Corporate Social Responsibility (CSR), Risk Mitigation, Customer Orientation, Benevolence
Business | Business Administration, Management, and Operations
Corporate social responsibility (CSR) positively impacts relationships between firms and customers. Previous research construes this as an outcome of customers’ warm glow that results from supporting firms’ benevolence. The current research demonstrates that beyond warm glow, CSR positively impacts firms’ sales through mitigating their customers’ perceptions of purchase risk. We demonstrate this effect across three conditions in which customers’ perceived risk of purchase is heightened, using both secondary data and two lab experiments. Under conditions of greater purchase risk (i.e., recessions, a service context, and longer-term consumer commitments), CSR positively impacts both sales and customer purchase intentions to a greater extent than in conditions of lower purchase risk. In addition to measuring purchase risk as the mediating process behind these effects, we demonstrate that the effect of CSR on sales is stronger for those CSR activities that signal a stakeholder orientation.
Bhattacharya, A., Good, V., Sardashti, H., & Peloza, J. (2020). Beyond Warm Glow: The Risk-Mitigating Effect of Corporate Social Responsibility (CSR). Journal of Business Ethics. https://doi.org/10.1007/s10551-020-04445-0
Bhattacharya, Abhi; Good, Valerie; Sardashti, Hanieh; and Peloza, John, "Beyond Warm Glow: The Risk-Mitigating Effect of Corporate Social Responsibility (CSR)" (2020). Peer Reviewed Articles. 4.