Advertisement

Journal of Business Ethics

, Volume 136, Issue 4, pp 759–773 | Cite as

Corporate Social Responsibility Failures: How do Consumers Respond to Corporate Violations of Implied Social Contracts?

  • Cristel Antonia RussellEmail author
  • Dale W. Russell
  • Heather Honea
Article

Abstract

This research documents consumers’ potential to monitor corporations’ License to Operate through their consumption responses to corporate social responsibility failures. The premise is that the type of social contracts or standards in place may determine how consumers, through their individual and collective behaviors, can play a direct role in influencing corporate behavior, when corporations fail to meet social responsibility standards. An experiment conducted with a large sample of consumers in the United States shows that consumers respond differently to a company’s failure in its social responsibilities depending on whether the violated standard is a government mandate or a voluntary commitment and depending on the consumers’ own environmental consciousness. The findings highlight the potential power of individual consumers and consumer collectives in narrowing the governance gaps relative to social and environmental issues and reducing the likelihood of CSR failures.

Keywords

Corporate social responsibility Ethical consumers Individual boycotts Social contract Collective action 

Abbreviations

CSR

Corporate social responsibility

GMOs

Genetically modified organisms

NGOs

Non-governmental organizations

US

United States

References

  1. Adams, M. (2013). YouTube censors ‘Organic Spies’ video exposing Whole Foods employees lying about GMOs. The Natural News, Retrieved July 14, 2014 http://www.naturalnews.com/037410_Organic_Spies_Whole_Foods_censored_video.html.
  2. Agrawal, A., & Lemos, M. C. (2007). A greener revolution in the making? Environmental governance in the 21st century. Environment, 49(5), 37–45.CrossRefGoogle Scholar
  3. Andriof, J., & McIntosh, M. (2001). Perspectives on corporate citizenship. Sheffield: Greenleaf Publishing.Google Scholar
  4. Aubin, D. (2011). Going green, big business hires auditors for proof. Retrieved April 2, 2013 from http://www.reuters.com/article/2011/11/23/us-usa-auditing-green-idUSTRE7AM06020111123.
  5. Aßländer, M. S. (2011). Corporate social responsibility as subsidiary co-responsibility: A macroeconomic perspective. Journal of Business Ethics, 99, 115–128.CrossRefGoogle Scholar
  6. Baron, D. P. (2001). Private politics, corporate social responsibility, and integrated strategy. Journal of Economics & Management Strategy, 10(1), 7–45.CrossRefGoogle Scholar
  7. Behles, D. (2011). Why California failed to meet its RPS target. Hastings West-Northwest Journal of Environmental Law & Policy, 17(2), 163–187.Google Scholar
  8. Bendell, J. (2004). Barricades and boardroom: A contemporary history of the corporate accountability movement. UNRISD Technology, Business and Society. Programme Paper, Number 13.Google Scholar
  9. Bennett, A., & Chakravarti, A. (2008). Self and social signaling explanations for consumption of CSR-associated products. In A. Y. Lee & D. Soman (Eds.), Advances in consumer research (Vol. 35, p. 1010). Duluth, MN: Association for Consumer Research.Google Scholar
  10. Berger, I. E., & Kanetkar, V. (1995). Increasing environmental sensitivity via workplace experiences. Journal of Public Policy & Marketing, 14(2), 205–215.Google Scholar
  11. Bhattacharya, C. B., Korschun, D., & Sen, S. (2009). Strengthening stakeholder–company relationships through mutually beneficial corporate social responsibility initiatives. Journal of Business Ethics, 85, 257–272.CrossRefGoogle Scholar
  12. Biehal, G. J., & Sheinin, D. A. (2007). The influence of corporate messages on the product portfolio. Journal of Marketing, 71(2), 12–25.CrossRefGoogle Scholar
  13. Bigas, H. (2012). The Global Water Crisis: Addressing an Urgent Security Issue. Papers for the InterAction Council, 2011–2012. Hamilton, Canada: UNU-INWEH.Google Scholar
  14. Bloche, M. G. (2002). Trust and betrayal in the medical marketplace. Stanford Law Review, 55, 919–954.CrossRefGoogle Scholar
  15. Bohnet, I., & Baytelman, Y. (2007). Institutions and trust: Implications for preferences, beliefs and behavior. Rationality and Society, 19(1), 99–135.CrossRefGoogle Scholar
  16. Boote, J. (1998). Towards a comprehensive taxonomy and model of consumer complaining behavior. Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior, 11, 140–151.Google Scholar
  17. Brown, T. J., & Dacin, P. A. (1997). The company and the product: Corporate associations and consumer product responses. Journal of Marketing, 61(1), 68–84.CrossRefGoogle Scholar
  18. Buske, L. (2014). Leading Organic Brand, Horizon, Blasted for Betraying Organics. The Cornucopia Institute, Retrieved July 14, 2014 http://www.cornucopia.org/2014/02/leading-organic-brand-horizon-blasted-betraying-organics/.
  19. Caldwell, C., Davis, B., & Devine, J. A. (2008). Trust, faith, and betrayal: Insights from management for the wise believer. Journal of Business Ethics, 84, 103–114.CrossRefGoogle Scholar
  20. CalLaw (2008). Mark Kasky v. Nike, Inc. Retrieved August 11, 2011 from http://www.law.com/regionals/ca/opinions/may/s087859.shtml.
  21. Carrier, J. G. (2012). Introduction. In J. G. Carrier & P. G. Luetchford (Eds.), Ethical consumption (pp. 7–42). New York: Berghahn Books.Google Scholar
  22. Carroll, A. B. (2000). The four faces of corporate citizenship. In J. E. Richardson (Ed.), Business Ethics (pp. 187–191). Guilford, CT: Dushkin/McGraw-Hill.Google Scholar
  23. Corriher, T. C. (2010). Please join the Horizon Milk Boycott and Horizon’s Dirty Tricks. The Health Wyze Report, Retrieved July 12, 2014 http://healthwyze.org/index.php/component/content/article/492-please-join-the-horizon-milk-boycott-and-horizons-dirty-little-tricks.html.
  24. Crane, A., Matten, D., & Moon, J. (2004). Stakeholders as citizens? Rethinking rights, participation, and democracy. Journal of Business Ethics, 53(1/2), 107–122.CrossRefGoogle Scholar
  25. Daviss, B. (1999). Profits from principle: Five forces redefining business. The Futurist, 33(3), 28–33.Google Scholar
  26. Dawkins, J., & Lewis, S. (2003). CSR in stakeholder expectations: And their implication for company strategy. Journal of Business Ethics, 44(2/3), 185–193.CrossRefGoogle Scholar
  27. Detomasi, D. A. (2008). The political roots of corporate social responsibility. Journal of Business Ethics, 82, 807–819.CrossRefGoogle Scholar
  28. Donaldson, T., & Dunfee, T. W. (1999). Ties that Bind. Boston, MA: Harvard Business School Press.Google Scholar
  29. Du, S., Bhattacharya, C. B., & Sen, S. (2007). Reaping relational rewards from corporate social responsibility: The role of competitive positioning. International Journal of Research in Marketing, 24(3), 224–241.CrossRefGoogle Scholar
  30. Dunfee, T. W., & Donaldson, T. (1995). Contractarian business ethics: Current status and next steps. Business Ethics Quarterly, 5(2), 173–186.CrossRefGoogle Scholar
  31. Dunfee, T. W., Smith, N. C., & Ross, W. T, Jr. (1999). Social contracts and marketing ethics. Journal of Marketing, 63(3), 14–32.CrossRefGoogle Scholar
  32. EIU. (2008). Doing Good: Business and The Sustainability Challenge. London, UK: Economist Intelligence Unit.Google Scholar
  33. Experian Marketing Services (2013). Simmons OneView (Fall 2010) [Computer Software]. Retrieved from https://oneview.experian.com.
  34. Feddersen, T. J., & Gilligan, T. W. (2001). Saints and markets: activists and the supply of credence goods. Journal of Economics & Management Strategy, 10(1), 149–171.CrossRefGoogle Scholar
  35. Fishman, C. (2012). The Big Thirst. New York: Free Press.Google Scholar
  36. Folkes, V. S., & Kamins, M. A. (1999). Effects of information about firms ‘ethical and unethical actions on consumers’ attitudes. Journal of Consumer Psychology, 8(3), 243–259.CrossRefGoogle Scholar
  37. Freestone, O. M., & McGoldrick, P. J. (2007). Concerns of the ethical consumer. Journal of Business Ethics, 79, 445–467.CrossRefGoogle Scholar
  38. Friedman, M. (1995). American boycotts in response to rising food prices: Housewives’ protests at the grassroots level. Journal of Consumer Policy, 18(1), 55–72.CrossRefGoogle Scholar
  39. Gereffi, G., Garcia-Johnson R. & Sasser, E. (2001). The NGO industrial complex. Foreign Policy (July/August), 56–65.Google Scholar
  40. Gond, J. P., Kang, N., & Moon, J. (2011). The government of self-regulation: On the comparative dynamics of corporate social responsibility. Economy and Society, 40(4), 640–671.CrossRefGoogle Scholar
  41. Grappi, S., Romani, S., & Bagozzi, R. P. (2013). Consumer response to corporate irresponsible behavior: Moral emotions and virtues. Journal of Business Research, 66(10), 1029–1042.CrossRefGoogle Scholar
  42. Hargrave, T. J., & Van de Ven, A. H. (2006). A collective action model of institutional innovation. Academy of Management Review, 31(4), 864–888.CrossRefGoogle Scholar
  43. Haufler, V. (2001). A public role for private sector: Industry self-regulation in the global economy. Washington, DC: Carnegie Endowment for International Peace.Google Scholar
  44. Hollenbeck, C. R., & Zinkhan, G. M. (2010). Anti-brand communities, negotiation of brand meaning, and the learning process: The case of Wal-Mart. Consumption, Markets, and Culture, 13(3), 325–345.CrossRefGoogle Scholar
  45. Jones, P. (2004). All for one and one for all? Transactions cost and collective action. Political Studies, 52, 450–468.CrossRefGoogle Scholar
  46. Kahan, D. M. (2001). The logic of reciprocity: Trust, collective action, and law. Yale Law School, Public Law Research Paper (31). Social Science Research Network, http://ssrn.com/abstract=361400.
  47. Klein, J. G., & Dawar, N. (2004). Corporate social responsibility and consumers’ attributions and brand evaluations in a product-harm crisis. International Journal of Research in Marketing, 21(3), 203–217.CrossRefGoogle Scholar
  48. Klein, J. G., Smith, C. N., & John, A. (2004). Why we boycott: Consumer motivations for boycott participation. Journal of Marketing, 68(3), 92–109.CrossRefGoogle Scholar
  49. Kozinets, R. V., & Handelman, J. M. (2004). Adversaries of consumption: Consumer movements, activism, and ideology. Journal of Consumer Research, 31(3), 691–704.CrossRefGoogle Scholar
  50. Krause, D. (1993). Environmental consciousness: An empirical study. Environment and Behavior, 25(1), 126–142.CrossRefGoogle Scholar
  51. Lewis, T., & Potter, E. (2011). Ethical consumption: A critical introduction. London: Routledge.Google Scholar
  52. Luther, D. (2013). The Grocery Store Blacklist: 12 Food Companies to Avoid. The Organic Pepper, Retrieved July 12, 2014 http://www.theorganicprepper.ca/blacklist-12-food-companies-to-avoid-and-95-sneaky-aliases-04102013.
  53. Maigan, I., & Ferrell, O. C. (2006). Corporate social responsibility and marketing: An integrative framework. Journal of the Academy of Marketing Science, 32(1), 3–19.CrossRefGoogle Scholar
  54. Merriam-Webster (2014). Online Dictionary. http://www.merriam-webster.com/dictionary/affront.
  55. Micheletti, M. (2003). Political virtue and shopping: Individuals, consumerism, and collective action. New York: Palgrave.CrossRefGoogle Scholar
  56. Mohr, L. A., Webb, D. J., & Harris, K. E. (2001). Do consumers expect companies to be socially responsible? The impact of corporate social responsibility on buying behavior. The Journal of Consumer Affairs, 35(1), 45–72.CrossRefGoogle Scholar
  57. Moon, J., Crane, A., & Matten, D. (2005). Can corporations be citizens? Corporate citizenship as a metaphor for business participation in society. Business Ethics Quarterly, 15(3), 429–453.CrossRefGoogle Scholar
  58. Muldoon, A. (2006). Where the green is: Examining the paradox of environmentally conscious consumption. Electronic Green Journal, 23(1), 2–19.Google Scholar
  59. Neiman, P. (2013). A social contract for international business ethics. Journal of Business Ethics, 114, 75–90.CrossRefGoogle Scholar
  60. Niebuhr, R. (1961). Moral Man and Immoral Society. Louisville, KY: Westminster John Knox Press.Google Scholar
  61. Nielsen. (2011). Sustainability Survey: Global Warming Cools off as Top Concern. Retrieved May 12, 2013 from http://www.nielsen.com/us/en/press-room/2011/global-warming-cools-off-as-top-concern.html.
  62. O’Rourke, D. (2003). Outsourcing regulation: Analyzing nongovernmental systems of labor standards and monitoring. The Policy Studies Journal, 31(1), 1–29.CrossRefGoogle Scholar
  63. Olson, M, Jr. (1965). The Logic of Collective Action: Public goods and the theory of groups. Cambridge, MA: Harvard University Press.Google Scholar
  64. Petkoski, D., Warren, D. E., & Laufer, W. S. (2009). Collective strategies in fighting corruption: Some intuitions and counter intuitions. Journal of Business Ethics, 88, 815–822.CrossRefGoogle Scholar
  65. Pohle, G., & Hittner, J. (2008). Attaining sustainable growth through corporate social responsibility. New York: IBM Global Business Services.Google Scholar
  66. Rama, D., Milano, B. J., Salas, S., & Liu, C. (2009). CSR implementation: Developing the capacity for collective action. Journal of Business Ethics, 85, 463–477.CrossRefGoogle Scholar
  67. Robin, D. P., & Reidenbach, R. E. (1987). Social Responsibility, Closing the Gap Between Concept and Application. Journal of Marketing, 51(1), 44–58.CrossRefGoogle Scholar
  68. Romani, S., Grappi, S., & Bagozzi, R. P. (2013). My anger is your gain, my contempt your loss: Explaining consumer responses to corporate wrongdoing. Psychology and Marketing, 30(12), 1029–1042.CrossRefGoogle Scholar
  69. Sanchez, M. J., & Lafuente, R. (2010). Defining and measuring environmental consciousness. Revista Internacional de Sociología, 68(3), 731–755.CrossRefGoogle Scholar
  70. Schüler, D. A., & Christmann, P. (2011). The effectiveness of market-based social governance schemes: The case of fair trade coffee. Journal of Business Ethics, 21(1), 133–156.CrossRefGoogle Scholar
  71. Schwartz, M. S., & Carroll, A. B. (2003). Corporate social responsibility: A three-domain approach. Business Ethics Quarterly, 13(4), 503–530.CrossRefGoogle Scholar
  72. Sen, S., & Bhattacharya, C. B. (2001). Does doing good always lead to doing better? Consumer reactions to corporate social responsibility. Journal of Marketing Research, 38(2), 43–62.CrossRefGoogle Scholar
  73. Sen, S., Gurhan-Canli, Z., & Morwitz, V. (2001). Withholding consumption: A social dilemma perspective on consumer boycotts. Journal of Consumer Research, 28, 399–417.CrossRefGoogle Scholar
  74. Shamir, R. (2008). The age of responsibilization: On market-embedded morality. Economy and Society, 37(1), 1–19.CrossRefGoogle Scholar
  75. Shen, J., Sakata, Y., & Hashimoto, Y. (2008). Is individual environmental consciousness one of the determinants in transport mode choice? Applied Economics, 40, 1229–1239.CrossRefGoogle Scholar
  76. Shepherd, S., & Kay, A. C. (2012). On the perpetuation of ignorance: System dependence, system justification, and the motivated avoidance of sociopolitical information. Journal of Personality and Social Psychology, 102(2), 264–280.CrossRefGoogle Scholar
  77. Silverstein, K, (2014). Is the nation’s ‘greenest’ utility green enough? Boulder says no. The Christian Science Monitor, Retrieved July 20, 2014 from http://www.csmonitor.com/Environment/Energy-Voices/2014/0612/Is-the-nation-s-greenest-utility-green-enough-Boulder-says-no.
  78. Sitkin, S. B., & Roth, N. L. (1993). Explaining the limited effectiveness of legalistic “Remedies” for trust/distrust. Organization Science, 4(3), 367–392.CrossRefGoogle Scholar
  79. Smith, N. C. (1995). Marketing strategies for the ethics era. Sloan Management Review, 36(4), 85–97.Google Scholar
  80. Smith, N. C., Palazzo, G., & Bhattacharya, C. B. (2010). Marketing’s consequences: Stakeholder marketing and supply chain corporate social responsibility issues. Business Ethics Quarterly, 20(4), 617–641.CrossRefGoogle Scholar
  81. Steiner, G. A. (1972). Social policies for business. California Management Review, 15(20), 17–24.CrossRefGoogle Scholar
  82. Stern, P. C. (2000). Toward a coherent theory on environmentally significant behavior. Journal of Social Issues, 6, 407–424.CrossRefGoogle Scholar
  83. Taneja, S. S., Taneja, P. K., & Gupta, R. K. (2011). Researches in corporate social responsibility: A review of shifting focus, paradigms, and methodologies. Journal of Business Ethics, 101(3), 343–364.CrossRefGoogle Scholar
  84. Thompson, C. J., Rindfleisch, A., & Arsel, Z. (2006). Emotional branding and the strategic value of the doppelgänger brand image. Journal of Marketing, 70, 50–64.CrossRefGoogle Scholar
  85. Trudel, R., & Cotte, J. (2008). Corporate reputation: Does being ethical pay? The Wall Street Journal (12 May), R1.Google Scholar
  86. Van Aelst, P., & Van Laer, J. (2010). Cyber-protest and civil society: The Internet and action repertoires in social movements. Information, Communication & Society, 13(8), 1146–1171.CrossRefGoogle Scholar
  87. Weaver, G. R., Treviño, L. K., & Cochran, P. L. (1999). Integrated and decoupled corporate social performance: Management values, external pressures, and corporate ethics practices. Academy of Management Journal, 42(5), 539–552.CrossRefGoogle Scholar
  88. Wiener, J. L., & Doescher, T. (1994). Cooperation and expectations of cooperation. Journal of Public Policy & Marketing, 13(2), 259–271.Google Scholar
  89. Windsor, D. (2001). Corporate citizenship: Evolution and interpretation. In J. Andriof & M. McIntosh (Eds.), Perspectives on corporate citizenship (pp. 39–52). Sheffield: Greenleaf.CrossRefGoogle Scholar
  90. Wood, D. J. (1991). Corporate social performance revisited. Academy of Management Review, 16, 691–718.Google Scholar
  91. Worcester, W., & Dawkins, J. (2005). Surveying ethical and environmental attitudes. In R. Harrison, T. Newholm, & D. Shaw (Eds.), The ethical consumer (pp. 199–203). Thousand Oaks, CA: Sage Publications.Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  • Cristel Antonia Russell
    • 1
    Email author
  • Dale W. Russell
    • 2
  • Heather Honea
    • 3
  1. 1.Department of MarketingAmerican UniversityWashingtonUSA
  2. 2.Department of PsychiatryUniformed Services UniversityBethesdaUSA
  3. 3.Department of MarketingSan Diego State UniversitySan DiegoUSA

Personalised recommendations