More than 90 percent of Fortune 500 companies commit themselves to corporate social responsibility initiatives in order to protect themselves against negative information. But these moves don't serve as a strong insurance policy against bad press and criticism, according to a report in the current edition of the Journal of Service Research.
The authors found that general corporate social responsibility in and of itself will not shield a company from criticism or negative information because consumers separate ethical/social issues from product or service quality issues in their minds, according to the researchers, who surveyed more than 800 firms and 100 individuals.
The protection corporate social responsibility offers is largely limited to social or ethical issues with the company. It does little to combat negative information relating to a company's product or service quality. To do so, a firm must make itself more service quality oriented and focus its concern on the final outcome of a product or service.
The authors also studied the effects of a firm's consumer base. If a firm has a consumer base of experts, it should focus on its service quality orientation. However, if a firm's consumers are mostly novices, it should focus more on corporate social responsibility to mediate any negative information. Co-authors of the report are:
- Andreas Eisingerich is an Assistant Professor of Marketing at the Imperial College Business School in London.
- Gaia Rubera is an Assistant Professor of Marketing at the Eli Broad College of Business at Michigan State University.
- Matthias Seifert is a Professor of Quantitative Methods in Operations and Technology at the IE Business School in Madrid.
- Gunjan Bhardwaj is with the Boston Consulting Group at their Stuttgart office.
Explore further: Rapid UK population growth undermines living standards, but may be necessary for economic growth