It's All Good: Corporate Social Responsibility Reduces Negative and Promotes Positive Responses to Service Failures among Value-Aligned Customers

Abstract

The present research investigates whether corporate social responsibility (CSR) reduces negative and promotes positive responses to service failures among value-aligned customers. Study 1 shows that customers are less likely to experience anger and spread negative word of mouth following a service failure when a firm engages in high (donating 15% of profits to environmental conservation) but not low (donating 2% of profits) levels of environmental CSR, but only if customers are high in environmental concern. In Study 2, the authors explore the benefits of CSR policies that target a broader range of beneficiaries versus policies that offer customers a choice over the firm's CSR allocations. Compared with a no-CSR policy, CSR with choice has a stronger effect on customers' emotions and intentions by enhancing perceived value alignment, reducing anger and regret over choosing the firm, and increasing guilt over harming the firm. These emotions subsequently reduce negative word of mouth and increase positive word of mouth and repurchase intentions. The results support the benefits of value-aligned and choice-based CSR policies in the wake of service failures.

Fair or Unfair: The Moderating Effect of Sustainable CSR Practices on Anticipatory Justice Following Service Failure Recovery

“…In line with the literature on service failure response, previous research has explored moderators such as customer emotional responses [101], emotional intelligence [102], relationship quality [73], customer orientation [103], customer attitude toward complaining (ATC) [9], service failure severity [104], and CSR [105]. However, sustainable CSR practice has not yet been examined as a moderator following service failure recovery.…”

The Business Case for Sustainability Reporting: Evidence from Stock Market Reactions

“…By engaging in social and environmentally friendly practices, firms can reap a variety of coveted marketing benefits, such as more favorable product evaluation and purchase behavior; greater customer trust, satisfaction, and loyalty; and increased brand equity (Brown and Dacin 1997; Sen, Du, and Bhattacharya 2016; Simmons and Becker-Olsen 2006; Torres et al 2012). Furthermore, the goodwill generated from a positive sustainability performance can act as an “insurance policy,” mitigating the damage to a firm during times of negative events or crises (Godfrey, Merrill, and Hansen 2009; Joireman et al 2015). Also important, the resource-based view of the firm suggests that a firm's sustainability programs enable it to develop new competencies and capabilities.…”

“…This article focuses on the business case for sustainability reporting by examining both the short- and long-term reactions of a pivotal stakeholder group, investors, to sustainability reports. Specifically, we draw upon multidisciplinary streams of literature on sustainability (Brown and Dacin 1997; Joireman et al 2015; Luo and Bhattacharya 2006; Raghubir et al 2010), marketing communication (Osinga et al 2011; Vakratsas and Ambler 1999), and information disclosure (Healy and Palepu 2001) to argue and show, through an event study, that sustainability reports released by companies are likely to have a significant immediate impact on investors (i.e., abnormal stock returns). Further, the impact of sustainability reports in terms of abnormal stock returns is smaller for firms that communicate their sustainability information through alternative channels prior to the release of reports (i.e., a strong information environment).…”

Does the perception of incongruence hurt more? Customers’ responses to CSR crises affecting the main reputation dimension of a company

“…Consequently, they did not explore the inner state experienced by individuals when a perception of incongruence occurs after a crisis. Instead, consistently with current streams of research on CSR and crises, which focus more significantly on the emotions and inner states of individuals facing a company crisis [e.g., anger and sympathy (Gistri, Corciolani, & Pace, 2018;Grappi & Romani, 2015); anger, regret, and guilt (Joireman, Smith, Liu, & Arthurs, 2015); forgiveness (Tsarenko & Tojib, 2015)], we believe that it is fundamental to also study the inner states of consumers, such as the state of discomfort that we explored in Study 2.…”