Corporate Social Responsibility and Consumers’ Reaction: An Experiment

Authors

  • Adriana C. Ribeiro Instituto Superior Técnico, Universidade de Lisboa, Portugal
  • Margarida Catalão-Lopes CEG-IST, Instituto Superior Técnico, Universidade de Lisboa, Lisbon, Portugal
  • Ana S. Costa CEG-IST, Instituto Superior Técnico, Universidade de Lisboa, Lisbon, Portugal

DOI:

https://doi.org/10.30564/jsbe.v5i3.13

Abstract

Companies differ in their motivation to corporate social responsibility (CSR) practices, with some companies taking a genuine, altruistic approach and others preferring an opportunistic approach (and attempting to mimic the former). If consumers can distinguish them, they will eventually reward the altruistic (being willing to pay more) and penalize the opportunistic ones. This paper performs an experimental study to assess whether differences in consumers’ willingness to pay are statistically significant for different classifications of CSR activities: i) proactive or reactive, ii) environment, employees, or social, iii) involving more or less expensive products, iv) being performed by firms facing competition or not. Results show that consumers are willing to reward CSR initiatives that follow a reactive approach; consumers’ decisions are more moderate when rewarding initiatives associated with more expensive products; the rewards provided depend on the CSR dimension; a relationship between market structure and consumers’ reaction to CSR was not found.

Keywords:

Corporate social responsibility, Genuine versus opportunistic approach, Experiment, Consumers’ reaction, Reward versus penalty

References

[1] Reder, A., 1994. In pursuit of principle and profit: Business success through social responsibility. G.P. Putnam's Sons.

[2] Drumwright, M.E., Murphy, P.E., 2001. Corporate societal marketing. In Handbook of Marketing and Society. Thousand Oaks, CA: Sage Publications. pp. 162-183.

[3] Cone, 2015. 2015 Cone Communications/Ebiquity Global CSR Study. Retrieved from https://www.conecomm.com/2015-cone-communications-ebiqui-ty-global-csr-study-pdf.

[4] Carroll, A.B., 1979. A three-dimensional conceptual model of corporate performance. Academy of Man-agement Review. 4(4), 497-505.

[5] Wartick, S.L., Cochran, P.L., 1985. The evolution of the corporate social performance model. Academy of Management Review. 10(4), 758-769.

[6] Torugsa, N.A., O’Donohue, W., Hecker, R., 2013. Proactive CSR: An empirical analysis of the role of its economic, social and environmental dimensions on the association between capabilities and perfor-mance. Journal of Business Ethics. 115(2), 383-402.

[7] Chang, C.H., 2015. Proactive and reactive corporate social responsibility: antecedent and consequence. Management Decision. 53(2), 451-468.

[8] Groza, M.D., Pronschinske, M.R., Walker, M., 2011. Perceived organizational motives and consumer re-sponses to proactive and reactive CSR. Journal of Business Ethics. 102(4), 639-652.

[9] Sen, S., Du, S., Bhattacharya, C.B., 2016. Corporate social responsibility: A consumer psychology per-spective. Current Opinion in Psychology. 10, 70-75.

[10] Baskentli, S., Sen, S., Du, S., et al., 2019. Consumer reactions to corporate social responsibility: The role of CSR domains. Journal of Business Research. 95, 502-513.

[11] Dahlsrud, A., 2008. How corporate social respon-sibility is defined: An analysis of 37 definitions. Corporate Social Responsibility and Environmental Management. 15(1), 1-13. DOI: https://doi.org/10.1002/csr.132

[12] Du, S., Bhattacharya, C.B., Sen, S., 2007. Reaping relational rewards from corporate social responsibili-ty: The role of competitive positioning. International Journal of Research in Marketing. 24(3), 224-241. DOI: https://doi.org/10.1016/j.ijresmar.2007.01.001

[13] Murray, K.B., Vogel, C.M., 1997. Using a hierar-chy-of-effects approach to gauge the effectiveness of corporate social responsibility to generate goodwill toward the firm: Financial versus nonfinancial im-pacts. Journal of Business Research. 38(2), 141-159. DOI: https://doi.org/10.1016/S0148-2963(96)00061-6

[14] Yoon, Y., Gürhan‐Canli, Z., Schwarz, N., 2006. The effect of corporate social responsibility (CSR) activ-ities on companies with bad reputations. Journal of Consumer Psychology. 16(4), 377-390.

[15] Alhouti, S., Johnson, C.M., Holloway, B.B., 2016. Corporate social responsibility authenticity: Investi-gating its antecedents and outcomes. Journal of Busi-ness Research. 69, 1242-1249.

[16] Becker-Olsen, K.L., Cudmore, B.A., Hill, R.P., 2006. The impact of perceived corporate social respon-sibility on consumer behavior. Journal of Business Research. 59(1), 46-53. DOI: https://doi.org/10.1016/j.jbusres.2005.01.001

[17] Husted, B.W., Salazar, J.D.J., 2006. Taking Friedman seriously: Maximizing profits and social performance. Journal of Management Studies. 43(1), 75-92. DOI: https://doi.org/10.1111/j.1467-6486.2006.00583.x

[18] Burke, L., Logsdon, J.M., 1996. How corporate so-cial responsibility pays off. Long Range Planning. 29(4), 495-502.

[19] Jamali, D., 2007. The case for strategic corporate so-cial responsibility in developing countries. Business and Society Review. 112(1), 1-27. DOI: https://doi.org/10.1111/j.1467-8594.2007.00284.x

[20] Tichy, N.M., McGill, A.R., Clair, L.S., 1997. Corpo-rate global citizenship: Doing business in the public eye. San Francisco, CA: The New Lexington Press.

[21] Catalão-Lopes, M., Pina, J.P., Branca, A.S., 2016., Social responsibility, corporate giving and the tide. Management Decision. 54(9), 2294-2309. DOI: https://doi.org/10.1108/MD-12-2015-0553

[22] Acabado, D., Branca, A.S., Catalão-Lopes, M., et al., 2020. Do distinct CSR Categories have distinct de-terminants? The roles of Market Structure and Firm Size. European Management Review. 17(1), 5-17. DOI: https://doi.org/10.1111/emre.12341

[23] Zasuwa, G., 2016. Do the ends justify the means? How altruistic values moderate consumer responses to corporate social initiatives. Journal of Business Research. 69(9), 3714-3719. DOI: https://doi.org/10.1016/j.jbusres.2016.03.034

[24] Berglind, M., Nakata, C., 2005. Cause-related mar-keting: More buck than bang? Business Horizons. 48(5), 443-453. DOI: https://doi.org/10.1016/j.bushor.2005.04.008

[25] Kim, S., Lee, Y.J., 2012. The complex attribution process of CSR motives. Public Relations Review. 38(1), 168-170. DOI: https://doi.org/10.1016/j.pubrev.2011.09.024

[26] Melero, I., Montaner, T., 2016. Cause-related mar-keting: An experimental study about how the product type and the perceived fit may influence the consum-er response. European Journal of Management and Business Economics. 25(3), 161-167.

[27] Deng, X., Xu, Y., 2017. Consumers’ responses to cor-porate social responsibility initiatives: The mediating role of consumer-company identification. Journal of Business Ethics. 142(3), 515-526.

[28] Brown, T.J., Dacin, P.A., 1997. The company and the product: Corporate associations and consumer prod-uct responses. Journal of Marketing. 61(1), 68-84. DOI: https://doi.org/10.1177/002224299706100106

[29] Creyer, E.H., Ross, W.T., 1996. The impact of corpo-rate behavior on perceived product value. Marketing Letters. 7(2), 173-185.

[30] Barone, M.J., Miyazaki, A.D., Taylor, K.A., 2000. The influence of cause-related marketing on con-sumer choice: Does one good turn deserve another? Journal of the Academy of Marketing Science. 28(2), 248-262.

[31] Sen, S., Bhattacharya, C.B., 2001. Does doing good always lead to doing better? Consumer reactions to corporate social responsibility. Journal of Marketing Research. 38(2), 225-243. DOI: https://doi.org/10.1509/jmkr.38.2.225.18838

[32] McWilliams, A., Siegel, D.S., 2011. Creating and capturing value: Strategic corporate social responsi-bility, resource-based theory, and sustainable com-petitive advantage. Journal of Management. 37(5), 1480-1495. DOI: https://doi.org/10.1177/0149206310385696

[33] Levy, R., 1999. Give and take: A candid account of corporate philanthropy. Boston, MA: Harvard Busi-ness School Press.

[34] Choi, S., Ng, A., 2011. Environmental and economic dimensions of sustainability and price effects on con-sumer responses. Journal of Business Ethics. 104(2), 269-282.

[35] Tian, Z., Wang, R., Yang, W., 2011. Consumer re-sponses to corporate social responsibility (CSR) in China. Journal of Business Ethics. 101(2), 197-212.

[36] Olsen, M.C., Slotegraaf, R.J., Chandukala, S.R., 2014. Green claims and message frames: how green new products change brand attitude. Journal of Mar-keting. 78(5), 119-137.

[37] Torelli, C.J., Monga, A.B., Kaikati, A.M., 2012. Do-ing poorly by doing good: Corporate social respon-sibility and brand concepts. Journal of Consumer Research. 38(5), 948-963.

[38] Ryals, L., Wilson, H., 2005. Experimental methods in market research: From information to insight. Inter-national Journal of Market Research. 47(4), 347-366. DOI: https://doi.org/10.1177/147078530504700402

[39] Lusk, J.L., Shogren, J.F., 2007. Experimental auc-tions: Methods and applications in economic and marketing research. In Experimental Auctions. Cam-bridge University Press. DOI: https://doi.org/10.1017/cbo9780511611261[

[40] MacFie, H., 2007. Consumer-led food product devel-opment. Cambridge: Woodhead Publishing Limited.

[41] Holbrook, M., Howard, J., 1977. Frequently Purchased Nondurable Goods and Services. In Selected Aspects of Consumer Behavior, Robert Ferber, ed., Washington, DC: National Science Foundation. pp. 189-222.

[42] Wagner, T., Lutz, R.J., Weitz, B.A., 2009. Corporate hypocrisy: Overcoming the threat of inconsistent corporate social responsibility perceptions. Journal of Marketing. 73, 77-91.

[43] Magistris, T., Del Giudice, T., Verneau, F., 2015. The effect of information on willingness to pay for canned tuna fish with different corporate social re-sponsibility (CSR) certification: A Pilot study. Jour-nal of Consumer Affairs,. 49(2), 457-471. DOI: https://doi.org/10.1111/joca.12046

[44] Ding, M., 2007. An incentive-aligned mechanism for conjoint analysis. Journal of Marketing Research. 44(2), 214-223. DOI: https://doi.org/10.1509/jmkr.44.2.214

[45] Kothari, C.R., 2004. Research methodology: Meth-ods and techniques. New Age International.

[46] Andreu, L., Casado-Díaz, A.B., Mattila, A.S., 2015. Effects of message appeal and service type in CSR communication strategies. Journal of Business Re-search. 68(7), 1488-1495. DOI: https://doi.org/10.1016/j.jbusres.2015.01.039

[47] Kotler, P., Keller, K.L., 2015. Marketing manage-ment, global edition. Pearson Education UK.

[48] Malmström, L., Sevilla, I.A., 2014. Young consum-ers' perception of corporate social responsibilty (CSR) and the way they are being communicated. BSc The-sis, Luleå University of Technology.

Downloads

How to Cite

Ribeiro, A. C., Catalão-Lopes, M., & Costa, A. S. (2022). Corporate Social Responsibility and Consumers’ Reaction: An Experiment. Journal of Sustainable Business and Economics, 5(3), 1–11. https://doi.org/10.30564/jsbe.v5i3.13

Issue

Vol. 5 , Iss. 3 (July 2022)

Article Type

Article

License

Copyright © 2022 Adriana C. Ribeiro, Margarida Catalão-Lopes, Ana S. Costa

Creative Commons License

This is an open access article under the Creative Commons Attribution 4.0 International License.