Consumer Responses to Corporate CSR Marketing

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Consumer Responses to Corporate CSR Marketing

The Effect of Authentic CSR on Firm Perceptions

Martijn van den Burg

August 30, 2012

MSc Business Administration: Marketing Management

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Consumer Responses to Corporate CSR Marketing

The Effect of Authentic CSR on Firm Perceptions

Paper type: Master Thesis MSc Business Administration; Marketing Management

Author: M. van den Burg Draaiweg 56A 3515 EM UTRECHT +31 (0)6 – 52 32 33 39 martijnvandenburg@gmail.com Student no.: s1530631

Supervisors: dr. J.A. Voerman

dr. M.C. Leliveld

Institution: University of Groningen

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ABSTRACT

Since corporations seem almost obligated to engage in corporate social responsibility (CSR) initiatives nowadays, firms are setting up corporate marketing (CM) strategies to ensure their existence and competitive edge in the years to come. However, many corporations have a CSR performance that is inconsistent with their initial motivation for, and communication on, their CSR initiatives. In other words, corporations might not be so genuine and truthful concerning their overall CSR. Offering

authentic (i.e. being both genuine and truthful) CSR deemed to be key to enhance the associations of

consumers towards the corporation’s CSR. This research is there to provide valuable insights into the

authenticity perceptions of consumers regarding a corporation’s CSR, by confronting them with a

fictive corporation’s CM on CSR. The CM exists of the firm’s desired-‐, actual-‐, and communicated identity on CSR, which eventually leads to a conceived identity (i.e. associations with the overall CSR) of the firm in the minds of consumers. The research is performed by means of a 2x2x2 factorial design in which eight conditions are tested. The results of this study suggest that the conceived identity of a corporation that is enacting CSR is enhanced only when the corporation is actually performing well on CSR. Based on the results of this study, valuable recommendations on authentic CSR strategies for corporations and (especially) corporate management are provided.

Research theme: Corporate CSR Marketing

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PREFACE

This thesis is the final step in completing my MSc BA: Marketing Management at the University of Groningen. After many months of work, the report is now finalized. By graduating, my life as a student will end, and at the same time there is the start of something new.

I would like to thank all whom supported me during my studies, and in writing my thesis. First of all, I would like to thank Liane Voerman in giving me guidance and support and in providing me with constructive feedback throughout the entire writing-‐ and research process. Secondly, I want to express my gratitude to my co-‐supervisor Marijke Leliveld for her feedback on my final thesis. Lastly, my appreciation and gratefulness goes to all my close friends and relatives.

Martijn van den Burg

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1 INTRODUCTION

Today, corporate social responsibility (CSR) is one of the hot topics in boardrooms of all large corporations and has become part of many corporate marketing (CM) strategies. In recent years, few notions have so totally captured the global corporate consciousness. Especially since CSR has changed from exclusive ideology to a mainstream part of almost every large organization (Kotler 2011). Corporations would discover that CSR could be much more than just an expense, a constraint, or a charitable deed and can instead be a source of opportunity, innovation, and competitive advantage if they were to analyze their prospects for social responsibility using the same frameworks that guide their major business strategies (Porter & Kramer 2006, 2011). In fact, there are plenty of corporations that are concerned with the ‘shared value’ they can create to society by implementing corporate CSR marketing strategies. This shared value creation focuses on identifying and expanding the connections between societal and economic progress.

Developments and future prospects concerning CSR marketing underscore the need for marketers to adopt a strategic perspective, aligning their CSR initiatives with not only the company’s overall strategic thrust, but also its competitive positioning and the CSR perceptions of consumers (Brown & Dacin 1997; Sen & Bhattacharya 2001). “Marketers have often viewed consumers as choosing among offerings on the basis of functional (Marketing 1.0) and emotional (Marketing 2.0) criteria” (Kotler 2011, p. 133). Yet, many consumers are now concerned about how the company meets its social responsibilities (Marketing 3.0) (Kotler 2011). Consumers, especially those in developed countries, are increasingly aware of, and are placing more importance, on the corporate social responsibility of firms (Luo & Bhattacharya 2006). In part, this elevated importance of CSR is driven by the increase in public information about the CSR initiatives of firms (Wagner et al. 2009). From now on, an increasing number of consumers will prefer to buy their goods and services from corporations that care about their (social) environment. However, it seems difficult for consumers to address the

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motivation is perceived by consumers as genuine and its CSR communication as truthful. Hence, the growing demands of firms for authentic practices and communication encompassed in their corporate CSR marketing (Hildebrand et al. 2011).

1.1 Problem Background

The main issue that is dealt with in this thesis is whether or not consumers notice the fact that some corporations are covering up their ‘negative’ CSR performance by the use of ‘positive’ CM

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campaigns? The importance for firms to communicate their social responsibility not only has risen substantially over the last few years, but also continues to increase dramatically as a result of current worldwide economic conditions and the resultant skepticism of how corporate practices affect the well being of societies. In many circumstances the notice given by corporations to CSR has not been totally voluntary, because nowadays companies are confronted with public or NGO requests to issues concerning CSR. Currently, the global and hyper-‐competitive business environment is changing rapidly and so do consumer preferences. Companies are struggling to adapt to the new environment and some buy into the demand to be socially responsible (Wagner et al. 2009; Hildebrand et al. 2011). Corporations sometimes see themselves obliged to incorporate green washing. ‘Green washing’ is dubbed the making of short-‐term gains through positive communication about CSR, while actually CSR performance is poor. This practice does not seem the right way to generate long-‐term success for any specific firm (Vaaland et al. 2008). However, due to external market drivers (e.g. consumer demand for socially responsible business practices) corporations become astounded (Delmas & Burbano 2011). This causes some companies to deal with these issues in a cosmetic manner. In order to keep up with competition, they enact high profile cause-‐related marketing campaigns instead of finding a strategic or operational long-‐term solution (Porter & Kramer 2006).

Even so, while firms with diverse operations on a global scale are challenged in enforcing corporate policies, consumers are likely to be exposed to inconsistent or untruthful information about a firm’s actual CSR initiatives (Wagner et al. 2009). The inconsistency between corporate practices and communications can have a large impact on consumers’ perceptions of the firm and of the firms’ CSR initiatives. Due to limited regulations regarding ‘greenwashing’ consumer confidence could erode as more firms try to mock up their CSR performances to benefit from the current momentum of the CSR ‘hype’ (Delmas & Burbano 2011). In the end, this may affect the willingness of consumers to purchase offerings from that corporations’ portfolio of brands (Delmas & Burbano 2011). This shows that concerns about corporate reputation sometimes just focus on satisfying external audiences instead of genuinely creating value for both the firm and society.

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consumers as unethical overshadow all other considerations (e.g. quality of products) in judging a firm as genuine and truthful (i.e. authentic) (Beverland & Farrelly 2010). These researchers found that regardless of the recognized merits of brands and products, consumers seeking authentic offerings were intolerant of moral failures, such as green washing (Beverland & Farrelly 2010). 1.2 Research Framework

In this paragraph, the research as conducted in this report is clarified. At first the research objective is laid out, after which the problem statement and research questions are presented. The research questions are then summarized into the conceptual model. The full-‐length description of the research, together with a more extensive clarification of the conceptual model, can be found in section 3 (Research Design).

1.2.1 Research Objective

This report is an attempt to answer the questions on whether CSR motivations (i.e. the consistency and/or fit between CSR motivations and initiatives) are being perceived as genuine, and whether CSR communications (i.e. the consistency and/or fit between CSR initiatives and communications) are perceived as truthful. The combination of both questions forms the concept of perceived authenticity of CSR marketing. Whether or not it is deemed useful for corporations to consider, and foremost valued by stakeholders2_{,
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this report.

1.2.2 Problem Statement and Research Questions

The research objectives of this report lead to the following problem statement:

How are consumer perceptions of corporations affected by CSR marketing?

Based on this statement and the research objectives, the main research question (RQ) is formed:

RQ: How does authentic corporate CSR marketing affect the CSR perceptions of consumers?

The main research question is split into 2 sub research questions (SQ). The combined answers to these 2 SQ’s form the answer to the main RQ.

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SQ1: Do consumers perceive consistency between CSR motivation and CSR performance by corporations as genuine?

SQ2: Do consumers perceive consistency between CSR performance and CSR communication by corporations as truthful?

The research questions mentioned above can be summarized into the following conceptual framework (See Figure 1).

Figure 1: (Preliminary) Conceptual Model

1.3 Relevance of the Research

Recently, the interest of both academics and businesses in CSR marketing has flourished. More and more corporations use CSR as a key strategic instrument to influence consumers or to differentiate their firm from competitors (Becker-‐Olsen et al. 2006). Partly, the increased attention given to CSR is determined by the growing availability of information (e.g. by mass-‐media coverage, documentaries and consumer advocacy groups) on CSR efforts of firms (Wagner et al. 2009). The attention for CSR communications will continue to rise in the future, mainly due to the current worldwide economic conditions, but also because of the skepticism concerning whether or not corporations truly create ‘shared value’ (Wagner et al. 2009).

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There are numerous studies on CSR marketing that indicate a link between CSR and positive responses and corporate attitudes of consumers (e.g. Brown & Dacin 1997; Sen & Bhattacharya 2001). Several studies do describe how CSR information, either positive or negative, affects consumers, for example purchase behaviors (Mohr et al. 2001); causal attributions (Sen et al. 2006); and identification with firms (Sen & Bhattacharya 2001). Sen and Bhattacharya (2001) determined that negative CSR information affects consumers more, than positive CSR information does. Other researchers have looked at a variety of topics concerning the relationship between corporate CSR and marketing strategy and corporate philanthropy (Varadarajan & Menon 1988), competitive advantage of corporate philanthropy (Porter & Kramer 2002), consumer choice (Barone et al. 2000), fit, motivation and timing (Becker-‐Olsen et al. 2006), stakeholder-‐company relationships (Bhattacharya & Sen 2003; Sen et al. 2006; Bhattacharya et al. 2009), communication assertiveness (Kronrod et al. 2012) and type of CSR and corporate reputation (Lii & Lee 2012). However, little research exists (besides the work of Wagner et al. 2009) that explores how consumer perceptions of a corporation are affected by the authenticity of CSR marketing.

Yet, it is of great value for corporations to acknowledge the perceptions of consumers. CSR associations offer consumers the opportunity to really get to know the ‘soul’, ‘value system’ and ‘character’ of a firm. Consumers’ identification and perceptions about a corporation are typically comprised of two knowledge aspects they have of a firm (Hildebrand et al. 2011). These two aspects are the corporate ability (CA) associations and corporate social responsibility (CSR) associations of consumers. While the first withholds the perceived expertise of the firm in producing and delivering its products and services, the latter reflects the initiatives of the firm with respect to societal matters and obligations (Brown & Dacin 1997). Nonetheless, identification of consumers with a firm is shaped by CSR associations rather than by CA associations (Balmer et al. 2007; Brown & Dacin 1997; Sen & Bhattacharya 2001). This identification is based on the positive influence of the CSR initiatives and the corporate associations consumers have regarding CSR. This holds especially in the current marketplace, where consumers tend to develop close relationships with both products and brands, but also with the corporations behind those offerings. Consumers learn about organizations (e.g. via corporate marketing and media) and are in that way identifying themselves with the corporation even though they are not ‘active’ members of the firm (Bhattacharya & Sen 2003; McAlexander et al. 2002; Sen & Bhattacharya 2001). These associations can result in positive consumers evaluations and behavioral intentions of consumers with regard to the firm, and the firms’ offerings (Bhattacharya & Sen 2003; Marin et al. 2009).

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Additionally, according to Beverland & Farrelly (2010), consumers are looking for authentic (i.e. genuine and truthful) cues in dealing with firms’ offerings. Nevertheless, consumer researchers have overlooked authenticity in the last few decades. Only recently did authenticity draw the attention of scholars, although consumer researchers have not completely ignored it (Derbaix & Decrop 2007). There are researchers that studied how consumers are influenced by authenticity in brands (Holt 2002), tourist attractions (Grayson & Martinec 2004) and consumption communities (Kozinets 2002), however none of these studies involves the authenticity perceptions of CSR initiatives. This partly declares the importance of the in depth understanding of consumer perceptions of the authenticity of CSR. Besides, Wagner et al. (2009) argue that corporation should be aware of inconsistency in their CSR efforts and communication. As this would indicate whether or not consumers will have a positive attitude to and associations with, not only the overarching firm, but also in buying that firms’ offerings. This report is here to generate valuable insights into the authenticity perceptions of consumers regarding corporate CSR marketing.

1.4 Structure of Thesis

The remainder of this thesis is organized as follows: At first, the theoretical framework is depicted in which the subsequent research questions will be clearly addressed. Next, the research design and data collection method is explained. Thereafter, the relevant results are described and analyzed using the correct methods. Lastly, the conclusions and recommendations of this thesis will be presented. Concluding by reflections on the implications, and limitations of this research.

2 LITERATURE REVIEW AND HYPOTHESES

In the sections ahead both corporate marketing (CM) and corporate social responsibility (CSR) are depicted. At first, the link between CM and CSR is clarified. Secondly, the interpretation of ‘authenticity’, the concept that forms the backbone of this report, is defined. After that, the corporate marketing mix along with the corporate identities residing within CSR enacting corporations is discussed, together with their linkage to genuineness and truthfulness (i.e. the building blocks of authenticity). Lastly, consumer perceptions of CSR and its authenticity are reflected upon in order to explain the relevancy of the research design of this thesis.

2.1 Linking Corporate Marketing and Corporate Social Responsibility

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operates (Vaaland et al. 2008). CSR, as critical part of corporate marketing strategies, drives firms to develop relevant initiatives and communication. Besides, CSR is critical to the success of firms attempting to meet the needs of the ever-‐increasing environmentally conscious consumer (Cronin et al. 2011). This creation of value is also at the center of CM and is based on the proliferation of fundamental issues resolving around the corporation having a meaningful, progressive and profitable long-‐term relationship with its environment and surrounding society (Balmer 1998, 2001, 2008; Balmer et al. 2007; Balmer & Greyser 2006). With CM, the end-‐focus lies not just in profit maximization, but also in business survival and in finding equilibrium between present and future needs of both consumers and society in general (Hildebrand et al. 2011). According to Balmer (1998, 2001), corporate marketing has a strategic influence on the considerations and actions of a company. This development has led several of the worlds leading corporations to take a strategic approach to creating and maximizing what Porter and Kramer (2011 p.66) have called ‘shared value’ (i.e. “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates”).

In sum, both CSR and CM are aimed at generating both customer satisfaction and long-‐run consumer welfare. Besides, the end-‐focus of CM lies not just in profit maximization, but also in business survival and in satisfying societal wants and needs. With the conceptualization of CM at hand it is not difficult to picture the link with the motivations and objectives of CSR. It therefore provides an almost continuous theoretical viewpoint in order to research the effect of corporate CSR marketing on consumer’ perceptions (Hildebrand et al. 2011).

In the case of incongruent performance by a corporation with respect to its motivation and communication of its CSR efforts, unnecessary pressure on ‘authenticity’, as perceived by consumers, is created. By doing so corporations enacting CSR marketing, that might affect the associations of consumers of the total firm, are creating reputational risk. To examine these above stated issues, the concept of authenticity and its importance, as used within the scope of this report, are defined next. After that, the proposed effects of perceived authenticity of CSR are explored.

2.1.1 Authenticity of Corporate CSR Marketing

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efforts in that world. Consumers eagerly long for offerings, which they perceive to be genuine and truthful (thus authentic). As a result, consumers tend to prefer offerings, which match or underline their desired identities and/or personal goals in live (Beverland & Farrelly 2010). Also, authentic offerings can point the way towards a better future for society as a whole, which closely resembles the initial intentions of CSR. The authors further argue that in order for offerings to be authentic, the particular corporation must earn that grant by explicating their efforts, which others then can perceive as authentic. So consumers judge on whether or not a corporate CSR strategy is by any means authentic. Hence, it eventually is the overarching task of the corporation to let consumers decide and hopefully grasp the authenticity of its corporate marketing and corporate social responsibility efforts (Gilmore & Pine 2007).

Moreover, consumers by themselves are well capable of sorting real from fake during their selection procedures. Even though traditional sources of meaning and self-‐identity have become less prevailing, for example due to growing globalization where everything has become standardized and manipulated to be as efficient as possible, consumers are more and more motivated to actively search for authenticity of corporate offerings (Beverland & Farrelly 2010). Consumers are keen on looking for authenticity in order for them to find meaning in their lives, and so does CSR. ‘Consumers are identified as adept, creative, and capable producers of authenticity against a background of seemingly competing societal norms’ (Beverland & Farrelly 2010, p. 853). Authenticity therefore provides consumers with a sense of unequivocal verification of marketing efforts of corporations (Grayson & Martinec 2004).

2.1.2 Definition of Authenticity

The definition of ‘authenticity’, as it is conceptualized in this report, is based on two notions. When looking at its direct meaning and general associations, authenticity is linked to ‘genuineness’ and ‘truthfulness’ (Grayson & Martinec 2004; See Oxford Advanced Learner’s Dictionary of Current

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available variables, and therefore authenticity is here built up out of genuineness and truthfulness. In this report, ‘genuine’ is considered as “having sincere motivations in doing good for the purpose of serving both the business and society” and ‘truthful’ is considered as the concept of “providing credible and reliable corporate communication on CSR efforts to consumers”.

2.1.3 Authenticity’s Effect on Consumer Perceptions of CSR

Today, the expectations of consumers regarding corporate social responsibility increase due the growing number of corporations with CSR strategies. Besides, corporations tend to share their CSR efforts via communications and NGOs deliver their clear-‐cut commentary based on CSR errors of corporations all around the world (Becker-‐Olsen et al. 2006). Also the influence of social media should not be underestimated in getting the CSR ‘message’ out. Although many organizations are involved in CSR initiatives, this does not have to mean that consumers will yield these initiatives as genuine and true, and in the end reward (e.g. by purchasing their products) those firms for their CSR efforts (Becker-‐Olsen et al. 2006; Brown & Dacin 1997; Sen & Bhattacharya 2001). According to Sen & Bhattacharya (2001) consumers evaluate firms with non-‐genuine CSR efforts negatively. Adding to that belief is the notion of Becker-‐Olsen et al. (2006), that positive evaluations of CSR performance are a result of the combination of the effort itself and the perception of genuine motivations of the corporation. Furthermore, the perceived corporate motivations for CSR can be of influence on the associations, beliefs, attitudes and intentions of consumers regarding the firms’ CSR initiatives (Becker-‐Olsen et al. 2006). Firms that desire their CSR to be perceived as authentic can use CSR marketing of wisely selected CSR initiatives to accomplish this (Becker-‐Olsen et al. 2006). According to Beverland & Farrelly (2010), these CSR initiatives are not deemed themselves as authentic; rather consumers perceive them as authentic only when they lead to associations of genuineness and truth.

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authenticity and CSR marketing, in order to understand the linkage between these two concepts,

which are increasing in meaning and impact today and in the future.

In sum, it turns out that many organizations are involved in CSR initiatives today. Yet, this does not always mean that consumers confronted with CSR marketing will yield CSR initiatives as genuine and truthful (i.e. authentic). The effect of corporate CSR on consumer perceptions can be mediated by the perceptions of authenticity of corporate marketing (Bigné-‐Alcañiz et al. 2009; Hildebrand et al. 2011). Besides CSR can help corporations to align their various identities and thereby enforce the strategic power of CSR initiatives via corporate marketing (Hildebrand et al. 2011). It is therefore task to explore how consumers actually perceive the corporate CSR marketing’s authenticity. Hence, in the next section of this report, an applicable set of corporate identities that are linked with CSR, are explored. Yet, starting off by explaining the ‘corporate marketing mix’ as part of CM.

2.2 Corporate CSR Marketing

Corporate marketing is a relatively new cognitive area of management and can be defined as an evolutionary formation and integration of the concepts of corporate identity, organizational identity and visual identity (Balmer 1998). Yet, CM also comprises other concepts such as total corporate communications, corporate image & reputation and corporate brand management (Balmer 1998, 2001). Conversely, those concepts are comparatively more straightforwardly applied to products then when applied to the corporate level, in which they become inevitably linked to corporate concerns on (marketing) strategy (Balmer 2001). The following paragraphs define the corporate marketing mix, the specific corporate identity types related to CSR and the connection between the concept of authenticity and CSR marketing.

2.2.1 Corporate Marketing Mix

Several factors contributed to the growth of interest in corporate identity, of which two factors are applicable to this thesis. At first, the environmental pressure on organizations (e.g. green issues, codes of conduct and legislation with regard to corporate governance). Secondly, the increasing interest of the public with regard to organizations and their ownership of specific subsidiaries and product brands is proliferating the knowledge and relationships of consumers with firms (Balmer 1998). These factors are related to the corporations’ CSR initiatives and the CM of CSR, respectively. Balmer (1998, 2001) outlines a corporate marketing mix (See Figure 2) in which the traditional model of four marketing P’s is extended to a model containing ten P’s.

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Figure 2: The 10P’s of the Corporate Marketing Mix (Balmer 1998, p. 991)

The most relevant parts of this corporate marketing mix, with respect to CSR, are Philosophy, Performance, Promotion and Perception. At first Philosophy is the proclaimed motivation for CSR action. Performance is indicating the actual CSR initiatives that a corporation is carrying out. Promotion is related to the total corporate communications of a firm. Lastly, Perception is consisting of associations and perceived image and reputation of a firm in the minds of consumers. The firm does not regulate perception though, since it encompasses the perceived authenticity of CSR by consumers instead. In the next sections the corporate identities, as part of CM, are discussed, as well as the various proposed effects of corporations’ CSR efforts in motivation, performance and communication.

2.2.2 Corporate Identities Linked to CSR

Probably the best way in which the identity of corporations is described is in the ‘Strathclyde Statement’ (ICIG) on Corporate Identity (Balmer 1998, p.985).

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Next to the fact that CM is dealing with a marketing mix containing ‘extra’ P’s, it is evident to clarify that a corporation’s overall marketing strategy can be built up out of five separate, though interconnected, identities (i.e. actual, communicated, conceived, ideal and desired identities) (Balmer 2001, 2008) (See Table 1). Although the ideal identity is of importance as well when it comes to CSR strategies, this concept is beyond the scope of this thesis, because the focus lies on sheer consumer perceptions of CSR motivation, efforts and communications. So where Balmer (2001) explicates the importance of all five identities, this report will focus on four ‘identities’ for the specific reason that these four identities are linked with the 4 P’s of Philosophy, Performance, Promotion and Perception. This specific part of CM is relevant to this report, since CSR marketing is closely linked to the aspects of corporate identity that embrace CSR motivation, CSR performance, the communication of CSR efforts, and the CSR perceptions of consumers, respectively (Balmer 2001). In the next few paragraphs, the four before mentioned identities (i.e. desired-‐, actual-‐, communicated-‐ and conceived identity) are depicted. Besides, the four identities are explained in the eye of CSR marketing. Furthermore, the link between the identities and the authenticity perception of CSR by consumers is clarified.

Table 1: 5 Corporate Identities as part of Corporate Marketing (Balmer 2008; p. 897)

2.2.3 A Corporation’s Desired Identity with Respect to CSR

The desired identity of a corporation withholds the future identity of the firm as espoused by senior management and the CEO. With the desired identity the motivation to enact CSR initiatives is set and proliferated amongst the people working at the corporation. The motivation to enact CSR is widely discussed in the literature, however under various terminology. First and foremost, this motivation is based on one of two notions; namely whether a firm, by enacting CSR, creates shared value or is just profit focused. Where Porter & Kramer (2006) discuss the concept of shared value creation, others identified different names for the motivational attributions ascribed to CSR enacting firms and corporations (Öberseder et al. 2011). Ellen et al. (2006) identified both other-‐centered and self-‐

Actual identity Internal values, organizational behavior, activities, market scope, performance and positioning

Communicated identity Various organizational messages conveyed via primary, secondary and tertiary communications: “total corporate communications”

Conceived identity Images/representations, reputational profile held of the organization by stakeholders

Ideal identity Optimum positioning for the organization in a given time frame

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centered corporations. Where other-‐centered firms feel morally committed to society and therefore

proliferate CSR, self-‐centered firms are engaged in CSR mostly for strategic purposes (i.e. to increase sales and profits). Pirsch et al. (2007), on the other hand, identified the institutional-‐ and promotional CSR programs which are based on the same premise as the concepts before mentioned (i.e. other-‐ centered and self-‐centered motivation to CSR, respectively). Pirsch et al. (2007) argue that corporations offering institutional CSR programs thereby create a larger impact on customer loyalty, favorable attitudes towards the firm and increase purchase intention. In contrary, they argue that promotional CSR programs do not offer these advances, since these programs are solely focused on selling extra products or services.

Eventually, consumers will also get to know the corporations’ motivation to CSR, as it is often part of a larger strategic CM plan. According to Ellen et al. (2006), consumer perceptions of corporate’ motives for enacting CSR initiatives play a large role in how consumers perceive CSR. Additionally, Becker-‐Olsen et al. (2006) argue that consumers react positively on social CSR motivation instead of profit-‐motivated CSR efforts of firms. While Becker-‐Olsen et al. (2006) investigated the role of perceived fit between corporate mission and social initiative and perceived corporate motive (i.e. other-‐centered versus profit-‐centered), this report will explore the ‘fit’ (i.e. perceived genuineness) between CSR motivation and CSR actions and the ‘fit’ (i.e. perceived truthfulness) between CSR actions and CSR communications. After discussing the desired identity of corporations, it is evident to discuss the actual identity next, since the actual identity is linked to corporations’ performance and actions with regard to CSR. Therefore, in the next paragraph the actual identity of a firm is depicted.

2.2.4 A Corporation’s Actual Identity with Respect to CSR

The actual identity of a corporation consists of the firms’ internal values, organizational behavior, activities, market scope and performance. When considering the overall theme of this report and thus keeping CSR in mind, it is noted that the specific representations of performance and activities (i.e. a corporations’ actual identity) are of relevance. Especially since consumers can be confronted with this actual identity via all sorts of information sources nowadays. So, the actual CSR efforts of a corporation, reflected through the actual identity, can become visible to a large audience of consumers. It proves evident to present the specification of the CSR efforts that are considered in this report. Peloza and Shang (2011) categorize CSR in three broad activities; philanthropy, business

practices, and product-‐related features (See Table 2). They observed these activities in 65%, 51% and

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combined measures generate clear understanding of the general tendencies of corporations’ CSR initiatives (Peloza & Shang 2011). However, this report is including only two categories of CSR initiatives; philanthropy and business practices. Thus excluding CSR concerning product-‐related

features, since this is not considered being part of corporate marketing strategy and these activities

are not as commonly cited in the articles reviewed by Peloza and Shang (2011).

Table 2: The Three CSR Initiative Categories (Peloza & Shang 2011)

By considering the two specific efforts of a corporation concerning corporate CSR initiatives it is possible to link actual-‐ and communicated performance on that set of efforts. Whether consumers perceive the genuine motivation of firms to create shared value, through the use of CSR performance, closely connects with the ‘fit’ between the desired and the actual identity of that corporation. This ‘fit’ between desired and actual identity is characterized by the term of

genuineness of motivation and serves as one of two crucial parts of the authenticity concept used in

this report. The next section depicts the concept of genuineness.

2.2.5 Genuineness of CSR Motivation

The fit between the desired-‐ and the actual identity of a firm is associated to the perceived

genuineness of that specific fit. In this thesis, the two concepts of genuineness and truthfulness form

the basis for authenticity of respectively motivation and communication of CSR. Genuineness is linked to the motivation of a firm to either create shared value or to just make an extra profit. It can depend on the consistency, and thus fit, of motivation with regard to the linked CSR performance of a corporation. The term genuineness is outlined as morality or virtue (i.e. separating right from wrong). Additionally, Beverland and Farrelly (2010) identified purity and universality as two constructs of genuineness. Where purity stands for the consistent use of a set of moral values (reflected by innocence and selflessness), universality stands for the superseding of other considerations by this same set of moral values. Either way, Beverland and Farrelly’s (2010) found that consumers searching for virtue (i.e. genuineness) were intolerant of moral lapses. Furthermore, in deciding whether a brand or product is authentic or not, unethical behavior of the selling firm overshadowed all other considerations in the decision-‐making process of consumers (Beverland & Philanthropy Cause-‐related marketing (CRM), donations of cash or products, support for charities, community involvement, employee voluntarism, promotion of social issue, licensing, event sponsorship, and customer donations.

Business practices Environmental protection practices, decent labor conditions, employee diversity, ethical behavior, fair trade, relationship management, etc.

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Farrelly 2010). In this report, genuineness is thus conceived as the moral image of a corporations’ motivation-‐performance ‘fit’ that is held by consumers of that firm. In other words: ‘Do consumers believe in the morality of firms’ actions with respect to its CSR initiatives and motivations?’

Genuineness perception, as the one part of authenticity, is therefore one of the main pillars to attain

valuable insights in how consumers are affected by corporate CSR marketing.

In sum, genuineness of motivation pertains the perception of consumers with regard to the ‘fit’ between a corporation’s actual CSR performance and its initial motivation to enact CSR and thus whether the firm is in CSR solely for its own wins or for societal wins. Combined with consumers’ perceptions of truthfulness of CSR communication, which is the ‘fit’ between a firm’s actual CSR performance and its communication afterwards in relation with that earlier CSR performance, these two parts make up the perceived authenticity of CSR. The overall perceptions of the firm with regard to CSR (i.e. conceived identity) are ought to be influenced by this authentic CSR. This leads to the following hypotheses:

H1a: Consumer perceptions of a corporation’s overall CSR will be more positive when the

motivation to enact CSR of the corporation is genuine (in case of self-‐centeredness and bad performance).

H1b: Consumer perceptions of a corporation’s overall CSR will be more positive when the

motivation to enact CSR of the corporation is genuine (in case of other-‐centeredness and good performance).

The truthfulness of communication is discussed in the upcoming section, but first the communicated corporate identity is depicted. Lastly, the conceived corporate identity (i.e. the reputational view of the corporation’s CSR that resides in the minds of consumers) and the interconnected relationship between the four identities and CSR marketing are further clarified.

2.2.6 A Corporation’s Communicated Identity with Respect to CSR

Consumer Responses to Corporate CSR Marketing

Consumer Responses to Corporate CSR Marketing

The Effect of Authentic CSR on Firm Perceptions

Consumer Responses to Corporate CSR Marketing

The Effect of Authentic CSR on Firm Perceptions

ABSTRACT

PREFACE

TABLE OF CONTENTS

1 INTRODUCTION

2 LITERATURE REVIEW AND HYPOTHESES