When Authenticity Backfires: Genuine CSR Intent Could Cause More Harm than Good: An Abstract

Abstract

There are numerous reasons firms engage in CSR activities; however, many firms will at some point, or another experience a publicly known fraud or wrongdoing, which may complicate how individuals perceive firms that have been using CSR. This research questions how individuals will view firms that engage in different types of CSR with various expected benefits when fraud has come to light. When CSR motivations are seen by consumers as profit driven, attitudes are more negative towards the firm, but when motivations appear socially motivated, firm attitudes are more favorable (Becker-Olsen et al. 2006). Additionally, CSR motivations influence consumer perceptions of a firm –firms with low salient benefits from CSR appeared more sincere and had higher evaluations than firms with higher salient CSR benefits. (Yoon, Gürhan-Canli, and Schwarz 2006).

The results suggest that the expected CSR payoffs moderate the moderation of the indirect effect of CSR fraud perceptions on the purchase intention through ethical CSR beliefs by the type of CSR activities. When firms use CSR that is positioned to aid stakeholders outside of the firm coupled with low expected financial benefits, individuals will judge firms more harshly with fraud than if the firm had high expected financial benefits and CSR positioned to benefit those inside or close to the firm. These findings imply that when there is congruence between CSR ethical values and a firm’s CSR motivations, consumers may feel deceived, resulting in a backlash effect. Therefore, firms should be truthful about the real intent of CSR behavior, and subsequently, consumers will not judge those firms as harshly, even if CSR motivations are purely financially driven.