Getting political – is it worth it? Examination of reactions to Corporate Political Advocacy among European consumers.

Getting political – is it worth it? Examination of reactions to Corporate Political Advocacy among European consumers.

Katarzyna Nowosad 11354534 Master’s Thesis

Graduate School of Communication Master’s program: Communication Science

Suzanne de Bakker June 26, 2020

Abstract. In recent years, corporations have become more inclined to engage in corporate political advocacy, publicly expressing their stance on various divisive socio-political issues, such as LGBT rights, emergency contraception or immigration. Many examples of such practice have shown that it polarizes the public, eliciting both approval as well as

disapproval. This research examines the effects of CPA on purchase and avoidance intention, among European consumers, with consideration to some external factors that might influence these relationships. The results indicate that engaging in CPA requires careful

considerations and thorough understanding of the company’s target audience, as it can have a negative effect on financial performance, when consumers do not agree with the stance that was supported. This negative effect, however, can be reduced, if the involvement in CPA is perceived to be in line with what the company claims to represent.

Introduction

Traditionally, corporations have refrained from being publicly involved in socio-political issues, because this type of practice was thought to divert attention from the business’s main objectives, and to needlessly insert ideology into the economic realm (Weinzimmer & Esken, 2016; Wettstein & Baur, 2016). However, in response to the current politically and socially charged climate companies have become more inclined to step out of their comfort zone and take a stance on various divisive issues (Nalick, Josefy, Zardkoohi, & Bierman, 2016). Instances of such practice include Budwiser and Coca-Cola publicly

supporting gay marriage (Huddelston, 2016; Long, 2017). Barilla speaking out against same-sex marriage (Davies, 2013), Unilever encouraging refugee support in Europe (Horvath, 2016), Netflix, Disney and WarnerMedia denouncing the prohibitive abortion law introduced in the state of Georgia (Denning, 2019), as well as Starbuck promoting acceptance and inclusion of transgender people (Walansky, 2020). In academic literature, such explicit and public expression of support for particular groups, ideals or values is often referred to as corporate political advocacy (CPA) (Wettstein & Baur, 2016; Korschun, Rafieian, Aggrawal & Swain, 2016).

Over the last decades, organizations have become more active in not only disclosing, but also promoting their actions as responsible social actors (Carrol, 2015). This has been in line with a substantial number of studies in marketing research and CSR pointing to the fact that, while making purchases, consumers reflect on the societal impact of their decisions (Hydock, Paharia & Weber, 2019). More recently, however, the expectations of consumers seem to have gone even further than the long-established CSR practices focused on rather undisputed issues, relevant to the organizational functioning (Rim, Lee & Yoo, 2019). With variety of divisive issues gaining attention on social media (Berthon, Pitt, Plangger &

Shapiro, 2012; Seele & Lock, 2014; Rim et al., 2019) and social consciousness becoming increasingly prevalent in consumer behavior (Micheletti & Stolle, 2012; Sandikci & Ekici, 2009), at least some part of the population seems more inclined to evaluate the political affiliation of the company, when contemplating a purchase. This is further supported by the academic scholarship on political consumerism (Neilson, 2010), which is defined as

consumption with regard to one’s societal impact, through support of companies exhibiting desired behavior. It involves either buycotting or boycotting, that is, either purchasing or avoiding the company’s products based on the evaluation of its behavior. By engaging in political consumerism, consumers can express their personal political stance, and effectively secure and assert their political identity (Bhattacharya & Sen, 2003; Yates, 2011; Deng & Xu, 2017).

Many of the companies, which engage in CPA, function on a multinational market, and, in the age of social media, their actions are often visible to an international audience. Even initially local issues, the organization is involved in, can rapidly become of global concern (Berthon et al., 2012). Nevertheless, the vast majority of existing empirical research regarding consumer reactions to CPA (Dodd & Supa, 2014; Korschun et.al., 2016, Rim et al., 2019) focuses solely on the United States citizens. Building on the existing studies, it is interesting to explore a different geographic segment of the market, that is, establish the effects of CPA among European consumers. It is fair to assume that institutional and cultural differences between the United States and Europe, may affect consumers’ expectations of the companies, and may have an effect on how they perceive CPA (Matten & Moon, 2008).

In line with academic scholarship, CPA functions beyond the market and profit motivation of organizations. Nonetheless, several studies investigating consumers in the United States have acknowledged that such political involvement can influence the financial bottom-line of the company, particularly, purchase intention (Dodd & Supa, 2014; Rim et al.,

2019). The same studies have established that opinion congruence, that is, the degree to which a consumer agrees with the stance voiced by an organization, provides additional insights in terms of CPA effectiveness. The effect of CPA on purchase intention has also been explained by the perceived hypocrisy of the company, as seen by the consumers

(Korschun et.al., 2016). This perceived alignment between what the organization claims to be and what it actually does was found to depend on not only CPA, but also company

orientation, that is, the company’s mission, as described to the public.

The goal of this study was to investigate whether the effects of CPA observed among European consumers, would be comparable with those established in the United States. The results could either question, or contribute to the conventional wisdom, according to which companies should refrain from taking sides in socio-political issues (Korschun et.al, 2016). Simultaneously, they could provide implications for the practitioners, indicating the possible benefits and risks of taking a political stand, and considering the conditions that need to be met on the way to successful CPA. Furthermore, the aim of the study was to establish to what extent does CPA induce rewarding, as well as punitive behavior, that is, to what extent does it influence purchase intention, as well as avoidance intention. In line with the literature on political consumerism, separating these two outcomes could improve the understanding of the different forms of civic expression, practiced by the consumers (Neilson, 2010; Kelm & Dohle, 2018). Additionally, it could help professionals create a more effective organizational strategy, whether they are focused on attracting new consumers or minimizing the negative responses from the existing customer base (Neilson, 2010).

The study proceeded as follows. First, it investigated the direct influence of CPA on purchase intention and avoidance intention. Subsequently, it examined the effect of CPA on perceived hypocrisy of the company, considering potential interaction with the company

orientation. Thereafter, the study explored whether perceived hypocrisy can explain the relationship between CPA and purchase intention, as well as CPA and avoidance intention.

Initially, all of the analyses focused on the comparison between consumers, who encountered CPA, and those, who did not. Secondarily, each of the steps involved an additional analysis, separating consumers exposed to CPA into two groups, based on the opinion congruence. This was thought to provide additional insights regarding all of the investigated relationships (Dodd & Supa, 2014; Dodd & Supa, 2015; Hydock et al., 2019). Accordingly, the research addressed the following questions:

RQ1: To what extent does CPA influence consumers’ (a) purchase intention and their (b) avoidance intention?

- Sub-question 1: To what extent does consumers’ (a) purchase intention and (b) avoidance intention vary, depending on whether their opinion is congruent with CPA?

RQ2: To what extent does CPA influence perceived hypocrisy among the consumers? - Sub-question 1: To what extent does company’s orientation moderate the influence

of CPA on perceived hypocrisy among the consumers?

- Sub-question 2: To what extent does the moderation effect of company orientation on perceived hypocrisy among the consumers vary, depending on whether their opinion is congruent with CPA?

RQ3: To what extent does perceived hypocrisy mediate the influence of CPA on consumers’ (a) purchase intention and (b) avoidance intention?

Theoretical Framework

Corporate Political Advocacy

The concept of CPA has been defined in various ways across the academic literature. Some refer to it as taking a public position on a divisive socio-political issue or legislation, either by a company or its executives (Korschun et.al, 2016). Others define it as voicing support for specific ideals or values, explicitly and publicly, with the goal of encouraging others to act in the same way (Baur & Wettstein, 2016). In both cases, CPA implies the propagation of a cause, or an issue, which is beyond the financial interests of the company.

Due to its relatively novel nature, CPA poses certain conceptual and normative challenges (Wettstein & Baur, 2016; Ciszek & Logan, 2018; Rim et al., 2019). It seems to correspond in large part with corporate political activity and political CSR, however, neither of them explains it sufficiently.

Corporate political activity - such as lobbying, donating to political parties, or funding research (Anastasiadis, 2014; Lock & Seele, 2016) - relates to CPA, in a way that both

practices aim to exert some kind of influence on politics. In its traditional understanding, however, corporate political activity focuses on quietly advancing the economic interests of the organization, through adoption of relevant policies, whereas CPA involves public support of issues, that are not directly relevant to the organizational functioning (Baur & Wettstein, 2016; Lock & Seele, 2016).

CPA is also considered together with CSR, or more specifically, political CSR

(Scherer & Palazzo, 2011; Frynas & Stephens, 2015; Baur & Wettstein, 2016; Lock & Seele, 2016; Hydock et al., 2019). Both CPA and political CSR function beyond the financial considerations and assume a publicly expressed political involvement. Nevertheless, what separates one from another is the fact that while political CSR aims at involving the company

in holistic deliberation process and considering the needs of all the stakeholders, CPA calls for exposure of the company beyond such considerations (Baur & Wettstein, 2016; Hydock et al., 2019).

Although political CSR fails to sufficiently embed the concept of CPA, it provides some normative justification for such practice, since it also acts beyond economic interests. Nonetheless, the notion of legitimacy, often attributed to political CSR, involves consensus-driven, open dialogue among all the stakeholders. CPA goes beyond consensus, promoting certain values and ideals over others, and therefore, it requires looking beyond the idea of legitimacy associated with stakeholder theory. Interestingly, Wettstein and Baur (2016) argued that it is possible to consider CPA as a component of CSR, however, doing so demands adoption of value-driven perspective on CSR, rather than activity-driven

perspective, which dominates the academic scholarship (Wettstein & Baur, 2016). This way, CSR would be evaluated based on overall corporate character, grounded in integrity, that is, consistency between the fundamental values, communication, and behavior (Basu & Palazzo, 2008).

All in all, CPA involves public support of socio-political issues, disconnected from the organizational functioning, and promoting certain values over others, at the cost of isolating some of the stakeholders.

Corporate Political Advocacy and Company Performance

Due to the divisive nature of some socio-political issues, CPA may lead to polarization among the stakeholders, and induce either buycotting or boycotting, that is, either actively rewarding the actions of the company, through purchasing its products, or actively punishing these actions, through avoiding its products (Rim et al., 2019). Previous studies (Paek & Nelson, 2009; Neilson, 2010; Yates, 2011; Rim et al., 2019) have found

some significant differences between buycotters and boycotters, demonstrating that political consumers should not be considered as a homogeneous group. In line with this view,

Korschun et al. (2016) conducted a study among American consumers, investigating the effects of CPA on both purchase intention, as well as avoidance intention. Interestingly, for both of these outcome variables, no differences were found between the conditions where CPA was present and where it was absent. Notwithstanding, the existing literature dedicated to CPA and political consumerism (Hydock et al., 2019) seems to endorse the idea that CPA can elicit both support and resistance from the consumers. Ultimately, the question is, whether one of these outcomes overshadows the other.

Some suggest that, in response to CPA, people are more prone to engage in

avoidance, rather than purchasing behavior, and this can be attributed to the negativity bias (Friedman, 1996; Iyengar & Westwood, 2014; Hydock et al., 2019). It means that negative information affects consumers more than positive information, effectively making them more inclined to avoid companies with negative associations, than to support companies with positive associations. Similarly, consumers seem more motivated to disassociate themselves from a company, whose actions they disapprove of, than to seek association with a company they approve of (Baron, 1999; Hydock et al., 2019). The need of disassociation is further amplified by the, currently evident, political polarization of the society (Hydock et al., 2019; White & Dahl, 2007). What is more, when considering purchase and avoidance intention as possible outcomes of CPA, it is clear that the former requires more thinking and effort than the latter. Correspondingly, purchasing products, in response to CPA, can be considered a less accessible, and more explicit expression of one’s identity, than avoidance (Yates, 2011; Hydock et al., 2019).

Although some positive effects of CPA on purchase intention have been found among consumers in the United States (Dodd & Supa, 2015), it is reasonable to assume that the

result among European consumers would be different. This is due to some important cultural and institutional differences between the United States and Europe (Matten & Moon, 2008). For instance, American consumers are generally considered as more altruistic, which makes them more likely to seek purchase from a company, based on its involvement in socio-political issues (Matten & Moon, 2008; Neilson, 2010). Additionally, in the United States, engaging in various voluntary activities focused on politics or the well-being of society is much more prevalent among corporations, than it is in Europe (Matten & Moon, 2008). Therefore, this inclusion of ideology in business practices, might be considered more familiar, and easier to accept. What is more, the Edelman Earned Brand Study (2018)

conducted in eight countries around the world, including the United States, as well as France, Germany and the United Kingdom, questioned the overall, positive effect of CPA on

purchase intention. It indicated that consumers, who viewed communication regarding the company’s stance on an issue, were somewhat less likely to consider a purchase than those, who were exposed to a regular, product-focused message.

All in all, despite the fact that CPA has a potential to yield both positive, and negative outcomes, this research hypothesized that the latter might overpower the former. Taking a stand can not only inhibit purchase intention, but it can also encourage avoidance intention. Therefore, the following was hypothesized:

Hypothesis 1: Purchase intention will be lesser for participants in CPA condition, than for those in condition without CPA.

Hypothesis 2: Avoidance intention will be greater for participants in CPA condition, than for those in condition without CPA.

Corporate Political Advocacy and Consumers’ Opinion

Although CPA does not offer consumers information about the company’s products, it often discloses aspects of organizational identity (Bhattacharya & Sen 2003; Deng & Xu, 2017). The social identity theory suggests that similarity between the values and ideals embraced by the company, and those accepted by the consumer, is an important determinant of identification, which can subsequently lead to greater purchase intention (Tajfel & Turner, 1986; Bhattacharya & Sen 2003; Korschun et al., 2011). At the same time, when the values of the company contradict with those of the consumer, the relationship between the two is unlikely to continue (Elsbach & Bhattacharya, 2001; Korschun et al., 2016).

Indeed, Hydock, Paharia and Weber (2019) have indicated that behavioral outcomes of CPA are likely to depend on the consumer characteristics, such as political orientation and identity. Correspondingly, in the study of Dodd and Supa (2014), purchase intention was greater among respondents with opinion congruent to the company’s stance, than among those with opinion that was incongruent with that stance. Furthermore, another experimental research (Korschun, et al., 2016) established that the reported purchase intention was higher when consumers agreed with the CPA claim of the organization, as compared to the situation when the company decided not to take a stance at all. At the same time, taking a stance that consumers do not agree with resulted in lower purchase intention than refraining from taking a stand.

The same study (Korschun, et al., 2016) has also found that consumers, who agreed with the company’s CPA, reported lower avoidance intention, in comparison to when no stance was taken. Although avoidance intention was not found to differ between the

consumers, who were not exposed to CPA and those, who did not agree with CPA, literature suggests that this could indeed be the case. Consumers are likely to seek disassociation from a company that engages in CPA, in case the values, expressed through this practice, do not

align with their own (White & Dahl, 2007; Hydock et al., 2019). On the other hand, if a company does not take a stand, there seems to be less space for disagreement. Political orientation has been proven to robustly affect consumption preferences and behavior (Jost, 2017; Hydock et al., 2019), and the increasing political polarization of society seems to further amplify its influence (Iyengar & Westwood, 2015). Importantly, such bias makes consumers particularly motivated to avoid companies with ideals that are divergent from their own (White & Dahl, 2007; White, Simpson & Argo, 2014; Hydock et al., 2019).

All in all, theory (Tajfel & Turner, 1986; Elsbach & Bhattacharya, 2001;

Bhattacharya & Sen 2003; White & Dahl, 2007; Hydock et al., 2019) and empirical research among American consumers (Dodd & Supa, 2014; Dodd & Supa, 2015; Korschun et al., 2016) have generally acknowledged that similarity between the organization and the consumer is the underlying system behind the public’s reaction to CPA. Grounded in these insights, this study examined whether we can confirm similar effects among the consumers in Europe. Thus, the following was hypothesized:

Hypothesis 1a: Purchase intention will be greater for participants, whose opinion is congruent with CPA, than those, who were not exposed to CPA. Participants, whose opinion

is not congruent with CPA, however, will report lower purchase intention than those, who were not exposed to CPA

Hypothesis 2a: Avoidance intention will be higher for participants whose opinion is not congruent with CPA, than those, who were not exposed to CPA. Participants, whose opinion is congruent with CPA, however, will report lower avoidance intention than those, who were

Corporate Political Advocacy and Perceived Hypocrisy

Literature on CSR has commonly recognized that consumers tend to attribute various motives to organizational practices that go beyond economic considerations. In fact, such interpretations are considered a fundamental factor in assessment of society-oriented

corporate practices (Du, Bhattacharya & Sen, 2010). When a company seems to engage in a certain practice out of sincere desire to have an influence on the state of affairs, such behavior is considered to have an intrinsic motivation. When the goal of corporate practice is to

improve performance, however, its motivation is deemed extrinsic. (Gilbert, 1989; Du et al., 2010)

The two-stage model of attributions (Gilbert, 1989) has been used to reason that if the cause, that company engages in, matches its core business, its practice is more likely to be considered as intrinsically motivated, which can in turn lead to more positive attributions (Du et al., 2010). When applying this to CPA, the fit between the cause and the core business of the company can be compared to the concept of organizational integrity, which stands for consistency between the fundamental values and the practices of the company (Basu & Palazzo, 2008).

Taking a value-driven perspective on CSR helps understand why a company with a particular set of values or orientation, cannot remain indifferent, and therefore compromise its integrity, in face of systematic violation of these values in its immediate environment (Wettstein & Baur, 2016). It can be assumed that if the values embraced through CPA were consistent with the orientation of the company itself, its integrity would most likely be preserved. On the other hand, if the values of the company did not align with CPA, the integrity would be compromised. As a result, consumers might consider the company as hypocritical, and this can lead to less favorable attitudes (Wagner, Tillman, Lutz & Weitz, 2009). Since CPA tends to alienate part of the stakeholders and it focuses on issues, which

are largely disconnected from the daily operations of the company, it is fair to assume that it will be more likely to elicit perceived hypocrisy, when compared to conventional brand communication. Accordingly, the following was expected:

Hypothesis 3: Perceived hypocrisy will be greater for participants in CPA condition, than for those in condition without CPA.

Consumers’ opinion on the subject of CPA is generally considered to play an

important part in its effectiveness (Korschun et al., 2016; Hydock et al., 2019). Furthermore, it has been established that political opinion can affect the way one processes objective information (Huber, Boven, Park & Pizzi, 2015; Krishna & Sokolova, 2017). Accordingly, when consumer’s opinion is congruent with that expressed through CPA, one can expect that the reaction will be based on cognitive shortcuts, rather than thoroughly analyzed information (Krishna & Sokolova, 2017). This suggests that the opinion congruence could potentially reduce perceived hypocrisy among consumers, as they would simply pay less attention to the alignment between what company says about itself and what it does. Therefore, the following was hypothesized:

Hypothesis 3a: Perceived hypocrisy will be lesser for participants, whose opinion is congruent with CPA, than those, whose opinion is not congruent with CPA.

Perceived Hypocrisy as a Result of Corporate Political Advocacy and Company Orientation In the study of Korschun et al. (2016), conducted in the United States, the assessment of company’s orientation, made by consumers, resulted in certain expectations regarding the extent, until which engaging in CPA was appropriate. Advocating for a socio-political cause

was desired for value-oriented companies, claiming that certain beliefs and values are as important to them, as achieving financial success. On the other hand, result-oriented companies, representing strive for investor satisfaction and building capital, were expected not to engage in CPA, and therefore keep their practices in line with market motivations. The inconsistency between the organizational values, and the values supported through CPA, made the company look hypocritical in the eyes of the consumers, and ultimately influenced consumption intentions. Assuming that similar effects might occur among European

consumers, the following was expected in this study:

Hypothesis 4. In the CPA condition, perceived hypocrisy will be lower for a value-oriented company, than result-oriented company, whereas in the no CPA condition, perceived hypocrisy will be greater for a value-oriented company, than result-oriented company.

Previous research have generally acknowledged that reactions to CPA are likely to be shaped by the opinion congruence between a consumer and a company (Bhattacharya & Sen 2003; Dodd & Supa, 2014; Korschun et al., 2016; Hydock et al., 2019). Accordingly, one can assume that this aspect would also affect the relationship between CPA, company orientation and perceived hypocrisy. Similar rationale was used in the study of Korschung et al. (2016), who have separated the conditions, where CPA was present, into two. As a result, one condition included participants, who agreed with the supported stance, and the other one included those, who disagreed with the supported stance. The scholars have established that when opinion congruence was not present, perceived hypocrisy was greater for result-oriented companies engaging in CPA, than value-result-oriented companies. Nevertheless, when consumers agreed with the supported stance, the difference in outcomes was not significant. This result does not seem surprising, considering that one’s political affiliation has been

proven to influence their ability to systematically process information, under certain

circumstances (Huber et al., 2015; Krishna & Sokolova, 2017). Perhaps, the feelings induced by a company taking a stance for one’s values and beliefs is enough to dismiss the role of company orientation, when responding to CPA (Rydell, Mackie, Maitner, Claypool, Ryan & Smith, 2008; Krishna & Sokolova, 2017). All things considered the following was

hypothesized in this study:

Hypothesis 4a: In the CPA condition, perceived hypocrisy will be lower for value-oriented company, than result-oriented company, but only when participant’s opinion is not congruent

with CPA, and not when it is congruent.

Corporate Political Advocacy and Company Performance, Explained by Perceived Hypocrisy

In their examination of American consumers, Korschung et al. (2016) have

established that, after exposure to CPA, perceived hypocrisy could lead to lower purchase intention. On the other hand, when organizational values corresponded with CPA, purchase intention was likely to be greater, due to decreased perceived hypocrisy. The aim of this research was not only to establish whether comparable effects would occur among the European consumers, but also to investigate whether similar relationships would occur with avoidance intention as an outcome variable.

Consumers tend to avoid purchases from organizations, with whom they disagree on certain values, principles or desirable practices (White & Dahl, 2007; Hydock et al., 2019). Hypocrisy could be considered as a point of such a discord. Moreover, if this type of act is viewed as immoral, one could be particularly driven to avoid any sort of association with the company involved (Baron, 1999). This reasoning, combined with utilitarian qualities of

boycotts (Hydock et al., 2019), suggests that avoidance intention is another outcome to consider, when examining the effectiveness of CPA with regard to company orientation and consequent perceived hypocrisy. Inspired by the CSR scholarship (Du et.al., 2010),

theoretical considerations of CPA (Basu & Palazzo, 2008; Wettstein & Baur, 2016), as well as the experimental study by Korschun et al. (2016), the following was expected in this research:

Hypothesis 5: Perceived hypocrisy will negatively influence purchase intention, mediating the effect of CPA on consumers’ purchase intention.

Hypothesis 6: Perceived hypocrisy will positively influence avoidance intention, mediating the effect of CPA on consumers’ avoidance intention.

Method

Design

The study employed a 2x2x2 between-subject factorial design, with two experimental factors – CPA (present or absent) and company orientation (result- or value-oriented)– and one quasi-experimental factor – opinion congruence between the consumer and the company. The quasi-experimental factor separated the audience exposed to CPA, based on their

agreement with the stance taken by a company. Choosing this design enabled collection of adequate data in a limited time period, and with scarce resources, as it required minimal effort from the participants. Additionally, its goal was to minimize the carry-over effects and fatigue.

A fictional company was created for the purpose of the experiment, in order to minimize the impact of any preexisting attitudes among the consumers. The company, called TUERI, was designed to specialize in selling sustainable products for everyday personal care. The socio-political issue of interest was chosen, based on the main concerns of Europeans, as reported in various analyses of public opinion (Dražanová, Liebig, Migali, Scipioni &

Spielvogel,2017; Heath & Richards, 2019). It was established that immigration is one of the most divisive issues, with some considering it as an opportunity, and others regarding it as more of a problem. Since this research was conducted in exceptional circumstances, during a time of a global pandemic caused by the SARS-CoV-2 virus (World Health Organization, 2020), the manipulation was adjusted, so that it corresponds with the current social climate. Therefore, the CPA claims made by TUERI focused on supporting inclusive COVID-19 responses, which aim at incorporating migrants into public health strategies. These claims were presented to participants in a form of a Facebook post on a profile of TUERI. In order for the conditions with and without CPA to be similar as possible, all of them presented a post where the company describes its CSR practice in response to the restrictions caused by the pandemic. The conditions with CPA additionally included a paragraph regarding the immigration. Second part of the manipulation involved a short description of the company, with emphasis on either organizational values, or organizational results.

All in all, participants could be exposed to one of the four experimental conditions: (a) Facebook page including CPA claim and description of the company as value-oriented; (b) Facebook page including CPA claim and description of the company as result-oriented; (c) Facebook page without a CPA claim and with description of the company as

value-oriented; and (d) Facebook page without a CPA claim and with description of the company as result-oriented. Although the description of the company and all the content published in its name were created for the sake of this research only, they were inspired by content published

by existing businesses and their past involvement in socio-political issues (Molloy, 2017; McAuliffe & Bauloz, 2020).

Procedure

In order to collect the necessary data, an online questionnaire was distributed through various social media platforms, such as Instagram, Facebook and WhatsApp. These platforms were chosen due to the fact that they report the greatest number of monthly users, among the competitors (Sheth, 2018). All of the respondents were assured that their anonymity and privacy are safeguarded.

The first part of the questionnaire aimed to gather relevant demographic information about the consumers, including gender, age, place of residence and education. This was followed by a short fragment of a news article, summarizing the current issues faced by migrants, which was created on the basis of content published by various news agencies (McAuliffe & Bauloz, 2020, Stam, 2020). The second part involved manipulation of two variables – CPA and company orientation – and therefore, participants could be exposed to one of the four experimental conditions. Subsequently, respondents, who were exposed to one of the treatments including CPA claim, were asked to indicate their opinion on the issue discussed by the company. This way, the quasi- experimental factor – consumer-company opinion congruence – could be measured and investigated. The following part of the

questionnaire involved measurement of the outcome variables, namely, perceived hypocrisy, purchase intention and avoidance intention. In the end, participants were debriefed on the manipulation included in the study.

First, in order to test the successful manipulation of CPA, respondents were expected to indicate their level of agreement with the following statement: „TUERI publicly expressed its stance on a divisive political issue.”. This was measured using a 5-point Likert scale (1 = strongly disagree; 2 = disagree; 3 = neither agree nor disagree; 4 = agree; 5 = strongly agree). Secondly, the manipulation of company-orientation was assessed using the following question: “When making important decisions, what does TUERI rely on?”. The responses were measured using two 5-point semantic differential scales – one with beliefs and facts on two opposite ends of the spectrum (1 = Beliefs; 5 = Facts) and another one ranging between values and data (1 = Values; 5 = Data). The scale created for this manipulation check was confirmed to have a good reliability, α = .814, (M = 2.75, SD = 1.24).

The effectiveness of the manipulations was assessed using Independent Samples T-Test. The result indicated that the manipulation of CPA was effective, as participants exposed to CPA (M = 3.80, SD = .90) reported a significantly higher mean score than participants, who were not exposed to CPA (M = 2.85, SD = 1.02), t(242) = 7.08, p = .000, 95%CI[.68, 1.21]. Similarly, manipulation of company orientation was deemed successful, as the result-oriented condition (M = 3.32, SD = 1.18) resulted significantly higher mean score than the value-oriented condition (M = 2.20, SD = 1.02), t(242) = -7.95, p = .000, 95%CI[-1.40, -.84].

Measures

Opinion congruence between the consumer and the company, on the issue addressed through CPA, was measured by means of two questions, adopted from the study of Korschun et al. (2016). The questions were as follows: (1) “What is your stand on the inclusive COVID-19 response, supported by TUERI?”; (2) “What is your stand on the issue of immigrant integration itself?”. Respondents could answer these questions using a 7-point s scale, on

which 1 indicated “completely against”, whereas 7 indicated “completely for”. The scale was proven to be reliable, α = .80 (M = 5.18, SD = 1.38).

Opinion congruence was used as a basis for separating participants, who were exposed to CPA. Responses with the value below or equal to 3.5 were classified as

incongruent opinions, whereas responses with the value equal to, or above 4.5 were classified as congruent opinions. All neutral responses were excluded. This formed a basis for a new variable with three values: (1) CPA with incongruent opinion; (2) CPA with congruent

opinion; and (3) no CPA. This variable was essential to establish whether opinion congruence between the consumer and the company has an impact on the effectiveness of CPA.

Measuring the outcome variables, that is hypocrisy, purchase intention, and

avoidance intention, required participants to indicate their level of agreement with various statements, using a 7-point Likert scale (1 = strongly disagree; 2 = disagree; 3 = slightly disagree; 4 = neither agree nor disagree ; 5 = slightly agree; 6 = agree; 7 strongly agree).

In order to measure perceived hypocrisy among the consumers, the four following items were adopted from Wagner et al. (2009): (1) “What TUERI says about itself is not in line with what it does”; (2) “TUERI pretends to be something that it is not”; (3) “TUERI does not put its words into action”; (4) “In my opinion, TUERI acts hypocritically”. The hypocrisy scale was found to be reliable, α = .88 (M = 3.33, SD = 1.11).

The measures of purchase intention comprised four items adopted from Barber, Kuo, Bishop and Goodman (2012): (1) “I would consider purchasing TUERI product(s).”; (2) “I intend to try TUERI product(s).”; (3) “I plan on buying TUERI product(s).”; (4) I am interested in trying TUERI product(s)”. The purchase intention scale was proven to have a very good reliability, α = .99, (M = 3.95, SD = 1.25).

Avoidance intention was measured in line with the studies of Baker & Churchill (1977), as well as Khan and Lee (2014). The measurement was based on the following

statements: (1) “I would avoid trying TUERI products.”; (2) “I would buy TUERI products if I happened to see it in a store.”; (3) “I would actively avoid purchasing TUERI products.”.). This scale was also confirmed to be reliable, α = .90 (M = 2.72, SD = 1.23).

Sample

The data for this study was collected through an online questionnaire distributed on social networking sites. The sample was generated by means of convenience sampling, specifically snowball sampling, that is, using the researcher’s network, within participants passing on the questionnaire further within their network. This strategy was selected with regards to availability, restricted time frame, and limited resources. Snowball sampling was also chosen to restrict possible systematic differences between the sample and the population, that could result from recruiting respondents solely within the network of the researcher. All of the participants were required to be between 18 and 30 years of age, as this particular group has been found to be more likely to engage in political consumerism, as compared to others (Newman & Bartels, 2011; Acik, 2013). Furthermore, the goal was to recruit European citizens, as most of existing empirical studies on CPA focus on the context of the United States (Dodd & Supa, 2014; Korschun et al., 2016; Ciszek & Logan, 2018; Rim et al., 2019).

The study gathered 282 participants, out of which 38 were excluded due to the missing responses on relevant variables. As a result, 244 respondents were included in the hypothesis testing. The sample contained 124 females (50.8%), 117 males (48%) and three participants, who do not identify as neither female, nor male (1.2%). The age of the

participants varied between 18 and 30 years old, with the average around 23 years old (M = 23.28, SD = 2.71). Each member state of the Council of Europe was represented by at least one participant, however, most of the responses were provided by residents of the

reported various levels of education, with High School graduates accounting for 36% and Bachelor’s degree graduates comprising 32.8%.

Randomization Check

In order to establish whether participants were evenly distributed over treatments, randomization checks were conducted. Respondents’ age across conditions was compared through One-way ANOVA, with Condition (CPA claim and value-orientation vs. CPA claim and orientation vs. CPA claim and value-orientation vs. CPA claim and

result-orientation) as independent variable, and age as dependent variable. The analysis revealed no significant difference between conditions, F(3, 240) = .44, p = .73. In case of gender, a Chi-Square test was conducted to determine any differences across the conditions. The results indicated that conditions did not differ in terms of this demographic characteristic, X2(3, N = 241) = 1.26, p = .74.

Results

The Effect of CPA on Purchase Intention and Avoidance Intention.

An Independent Samples T-Test was conducted, in order to test Hypothesis 1 and 2. The analysis revealed no significant difference in purchase intention between the

participants, who were exposed to CPA (M = 3.84, SD = 1.32) and those, who were not (M = 4.15, SD = 1.05), t(242) = -1.94, p = .054, 95%CI[-.61, .01]. Analogous, the avoidance intention was not found to differ significantly among consumers in CPA condition (M = 2.73, SD = 1.30), and those in condition without CPA (M = 2.70, SD = 1.06), t(242) = .19, p = .085, 95%CI[-.28, .34]. The Hypothesis 1 and 2 were therefore rejected.

The Effect of CPA and Opinion Congruence on Purchase Intention and Avoidance Intention In order to establish whether the opinion congruence between the consumer and the company influences the effect of CPA on purchase intention, and on avoidance intention, One-way ANOVA was run. For the sake of this analysis, the participants from the CPA condition were separated into two groups, based on whether their opinion wass congruent or incongruent with the stance of the organization. These two groups were then compared against the participants, who were not exposed to CPA.

The groups created on the basis of opinion congruence were not of equal size, however, based on the Lavene’s test conducted along the One-way ANOVA, with purchase as the dependent variable, we could assume equal variances in the population, F(2,238) = 1.31, p = .27. The analysis indicated a significant difference between the three groups, F(2,238) = 19.03, p = .00, η2 = .14. The post hoc test revealed differences between CPA with

incongruent opinion (M = 2.81, SD = 1.01) and CPA with congruent opinion (M = 4.14, SD = 1.26), Mdifference = -1.32, SE = .22, p = .000, 95%CI[-1.87, -.78], as well as CPA with incongruent opinion and no CPA conditions (M = 4.15, SD = 1.05), Mdifference = -1.33, SE = .24, p = .000, 95%CI[-1.91, -.76].

The One-way ANOVA, with avoidance as the dependent variable, also allowed us to assume equal variances in the population, based on the Lavene’s test, F(2,238) = .33, p=.72. The analysis proved a significant difference in avoidance intention between CPA with incongruent opinion (M = 3.96, SD = 1.10), CPA with congruent opinion (M = 2.36, SD = 1.12), and no CPA (M = 2.70, SD = 1.06) conditions, F(2,238) = 28.39, p = .00, η2 = .19. The

post hoc test indicated that participants exposed to CPA with incongruent opinion (M = 3.96, SD = 1.10) reported a significantly higher perceived hypocrisy, than those exposed to CPA with congruent opinion (M = 2.36, SD = 1.12), Mdifference = 1.60, SE = .21, p = .000,

95%CI[-1.09, 2.11], and those not exposed to CPA at all (M = 2.70, SD = 1.06), Mdifference = -1.26, SE = .22, p = .000, 95%CI[.71, 1.79]. All in all, the Hypothesis 1a and 2a were partly supported.

The Effect of CPA on Perceived Hypocrisy

In order to establish differences in perceived hypocrisy among those, who saw CPA, and those, who did not, an Independent Samples T-Test was conducted. Surprisingly, the Hypothesis 3 was rejected, as no significant difference was found, t(242) = -.38, p = .70, 95%CI[-.36, .24].

Nevertheless, One-way ANOVA with multicategorical CPA as an independent variable detected some differences in terms of perceived hypocrisy, F(2, 238) = 8.67, p = .000, η2 = .06. It indicated that incongruent opinion (M = 3.97, SD = 1.16) resulted in greater

perceived hypocrisy than not only congruent opinion (M = 3.12, SD = 1.07), Mdifference = .85, SE = .21, p = .000, 95%CI[.35, 1.34], but also no CPA (3.37, SD = 1.03), Mdifference = .60, SE = .22, p = .000, 95%CI[.07, 1.12]. Accordingly, the results partly supported Hypothesis 3a.

The Effect of CPA on Perceived Hypocrisy, Moderated by the Company Orientation. Although no differences in perceived hypocrisy were found between the condition with CPA and the condition without CPA, the potential moderating effect of company orientation was still examined. Nevertheless, a Two-way ANOVA did not yield a significant main effect, neither for CPA, F(1,240) = .13, p = .716, nor for company orientation, F(1,240) = 1.78, p = .228. The interaction effect of these two variables was also deemed insignificant, F(1,240) = .63, p = .428. Therefore, Hypothesis 4 was rejected.

Similar analysis was run with multicategorical CPA, considering opinion congruence. The Two-way ANOVA indicated a significant main effect of CPA on perceived hypocrisy, F(2, 235) = 8.69, p = .00, η2 = .07, with participants exposed to CPA with incongruent

opinion (M = 3.97, SD = 1.16) reporting significantly higher perceived hypocrisy than those exposed to CPA with congruent opinion (M = 3.12, SD = 1.06), Mdifference = .85, p = .000 96%CI[.35, 1.35], as well as those, who were not exposed to CPA (M = 3.37, SD = 1.03), Mdifference = .59, p = .000 96%CI[.07, 1.12]. Notwithstanding, the analysis did not establish a main effect of company orientation on perceived hypocrisy, F(1,235) = 1.46, p = .23. What is more, the interaction effect of multicategorical CPA and company orientation was found not significant, F(2, 235) = .26, p = .77. Hypothesis 4a was effectively rejected.

The Effect of CPA on Purchase Intention and Avoidance Intention, Mediated by Perceived Hypocrisy.

The significant differences in purchase intention, avoidance intention and perceived hypocrisy were found solely after dividing participants exposed to CPA, based on the opinion congruence between them and the company. Accordingly, the research proceeded with the mediation analyses, focusing only on the multicategorical version of the CPA variable.

In order to determine whether the effect of the multicategorical CPA on purchase intention is moderated by perceived hypocrisy, a multicategorical mediation analysis with PROCESS macro was conducted, using Model 4. First, the indicator coding system was selected, in order to compare participants exposed to CPA with incongruent opinion to those exposed to CPA with congruent opinion, and those not exposed to CPA at all. Subsequently, the mediation analysis using sequential coding system was run, in order to assess differences between participants exposed to CPA with congruent opinion, and those not exposed to CPA (See Figure 1).

Figure 1. The examined multicategorical mediation model, with CPA as independent variable, purchase intention as dependent variable and perceived hypocrisy as moderator.

The results of the mediation are disclosed in Table 1. The analysis of path a1 confirmed a significant difference in perceived hypocrisy between CPA with incongruent opinion (M = 3.97, SD = 1.16) and CPA with congruent opinion (M = 3.12, SD = 1.07). The difference was also found, when examining path a2, comparing CPA with incongruent opinion and no CPA (M = 3.37, SD = 1.03). On the other hand, the investigation of path a3 did not reveal a significant difference in perceived hypocrisy between participants exposed to CPA with congruent opinion (M = 3.12, SD = 1.07) and those, who were not exposed to CPA (M = 3.37, SD = 1.03). Importantly, only 7% of the variance in perceived hypocrisy was explained by multicategorical CPA.

The regression model with purchase intention as the dependent variable, CPA as the independent variable, and perceived hypocrisy as the mediator found a significant, negative effect of perceived hypocrisy on purchase intention, indicating that as perceived hypocrisy rises, the purchase intention declines. Furthermore, the analysis of path c’1 and c’2,

established that participants exposed to CPA with incongruent opinion (M = 2.82, SD = 1.01), reported significantly lower purchase intention, than those exposed to CPA with

a1 a2 _a3 c’2 c’3 c’1 b

congruent opinion (M = 4.14, SD = 1.26), as well as those, who were not exposed to CPA (M = 4.15, SD = 1.05). Overall, CPA and perceived hypocrisy accounted for 31% of variance in purchase intention. The results of the relative indirect effect revealed that that the influence of multicategorical CPA on purchase intention can be mediated by perceived hypocrisy, when comparing the groups of CPA with incongruent opinion and CPA with congruent opinion, Xindirect = .42, SE = .13, 95%CI[.49, 1.32], as well as when pairing groups of CPA with incongruent opinion and no CPA, Xindirect = .29, SE = .12, 95%CI[.06, .54].

In contrast, the regression model analyzing path c’3, indicated no significant

difference between the participants exposed to CPA with congruent opinion (M = 4.14, SD = 1.26), and those not exposed to CPA at all, (M = 4.15, SD = 1.05). Accordingly, when comparing these two groups, the effect of multicategorical CPA on purchase intention was not mediated by perceived hypocrisy. Xindirect = -.125, SE = .02, 95%CI[-.29, .01].

Table 1

Mediation Effects of Perceived Hypocrisy on the Relationship between CPA and Purchase Intention (N = 241)

Regression paths b df t p 95% CI

[LL, UL] Path a1 (Incongruent – Congruent) -.85 238 -4.13 .000 [-1.26, -.45] Path a2 (Incongruent – no CPA) -.59 238 -2.74 .000 [-1.03, -.17] Path a3 (Congruent – no CPA) -.25 238 1.66 .09 [-.05, .55]

Path b -.49 237 -7.77 .000 [-.62, -.37]

Direct effect c’1 (Incongruent – Congruent) .91 237 4.35 .000 [.49, 1.32] Direct effect c’2 (Incongruent – no CPA) 1.04 237 4.80 .000 [.61, 1.47] Direct effect c’3 (Congruent – no CPA) .14 237 .90 .37 [-.16, .43]

Note. b = difference between the mean scores. CI = confidence interval. LL and UL represent the

lower-limit and upper-limit of the Mean Difference (I-J), respectively. For Model with paths a1,a2 and a3 F(2, 238) = 8.67, p = .00, R2 = .07. For model with paths b, c’1, c’2 and c’3 F(3, 237) = 35.99, p =

Figue 2. The examined multicategorical mediation model, with CPA as independent variable, avoidance intention as dependent variable and perceived hypocrisy as moderator.

The mediation analysis with avoidance intention as the dependent variable,

multicategorical CPA as the independent variable, and perceived hypocrisy as the mediator (See Figure 2), revealed that perceived hypocrisy positively affected avoidance intention.

The results of the analyses are visible in Table 2. The regression model investigating paths c’1 and c’2 indicated that participants exposed to CPA with incongruent opinion (M = 3.96, SD = 1.10), reported significantly greater avoidance intention than those exposed to CPA with congruent opinion (M = 2.36, SD = 1.12), as well as those not exposed to CPA, (M = 2.70, SD =1.06). In this case, as much as 51% of the variance in avoidance intention, was attributed to CPA and perceived hypocrisy. One the other hand, examination of path c’3, did not reveal a significant difference in avoidance intention between CPA with congruent opinion (M = 2.36, SD = 1.12) and no CPA (M = 2.70, SD =1.06).

The results describing the relative indirect effect indicated that, when comparing CPA with incongruent opinion and CPA with congruent opinion, Xindirect = -.55, SE = .15,

95%CI[-.88, -.28], as well as CPA with incongruent opinion and no CPA, Xindirect = -.39, SE a1 a2 a3 b c’1 c’2 c’3

hypocrisy. However, when comparing participants exposed to CPA with congruent opinion and those not exposed to CPA, the mediation does not occur, Xindirect = .16, SE = .09, 95%CI[.02, .37].

Table 2

Mediation Effects of Perceived Hypocrisy on the Relationship between CPA and Avoidance Intention (N = 241)

Regression paths b df t p 95% CI

[LL, UL] Path a1 (Incongruent – Congruent) -.85 238 -4.13 .000 [-1.26, -.45] Path a2 (Incongruent – no CPA) -.59 238 -2.74 .000 [-1.03, -.17] Path a3 (Congruent – no CPA) -.25 238 1.66 .09 [-.05, .55]

Path b .65 237 12.14 .000 [.54, .75]

Direct effect c’1 (Incongruent – Congruent) -1.05 237 -6.12 .000 [.55, .75] Direct effect c’2 (Incongruent – no CPA) -.87 237 -4.88 .000 [-1.22, -.52] Direct effect c’1 (Congruent – no CPA) .18 237 1.45 .15 [-.06, .42]

Note. b = difference between the mean scores. CI = confidence interval. LL and UL represent the

lower-limit and upper-limit of the Mean Difference (I-J), respectively. For Model with paths a1,a2 and a3 F(2, 238) = 8.67, p = .00, R2 = .07. For model with paths b, c’1, c’2 and c’3 F(3, 237) = 82.77, p = .00, R2 = .51

Conclusion

The overall goal of this research was to establish to what extent does CPA affect purchase and avoidance intention among European consumers, and in what way are these relationships affected by company orientation, perceived hypocrisy and opinion congruence between consumers and the organization.

The results suggest that engaging in CPA can be associated with more risks, rather than benefits. Initially, participants, who were presented with CPA, and those, who were not,

reported similar perceived hypocrisy, purchase intention and avoidance intention, which contributed to the rejection of Hypotheses 1, 2 and 3, and suggested that taking a stand on a socio-political issue might not affect company’s performance on the European market. Nevertheless, when consumers’ opinion was taken into consideration, it became clear that, under certain conditions, CPA can indeed influence both purchase, and avoidance intention. Participants, who saw CPA that they disagreed with, reported greater perceived hypocrisy and avoidance intention, as well as lower purchase intention, when compared to those, who did not see CPA at all. These results partly confirmed Hypotheses 1a, 2a and 3a, bringing attention to the fact that European consumers seem to be particularly motivated to seek disassociation from a company, when the values supported by that company contradict their own beliefs. Such misalignment of opinions is also likely to influence the way, in which consumers analyze objective information, making them more prone to be critical towards the company (Krishna & Sokolova, 2017)

Hypotheses 4 and 4a were rejected, since the orientation of the company had no effect on the perceived hypocrisy. This suggested that, perhaps, when reacting to CPA, European consumers either do not pay attention to, or do not mind how the organization describes itself. Notwithstanding, this indifference can be attributed to the fact that sustainability was an important quality of the fictional company used in the experiment. Accordingly, all descriptions of the company orientation involved focus on sustainability, which can be interpreted as a form of engagement in CSR. It is possible then, that the description of a result-oriented company was seen as disclosure of both intrinsic, as well as extrinsic motives, which has been found to inhibit skepticism among the consumers (Forehand & Grier, 2003; Du et al., 2010).

Perceived hypocrisy was proven to mediate the effect of CPA on purchase intention, as well as avoidance intention, but only when comparing CPA with incongruent opinion

against CPA with congruent opinion or lack of CPA. Therefore, Hypotheses 5 and 6 were supported under certain conditions. Participants exposed to CPA with congruent opinion and those, who were not exposed to CPA, reported lower perceived hypocrisy, and consequently greater purchase intention, as compared to the participants, who were exposed to CPA with incongruent opinion. Moreover, greater perceived hypocrisy among respondents, who saw CPA with incongruent opinion, contributed to higher levels of avoidance intention, when compared to the other two groups.

The study implied that, perhaps, when operating on European market, companies should be careful with speaking out on issues, which are not relevant to their functioning. Such exposure of the organization beyond economic and stakeholder considerations can result in financial loss, and subjection to criticism. Although CPA does not seem to provoke support from consumers, who agree with the advocated stance, it does seem to inhibit purchase and encourage avoidance among those, who do not agree with that stance.

Therefore, before engaging in CPA, organizations should carefully research their audience and consider the potential outcomes of publicly taking a side in socio-political issues, minding the overall goals and objectives of the company. In some cases, the risk of isolating part of the stakeholders is more evident, than the potential benefits of CPA. Additionally, addressing socio-political issues might not necessarily be expected by the European consumers, to the extent it is expected among American consumers, even if the company describes itself as value oriented.

The research contributed to the academic scholarship by generally supporting the conventional wisdom, according to which organizations should be very careful expressing their stance on issues, which are not relevant to their functioning. The study also suggested that the evaluations of CPA do not have to be based on the alignment of this practice with the overall orientation and central values of the company. What seems to be more important, is

the similarity, or rather dissimilarity, between the company and the consumers. Another important contribution is the fact that the study shows a visible difference between the boycotting and boycotting behaviors. The effect of CPA and perceived hypocrisy on avoidance intention was noticeably stronger than their effect on purchase intention,

supporting the claims that political consumers should be regarded as a heterogenous group. (Peak & Nelson, 2009; Neilson, 2010; Yates, 2011; Rim et al., 2019).

As an empirical research, this study had several limitations. First, the number of participants was relatively small, especially when considering the number of conditions. What is more, the sample including European consumers was dominated by the residents of the Netherlands, Poland and the United Kingdom. These characteristics significantly reduced the generalizability of the study. Second, the questionnaire used in the research was

distributed online, through social networking platforms, and therefore it required self-reporting, which tends to be untruthful or inaccurate, especially when sensitive topics are discussed. For some, expressing opinion on a socio-political issue might belong to that category. Third, the manipulation involved a fictional company, distributing sustainable personal care products. Regardless of CPA, personal opinion and company orientation, some respondents could find the company as more appealing than others, based on its aesthetic or functional value. Fourth, this research was conducted under unusual circumstances, that is, during a global pandemic caused by SARS-CoV-2 virus (World Health Organization, 2020). This situation could affect consumers’ current priorities and attitudes towards consumption goods.

Future studies on CPA should most certainly focus on different industries, as well as different socio-political issues, that can be addressed through CPA. The results of this study apply solely to the issue of immigration, specifically integrating immigrants into Covid-19 response strategies and planning. Perhaps consumers’ responses to CPA would be more

favorable, if it focused on less controversial issues, than immigration. Moreover, there is a need to further explore the characteristics of the company, which may determine whether its engagement in CPA is viewed in a more or less favorable way.

All in all, the relatively novel practice of CPA seems to induce diversified opinions among scholars as well as professionals. It is definitely a concept, which requires thorough investigation, recognizing various characteristics of the company, the consumer, and the issue that is addressed.

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