Assessing the Prerequisite of Successful CSR Implementation: Are Consumers Aware of CSR Initiatives? Alan Pomering Sara Dolnicar ABSTRACT. As a reflection of the values and ethics of firms, corporate social responsibility (CSR) has received a large amount of research attention over the last decade. A growing area of this research is the CSR–consumer rela- tionship. Results of experimental studies indicate that con- sumer attitud
of 17
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
Related Documents
  Assessing the Prerequisite of SuccessfulCSR Implementation: Are ConsumersAware of CSR Initiatives?  Alan Pomering Sara Dolnicar  ABSTRACT. As a reflection of the values and ethics of firms, corporate social responsibility (CSR) has received alarge amount of research attention over the last decade. Agrowing area of this research is the CSR–consumer rela-tionship. Results of experimental studies indicate that con-sumer attitudes and purchase intentions are influenced byCSRinitiatives–ifconsumersareawareofthem.Inordertocreatethis awareness,businessis increasingly turning to ‘pro-social’marketingcommunications,butsuchcampaignsismetwith scepticism and their effectiveness are therefore uncer-tain. Consequently, researchers in the field (for example,Maignan, 2001; Mohr et al., 2001) have called for empiricalstudiestodeterminethelevelofactualconsumerawarenessof CSR initiatives. This study examines the Australian bankingsector, which engages in and promotes its CSR activities,to help fill this gap. Results from our qualitative study withbank managers, and our quantitative study with consumers,indicate low consumer CSR awareness levels. Consumer understandingofmany of the socialissues banksengagewithis also low. While CSR is effective in eliciting favourableconsumer attitudes and behaviour in theory, CSR has notproven its general effectiveness in the marketplace. The lowconsumerawarenessofthevarioussocialissuesinwhichfirmsengage with their CSR programs suggests that firms mayneed to educate consumers, so they may better contextualiseCSR initiatives communicated. However, better contextmay amount to little if claimed CSR initiatives are perceivedas inconsistent with otherfacets of the business that reflect itsvalues and ethics.KEY WORDS: banks, communication, consumer awareness, corporate social responsibility Introduction Values, ethics and corporate social responsibility(CSR) are linked in the culture and management of a firm (Joyner and Payne, 2002). CSR is ‘thecommitment of business to contribute to sustainableeconomic development, working with employees,their families, the local community and society atlarge to improve their quality of life’ (World Busi-ness Council for Sustainable Development, 2004).As an ethical business philosophy, CSR might bethought of as the minimisation of negative exter-nalities of a firm’s operating activities and the max-imisation of beneficial impacts on society (for example, Mohr et al., 2001). While attempts to justify CSR on purely normative grounds were opento criticism, particularly from neo-classical econo-mists like Friedman (1970) who saw such practice asa breach of the manager’s fiduciary duty to the firm’sowners, the establishment of a link between CSRand financial performance (Orlitzky et al., 2003) hasnow provided the ‘business case’ for CSR, whatMintzberg (1983) calls ‘enlightened self-interest’, as apowerful justification for firms engaging in CSRinitiatives. For this business philosophy to be suc-cessful then, and this success sustained, it must ulti-mately be rewarded in the marketplace byconsumers through their purchase behaviour. For consumers to act as ‘rewarding and punishingauthorities’, who, through their purchase decisions,‘influence the profits of competing firms, and indi-rectly also the direction of the economy’ (Hansenand Schrader, 1997, p. 447), however, it is importantthey are informed of which firms are and are notsocially responsible.Marketplace polls report that consumers not onlyexpect businesses to be socially responsible, but theyalso want to be informed about what firms are doing,and will support firms that pursue CSR initiatives. A23-nation poll of public attitudes to CSR found that  Journal of Business Ethics (2009) 85:285–301    Springer 2008DOI 10.1007/s10551-008-9729-9  Australians have amongst the highest CSR expectationsof business (Environics, 1999). Cone Inc. (2004) found that 86% of American respondents saidcompanies should tell them how they support socialissues. In the UK, 74% of respondents indicated thatmore information on a company’s social and ethicalbehaviour would influence their purchasing deci-sions, and 86% thought companies should activelycommunicate their CSR activities (Dawkins, 2004).These survey results show a strong consumer demand for CSR information and imply that CSRinformation could significantly affect consumer behaviour, leading to what Hansen and Schrader (1997, p. 444) describe as ‘ consumer responsibility’ .CSR’s ability to produce positive consumer atti-tudes and purchase behaviour has been extensivelyinvestigated, particularly using the experimental ap-proach, where consumer awareness represents theindependent variable that is experimentally manip-ulated (see for example, Auger et al., 2003; Brownand Dacin, 1997; Creyer and Ross, 1997; Sen and Bhattacharya, 2001). Consequently, ‘awareness’plays a major role in previous research into CSReffectiveness. While the effect of awareness has beendemonstrated in laboratory settings, it remains un-clear whether real consumers are aware of CSRactivities when facing real consumption decisions,leaving a gap in our understanding of the CSR– consumer nexus. If consumer awareness is low, theeffect of CSR initiatives on purchasing behaviour isonly of theoretical, not practical, relevance. This hasprompted several researchers (for example, Maignan,2001; Mohr et al., 2001) to call for research to determine the true level of CSR awareness amongconsumers.This study primarily aims to investigate thisknowledge gap, as it presents a key inhibition to therewarding and punishing influence of consumer responsibility. It also aims to gain an insight intoconsumer CSR information demands, includingidentifying the most trusted media opportunities for CSR communication. Our study acknowledges theethical issue of whether CSR should be used cyni-cally for ‘public relations’ benefits, especially when itis not representative of the values and ethics of thefirm, but does not include discussion of this issuehere. Instead, our approach recognises that firms facea difficult task in seeking to publicise particularlysensitive areas of their business, such as their CSRprograms, and we investigate issues around theeffectiveness of such communication behaviours(Pomering and Dolnicar, 2007). Given the unveri-fiable, or ‘credence’ nature of many CSR claims,such information obtained directly from firms islikely to be treated with a greater degree of scepti-cism than more provable ‘search’ and ‘experience’claims.We examine these questions in the context of theAustralian banking sector, chosen because (1) it rep-resents the single-most active business sector withrespecttoCSR,illustratedbythefactthatWestpachasdominated Australia’s annual Corporate Responsi-bility Index since its introduction in 2003. Other banks now imitate Westpac’s positioning approach.(2) For the consumer, banking is a high-involvementservice, characterised by being important to the con-sumer, risky, and infrequently purchased. Note thatthe purchase in this case does not refer to day-to-daybanking interactions but the decision to become acustomer of a bank. This is typically a very infrequentdecisionandbankcustomerstendtostayloyaltotheir banks over long periods of time. As a consequence,consumers engage in complex buying behaviour (Kotleretal.,2006).Investigatingahigh-involvementcategory is important because consumers processinformation actively before making a purchase deci-sion. It can, therefore, be assumed that CSR infor-mation would also be processed as part of the decisionmakingprocess.Inalow-involvementcase,cognitiveprocessingisminimal,andthereforeCSRshouldhavelittle, if any, effect on purchase decisions. (3) Theconsumerhasanongoingrelationshipwiththeirbank.Consequently,thebankhasconsiderablepotentialfor customer contact and marketing communications vianumerous  high-contact   (Lovelock et al., 2004) ‘touchpoints’, including customer interactions with bankstaff in retail branches, and lower-contact interactionsvia, for example, Internet banking, automatic teller machines and account correspondence. (4) TheAustralian banking sector has experienced consider-able consumer disaffection over the past decade, dueto unpopular operational practices, such as the intro-duction of fees and the closure of retail branches inrural areas (Kohler, 2003).As a result of this disaffection, banks thus see CSRas a suitable avenue to re-engage with communitiesand improve their corporate images. While Porter and Kramer (2002) argue that CSR objectives can286  Alan Pomering and Sara Dolnicar   produce competitive advantage, and Auger et al.(2003) and McWilliams and Siegel (2001) emphasise that if CSR is to act as a point of differentiation in acompetitive ‘tiebreaker’ situation, awareness of afirm’s CSR activities is crucial. Claims of sociallyresponsible behaviour that conflict with consumers’perceptions of banks, based on their marketplaceknowledge, may not be accepted, however. WhereCSR programs are cynically perceived to be used asa corporate image tactic, rather than a genuinereflection of a firm’s values and ethical commitment,such claims may backfire. Our study does notmeasure the depth of such scepticism or cynicism,but seeks instead to highlight the effectiveness of CSR communication efforts. Nor does our studyexamine the ethicality of banks’ informing con-sumers of their CSR activities; such ethicality isassumed, given consumers’ need for information tobe able to act as citizen consumers, rewarding ethicalfirms and punishing unethical firms, and firms’obvious benefit in making such information avail-able. We contribute to knowledge by determiningthe true level of CSR awareness among consumersin an industry sector in which member firms activelydisseminate CSR information to influence percep-tions of corporate image, and hence consumer favour. We see consumer awareness as the requiredprecondition for consumers rewarding businesses for ethical behaviour. Such reward is critical as it helpsto make ethical business philosophy compatible withprofit maximization aims and therefore sustainable. Prior work This section reviews prior work underpinning thepresent study, specifically in the areas of firms’ CSRcommunication strategies, consumer awareness of CSR initiatives, consumer CSR informationdemands, as well as the extent to which consumerstrust alternative communication channels for suchinformation.Regarding the role of awareness, Mohr et al.(2001) note that academic research into consumer response to CSR activities typically either assumesconsumers awareness, or artificially creates it under experimental conditions. Among such studies arethose of Brown and Dacin (1997), Creyer and Ross(1997), and Sen and Bhattacharya (2001). Brown and Dacin find that a company’s CSR record createsa general context, for the evaluation of its products.Creyer and Ross, focusing on ethics rather thanCSR, demonstrate that preference for a company’sproducts is linked to the extent the company’s eth-ical behaviour exceeds consumer expectations. Senand Bhattacharya reiterate the general context resultof Brown and Dacin, and conclude that consumers’positive response to CSR is mediated by their self-company congruence, and moderated by their sup-port for the specific CSR domain, but the impact onconsumers may lessen if CSR is perceived to be atthe expense of product quality.Maignan (2001) criticises the above studies for drawing conclusions on too narrow a conceptuali-sation of CSR and focusing only on one or twoCSR activities. Commenting on Brown and Dacin’s(1997) findings, Maignan (2001, p. 58) acknowl- edges that, while typical of philanthropic responsi-bility, the two activities manipulated as theindependent variable (corporate giving and com-munity involvement) ‘do not represent the fullspectrum of CSR initiatives’, leading her to con-clude that past research offers very limited insightsinto consumers’ views of CSR behaviour. Instead,extant studies typically focus on one or two ‘social’dimensions, which are then often taken to be anexpression of CSR.Mohr et al. (2001, p. 48) state that there is adistinct lack of studies which measure general con-sumer awareness of CSR initiatives, presumablybecause ‘CSR is a broad and complex concept that ischallenging to measure’. Auger et al. (2003) movetowards filling this gap. In a cross-cultural choiceexperiment focusing on the athletic shoes and soapproduct categories, Auger et al. find that, whileconsumers are reasonably confident in their knowl-edge of the functional features of the products theycurrently buy, they have difficulty recalling some of the most basic ethical characteristics of these sameproducts. Of subjects from Hong Kong, for exam-ple, 90% could not recall the ethical features of their current bath soap, and only 5% could recall theethical attributes of their athletic shoes. By com-parison, Australian subjects had slightly higher recallof 80% and 10% respectively.A lack of awareness and understanding of com-panies’ CSR achievements is one explanation for the disconnection observed between attitude and  Assessing the Prerequisite of Successful CSR Implementation  287  actual behaviour (Mohr et al., 2001; Bhattacharyaand Sen, 2004). Bhattacharya and Sen (2004, p. 14) also report from focus group and survey researchthat, apart from a handful of ‘CSR mavens’, ‘largeswaths of consumers do not seem to be aware that byand large most companies engage in CSR initia-tives’. According to Mohr et al. (2001), consumershave difficulty acquiring and storing CSR informa-tion about the firms they buy from. Dawkins (2004,p. 4) identifies the problem at an earlier stage of theprocess – the corporate communication stage – proposing that effective communication of firms’CSR programs is ‘a rare achievement’. Roberts(1996, p. 80) suggests that socially conscious attitudesmay not result in behaviour, because ‘scant data existon how most companies perform on any number of social criteria that might affect a consumer’sdecision’.While Auger et al. (2003, p. 299) also highlight alack of consumer awareness of firms’ CSR records,they go further, noting that ethical awareness levels – that is, knowledge of the ethical and social issuesaround which firms are framing their CSR initiatives – are surprisingly low, especially given the ‘occasion-ally extensive media coverage afforded to ethicalissues’. They conclude that consumers may act verydifferently when CSR information is provided.While prior work indicates that consumer awareness levels of CSR initiatives are not very high,Dawkins (2004) concludes that consumers are in factquite interested in learning more about CSR ini-tiatives and that, consequently, CSR-related mar-keting communications present an opportunity toshape organisational image and brand beliefs. ‘Pro-social’ marketing initiatives can form a market-differentiating strategy (McWilliams and Siegel,2001), build brand equity (Hoeffler and Keller,2002), and lead to customer loyalty and other posi-tive post-purchase outcomes (Bhattacharya and Sen,2003).In a Danish study, for example, Schultz andMorsing (2003) found the use of CSR engagementfor marketing communication purposes distasteful tosome consumers, even though, ironically, consumersmay otherwise possess little if any detailed knowl-edge about a firm’s CSR activities. Due to thesensitive nature of CSR communications, Schultzand Morsing conclude that CSR initiatives cannotbe advertised in the same way as products, services or brands typically are, thus posing a much morecomplex challenge to marketers. Drumwright (1996,p. 71) finds that ‘company advertisements with socialdimension have been among the most controversialof marketing approaches,’ seen on the one hand as‘marketing’s greatest contribution to society,’ whileon the other, ‘as marketing’s most unabashedexploitation.’ Highlighting the risks of such per-ceived exploitation, Morsing (2006, p. 176) reportsthat despite the Danish telecom giant TDC’s repo-sitioning from a high-profit shareholder drivencompany to a more socially responsible organisation,with an extensively communicated CEO-endorsedCSR commitment and several CSR initiatives,TDC’s CSR message has been ‘met with scepticism,disbelief, and accusations of window-dressing.’Communicating CSR initiatives is problematic.Trust in the information source is critical for CSRcommunication success (for example, Maignan andFerrell, 2001). Consumers have a natural tendencyto be sceptical of advertising, more so than towardsother information sources (Obermiller and Span-genberg, 1998). Consumers also react to marketers’perceived attempts to persuade, as explained byFriestad and Wright’s (1994) Persuasion KnowledgeModel. Communicating CSR through traditionaladvertising is perceived by many consumers as over-accentuating the good deeds of the company, whichcan lead to scepticism about the message, and cyn-icism towards the firm’s motives. Webb and Mohr (1998, p. 237), for example, find that cause-relatedmarketing, where the firm contributes an amount of money per unit sold to a non-profit partner orga-nisation, is the ‘easiest way for a company to educatethe consumer about its philanthropic activities, yetthe involvement of advertising, a particularly dis-trusted form of communication, amplifies cynicism’.While consumers express the desire for informationon firms’ CSR records, the communication of CSRinitiatives is therefore a challenge for the CSRmarketing communicator. Morsing and Schultz(2006) find that consumers prefer CSR initiatives tobe communicated through so-called ‘minimalrelease’ channels (such as annual reports and web-sites) over the use of traditional communicationchannels. Given these informational issues, we mightonly guess at the levels of consumer awareness of firms’ CSR initiatives in the marketplace. WhileAuger et al. (2003) report consumer knowledge of 288  Alan Pomering and Sara Dolnicar 
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks