Professional Documents
Culture Documents
Associate Professor of Marketing, Smeal College of Business, The Pennsylvania State University, 441 Business Building, University Park, PA 16802, United States
b Marriott Professor of Lodging Management, School of Hospitality Management, The Pennsylvania State University, 224 Mateer Building, University Park, PA
16802, United States
Abstract
The researchers investigate how corporate social responsibility (CSR) affects customer response following service failure within the context
of buyerseller relationships. A series of three experiments demonstrate that CSR is more effective under communal (vs. exchange) relationship
norms, consistent with the alignment of CSR with the communal norm of concern for the needs of others. The effectiveness of CSR is also shown
to vary as a function of company motives and CSR framing, serving as theoretically and managerially relevant boundary conditions. Together,
these findings increase our understanding of how and when CSR will have a positive impact on consumers and, in turn, companies via customer
satisfaction and loyalty.
2014 New York University. Published by Elsevier Inc. All rights reserved.
Keywords: Corporate social responsibility; Sustainability; Buyerseller relationship; Service recovery; Customer satisfaction; Customer loyalty
How far that little candle throws his beams! So shines a good
deed in a naughty world. (William Shakespeare, Merchant
of Venice, Act V, Scene I)
In todays competitive marketplace, where consumers have
nearly unlimited choices of merchants and service providers,
building a sustainable relationship with customers becomes
paramount. As marketers search for new ways to build relationships with customers, recent research has suggested that
Corporate Social Responsibility (CSR) programs might be a
key way for companies to attract and retain customers (Sen, Du,
and Bhattacharya 2009) and for retailers to enhance brand image
(Ganesan et al. 2009). Examples of retailers with CSR activities include Publix Supermarkets Inc. (charitable donations to
the United Way), Lowes Home Improvement (partnership with
the American Red Cross to provide disaster relief), McDonalds (support of Ronald McDonald House Charities), and
Marriott UK (carbon footprint reduction and sustainability).
Indeed, CSR has become mainstream in todays corporate world
http://dx.doi.org/10.1016/j.jretai.2014.10.001
0022-4359/ 2014 New York University. Published by Elsevier Inc. All rights reserved.
141
research has suggested that CSR may enhance consumer resistance to negative publicity (Eisingerich et al. 2011; Klein and
Dewar 2004; Yoon, Grhan-Canli, and Schwarz 2006). On the
other hand, CSR could backfire: for example, company behavior
that is inconsistent with CSR could lead to consumer perceptions
of corporate hypocrisy (Wagner, Lutz, and Weitz 2009). Our
research will build on these provocative findings and examine the
impact of CSR on consumer response to service failure, including satisfaction and loyalty intentions. Doing so provides an
arguably strong test of the power of CSR, as well as its potential
role in service recovery, customer satisfaction, and loyalty.
CSR and Relationship Norms
Our research proposes that consumer response to CSR will
depend upon the norms governing the buyerseller relationship.
In communal relationships, members benefit from each other
on the basis of needs or to demonstrate general concern for
each others welfare (Clark 1984). Conversely, in exchange relationships, members benefit each other in response to specific
benefits received in the past or expected in the future (Clark and
Mills 1979; Mills and Clark 1982). Communal and exchange
relationships and their accompanying norms were first identified in the interpersonal relationships literature but have proved
useful in consumer contexts (Aggarwal 2004; Goodwin 1996;
Johnson and Grimm 2010; Wan, Hui, and Wyer 2011). Communal and exchange norms are posited to vary across buyerseller
relationships, due to differences across industry (e.g., medical
vs. financial services) and across firm due to brand positioning
(Aggarwal 2004). For example, marketing communications may
vary in their emphasis on communal versus exchange norms
(e.g., Sheraton Hotels Whos taking care of you? vs. Days
Inn Best value under the sun). Individuals may also vary
in the chronic tendency to adhere to communal and exchange
norms in relationships (referred to as communal and exchange
orientation) (for a recent review, see Clark and Mills 2011).
Given their conceptual equivalence, our research will refer interchangeably to communal consumers as consumers in communal
relationships, guided by communal norms, or high in communal
orientation (and likewise for exchange).
In interpersonal relationships, people use relationship norms
as standards to evaluate others and to decide what is appropriate in certain situations. For example, helping occurs more
in communal than exchange relationships (Bar-Tal et al. 1977;
Clark et al. 1987) and refusing to help makes individuals feel
worse (Williamson and Clark 1989a, 1989b; Williamson et al.
1996). Moreover, individuals in communal (vs. exchange) relationships expect partners to be more responsive to their needs
and to provide more help. Feelings of injustice. . .should be
common when one person willingly neglects the others needs
but . . .should not lead to feelings of injustice in exchange
relationships (Williamson and Clark 1989a, p. 93). Indeed,
the communal orientation scale includes a measure of others
responsiveness (e.g., I believe people should go out of their
way to be helpful, It bothers me when other people neglect my
needs; Clark et al. 1987). Consistent with higher expectations
of partners responsiveness to their needs, individuals felt less
142
et al. 2007), competence may dominate commercial relationships (Aaker, Vohs, and Mogilner 2010)although recent
research argues that their impact may depend upon relationship
norms (Scott, Mende, and Bolton 2013).
Warmth. H1 is based on the premise that CSR enhances
consumer response by improving customers perceptions that
the company is concerned about the needs and welfare of its
customers and society at large. That is, CSR signals a firms
warmtha signal that may be especially important in light of
service failure as consumers seek evidence that the firm does
indeed care for its customers. Indeed, prior research Aaker, Vohs,
and Mogilner (2010) find that consumers associate non-profit
(vs. for-profit) organizations with greater warmth. If so, then we
argue that a company engaging in non-profit activities via CSR
might acquire a stronger association with warmth. However,
consumer response to CSR as a signal of warmth may depend
upon the type of buyerseller relationship. Scott, Mende, and
Bolton (2013) find that consumers in communal relationships
place more emphasis on warmth and therefore interpret seller
signals (in their case, conspicuous consumption) as evidence of
(lack of) warmth. If so, then consumers in communal relationships should be especially inclined to view CSR as a signal of
a firms warmth and their favorable response to CSR should be
mediated by warmth.
Competence. A similar argument seems less likely to hold for
competence. Just as communal consumers are expected to place
more emphasis on warmth, exchange consumers are expected
to place more emphasis on competence and interpret seller signals in terms of competence (Scott, Mende, and Bolton 2013).
However, the signal value of CSR for competence is unclear.
From a definitional standpoint, CSR does not imply competence in the same way that it does warmth. On the one hand,
prior research suggests a halo effect could emerge and CSR
could spill over and affect perceptions of a companys competence (Du, Bhattachrya, and Sen 2007; Judd et al. 2005). On
the other hand, exchange consumers seem unlikely to view CSR
as evidence that a firm is fulfilling its normative obligations
(which implies competence; Maignan and Ferrell 2004; Vaaland,
Heide, and Grnhaug 2008), especially in light of service failure that itself may imply a lack of competence. Indeed, prior
research does not strongly support an association between CSR
and enhanced competence perceptions (Sen and Bhattacharya
2001). [Interestingly, pro-social and ethical behavior is sometimes associated with lack of competence (Aaker, Vohs, and
Mogilner 2010; Lin and Chang 2012; Luchs et al. 2010)but
the conditions for this association would not seem to hold in the
present context.3 ] In sum, these mixed findings suggest that consumer perceptions of a companys competence may be relatively
unaffected by CSR activities. Accordingly,
3 Aaker et al. (2010) find that non-profits are seen as less competent than forprofitsbut the effect dissipates when money is primed (which seems the case
for a for-profit firm that supports CSR). Luchs et al. (2010; Lin and Chang 2012)
find that higher product ethicality undermines performance IF it is strengthrelatedbut strength seems less relevant in the present retail services context.
BUYER-SELLER
RELATIONSHIP
Communal/exchange
norms (E1)
Communal orientation
(E2-E3)
H1
CSR
Corporate philanthropy
(E1)
Sustainability (E2, E3)
CONSUMER
PERCEPTIONS:
Warmth
Competence
(H2)
H3
COMPANY
MOTIVES (E2)
143
CONSUMER
RESPONSE
Satisfaction
Loyalty Intentions
(E1E3)
H4
CSR FRAMING
(E3)
144
Table 1
Consumer response to CSR as a function of primed relationship norm (Study
1).
Relationship norm
CSR
Satisfaction
Loyalty intentions
Communal
Communal
Exchange
Exchange
None
CSR
None
CSR
30
37
35
28
2.00 (0.96)
2.86 (1.25)
2.19 (1.16)
2.07 (0.96)
2.22 (0.95)
3.16 (0.96)
2.81 (1.05)
2.63 (0.70)
in. You will be staying at hotel XYZ for several nights, and
the hotel has a Four-Diamond rating from AAA.
Participants in the CSR condition only were then told Hotel
XYZ makes regular donations to environmental causes. All
participants then read about a service encounter at the retailer (a
hotel service outcome failure adapted from Smith, Bolton, and
Wagner 1999):
You arrive at the hotel at approximately 7:00 pm and go to
the front desk to check in. The representative at the front desk
looks up your prepaid reservation and informs you that your
room is ready. However, it is not the type of room (in terms
of number and size of beds and smoking or nonsmoking) that
you had preferred and reserved.
Participants then reported their satisfaction and loyalty intentions, as well as perceptions of the retailers warmth and
competence (see Appendix A for exact wording).
Results
Manipulation Check. Following Aggarwal and Law (2005),
participants open-ended responses in the priming task were
coded by independent judges (inter-coder agreement 84%) as
reflecting exchange or communal norms (e.g., paying own share
or treating by paying the entire bill). More participants indicated
treating in the communal versus exchange condition (58.2%
vs. 30.2%, 2 = 10.03, p < .05), and more participants indicated
paying own share in exchange versus communal conditions
(57.1% vs. 32.8%, 2 = 7.60, p < .05). As intended, indirect
priming of communal (vs. exchange) norms led to stronger
endorsement of communal (relative to exchange) responses
among respondents.
Satisfaction and Intentions. Analyses were conducted for satisfaction and intentions as a function of relationship norms, CSR,
and their interaction (with age, income, and gender as covariates;
details omitted for brevitys sake). Descriptive means are shown
in Table 1 and Fig. 2. MANCOVA reveals a marginal effect
of CSR (F(1, 111) = 3.59, p < .10), qualified by the expected
interaction with relationship norm (F(1, 111) = 8.66, p < .05).
[The main effect of norm is non-significant (F(1, 111) = 1.96,
p > .10).] Follow-up simple effects tests indicate that CSR
improved satisfaction and intentions under communal norms
(F(1, 111) = 11.79, p < .05) but had no effect under exchange
norms (F < 1). This pattern of results supports H1.
Mediation Analysis. We ran a moderated mediation analysis
(Hayes 2012), in which the independent variable was CSR, the
moderator was relationship norm, the mediators were warmth
145
146
Table 2
Consumer response to CSR as a function of relationship orientation (spotlight analysis with predicted (SE)) (Study 2).
Communal orientation
CSR
Satisfaction
Loyalty intentions
1SD
1SD
None
Sustainability
2.09 (.24)
1.71 (.28)
2.44 (.26)
2.25 (2.25)
+1SD
+1SD
None
Sustainability
1.50 (.27)
1.95 (.28)
1.85 (1.85)
2.24 (.31)
Satisfaction
Loyalty intentions
Self-serving
Society-serving
1.80 (.30)
1.48 (.34)
2.25 (.33)
2.17 (.37)
Self-serving
Society-serving
1.70 (.30)
2.51 (.35)
1.94 (.33)
2.78 (.38)
Discussion
To summarize: (i) CSR in the form of sustainability initiatives is more effective when communal orientation is high
(reflecting communal norms); (ii) warmth mediates the positive
147
Method
Participants and Design. The experiment was a three-group
(CSR: none, CSR, CSR framing) between-subjects design, with
communal relationship orientation (an individual difference
measure of communal norms) as a measured covariate. A total
of 277 participants, drawn from a paid commercial panel, completed the study. Participants were 54.5% male, with a median
age of 2534, median income of $40,00049,999, and median
education of 4-year college degree. Participants reported spending a median 35 nights in a hotel in the past year.
Materials and Procedure. Participants first responded to
background measures, including communal relationship orientation (same as in study 2) and demographics. After a filler
task, all participants then read a short introduction describing
a retailer:
Hotel XYZ is a mid-scale hotel chain with multiple locations
in North America. The hotels are typically located in major
cities or suburban areas, often near expressways or business
areas, and convenient to shopping and attractions. The hotels
feature medium-sized restaurants, fitness centers, and pools.
Like most hotels, XYZ chain has an online reservation
system. Customers can book their reservations online,
requesting the length of stay, type of room, and so on. The
system also takes special requests (e.g., non-smoking, type
of bed, etc.). The hotel also offers a 1-800 number for making
reservations, or consumers can call the hotel location directly
to book a room.
Some participants also read about the retailers CSR initiatives
in the form of sustainability (omitted in the no-CSR control
group). The CSR manipulation was similar to study 2 but a
second version framed CSR as sound business practice (adapted
from real-world examples of such framing; Smith 2010).
Hotel XYZ is committed to sustainability. The hotel has a
strong green strategy toward the natural environment (e.g.,
energy efficiency, sourcing supplies locally, pollution and
waste control) and was recently ranked 1st among 14 major
hotel companies for corporate sustainability. According to the
CEO: [Sustainability is about doing good for the environment and our customers. Our entire organization takes pride
in our commitment to sustainability. (CSR) / Sustainability
is a lot more than just doing good for the environment and
our customers. Its also a business strategy efficient and
sustainable resource use simply makes good business sense,
for any firms bottom line. Our entire organization takes pride
in our commitment to sustainability. (framed CSR)]
Participants then read a news article describing a service failure
by the retailer.
Recently, a newspaper reported on Hotel XYZ as follows:
There have been several hundred reports of over-booking
at Hotel XYZ. Consumers across a number of cities have
complained that reservations at the hotel were not being
honored: consumers with bookings were turned away at the
door and forced to find alternative accommodation because
148
Table 3
Consumer response to CSR with/out framing as a function of relationship orientation (spotlight analysis with predicted (SE)) (Study 3).
Communal orientation
CSR
Attitude
Loyalty intentions
1SD
1SD
1SD
None
CSR
Framed CSR
3.27 (.23)
3.63 (.23)
3.92 (.24)
2.71 (.24)
3.03 (.24)
3.39 (.25)
+1SD
+1SD
+1SD
None
CSR
Framed CSR
3.13 (.23)
4.09 (.23)
3.64 (.24)
2.47 (.24)
3.71 (.25)
3.11 (.25)
loyalty intentions for consumers who hold communal relationship norms by acting primarily as a signal of warmth. CSR
framed to signal competence can improve attitudes and loyalty
intentions for less communally-oriented consumersbut at the
cost of less positive effects among more communally oriented
consumers.
General Discussion
The present research investigates how CSR affects customer
satisfaction within the context of retail service failures. First, we
investigate the effectiveness of CSR as a function of buyerseller
relationship norms (studies 13): CSR increases satisfaction
and loyalty intentions under communal (but not exchange) relationship norms, consistent with the alignment of CSR with the
communal norm of care and concern for others. Second, we
examine the mediating roles of warmth versus competence in
driving the positive effects of CSR as a function of buyerseller
relationship norms. Third, we investigate theoretically and managerially relevant boundary conditions on the effectiveness of
CSR, including company motives (study 2) and CSR framing
(study 3), which are each shown to alter CSRs impact. Together,
these findings expand our understanding of consumer response
to CSR within buyerseller relationships.
Theoretical Implications and Future Research
Taken together, our findings contribute to the literatures on
CSR, buyerseller relationships, and customer satisfaction and
loyalty (including service failure and recovery).
CSR. Previous research postulates that effective CSR tends
to have a positive impact on consumers attitude toward the
companybut the role of CSR in light of service failure has
received little attention. Our findings indicate that CSR can play
a buffering role against service failure by signaling warmth and,
in turn, improving satisfaction and loyalty intentions following a
service failure. Doing so expands the customer satisfaction and
loyalty literature by incorporating non-product related factors
like warmth and CSR (Kumar, Pozza, and Jaishankar Ganesh
2013). This role for warmth is consistent with prior research
suggesting that caring perceptions are a key driver of satisfaction in a service encounter (e.g., Mattila, Grandey and Fisk
2003; Parasuraman, Zeithaml, and Berry 1985). Interestingly,
prior research has proposed a dominant role for competence in
commercial relationships (Aaker, Vohs, and Mogilner 2010).
However, our findings suggest a more balanced perspective
inasmuch as emphasis on warmth and competence varies as a
function of the buyerseller relationship (cf. Scott, Mende, and
Bolton 2013). Moreover, framing CSR can shift its impact from
warmth to competence as a function of buyerseller relationship
norms.
Our research finds evidence for the effectiveness of CSR
across several types of service failure (e.g., outcome failure in
study 1, process failure in study 2). Although we find robust
effects, future research is merited to investigate whether characteristics of the experience alter the impact of CSR. For example,
is CSR more effective for outcome (vs. process) failures or for
149
150
Limitations
We acknowledge several limitations of the present research.
First, our research relies upon the use of hypothetical scenarios describing retail service failure. There is ample precedent
for doing so in the literature and, indeed, we draw upon such
research in designing our stimuli. We augment this approach
by using a video simulation in study 2, and encourage further research to examine service failure and CSR in the field.
Second, our research relies upon self-reported measures of
loyalty intentions toward the company rather than actual behavior. Doing so allows us to gain insight into the psychological
processes (warmth and competence perceptions) that underlie
consumer response to CSR, and we rely upon past research
that has established the link between satisfaction/intentions
and actual behavior. Finally, our research makes no overarching claims regarding generalizability of our findings pertaining
to CSR. We do, however, provide some evidence of generalizability within the context of service failure across industry
(e.g., restaurant, hotel), across consumer samples (e.g., experienced adult consumers from paid commercial panels in studies
1 and 2), across communal/exchange relationship (by varying
operationalizations across studies), and across CSR (e.g., philanthropy, sustainability).
Managerial Implications
The present research contributes to a better understanding of
managerial practice related to CSR and service recovery. Prior
literature has examined organizational response to customer
complaints and categorized six domains: facilitation, timeliness,
redress, apology, credibility (explanations), and attentiveness
(Davidow 2000, 2003). Most studies suggest that some form
of compensation and apology are prerequisites for an effective service recovery strategy (e.g., Smith, Bolton, and Wagner
1999; Wirtz and Mattila 2004). Although beyond the scope of
the present work, future research on the relative impact of CSR
versus other recovery methods, both socio-emotional (e.g., apology) and financial (e.g., financial compensation), is merited.
(Our own research, omitted for brevitys sake, suggests that CSR
may be as effective as standard recovery in the form of an apology and discount, even though consumers perceive it as less
costly.) Past research finds customers prefer recovery resources
that match the type of failure they experience (Smith, Bolton,
and Wagner 1999). In an analogous fashion, our research finds
that CSR as a recovery method is more effective when it
matches the norms of the buyerseller relationship. Likewise,
past CSR research suggests that CSR activities that match consumer CSR attitudes, values, and lifestyle are also more effective
(e.g., Barone, Norman, and Miyazaki 2007). In sum, our findings
suggest that CSR activities are more effective when they match
consumers communal orientation (i.e., in a broader sense,
reflecting their sensitivity toward the needs of others in social
relationships).
In terms of CSR messaging, service providers and retailers
should take into account the type of relationship their company
promotes to customers. Within the context of service failure,
Construct
Acknowledgements
Competence
151
Study
1
.72
.81
.85
Satisfaction
Loyalty intentions
Warmth
Study
1
.80
.83
Exchange
Communal
Communal
orientation
1SD
+1SD
.75
.92
.94
.89
.71
.79
Indirect effect of
framed CSR (vs.
none) on intentions
via warmth
Indirect effect of
framed CSR (vs.
none) on intentions
via competence
1SD
+1SD
Communal
orientation
Indirect effect of
framed CSR (vs.
CSR) on intentions
via warmth
Indirect effect of
framed CSR (vs.
CSR) on intentions
via competence
1SD
+1SD
152
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