Impacts of Socially Responsible Corporate Activities on Korean Consumers' Corporate Evaluations ...

18 Pages·2016·0.81 MB·English

sustainability
Article
Impacts of Socially Responsible Corporate Activities
on Korean Consumers’ Corporate Evaluations in the
Agrifood Industry
DongminLee1,JunghoonMoon1,*,YoungChanChoe1andJaeseokJeong2
1 PrograminRegionalInformation,DepartmentofAgriculturalEconomicsandRuralDevelopment,
SeoulNationalUniversity,Seoul08826,Korea;[email protected](D.L.);[email protected](Y.C.C.)
2 GraduateSchoolofPan-PacificInternationalStudies,KyungHeeUniversityGlobalCampus,Yongin17104,
Korea;[email protected]
* Correspondence:[email protected];Tel.:[phone]
AcademicEditors:AlessioCavicchiandCristinaSantini
Received:9October2016;Accepted:5December2016;Published:9December2016
Abstract: Thevarietyofsociallyresponsiblecorporateactivitiesemployedintheagrifoodindustry
hasbeenbroadening. Anincreasingnumberofagrifoodcompanieshavebeenemployingstrategic
approachestosociallyresponsibleactivities,reinforcedbyPorterandKramer’sconceptofcreating
shared value (CSV). This study compares the effects on corporate evaluations of two socially
responsiblecorporateactivities: philanthropicgivingandCSV.Becausepriorstudiesconcerning
the effects of corporate prosocial behaviors on consumer responses have yielded mixed results,
the present study examines the effects of a priori perceptions of companies by using corporate
stereotypesasmoderators. Theresultsshowthatthetypeofsociallyresponsiblecorporateactivity
(CSVvs. philanthropicgiving)doesnotinfluencecorporateevaluations. However,incasesofCSV
(vs. philanthropicgiving),consumersevaluateanunwarmbutcompetentcompanymoreattractively
andplacehighervalueonanincompetentbutwarmcompany. Thisresearchisimportantnotonly
forenrichingexistingliterature,butalsoforprovidingguidelinestopractitionerswithrespectto
selectingappropriatecorporateinitiativesbasedonperceivedconsumerstereotypes.
Keywords: corporatesocialresponsibleactivity;corporatesocialresponsibility;corporatestereotype;
creatingsharedvalue;stereotypecontentmodel;agrifoodindustry
1. Introduction
Corporatesocialresponsibility(CSR)hasbeendiscussedinthecontextofbothpracticalandthe
academicfieldssinceatleastthe1950s[1]. Giventhattraditionalcorporatephilanthropyisfoundedon
altruism[2],thefundamentalnotionofphilanthropyconcernsthecontributionsafirmmakeswithout
anyexpectationofreceivingbenefitsinreturn[3]. Ascorporateinvolvementinsocialproblemshas
evolvedfromavoluntaryactivitytoamandatoryone[4],corporateexecutiveshavefacedincreasing
demandforhigherlevelsofCSR.“Themorecompaniesdonate,themoreisexpectedofthem”[5]
(p. 5). Thisdilemmahasledtoanincreasingnumberofcompaniesadoptingstrategicapproachesto
socialactivities[5,6]. Bothacademiaandpracticalfieldsaddressseveralconceptsthatlinkbusiness
valueandsocietalproblems,suchasPrahaladandHammond’sBottom-of-the-Pyramidtheory[7]and
PorterandKramer’sCSVconcept[8].
ThestreamofresearchonstrategicapproachesintheCSRfieldisparticularlyrelevantinthe
agrifood industry. Several multinational companies (e.g., Nestlé (Vevey, Switzerland), Unilever
(London,UK))haveappliedtheCSVconcepttotheirbusinessmodels.Forinstance,Nestléinternalizes
CSVactivitiesinitsdailybusinessprocessesandevaluatesitsCSVperformanceannually.Whydoesthe
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agrifoodsectorfacesuchstrongpressuretotakeupactivitiesrelatedtocorporatesocialresponsibility?
AccordingtoHartmann[9],thispressureisduetotheagrifoodsector’suniquecharacteristics. First,
thefoodsectordependsheavilyonnatural, human, andphysicalresources, meaningthatithasa
significantimpactontheenvironment[10]. Second,consumersaresensitiveaboutthefoodthatthey
eat.Withrespecttosocietalconcernsaboutfood(e.g.,dangerofpowerabuseinprocurementprocesses,
interferenceinanimalwelfare,etc.),manyconsumershavestrictrequirementsforthecompletevalue
chain of the agrifood industry [9]. Nevertheless, though many food companies engage in socially
responsibleactivities,littleresearchhasaddressedtheeffectsoftheseactivitiesonthefoodsector[11].
The consumer perspective is critical when initiating socially responsible corporate activities.
Manyorganizationsinitiatesociallyresponsibleactivitiesundertheassumptionthatconsumerswill
reward them for their support of social programs [12]. Consumers are particularly responsive to
corporate socially responsible activities [13] and perceive these activities as essential components
of consumer–company communication [14]. When evaluating consumers’ responses to socially
responsiblecorporateactivities,priorknowledgeshouldbeconsidered. Anindividual’sinitialattitude
serves as a frame of reference for evaluating new information [15]. That is, consumers evaluate
corporateactivitiesinthecontextoftheirexistingknowledge[16]. Thisstudyattemptstoverifythe
impactofsociallyresponsiblecorporateactivitieswithintheagrifoodsectoronconsumersbasedon
differentpriorcorporatestereotypes.
Inadditiontounderstandingconsumers’priorcorporatestereotypes,itisimportanttounderstand
whichtypesofactivitiesaremoreorlesslikelytobeeffectiveorefficient,particularlyaslargerbudgets
areincreasinglyinvestedintosociallyresponsiblecorporateactivities[16]. Thisstudycomparestwo
differenttypesofsociallyresponsiblecorporateactivities: (1)CSV,arecentparadigminwhichthe
interestsofprivatecompaniesandsocietalproblemsarefullyconnected[17];and(2)philanthropic
giving, a reactive strategy to counter stakeholder demands, threats of government intrusion, and
escalatingpublicexpectations[18,19]. CSV,asanewlysuggestedparadigm,stillreceivessignificant
criticism [20]. However, since this study aims to address the effect of corporate activities on the
consumerresponse,weassertthatbothCSVandphilanthropicgivingarecorporateactivitiesthat
producesocialvaluefromtheperspectiveofconsumers.
Theremainderofthisarticleisorganizedasfollows: First,atheoreticalbackgroundofsocially
responsible corporate activities and stereotype content models is described, and hypotheses are
formulated. Next,themethodologyisdescribed,andresultsandadiscussionarepresented. Finally,
wedrawconclusionsandsuggesttheoreticalandpracticalimplications.
2. TheoreticalBackground
2.1. SociallyResponsibleCorporateActivities
CSRisthevoluntaryassumptionbycompaniesofresponsibilitiesbeyondpurelyeconomicand
legalresponsibilities[21]. AccordingtoCarroll[22],CSRcoversfourdimensions: economic,legal,
ethical, and philanthropic. Firms use many types of CSR to cover several dimensions of societal
problems. Priorstudies[2,23–25]haveaddressedphilanthropy,sponsorship,cause-relatedmarketing
(CRM),andcorporategivinginparticular.
Corporatephilanthropywasinitiallyfoundedonaltruism[2]. Ithasbeendefinedasmaking
a contribution of cash or kind to a worthy cause without any expectation of receiving a benefit in
return[3,23]. However,“muchofwhatislabeledascorporatephilanthropydoesseektogenerate
and exploit an association between the giving company and recipient organization” [2] (p. 1364).
Adistinctionshouldbemadebetweenpureformsofcorporatephilanthropyand“pseudo-altruism”[3],
which aims to benefit from “giving” activities, such as CRM or sponsorship. True philanthropy
seeksonlytocreatesocialvalueanddoesnotimpactconsumerbehaviorsorsales,giventhelackof
expectationoffirm-relatedbenefits[2]. Thatistosay,inthecontextoftruephilanthropy,nobusiness
valueisexpected. Comparedto“truephilanthropy”,sponsorship,corporategiving,andCRMare
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activitiesthatmayinvolvecommercialmotivationsandstrategicfactors[2]. SponsorshipsandCRM
are considered to be conditional and contaminated prosocial activities in terms of pure corporate
philanthropy[26].
Sponsorshipisaformofsupportingsociety,butitisrecognizedasacommercialactivitydueto
therightofthesponsoringfirmtopromoteanassociationwiththerecipientinreturnforsupport[2].
Thatis,sponsorshipismoreof“aninvestment,incashorin-kind,inanactivity,inreturnforaccessto
theexploitablecommercialpotentialassociatedwiththatproperty”[27](p. 36). Sponsorshiptypically
involvesthefollowingthreeagents: asponsor,property,andconsumers[28]. Thepropertyreceivesa
payment,andthesponsorobtainstherighttoassociatewiththeproperty[29]. Sponsorshipcreates
socialvalue,butitalsoindirectlyimpactsbusinessvalue[2].
Likesponsorship,CRMiscommerciallymotivatedand,thus,createsbothsocialandbusiness
value. InCRM,acorporationpromisestodonatetoasocialcauseinordertoinfluenceconsumers’
purchasingbehaviors[30,31]. Thus,CRMdirectlycreatesbusinessvaluebyincreasingsales[2]. Afirm
maycreatebusinessvaluethroughCRMbecauseCRMinvolvesconsumerspurchasingthesponsoring
company’s product [32]. Moreover, previous studies concerning the effects of CRM on consumer
perceptionsofthesponsoringbrandorfirmshowthatCRMisexpectedtoindirectlycreatebusiness
value,byimprovingcorporatereputationorimage[33,34].
Corporate giving refers to making monetary gifts or giving goods and/or services through
an established corporate foundation [18]. Corporate giving is usually considered to be a reactive
strategy to counter stakeholder demands, threats of government intrusion, and escalating public
expectations [18,19]. Thus, like sponsorship, corporate giving seeks mainly to improve corporate
image[18]inordertoindirectlycreatebusinessvalue. Campbelletal.[18]definedcorporategiving
asallgivingactivities,includingCRM.However,topreventconfusion,thepresentstudylimitsthe
definitionofcorporategivingtoonlythosegivingactivitiesoffirmsthatdonotrequireconsumer
involvement(e.g.,CRM),andusethenewterm,“philanthropicgiving”.
Inacademiaandthepracticalfield,inadditiontotheCSRactivitiesaddressedabove,several
furtherconcepts, suchasCSVandtheBottom-of-the-Pyramid(BoP)theory, “link”businessvalue
withsocietalproblems. CSVcanbedefinedasthe“policiesandoperatingpracticesthatenhancethe
competitivenessofacompanywhilesimultaneouslyadvancingtheeconomicandsocialconditionsin
thecommunitiesinwhichitoperates”[8](p. 66). Businessvaluecreation(cf.,profit)haslongbeena
majorconcerninthebusinessfield,whilesocietalissueshavebeentreatedasperipheralmatters[8].
Assumingthatcorporationshaveanadvantageoverindividualsorgovernmentsinsolvingsocial
problems[6],sharedvaluecreationidentifiesandexpandsthelinkbetweenbusinessvaluecreation
andthepursuitofsocialcauses. Inasimilarvein,theBoPtheory[7]concernsbusinessmodelsthat
targetmarketsatthebottomoftheeconomicpyramid. PrahaladandHammond[7]arguethatthese
BoPmodelsarenewsourcesofgrowthformultinationalcompanies. Itisknownthatthecreationof
sharedvalueismoreinfluentialwhencompaniesexpandtheirbusinesstodevelopingcountriesand
targetlow-incomemarkets[17].
ThisstudycomparestheeffectsofCSVwithphilanthropicgivingonconsumerresponse.Westudy
CSV,inparticular,becauseitcoverslargertargetsandmarkets,includingtheBoPmarket.CSVinvolves
creatingbusinessvaluebyaddingvaluetosocietybysolvingitsneedsandchallenges. Thatis,CSV
recognizes societal needs, not just conventional economic needs, and defines relevant markets [8].
As such, it is similar to other types of socially responsible activities, especially CRM. Porter and
Kramer[8]distinguishCSVfrompriorCSRactivitiesbyexplainingthatCSV“expandsthetotalpool
ofeconomicandsocialvalue”[8](p. 65),ratherthanredistributingthevaluealreadycreatedbyfirms.
However, inacademiaandpracticalareas, PorterandKramer’s[8]CSVconceptcontinuesto
sparkcontroversialdebate[20]. Craneetal.[20]criticizesCSVforbeing(1)anunoriginalconcept;
(2)toooptimisticwithrespecttoexpectationsofreachingsocialandeconomicgoalsconcurrentlywith
businesscompliance;(3)anaïveapproachintermsofbusinesscompliance;and(4)basedonashallow
assumptionoftheroleofcorporationsinsociety.
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Nevertheless,thepresentstudycomparesCSVactivitywithphilanthropicgiving,asCSVinherits
thecontextsofotherCSRtypesintermsofcreating“socialvalue”. Topreventconfusionconcerning
thetermsCSR,CSV,andphilanthropicgiving,thetermof“sociallyresponsiblecorporateactivity”is
usedtoencompassanyformofcompanyinvolvementinsolvingsocietalproblems,includingCSV
andphilanthropicgiving.
Thereasonsforaddressingphilanthropicgiving,inparticular,areasfollows. First,examples
oftruephilanthropyarerarelyfoundinreality. Muchofwhatislabeledascorporatephilanthropy
seekstogenerateandexploitassociationswithcauses[2]. Second,becausesponsorshipandCRM
areconsideredtobemoreconditionalactivities[15,26],theseactivitiesmightarousepublicsuspicion
aboutcompanies’hiddenmotives[15]. Corporatephilanthropicgiving,however,isconsideredtobe
themosteffectiveprosocialactivitytominimizepublicsuspicion[26].
2.2. StereotypeContentModel
Consumersevaluatecorporatesocialactivitiesinthecontextoftheirexistingknowledge[16].
Moreover,giventhatcompaniesareincreasinglyinvestinglargerbudgetsintosociallyresponsible
activities,itisimportanttoknowwhichtypesofcompaniesaremoreorlesslikelytobeeffectiveand
efficient[16]. Thepresentstudyexaminestheeffectsofconsumers’priorcorporatestereotypesonthe
evaluationofsociallyresponsibleactivities.
According to the stereotype content model, a stereotype is measured by the warmth and
competence of a target [35,36]. The literature on social psychology and organizational behaviors
has addressed the tendency to differentiate among others on the basis of perceived warmth and
competence[37]. Whenevaluatingatarget,perceiversjudge(1)whetherthetargetintendstohelp
or harm (i.e., warmth) and (2) whether the target can carry out its intent (i.e., competence) [38].
Thesetwofundamentaldimensionscombineandgeneratedistinctemotions,includingadmiration,
contempt,envy,andpity[35,36].Althoughdefinitionsvary,warmthrelatestoperceptionsofgenerosity,
kindness,sincerity,friendliness,andtolerance,whilecompetencerelatestoperceptionsofconfidence,
effectiveness,efficiency,independence,capability,intelligence,andcompetitiveness[35–37,39].
Astereotypeisdefinedas“ashorthand,blanketjudgmentcontainingevaluativecomponents”[37]
(p. 225). Forinstance,richpeopleareoftenperceivedasbeinghighlycompetentbutnotverywarm,
andtheelderlyareoftenperceivedasbeingnotverycompetentbutverywarm[35]. Warmthand
competencehaveconsistentlyemergedastwocentraldimensionsofperceptionsregardingspecific
individualsandgroups[35,36,40–42],andtheyareoftenusedwhenevaluatingothersaspotential
leaders[43],romanticpartners[44],oremployees[45].
Recentstudieshaveusedthestereotypecontentmodeltoexaminesocialperceptionasitapplies
to a variety of social targets. Some studies have expanded the use of the two aforementioned
dimensionstomeasurestereotypesaboutcorporatebrands[37,46,47]. Kervynetal.[47]usedtwo
dimensions—namely,warmthandcompetence—toexaminehowconsumers’perceptionsofbrandsare
similartotheirperceptionsofpeople. Inparticular,Aakeretal.[37]investigatedwhetherthewarmth
andcompetenceconsumersfeeltowardcorporatebrandsinfluencetheirmarketplacedecisions,such
astheirwillingnesstobuy. Consumersperceivenonprofitsasbeingwarmerbutlesscompetentthan
for-profitorganizations,and,giventhisperceptionoflowcompetence,havelowerintentionstobuy
productsmadebynonprofits[37].
Thepresentstudyexaminestheeffectsofstereotypesonevaluationsofsociallyresponsiblecorporate
activities.Weoperationalizecorporatewarmthandcompetencebasedonpriorstudies[37,46,47],using
awarmthindexcomprising“warm”,“kind”,and“generous”andacompetenceindexcomprising
“competent”,“efficient”,and“effective”.
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3. HypothesisDevelopment
3.1. MainEffectofSociallyResponsibleCorporateActivities(PhilanthropicGivingvs. CSV)
ThepointthatdifferentiatesCSVfromphilanthropicgivingisthepursuitofbenefitsforthefirm,
with an emphasis on extrinsic or self-interested motives. An extrinsic or self-interested motive is
relatedtoincreasingthewelfareofacompany’sbrandbyincreasingsalesorimprovingcorporate
image[48]. Bycontrast, philanthropicgivingplacesgreateremphasisonmoreintrinsicorselfless
motives,givenitsultimategoalofdoinggoodand/ortakingresponsibilityforsocietalproblems[48].
AccordingtoBecker-Olsenetal.[49],whenmotivationsareconsideredtobefirm-oriented,consumers’
favorableattitudestowardfirmsarelikelytodiminish. However,whenmotivationsareconsideredto
besociety-oriented,attitudestowardfirmsareenhanced. Moreover,messagesthatcompletelylack
self-interestareperceivedasmoretrustworthyandpersuasive[50].
Previous studies have shown that firms’ perceived motives underlying their social activities
influence their evaluations by consumers [51,52]. Thus, the present study builds on the following
hypotheses(H1a–b),whichaimtoexploreandcomparetheeffectsofCSVandphilanthropicgivingon
consumers’evaluationsoffirms.
H1a–b: Philanthropicgiving(vs. CSV)influencesconsumerstoevaluateacompanymorepositively(H1a)and
toperceivehigherfirmvalue(H1b).
3.2. ModeratingEffectofCorporateStereotype
The present study uses two dimensions from the stereotype content model: warmth and
competence,whicharearguablyfundamentaldimensionsofpeople’sjudgments. Inparticular,ituses
thefollowingfourcompanystereotypes: (1)highwarmthandhighcompetence(HWHC);(2)low
warmthandlowcompetence(LWLC);(3)lowwarmthandhighcompetence(LWHC);and(4)high
warmthandlowcompetence(HWLC).
3.2.1. HWHC,LWLC
Theemotionofadmiration,whichislinkedtohighcompetenceandhighwarmth,is“directed
towardthosewithpositiveoutcomeswhenthatdoesnotdetractfromtheself”[35](p. 869). This
canbeconsideredapositiveemotionalsignal. Whenacompanyhasagoodreputation,peopleinfer
corporatesocialresponsibleactivityasamutuallybeneficialactivity[26]. Moreover,consumers’desire
tobuyacompany’sproductsincreaseswhentheyfeeladmirationforthecompany[37]. Insuchcases,
CSV,whichisconsideredtoinvolveself-interestedmotives,isinferredasmutuallybeneficialactivity.
Therefore, the effects of CSV and philanthropic giving on consumers’ attitudes are expected to be
similar(H2a–b).
H2a–b: Inacompanycharacterizedbyhighwarmthandhighcompetence(HWHC),CSVandphilanthropic
givinghavethesameeffectoncompanyevaluation(H2a)andperceivedfirmvalue(H2b).
Bycontrast,whenacompanyhasapoorreputation,peopletendtoperceivethecompany’sefforts
asself-interested[26]. Whenapersonencountersanobjectcharacterizedbylowcompetenceandlow
warmth,theywillfeelcontemptanddisgust[40]. Therefore,suchcompanieswillnotbenefitfroma
positivehaloeffectinevaluationsoftheirCSV(H3a–b).
H3a–b:Inacompanycharacterizedbylowwarmthandlowcompetence(LWLC),philanthropicgiving(vs.CSV)
influencesconsumerstoevaluatethecompanymorepositively(H3a)andtoperceivehighercompanyvalue(H3b).
3.2.2. HWLC,LWHC
AccordingtoKervynetal.[47],companiesperceivedashavinglowwarmthandhighcompetence
(LWHC) are considered to be luxury brands, whereas organizations with high warmth and low
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competence (HWLC) are believed to need government support in the form of subsidy funding.
Theeffectofcorporatesocialactivitiesondifferenttypesofcompaniescanbeexplainedbythe“dual
motivationaleffect”,whichreferstotwocontradictoryvalues: relianceonsocialactivitiesandabstract
conceptionsoftheparentbrand[16].
Luxury brands are associated with the self-enhancement concept, which causes motivational
conflictincommunicationsofcorporatesociallyresponsibleinitiatives[16].AccordingtoTorellietal.[16],
theevaluationofaluxurybrandtendstodeclineinthepresence(vs. absence)ofCSRinformation.
The “luxury” tag automatically activates self-enhancement values of dominance over people and
resources[53]. Bycontrast,CSRactivatesself-transcendencevaluesanddrivesprosocialactivities,
suchascaringforsociety[54]. VerplankenandHolland[54]assertedthatthiseffectwouldnotemerge
withotherbrandconceptsthatdonothavemotivationalconflictswithCSR.
Therefore,acompanyperceivedasLWHCmayfaceconflictwhenengaginginsocialactivities
(H4a–b). PhilanthropicgivingisconsideredtobeamoreselflessactivitythanCSV,whichproducesa
positiveperceptionofCSV.
H4a–b: Inacompanycharacterizedbylowwarmthandhighcompetence(LWHC),CSV(vs. philanthropic
giving)influencesconsumerstoevaluatethecompanymorepositively(H4a)andtoperceivehighercompany
value(H4b).
The emotion of pity is closely related to companies characterized by high warmth and low
competence [40]. When HWLC companies initiate philanthropic giving, the emotion of pity may
beenhancedbytheassimilationeffectandmayresultinnegativeattitudesorbehaviorstowardthe
companies’CSRinitiatives. Therefore,becausephilanthropicgivingactivitiesareconsideredtobe
moreselflessthanCSVactivities,philanthropicgivingwillproduceastrongeremotionofpityand
heightenednegativeattitudes(H5a–b).
H5a–b: Inacompanycharacterizedbyhighwarmthandlowcompetence(HWLC),CSV(vs. philanthropic
giving)influencesconsumerstoevaluatethecompanymorepositively(H5a)andtoperceivehighercompany
value(H5b).
4. MaterialsandMethods
StimulusMaterialandInstrumentDevelopment
Participants were told that the survey involved determining how consumers evaluate the
corporate activities of a leading agrifood company producing home meal replacement products
in Korea. The participants began the study by reading one of four manipulated corporate history
timelines. Atotalof5warmevents,5competentevents,and11neutraleventswereassembledto
manipulatethewarmthandthecompetenceofthefocalcompany(Table1,AppendixA).Thewarm
eventsincludedcorporateactivitiesconcerningtheenvironmentandthecompany’semployees(e.g.,
initiatingananimalwelfareprogram). Competenceeventsmainlyincludedeventsrelatedtocompany
products and services (e.g., certified Hazard Analysis and Critical Control Point). Neutral events
included events related to daily activities, such as moving to a new office. To check whether the
timelineswerewellmanipulated,theresearchersaskedtheparticipantstoratetheirperceptionsofthe
company’swarmthandcompetenceonathree-itemfive-pointscale(AppendixB).
Table1.Numberofinsertedeventsforeachcorporatestereotype.
TypeofEventsInserted HWHC HWLC LWHC LWLC
Warmevents 5 5 0 0
Competentevents 5 0 5 0
Neutralevents 1 6 6 11
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Theparticipantsweresubsequentlyinstructedtoreadoneoftwoexcerpts(AppendixC).Each
excerpt represented a different social value creation strategy: philanthropic giving or CSV. Each
scenariobeganwithathoroughnarrativeofthecompany,includingitsresponsibleethicalactionsand
theireffects.TheexcerptswereadaptedandmodifiedbasedontheactualcorporatepracticeofDanone,
“GrameenDanoneFoods”[55]. DanonedevelopedayogurtcalledShaktiDoithathasahighnutritional
valueandisaffordabletothepoorinBangladesh[55,56]. Ratherthanmakingdonations, Danone
retailsShaktiDoiforbetweenthreeandfourcents. Inthepresentstudy,arice-porridgeproductwas
usedinsteadofyogurt,andthetargetpopulationwas“elderlypeopleandchildreninanurbanarea”.
AccordingtoPorterandKramer[8],thestartingpointofbusinessplanninginvolveshighlighting
the possibility of earning business profits while simultaneously addressing societal problems.
Compared to philanthropic giving, CSV focuses more explicitly on creating real business profits
directly. Therefore, the CSV excerpt referred to R&D for a new rice-porridge product and the
philanthropic giving excerpt referred to the company donating an existing rice-porridge product.
OnlytheCSVscenariodescribedaresultforthecompany—agradualincreaseinsales. AsbothCSV
andphilanthropicgivingcreatesocialvalue, bothscenarioscontainedtheresultofdecreasingthe
societalcalciumdeficiencyratebyeitherdevelopingordonatingrice-porridge.
Tocheckthemanipulationofeachscenario,theresearchersaskedtheparticipantstoevaluate
theperceivedsocialvalueandbusinessvalue(α=0.758)ofeachactivity(AppendixB).Moreover,
thecongruencybetweencorporatecorecompetenceandsocialactivitywascontrolledandmeasured
(AppendixB).Previousstudieshaveconsistentlyassertedthatcompaniesshouldsupportcausesthat
match logically with their products or brand images to elicit positive consumer behaviors [49,57].
Table2summarizesthemanipulatedpointsinthephilanthropicgivingandCSVscenarios.
Table2.ManipulatedpointsinphilanthropicgivingandCSVscenarios.
ManipulatedPoints PhilanthropicGivingScenario CSVScenario
Perceivedsocialvaluecreated Yes Yes
Perceivedbusinessvaluecreated No No
Perceivedcongruencybetweencorporate
Yes Yes
corecompetenceandsocialinitiative
Subsequently,theparticipantsansweredaseriesofquestionsaboutconsumerresponsestosocially
responsiblecorporateactivities. Priorstudieshavecategorizedconsumerresponsesintopsychological
andbehavioraloutcomes[58]. Asthepresentstudyusedafictitiouscompanyasastimulus,weused
apsychologicalvariableforthecorporateevaluation. Specifically,weusedBrownandDacin’s[59]
measurementofcorporateevaluation, whichconsidersacompany’soveralldegreeoffavorability.
Theparticipantsevaluatedthefictitiouscompanyonafive-pointscale(AppendixB).
Inadditiontoexaminingcompanies’degreesoffavorability,manypriorstudieshavemeasured
theimpactofsociallyresponsibleactivitiesoncompanyvalueusingmarket-basedmeasures,suchas
pricepershareorsharepriceappreciation[60]. Stockpricesdeterminemarket[60]. Sincethepresent
studyisconcernedwithconsumers’perceptions,weaskedtheparticipantstoevaluatethestockprice
ofthefictitiouscompany,ABCAgriFoodInc. inrelationtotheaveragestockpriceinKoreancurrency
(KoreanWon,KRW).Weassumedtheaveragestockpricetobethatofagrifoodcompaniesofsimilar
sizeandprofitandwithasimilarnumberoflistedstocks.
5. Results
Asurvey-basedexperimentwasconducted. Datawerecollectedusingbothapaper-basedsurvey
and a web-based survey system. This study recruited 212 undergraduate and graduate students
from business- and economics-related classes in Seoul and its greater urban area. An additional
268participantswereofficeworkersrecruitedusingweb-basedsurveysystem. Themostimportant
filteringcriterionfortheseworkerswaswhethertheyworkedinanagrifood-relatedcompany. Upon
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completionofthesurvey,theparticipantswereprovidedwithamealcouponorbookgiftcard($3–$5)
fortheirparticipation.Eachofthe480participants(49.4%male,50.6%female)wereassignedrandomly
totheconditionsofthefourpreviouslydescribedcorporatestereotypes(LWLC,HWLC,LWHC,and
HWHC)×twosociallyresponsiblecorporateactivities(CSVandphilanthropicgiving).
5.1. ManipulationCheck
Before analyzing the effects of philanthropic giving and CSV on consumer responses, the
manipulationsofthestimuliwerechecked. First,theresultofone-wayanalysisofvariance(ANOVA)
demonstratedthatthecorporatehistorytimelineswerewellmanipulatedintermsofwarmthand
competence(p<0.001). Corporatehistorytimelineswithcompetenceevents(LWHC:m= −0.371,
SD=0.853; HWHC:m=0.309,SD=0.837)differedsignificantlyfromthosewithnon-competence
events (LWLC: m = −0.528, SD = 1.128; HWLC: m = −0.196, SD = 0.909) at a 1% level. Moreover,
corporate history timelines with warm events (HWLC: m = 0.588, SD = 0.712; HWHC: m = 0.623,
SD=0.736)differedsignificantlyfromthosewithnon-warmevents(LWLC:m=−0.873,SD=0.758;
LWHC:m=−0.428,SD=0.864)ata1%level.
TheparticipantsperceivedthephilanthropicgivingandCSVexcerptsdifferently.Whenencountering
a CSV scenario, they tended to perceive higher business value (p < 0.05) and lower social value
(p<0.001)thantheydidwhenencounteringphilanthropicgiving. Asexpected,theparticipantsdid
notperceiveadifferenceincongruencybetweensocialactivityandthecompanyitself(p=0.055).
Sustainability2016, 8, 1292 8 of 17
5.2. MainEffectofSociallyResponsibleActivities
value (p < 0.001) than they did when encountering philanthropic giving. As expected, the participants
Toedxiadm noint peetrhceeivme aa diniffeefrfeencctes ino cfopnhgriulaennctyh rboetpwiceegni svoicniagl aacntidvitCy SanVdo thne pcoamrtpicanipya itnsetlrf e(ps p= o0.n05s5e).( H1a–b),
anindependentt-test(one-tailedtest)wasconducted. Therewasnosignificantdifferencebetweenthe
5.2. Main Effect of Socially Responsible Activities
participants who read the scenario of philanthropic giving and those who read the CSV scenario
in terms of cToor epxoamraintee tehve amluaiant ieoffnect(sM of phi=lan3th.6r6op,iMc giving= an3d. 7C0S,Vp on= pa0r.t2ic5i9p)anot rrepspeorncseei v(Hed1a–fibr),m value
PG CSV
an independent t-test (one-tailed test) was conducted. There was no significant difference between
(M =116,849,M =119,839,p=0.129). However,thisresultdependsonthecorporatestereotype.
PG CSV
the participants who read the scenario of philanthropic giving and those who read the CSV scenario
Ourfindingssupporttheviewthatconsideringcorporatestereotypesiskeytounderstandinghow
in terms of corporate evaluation (MPG = 3.66, MCSV = 3.70, p = 0.259) or perceived firm value (MPG = 116,849,
consumersrespondtodifferedsocialinitiatives. Althoughfirmsgenerallycommunicatetheirsocial
MCSV = 119,839, p = 0.129). However, this result depends on the corporate stereotype. Our findings
initiativessuptopoerlti cthite pvioeswit tihvaet ccoonnssiduemrinegr croersppoorantes esste,rtehoetypreess uisl tkseyo btota uinndeedrshtaenrdeiinng shuogwg ceosntsuthmaetr,s in some
circumstarenscpeosn,dt htoe sdeiffienrietdia stoivcieals ihniativaetivaens. iAnlstuhoffiugcihe fnirtmesf fgeecnt.erally communicate their social initiatives
to elicit positive consumer responses, the results obtained herein suggest that, in some circumstances,
5.3. Modetrhaetsien igniEtifafteicvteso fhaCvoer apno rinatseufSfitceireenot teyfpfeect.
Toe5x.a3.m Minodeertahtiengm Eoffdecet roaf tCinorgpoerafftee cStteorefotcyoprep oratestereotypesontherelationshipbetweencorporate
sociallyrespoTno seixbalmeiance ttihvei tmieosdaernadtincgo enffseuctm ofe rcorrepsopraoten sstee,retohteypdesa toan wthee rreelaatnioanlsyhzipe dbeutwsieneng caonrpionrdatee pendent
t-test(Figsuocrieall1y) r.esponsible activities and consumer response, the data were analyzed using an independent t-test
(Figure 1).

Figure1.Cont.

Figure 1. Results of the independent t-test of corporate evaluation (a) and perceived firm value (b).
Sustainability2016, 8, 1292 8 of 17
value (p < 0.001) than they did when encountering philanthropic giving. As expected, the participants
did not perceive a difference in congruency between social activity and the company itself (p = 0.055).
5.2. Main Effect of Socially Responsible Activities
To examine the main effects of philanthropic giving and CSV on participant response (H1a–b),
an independent t-test (one-tailed test) was conducted. There was no significant difference between
the participants who read the scenario of philanthropic giving and those who read the CSV scenario
in terms of corporate evaluation (MPG = 3.66, MCSV = 3.70, p = 0.259) or perceived firm value (MPG = 116,849,
MCSV = 119,839, p = 0.129). However, this result depends on the corporate stereotype. Our findings
support the view that considering corporate stereotypes is key to understanding how consumers
respond to differed social initiatives. Although firms generally communicate their social initiatives
to elicit positive consumer responses, the results obtained herein suggest that, in some circumstances,
these initiatives have an insufficient effect.
5.3. Moderating Effect of Corporate Stereotype
To examine the moderating effect of corporate stereotypes on the relationship between corporate
socially responsible activities and consumer response, the data were analyzed using an independent t-test
(Figure 1).
Sustainability2016,8,1292 9of18

FigureF1i.guRrees 1u. lRtsesouflttsh oef itnhed ienpdeenpednednetntt- tt-etesstt ooff ccoorrppooraratet eeveavluaalutioanti o(an) a(nad) apnerdcepiveerdc efiirvme dvafilurem (bv)a. lue(b).
5.3.1. HWHCCompany
When presented with a warm and competent company, there was no significant difference
betweentheparticipantswhoreadthephilanthropicgivingscenarioandthosewhoreadtheCSV
scenario in terms of corporate evaluation (M = 3.81, M = 3.66, p = 0.113) or perceived firm
PG CSV
value(M =124,401,M =119,017,p=0.181). Consumersperceivesociallyresponsiblecorporate
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activitiesasbeingmutuallybeneficialwhenacompanyhasagoodreputation[26]. Theemotionof
admirationiscloselylinkedtopeople’sperceptionofanentityaswarmandcompetent[40]. Thus,
consumers will perceive even those warm and competent companies that include self-interested
motivesincommunicatingtheirsociallyresponsibleactivitiesasmutuallybeneficial(cf.,CSV).
5.3.2. LWLCCompany
By contrast, the moderating role of the low-warmth low-competence stereotype in the effect
ofsociallyresponsiblecorporateinitiativeswasproventobeinsignificant. Therewasnodifference
betweentheparticipantswhoreadthephilanthropicgivingscenarioandthosewhoreadtheCSV
scenariointermsofcorporateevaluation(M =3.48,M =3.52,p=0.392)andperceivedfirmvalue
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(M =115,322, M =115,019, p=0.474). Theexpectationwasthatphilanthropicgivingwould
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haveastrongereffectthanCSV,buttheresultsrevealednodifferencebetweenthetwoinitiatives.
Thismaybeexplainedbytheemotionslinkedtoeachcombinationofhigh-lowcompetence-warmth
stereotypes. StudieshaveshownthatLWLCstereotypemayinducetheemotionofcontempt[40].
AccordingtoCuddyetal.[40],contempt-relatedemotionselicitpassivelyharmfulactions,suchas
distancing,exclusion,andrejection. IncasesofLWLCcompanies,consumersmaydistancethemselves
fromorrejectsociallyresponsiblecorporateactivities,resultinginnodifferencebetweenphilanthropic
givingandCSV.ThisassertionissupportedbytheresultspresentedinTable3. Corporatestereotypes
resultedinsignificantdifferencesincorporateevaluation(F=5.842,p<0.01),withthepost-hoctest
showingthattheLWLCstereotypeevokedthelowestcorporateevaluations.
Table3.Differenceincorporateevaluationofdifferentcorporatestereotypes.
CorporateStereotype N Mean S.D. F p Post-Hoc(Duncan)
LWLC 112 3.50 0.684 3.50
HWLC 122 3.83 0.585 3.83
5.842 0.001
LWHC 120 3.65 0.545 3.65 3.65
HWHC 124 3.73 0.664 3.73 3.73
Sustainability2016,8,1292 10of18
5.3.3. HWLCCompany
Themoderatingroleofthehigh-warmthlow-competencestereotypeintheeffectofcorporate
social initiatives was proven to be significant. When a warm but less competent company was
presented, the participants who read the CSV scenario evaluated the company as more valuable
(M =107,966,M =122,648,p<0.01). However,theparticipants’corporateevaluationsofthe
PG CSV
scenariosofphilanthropicgivingandCSVwerenotverydifferent(M =3.80,M =3.86,p=0.271).
PG CSV
TheemotionofpityiscloselyrelatedtocompaniesperceivedasHWLC[40]. Cuddyetal.[40]
suggested that pity involves sadness and depression, which may lead to inaction, avoidance, or
neglect. AnexampleofsuchabehaviorwouldbeturningofftheTVduringacommercialshowing
starvingchildren. WhenanHWLCcompanyinitiatesphilanthropicgiving,theemotionofpitymay
beenhancedthroughtheassimilationeffect,potentiallyresultinginnegativeattitudesorbehaviors
towardthecompany’ssociallyresponsibleactivities.
5.3.4. LWHCCompany
The moderating role of the low-warmth high-competence stereotype in the effect of social
initiatives on consumer response was partially proven. When presented with a less warm but
competent company, the participants who read the CSV scenario evaluated the company as more
attractive(M =3.56,M =3.75,p<0.05). However,therewasnosignificantdifferencebetween
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theparticipantswhoreadthephilanthropicgivingscenarioandthosewhoreadtheCSVscenarioin
termsofperceivedfirmvalue(M =119,838,M =121,817,p=0.329).
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Kervynetal.[47]assertedthatLWHCcompaniesrepresentluxurybrandsbecausetheyspecifically
target wealthy consumers, resulting in the general public perceiving them as less warm. Luxury
brands generally activate self-enhancement values of dominance over people and resources [53].
Theseself-enhancementvaluesmaypresentconflictswhensuchcompaniesinitiateprosocialactivities.
BecauseCSVisamoreself-interestedactivity,itmayproducelessconflictthanphilanthropicgiving.
6. Discussion
6.1. TheoreticalImplications
First,thisstudyisoneofthefirstinvestigationsoftheeffectofCSVonconsumerresponse. Prior
research on CSV has focused on extending CSV-related theory [61,62] or on developing business
strategy in specific societal fields [56,63]; in other words, these studies have focused more on the
internalperspectiveofthefirm. Ascompaniesinitiateprosocialactivitiesbasedontheirassumptions
of consumers’ rewards for their support [12], this study contributes to the extant knowledge by
examiningCSVfromanexternalperspective.
Second,thoughtheoriginalityandeffectivenessofCSVarestilldebated,ourresultsshowthat
thetwostudiedactivitiesaffectconsumersdifferently,accordingtothetypeofcompany. Thissuggests
thepossibilityofCSVuseasonecommunicationstrategyandsociallyresponsiblecorporateactivity
thatcorporationscanfollow.
Third,thisstudyexaminesthemoderationeffectofpriorattitudestowardcompanies. Afewprior
studieshaveaddressedhowevaluationsofcorporatesocialinitiativesdifferdependingonfirms’prior
reputations[15,16,26]. Thisstudyexpandsthescopeofthesepriorattitude-relatedstudiesbyusing
thetwofundamentaldimensionsofwarmthandcompetenceemployedwhenjudgingotherpeopleor
objects. Theresultsofthepresentstudyshowthattheeffectsofsociallyresponsiblecorporateactivities
varydependingonconsumers’priorattitudestowardstheimplementingcompanies.
Fourth,thisstudyexpandstheuseofthestereotypecontentmodelwhenevaluatingcompaniesor
brands. Thetwodimensionsofwarmthandcompetencehavetypicallybeenusedinstudiesjudging
otherpeopleornations. Becauseattemptstousethesedimensionsinbrandevaluationsarerelatively
recent,onlyalimitednumberofstudiesexist[39,47]. Thisstudycategorizesandexaminestheconcrete
effects of four corporate stereotypes of a hypothetical company. The corporate history timeline of