Skip to main content

Building Trust Between Consumers and Corporations: The Role of Consumer Perceptions of Transparency and Social Responsibility

Abstract

Developing trust in a company is a significant part of building the company-consumer relationship. Previous studies have sought to identify the positive consequences of trust such as loyalty and repurchase, but the question of what builds trust remains largely unanswered. To answer the question, we developed a model that depicts the relationships among transparency, social responsibility, trust, attitude, word-of-mouth (WOM) intention, and purchase intention. An online survey was conducted with a US nationwide sample of 303 consumers, and the data were analyzed using the structural equation modeling method. The results indicated that consumers’ perceptions of a corporation’s efforts to be transparent in the production and labor conditions and to be socially responsible by giving back to the local community directly affected these consumers’ trust and attitudes toward the corporation, and indirectly affected their intentions to purchase from and spread positive WOM about the corporation. Theoretical and practical implications are discussed.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2

Abbreviations

FLA:

Fair labor association

CSR:

Corporate social responsibility

WOM:

Word-of-mouth

TRA:

Theory of reasoned action

CFA:

Confirmatory factor analysis

GFI:

Goodness of fit index

AGFI:

Adjusted goodness of fit index

CFI:

Comparative fit index

NFI:

Normed fit index

SRMR:

Standardized root mean square residual

RMSEA:

Root mean square error of approximation

MIs:

Modification indices

SMC:

Squared multiple correlation

AVE:

Average variance-extracted estimate

References

  1. Alcañiz, E. B., Cáceres, R. C., & Pérez, R. C. (2010). Alliances between brands and social causes: the influence of company credibility on social responsibility image. Journal of Business Ethics, 96(2), 169–186.

    Article  Google Scholar 

  2. Allsop, D. T., Bassett, B. R., & Hoskins, J. A. (2007). Word-of-mouth research: principles and applications. Journal of Advertising Research, 47(4), 398–411.

    Article  Google Scholar 

  3. Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: a review and recommended two-step approach. Psychological Bulletin, 103(3), 411–423.

    Article  Google Scholar 

  4. Arbuckle, J. L. (2009). Amos 18 user’s guide. Chicago: SPSS Inc.

    Google Scholar 

  5. Arnold, D. G., & Hartman, L. P. (2005). Beyond sweatshops: positive deviancy and global labour practices. Business Ethics: A European Review, 14(3), 206–222.

    Article  Google Scholar 

  6. Barone, M. J., Miyazaki, A. D., & Taylor, K. A. (2000). The Influence of cause-related marketing on consumer choice: does one good turn deserve another? Journal of the Academy of Marketing Science, 28(2), 248–262.

    Article  Google Scholar 

  7. Berger, I. E., & Kanetkar, V. (1995). Increasing environmental sensitivity via workplace experiences. Journal of Public Policy & Marketing, 14(2), 205–215.

    Google Scholar 

  8. Castaldo, S., Premazzi, K., & Zerbini, F. (2010). The meaning(s) of trust. A content analysis on the diverse conceptualizations of trust in scholarly research on business relationships. Journal of Business Ethics, 96(4), 657–668.

    Article  Google Scholar 

  9. Chan, R. Y. K. (2001). Determinants of Chinese consumers’ green purchase behavior’. Psychology and Marketing, 18(4), 389–413.

    Article  Google Scholar 

  10. Chaudhuri, A., & Holbrook, M. B. (2001). The chain of effects from brand trust and brand affect to brand performance: the role of brand loyalty. Journal of Marketing, 65(2), 81–93.

    Article  Google Scholar 

  11. Chen, Y., & Chang, C. (2013). Greenwash and green trust: the mediation effects of green consumer confusion and green perceived risk. Journal of Business Ethics, 114(3), 489–500.

    Article  Google Scholar 

  12. Cheng, S., Lam, T., & Hsu, C. H. C. (2005). Testing the sufficiency of the theory of planned behavior: a case of customer dissatisfaction responses in restaurants. International Journal of Hospitality Management, 24(4), 475–492.

    Article  Google Scholar 

  13. Cheng, S., Lam, T., & Hsu, C. H. C. (2006). Negative word-of-mouth communication intention: an application of the theory of planned behavior. Journal of Hospitality and Tourism Research, 30(1), 95–116.

    Article  Google Scholar 

  14. Chu, S., & Kim, Y. (2011). Determinants of consumer engagement in electronic word-of-mouth (eWOM) in social networking sites. International Journal of Advertising, 30(1), 47–75.

    Article  Google Scholar 

  15. Creyer, E. H. (1997). The influence of firm behavior on purchase intention: do consumers really care about business ethics? Journal of Consumer Marketing, 14(6), 421–432.

    Article  Google Scholar 

  16. Delgado-Ballester, E., Munuera-Aleman, J. L., & Yague-GuillenL, M. J. (2003). Development and validation of a brand trust scale. International Journal of Market Research, 45(1), 35–53.

    Google Scholar 

  17. Eisingerich, A. B., Rubera, G., Seifert, M., & Bhardwaj, G. (2011). Doing good and doing better despite negative information? the role of corporate social responsibility in consumer resistance to negative information. Journal of Service Research, 14(1), 60–75.

    Article  Google Scholar 

  18. Erdem, T., & Swait, J. (2004). Brand credibility, brand consideration, and choice. Journal of Consumer Research, 31(1), 191–198.

    Article  Google Scholar 

  19. Esch, F. -R., Langner, T., Schmitt, B. H., & Geus, P. (2006). Are brands forever? how brand knowledge and relationships affect current and future purchases. Journal of Product and Brand Management, 15(2), 98–105.

    Article  Google Scholar 

  20. Evans, J. R., & Mathur, A. (2005). The value of online surveys. Internet Research, 15(2), 195–219.

    Article  Google Scholar 

  21. Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention, and behavior: an introduction to theory and research. Reading, MA: Addison-Wesley.

    Google Scholar 

  22. Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.

    Article  Google Scholar 

  23. Fournier, S. (1998). Consumers and their brands: developing relationship theory in consumer research. Journal of Consumer Research, 24(4), 343–353.

    Article  Google Scholar 

  24. Fournier, S., & Yao, J. L. (1997). Reviving brand loyalty: a reconceptualization within the framework of consumer-brand relationships. International Journal of Research in Marketing, 14(5), 451–472.

    Article  Google Scholar 

  25. Fransson, N., & Gärling, T. (1999). Environmental concern: conceptual definitions, measurement methods, and research findings. Journal of Environmental Psychology, 19(4), 369–382.

    Article  Google Scholar 

  26. Godfrey, P. C., Merrill, C. B., & Hansen, J. M. (2009). The relationship between corporate social responsibility and shareholder value: an empirical test of the risk management hypothesis. Strategic Management Journal, 30(4), 425–445.

    Article  Google Scholar 

  27. Handelman, J. M., & Arnold, S. J. (1999). The role of marketing actions with a social dimension: appeals to the institutional environment. Journal of Marketing, 63(3), 33–48.

    Article  Google Scholar 

  28. Hays, A. F. (2009). Beyond Baron and Kenny: statistical mediation analysis in the new millennium. Communication Monographs, 76(4), 408–420.

    Article  Google Scholar 

  29. Hillenbrand, C., Money, K., & Ghobadian, A. (2011). Unpacking the mechanism by which corporate responsibility impacts stakeholder relationships. British Journal of Management, 24(1), 127–146.

    Article  Google Scholar 

  30. Hoffmann, S., & Hutter, K. (2012). ‘Carrotmob as a new form of ethical consumption. The nature of the concept and avenues for future research’. Journal of Consumer Policy, 35, 215–236.

    Article  Google Scholar 

  31. Hu, L., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: conventional criteria versus new alternatives. Structural Equation Modeling, 6(1), 1–55.

    Article  Google Scholar 

  32. Hustvedt, G., & Kang, J. (2013). Consumer perceptions of transparency: a scale development and validation. Family and Consumer Sciences Research Journal, 41(3), 299–313.

    Google Scholar 

  33. Hyllegard, K. H., Yan, R. -N., Ogle, J. P., & Lee, K. -H. (2012). Socially responsible labeling: the impact of hang tags on consumers attitudes and patronage intentions toward an apparel brand. Clothing and Textiles Research Journal, 30(1), 51–66.

    Article  Google Scholar 

  34. Kitchin, T. (2003). Corporate social responsibility: a brand explanation. Journal of Brand Management, 10(4/5), 312–326.

    Article  Google Scholar 

  35. Klein, J. G., Smith, N. C., & John, A. (2004). Why we boycott: consumer motivations for boycott participation. Journal of Marketing, 68(3), 92–109.

    Article  Google Scholar 

  36. Kline, R. B. (2005). Principles and practice of structural equation modeling. New York: Guilford Press.

    Google Scholar 

  37. Knowles J. (2003), ‘Credit for credibility: leadership in turbulent times’, McKinsey Reports, 25–27.

  38. Krishnamurthy, P., & Sivaraman, A. (2002). Counterfactual thinking and advertising responses. Journal of Consumer Research, 28(3), 650–658.

    Article  Google Scholar 

  39. Lichtenstein, D. R., Drumwright, M. E., & Braig, B. M. (2004). The effect of corporate social responsibility on customer donations to corporate-supported nonprofits. Journal of Marketing, 68(4), 16–32.

    Article  Google Scholar 

  40. Luo, X., & Bhattacharya, C. B. (2006). Corporate social responsibility, customer satisfaction, and market value. Journal of Marketing, 70(4), 1–18.

    Article  Google Scholar 

  41. Macys, (2012). Macy’s fashions support breast cancer awareness. Retailing today. Retrieved from http://www.retailingtoday.com.

  42. Manik, J.A., Greenhouse, S., Yardley, J. (2013). Western firms feel pressure as toll rises in Bangladesh. New York Times. Retrieved fromhttp://www.nytimes.com/2013/04/26/world/asia/bangladeshi-collapse-kills-many-garment-workers.html?smid=pl-share.

  43. Marcketti, S. B., & Shelley, M. C. (2009). Consumer concern, knowledge and attitude towards counterfeit apparel products. International Journal of Consumer Studies, 33(3), 327–337.

    Article  Google Scholar 

  44. Matzler, K., Grabner-Kräuter, S., & Bidmon, S. (2008). Risk aversion and brand loyalty: the mediating role of brand trust and brand affect. Journal of Product & Brand Management, 17(3), 154–162.

    Article  Google Scholar 

  45. Maxham, J. G., I. I. I., & Netemeyer, R. G. (2003). Firms reap what they sow: the effects of shared values and perceived organizational justice on customers’ evaluations of complaint handling. Journal of Marketing, 67(1), 46–62.

    Article  Google Scholar 

  46. McDonald, L. M., & Rundle-Thiele, S. (2008). Corporate social responsibility and bank customer satisfaction. The International Journal of Bank Marketing, 26(3), 170–182.

    Article  Google Scholar 

  47. Micheletti, M., & Stolle, D. (2007). Mobilizing consumers to take responsibility for global social justice. The Annals of the American Academy of Political and Social Science, 611(1), 157–175.

    Article  Google Scholar 

  48. Middlemiss, N. (2003). Authentic not cosmetic: CSR as brand enhancement. Journal of Brand Management, 10(4/5), 353–361.

    Article  Google Scholar 

  49. Monroe, M. C., & Adams, D. C. (2012). Increasing response rates to web-based surveys. Journal of Extension, 50(6), 6–7.

    Google Scholar 

  50. Morgan, R. M., & Hunt, S. D. (1994). The Commitment-Trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38.

    Article  Google Scholar 

  51. Pino, G., Peluso, A. M., & Gianluigi, G. (2012). Determinants of regular and occasional consumers’ intentions to buy organic food. Journal of Consumer Affairs, 46(1), 157–161.

    Article  Google Scholar 

  52. Pivato, S., Misani, N., & Tencati, A. (2008). The impact of corporate social responsibility on consumer trust: the case of organic food. Business Ethics: A European Review, 17(1), 3–12.

    Article  Google Scholar 

  53. Porter, M. E., & Kramer, M. R. (2006). The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78–92.

    Google Scholar 

  54. Ranaweera, C., & Prabhu, J. (2003). The influence of satisfaction, trust and switching barriers on customer retention in a continuous purchasing setting. Journal of Service Management, 14(3/4), 374–395.

    Google Scholar 

  55. Reynolds, M., & Yuthas, K. (2008). Moral discourse and corporate social responsibility reporting. Journal of Business Ethics, 78(1), 47–64.

    Article  Google Scholar 

  56. Richins, M. L. (1983). Negative word-of-mouth by dissatisfied consumers: a pilot study. The Journal of Marketing, 47(Winter), 68–78.

    Article  Google Scholar 

  57. Scholder, E. P., Webb, D. J., & Mohr, L. A. (2006). Building corporate associations: consumer attributions for corporate socially responsible programs. Journal of the Academy of Marketing Science, 34, 147–157.

    Article  Google Scholar 

  58. Sengupta, J., & Johar, G. V. (2002). Effects of inconsistent attributes information on the predictive value of product attributes: toward a resolution of opposing perspectives. Journal of Consumer Research, 29(6), 39–56.

    Article  Google Scholar 

  59. Sichtmann, C. (2007). An analysis of antecedents and consequences of trust in a corporate brand. European Journal of Marketing, 41(9–10), 999–1015.

    Article  Google Scholar 

  60. Singh, J., Iglesias, O., & Batista-Foguet, J. (2012). Does having an ethical brand matter? the influence of consumer perceived ethicality on trust, affect and loyalty. Journal of Business Ethics, 111(4), 541–549. doi:10.1007/s10551-012-1216-7.

    Article  Google Scholar 

  61. Steigrad, A. (2010). CSR enters the spotlight. Women’s wear daily. Retrieved from http://www.wwd.com.

  62. Sweeney, J., & Swait, J. (2008). The effects of brand credibility on customer loyalty. Journal of Retailing and Consumer Services, 15(3), 179–193.

    Article  Google Scholar 

  63. Tan, B. -C. (2011). The roles of knowledge, threat, and PCE on green purchase behaviour. International Journal of Business and Management, 6(12), 14.

    Article  Google Scholar 

  64. Tu, J. I. (2012). Microsoft launches charity for young people. The christian science monitor. Retrieved from http://www.csmonitor.com.

  65. Vermeir, I., & Verbeke, W. (2008). Sustainable food consumption among young adults in Belgium: theory of planned behaviour and the role of confidence and values. Ecological Economics, 64(3), 542–553.

    Article  Google Scholar 

  66. Vlachos, P. A., & Tsamakos, A. (2011). Corporate social responsibility: attributions, loyalty and the mediating role of trust. Journal of the Academy of Marketing Science, 37(2), 170–180.

    Article  Google Scholar 

  67. Waddock, S. (2004). Creating corporate accountability: foundational principles to make corporate citizenship real. Netherlands: Springer.

    Google Scholar 

  68. Waddock, S., & Bodwell, C. (2007). Total responsibility management: the manual. Sheffield: Greenleaf Publishing.

    Google Scholar 

  69. Wang, S., & Huff, L. C. (2007). Explaining buyers’ responses to sellers’ violation of trust. European Journal of Marketing, 41(9/10), 1033–1052.

    Article  Google Scholar 

  70. Willmott, M. (2003). Citizen brands: corporate citizenship, trust and branding. Journal of Brand Management, 10(4/5), 362–369.

    Article  Google Scholar 

  71. Yan, R. -N., Ogle, J., & Hyllegard, K. (2010). The impact of message appeal and message source on Gen Y consumers’ attitudes and purchase intentions toward american apparel. Journal of Marketing Communications, 16(4), 203–224.

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Jiyun Kang.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Kang, J., Hustvedt, G. Building Trust Between Consumers and Corporations: The Role of Consumer Perceptions of Transparency and Social Responsibility. J Bus Ethics 125, 253–265 (2014). https://doi.org/10.1007/s10551-013-1916-7

Download citation

Keywords

  • Social responsibility
  • Transparency
  • Trust
  • Word-of-mouth
  • Sustainable business