Does Doing Good Always Lead to Doing Better?

Consumer Reactions to Corporate Social

Responsibility
Journal of Marketing Research
Sen, S., & Bhattacharya, C. B. (2001)

Marketing
Contents

1. Overview of CSR
2. Research Purpose
3. Conceptual Framework
4. Method
5. Results
6. Discussion
Research Purpose

❖ To understand when, how, and why consumers react to CSR by focusing on both some key moderators of
consumers’ CSR responses and the mechanisms underlying these responses.
What are the focus, causes, and company- and consumer-specific moderators of CSR effects that is
underscored by the equivocal link between a company's CSR actions and aggregate measures of its financial
performance?
How and why their various customer segments are likely to respond to specific CSR actions?
Corporate Social Responsibility
Overview

Corporate social responsibility (CSR) - "status Murray and Vogel (1997) managers are more willing to consume from company after
and activities with respect to [i.e., responsiveness to] exposure to information about its CSR efforts
its perceived societal obligations.”

(1) community support Ellen, Mohr, and Webb (2000) consumers' reactions to a retailer's cause-related marketing
efforts are reflected in consumers' attributions regarding their
own motivations and that of the retailer.
(2) diversity
(3) employee support
(4) environment Creyer and Ross (1997) positive relationship between consumers' preference for a
company's products and the extent to which their perceptions
of that company's ethicality exceed their expectations
(5) non-US operations
(6) product
Brown and Dacin's (1997) CSR's effect on consumers' preference for a new product
company's CSR record creates occurs through consumers' overall evaluation of the company
a general context for itself
consumers" evaluation
Conceptual Framework

• C-C-Congruence: perceived congruence

between consumer’s characters and that
of the company
moderator
• CSR Support: consumer’s support of
Study 1 Study 1 CSR domain
mediator • CSR Domain: the domain of the company's
CSR actions
Indirect effect
Study 2 • CSR-CA Belief: consumers' beliefs
about the relationship between CSR and
a company's ability to make quality
product

moderator
moderator
 Conceptual Framework
C-C Congruence: consumers' reactions to CSR are contingent on the amount of congruence
or overlap they perceive between the company's character, as revealed by its CSR efforts, and
their own.
Prior study (1) focuses on the central role of person-organization(P-O) fit & Prior study (2)
on organizational identification suggests that people often identify with organizations they
belong to
=> company's CSR actions to affect consumers perceptions of C-C congruence

CSR Support: Such perceptions of C-C congruence are likely to vary with consumers'
personal support of the domain of the company's CSR actions (CSR support).

High CSR support -> greater congruence,

low CSR support -> lower congruence between consumer and the company.

H1: A company's CSR initiatives will increase consumers' perceptions of C-C

congruence.

H2: The relationship between a company's CSR initiatives and consumers' C-C
congruence perceptions will be moderated by the consumers' support of the
CSR domain. The CSR-induced changes in C-C congruence perceptions will
be greater for consumers who are more supportive of the CSR domain.
 Conceptual Framework
Effect of CSR on company evaluations:
CSR-induced C-C congruence to have a similarly positive effect on consumers evaluations of
a company because of consumers' greater commitment to it and the self-enhancing effects of
identification.

H3: A company's CSR initiatives will enhance consumers' evaluations of that

company.

H4: The relationship between a company's CSR initiatives and consumers'

evaluations of that company will be moderated by the consumers' support of
the CSR domain. The CSR- induced changes in company evaluations will be
greater for consumers who are more supportive of the CSR domain.

H5: The effect of CSR on consumers' company evaluations will be mediated by

their C-C congruence perceptions for the high-CSR support consumers but not the
low-CSR support ones. In other words, the mediational role of C-C congruence
perceptions in the CSR-company evaluation relationship will be moderated by
consumers' support for the CSR domain.
 Conceptual Framework
Effect of CSR on Product Evaluations: the moderating effect of CSR support

High-CSR support consumers' purchase intentions are distorted away from their CSR-based evaluative context by a perceptual contrast effect, which
results in a CSR-induced reduction in such consumers' intentions to purchase a high-quality product.

H6: The effect of a company's CSR initiatives on consumers' evaluations of its products
will be moderated by the consumers' CSR support. The effect of CSR on the product
evaluations of low-CSR support consumers will parallel its effect on their company
evaluations. However, a company's CSR initiatives will lower high-CSR support
consumers' evaluations of that company's products.
Method
Study 1: Design and Dependent Variables

By using 3 (CSR Record) x 2 (New Product Quality) between-subject design, effects of a real company and
new product information on subjects’ C-C congruence perceptions and their evaluations of this company and
product was examined.

Dependent variable Measure

1. C-C Distance: measured as the Euclidean distance between subjects’ perceived personality profile of the company and of themselves (0 = “perfect fit,” 27
= “no fit”); drawn from P-O fit research
C-C Congruence 2. Identity Overlap: subjects' identification with the company using visual scale (1 = "no overlap," 8 = "complete overlap”); drawn from organizational
identification research

Company evaluation Company Evaluation, overall impression ratings of the company (1 = “very unfavorable,” 7 = “very favorable”)

Product purchase intention Purchase Intention (1 = “not at all likely to buy,” 7 = “very likely to buy”)
Method
Study 1: Stimuli and Procedure
Procedure:
Diversity issues as CSR domain was picked.
• A total of 277 MBA students completed the study as an in-class, paper-and-pencil
exercise.

2-nd initial Company Evaluation rating

1-st initial Company CSR inf-n (positive, Identity Overlap (20 Purchase Intention to
on 5 CA dimensions and 6-item CSR
Evaluation rating negative) adj) new product
dimensions

5 CA dimensions Attributions regarding

Ten item CSR
and 6-item CSR controllability , locus of C-C Distance
support scale
dimensions control, and stability

In the analyses of variance (ANOVAs) used to analyze subjects' reactions to a company's CSR
and new product quality information, each subject constituted a unit of analysis.
: 258 observations
Results
Study 1
4.65

4.40

1. C-C Congruence perception were greater in the positive CSR 3.76

Record condition than in the negative CSR Record one, that
supports H1.
1.81

C-C Distance Identity overlap

Positive CSR Record 7.15 4.52 F(1.170)=70.9, p<.05

Negative CSR Record 10.59 2.78 F(1.170)=41.8, p<.05 12.78

2. C-C Congruence perception of high support subjects were

more sensitive than for low-support ones, which supports H2. 8.36

7.33

6.99

CSR Record
Results
Study 1

1. H3 is supported: A company's CSR initiatives will enhance

consumers' evaluations of that company.
2. H4 is supported: The relationship between a company's CSR 5.27
initiatives and consumers' evaluations of that company will be 5.07 5.13
moderated by the consumers' support of the CSR domain. The
CSR- induced changes in company evaluations will be greater 4.65

for consumers who are more supportive of the CSR domain. 4.56

3. H5 is supported: The C-C congruence of low-support subjects

did not mediate the CSR Record-Company Evaluation
relationship. 3.38
Results
Study 1

• H6 is partially supported: The effect of a

company's CSR initiatives on consumers'
evaluations of its products will be moderated
by the consumers' CSR support. The effect of
3.37
CSR on the product evaluations of low-CSR
3.14
5.50
support consumers will parallel its effect on
5.42 their company evaluations. However, a
2.5 2.5 company's CSR initiatives will lower high-
CSR support consumers' evaluations of that
company's products.
Study 1

• The role of consumers’ support of specific CSR domain and their perception of congruence
between themselves and a company in their company-level reaction to its CSR efforts.
• Positive CSR record decreased the high- and low support subjects' purchase intentions of high
and low quality products, respectively.

When are CSR efforts likely to increase product purchase intentions?

Study 2
H7: The effect of CSR on consumers' product purchase intentions will be
moderated by the CSR domain. Corporate social responsibility initiatives in a
CA-relevant domain (but not in a CA-irrelevant one) will increase consumers
purchase intentions regardless of their CSR support or of product quality.

H8: The effect of CSR on consumers' company evaluations and product purchase
intentions will be moderated by their CSR-CA beliefs. Consumers with trade-off
CSR-CA beliefs will react less positively to a company's CSR initiatives than will
those with win-win CSR-CA beliefs.

H9: The moderating effect of CSR-CA beliefs on the CSR-product purchase

intention relationship will be greater when the product quality is low, the CSR
domain is CA- irrelevant, and consumers' support for this domain is low.
Method
Study 2

- 2 (CSR Domain) x 2 (CSR Record) x 2 (New Product Quality) between-subject design

- 345 students completed the study, 320 observations.

Dependent variable Measure

1. C-C Distance: measured as the Euclidean distance between subjects’ perceived personality profile of the company and of themselves (0 = “perfect fit,” 27
= “no fit”); drawn from P-O fit research
C-C Congruence 2. Identity Overlap: subjects' identification with the company using visual scale (1 = "no overlap," 8 = "complete overlap”); drawn from organizational
identification research

Company evaluation Company Evaluation, overall impression ratings of the company (1 = “very unfavorable,” 7 = “very favorable”)

Product purchase intention Purchase Intention (1 = “not at all likely to buy,” 7 = “very likely to buy”)
Results
Study 2

- CSR Record x CSR Domain interaction was a significant, positive predictor of

Purchase Intentions, which supports H7.
- The nonsignificant CSR Record x CSR-CA Beliefs interaction in the Purchase
Intentions regression indicated that CSR-CA Beliefs is not an overall moderator of the
CSR-Purchase Intentions relationship.Thus H8 is not supported for Purchase
Intentions.
Discussion
1. The effect of CSR on company evaluations. Using real CSR and product information about a company (Study
1), it was shown that the positive effect of CSR initiatives on consumers' company evaluations is mediated by
their perceptions of self-company congruence and moderated by their support of the CSR domain.
2. Consumer’s company evaluations are more sensitive to negative CSR information than positive CSR
information.
3. A company's CSR efforts can affect consumers' intentions to purchase its products both indirectly (Path3) and
directly (Path4). Indirect effect is negative: high-CSR support consumers' purchase intentions are distorted
away from their CSR-based evaluative context by a perceptual contrast effect.
4. Consumers' beliefs about the trade-offs that a company makes between its CSR and CA efforts (i.e., CSR-CA
beliefs) can play a key role in their reactions to CSR, in terms of not only their evaluations of the company and
its products but also, unexpectedly, their C-C congruence perceptions.
Research quesion

• Corporate Social Performance and Firm Performance: Moderating Effect of Firm Size