Strategic and institutional sustainability: corporate social responsibility, brand value, and Interbrand listing

Publication Date18 September 2017
Date18 September 2017
AuthorMaretno Agus Harjoto,Jim Salas
SubjectMarketing,Product management,Brand management/equity
Strategic and institutional sustainability:
corporate social responsibility, brand value,
and Interbrand listing
Maretno Agus Harjoto
Department of Finance, Pepperdine University Graziadio School of Business and Management, Malibu, California, USA, and
Jim Salas
Department of Marketing, Pepperdine University Graziadio School of Business and Management, Malibu, California, USA
Purpose – This study aims to investigate the impact of strategic and institutional (normative) corporate social responsibility (CSR) on brand value
and brand reputation, based on the strategic and legitimacy theory of CSR. It argues that because CSR strengths represent firms’ proactive approach
to satisfy their stakeholders’ interests, the authors expect that this proactive approach is likely to generate an accumulated level of reservoir of
goodwill that is positively related to the level of brand value. In contrast, the authors would expect that social irresponsibility (CSR concerns), as
a measure of firms’ reactive position to stakeholders’ interests, adversely affects the incremental change in this reservoir of goodwill.
Design/methodology/approach – This paper measures strategic CSR using CSR strengths and normative (institutional) CSR from CSR concerns
scores from the MSCI ESG (Kinder Lydenburg Domini). This paper measures the level of brand value from the Interbrand listing, and it measures
the brand reputation based on changes in brand value and brand ranking from Interbrand’s 100 global brands.
Findings – This paper finds evidence to support the authors’ theory that one-, two- and three-year lagged CSR strengths positively affect the level
of brand value. This study also finds empirical evidence to support the authors’ hypothesis that CSR concerns adversely affect changes in brand value
and brand ranking. This study concludes that the differing impacts of CSR strengths and CSR concerns help the authors better understand the impacts
of firms’ pro-action and reaction to stakeholders’ interests ion brand values and ranking.
Practical implications – The findings indicate that strategic CSR enhances brand value, while socially irresponsible activities that are against social
norms, values and ethics adversely affect the companies’ legitimacy and adversely affect changes in brand reputation.
Originality/value – This research offers a new perspective to distinguish the differing impacts of CSR strengths and concerns on brand value and
brand reputation.
Keywords Brand value, Corporate social responsibility, Strategic CSR, Interbrand, Brand reputation, Institutional CSR
Paper type Research paper
Brands can be the key to firms’ long-term competitive
advantage (Werther and Chandler, 2005). They enable
consumers to differentiate quality from commodity-type
products (Hestad, 2013). As a result, firms charge higher
prices for consistent value and security (reputation) because
these characteristics assure consumers that the branded
product they buy will have the same performance and quality
characteristics they have come to believe the brand represents
(Agres and Dubitsky, 1996). Thus, brand management is not
just an important marketing activity but also a critical
long-term relationship building activity for a firm with its
stakeholders (Du et al., 2007).
Brands evolve and change. Sometimes, these changes are
strategic (Keller, 2012). A firm may choose to reposition its
brand to fit a new target market or some other marketing
objective. The change in brand image may be the result of a
proactive action the firm takes as part of its overall marketing
strategy or a response to a change in the marketing and social
environment. Recent headlines surrounding Volkswagen’s
vehicle emission problems (Minter, 2015), for example, echo
challenges that other companies (Nike and GAP sweatshops
and Wal-Mart labor disputes) face when the images of their
brands are called into question. A company’s image can affect
its brand value and reputation. These societal perceptions and
expectations about companies’ products and brands can
change over time. In the early twentieth century, for example,
the oil and gas industry was perceived to be the backbone of
the industrial revolution and as being responsible for
economic growth and prosperity (Business and Economic
Research Advisor, 2006). This industry is now viewed more
The current issue and full text archive of this journal is available on
Emerald Insight at:
Journal of Product & Brand Management
26/6 (2017) 545–558
© Emerald Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-07-2016-1277]
The authors would like to thank two anonymous referees for their careful
review and constructive recommendations. They would also like to thank
the Editor, Francisco Guzman, for his recommendations. Harjoto
acknowledges research support from the 2015-2017 Denney Endowment
at the Graziadio School of Business, Pepperdine University.
Received 25 July 2016
Revised 22 December 2016
30 March 2017
Accepted 4 April 2017

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