The double-edged sword of corporate social responsibility campaigns : examining the effects of congruence and identification in product-failure and moral crises

As consumer expectations of corporate values and ethics increase, more and more companies are engaging in corporate social responsibility (CSR) initiatives. While CSR in general is believed to play a positive role in consumer behavior, the implications of CSR in diverse situations that involve firms has not been studied in great detail. Specifically, little is known about how CSR activities influence consumer judgments in corporate crisis settings such as product-harm and ethical-misdeeds. Thus, in this dissertation, a series of experimental studies uncover the potential role of previous CSR engagement when a company is faced with a corporate crisis, and examine its impact on a consumer’s evaluation of the company. For a systematic and comprehensive understanding of this issue, two types of negative attributes in corporate scandals are distinguished: incompetence versus immorality. The results of the first experimental study suggest that prior CSR initiatives can more effectively protect consumer evaluation of the company when the company is faced with a competence-related negative event than a morality-related negative event. In addition, when the cause of CSR is directly congruent with the issue of the negative event, consumer responses were more negative than when there is no issue congruence between CSR and the negative event. The most interesting aspect is that the issue congruence effects were more negative for an immoral event versus an incompetent event. In other words, when a firm’s moral crisis is associated with a cause in a previously involved CSR initiative, consumers perceive that the firm’s intention of CSR initiative involvement was the least sincere and altruistic. The second study of this dissertation examines how consumer-company identification can protect the company from a corporate crisis in the context of an incompetent versus an immoral crisis situation. The findings of this study reveal that consumers strongly identified with the company perceive the company’s negative information less seriously than weak identifiers with the company regardless of the negative type – incompetence or immorality. Finally, the detailed theoretical and managerial implications of the dissertation and the role of CSR initiatives in crises are discussed.