Marketers and investors face a heated, provocative debate over whether excelling in social responsibility initiatives hurts or benefits firms financially. This study develops a theoretical framework ...that predicts (1) the impact of corporate social performance (CSP) on firm-idiosyncratic risk and (2) the role of two strategic marketing levers, advertising and research and development (R&D), in explaining the variability of this impact among different firms. The results show that higher CSP lowers undesirable firm-idiosyncratic risk. Notably, although the salutary impact of CSP is greater in firms with higher (versus lower) advertising, a simultaneous pursuit for CSP, advertising, and R&D is harmful with increased firm-idiosyncratic risk. For theory, the authors advance the literature on the marketing—finance interface by drawing attention to the risk-reduction potential of CSP and by shedding new light on some critical but neglected roles of strategic marketing levers. They also extend CSP research by moving away from the long-fought battle for a universal CSP impact and toward a finer-grained understanding of when some firms derive more risk-reduction benefits from CSP. For practice, the results indicate that the "goodwill refund" of CSP is not unconditional. They also empower marketers to communicate more effectively with investors (i.e., doing good to better manage the risk surrounding firm stock prices).
This research builds on the complementary corporate social responsibility (CSR) literatures in strategy and marketing to provide insight into the efficacy of CSR as a challenger's competitive weapon ...against a market leader. Through an investigation of a real-world CSR initiative, we show that the challenger can reap superior business returns (i.e., more positive attitudinal and behavioral outcomes) among consumers who had participated in its CSR initiative, relative to those who were merely aware of the initiative. Specifically, participant consumers demonstrate the desired attitudinal and behavioral changes in favor of the challenger, regardless of their affective trust in the leader, whereas aware consumers' reactions become less favorable as their affective trust in the leader increases. Furthermore, participant consumers, but not aware ones, form a communal, trust-based bond with the challenger.
This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors.
This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors.
Corporate social responsibility (CSR) continues to gain attention atop the corporate agenda and is by now an important component of the dialogue between companies and their stakeholders. ...Nevertheless, there is still little guidance as to how companies can implement CSR activity in order to maximize returns to CSR investment. Theorists have identified many company-favoring outcomes of CSR; yet there is a dearth of research on the psychological mechanisms that drive stakeholder responses to CSR activity. Borrowing from the literatures on meansend chains and relationship marketing, we propose a conceptual model that explains how CSR provides individual stakeholders with numerous benefits (functional, psychosocial, and values) and how the type and extent to which a stakeholder derives these benefits from CSR initiatives influences the quality of the relationship between the stakeholder and the company. The paper discusses the implications of these insights and highlights a number of areas for future research.
By engaging in corporate social responsibility (CSR) activities, companies can not only generate favorable stakeholder attitudes and better support behaviors (e.g. purchase, seeking employment, ...investing in the company), but also, over the long run, build corporate image, strengthen stakeholder–company relationships, and enhance stakeholders' advocacy behaviors. However, stakeholders' low awareness of and unfavorable attributions towards companies' CSR activities remain critical impediments in companies' attempts to maximize business benefits from their CSR activities, highlighting a need for companies to communicate CSR more effectively to stakeholders. In light of these challenges, a conceptual framework of CSR communication is presented and its different aspects are analyzed, from message content and communication channels to company‐ and stakeholder‐specific factors that influence the effectiveness of CSR communication.
This study examines frontline employee responses to corporate social responsibility (CSR) using a multisourced data set at a Global 500 financial services company. The authors find that frontline ...employees identify with the organization (i.e., organizational identification) and with customers (i.e., employee–customer identification) as a function of how much the employees perceive management and customers (respectively) to support the company’s CSR activities. However, these respective effects are stronger among employees for whom CSR is already tied to their sense of self (i.e., CSR importance to the employee). In addition, both organizational identification and employee–customer identification are related to supervisor-rated job performance; however, only the effect of employee–customer identification is mediated by customer orientation, suggesting that these two targets of identification manifest through distinct mechanisms. The research empirically addresses the open questions of whether and when CSR can yield observable changes in employee behavior and alerts researchers to a novel target of identification for frontline employees.
This paper examines how employees react to their organizations' corporate social responsibility (CSR) initiatives. Drawing upon research in internal marketing and psychological contract theories, we ...argue that employees have multi-faceted job needs (i.e., economic, developmental, and ideological needs) and that CSR programs comprise an important means to fulfill developmental and ideological job needs. Based on cluster analysis, we identify three heterogeneous employee segments, Idealists, Enthusiasts, and Indifferents, who vary in their multi-faceted job needs and, consequently, their demand for organizational CSR. We further find that an organization's CSR programs generate favorable employee-related outcomes, such as job satisfaction and reduction in turnover intention, by fulfilling employees' ideological and developmental job needs. Finally, we find that CSR proximity strengthens the positive impact of CSR on employee-related outcomes. This research reveals significant employee heterogeneity in their demand for organizational CSR and sheds new light on the underlying mechanisms linking CSR to employee-related outcomes.
Although prior research has addressed the influence of corporate social responsibility (CSR) on perceived customer responses, it is not clear whether CSR affects market value of the firm. This study ...develops and tests a conceptual framework, which predicts that (1) customer satisfaction partially mediates the relationship between CSR and firm market value (i.e., Tobin's q and stock return), (2) corporate abilities (innovativeness capability and product quality) moderate the financial returns to CSR, and (3) these moderated relationships are mediated by customer satisfaction. Based on a large-scale secondary data set, the results show support for this framework. Notably, the authors find that in firms with low innovativeness capability, CSR actually reduces customer satisfaction levels and, through the lowered satisfaction, harms market value. The uncovered mediated and asymmetrically moderated results offer important implications for marketing theory and practice.
In today's market environment, corporate social responsibility (CSR) represents a high-profile notion that has strategic importance to many companies. By dedicating ever-increasing amounts to cash ...donations, in-kind contributions, cause marketing, and employee volunteerism programs, companies are acting on the premise that CSR is not merely the "right thing to do" but also "the smart thing to do." This research investigates the linkage between CSR and firm market value with a longitudinal, archival data set. Given that firms are not the same in their execution, support, and exploitation of CSR initiatives in the marketplace, the authors predict that companies may generate different (i.e., positive, nonsignificant, and negative) market returns from CSR under different conditions. Specifically, this article asks the following questions: (1) Under what conditions do CSR initiatives result in positive financial performance? and (2) Does customer satisfaction matter in the relationship between CSR and firm performance? The authors develop and test a conceptual model that proposes that CSR initiatives enable firms to build a base of satisfied customers, which in turn contributes positively to market value. Based on multiple secondary data sets (e.g., Fortune's "America's Most Admired Companies," the American Customer Satisfaction Index, Compustat) that include ratings of large companies and structural equation modeling methodologies, the results show support for the CSR customer satisfaction firm market value causal linkages. Specifically, the authors find that customer satisfaction partially mediates the relationship between CSR and market value. Furthermore, they establish the boundary conditions under which firms may derive positive or negative market value from CSR. Firms that have better inside-out corporate abilities (i.e., product quality and innovativeness) to begin with tend to generate more market value from outside-in strategic initiatives (i.e., CSR programs). Conversely, firms that exhibit poorer corporate abilities may find that CSR actually harms customer satisfaction and, because of the lowered satisfaction, decreases their stock performance. The finding that CSR contributes positively to market value suggests that managers can obtain competitive advantages and reap more financial benefits from investing in CSR. However, the data also reveal a previously neglected "dark side" of CSR. That is, CSR actually reduces customer satisfaction levels in firms with low innovativeness capability and, through this negative impact, harms firm market value. Thus, firms need to ensure that they are perceived as innovative and as makers of high-quality products before they undertake major CSR initiatives. PUBLICATION ABSTRACT
This paper examines the effects of employees’ sense that they work for a purpose-driven company on their workplace sustainability behaviors. Conceptualizing corporate purpose as an overarching, ...relevant, shared ethical vision of why a company exists and where it needs to go, we argue that it is particularly suited for driving employee sustainability behaviors, which are more ethically complex than the types of employee ethical behaviors typically examined by prior research. Through four studies, two involving the actual employees of construction companies, we demonstrate that purpose drives the sustainability behaviors of employees by causing them to take psychological ownership of sustainability. In addition, we show that the sustainability-enhancing effect of purpose is stronger when employees perceive that they have higher autonomy in enacting their sustainability actions and for those employees for whom being moral is more central to their sense of self.
In this article, the authors try to determine why and under what conditions consumers enter into strong, committed, and meaningful relationships with certain companies, becoming champions of these ...companies and their products. Drawing on theories of social identity and organizational identification, the authors propose that strong consumer-company relationships often result from consumers' identification with those companies, which helps them satisfy one or more important self-definitional needs. The authors elaborate on the nature of consumer-company identification, including the company identity, and articulate a consumer-level conceptual framework that offers propositions regarding the key determinants and consequences of such identification in the marketplace.
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