The CSR-Quality Trade-Off: When can Corporate Social Responsibility and Corporate Ability Compensate Each Other?

Abstract

ABSTRACT. This paper investigates under what conditions a good corporate social responsibility (CSR) can compensate for a relatively poor corporate ability (CA) (quality), and vice versa. The authors conducted an experiment among business administration students, in which information about a financial services companyÕs CA and CSR was provided. Participants indicated their preferences for the companyÕs products, stocks, and jobs. The results show that for stock and job preferences, a poor CA can be compensated by a good CSR. For product preferences, a poor CA could not be compensated by a good CSR, at least when people thought that CA is personally relevant to them. Furthermore, a poor CSR could be compensated by a good CA for product, stocks, and job preferences.

An Integrated Model to Explain How Corporate Social Responsibility Affects Corporate Financial Performance

“…Several scholars suggested that CSR activities have negative effects on firm performance [38]. They argued that investment in any CSR activity will incur higher costs, inducing competitive disadvantages for companies in a competitive market.…”

Antecedents of Corporate Reputation in the Hotel Industry: The Moderating Role of Transparency

“…Corporate associations refers to all the information about a company that is available to consumers. Berens and van Riel [24] define corporate associations as "a heterogeneous set of perceptions, which may be related to a wide variety of aspects of a company". Brown and Dacin [12] also refers to "corporate associations include perceptions, inferences and beliefs about a company; an individual's general knowledge of the firm; information on the company's prior actions; and the individual's overall and specific evaluation of the firm and its perceived attributes."…”

“…It is important to differentiate between CSR and CA because they may exert different influences on consumer responses to products/companies/brands [12]. Berens et al [24] has investigated the conditions under which a good CSR record can compensate for relatively poor CA, and vice versa. Based on previous literature, this research developed the argument that both CSR and CA can help companies enhance their competitive position with consumers.…”

CSR related management practices and firm performance: An empirical analysis of the quantity–quality trade-off on French data

“…The good relations with customers could not compensate for the environmental degradation. In this sense, Berens et al (2007), examining the effect on product preferences, find that a poor corporate ability could not be compensated by good CSR. Moreover, based on decision-making theory, it is argued that in forming a general evaluation, negative attributes tend to outweigh positive attributes (e.g.…”