Altruism vs. Instrumentalism –
Firms’ CSR-‐Motivation Meets Consumer Values
Master Thesis – Malte M. Hager – January 2014
University of Amsterdam
Amsterdam Business School
Altruism vs. Instrumentalism
Firms’ CSR-‐Motivation Meets Consumer Values
Master Thesis by
Malte M. Hager, 2013
University of Amsterdam
Amsterdam Business School
Student: Malte M. Hager
Student-‐Nr. 10351000
Contact: maltehager@gmx.de
Telephone NL 0031-‐628077545 Telephone GER 0049-‐178-‐1410201
Subject: Master of Sc. in International Business Studies
University of Amsterdam, Amsterdam Business School Thesis-‐supervisor: Dr. Joris Ebbers, J.J.Ebbers@uva.nl
Second examiner: Dr. Arno Kourula, A.E.Kourula@uva.nl Date handed in: 3rd of February 2014
Pages: Chapter 1-‐6: 84 (incl. tables and figures)
Abstract
Corporate social responsibility (CSR) has become an omnipresent component of firms’ business activities. Their motivation to pursue CSR has shown to be manifold: In many cases firms use CSR instrumentally in order to improve their reputation among stakeholders, to fulfil legal standards, comply with social norms or get access to cheap capital. In other cases firms act socially responsibly out of more altruistic motives; e.g. because their management feels the moral obligation to be a good ‘corporate citizen’. Particularly consumers tend to respond to CSR with higher general evaluations of firms and increased intentions to buy their products. However, there is hardly any research on whether it matters to consumers why the firm
pursues CSR. This exploratory study seeks to shed some light on the relationship between firms’ CSR-motivation – in terms of altruism versus instrumentalism – and consumers’ responses. Furthermore, it examines whether this relationship might be mediated by the degree to which consumers identify with the firm, if their support of the CSR-domain interferes with the effects and if consumers’ personal values along Schwartz’ (1994) self-enhancement and self-transcendence play a role in consumers reaction to the type of CSR-motivation.
The hypotheses were tested by means of an experimental design involving two different vignettes about the CSR-activity of a fictional firm. The analyses of our hypotheses show that consumers do significantly discriminate between CSR that was pursued out of altruistic or instrumental motives. Instrumental CSR had a negative impact on company evaluation and indirectly on purchase intention. The effect of firm-motivation was partly mediated by consumers’ identification with the company and some interesting moderation patterns of self-enhancement values and the individual’s support for the CSR-domain were uncovered.
The present study provides several valuable implications for both CSR-theorists and practitioners. At the same time it points at many possibilities for future research and can serve as a reliable basis to draw a more fine-grained image of the mechanisms
between CSR-motivation and consumer response.
Table of Contents
1. Introduction... 1
2. Literature Review & Hypotheses... 5
2.1 Introduction to CSR ... 5
2.2 Firms’ CSR-‐Motivation – Instrumentalism vs. Altruism ... 6
2.3 CSR and consumers’ response ...10
2.3.1 Company evaluation and purchase intent ...11
2.3.2 CSR-information ...12
2.3.3 CSR and consumer–company congruence ...14
2.3.4 CSR and consumers’ values...15
2.3.5 Consumers’ CSR-support...19
3 Methodology ...23
3.1 Sample & Data Collection...23
3.2 Vignettes...24 3.3 Variables...25 3.3.1 Independent variables ...25
3.2.3 Dependent variables...29
3.2.3 Moderators ...30
3.2.4 Control variables...31
4. Results...33
4.1 Missing Data...33 4.2 Reliability Analysis ...34 4.2.1 Manipulation checks...34
4.2.2 Multi-item scales ...34
4.2.3 Factor Analysis...35
4.3 Descriptive statistics...36
4.3.1 Frequencies & Means...36
4.3.2 Correlations...38
4.4 Regression Analysis...41 4.4.1 Hypothesis 1 ...41
4.4.2 Hypothesis 2 ...44
4.4.3 Hypothesis 3 ...47
4.4.4 Hypothesis 4 ...50
4.4.5 Hypothesis 5 ...52
4.5 Summary and Exploratory Analysis...55
4.5.1 Hypothesis 6 – Purchase Intention...56
4.5.2 Hypothesis 7 – Self-Transcendence ...63
5. Discussion...65
5.1 CSR-‐Motivation as a Determinant of Consumer Response...66
5.1.1 Company evaluation...66
5.1.2 Consumer-Company Overlap ...66
5.1.3 Consumer-Company Distance...66
5.1.4 Purchase Intention ...67
5.2 The Impact of Consumers’ Values and CSR-‐Support...68
5.2.1 Self-Enhancement...68
5.2.2 Self-Transcendence ...69
5.2.3 CSR-Support ...71
5.3 Theoretical contributions ...72
5.4 Practical Contributions ...74
5.5 Limitations & Future Research...76
6. Conclusion ...83
References...85
Appendix ...93
Appendix I – Questionnaire ...93
1. Introduction
For almost all of economic history the main goal of any economic transaction was both by theorists and practitioners regarded to be utility-‐ or profit maximization of some sort. Cost-‐ benefit considerations have usually been constrained to the resources immediately attributed to the economic actors and their actions’ time-‐span. However, within recent decades, consumers’, firms’ and consequently theorists’ awareness has been expanded in two dimensions: firstly, individual and corporate stakeholders have been supplemented by commons such as the
environment (environmental commons) and society (overall social welfare), and secondly these considerations are increasingly applied to time-‐spans that reach farther into the future, namely beyond a generation’s or a firm’s lifetime. The combination of long-‐term perspective and inclusion of commons is coined sustainability. Firms’ consideration and balancing of the triple bottom line of sustainable economic, environmental and social health is summarized as the corporate social responsibility (CSR) (Elkington, 1994).
Throughout the past decades the issue of CSR became increasingly more significant in virtually all domains of business and economics. Newspapers, journals, the internet, and advertising campaigns contain messages, information and discussions on the the role of CSR in new products and business practices (Carroll & Shabana, 2010). The majority of Fortune 500 companies engage in CSR activities and put a great deal of effort into communicating their CSR initiatives to their corporate stakeholders (Bhattacharya et al, 2009).
The business rational for CSR-‐activity can be found in stakeholder theory: CSR creates value by enhancing the strength and endurance of a company’s stakeholder relationships (Barnett, 2007) and by encouraging stakeholders to devote more of their resources to that relationship (Jones, 1995). Even though there is no conclusive evidence for a positive net-‐effect of CSR investment on firm-‐performance (Margiolis & Walsh, 2001), stakeholders generally reward companies’ CSR-‐ engagement. Consumers for example are more willing to buy products from CSR-‐companies and
generally evaluate them higher (Brown & Dacin, 1997; McDonald & Lai, 2009; Marin, Ruiz & Rubio, 2009; Mohr & Webb, 2005; Sen & Bhattacharya, 2001). With consumption behaviour as their means of power, consumers’ views on and response to firms’ CSR-‐activities are particularly important.
Studies have examined consumers’ responses to multiple different features of firms’ CSR. Most importantly, consumers have been shown to significantly differentiate between different levels of CSR (e.g. Sen & Bhattacharya, 2001; Brown & Dacin, 1997; Murray & Vogel, 1997; Turban & Greening, 1997): with reservations, the stronger and more impactful firm’s CSR-‐activities are, the more positively consumers respond to them. Also the domain of CSR-‐measures has been shown to be relevant in terms of consumer response. For example consumers tend to respond much stronger to CSR that addresses the conditions or treatment of humans (e.g. working conditions, company culture, employee treatment) than to CSR that addresses the environment (Anselmsson & Johansson, 2007). CSR that benefits consumers themselves tends to be
appreciated more (e.g. product safety, information) (Auger et al., 2008; Peloza & Shang, 2011). There is more information than the level and domain of a CSR-‐activity that can be processed by consumers: Some research suggests that consumers might differentiate between the motivation that drove a firm to engage in CSR (Becker-‐Olsen, 2006) and many consumers put great
cognitive effort into attributing firms’ motivations behind CSR behaviour. This is not surprising since the ‘responsibility’ component in CSR implies that CSR is ethically required independent from how much it is of use for the firm it self, i.e. in how far it is an instrument for the generation of corporate profit. The relevance of firm’s CSR-‐motives to consumers is supported by a
mechanism from ‘attribution theory’ (Jones & Davis, 1965): Individuals will interpret firms’ CSR behaviour in terms of the underlying intentions; they will try to understand the intention that motivates behaviour and use these considerations to evaluate the behaviour’s outcome.
Consequently, one outcome – e.g. a high level of CSR – can trigger different responses depending on the underlying motivation.
Despite these hints as to the importance of firms CSR-‐motivation to consumers, there is no research that explicitly investigates their relationship and the underlying mechanics. With our present study we seek to initiate an understanding of this aspect of corporate social
responsibility. We want to answer the question:
1. Do consumers react more negatively to CSR that is profit-motivated as opposed to CSR that is altruistically motivated? And if so: By what mechanism does CSR-motivation translate into consumer response?
In investigating this question, consumers’ personal values may be particularly relevant. Values determine what individuals consider important and thus likely impact what aspects of CSR and CSR-‐motivation matter to them and in what way. Shalom Schwartz (1994; for an overview: Schwartz, 2012) captures values along the categories of self-‐enhancing and self-‐transcending value types. Individuals who are highly self-‐enhancing tend to be characterized by a rather egoistic perspective and a focus on their own achievements, success and dominance over others. Self-‐transcending individuals show a lot of concern for others and care a lot about overall welfare and have a very holistic view on humans and nature. Research showed that consumers’ values play an important role in their response to CSR (Golob et al 2008, Siltaoja 2006, Basil & Weber 2006). We seek to find out whether the importance of consumer values also holds for their response to the motivation behind CSR. Therefore we ask:
2. Do personal values interfere with consumer responses to firms’ CSR-motivation?
This thesis is structured as follows: In chapter 2, we will present relevant literature to provide context for our research questions and to derive the hypotheses to answer it. It will lay out our
framework for CSR-‐motivation, present the possible mediator ‘consumer-‐company
identification’ and will present the suspected moderators ‘values’ and ‘CSR-‐support. In chapter 3 will present our chosen research design and method while chapter 4 presents the results of its application and some exploratory research. Chapter 5 will deliver the interpretation of our empirical findings. To do justice to the exploratory character of our research, it will contain a detailed section on our study’s limitations and suggestions for future research. The paper will end with a brief conclusion in Chapter 6.
2. Literature Review & Hypotheses
2.1 Introduction to CSR
The academic literature offers several definitions of corporate social responsibility. According to Wood (1991), CSR is “a business organization’s configuration of principles of social
responsibility, processes of social responsiveness, and policies, programs, and observable outcomes as they relate to the firm’s social relationships”. Another definition – by McWilliams and Siegel (2001) – states CSR to represent “actions that appear to further some social good, beyond the interests of the firm and that which is required by law”. Thirdly, Turker (2009) defines CSR as “corporate behaviours which aim to affect stakeholders positively and go beyond its economic interest”. As McWilliams & Siegel (2001) say, the definition of CSR is not always clear and in some cases the goals and objectives of the definitions that follow from demands of multiple stakeholders conflict.
Firms become more and more aware of the fact that their profitability in the future depends on their willingness to invest in CSR-‐related activities (Collier & Esteban, 2007). Studies that investigated the firms’ financial performance as a result from CSR did not come to any univocal conclusion. However, Orlitzky et al’s (2003) meta-‐analysis shows that the majority of studies certify CSR a positive impact (McWilliams & Siegel, 2001; Orlitzky et al, 2003).
A central reason to engage in CSR is the hope to trigger favourable responses from various stakeholders (Bhattacharya et al, 2009; Jones, 1995; McWilliams & Siegel, 2001). This means that an increase in a firm’s financial performance would come indirectly through stakeholder responses (Murray & Vogel, 1997) that gain in strength and durability through CSR (Barnett, 2007). In contrast to Milton Friedman (1970), who claimed that the only responsibility of a firm is its own profit and generation of shareholder value, Freeman (1984) postulated that firms owe responsibility to many stakeholder groups and their survival depends on living up to these responsibilities. At the latest by the rise of stakeholder theory in the mid 1980’s, the pool of
relevant stakeholders was extended beyond shareholders, employees, customers and suppliers by adding e.g. the local and global, social and natural environment (Jamali, 2008). This opened up the way for managerial conduct that tried to align shareholder considerations with that of other stakeholders and pursued corporate goals beyond mere monetary profit maximization (Jamali, 2008).
2.2 Firms’ CSR-‐Motivation – Instrumentalism vs. Altruism
According to prior literature, firm-‐motives to act socially and environmentally responsibly are manifold. So far there has no overarching framework been presented that structures the many firm motives identified by researchers. Therefore deeper research on the role of firm motivation to engage in CSR requires a clear categorization. Based on the subsequent review of firm motives identified in past research, we will argue that each possible motivation of firms to pursue CSR can be categorized as either altruistic or instrumental.
We define a motive for a firm to act socially or environmentally responsibly as instrumental when the driver for the CSR-‐activity is the anticipated benefit for the firm itself. This means that the CSR-‐activity is pursued due the logic that it will result in a corporate return-‐on-‐CSR-‐
investment. This return can ultimately be a financial benefit, but might also be of less tangible nature as will be laid out. An altruistic motive, on the other hand, will be defined as a motive whose driver is an ultimate, anticipated benefit to a party external to the firm. An altruistic motive for CSR-‐activity requires that the firm does not base its action on the anticipation of any benefits to be returned to the firm; the CSR-‐investment is assumed to be a one-‐way-‐investment in the sense that the beneficiary is not expected to respond with pay-‐backs, neither in monetary nor in terms of any other commitment.
These definitions are mutually exclusive and thus that a motive will be either instrumental or altruistic. This is in line with Becker-‐Olsen’s (2006) approach to firm motivation as being either self-‐centred (instrumental) or other-‐centred (altruistic). However, this does not mean that a
CSR-‐activity can only be altruistic or instrumental: it is possible for a firm to pursue one CSR activity due to several different motivations, each of which is either altruistic or instrumental and – at most, if at all – the weighted sum of the importance of each underlying motive could indicate to what degree an activity is rather instrumentally or altruistically driven. Because firms’ motives for each action can be manifold and because firms are involved in an uncountable number of activities (both CSR-‐ and non-‐CSR-‐related), this dual classification of CSR-‐motives does not imply a necessary dual classification of firms or their activities into being either altruistic or instrumental.
Research has identified many motives of firms to engage in CSR, the most prominent of which will subsequently be classified as altruistic or instrumental. Table 1 summarizes the findings. For example, Porter & Kramer (2006) mention four different types of motives, namely moral
obligation, sustainability, the license to operate and reputation. The motive of moral obligation
refers to the argument that firms have a duty to be good corporate citizens. The non-‐profit organization ‘Business for Social Responsibility’ coined it in 2004 as “…achiev[ing] commercial success in ways that honour ethical values and respect people, communities and the natural environment”. It is important to note that this motive does not exclude the simultaneous goal to make profit and be commercially successful. But since (according to Porter & Kramer) it means that additional to commercial success a firm adds ethical behaviour merely for the sake of it – and not out of self-‐interest – in that case the firm acts moral because of the perceived obligation to be a good corporate citizen of a society. It can be called altruistic, because the benefit of the social behaviour is external to the firm and the moral behaviour is not an instrument for the organisation’s purposes.
Husted and Salazar (2006) defined altruism in companies’ CSR activities in more formal,
numerical terms: They consider a firm altruistic when it pursues activities for the greater social (firm-‐external) good that go beyond the CSR-‐investment at which the firm’s profit from CSR would be maximized; i.e. an altruistic firm may gain profits from it’s CSR investment but
sacrifices some of it’s profit (return of CSR-‐investment) in order to give even more benefit to society, thus it does not aim at profit maximization.
Porter and Kramer’s motive of being sustainable emphasizes the relationship between current benefit in-‐ and outside the firm and future benefits. They focus on the idea of presently acting in a way that does not compromise future wellbeing. For firms very often that means survival or the maintenance of resources that will be required to continue operations far into the future. This motive is instrumental if it regards the company’s own future, and can be altruistic if it refers to the future of commons like societal or environmental wellbeing, maybe even beyond the time of the firm’s own existence.
Husted and Salazar (2006) use the term sustainability in the sense of a firm pursuing a CSR activity that at the same time generates a direct return to the firm in the present and a long-‐term benefit to society reaching into the future or vice versa. For example if a firm issues scholarships to students in domains relevant to the firm, it improves the education for students and thus ensures a direct benefit to society which also leads to increased firm-‐reputation; in the future the firm gains a second time by having more and higher qualified potential employees. Due to this potential double exploitation, firms will use this CSR-‐activity in an instrumental way. The license to operate according to Porter and Kramer refers to the “tacit or explicit permission from governments, communities and numerous other stakeholders to do business.” This motive can e.g. relate to the adherence to law and regulations set up by a government or an industry-‐ specific authority. The license to operate can also refer to following established norms without which operations in a certain social environment would be impossible and require the firm to stop business. For example a society might expect a certain minimum social contribution that goes beyond juridical requirements. For example the violation of these minimal expectations could result in a boycott of the firm’s products or services. Husted and Salazar (2006) call a firm that acts only in order not to lose their license to operate a “coerced egoist”. Since this
entirely internal to the firm. Therefore it does not include the necessity of selfless behaviour and can thus be considered self-‐regarding and instrumental in character.
Finally, Porter’s fourth motivation for a firm to pursue its social responsibility refers to
improved reputation resulting from CSR as soon as it has been communicated to stakeholders. The value of reputation to a firm lies in its potential to increase profits by increasing sales, allowing for premium prices, customer loyalty (Milgrom & Roberts 1986a, Klein & Leffler 1981) and customer identification with the company (Keh & Xie 2009), attracting better-‐qualified employees (Stigler 1962) and more and cheaper capital (Milgrom & Roberts 1986b). High reputation due to CSR-‐activities can even to some extent insure firms against the loss of reputation in case of adverse events (Minor & Morgan 2011, Klein & Dawar 2004). This multitude of ways in which reputation can generate benefits to a company makes it the most important and most-‐cited source of return on CSR-‐investments. These benefits clearly become effective firm-‐internally and a firm would not strive for reputation if it would not translate into increased income. Consequently, the motive of increasing reputation through CSR is
instrumental.
Empirical studies identified a couple more motives for firms to engage in CSR, some of them overlapping with Porter and Kramer’s (2006) four main motivations. CSR being good for business and leading to increased competitiveness and legitimacy are motives introduced by Bansal & Roth (2000) and belong in the category of instrumental motivation. However they also identified normative reasons for CSR like a sense of duty and responsibility and Aguilera et al (2007) added a “higher order of morals” while Davis et al (1997) speak of a “sense of
stewardship”. The latter motives can altogether be classified as non-‐instrumental and thus
altruistic.
All these findings support the above postulated possible categorization of firms’ motives to engage in CSR into altruistic and instrumentalist motives (See Table 1).
Table 1) Altruistic vs. instrumental motives
instrumental motives altruistic motives
license to operate Porter & Kramer 2006, Husted & Salazar 2006 moral obligation Porter & Kramer 2006
reputation Porter & Kramer 2006, Minor & Morgan 2001, Klein & Dawar 2004
sense of duty &
responsibility Bansal & Roth 2000
sustainability Porter & Kramer 2006, Husted & Salazar 2006 sense of stewardship Davis et al. 1997
increased
competitiveness Bansal & Roth 2000 “higher order of morals” Aguilera et al. 2007 Legitimacy
Bansal & Roth 2000 “corporate citizenship” Carroll, 1998
2.3 CSR and consumers’ response
Extensive research has been done in the field of consumer-‐reactions to corporate social responsibility measures. Most research investigated the consumer response to particular CSR-‐ characteristics. Sen & Bhattacharya (2001) introduced a general model that holds for much of the research in this field. They relate CSR-‐information as an independent variable to two
dependent variables: consumers’ purchase intent and consumers’ company evaluation. Figure 1 shows a simplified version of this model, (including constructs that will be addressed in section 2.3.3: C-‐C overlap and C-‐C congruence and section 2.3.5 on CSR-‐Support). We will use this as the basis for the development of our theoretical framework (see section 2.3.5 Figure 2)
2.3.1 Company evaluation and purchase intent
The dependent variable “company evaluation” is a broad measure referring to the extent to which a respondent generally favours the firm as a whole. “Purchase intent” refers to the hypothetical intention of a respondent to buy a product of a firm, expressed in terms of likelihood. Most studies in this field measure both company evaluation and purchase intent simultaneously as dependent variables because they positively correlate (Mohr & Webb, 2005; Anselmsson & Johansson, 2007; Arli & Lasmono 2009). A positive effect on company evaluation in all studies goes hand in hand with an increased purchase intention. Because both concepts can be translated into managerial implications and because both proved significant in all prior studies, we will adopt purchase intent and company evaluation as dependent variables and treat them side-‐by-‐side (more studies will be mentioned in the context of the following sections).
Figure 1)
Theoretical framework Sen & Bhattacharia (2001) (including CC-‐distance and C-‐C overlap)
2.3.2 CSR-‐information
The independent variable “CSR-‐information” refers to the information about a firm’s CSR-‐ characteristics that is (made) available to consumers. Previous studies in this field refer to different kinds of CSR information; many of the studies concern one of two characteristics: 1. the
level of CSR-‐activity or 2. the CSR-‐domain. We will add 3. the firm’s motivation for CSR (see table
2) as a third category. Of course there are many more CSR-‐characteristics. Each of these three kinds of CSR-‐characteristics is relevant to each CSR-‐activity; i.e. each CSR activity has a certain level (e.g. high or low), a addresses a certain domain and is pursued due to (a) certain
motivation(s). To illustrate the dependence of purchase intent and company evaluation on this
CSR-‐information, and to provide some context for firm motivation, we will introduce these types of CSR-‐information (see Table 2) and some associated findings.
The level of CSR as a determinant of consumer response can refer to either the simple, binary difference between the presence or the absence or a more nuanced differentiation between e.g. a high, moderate or low level of CSR involvement as measured by the effectiveness of CSR or the effort put into it. Several experimental studies demonstrated that the presence of CSR initiatives positively impacts consumers’ company evaluation (Brown & Dacin, 1997; Mohr & Webb, 2005; Murray & Vogel, 1997; Sen & Bhattacharya, 2001). Firms that engage in their social
responsibility may enhance their public images (Davis 1973; Gatewood et al, 1993; McDonald & Lai, 2011; Turban & Greening, 1997). Crucial for the realization of these positive effects on corporate image is consumers’ awareness of the CSR-‐measure (Sen et al, 2006). Further research suggests that the positive effects of CSR are not
Table 2) Different CSR characteristics (and examplary categories)
level domain firm-motivation
high community support altruistic
moderate diversity instrumental
low employee support etc.
present/absent environment
non-‐domestic operations
only temporary, but that CSR can increase customer loyalty (Marin et al, 2009).
The domain of CSR refers to the ‘addressee’ of the CSR activity or the cause it addresses. Kinder et al. (1999), provide a categorization that captures most possible CSR activities. They are: 1. community support, which refers e.g. to support of arts and health programs or educational initiatives, 2. diversity regarding e.g. sex, race, family status, sexual orientation and disabilities, 3. employee support (e.g., concern for safety, job security), 4. the environment which might contain environment-‐friendly products, hazardous-‐waste management or CO2-‐emmissions, 5. non-‐domestic operations such as non-‐domestic supplier relationships, overseas labour practices and working conditions, and lastly 6. product which could address product safety, research and development practices and innovation.
Anselmsson & Johansson (2007) concluded in their research that the CSR that addresses the human-‐related domain (e.g. employee support and diversity), results in higher purchase intentions than the other domains, whereas product-‐related CSR increases the company
evaluation. Environmental CSR surprisingly had the lowest effect on either purchase intent and company evaluation. Furthermore, CSR that benefits consumers themselves – like the domain of product safety and information – tends to be appreciated more than others (Auger et al., 2008; Peloza & Shang, 2011). The categorization of domains will be particularly relevant later when we discuss the moderating variable ‘CSR-‐Support’ in our study (section 2.3.5).
Lastly, the CSR-‐information about the firm-motivation to pursue CSR refers to the motivations as discussed in section 2.2. This field has up until now been almost entirely neglected in the
literature. Not only does it intuitively seems plausible that consumers would be interested in whether a firm’s CSR-‐efforts are made for the sake of the societal good (altruistic firm-‐ motivation) or if they are merely used instrumentally for the sake of the firm’s own profit. In fact, attribution theory (Jones & Davis 1965) states that individuals tend to interpret others’ actions in terms of the underlying intentions; especially in the case of “out-‐of-‐role” behaviour such as when a company tries to improve societal welfare. This suggests, that consumers might base their evaluations of a company on the intentions they attribute to its behaviour – also in
terms of CSR. In a study on cause-‐related marketing (CRM), Ellen & Mohr (1998) suggest that one third of consumers is by default very sceptical with regards to firms’ sincerity when combining business and social cause while an other third puts a lot of cognitive effort into attributing a firm’s motivation for CRM. A study by Olsen-‐Becker et al (2006) confirms this assumption and furthermore finds that in fact profit-‐motivated CSR will result in consumers having “thoughts that are less favourable, […] more negative attitudes toward the firm, beliefs about the firm as less credible, and lower likelihood of purchase intention”. We seek to examine the role of firm motivation more explicitly. Therefore our first hypothesis is as follows (see Figure 2 for the complete model):
H1a: An instrumental firm-motivation will result in a lower company evaluation as compared to an altruistic firm-motivation.
H1b: An instrumental firm-motivation will result in a lower purchase intent as compared to an altruistic firm-motivation.
2.3.3 CSR and consumer–company congruence
In Sen & Bhattacharya’s 2001 study (Figure 1), the effect of the CSR-‐level on respondents’ company evaluation was positively tested for mediation by a construct they named Consumer-
Company-congruence (C-‐C congruence). C-‐C congruence is “the amount of congruence or overlap
[consumers] perceive between the company’s character […] and their own” and thereby a measure of company-‐identification (Sen & Bhattacharya, 2001). In their study the level of CSR activity significantly impacts C-‐C congruence; a high level of perceived C-‐C congruence in turn enhances company evaluation.
The assumption that the match of an individual’s character with the perceived company character influences the individual’s reaction to that company is derived from research on “person-‐organization fit” (P-‐O fit) (Kristof, 1996) that focused on the relationship between
employees and the organization that employs them. Sen & Bhattacharya reasoned that such P-‐O fit would also hold for consumer-‐company relationships and that consumers would equally distinguish between high-‐fit and low-‐fit companies (Sen & Bhattacharya, 2001). Secondly, the concept of C-‐C congruence is derived from research on individuals’ identification with the company they belong to (Bergami & Baggozzi, 2000). It postulates that individuals perceive a stronger identification with companies whose character they perceive as similar to their own. At the same time consumers also tend to attribute favourable characteristics of a firm whose products they buy to themselves in order to enhance their self-‐consistency.
As mentioned above, Sen & Bhattacharya’s research focused on the level of CSR activity (and its effective outcome) as the type of CSR information that consumers receive. Since the role of C-‐C congruence was significant in the case of their study, we assume that, firstly, the fit of a
consumer and the company also depends on firm-motivation as the type of CSR information: consumers will perceive the motivation behind a company’s activity as part of the company’s character and it will therefore affect their perception of the match between the company’s character and their own (which is C-‐C congruence). Secondly, as confirmed by Sen’s study, the degree of C-‐C congruence will affect consumers’ company evaluation. This makes C-‐C
congruence a mediator and thus also applicable to our model:
H2a: The effect of firm motivation on company evaluation will be mediated by the level of consumer-company distance.
H2b: The effect of firm motivation on company evaluation will be mediated by the level of the perceived consumer-company overlap.
2.3.4 CSR and consumers’ values
So far in the effect on consumer response, we accounted for CSR-‐level, CSR-‐domain and
play a role in consumer response particularly to firm-‐CSR-‐motivation. In fact, several studies have incorporated consumer values in their analysis of the relationship between CSR-‐
information and consumer response (Golob et al 2008, Siltaoja 2006, Basil & Weber 2006). The most widely accepted value-‐framework used in recent literature (Siltaoja 2006) was established by Shalom Schwartz in 1987 (Peloza & Shang, 2011) and refined subsequent papers (Schwartz & Bardi, 2001a, Schwartz et al. 2002). Schwartz says that even though individuals differ in their value priorities, the underlying structure of the human value system is universal. In other words, there are universally recognized types of values and people merely differ in terms of the relative importance they put on these value types. Schwartz defines values as “(a)
concepts or beliefs about (b) desirable end states or behaviours that (c) transcend specific situations, (d) guide selection or evaluation of behaviour and events, and (e) are ordered by relative importance.” This definition makes clear why Schwartz values are highly relevant to
consumer research: “selection and evaluation” (d) directly correspond to the afore-‐mentioned consumer responses “purchase intent” and “company evaluation”. Furthermore, since values “transcend specific situations” (c), they are a permanent characteristic of the consumer, independent from the specifics of a particular case of a purchase decision. Schwartz also calls values “motivational goals” since they guide individual behaviour toward a “desired end-‐state”
Table 3) Schwartz’ (1987) values
values associated goals single representative values
benevolence the welfare of people with whom one Preservation and enhancement of is in frequent personal contact
Helpful, honest, forgiving, loyal, responsible
self-‐transcendence values
universalism tolerance, and protection for the Understanding, appreciation, welfare of all people and for nature
Broadmindedness, wisdom, social justice, equality, a world
at peace, a world of beauty, unity with nature, protection of
the environment
power
Social status and prestige, control or dominance over people and
resources
Social power, authority, wealth, preserving one’s public image Self-‐enhancement
values
achievement demonstrating competence Personal success through according to social standards
Being successful, capable, ambitious, influential
which functions as an incentive that motivates action.
Schwartz identified ten important values, four of which turned out relevant in explaining consumer response to CSR (Golob et al 2008, Siltaoja 2006): On the one hand the values of
universalism and benevolence correspond to and translate into self-‐transcendent motivation and
behaviour because they mean that an individual puts a high importance on overall welfare independent from its own desires (for a detailed description see Table 3). On the other hand the values of power and achievement translate into self-‐enhancing motivation and behaviour
because they seek personal accomplishment and dominance over their human and natural environment. Individuals with high importance on these values tend to be more egoistic than those with low self-‐enhancing values.
In the case of the relationship between CSR and consumer response, the antagonism of self-‐ enhancement vs. self-‐transcendence is of particular relevance because it constitutes the struggle between the concern for the effects of actions and events on oneself (self-‐enhancement) and the concern for the effects on others in a social and global context (self-‐transcendence) (Peloza & Shang, 2011). Several study related the effect of the CSR-‐domain to respondents’ values and found that those scoring high on self-‐transcendence tend to very positively respond to
environmental CSR (Karp, 1996; Schuler & Cording, 2006; Stern et al., 1995). Golob et al. (2008) conducted research that related the self-‐enhancement and self-‐transcendence values of
consumers’ values to their relative expectation of firms to engage in different types of CSR. The study came to the conclusion that self-‐enhancing individuals have significantly higher
expectations regarding a firm’s fulfilment of its economic responsibility whereas individuals who are strong on self-‐transcending values put a much higher value on the ethical and
philanthropic component. The fact that highly self-‐enhancing individuals expect firms to fulfil their economic responsibility relatively more than individuals who are low on self-‐enhancing values, suggests, that these (self-‐enhancing) individuals would also be much more in favour of an instrumental (e.g. profit-‐oriented) firm-‐motivation behind a CSR-‐activity. Therefore we postulate the following hypothesis:
H3a: The relationship between firm-motivation and company evaluation will be moderated by respondents’ self-enhancement values. The higher the self-enhancement, the higher will the company be evaluated despite an instrumental firm motivation.
H3b: The relationship between firm-motivation and company evaluation will be moderated by respondents’ self-transcendence values. The higher the self-transcendence, the lower will the company be evaluated in case of instrumental firm motivation.
As explained above, the company evaluation is likely to be mediated by C-‐C congruence (the individual’s identification with the company). Since C-‐C congruence refers to the match between the individual’s character with the firm character, it will likely be influenced by the individual’s values (as part of the individual character) and the way they match the perceived firm-‐
motivation which serves as an indicator for the firm’s character. Therefore we assert that C-‐C congruence – as a response to the company’s CSR-‐motive – is moderated by individual values and that therefore the mediation through C-‐C congruence is moderated.
H4a: The relationship between firm-motivation and consumer-company congruence in terms of (H4a1) C-C distance and (H4a2) C-C overlap will be moderated by the respondents’ self- enhancement. The higher the self-enhancement, the higher will be C-C congruence when facing an instrumental firm-motivation.
H4b: The relationship between firm-motivation and consumer-company congruence in terms of (H4b1) C-C distance and (H4b2) C-C overlap will be moderated by the respondents’ self- transcendence. The higher the self-transcendence, the lower will be the perceived C-C congruence when facing an instrumental firm motivation for CSR activity.
2.3.5 Consumers’ CSR-‐support
“CSR-support” refers to the importance of the addressed CSR-‐domain (section 2.3.2) to the
individual respondent. Sen & Bhattacharya (2001) tested whether the importance individuals put on the domain of a CSR activity affects how they evaluate a company in response to CSR-‐ level. In past studies, this construct has been coined e.g. “importance of issue to self” (Haley 1996) and “personal relevance” (Creyer & Ross, 1997). These studies as well as Sen & Bhattacharya (2001) found the individuals’ CSR-‐support to be a significant moderator of the effect of CSR-‐information on both purchase intent and company evaluation. In order to find out whether this also holds for CSR-‐information on firm-‐motivation, we hypothesize:
H5a: CSR-support moderates the relationship between firm-motivation and (H5a1) company- evaluation / (H5a2) purchase intent. The higher CSR-support, the more negatively will the company evaluation be when facing an instrumental firm-motivation.
H5b: The mediation of company evaluation through (H5b1) C-C distance / (H5b2) C-C overlap will be moderated by CSR-Support. In case of an instrumental firm motivation (as opposed to altruistic), C-C congruence will drop stronger when CSR-support is high.
In summary, based on our postulated hypotheses we seek to expand Sen & Bhattacharya’s (2001) model in the following way: While Sen chose the level of CSR as the type of CSR
information whose effect was to be investigated, we choose the motivation due to which the firm pursues CSR. Secondly we introduce additional moderators, namely the self-‐enhancement and self-‐transcendence values. Thirdly, since this is a highly exploratory study, we want to get an as diverse picture as possible and therefore analyse both the direct moderation effects of all moderators as well as the indirect, mediated moderation effects. Our research model is depicted in Figure 2. For a better overview of all hypotheses we included a summary table (Table 4).
Ta b le 4 ) H yp ot he se s – O ve rv ie w
