05 0.02 1 6 0.00 0.17 0.11 0.00 0.06 1 6 0.02 0.26 0.24 0.06 0.06 1 7 0.14 0.09 0.09 0.00 0.08 0.08 1 7 0.08 0.12 0.08 0.01 0.02 0.21 1 Note: 1.2008 Most Accountable (Fortune) 2. Top 50 Most Admired (2008) 3. Global 200 2008(most respe cted) 4. Global Corporate Citizenship (2008) 5. Global Compact 6. World's Most Ethical Companies (2008) 7. Global 100 Sustainable (2008) Analysis of P ublic R elations R elationships with CSP and R evenue Test of R esearch Q uestion 2 ations practice related to CSP, and does it have an indirect relationship with CFP (Revenue) in different regions?


55 The second objective of this study is to determine the relationship between public relations functions and corporate social performance. Most previous studies agree that CSP has a major that the public relations function is an essential function for a company interested in preserving a good reputation (Clark, 2006 ; Fombrun & Shanley, 1990; Siltaoja, 2006 ). Thus, in this study, we are using the seven public relations functions definitions from Cutlip et al. ( 2000 ) book, Effective Public Relations, to evaluat e six relations function s. We then interpret the relationship between public relations with CSP. In general we will follow the guideline s below to evaluate the seven public functions : 1. Publicity is evaluated b ased on the news gathered and posted on the N ews which appears to originate from its public relation source Th is would include any quote from a company addition, we evaluate how actively the firm appears to put effort into their current campaign and any PR events. 2. Advertisement s are evaluated by the efforts or budget firms pay for sponsorship and media adverting. 3. Customer communication is evaluated by the tone and the content in the firm Web site description about their communication and customer policies. 4. Crisis/ i ssue management is evaluate d by how firms control any crisis that arises or if there is any web content that mention s crisis management policies. 5. Corporate social responsibility/sustainability/ p hilanthropy is evaluated by how much effort firms expend to ward social concern s and how m uch they elaborate on this in their web content. 6. Investor Relations is evaluated by whether firms provide efficient and sufficient information on the Web site regarding their business to their investors. 7. Human resource/internal communication are evaluated by the tone and content of the firm Web site description about communication s and policies with their employees U.S companies: United Parcel Service and General Electric United Parcel Service Th social concern oriented business goal s can be ea sily discerned from the UPS Web site They most emphasize environmental care which can be


56 discerned from both their corporate information description and colored sidebars on the Web site design. F ive of the eight topics on the UPS Web site are related to social responsibi lity issues or concerns, such as the UPS strategic enterprise fund U nlike common compan y fund s information on this fund revealed the philosophy of one of invest ment foc i In addition, 12 top executives are introduced on the Web site. T wo are in charge of public relations related fields as defined by their job title, including Worldwide Sales and Marketing and Communications and Brand Management. In the UPS pressr oom, despite timely update d press release s 17 of 20 (85%) major news stories for 2008 posted on its news section originated from its public relation source. At the end of every news release, the at ed to be contacted instead of a general corporation or management team. In addition, the UPS Web site presents a sound media kit covering various and abundant activities and information about the company. M inor sponsorships are National Thoroughbred Racing Association (NTRA) in United States and Louvre Atlanta in France. In addition, it started a UPS Whiteboard advertising campaign in 2007 and sponsored the 2008 Beijing Olympics. program that guarantees customer service quality through any UPS vendor or publisher. In addition, it builds its customer communication by discussing customer solutions. The company ness requirements to meet any challenges without reinventing the Web site ). Since 1981, UPS has built up a crisis management center due to the transportation industry strike at the time. Later, UPS made a commitment to its employees that they w ould manage any crisis against any threat and provide a safe workplace. the company pays significant attention to corporate social responsibility. It launched seven major social programs to guarantee its stakeholders are taken c are and well informed. UPS promise s depends upon balancing economic, social and environmental objectives. UPS provides optimal service and value to our customers by striving for the highest operational efficie ncies and minimizing impact to the environment. From philanthropic and workforce investments to infrastructure and energy initiatives, UPS continues to focus on improving Web site ). Based on th e UPS Web site information the company offers efficient and sufficient information for investors. S ix major fields are covered including the UPS profile, stock


57 information, financials, news and events, governance, and share owner service. All the content is clear and informative, and the information placement on the Web site is adequate and comfortable to read. In addition to ensuring a safe workplace, UPS promise s a variety of educational programs for its employees. In addition, UPS has conducted an empl oyee opinion survey since 1983 so that employees can communicate their opinions and concerns, and to provide feedback to management on employee relations issues. General Electric GE devotes its business on producing environment al care products and service that technology for saving expenditures on ( GE web site ). GE owns a television ne twork, NBC, which gives the company advantages and a major channel for releasing advertising content Forty two top executives are introduced on the Web site. Two of them represent NBC and one represent s the c hief marketing officer. As for their public rel ations department, five PR directors are introduced on the Web site Fifty five out of 68 posted items (80%) were major news items, including financial news for 2008 that originated from its public relation s source. In addition, GE has create d an individual Web site GE R eports, for posting their pitch stories and news updates They also provide a blogosphere for readers to comment or exchange opinions. The pressroom organizes and categorizes news and stories in a reader friendly order, and presents the Web site GE spent $ 250 million dollars to sponsor the 2008 Beijing Olympic Games. In addition, they are working on two major advertising camp aigns, Ecomagination and Healthymagination, with emphasis on their green and health care products and services. T hey are also I Web site ) logan is I magination at W ork GE promises to work as a customer focused organization with their newly developed relationship building tools, Net Promoter Score (NPS), to engage customers in the product development cycle. The Web site states, itted to holding ongoing dialogues and working with customers in innovative ways. Customers are increasingly important collaborators in the product and service development cycle. Their perceptions into the real life applications of GE products, services an d partnerships help reveal areas for Web site ).


58 GE has formed a Security & Crisis Management (SCM) team with a rigorous SCM plan. their employees, fa cilities, information, information technology (IT) infrastructure, business continuity and crisis management. In addition, employees are promised a safe and threaten free workplace. ( GE web site ). They highlight their citizenship performance with data points, metrics, actions and progress T he key categories covered include public policy, environment, health and safety customers, suppliers, products and services, employers, communities and philanthropy, and human Web site social concerns, and get a strong feel ing of their ambiti on to impr ov e communities and societies a s much as improving their technology. The GE Web site includes efficient and sufficient information for investors. There are s ix major field s covered, including stock information, financial reporting, events and presentation s shareholder service, personal investing and institutional investing. All the content is organized and detailed, and the information placement on the Web site is adequate and comfortable to access GE promises to engage with employees to understand thei r opinions on their relationship with the company and to tap into their unique perspectives in their fields of work. Moreover, GE has a biannual Employee Opinion Survey cycle in order to facilitate effective follow up actions on issues raised The company therefore builds two way communications with its employees. Asian c ompanies: Toyota and Honda M otors Honda motors Unlike the UPS and GE Web site s, Honda M otors homepage p laces more emphasis on its motor technology and its honors form car racing awards, wh ich echoes its slogan T he P ower of D reams Respect for the Individual" and The Three Joys commonly expressed as The Joy of Buying, The Joy of Selling and The Joy of Creating (Honda W eb site ) N one of these is related to social concern s Honda does, however, create an individual Web site technology and to make a commitment to environmental protection. Forty seven top executives are introduced on their Web sit e but there is only one director with a public relations related title : Compliance Officer of Government & Industrial Affairs.


59 from around the world, and categorizes them by regions such as Japan, Americas, Europ e, Middle East and America, and Asia O ceania. Forty five of the 133 (33%) major news releases, including financial news for 2008 posted on its news section originated from its public relation source. T here is no media or public relations contact informat ion posted on the Web site, however, and the most of pitch stories are related to Honda car racing and new engine technology. Honda sponsors and participates in all the major car racing and motorcycle racing events around the world. It has create d a n elabo rate S ports C hallenging S Web site to report its racing record and history. In addition, it also sponsors some junior car racing events in Japan. Honda has create d a customer relations center to handle inquiries from Honda customers po litely, clearly and quickly, delivering the same high quality in their communications as in our products (Honda Web site ) Honda operates this section with the slogan C ustomer s a day, 7 days a week service to its cu stomer s to communicate and to handle all the questions and problems. ding to corporate governance issues. It promises that its risk control systems would ensure a systematic approach to compliance and risk mana gement, in accordance with the basic policy concerning the Maintenance of Internal Control Systems adopted by the Board of Directors. the company focuses its social concerns in three major fields : quality and safety of the product, environment, and harmony with communities. It its customer trust, and also promises technology for protecting the environment. Honda started launch ing philanthropic initiatives designed to stre ngthen ties with local communities since 1970, and has established foundations in Japan to foster broad ranging research, education and cultural exchange to make the future brighter for society. Web site, we can tell it does an adequate job updat ing its financial information and news. Investors can find no elaborate detail and extra information however, nor are they informed where they can find it. The Web site only covers general information for the necessi ty of general investors. Web site there is no specific section related to internal/employee communication. The site does mention however, that the company provide s training programs for their employees at different levels so that all member s of the company will have a full recognition of their own position and make progress toward the company s commitment to customers and investors. Toyota Motors Toyota Motors is committed to three sustainable concepts to contribute to the future of society : technology, manufacturing, and social contribution s It has engaged in


60 o unded (Toyota Web si te ). T hirty top executives are listed on its Web site, but none include specific titles; all the titles are general, such as senior managing directors I t was not possible, therefore, to determine who is in charge of the public relations function. In the Toyota pressroom, all the major news including financial news for 2008 posted on its news section originated from its public relation source. Twenty of the 75 news stories are pitched from Toyota. Similar to Honda, however, no media or public relations c ontact information can be found on the Web site Toyota also sponsors most of the car racing events around the world. In addition, it sponsors four major annual music concerts and hosts six art awards in Japan. As opposed to Honda, Toyota focuse s more on its art and music sponsorship than its car racing event sponsorship 1935. evalua tions and opinions are an expression of their expectations of Toyota, so Toyota receives them sincerely and responds in good faith, in the belief that making use of them in Web site ). It also has set up a well thought out customer service and response protocol to deal with two way communication with customers. Web site there is no specific information about crisis or risk management plan s or team s The site included only one s entence in its CSR report that it has a complete security and crisis management plan. among people, society and the global environment, and sustainable development of society through manufacturing. It has various CS R initiatives to ensure positive communication with stakeholders, and promises to improve technology to protect environment. As the company state s on its Web site its major code of conduct since 1998. F investors. F ive major fields covered, including financial results, financial data, stock information and ratings, presentation, and IR calendar. Most of the infor mation on the Web site is clear and adequately placed. Toyota believes it is essential to share the beliefs and values that it deems important with Toyota employees throughout the world. Thus, Toyota promises to have mutual trust and respect between labor and management, long term employment stability, and communication E ach Toyota employee is taking measures to enhance work related skills and their work ethic. M ost of the programs Toyota provides to its employee however, are


61 confined to education and ski ll training programs. They do not establish any channel to enhance two way com munication with their employees Europe an c ompanies: BMW Group and Nestl BMW Group BMW is committed to ensuring that its traditional focus on corporate profits and shareholder v alue is accompanied by equal concern for needs and the environment. The company believe s its responsible interaction with associates and society and commitment to the environment are just as important as innovative, problem solving expertise and open dialogue. As we observe from the BMW Web site BMW group gives more weight to the the general public relations function. F our investor relations directors are introduced on their Web site tor of Finance Communications In the BMW pressroom, all the major news including financial news for 2008 posted on its news section originated from its public relation source. Twenty four of the 31 news items for 2008 are related to financial informati on. In addition, four communication departments are listed: Corporate Communications, Corporate and Governmental Affairs, Press and Public Relations, and Business and Finance Communications. On the bottom of every news release, there is specific communicat web visitors to reference. As BMW s tates on its Web site and it has create d an individual Web site to report and record information every sport it sponsors The company sponsors four major sports : BMW golf sport, BMW yacht sport, BMW Formula 1 team, and BMW oracle racing. Each site elaborate s history, performance, news and press with abundant information. BMW brands are associated with high quality s ervices by its customers. In this respect, the BMW Group is doing its best to fulfill the premium demands of the customer with every company contact. The goal of its customer communication is to achieve the greatest customer satisfaction in the premium seg ment. BMW introduced its Customer Relationship Management (CRM) team in 2003 to and to implement measures consistently. BMW has realized that its business activities involve an element of risk that may arise in conjunction wi th business operations or th at may affect the company as a result of changes in external factors. Therefore, as the company reported on its Web site the risk management within the BMW Group is managed centrally and reviewed for its


62 appropriateness and eff department. BMW conducts several CSR programs committ ed to sustainability that place equal importance on economic, ecological and social concerns in forming its business strategies. Its CS R programs included five major fields : environment, employees, society, culture, and maintaining stakeholder dialogue. It is obvious from its sustainability Web site that the BMW group is committed to achiev ing its corporate philosophy for social concerns, and the company seeks to set an example for committed corporate responsibility Web site comprises efficient and sufficient information for investors. It has a strong communication s team work ing on its investor relations. It is obvious that it value s investor communication very much s uch that it divide s its communication team into four specific functions : Corporate Communications, Corporate and Governmental Affairs, Press and Public Relations, and Business and Finance Communications. The investor rel ations function is handled by its C orporate C ommunications and B usiness and F inance C ommunications D epartment. BMW believes its employees are distinguished by personal responsibility, flexibility, commitment and dedicati on The company therefore values its employees as an important assent. Besides providing attractive welfare and equal opportunities to its employees, BMW also promises to facilitate internal dialogue among employees and corporate management which thus all ows employees to voice their interests, needs and concerns in the best way possible. Nestl Nestl is committed to increasing the nutritional value of its products while Since it was founded, the company has promised to reflect the basic ideas of fairness, honesty, and a general concern for people. The slogan for Nestl F ood, Good L ife wo of the 13 executives introduced on the Web site were related to public relations function under the title of VP of Strateg ic Business Units, Marketing and Sales. In the Nestl pressroom, all the major news including financial news for 2008 posted on its news section originated from its public relation source. At the end of every news release, the be contacted The site list s media teams for 14 different regions the Nestl Web site has a sound media kit covering various and abundant activities, speeches, and information about the company. In 2002, Nestl bec a me the founding corporate sponsor of the International Federation of Red Cross and Red Crescent Societies Africa Health Initiative. In addition, responsible advertising to children has always been part of Nestl s Consumer Communication Principles, with chil dren marketing programs occurring in four major regions : the U.S Europe, Canada and Australia.


63 It is firmly committed to responsible consumer communication, and state s that consumer communications such as advertising help consumers exercise their right to informed choice. In addition, Nestl also facilitates two way communication with its consumers by inviting them to contact its Consumer Service Team. A recent crisis for Nestl was the China milk crisis. According to Nestl Web site during the milk crisis in China it undertook immediate, decisive actions to ensure the continuous and uncompromised quality and safety of its products. E ver since then, Nestl has theref ore reinforced its supply chain quality control to pre v ent a similar crisis from occurring again. Nestl recognizes that success means creating value for everyone we touch from the farmers who supply our products, to their employees, to consu mers and th e communities where we operate Nestl therefore call s such commitment to its stakeholders the and it focus es efforts o n three key areas: nutrition water and rural development Th e se areas are the core of its comp and essential to creating a better and healthier world in the 21 st century. Nestl Web site covers efficient and sufficient information for investors. It also express ed its business goal to its investors by sayin recognized as the leader in n utrition, h ealth and w ellness and as the reference for financial Nestl Web site ). F ive major fields are covered i n its investor relations section : finan cial overview, corporate governance, reports, press release s, and presentations. Distinct from other companies, Nestl also provide s its ADRs information placement on t he Web site is adequate and comfortable to access Nestl states their overarching principle is that each employee should have the opportunity to develop to the maximum of his or her potential. For this, Nestl provides training, education, and a safe work place for its employees. In addition, it also conduct s an annual survey among employees to understand employee expectations toward the company The company t hus establish es a channel to conduct two way communication with its employees. Findings for R esearc h Q uestion 2 To answer research question 2, the conclusion from our observation of these six companies Web sites (UPS, GE, Honda Motors, Toyota, BMW Group and Nestl ) can be applied as follow: 1. Two most social ly concerned U.S and Europe an companies UPS, G E, BMW and Nestl all have a very good public relation function operating in their business. Based on analyzing their Web site s, each company cover s all the detail information and performance that Cutlip et al. (2000) mentioned. Also all of the companies facilitate two way


64 communication with their stakeholders as J. E. Grunig (1999) emphasized as important to a 2. The two European companies however, operat e their public relations functions a bit different ly than do U.S compa nies. They divide public relations functions into few specific communication functions to handl e different stakeholders. In addition, they do not see sponsorship as an advertising avenue, but rather as an expression of their brand ; both of them me ntioned their brand spirit in their sponsorship section of their website. There is no advertising campaign or database on either BMW Group or Nestl Web site 3. Neither Honda nor Toyota introduce d or mention ed their public relation team on the Web site w hich makes one wonder if they have public relations departments in the company. In addition, it seems that neither of the Asian companies ha ve sound crisis management plan s or team s to prepare for unexpected cris e s. Further, they do not have programs to fa cilitate two way communications with their employees. By applying Cutlip et al. (2000) seven public relations functions in this study, we can conclude that Asian companies do not satisfy the six functions as well as the European and U.S companies do base d on Web site analysis. In this regard, we suggest that Asian s public relations functions are not as well developed as Europe and the U.S As previously stated, we predicted that a less well developed public relations function would result in worse CSP T he result s here can therefore respon d to the findings of our third hypothesis that Asian companies have significant ly worse CSP than U.S and European companies. W e can therefore conclu de that better public relations practice s will result in better corpor ate social performance. In the U.S and Europe, we could conclude that the public relation function in a firm would indirectly lead to better reputation related financial return s revenue. S uch an indirect relationship cannot be generated for Asia however, as there is no reasonable link among public relations, CSP and CFP (Revenue) based on the findings of this study.


65 CHAPTER 5 D ISCUSSION AND CONCLU SION The chapter begins with an overview of the present study, followed by a detailed analysis of conclus ions related to the research questions and hypotheses. Next, a discussion of the implications for theoretical and practical perspectives in corporate social performance is provided, followed by research limitations. T he chapter concludes with recommendatio ns for future research. Study Overview The present study represents an empirical examination of CSP CFP relationships within three regions : Asia, Europe, and the U.S by applying two definitions of CFP, revenue and EPS. In the second part of the study, th e public relations function was included in the discussion as a factor to explain different CSP CFP relationships in those regions. Many scholars differ in their opinions o f the CSP CFP relationship. Some scholars, especially those who support n eo classica l theory, believe that too much CSR expenditure will put firms in a disadvantaged position and hurt their actual earnings, thus result ing in a negative relationship or no relationship between CSP and CFP. O thers argue that CSR actions generate intangible b enefits ; for example good reputation and positive brand images, and that those intangible benefits will result in tangible benefits including financial returns. Cetindamar and Husoy (2007) concluded that improved corporate image is one of the major benefi ts of corporate social involvement. In addition, existing literature has confirmed a positive relationship between CSR and corporate reputation and has shown that CSP influences the perceptions and assessment of existing and potential consumers (Hockerts & Moir, 2004) as well as corporate attractiveness to prospective employees (Turban et al., 1996).


66 Most schola rs have suggested that inconsistent CSP CFP relationship s results from three major factors: 1) t he use of questionable social responsibility index es ; 2) d ifferent measurement s and definition s of financial performance ( a ccounting based or market based) ; and 3) ignorance CFP relationship. This study has trie d to examine CSP CFP relationships by avoiding th e se factors, an d instead has i ncluded the public relations function in the discussion to explain a triang ular relationship among PR, CSP and CFP. As Orlitzky et al. (2003) pointed out accounting based indicator s for investigating a CSP CFP relationship are more adequate than market based indicator s With the essential meaning s and implication s of two accounting based indicators, revenue and EPS, this study has applied these two indicators to represent reputation related and market related CFP respectively. By performing a statistical study examining CSP CFP relationship in three regions, Asia, Europe, and the U.S the results suggested that corporate social performance is significantly related to the reputation related variable, revenue, in all three regions. The study th erefore confirmed the image and reputation building effect of corporate social performance. From a s to explor ing the different relationship s between corporate social performanc e and reputation related financial variable s and market related variable s The results provide preliminary evidence for future research regarding the definition of CFP in investigating the CSP CFP relationship. In addition, this study allows for greater un derstanding of the major effect s that accompany CSP, which eventually influence corporate financial performance. This study could inform the work of scholars interested in providing convincing evidence of CSR bottom line effect to profit seeking companie


67 social performance continuous to gain attention, the relationship among public relations, CSP and CFP will garner more importance. Overview of Research Questions and Hypothesi s In the following section, each of the three research questions and one hypothesis is discussed in detail based on the results of this study. Hypothesis 1 : CSP is positively related to its reputation related CFP factor, revenue. The first hypothesis inve stigates the CSP Revenue relationship under two scenarios, synchronized CSP and one year lag CSP. To answer this hypothesis, regression analysis was performed. The results yielded a significantly positive relationship between CSP Revenue using either 2008 CSP a s an independent variable (Asia, p<.05; Europe, p<.05; U.S p<.05) or 2007 CSP is an independent variable (Asia, p<.05; Europe, p<.05; U.S p<.05). Regarding R square, 2008 CSP is a more predictabl CSP is positively related to reputation related indicator, revenue, and that lag ged time CSP does not contribute more to revenue. The results are through building a good reputation i n the minds of stakeholders (Fombrun & Shanley, 1990; Siltaoja, 2006; Balmer, 2001; Hooghiemstra, 2000, Fryxell & Wang, 1994) Further, it supports previous research that t he accounting based measurement shows more internal efficiency and reflects stakehol Wu, 2006). Hypothesis 2 related CFP factor, EPS. The second hypothesis examines the CSP EPS relationship under two scenarios, synchroni zed CSP and one year lag CSP. To answer this hypothesis, regression analysis was applied. The results showed no significantly positive relationship between CSP EPS when 2008 CSP is used as an independent variable (Asia, p>0.05; Europe, p>0.05; U.S p>0.05) W hen 2007 CSP is applied as


68 an independent variable, however, a significant ly positive CSP EPS relationship emerges in the U.S region (p<.05), but we still see no significant ly positive CSP EPS relationship in Asia and Europe (p>.05). Consistent with pre vious findings comparing reputation related indicator s market related indicator s response slowly to CSP (Bird, 2007), and mitigate the CSP effect when being affected by other operation related factors (Orlitzky et al., 2003; Wu, 2006). Research question 1 : Are CSP CFP relationships, either CSP Revenue or CSP EPS, different in the U.S Europe and Asia? The first research question addressed the international difference s of the CSP CFP relationship. Based on the results concluded from the two regression analy s es no different CSP Revenue relationship exists within Asia, Europe, and the U.S Th is result disapproved the findings of Hill et al. (2006) who investigated SRI returns and indicated that Asia had no significant CSP CFP relationship. In addition, the C SP EPS relationship is consistent in three regions for the 2008 CSP variable; no significant ly positive relationship was found O ne year lag CSP (2007 CSP) however, has a significantly positive relationship with firms EPS in th e U.S but has no significant relationship in Asia and Europe. The U.S the market is slow to respon d to CSP T he other findings confirm that market related variable s are too complex in their implication s to inter pret the CSP EPS relationship in an optima l way (Orlitzky et al., 2003; Wu, 2006). P revious studies concluded Asian countries undervalued CSP and pointed out that Asian CSP fell behind W estern countries, but was progressing (Hill et al., 2006) Th is study indicated that the CSP Revenue and CSP EPS relationship s in Asia do not significant ly differ from W estern countries. In other word s Asian companies and stakeholders have the same socially concerned mindset as do W estern countries.


69 Hypothesis 3 : The third hypothesis included hypothesis, regression analysis with dummy variables was performed. The results show ed that European companies do not have a significant ly different CSP when compared with U.S companies (p>.05), but Asian companies have lower CSP scores when compared to U.S Hypothesis 4 is positively related to their last year revenue. The forth hypothesis investigated (2006) research, CSP brings in is hypothesis, a third regression analysis was performed. The result s indicated a significant ly positive value and would drive reinvestment in CSP. Research question 2 ted to CSP, and does it ha ve an indirect relationship with CFP (Revenue) in different regions? Based on previous research, the & Zollinger, 2001; Ferguson, Popescu & Colli ns, 2006). R esearch question two suggested that a stronger public relations function in a firm will result in a better CSP, and will therefore be related to the related variable, revenue. By conducting Web site content analysis of the two most social ly concerned firms in the three regions (six firms were examined), the result s show that better public relation practice s result in better corporate social performance. In the U.S and Europe, it can be conclude d that the public relation functio n in a firm would indirectly lead to better reputation related financial return, revenue. S uch an indirect relationship


70 cannot be generated for Asia however, because there is no reasonable link among public relations, CSP and CFP (Revenue) based on this study. Conclusion Alt hough the CSP CFP relationship has been the subject of consideration in a number of research papers, most of studies have a mix ed conclusion regarding the CSP CFP relationship. Griffin and Mahon (1997) reviewed 51 papers on this topic, and found that 33 reported a positive relationship; nine reported no relationship ; while 20 reported a negative relationship. In addition, the lack of sufficient research studies on CSP CFP relationships from a global view causes managers in multinational enterprises to hesitate to carry out CSR in their subsidiary regions. L ocal differences such as culture and religion result in different business ethics standard s and therefore confuse business managers with how to communicate with stakeholders under var ied business ethics and how to balance shareholders and stakeholders interests. Moreover, ever since Ryan and Martinson (1983) and other scholars argued that the corporate responsibility should belong to the public relations function, the link between publ ic relations and CSR has been studied (Wang, 2007; Lim, Lin, Ferguson & Kiousis, 2006; Ferguson, 2007; Ferguson, Weigold, & Gibbs, 1984 ; Ferguson, Popescu, & Collins, 2006). Ferguson, Popescu and Collins (2006) ations practitioners and with variation in public therefore, was to investigate the link s among public relations, CSP and CFP. By conducting a statistical stu dy (N=375; Asia=86, Europe=156, U.S =137), this study contributes to the research surrounding the relationship among public relations, CSP and CFP. The results suggest that CSP in all three regions has a significantly positive relationship with tation related financial indicator, revenue using either 2008 or 2007 CSP as an independent variable. The finding is consistent with previous research that indicated that CSP


71 creates both tangible (financial value) and intangible value (reputation) for fi rms (Fombrun & Shanley, 1990; Siltaoja, 2006; Balmer, 2001; Hooghiemstra, 2000, Fryxell & Wang, 1994). Regarding the CSP a significant relationship with EPS when the 2008 CSP score is used as an independent variable in th e three regions studied T he result for the U.S companies however, shows significantly positive relationship between 2007 CSP and firms EPS (2008) F or the other two regions, however, the results still show no relationship between CSP EPS. that market related indicator s would respon d slowly to CSP, and would mitigate CSP effect s as it consistent CSP Revenue relationship in th e se three regions prove s that the mindset of Asian companies and stakeholders h as progressed regarding corporate social concerns in recent years This is worth further research to learn more to be true by regression three with region being corporate social performance is confirmed by Web sit e content analysis. Firms in Europe and the U.S have stronger public relation s practice s, which therefore result s in better CSP as hypothesis 3 suggested. The indirectly positive relationship between the public relations function and CFP is thus manifest f or these two regions. To answer and explain t he triang ular relationship among public relation s CSP and CFP in Asia however, need s further stud y In conclusion, the present study confirmed that CSP brings reputation to companies and has image building ef fect, which therefore leads to financial returns. W hen the CSP CFP relationship is interpreted with market value related financial factor s however, it result s in


72 different conclusion s from accounting based reputational factor s In addition, the public rel ations function in a firm positively affects its CSP in both Europe and the U.S Implication indings can provide several theoretical and practical implications for both CSR researchers and professional managers. For the CSR research er th is s tudy yields inspiring conclusion s regarding surrounding the inconsistent CSP CFP relationship could be solved. R esearch studies that have applied SRI returns as a financial factor to conclu de a negative CSP CFP relationship may misinterpret their findings due to several reasons : 1) market related indicator s would respon d slowly to CSP (Bird, 2007) and 2) market value include s complex factors that cannot only be explained by CSP (Orlitzky et al., 2003; Wu, 2006). As a result, the present study provides statistical evidence that CSP does result in financial returns but it is generate d through its reputational influence. In addition, this study provides evidence that firms and stakeholders in A sia are changing and improving their concepts regarding CSR issues, which therefore results in different outcomes from previous studies. The study also generate s implications for the current financial downturn. As the Economist (2009) pointed out, the rec present study provides supporting evidence to encourage companies to keep doing good things while the economy is bad. As confirmed in this study CSP creates reputation and then revenue ; corpor ations should therefore sustain their CSP as a way to ensure their brand image and future revenue during this difficult time. As the Economist (2009) mentioned involve themselves more in CSP because any backsliding at this time would probably damage


73 morale. CSP therefore becomes more essential for companies to increase their chance for surviving the current crisis and succeeding in the future. Limitations No research is without limitations. Two key factors can affect firms market value : 1) fundamental factors and 2) t echnical factors. Alt hough Harper (2008) pointed out that EPS is a major accounting measure represent ing a fundamental factor tha t impacts market value, there are still technical factors that should be included to interpret market value. This study applied EPS to represent market value but it may not able to fully representative. Because firms market value comprises many factors, EPS c an only play a major part but not all of it. Separately applying revenue and EPS to distinguish reputational effect and market effect about firms financial performance however, is still reasonable. Revenue and EPS do have their representativeness f or reputational effect and market effect proven by massive research studies A second limitation of this study is associated with the Web site content analysis regarding public relations functions. Except for U.S companies, European and Asian companies do not use English as their main language in providing web content. In this case, some detail ed information may not be disclosed on the English version of their Web site which we may need in this study to judge their public relations practice. B oth BMW Grou p and Nestl, however, have an alternative international Web site called global webpage with sufficient public relations information in the English language. Toyota and Honda however, only have the translated version of their original Web sites, which lacks much information. The results of the present study may have a bias toward Asian companies therefore Because of time and resource constrain ts only seven CSR awards were included in this study. Although the award count ing method for creating the CS P score can generate comprehensive coverage of firms CSR practices, the number of awards applied in this study are


74 not enough to provide rigor ous representat ion In addition, the CSR focus and evaluations conducted by th e se awards are various; the inconsis tency of th e se awards CSR evaluation generat es diversity and comprehensiveness, but mitigates representativeness as well. Suggestion for Future Research The study contributes to examining the relationships among public relations, CSP and CFP The researc h should be rep licated with more companies beyond Fortune Global 500 companies and use more CSR awards in an attempt to generalize the above conclusions and garner different insights. In addition, because most of the companies in our sample are established in developed countries, future research cou ld investigate relationships in developed and developing countries rather than regions t o enhance the applicability of the proposed model As CSR issues have been intensively aroused in developing countries it a ppears essential to explore the ir relationships. Moreover, future study could take a qualitative approach to gain insights into the factors that most impact the relationships among public relations, CSP and CFP T he advantage of qualitative analysis is to gain research depth (Wimmer & Dominick, 2003). Regarding public relations functions this study takes a qua li tative approach to analyz ing t he function in a general manner It should be noted that future research could employ more in depth method s such as focus group s or in depth interviews to better understand firms performance in their public relations function, and to further elucidate its relationship with CSP and CFP.


75 APPENDIX A REVENUE, EPS, AND CS R SCORES FOR 379 COM PANIES Rank Company Name Re venue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 1 Wal Mart Stores, Inc. 378,476 348,368 3.16 United States 8.59 9.1 2 Exxon Mobil 477,359 404,552 8.78 United States 6.74 8.1 6 Chevron 273,005 220,904 11.74 United State s 9.26 9.02 9 General Motors 148,979 179,984 53.3 United States 6.73 9.47 10 ConocoPhillips 246,182 194,495 11.16 United States 9.78 10.47 12 General Electric 182,515 172,488 1.79 United States 2.41 0.38 13 Ford Motor 146,277 172,455 6.46 Un ited States 9.5 9.64 17 Citigroup 106,655 121,429 6.21 United States 9.3 7.76 28 Bank of America Corp. 85,684 87,304 0.74 United States 9.14 9.07 29 AT&T 124,028 118,928 2.23 United States 10.72 11.92 30 Berkshire Hathaway 107,786 118,245 3,22 4.10 United States 7.05 5.58 32 J.P. Morgan Chase & Co. 73,018 71,387 0.86 United States 11.26 9.28 35 American International Group 11,104 110,064 37.85 United States 9.83 9.87 41 Hewlett Packard Company 118,364 104,286 3.47 United States 5.18 7.25


76 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 44 McKesson Corporation 101,703 92,977 3.4 United States 11.37 12.19 46 International Business Machines 103,630 98,786 9.07 United States 5.36 9.33 49 Valero Energy Corporation 119,114 95,327 2.16 United States 12.09 11.99 53 Verizon Communications Inc. 97,354 93,469 2.33 United States 10.61 11.23 60 Cardinal Health 91,091 86,852 3.67 United States 8.99 12.06 61 The Goldman Sach s Group, Inc. 53,579 87,968 4.67 United States 11.4 6.85 62 Morgan Stanley 62,262 85,281 1.64 United States 11.92 12.02 65 Home Depot 71,288 77,349 1.37 United States 10.43 10.25 79 Procter & Gamble 83,503 76,476 3.86 United States 5.77 6.39 80 CVS Caremark 87,472 76,330 2.32 United States 10.55 11.93 81 UnitedHealth Group Incorporated 81,186 75,431 2.45 United States 11.4 11.88 87 Kroger 76,000 70,235 1.92 United States 11 12.19 93 Boeing 60,909 66,387 3.68 United States 7.01 8.53


77 R ank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 96 AmerisourceBergen 70,190 65,672 2.92 United States 11.95 11.95 99 Costco Wholesale 72,483 64,400 2.95 United States 7.2 6.62 100 Merrill Lynch & Co. Inc. 16,627 5,701 24.82 United States 11.44 12.19 102 Target Corporation 63,367 59,490 3.37 United States 5.47 7.43 105 WellPoint, Inc. 61,251 61,168 4.79 United States 12.19 12.19 106 Dell 61,133 57,420 1.36 United States 9.38 7.11 107 Joh nson & Johnson 63,747 61,095 4.62 United States 5.78 3.34 108 Marathon Oil 78,569 65,207 4.98 United States 9.68 12.19 123 United Technologies Corporation 58,681 54,759 5.28 United States 10.04 10.45 125 Walgreen Co. 59,034 53,762 2.18 United Stat es 9.35 10.96 126 Wells Fargo 34,898 35,177 0.7 United States 12.19 10.3 128 Dow Chemical Company 57,514 53,513 1.19 United States 9.16 12.12 129 MetLife 50,989 47,158 4.6 United States 12.19 11.3 136 Microsoft Corporation 60,420 51,122 1.9 Uni ted States 8.27 5.67


78 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 138 Sears Holdings 50,703 53,016 5.55 United States 12.19 12.19 142 United Parcel Service 51,486 49,692 3.29 United States 4. 56 2.73 143 Pfizer Inc. 48,296 48,418 1.19 United States 12.19 12.19 145 Lowe's 48,283 46,927 1.9 United States 9.32 10.97 150 Time Warner Inc. 46,984 46,482 3.74 United States 10.45 10.45 152 Caterpillar 51,324 44,958 5.83 United States 6.06 6.37 156 Medco Health Solutions 51,258 44,506 2.45 United States 12.19 11.75 157 Supervalu 44,048 37,406 2.8 United States 12.19 12.19 158 Archer Daniels Midland 69,816 44,018 2.8 United States 12.19 12.19 161 Fannie Mae 43,123 44,766 23.87 Uni ted States 12.19 12.19 162 Freddie Mac 12,302 42,635 26.76 United States 12.02 9.68 164 Safeway 44,104 42,286 2.29 United States 9.71 12.19 168 Sunoco, Inc. 54,146 44,728 6.63 United States 10.13 12.19 170 Lockheed Martin Corporation 42,731 41 ,862 8.05 United States 9.76 12.19


79 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 176 Sprint Nextel 35,635 40,146 0.56 United States 12.19 12.19 177 Best Buy 40,023 35,934 3.2 United States 9.18 9.96 184 PepsiCo, Inc. 13,796 13,591 0.75 United States 6.1 5.2 188 Intel Corporation 37,586 38,334 0.93 United States 6.35 7.52 190 Altria Group 19,356 18,664 1.49 United States 10.75 11.26 191 Bunge 52,574 37,842 9.49 United States 12. 19 12.19 192 Tyco International 20,199 18,477 2.98 United States 12.19 12.19 195 Kraft Foods 42,201 36,134 1.24 United States 8.83 8.97 198 Allstate 29,394 36,769 3.07 United States 12.19 12.19 200 Motorola, Inc. 30,146 36,622 1.87 United Stat es 11.31 11.58 207 Walt Disney Company 37,843 35,510 2.34 United States 5.42 5.23 214 FedEx 37,953 35,214 5.23 United States 6.53 6.2 216 Ingram Micro 34,362 35,047 2.37 United States 12.19 12.19 217 Sysco 37,522 35,042 1.83 United States 12. 19 12.19 218 Cisco Systems 39,540 34,922 1.35 United States 3.24 5.99 219 Johnson Controls 38,062 34,624 1.65 United States 12.06 10.45


80 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 220 Hon eywell International 36,556 34,589 4.17 United States 9.69 8.85 221 Prudential Financial 29,275 34,401 2.49 United States 12.19 12.19 234 American Express 31,920 31,540 2.49 United States 8.71 4.14 237 Northrop Grumman 33,887 31,828 3.83 United States 12.19 12.19 240 Hess Corporation 41,094 31,924 7.36 United States 9.59 11.26 248 Comcast 34,256 30,895 0.87 United States 12.19 12.19 249 Alcoa Inc. 26,901 29,280 0.28 United States 8.71 8.71 252 DuPont 31,836 30,653 2.67 United States 9.15 9.08 275 Coca Cola 31,944 28,857 2.51 United States 6.01 6.02 280 News Corp. 32,996 28,655 1.82 United States 12.19 12.19 291 Aetna 30,951 27,600 2.91 United States 9.5 12.19 298 Tyson Foods, Inc. 26,862 25,729 0.25 United States 11.74 12 .19 299 HCA 28,374 26,858 United States 12.19 12.19 301 Enterprise GP Holdings 35,470 26,714 1.33 United States 12.19 12.19 304 Macy's 26,313 26,970 2.04 United States 12.19 12.19 305 Delphi 18,060 22,283 5.42 United States 12.19 12.19


81 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 308 Travelers Companies, Inc. (The) 24,477 26,017 4.34 United States 12.19 12.19 311 Hartford Finance and Finance and Insurance 9,219 25,916 8.99 Un ited States 12.19 12.19 312 Abbott Laboratories 29,528 25,914 3.06 United States 12.19 12.19 320 Humana, Inc 28,946 25,290 3.87 United States 8.95 12.19 327 3M 25,269 24,462 4.95 United States 9.09 5.01 328 Rite Aid 26,289 24,327 1.82 United S tates 12.19 12.19 332 Merck & Co., Inc. 23,850 24,198 4.04 United States 12.19 12.19 334 Deere & Company 28,438 24,082 4.76 United States 5.05 7.03 337 Apple 32,479 24,006 5.48 United States 6.37 7.25 353 Tech Data 24,081 23,423 2.41 United Sta tes 12.19 12.19 358 Schlumberger 27,565 23,276 4.51 United States 12.19 10.45 359 McDonald's Corporation 23,522 22,787 3.83 United States 10.45 10.45 360 Publix Super Markets 24,110 23,194 1.33 United States 9.89 10.27 366 AMR Corporation 23,76 6 22,935 8 United States 12.19 12.19


82 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 375 Emerson Electric 24,807 22,131 3.14 United States 12.19 12.19 379 Raytheon 23,174 21,301 4.07 United States 9.85 12.19 381 Wyeth 22,834 22,400 3.31 United States 12.12 12.19 382 International Paper 24,829 21,890 United States 10.45 8.76 388 Tesoro 28,309 21,915 2.03 United States 12.19 9.09 399 Constellation Energy 19,818 21,193 7.34 United States 10.61 12.19 403 Coca Cola Enterprises Inc. 21,807 20,936 9.06 United States 10.45 10.45 410 Goodyear Tire & Rubber 19,488 19,644 0.32 United States 8.67 12.19 413 Manpower 21,553 20,500 2.78 United States 10.45 12.19 416 Plains All American Pipeline 30,061 20,394 2.75 United States 12.19 12.19 420 Occidental Petroleum 24,480 20,013 8.36 United States 12.19 12.19 422 UAL Corporation 20,194 20,143 42.2 United States 12.19 12.19 427 Bristol Myers Squibb 20,597 18,193 1.6 United States 12.19 12.04 429 J.C. Penney 19,860 19,903 4.96 United States 11.41 10.43


83 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 436 Whirlpool Corporation 18,907 19,408 5.57 United States 8.29 12.19 43 9 Staples, Inc. 23,084 19,373 1.29 United States 8.26 12.19 441 Delta Air Lines 22,697 19,154 19.06 United States 12.19 12.19 443 Capital One Financial 7,149 6,530 0.14 United States 12.19 12.19 444 Exelon 18,859 18,916 4.13 United States 9.82 12.19 452 TJX Companies, Inc. 19,000 18,337 2.07 United States 12.19 12.19 453 Eli Lilly 20,378 18,634 1.89 United States 12.19 12.19 456 Murphy Oil 27,513 18,439 9.18 United States 12.19 11.19 457 Express Scripts 21,978 21,824 3.13 United State s 11.71 12.19 458 Kimberly Clark Corporation 19,415 18,266 4.07 United States 12.19 9.5 462 Oracle 22,430 17,996 1.08 United States 10.45 12.19 465 AutoNation 14,132 17,347 6.89 United States 12.19 12.19 466 Loews 13,247 14,302 0.38 United St ates 12.19 12.19 469 Freeport McMoRan Copper & Gold 17,796 16,939 29.69 United States 10.5 12.19 474 Cigna 19,101 17,623 1.05 United States 12.19 12.19


84 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 20 07 484 Gaiam, Inc. 257 263 1.46 United States 12.19 9.54 487 DirecTV Group 19,693 17,246 1.36 United States 12.19 12.19 489 Xerox Corporation 17,608 17,228 0.26 United States 6.58 8.45 490 CHS Inc. 32,168 17,216 United States 12.19 12.19 495 United States Steel Corporation 23,754 16,873 18.04 United States 12.19 12.19 496 Weyerhaeuser Company 8,018 10,824 8.61 United States 11.57 12.19 500 Fluor 22,326 16,691 4.06 United States 12.19 10.45 16 Sinopec 208,922 158,408 0.06 China 10.3 12.19 133 Industrial & Commercial Bank of China 63,388 46,975 0.05 China 12.19 12.19 148 China Mobile Communications 59,344 51,373 0.81 China 10.45 10.45 171 China Construction Bank 51,292 37,447 0.06 China 11.95 12.19 187 Bank of China 41 ,282 34,430 0.04 China 8.75 7.03 223 Agricultural Bank of China 41,294 34,059 0.04 China 12.19 12.19 257 Sinochem 3,942 2,552 0.09 China 12.19 10.13


85 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 286 Hutchison Whampoa 30,239 28,035 1.06 China 12.19 12.19 288 China Telecommunications 21,979 20,253 0.06 China 12.19 12.19 303 China FAW Group 2,913 1,790 0.1 China 12.19 12.19 349 Noble Group 36,090 23,497 0.18 China 12.19 10.99 356 Chin a Railway Construction 51,307 23,335 0.06 China 12.19 12.19 385 China State Construction 1,415 1,312 0.03 China 12.19 12.19 405 China Ocean Shipping (China COSCO) 16,541 12,902 0.15 China 12.19 12.19 409 China National Offshore Oil (CNOOC Ltd) 18, 125 11,928 0.14 China 10.45 10.45 412 China Minmetals 16,287 11,541 0.12 China 9.42 12.19 426 China Communications Construction 25,738 19,800 0.06 China 12.19 12.19


86 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 437 Jardine Matheson 22,362 19,445 1.89 China 12.19 12.19 476 Aluminum Corp. of China 11,039 11,202 China 12.19 12.19 499 Lenovo Group 16,352 13,978 0.05 China 11.29 9.63 116 Indian Oil Corporation Ltd. 51,492 40,791 1.66 India 10.42 12.19 206 Reliance Industries 34,049 25,159 3.34 India 12.19 12.19 315 Tata Steel 35,953 32,799 3.55 India 12.19 11.57 5 Toyota Motor Corporation 228,780 229,997 1.99 Japan 3.7 5.35 40 Honda Motor 109,561 105,010 19.64 Japan 3.56 5.79 48 Hitachi 131,259 98,220 1.05 Japan 8.74 10.41 54 Nippon Telegraph & Telephone 102,649 93,444 446.06 Japan 11.16 12.19 75 Sony Corporation 79,225 77,614 1.06 Japan 9.92 9.27 117 Nippon Oil 71,752 65,825 1.28 Japan 12.19 12.19 130 Mitsubish i 64,931 52,762 3.06 Japan 12.19 12.19 140 Mitsui 58,701 50,208 2.25 Japan 12.19 12.19 141 Seven & I Holdings 54,863 49,740 1.3 Japan 10.01 11.17


87 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 146 Tokyo Electric Power Company 57,171 47,938 0.3 Japan 12.19 12.19 154 AEON CO. 45,698 40,095 0.56 Japan 7.61 7.62 165 Nippon Steel 46,317 42,230 0.29 Japan 12.19 12.19 189 Canon 39,756 39,597 2.39 Japan 9.32 6.91 201 Marubeni 38,864 36,449 0.83 Japan 12.19 12.19 210 Mitsubishi Electric 35,590 35,431 0.16 Japan 12.19 12.19 212 Denso Corp. 30,517 35,214 0.62 Japan 9.31 10.45 215 Nippon Mining Holdings 39,473 37,965 0.26 Japan 12.19 12.19 236 Sumitomo 34,099 32,116 1.88 Japan 12. 19 12.19 243 KDDI Corporation 34,807 31,463 663.95 Japan 11.28 9.87 246 JFE Holdings 38,894 30,969 4.64 Japan 12.19 12.19 261 Sharp Corporation 27,648 29,901 0.36 Japan 8.99 8.11 262 Idemitsu Kosan Co.,Ltd. 36,885 33,807 5.42 Japan 12.19 12.1 9 276 Bridgestone Corporation 31,282 28,788 0.3 Japan 9.3 9.46


88 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 285 Mitsubishi Heavy Industries 36,885 26,239 0.13 Japan 10.45 12.19 302 Cosmo Oil 33,289 30,823 1.09 Japan 12.19 12.19 322 Itochu 33,200 25,020 1.26 Japan 12.19 12.19 330 Softbank 25,956 24,288 1.75 Japan 12.19 10.09 345 Aisin Seiki 21,504 23,646 0.52 Japan 12.19 12.19 347 Kansai Electric Power Co., Inc. 27,088 23,549 0. 09 Japan 12.19 12.19 350 Mitsubishi Motors 27,088 23,465 0.05 Japan 12.19 12.19 391 Chubu Electric Power 24,373 21,285 1.01 Japan 12.19 12.19 434 Komatsu 19,632 19,624 0.9 Japan 12.19 12.19 438 Ricoh Company Limited 20,816 19,422 0.09 Japan 1 0.45 10.45 451 Kobe Steel 21,142 18,656 0.03 Japan 12.19 12.19 459 Sanyo Electric 17,632 18,227 0.01 Japan 12.19 12.19 479 Toyota Industries Corporation 15,384 17,502 0.18 Japan 7.86 7.24 95 Petronas 6,619 5,399 0.2 Malaysia 12.12 9.68 47 Gazprom OAO 93,480 79,177 1.1 Russia 9.51 8.91 203 Rosneft Oil 68,991 49,216 1.17 Russia 11.03 9.56


89 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 296 General Dynamics 29,300 27,240 6.25 Russia 12.19 12.19 406 Sberbank 19,217 16,763 0.14 Russia 9.75 8.87 292 Flextronics International Ltd 30,949 27,558 7.52 Singapore 12.19 12.19 38 Samsung Electronics 110,211 106,016 33.93 South Korea 12.11 8.43 67 LG 57,498 57,499 3.83 South Korea 1 0.4 12.19 82 Hyundai Motor 72,451 74,906 3.49 South Korea 12.19 10.64 86 SK Holdings 80,709 70,723 17.27 South Korea 10.47 12.19 224 POSCO 37,928 34,017 53.62 South Korea 12.19 12.19 245 Korea Electric Power 28,676 31,358 4.33 South Korea 12.1 9 12.19 267 GS Holdings Corp. 36,457 29,479 1.41 South Korea 10.45 12.19 278 Shinhan Financial Group 14,837 14,879 5.13 South Korea 12.19 12.19 279 Woori Finance Holdings Co. 15,193 14,008 0.51 South Korea 12.19 12.19 329 Hanwha 24,751 24,375 3. 09 South Korea 12.19 12.19 378 Hyundai Heavy Industries Co., Ltd. 24,972 22,485 37.67 South Korea 10.81 12.19


90 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 387 KT 17,850 20,082 2.01 South Korea 12.19 12.19 461 Kookmin Bank 27,013 18,084 1.94 South Korea 12.19 12.19 475 Samsung C&T 18,612 17,586 2.13 South Korea 10.78 12.19 132 Hon Hai Precision Industry 61,835 51,833 0.25 Taiwan 10.45 12.19 300 Cathay Financial Holdings 5,976 7,642 0 .02 Taiwan 12.19 11.57 344 Quanta Computer 25,967 23,664 0.18 Taiwan 12.19 12.19 363 Asustek Computer 21,165 22,995 0.12 Taiwan 12.19 12.19 395 Formosa Petrochemical Corporation 27,808 21,346 0.05 Taiwan 12.19 12.19 135 PTT 59,962 44,031 0.55 T hailand 12.19 12.19 186 Ko Holding 42,646 35,842 0.76 Turkey 12.19 12.19 295 OMV Group 37,361 27,431 7.82 Austria 8.71 10.45 447 Erste Bank 17,502 13,261 1.03 Austria 12.19 12.19 14 Fortis 5,353 4,543 0.39 Belgium 10.54 9.95 19 Dexia Group 157,763 137,053 3.71 Belgium 6.33 6.68 306 Delhaize Group 27,966 26,075 7.42 Belgium 12.19 12.19 431 Inbev NV/SA 23,552 19,750 1.89 Belgium 12.19 12.19


91 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 470 Cie Nationale Portefeuille 22,687 17,730 2.74 Belgium 12.19 12.19 131 A.P. Mller Mrsk Group 61,173 51,228 737.01 Denmark 12.19 8.8 238 Danske Bank Group 29,507 24,573 0.78 Denmark 10.45 10.45 88 Nokia 74,172 69,881 1.71 Finland 4.84 3.87 407 Stora Enso Oyj 16,132 16,217 1.26 Finland 10.45 12.19 8 Total 234,512 187,267 6.93 France 7.97 10.45 15 AXA 80,201 162,751 0.71 France 7.42 8.45 21 BNP Paribas 86,062 80,944 3.49 France 8.45 9.01 23 Credit Agricole 68,901 60,3 86 0.53 France 6.95 8.87 33 Carrefour 129,045 114,004 3.41 France 8.01 7.87 43 Societe Generale 58,782 52,137 5.52 France 7.18 12.19 66 Peugeot 79,505 80,308 1.61 France 8.45 12.19 68 lectricit de France 94,019 81,623 2.79 France 10.45 9.4 84 France Telecom 78,791 73,086 2.28 France 11.99 11.15 97 GDF Suez 99,351 37,539 4.36 France 8.99 12.19 110 Saint Gobain 64,065 59,429 5.72 France 12.19 12.19 112 CNP Assurances 38,455 59,067 7.22 France 10.45 10.45 119 Renault 55,276 55,680 4.66 France 11.17 12.19


92 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 153 Veolia Environnement 52,957 43,705 1.2 France 10.45 10.45 169 Vinci 49,945 42,584 4.89 France 12.19 12.19 172 Bouyg ues 48,036 40,684 6.41 France 10.45 10.45 178 Sanofi Aventis 42,150 39,975 6.23 France 12.19 12.19 205 Fonciere Euris 35,811 29,621 17.74 France 12.19 12.19 222 Air France KLM Group 34,107 29,582 4.17 France 8.71 8.71 264 Vivendi 37,140 29,641 3.49 France 12.19 12.19 284 PPR 29,548 26,139 8.85 France 12.19 12.19 325 Alcatel Lucent 24,842 24,351 1.17 France 10.45 10.45 333 Lafarge 27,839 24,108 11.47 France 10.45 10.45 338 Alstom 24,741 1,400 8.82 France 10.45 10.45 342 Schneider Electric 26,783 23,690 11.4 France 12.19 12.19 346 Christian Dior 26,241 23,603 6.53 France 12.19 12.19 355 L'Oral 25,658 23,353 4.84 France 7.03 6.86 362 Michelin 24,000 23,085 3.6 France 12.19 8.9 423 Groupe Danone 22,262 17,486 3.2 France 12.19 5.54 473 Sodexo 20,367 17,669 3.62 France 12.19 12.19 488 Eiffage 19,449 17,219 4.8 France 12.19 12.19 498 Thales Group 18,525 16,829 4.2 France 12.19 12.19 11 Daimler 140,231 136,044 2.04 Germany 7.67 8.52 18 Volkswagen AG 166,464 149, 044 17.39 Germany 8.93 9.54 22 Allianz 133,721 126,347 13.21 Germany 7.2 9.21


93 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 26 Deutsche Bank 79,787 88,519 11.13 Germany 8.21 8.83 37 Siemen s 116,040 96,331 2.2 Germany 9.61 11.23 52 E.ON 149,496 104,713 Germany 8.85 9.26 55 Deutsche Post 83,680 77,174 0.7 Germany 6.82 9.18 56 Metro 99,398 87,882 3.44 Germany 11.47 12.19 64 Deutsche Telekom 90,197 85,564 0.59 Germany 7.63 8.11 73 BASF 91,131 79,316 4.67 Germany 5.06 5.61 78 BMW 77,810 76,670 0.98 Germany 1.36 2.82 89 ThyssenKrupp 80,173 68,774 6.73 Germany 11.44 12.19 98 Munich Re Group 67,469 64,737 11.58 Germany 11.33 12.19 114 RWE 70,842 57,874 9.86 Germany 10. 45 10.45 155 Bayer 48,148 44,324 3.8 Germany 9.88 10.45 179 Franz Haniel 38,590 39,931 4.39 Germany 10.45 12.19 185 Landesbank Baden Wurttemberg 10,120 8,499 0.02 Germany 12.19 12.19 196 Commerzbank AG 31,260 30,270 0.04 Germany 10.45 10.45 2 50 Lufthansa Group 39,257 32,836 1.94 Germany 11.99 12.19


94 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 260 TUI AG 27,373 21,806 0.17 Germany 10.51 12.19 316 Bertelsmann AG 24,462 22, 925 15,647.65 Germany 10.45 10.45 369 Continental Airlines 15,241 14,232 5.52 Germany 11.51 12.19 370 MAN Group 21,860 19,248 11.35 Germany 12.19 12.19 377 Hochtief 28,230 22,685 1.48 Germany 12.19 12.19 394 Arcandor AG 30,721 21,527 4.77 Ger many 10.45 10.45 418 Energie Baden Wrttemberg 25,043 21,488 5.22 Germany 12.19 12.19 468 Henkel 20,669 17,894 4.12 Germany 9.05 7.8 483 Linde Group 18,522 16,843 6.25 Germany 12.19 12.19 277 CRH 30,551 28,731 2.98 Ireland 12.19 12.19 482 Ba nk of Ireland Group 15,578 14,703 2.11 Ireland 12.19 12.19 27 ENI 159,238 120,556 3.82 Italy 4.39 7.07 34 Assicurazioni Generali 90,183 109,683 0.93 Italy 11.5 11.16 71 Fiat 86,854 80,107 1.9 Italy 9.85 10.26 77 UniCredit Group 79,149 57,514 0. 48 Italy 10.99 10.78 109 Enel 89,492 59,794 1.37 Italy 10.45 10.45 144 Intesa Sanpaolo 41,015 33,375 0.29 Italy 12.19 12.19 160 Telecom Italia 44,632 43,002 0.17 Italy 12.19 12.19


95 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CS R Score 2007 CSR Score 2008 2007 428 Finmeccanica SpA 23,021 19,794 2.06 Italy 12.19 12.19 467 Premafin Finanziaria 17,733 17,794 0.03 Italy 12.19 12.19 39 ArcelorMittal 124,936 105,216 6.8 Luxembourg 9.49 10.45 103 Aegon 11,008 62,378 1. 01 Netherlands 12.19 12.19 127 EADS 63,283 53,546 2.85 Netherlands 10.45 10.45 137 Royal Ahold 37,636 34,061 1.04 Netherlands 11.4 12.19 147 Rabobank 39,867 47,388 0.12 Netherlands 10.45 9.29 197 Royal Philips Electronics 38,593 36,671 0.15 Net herlands 10.45 10.45 455 Akzo Nobel 22,547 13,984 6.55 Netherlands 10.45 8.71 486 Royal KPN ( Koninklijke KPN ) 21,358 17,289 1.12 Netherlands 12.19 8.92 491 Heineken Holding 20,991 15,429 0.63 Netherlands 9.91 9.98 492 LyondellBasell Industr ies 61,101 61,133 1.25 Netherlands 9.44 12.19 3 Royal Dutch Shell 458,361 355,782 4.27 Netherlands/UK 7.32 8.71


96 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 59 StatoilHydro 116,089 89,210 2.4 Nor way 7.05 8.62 472 Norsk Hydro 15,686 16,451 0.54 Norway 10.45 10.45 477 PKN Orlen Group 33,003 23,073 Poland 11.07 12.19 58 Santander Central Hispano Group 82,214 63,387 1.79 Spain 10.64 12.19 76 Telefnica 85,783 78,072 2.35 Spain 8.18 10 .45 92 Repsol YPF 89,293 74,837 3.2 Spain 9.6 10.01 134 Banco Bilbao Vizcaya Argentaria 45,125 36,303 2.04 Spain 12.19 12.19 258 Endesa 33,402 24,736 3.19 Spain 10.45 10.45 270 ACS 24,198 21,644 1.47 Spain 12.19 12.19 313 Cepsa 36,736 29,200 1 .5 Spain 11.69 12.19 339 Iberdrola 38,015 24,558 0.73 Spain 12.19 10.45 424 Grupo Ferrovial 20,691 20,061 0.35 Spain 12.19 10.45 440 Fomento de Construcciones 21,050 18,511 3.96 Spain 10.45 12.19 463 Mapfre Group 22,285 17,201 0.49 Spain 11.86 10.18 167 Volvo 46,016 42,236 0.74 Sweden 7.53 6.22 289 L.M. Ericsson 31,660 27,789 0.54 Sweden 12.19 11.97 354 Nordea Bank 24,504 17,668 1.17 Sweden 10.45 10.45


97 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Sco re 2008 2007 411 Skanska 21,772 20,537 1.13 Sweden 12.19 10.23 471 Skandinaviska Enskilda Banken 14,741 12,732 1.58 Sweden 12.19 10.68 31 UBS AG 60,835 90,925 6.94 Switzerland 9.13 11.64 57 Nestle 101,475 89,625 2.84 Switzerland 4.18 9. 61 74 Credit Suisse 44,261 52,124 6.65 Switzerland 8.83 8.8 121 Zurich Financial Services 32,348 55,284 22.02 Switzerland 12.19 12.19 175 Roche Group 42,117 38,444 9.63 Switzerland 10.45 11.19 181 Novartis 42,584 38,947 3.55 Switzerland 8.57 8 .71 209 Swiss Reinsurance Company 23,061 35,730 2.41 Switzerland 10.45 8.71 256 ABB 34,912 29,183 1.37 Switzerland 12.19 12.19 272 Xstrata 27,952 28,542 3.16 Switzerland 12.19 12.19 274 Adecco 29,202 28,865 4.81 Switzerland 10.45 10.45 376 Ho lcim Ltd. 23,227 22,543 6.29 Switzerland 12.19 12.19


98 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 442 Swiss Life Holding 14,178 15,809 32.66 Switzerland 12.19 12.19 4 BP 365,700 288,951 1.14 UK 7.28 5.98 20 HSBC Holdings 91,301 92,359 0.88 UK 7.07 8.51 36 Royal Bank of Scotland 90,770 64,520 0.67 UK 7.9 12.19 45 HBOS 34,230 24,144 3.11 UK 6.13 3.97 51 Tesco 94,411 94,676 0.44 UK 8.43 8.35 69 Aviva PLC 35,491 81,032 2.41 UK 8.5 2 8.18 70 Barclays 51,340 50,628 0.49 UK 9.13 8.78 85 Vodafone Group Plc 71,189 58,806 0.25 UK 7.01 7.14 94 Prudential 29,275 34,401 2.49 UK 10.95 9.78 111 Lloyds TSB Group 32,203 33,756 0.26 UK 12.19 12.19 151 GlaxoSmithKline 44,635 45,443 2.05 UK 12.19 12.19 166 BT Group PLC 41,544 38,234 0.54 UK 8.71 8.71 202 Legal & General Group 58,001 36,413 0.33 UK 12.19 12.19 208 J. Sainsbury 35,776 32,351 0.38 UK 12.19 9.1 225 Old Mutual 86 35,351 0.16 UK 12.19 12.19 231 Centrica PLC 39,124 32,552 0.39 UK 8.71 8.71 241 Wolseley plc 33,090 31,581 2.92 UK 12.19 12.19


99 Rank Company Name Revenue Revenue EPS(2008) Country 2008 CSR Score 2007 CSR Score 2008 2007 253 Scottish & Southern Energy 34,451 30,613 0.88 UK 12.19 8. 71 265 AstraZeneca 31,601 29,559 4.58 UK 12.19 12.19 266 Anglo American 26,311 25,470 4.48 UK 10.45 10.45 281 BAE Systems 30,557 28,625 0.87 UK 11.83 12.19 310 William Morrison Supermarkets 26,018 25,960 0.31 UK 10.1 11.07 351 National Grid 24 ,352 23,072 0.87 UK 12.19 12.19 390 Standard Chartered Bank 7,387 6,265 2.02 UK 10.45 10.45 401 Compass Group 22,525 20,208 0.41 UK 12.19 12.19 419 Standard Life 28,575 20,231 0.08 UK 12.19 12.19 425 British American Tobacco 22,219 20,041 2.26 UK 12.19 12.19 449 Kingfisher PLC 17,955 18,114 UK 12.09 10.45 460 Marks & Spencer 16,600 18,102 0.26 UK 5.73 5.63 478 British Airways 16,589 17,564 0.24 UK 11.81 10.45 263 Rio Tinto Group 54,264 29,700 5.95 UK/Australia 8.71 12.19 122 U nilever 59,272 55,003 2.13 UK/Netherlands 5.71 6.19

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BIOGRAPHICAL SKETCH Hsin Y i (Sophia) Yeh was born in Tai pei Taiwan. In 200 4 she obtained her M.B.A d egree with concentration on Finance from National Sun Yat sen University, one of the most prestigious colleges of business in Taiwan. With the strong interest in investor relations and corporate social responsibility she came to the U.S for further study in 2007. She completed her Master of Arts in Mass Communication specializing in public relations from the University of Florida in 200 9 After graduation, she hopes to continue her career in business field in Taiwan