Lecture 6/7: Corporate social responsibility

Question 1

What is CSR?

Answer 1

Corporate social responsibility: a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders

It is often used as an umbrella term that encompasses a range of ethical discourses and practices including business ethics, corporate philanthropy, and corporate citizenship

Question 2

What are the objectives of CSR?

Answer 2

Organizations aim to balance:
- Economic objectives
- Social objectives
- Environmental objectives

Question 3

What is the CSR triple bottom line?

Answer 3

People (social performance): all social and labor issues both inside and outside the organization

Planet (ecological): integrating environmental care into business operations

Profit (financial): generating financial returns for the organization and shareholders

Question 4

CSR responsibilities

Answer 4

Philanthropic = be a good corporate citizen, desired by society

Ethical = do what is just and fair, avoid harm, expected by society

Legal = obey laws and regulations, required by society

Economic = be profitable, required by society

Question 5

What is CSR in practice?

Answer 5

• Care for the environment
• Sustainability of Products
• Diversity
• Relations with the local community
• Relations with shareholders
• Relations with suppliers
• Social impact
• Relations with employees

Question 6

Advantages of CSR?

Answer 6

• Acquiring legitimacy
• Protecting the public perception of the company
• Gaining competitive advantage through innovation
• Providing for consumer demand
• Changes in consumers’ attitudes

Question 7

What is greenwashing?

Answer 7

High consumer demand for greener business gives rise to a phenomenon called greenwashing
- Businesses deliberately present their activities as “greener” or as more socially responsible than they actually are
- Consumers find a difference between rhetoric (i.e. how things are communicated) and reality
Pinkwashing, rainbowwashing…

Question 8

When it comes to CSR, but also in the case of more negative events, consumers are likely to consider what are the motivations an organizations has to engage in a certain behavior. What are the different kinds of attributions?

Answer 8

Internal = perception that an event or behavior is caused by internal factors

External = perception that an event or behavior is caused by situational factors

Question 9

Motives of CSR

Answer 9

Firm-serving = Organization is worried about its own outcomes (E.g. maximizing profit, attracting new customers) - Also called “self-centered”

Public-serving = Organization is concerned about collective goals (e.g. welfare community, environmental protection) - Also called “other-centered” or “altruistic”

Question 10

An organization’s identity; What are the 6 C’s?

Answer 10

Character = what we are, without any doubt
Culture = what we feel like we are
Conceptualization = what we are seen as
Covenant = what is seen and expected
Constituencies = whom we seek to serve
Communication = what we say we are

Question 11

Different ideas about identity

Answer 11

Balmer, 2008:
Corporate identity: “character” in the previous list (what we are, without any doubt), “actual identity”

Organizational identity = perception of the organization from internal stakeholders

Brown, 2006:
Intended image = perception of the organization from external stakeholders
Reputation = mental association held by external stakeholders

Hildebrand et al. 2011:
Actual identity = how the company actually is
Intended identity = company’s ideal identity, what it aspires towards
Perceived identity = how a company is perceived from the inside/outside

Question 12

CSR and stakeholders: What are the positive outcomes?

Answer 12

Consumers are happy to pay more for sustainable products
Companies who engage in CSR can recruit the best candidates
However, question of identities:
o Do consumers identify with the company?
o Do consumers identify with the cause?

Question 13

CSR and reputation

Answer 13

CSR can be beneficial for the reputation of an organization if the organization uses CSR to improve the identification of stakeholders to them by signalling values: e.g. making product more sustainable could make an organization look better in the eyes of consumers who care about sustainability

Question 14

Climate crisis and CSR: Two streams of CSR

Answer 14

Moral = CSR as a way to fulfil businesses’ commitment to economic development while simultaneously improving the quality of life of the workforce, their families, the community, and society at large. Development and human well-being are part of the CSR agenda
Businesses engage in CSR because it is “the right thing to do” or they are motivated by intrinsic factors (e.g. ethical values and moral leadership)

Strategic = CSR is more focused on the strategic implications of CSR for corporations and less on its effects for society
Businesses engage in CSR because of extrinsic motivators (e.g. market and institutional pressures) and expected benefits (e.g. profits, increased employee commitment, customer loyalty)

Question 15

Critics to CSR in a time of climate crisis

Answer 15

Short term CSR action are ineffective if not dangerous

Cause-related marketing campaigns often associated with CSR efforts allow organizations to make a profit due to global social problems (i.e. limited safe drinking water) especially in developing countries
CSR can function as a depoliticizing marketing practice that cements the role and power of corporate actors without delivering real improvements to people and communities

Question 16

Shift in the view of what is CSR communication

Answer 16

Communication is more than a tool to craft a positive corporate image so as to gain or protect legitimacy

Question 17

From CSR to corporate social responsiveness

Answer 17

Responsiveness requires communication:
“Responsiveness concerns the relative permeability of the organization’s boundaries and its willingness and ability to anticipate and adjust to society’s changing character, needs, and values. In this way responsive organizations are able to be more socially responsible by virtue of their willingness to hear and respond to social needs, standards, and values”

Question 18

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: What is the Theory of the firm perspective on CSR?

Answer 18

CSR could be an integral part of differentiation strategies either directly through product features or indirectly through reputation and brand image

Question 19

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: What is the Supply and Demand theory of CSR?

Answer 19

firms should only supply CSR that consumer, and other stakeholders, demand

Question 20

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: What is the Consumer-company congruence (C-C-congruence)?

Answer 20

align manager and consumer perspectives in strategic CSR management

Question 21

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: What is the objective of this study?

Answer 21

1. Create a model to define and characterize CSR supply aimed at the ethical consumer market
2. Empirically test which CSR characteristics consumers would truly value to create an impact on purchase intention

Which CSR characteristics lead consumers to choose a certain business/brand/product/service instead of another

Question 22

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: CSR policy orientation + Theory

Answer 22

Weather a firm’s CSR value orientations echo consumer values and concerns

Social identity theory: explores the phenomenon of the “ingroup” and “outgroup”
People tend to adopt the identity of the group they belong to or are characterized in
Choosing ethical products from a specific company implies that customers endorse the company’s CSR policy orientation and identify with them
= In group identification

Question 23

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: CSR stakeholder emphasis + Theory

Answer 23

Firms’ intention to attach importance and prioritize its responsibility to meet key stakeholder group’s CSR expectations

Stakeholder salience theory: stakeholder salience is based on power, legitimacy, and urgency
In strategic CSR management, how a firm considers stakeholders must be linked with stakeholders’ CSR interests

Question 24

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: CSR fit with business + Theory

Answer 24

Fit of CSR means that a firm’s strategic CSR plan is determined by its core competencies and organizational capacities and its ability to excel in its efforts

Cognitive dissonance theory: a person whose private beliefs or behaviors do no align with public actions experience cognitive dissonance
- Whenever the fit is low = more cognitive resources are needed to process information
- CSR fit creates a perception of comfort by avoiding dissonance

Question 25

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: CSR action style + Theory

Answer 25

Proactive CSR: commitment to social good exceeds legal compliance and minimal stakeholder expectations

Reactive CSR: only does CSR to meet laws and regulations

Inactive CSR: do nothing or do the minimum

Counteractive CSR: use strategies to oppose neutralize or mitigate any damaging effect of criticisms

By doing CSR (in the different styles) a corporation is creating associations (positive/negative) on stakeholders’ minds

Attribution theory: people tend to derive causal explanations for events
e.g. proactive actions can lead to positive attributions of underlying motives, as consumers believe proactive CSR initiatives are more genuine and value-driven

Question 26

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: CSR verification

Answer 26

Basically means where the CSR information comes from
- Internal – e.g. reports
- External – third parties

Question 27

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: Trust production

Answer 27

Clear, honest and effective communication of CSR performance plays a vital role in building trust between firms and consumers

Question 28

The role of biases

Answer 28

Social desirability = Respondents give answers to questions that they believe will make them look good to others, concealing their true opinions or experiences

Cynicism = Scepticism towards CSR/green/sustainable firm strategies

Question 29

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: Method

Answer 29

24 scenarios (16 CSR attributes identifies in the framework + non-CSR attributes)

8 choice tasks per respondent
“another hotel” as a possible answer

Question 30

Kuokkanen and Sun, 2019 | CSR management to impact consumer choice: Results

Answer 30

Only philanthropy has a significant (and negative) influence on product/service choice favorable to CSR supplier -> Donating money (cause-related marketing) does not seem to benefit corporations in terms of consumer choice

Emphasis on local communities and the environment lead to product/service choice favorable to CSR supplier, whilst focus on consumer detract from it

CSR fit (high or low) does not influence consumer choice

Both proactive and reactive CSR leads to favorable consumer choices -> even a reactive approach creates improvement, therefore it is important for organizations to do some sort of CSR

Internal sources of CSR communication leads to unfavorable consumer choice of CSR favorable supplier; the opposite happen for external sources

Question 31

Orazi & Chan, 2018 | Information specificity influences consumer evaluations: Proactive and Reactive CSR

Answer 31

Proactive = brand who use CSR as a positioning tool. Sustainability is a core value, they are less likely to greenwash

Reactive = employs CSR to correct for problems in its image. This type of communication is more likely to be (perceived as) greenwashing
- But this is also what most companies do, and sometimes they are also honest

Question 32

Orazi & Chan, 2018 | Information specificity influences consumer evaluations: What does this research is about?

Answer 32

The paper studies the relationship between vagueness (or detailedness) of CSR messages and their disconfirmation

Question 33

Orazi & Chan, 2018 | Information specificity influences consumer evaluations: Results

Answer 33

When environmental claims are specific, specific (vs. vague) disconfirming information will lead to lower
(a) brand attitudes and
(b) purchase intentions, whereas when environmental claims are vague there will be no difference on the basis of the specificity of external disconfirming information.

H2: When environmental claims are specific, specific (vs. vague) disconfirming information will lead to
(a) higher green skepticism and
(b) lower corporate credibility, whereas when environmental claims are vague there will be no difference on the basis of the specificity of external disconfirming information.

If the objective is limiting purchase intention or brand attitude, it’s always best to counter a specific claim with a specific disconfirmation. A vague message is more difficult to debunk (with the objective of limiting purchase intention/brand attitude)

The double mediation suggests that countering a vague message with a vague disconfirmation has an indirect effect on purchasing intention/brand attitude. Countering a vague message with a vague disconfirmation = mild effect on increasing people’s skepticism of the claim, and eventually purchase intention/brand attitude