Consumer Skepticism About CSR Motives of Companies (Skarmeas and Leonidou)
Elwin Poortman, Analyst, Netherlands, Premium Member
Businesses nowadays monitor and measure risks to which they are exposed to. One of these risks relate to organizational reputation damage that arise from CSR activities.
If companies engage in CSR initiatives, this may carry substantial risks with regard to reputational damage. Due to reported incidents on corporate misconduct, consumers may doubt the extent to which companies are internally motivated to live up to their professed CSR standards.
As a result, consumer skepticism towards corporate social involvement is on the rise. Skarmeas and Leonidou (2013) distinguish different kinds of motives upon which corporate social responsibility programs are constructed (seen from the perspective of the consumer). These 4 distinctive underlying motives towards CSR relate differently towards the concept of consumer skepticism.
- EGOISTIC DRIVEN MOTIVES are defined as beliefs that a company is exploiting rather than supporting the cause. This embodies the perception that a company is preoccupied with its own interest. The findings suggest that consumer skepticism increases when a company applies egoistic driven CSR motives, therefore this motive can be harmful to a company’s well-being.
- VALUE-DRIVEN MOTIVES are defined as beliefs that a company engages in CSR activities because of its moral, ethical and societal ideas. Consumers reason that a company is acting out of character rather than a pursuit of own interests. The findings suggest that consumer skepticism decreases when this motive is applied, therefore making this motive favorable with regard to CSR activities.
- STRATEGIC-DRIVEN MOTIVES are defined as beliefs that a company can achieve its business objectives by contributing to environmental, social & governance related initiatives. The findings suggest that no correlation exists between consumer skepticism and strategic-driven motives, meaning that this motive is neither harmful nor beneficial.
- STAKEHOLDER-DRIVEN MOTIVES are defined as beliefs that a company engages in CSR to satisfy their stakeholders.The findings show that consumer scepticism positively correlates with CSR stakeholder-driven motives, and therefore using this motive for a company’s CSR program can be harmful to the company’s reputation.
The aforementioned findings have important implications since knowledge on the damaging consequences of CSR scepticism can boost efforts to minimize this phenomenon. It has become evident that insufficient understanding of consumers’ explanation for corporate involvement may result in an increase in consumer skepticism, rather than creating goodwill. Note that a few negative CSR decisions may overwhelm the cumulative effects of many positive activities. Therefore the authors stress that the success of CSR programs often depends on mitigating the bad rather than on accumulating the good.
Source: Skarmeas, D. & Leonidou, C.N. (2013) When Consumers Doubt, Watch Out! The Role of CSR Skepticism.