Beyond Warm Glow: The Risk-Mitigating Effect of Corporate Social Responsibility (CSR)

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 positivel...

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Bibliographic Details
Published in:Journal of business ethics 2021-06, Vol.171 (2), p.317-336
Main Authors: Bhattacharya, Abhi, Good, Valerie, Sardashti, Hanieh, Peloza, John
Format: Article
Language:English
Subjects:
Altruism
Business and Management
Business Ethics
Companies
Corporate responsibility
Customer services
Customers
Education
Ethics
Experiments
Halo effect
Hypotheses
Investments
Management
Original Paper
Philosophy
Purchasing
Quality of Life Research
Recessions
Risk
Risk perception
Sales
Social responsibility
Stakeholders
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Summary: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.
ISSN:0167-4544
1573-0697
DOI:10.1007/s10551-020-04445-0