How Does Corporate Social Responsibility Affect ...

Journal of Retailing 91 (1, 2015) 140–153

How Does Corporate Social Responsibility Affect Consumer Response to Service Failure in Buyer–Seller Relationships? Lisa E. Bolton a,∗,1 , Anna S. Mattila b,1 a

Associate Professor of Marketing, Smeal College of Business, The Pennsylvania State University, 441 Business Building, University Park, PA 16802, United States b Marriott Professor of Lodging Management, School of Hospitality Management, The Pennsylvania State University, 224 Mateer Building, University Park, PA 16802, United States

Abstract The researchers investigate how corporate social responsibility (CSR) affects customer response following service failure within the context of buyer–seller relationships. A series of three experiments demonstrate that CSR is more effective under communal (vs. exchange) relationship norms, consistent with the alignment of CSR with the communal norm of concern for the needs of others. The effectiveness of CSR is also shown to vary as a function of company motives and CSR framing, serving as theoretically and managerially relevant boundary conditions. Together, these findings increase our understanding of how and when CSR will have a positive impact on consumers and, in turn, companies via customer satisfaction and loyalty. © 2014 New York University. Published by Elsevier Inc. All rights reserved. Keywords: Corporate social responsibility; Sustainability; Buyer–seller relationship; Service recovery; Customer satisfaction; Customer loyalty

“How far that little candle throws his beams! So shines a good deed in a naughty world.” (William Shakespeare, Merchant of Venice, Act V, Scene I) In today’s competitive marketplace, where consumers have nearly unlimited choices of merchants and service providers, building a sustainable relationship with customers becomes paramount. As marketers search for new ways to build relationships with customers, recent research has suggested that Corporate Social Responsibility (CSR) programs might be a key way for companies to attract and retain customers (Sen, Du, and Bhattacharya 2009) and for retailers to enhance brand image (Ganesan et al. 2009). Examples of retailers with CSR activities include Publix Supermarkets Inc. (charitable donations to the United Way), Lowe’s Home Improvement (partnership with the American Red Cross to provide disaster relief), McDonald’s (support of Ronald McDonald House Charities), and Marriott UK (carbon footprint reduction and sustainability). Indeed, CSR has become mainstream in today’s corporate world

∗

Corresponding author. Tel.: +1 814 865 4175. E-mail addresses: [email protected] (L.E. Bolton), [email protected] (A.S. Mattila). 1 Both authors contributed equally to this research.

(Torreli, Monga, and Kaikati 2012; Vlachos et al. 2009). Against this backdrop, our research focuses on CSR situated within buyer–seller relationships (such as communal vs. exchange relationships between companies and customers; Aggarwal 2004). Specifically, we investigate consumer response to CSR (“a good deed”) situated within service failure (“a naughty world”) to address the following questions: Does CSR improve satisfaction and loyalty intentions following service failure in buyer–seller encounters? If so, how does the buyer–seller relationship moderate the impact of CSR? And what are the underlying mechanisms and boundary conditions for effective CSR? Our investigation of these questions contributes to the retailing literature in several ways. First, previous research on CSR has identified various factors that alter the effectiveness of CSR but has not, to our knowledge, examined the type of buyer–seller relationship. We extend prior work by investigating how consumer response to CSR varies as a function of communal versus exchange norms governing the buyer–seller relationship. Second, previous research on CSR has mainly focused on its impact on choice and preference, but has largely ignored the context of service provision. Specifically, we assess whether CSR initiatives will exacerbate or mitigate the harmful effects of service failure—thereby addressing a surprising (and consequential) gap in the literature. Addressing this gap also contributes to the

http://dx.doi.org/10.1016/j.jretai.2014.10.001 0022-4359/© 2014 New York University. Published by Elsevier Inc. All rights reserved.

L.E. Bolton, A.S. Mattila / Journal of Retailing 91 (1, 2015) 140–153

literature on customer satisfaction by exploring the potential role of CSR in building customer satisfaction and loyalty. Third, our research identifies the underlying mechanism—perceptions of a company’s warmth and/or competence—by which CSR affects satisfaction and loyalty intentions. Doing so builds on recent research aimed at understanding the roles of warmth and competence (fundamental dimensions of social perception) within buyer–seller relationships. Fourth, our research examines how company’s motives and CSR framing affect consumer response to CSR within a buyer–seller relationship. These findings identify several theoretically and managerially relevant boundary conditions on CSR that enhance or limit its effectiveness. Finally, our work has novel managerial implications for the practice of CSR, including its role in buyer–seller relationships, customer satisfaction, and service recovery (to be elaborated upon in the general discussion). CSR in Buyer–Seller Relationships CSR can be defined as a company’s commitment to minimizing or eliminating any harmful effects and maximizing its long-run beneficial impact on society (Mohr, Webb, and Harris 2001, p. 46). CSR programs can take many forms, such as diversity initiatives, recycling programs, the use of green materials, support of community events, and charitable donations (Sen and Bhattacharya 2001). The present research focuses on CSR initiatives that include charitable donations (study 1) and sustainability (studies 2 and 3) for generalizability purposes and given their prevalence in business. Corporate philanthropy, including donation-based promotions, have become mainstream in the US corporate world (Henderson and Arora 2010; Krishna and Rajan 2009; Vlachos et al. 2009). Likewise, researchers and practitioners are paying increasing attention to environmental, social and economic dimensions of corporate sustainability (Chabowski, Mena, and Gonzalez-Padron 2011; McKinsey 2010). Companies have become increasingly interested in CSR as it seems to have a positive impact on consumers’ affective and behavioral responses (Barone, Miyakazi, and Taylor 2000; Brown and Dacin 1997; Du, Bhattachrya, and Sen 2007, 2011; Ellen, Webb, and Mohr 2006; Sen and Bhattacharya 2001). Moreover, CSR has been linked to increased market value of the company (Luo and Bhattacharya 2006, 2009) and better financial performance (Luo and Bhattacharya 2006, 2009; McGuire, Sundgren, and Schneeweis 1988; Stanwick and Stanwick 1998). Consumer research on CSR has mainly focused on its impact on choice and preference and surprisingly little is known about the impact of CSR (i) within the context of service provision, an important component of the economy (Vargo and Lusch 2004), and (ii) on customer satisfaction and loyalty (Anderson and Mittal 2000; Mittal and Frennea 2010; Oliver 2010). Given that service failures are inevitable and recovery is essential in retaining a stable customer base (Gelbrich and Rosck 2011; Karande, Magnini, and Tam 2007; Smith and Karwan 2010; Tax and Brown 1998), how might CSR initiatives affect the negative impact of service failure on customer satisfaction and loyalty? On the one hand, CSR could help: for example, some

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research has suggested that CSR may enhance consumer resistance to negative publicity (Eisingerich et al. 2011; Klein and Dewar 2004; Yoon, Gürhan-Canli, and Schwarz 2006). On the other hand, CSR could backfire: for example, company behavior that is inconsistent with CSR could lead to consumer perceptions of corporate hypocrisy (Wagner, Lutz, and Weitz 2009). Our research will build on these provocative findings and examine the impact of CSR on consumer response to service failure, including satisfaction and loyalty intentions. Doing so provides an arguably strong test of the power of CSR, as well as its potential role in service recovery, customer satisfaction, and loyalty. CSR and Relationship Norms Our research proposes that consumer response to CSR will depend upon the norms governing the buyer–seller relationship. In communal relationships, members benefit from each other on the basis of needs or to demonstrate general concern for each other’s welfare (Clark 1984). Conversely, in exchange relationships, members benefit each other in response to specific benefits received in the past or expected in the future (Clark and Mills 1979; Mills and Clark 1982). Communal and exchange relationships and their accompanying norms were first identified in the interpersonal relationships literature but have proved useful in consumer contexts (Aggarwal 2004; Goodwin 1996; Johnson and Grimm 2010; Wan, Hui, and Wyer 2011). Communal and exchange norms are posited to vary across buyer–seller relationships, due to differences across industry (e.g., medical vs. financial services) and across firm due to brand positioning (Aggarwal 2004). For example, marketing communications may vary in their emphasis on communal versus exchange norms (e.g., Sheraton Hotels “Who’s taking care of you?” vs. Days Inn “Best value under the sun”). Individuals may also vary in the chronic tendency to adhere to communal and exchange norms in relationships (referred to as communal and exchange orientation) (for a recent review, see Clark and Mills 2011). Given their conceptual equivalence, our research will refer interchangeably to communal consumers as consumers in communal relationships, guided by communal norms, or high in communal orientation (and likewise for exchange). In interpersonal relationships, people use relationship norms as standards to evaluate others and to decide what is appropriate in certain situations. For example, helping occurs more in communal than exchange relationships (Bar-Tal et al. 1977; Clark et al. 1987) and refusing to help makes individuals feel worse (Williamson and Clark 1989a, 1989b; Williamson et al. 1996). Moreover, individuals in communal (vs. exchange) relationships expect partners to be more responsive to their needs and to provide more help. “Feelings of injustice. . .should be common when one person willingly neglects the other’s needs” but “. . .should not lead to feelings of injustice in exchange relationships” (Williamson and Clark 1989a, p. 93). Indeed, the communal orientation scale includes a measure of others’ responsiveness (e.g., “I believe people should go out of their way to be helpful”, “It bothers me when other people neglect my needs”; Clark et al. 1987). Consistent with higher expectations of partner’s responsiveness to their needs, individuals felt less

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grateful toward others who helped and more resentment toward communal (vs. exchange) partners who refused to help (BarTal et al. 1977). A partner’s responsiveness to one’s needs also affects satisfaction in communal relationships such as marriage (Grote and Clark 1998; Lemay, Clark, and Feeney 2007) whereas inconsiderate behavior undermines relationship quality because they “indicate that the other is not doing a good job of living up to communal norms” (Clark and Grote 1998, p. 9). Given that communal norms place greater emphasis on responsiveness to needs and concern for others’ welfare in interpersonal relationships, then we expect a similar emphasis in commercial relationships. Moreover, the societal benefits of CSR seem better aligned with communal (vs. exchange) norms governing a buyer–seller commercial relationship. Indeed, prior research indicates that communal versus exchange relationship norms influence the extent to which consumers engage in welfare-oriented behaviors such as donating money to charity, volunteering time, and spreading word of mouth (Aggarwal 2004; Goodwin 1996; Gremler, Gwinner, and Brown 2001; Johnson and Grimm 2010; Small and Simonsohn 2008). We build upon this research and argue that consumers guided by communal (vs. exchange) norms in buyer–seller relationships will respond more favorably to companies that engage in societal welfare-oriented behaviors such as CSR. Accordingly, H1. Consumer response to company CSR activities will be enhanced under communal (vs. exchange) buyer–seller relationship norms. To our knowledge, research has not examined the joint impact of relationship norms and CSR. We do so by examining consumer response in the form of customer satisfaction and loyalty intentions following service failure, arguably a strong test of the power of CSR. We propose that buyer–seller relationship will moderate the impact of CSR due to CSR’s alignment with communal (but not exchange) norms. At a broad level, our argument is consistent with and builds on the notion that CSR’s impact is enhanced when congruent with the company and its offerings (Koschate-Fischer, Stefan, and Hoyer 2012; Menon and Kahn 2003; Sen and Bhattacharya 2001; Zdravkovic, Magnusson, and Stanley 2010) and consumer lifestyle and values (Barone, Norman, and Miyazaki 2007; Lee et al. 2012; Sen and Bhattacharya 2001). Put simply, CSR’s impact should be enhanced when congruent with norms governing the buyer–seller relationship. Warmth and Competence Prior research on social perception characterizes warmth and competence as the two universal dimensions of social perception (Fiske, Cuddy, and Glick 2007; Fiske et al. 2007). Warmth captures traits such as being caring or helpful (i.e., positive or negative intent) whereas competence captures traits such as skill and efficacy (i.e., the capability to pursue one’s intent). These dimensions, originally established in social psychology, have been extended to consumption contexts (e.g., Aaker, Vohs, and Mogilner 2010; Scott, Mende, and Bolton 2013). Although warmth is considered primary in personal relationships (Fiske

et al. 2007), competence may dominate commercial relationships (Aaker, Vohs, and Mogilner 2010)—although recent research argues that their impact may depend upon relationship norms (Scott, Mende, and Bolton 2013). Warmth. H1 is based on the premise that CSR enhances consumer response by improving customers’ perceptions that the company is concerned about the needs and welfare of its customers and society at large. That is, CSR signals a firm’s warmth—a signal that may be especially important in light of service failure as consumers seek evidence that the firm does indeed care for its customers. Indeed, prior research Aaker, Vohs, and Mogilner (2010) find that consumers associate non-profit (vs. for-profit) organizations with greater warmth. If so, then we argue that a company engaging in non-profit activities via CSR might acquire a stronger association with warmth. However, consumer response to CSR as a signal of warmth may depend upon the type of buyer–seller relationship. Scott, Mende, and Bolton (2013) find that consumers in communal relationships place more emphasis on warmth and therefore interpret seller signals (in their case, conspicuous consumption) as evidence of (lack of) warmth. If so, then consumers in communal relationships should be especially inclined to view CSR as a signal of a firm’s warmth and their favorable response to CSR should be mediated by warmth. Competence. A similar argument seems less likely to hold for competence. Just as communal consumers are expected to place more emphasis on warmth, exchange consumers are expected to place more emphasis on competence and interpret seller signals in terms of competence (Scott, Mende, and Bolton 2013). However, the signal value of CSR for competence is unclear. From a definitional standpoint, CSR does not imply competence in the same way that it does warmth. On the one hand, prior research suggests a halo effect could emerge and CSR could ‘spill over’ and affect perceptions of a company’s competence (Du, Bhattachrya, and Sen 2007; Judd et al. 2005). On the other hand, exchange consumers seem unlikely to view CSR as evidence that a firm is fulfilling its normative obligations (which implies competence; Maignan and Ferrell 2004; Vaaland, Heide, and Grønhaug 2008), especially in light of service failure that itself may imply a lack of competence. Indeed, prior research does not strongly support an association between CSR and enhanced competence perceptions (Sen and Bhattacharya 2001). [Interestingly, pro-social and ethical behavior is sometimes associated with lack of competence (Aaker, Vohs, and Mogilner 2010; Lin and Chang 2012; Luchs et al. 2010)—but the conditions for this association would not seem to hold in the present context.3 ] In sum, these mixed findings suggest that consumer perceptions of a company’s competence may be relatively unaffected by CSR activities. Accordingly,

3 Aaker et al. (2010) find that non-profits are seen as less competent than forprofits—but the effect dissipates when money is primed (which seems the case for a for-profit firm that supports CSR). Luchs et al. (2010; Lin and Chang 2012) find that higher product ethicality undermines performance IF it is strengthrelated—but strength seems less relevant in the present retail services context.


studies also shed light on the underlying psychological process and establish theoretically relevant boundary conditions for the effectiveness of CSR in buyer–seller relationships.

BUYER-SELLER RELATIONSHIP Communal/exchange norms (E1) Communal orientation (E2-E3)

Study 1: CSR and Relationship Norms

H1 CSR Corporate philanthropy (E1) Sustainability (E2, E3)

CONSUMER PERCEPTIONS: Warmth Competence (H2)

H3 COMPANY MOTIVES (E2)

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CONSUMER RESPONSE Satisfaction Loyalty Intentions (E1—E3)

H4 CSR FRAMING (E3)

Fig. 1. Organizing framework.

H2. The positive effects of CSR under communal (vs. exchange) relationship norms will be mediated by perceptions of a firm’s warmth (more so than competence). H2 proposes that warmth rather than competence inferences are the underlying psychological process by which CSR affects consumer response to service failure. (Later, we will explore how competence might also play a role depending upon how CSR is framed.) Prior research has proposed various other mediators of CSR’s impact, including CSR associations and corporate ability associations (which indirectly appear to map at least partially on to warmth and competence; Brown and Dacin 1997) and customer-company identification (Sen and Bhattacharya 2001, 2003). The latter proposes that consumers ascribe greater overlap in their own traits and a company’s traits (e.g., assertive, compassionate, risk-taking) when companies engage in CSR, and this sense of attachment drives favorable CSR responses. We build on this research by examining the nature of the underlying traits (i.e., warmth and competence) and the moderating role of buyer–seller relationship norms. Empirical Overview In a series of three experiments, we investigate the impact of CSR initiatives on consumer response to service encounters, instantiated in the form of service failure and assessed primarily via customer satisfaction and loyalty intentions.4 Fig. 1 provides an organizing framework. Study 1 investigates the moderating role of buyer–seller relationship norms (H1) and the mediating roles of warmth and competence (H2). Studies 2 and 3 continue to test the impact of CSR as a function of buyer–seller relationship norms, while assessing its robustness across the company’s CSR motive and CSR framing. Specific theory and hypotheses H3 and H4 regarding these factors will be introduced with each study. Aside from their pragmatic relevance to retailers, these 4 Given that deliberate delivery of service failure is problematic, we carefully follow precedent by using established scenarios (study 1) and also use a video simulation (study 2) to represent experience.

The primary objective of study 1 is to test H1 and assess how buyer–seller relationship norms affect consumer response to CSR within the context of service failure. Doing so will provide evidence for H2 and the underlying psychological process by examining mediation via warmth and competence inferences. Consistent with H1 and H2, CSR is expected to increase satisfaction and loyalty intentions, more so under communal (vs. exchange) relationship norms, due to enhanced perceptions of a firm’s warmth (more so than competence). Study 1 examines a hotel service failure (adapted from Smith, Bolton, and Wagner 1999). Relationship norms are primed indirectly using an established technique; specifically, relationship norms are primed in an unrelated scenario and, once salient, are expected to guide consumer response in the service setting (Aggarwal and Law 2005; Aggarwal and Zhang 2006). CSR is manipulated via charitable donations, and consumer response is measured via customer satisfaction and loyalty intentions toward the retailer. Method Participants and Design. The experiment was a 2 (CSR, none) × 2 (Relationship norms: communal, exchange) betweensubjects design. A total of 130 adult consumers, drawn from a paid commercial panel and screened for prior hotel experience, completed the study. Participants were 46.2% male, with a median age of 45–54, median income of $50,000–59,999, and median education of some college. All participants reported staying at hotels at least 3–5 nights in the past year. Materials and Procedure. All participants responded to initial background questions (including age, income, gender, and self-reported hotel frequency). Participants then read a scenario from Aggarwal and Law (2005, studies 1–2), designed to prime communal versus exchange relationship norms. In the communal condition, participants read about an individual who “likes to do things for people just to please them and to show them that she cares for them. In turn, she expects her friends to be there for her when she needs them.” In the exchange condition, participants read about an individual who “likes to keep things as even as possible and generally keeps track of her exchanges with others. . . and expects [others] to reciprocate in kind.” Participants then responded to an open-ended question regarding sharing of a check when dining out for lunch with a friend, which is an established manipulation check for communal versus exchange norms (Aggarwal and Law 2005). In an ostensibly unrelated task, participants then read the following retail scenario. Imagine the following experience with a hotel. You are traveling and looking forward to getting to your hotel and checking

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Table 1 Consumer response to CSR as a function of primed relationship norm (Study 1). Relationship norm

CSR

N

Satisfaction

Loyalty intentions

Communal Communal Exchange Exchange

None CSR None CSR

30 37 35 28

2.00 (0.96) 2.86 (1.25) 2.19 (1.16) 2.07 (0.96)

2.22 (0.95) 3.16 (0.96) 2.81 (1.05) 2.63 (0.70)

in. You will be staying at hotel XYZ for several nights, and the hotel has a Four-Diamond rating from AAA. Participants in the CSR condition only were then told “Hotel XYZ makes regular donations to environmental causes.” All participants then read about a service encounter at the retailer (a hotel service outcome failure adapted from Smith, Bolton, and Wagner 1999): You arrive at the hotel at approximately 7:00 pm and go to the front desk to check in. The representative at the front desk looks up your prepaid reservation and informs you that your room is ready. However, it is not the type of room (in terms of number and size of beds and smoking or nonsmoking) that you had preferred and reserved. Participants then reported their satisfaction and loyalty intentions, as well as perceptions of the retailer’s warmth and competence (see Appendix A for exact wording). Results Manipulation Check. Following Aggarwal and Law (2005), participants’ open-ended responses in the priming task were coded by independent judges (inter-coder agreement 84%) as reflecting exchange or communal norms (e.g., paying own share or treating by paying the entire bill). More participants indicated “treating” in the communal versus exchange condition (58.2% vs. 30.2%, χ2 = 10.03, p < .05), and more participants indicated “paying own share” in exchange versus communal conditions (57.1% vs. 32.8%, χ2 = 7.60, p < .05). As intended, indirect priming of communal (vs. exchange) norms led to stronger endorsement of communal (relative to exchange) responses among respondents. Satisfaction and Intentions. Analyses were conducted for satisfaction and intentions as a function of relationship norms, CSR, and their interaction (with age, income, and gender as covariates; details omitted for brevity’s sake). Descriptive means are shown in Table 1 and Fig. 2. MANCOVA reveals a marginal effect of CSR (F(1, 111) = 3.59, p < .10), qualified by the expected interaction with relationship norm (F(1, 111) = 8.66, p < .05). [The main effect of norm is non-significant (F(1, 111) = 1.96, p > .10).] Follow-up simple effects tests indicate that CSR improved satisfaction and intentions under communal norms (F(1, 111) = 11.79, p < .05) but had no effect under exchange norms (F < 1). This pattern of results supports H1. Mediation Analysis. We ran a moderated mediation analysis (Hayes 2012), in which the independent variable was CSR, the moderator was relationship norm, the mediators were warmth

Fig. 2. Loyalty intentions as a function of CSR and Primed Relationship Norms (Study 1).

and competence, and the dependent variable was intentions. The bootstrapping analysis supports mediation by warmth but not competence. Specifically, the mean indirect effects for warmth excluded zero under communal norms (a × b = .5646; 95% CI = .1999 to 1.1694); otherwise, the mean indirect effects for warmth and competence did not exclude zero. (See Appendix B for details.) These results support H2 and mediation by warmth. Discussion Study 1 provides evidence that positive effects of CSR on satisfaction and loyalty intentions following a service failure are stronger under communal (vs. exchange) relationship norms. CSR aligns with communal norms of care and concern for others: inferences of a firm’s warmth are therefore enhanced under communal (but not exchange) relationship norms, thereby increasing satisfaction and loyalty intentions toward the firm. Put simply, consumers guided by communal norms ‘tune in’ to CSR as a signal of a firm’s warmth; consumers guided by exchange norms do not. Study 2: Company Motives for CSR The objectives of the present study are two-fold. As its first objective, study 2 is designed to assess robustness of our findings in three ways. First, study 1 operationalized buyer–seller relationship via indirect norm priming. Instead, the present study investigates communal relationship orientation—reflecting individual differences in chronically salient relationship norms held by consumers—and its impact on consumer response to CSR. Second, study 1 operationalized CSR via corporate philanthropy whereas the present study operationalizes CSR via sustainability initiatives for generalizability purposes. Third, study 1 closely followed precedent in the literature and utilized scenario descriptions of an outcome service failure; instead, the present study employs videotaping to create an encounter with a retailer that is characterized primarily by process service failure. Consistent with H1 and H2, we predict that communally-oriented consumers will respond more favorably to sustainability forms of CSR due to its alignment with communal norms that emphasize care and concern for others. That is, our objective is to replicate the findings of study 1 using an individual difference measure of


relationship norms and with an eye toward experimental realism and generalizability. As its second objective, study 2 explores how company motives for engaging in CSR alter the impact of CSR as a function of relationship norms. Company CSR motives may become salient to consumers via news and social media, publicity and promotions, and other sources. Extrinsic or self-interested motives reflect the company’s desire to increase sales/profits while intrinsic or society-serving motives involve the ultimate goal of doing good (Du, Bhattachrya, and Sen 2007). Prior research indicates that consumer response depends on perceived company motives for engaging in CSR (Barone, Miyakazi, and Taylor 2000; Ellen, Webb, and Mohr 2006; Folse, Niedrich, and Grau 2010; Koschate-Fischer, Stefan, and Hoyer 2012; Sen, Bhattacharya, and Korschun 2006). For example, CSR’s impact is enhanced when CSR motives are perceived as sincere (Yoon, Gürhan-Canli, and Schwarz 2006), and CSR tactics (such as company donation amount and purchase requirements) can raise suspicion of company motives and undermine CSR’s impact (Folse, Niedrich, and Grau 2010). Indeed, prior research suggests that CSR is closely linked to “self-transcendence values of caring for society” (Torreli, Monga, and Kaikati 2012, p. 950)—that is, society-serving (rather than self-serving) motives. As study 1 demonstrates, consumers respond favorably to CSR when it aligns with communal relationship norms that emphasize care and concern for others—consistent with a purely society-serving motive for CSR. Hence, we predict that communally-oriented consumers will respond favorably to society-serving, but not-self-serving, company CSR motives. Accordingly, H3. When company motives are society-serving, consumer response to CSR activities will be enhanced under communal relationship norms (i.e., consistent with H1). When company motives are self-serving, these positive effects of CSR will not emerge. If supported, H3 provides further support for the underlying psychological process by establishing company motive as a theoretically relevant boundary condition. That is, communal consumers respond favorably to CSR because society-serving (but not self-serving) CSR aligns with communal relationship norms of care and concern for others. Looked at another way, H3 also establishes relationship norms as a boundary condition on the impact of company CSR motive. That is, company CSR motive will influence consumer response under communal buyer–seller relationship norms; in its absence, CSR motive will have little impact. Method Participants and Design. The experiment was a two-group (CSR: none, CSR) between-subjects design, with communal relationship orientation as a measured covariate (i.e., reflecting communal norms). A total of 135 participants, drawn from a paid commercial panel, completed the study. Participants were 48.9% male, with a median age of 25–34, median income of $40,000–49,999, and median education of some college.

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Materials and Procedure. Participants first responded to background measures, including communal relationship orientation (an individual difference measure of communal norms) and demographics. The communal orientation scale (Clark et al. 1987) comprises 14 items, such as: “I expect people I know to be responsive to my needs and feelings,” and “When making a decision, I take other people’s needs and feelings into account”, measured on five-point scales (with endpoints “disagree/agree”). After a filler task, all participants then read a short introduction to a retail service encounter as follows: You and a friend have decided to go out for a relaxing dinner. You enter a casual-dining restaurant and are seated at the table. Please watch the following short simulation of your restaurant experience. As you watch the video, imagine yourself in this situation and having this experience. Participants then watched a 2½ minute video that showed a restaurant experience characterized primarily by process service failure. (The failure, adapted from Smith, Bolton, and Wagner 1999, included slow and inattentive service, as well as poor quality food.) The video was filmed by a production company in a restaurant and featured actors representing diners and restaurant staff. At the end of the video, participants in the CSR condition only were told: You later discover that the restaurant is committed to sustainability (i.e., acting in ways that protect human health and the environment now and for future generations). The restaurant has a strong green strategy toward the natural environment (e.g., energy efficiency, sourcing supplies locally, pollution and waste control) and was recently ranked 1st among 14 major restaurant companies for corporate sustainability. All participants then reported their satisfaction and loyalty intentions toward the retailer (see Appendix A). Participants in the CSR conditions also assessed the retailer’s CSR motives on four 5-point scales (with endpoints “disagree/agree”): “The restaurant participates in CSR because it genuinely cares about the well-being of others”, “The restaurant’s commitment to CSR is genuine”, “The restaurant is really just engaging in CSR to benefit itself” (reverse-coded) and “The restaurant participates in CSR because it wants to sell more products” (reverse-coded). Results Satisfaction and Intentions. To test H1, analyses of satisfaction and intentions was conducted as a function of CSR, measured communal orientation (coefficient α = .80, standardized M = 0 (1)), and their two-way interaction (with age, gender, and income as measured covariates; details omitted for brevity’s sake). MANCOVA reveals a two-way interaction of CSR and communal orientation (F(1, 128) = 5.98, p < .05); main effects were non-significant (p > .10). Spotlight analyses were then conducted at higher and lower levels of communal orientation (+1SD and −1SD, respectively). When communal orientation was high (reflecting communal norms), CSR improved satisfaction and loyalty intentions (F(1, 128) = 4.30, p < .05); CSR had

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Table 2 Consumer response to CSR as a function of relationship orientation (spotlight analysis with predicted (SE)) (Study 2). Communal orientation

CSR

Satisfaction

Loyalty intentions

−1SD −1SD

None Sustainability

2.09 (.24) 1.71 (.28)

2.44 (.26) 2.25 (2.25)

+1SD +1SD

None Sustainability

1.50 (.27) 1.95 (.28)

1.85 (1.85) 2.24 (.31)

no effect when communal orientation was low (F(1, 128) = 1.98, p = .16). This pattern of results (shown in Table 2) supports H1. Mediation Analysis. We ran a moderated mediation analysis (Hayes 2012), in which the independent variable was CSR, the moderator was relationship orientation, the mediators were warmth and competence, and the dependent variable was intentions. Bootstrapping analysis revealed that warmth mediated the effects of the two-way interaction on intentions. Specifically, the mean indirect effects excluded zero for warmth when communal orientation was high (a × b = .1945; 95% CI = .0205 to .4122); otherwise, neither warmth nor competence indirect effects excluded zero. (See Appendix B.) This analysis supports H2 and mediation by warmth. Company Motive. To test H3, we categorized participants’ ratings of the company’s motives (coefficient α = .62) as either society-serving or self-serving (relative to scale midpoint of 3).5 Analyses of satisfaction and intentions were then conducted as a function of CSR (society-serving motive, self-serving motive, no CSR), communal orientation (standardized M = 0 (1)), and their two-way interaction (with age, gender, and income as covariates). MANCOVA revealed a two-way interaction of CSR and communal orientation (F(2, 126) = 5.28, p < .01); main effects were non-significant (p > .10). More germane to our hypotheses, we examined planned interaction contrasts of each perceived CSR motive against no CSR. For society-serving CSR, MANCOVA reveals a two-way interaction contrast (F(1, 126) = 10.36, p < .01) such that CSR increases satisfaction and intentions when communal orientation is high (reflecting communal norms; F(1, 126) = 11.26, p < .01) but not low (F(1, 126) = 1.92, p > .10). For self-serving CSR, the interaction contrast is non-significant (F(1, 126) = 1.45, p = .23); self-serving CSR has no effect at either level of communal orientation (p > .10). These results, shown in Table 2 and Fig. 3, support H3.

CSR motive rating

Satisfaction

Loyalty intentions

Self-serving Society-serving

1.80 (.30) 1.48 (.34)

2.25 (.33) 2.17 (.37)

Self-serving Society-serving

1.70 (.30) 2.51 (.35)

1.94 (.33) 2.78 (.38)

effects of CSR on satisfaction and loyalty intentions; and (iii) these positive effects of CSR emerge when company motives are perceived as society-serving, but not self-serving. These findings within the context of service failure support H1–H3: CSR improves satisfaction and loyalty intentions when the company’s motive is society-serving and aligns with communal norms of care and concern for others (i.e., warmth) held by consumers. Company motive therefore serves as a theoretically and managerially relevant boundary condition that alters the impact of CSR. Study 2 also provides evidence of generalizability to buyer–seller relationship norms operationalized via individual differences in chronically salient relationship norms held by consumers (i.e., communal orientation). In additional studies (available from the authors), we replicate the findings of studies 1–2 using alternative operationalizations of relationship norms, including a direct norm manipulation (adopted from Scott, Mende, and Bolton 2013) and descriptions of firms positioned on buyer–seller relationship norms (adopted from Aggarwal and Law 2005). Hence, communal and exchange relationship norms may be made salient in a variety of ways and, as our results attest, alter consumer response to company CSR activities. Finally, study 2 provides evidence of generalizability to a process service failure, operationalized via video simulation, and to CSR in the form of sustainability initiatives by retailers. We thus contribute to the growing literature on sustainability in marketing (Connelly, Ketchen, and Slater 2011; Leonidou, Katsikeas, and Morgan 2013).

Discussion To summarize: (i) CSR in the form of sustainability initiatives is more effective when communal orientation is high (reflecting communal norms); (ii) warmth mediates the positive

5 An alternative analysis using a continuous measure of CSR motive produces a consistent pattern of results. That is, satisfaction and loyalty intentions are a function of a significant two-way interaction of communal orientation and CSR motive, with positive effects emerging when communal orientation is high and company motive is society-serving. Details omitted for brevity’s sake. A categorization approach is utilized in the text for ease of exposition.

Fig. 3. Loyalty intentions as a function of relationship orientation and CSR motive (Study 2).


Study 3: How Can CSR Signal Competence? Thus far, our evidence points to CSR as a signal of a firm’s warmth—which aligns with communal norms of care and concern for others. As a result, CSR appears more effective following service failure in communal versus exchange relationships. A natural question then arises: Can CSR signal competence? And if so, how will such CSR affect consumer response to service failure as a function of buyer–seller relationship norms? Study 3 investigates these questions by framing CSR as a signal of warmth (its spontaneous signal, as evidenced by studies 1–2) or competence. Recall that past research does not strongly support an association between CSR and enhanced competence perceptions (Sen and Bhattacharya 2001; see also Aaker, Vohs, and Mogilner 2010; Lin and Chang 2012; Luchs et al. 2010). However, it may be possible to frame CSR as evidence that a firm is fulfilling its normative obligation, which should therefore imply competence (Maignan and Ferrell 2004; Vaaland, Heide, and Grønhaug 2008). (We note that framing can and does occur in a variety of firm marketing communications [e.g., Forbes 2008; Smith 2010].) Framing CSR should also overcome any potential negative implications of CSR, via its association with non-profit or pro-ethical behavior, for competence (Aaker, Vohs, and Mogilner 2010; Lin and Chang 2012; Luchs et al. 2010). Recall that consumers guided by communal norms are expected to place more emphasis on warmth than competence (Scott, Mende, and Bolton 2013). If so, then consumers in communal relationships who experience service failure should interpret CSR as a signal of a firm’s warmth—and, moreover, framing CSR in other ways may detract from this warmth signal and undermine consumer response. In contrast, consumers guided by exchange norms should place more emphasis on competence than warmth (Scott, Mende, and Bolton 2013). If so, then consumers in exchange relationships who are relatively unresponsive to CSR as a signal of a firm’s warmth—should react more favorably to service failure when CSR is framed in ways that imply competence. Accordingly,

H4. CSR that signals warmth will be more effective under communal relationship norms (i.e., consistent with H1). CSR framed to signal competence will decline in effectiveness under communal relationship norms but increase in effectiveness under exchange relationship norms.

If supported, H4 provides further support for our theorizing regarding the psychological processes that underlie consumer response to CSR within the context of service failure. Communal consumers respond more favorably when CSR signals warmth whereas exchange consumers respond more favorably when CSR signals competence. Looked at another way, H4 establishes how CSR can be framed to match buyer–seller relationship norms and therefore increase its effectiveness in a service failure setting—with corresponding pragmatic implications for marketers.

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Method Participants and Design. The experiment was a three-group (CSR: none, CSR, CSR framing) between-subjects design, with communal relationship orientation (an individual difference measure of communal norms) as a measured covariate. A total of 277 participants, drawn from a paid commercial panel, completed the study. Participants were 54.5% male, with a median age of 25–34, median income of $40,000–49,999, and median education of 4-year college degree. Participants reported spending a median 3–5 nights in a hotel in the past year. Materials and Procedure. Participants first responded to background measures, including communal relationship orientation (same as in study 2) and demographics. After a filler task, all participants then read a short introduction describing a retailer: Hotel XYZ is a mid-scale hotel chain with multiple locations in North America. The hotels are typically located in major cities or suburban areas, often near expressways or business areas, and convenient to shopping and attractions. The hotels feature medium-sized restaurants, fitness centers, and pools. Like most hotels, XYZ chain has an online reservation system. Customers can book their reservations online, requesting the length of stay, type of room, and so on. The system also takes special requests (e.g., non-smoking, type of bed, etc.). The hotel also offers a 1-800 number for making reservations, or consumers can call the hotel location directly to book a room. Some participants also read about the retailer’s CSR initiatives in the form of sustainability (omitted in the no-CSR control group). The CSR manipulation was similar to study 2 but a second version framed CSR as sound business practice (adapted from real-world examples of such framing; Smith 2010). Hotel XYZ is committed to sustainability. The hotel has a strong green strategy toward the natural environment (e.g., energy efficiency, sourcing supplies locally, pollution and waste control) and was recently ranked 1st among 14 major hotel companies for corporate sustainability. According to the CEO: [“Sustainability is about doing good for the environment and our customers. Our entire organization takes pride in our commitment to sustainability.” (CSR) / “Sustainability is a lot more than just doing good for the environment and our customers. It’s also a business strategy – efficient and sustainable resource use simply makes good business sense, for any firm’s bottom line. Our entire organization takes pride in our commitment to sustainability.” (framed CSR)] Participants then read a news article describing a service failure by the retailer. Recently, a newspaper reported on Hotel XYZ as follows: There have been several hundred reports of over-booking at Hotel XYZ. Consumers across a number of cities have complained that reservations at the hotel were not being honored: consumers with bookings were turned away at the door and forced to find alternative accommodation because

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Table 3 Consumer response to CSR with/out framing as a function of relationship orientation (spotlight analysis with predicted (SE)) (Study 3). Communal orientation

CSR

Attitude

Loyalty intentions

−1SD −1SD −1SD

None CSR Framed CSR

3.27 (.23) 3.63 (.23) 3.92 (.24)

2.71 (.24) 3.03 (.24) 3.39 (.25)

+1SD +1SD +1SD

None CSR Framed CSR

3.13 (.23) 4.09 (.23) 3.64 (.24)

2.47 (.24) 3.71 (.25) 3.11 (.25)

the hotel was fully occupied. In all cases, the reservations were made via the online booking system, and consumers are now left wondering whether the hotel is systematically overbooking in order to increase its occupancy rates. An XYZ Hotel spokesperson said yesterday: “Hotel XYZ has unfortunately experienced a glitch in the online reservation system. A portion of online bookings were lost during a recent software update by our external IT provider. Because the details were lost, we regret that we are unable to contact these customers to apologize directly.” Participants then reported attitude, loyalty intentions, warmth, and competence. Attitude was measured on three 7-point scales (with endpoints “unfavorable/favorable”, “negative/positive”, and “really dislike/really like”; coefficient α = .96). Participants also rated CSR on two 5-point scales (with endpoints “small/large” and “lower than average/higher than average”, r = .92) for use as a control variable when comparing CSR conditions. (For other measures, see Appendix A.) Results CSR. Our first analysis examines attitude and intentions as a function of CSR (vs. no CSR), measured communal orientation (coefficient α = .86, standardized M = 0 (1)), and their two-way interaction (with age, gender, and income as measured covariates; details omitted for brevity’s sake). MANCOVA reveals a main effect of CSR (F(1, 169) = 12.29, p < .01), qualified by its interaction with communal orientation (F(1, 169) = 4.12, p < .05); the main effect of communal orientation was nonsignificant (F < 1). Spotlight analyses were then conducted at higher and lower levels of communal orientation (+1SD and −1SD, respectively). When communal orientation was high (reflecting communal norms), CSR improved attitude and intentions (F(1, 169) = 14.96, p < .01); CSR had no effect when communal orientation was low (F(1, 169) = 1.10, p > .10). This pattern of results (shown in Table 3 and Fig. 4) supports H1 and mirrors the pattern observed in studies 1 and 2. CSR Framing. We now follow the same analysis approach to examine framed CSR. First, contrasting framed CSR versus no CSR, MANCOVA of attitude and intentions reveals a main effect of framed CSR (F(1, 162) = 13.38, p < .01); communal orientation and the two-way interaction are non-significant (respectively, F(1, 162) = 1.98, p = .16, F < 1). That is, framed CSR improved attitude and intentions regardless of communal orientation. Second, contrasting framed CSR versus CSR,

Fig. 4. Loyalty intentions as a function of relationship orientation and CSR framing (Study 3).

MANCOVA of attitude and intentions reveals a two-way interaction of CSR framing and communal orientation (F(1, 165) = 4.16, p < .05); the main effects of framing and orientation were non-significant (respectively, F < 1, F(1, 165) = 1.21, p > .15). When communal orientation was high (reflecting communal norms), framing CSR lowered attitude and intentions (F(1, 165) = 4.42, p < .05); when communal orientation was low, framing CSR had no effect (F < 1). This pattern of results supports H4. Mediation Analysis. We ran a moderated mediation analysis (Hayes 2012): the independent variable was each framed CSR contrast, the moderator was relationship orientation, the mediators were warmth and competence, and the dependent variable was intentions. Contrasting framed CSR versus no CSR, bootstrapping analysis revealed mediation by warmth and competence when communal orientation was high (warmth: a × b = .184, 95% CI = .028 to .434; competence: a × b = .207, 95% CI = .070 to .432) and mediation by competence only when communal orientation was low (warmth: a × b = .053, 95% CI = −.007 to .183; competence: a × b = .368, 95% CI = .130 to .662). Contrasting framed CSR versus CSR, bootstrapping analysis revealed mediation by warmth when communal orientation was high (a × b = −.293, 95% CI = −.669 to −.009); otherwise, neither warmth nor competence indirect effects excluded zero. (See Appendix B.) This analysis supports H4: competence mediates framed CSR among less communally-oriented consumers—but doing so harms warmth inferences that also mediate for communally-oriented consumers. Discussion To summarize: (i) CSR in the form of sustainability initiatives is more effective when communal orientation is high (reflecting communal norms); (ii) CSR framed to signal competence is effective regardless of communal orientation; (iii) these positive effects of CSR emerge via warmth and/or competence, depending upon framing and communal orientation; and (iv) framing CSR to signal competence undermines its effectiveness with communally-oriented consumers due to reduced warmth perceptions. Together, these findings within the context of service failure support H1, H2, and H4: CSR improves attitudes and


loyalty intentions for consumers who hold communal relationship norms by acting primarily as a signal of warmth. CSR framed to signal competence can improve attitudes and loyalty intentions for less communally-oriented consumers—but at the cost of less positive effects among more communally oriented consumers. General Discussion The present research investigates how CSR affects customer satisfaction within the context of retail service failures. First, we investigate the effectiveness of CSR as a function of buyer–seller relationship norms (studies 1–3): CSR increases satisfaction and loyalty intentions under communal (but not exchange) relationship norms, consistent with the alignment of CSR with the communal norm of care and concern for others. Second, we examine the mediating roles of warmth versus competence in driving the positive effects of CSR as a function of buyer–seller relationship norms. Third, we investigate theoretically and managerially relevant boundary conditions on the effectiveness of CSR, including company motives (study 2) and CSR framing (study 3), which are each shown to alter CSR’s impact. Together, these findings expand our understanding of consumer response to CSR within buyer–seller relationships. Theoretical Implications and Future Research Taken together, our findings contribute to the literatures on CSR, buyer–seller relationships, and customer satisfaction and loyalty (including service failure and recovery). CSR. Previous research postulates that effective CSR tends to have a positive impact on consumers’ attitude toward the company—but the role of CSR in light of service failure has received little attention. Our findings indicate that CSR can play a buffering role against service failure by signaling warmth and, in turn, improving satisfaction and loyalty intentions following a service failure. Doing so expands the customer satisfaction and loyalty literature by incorporating non-product related factors like warmth and CSR (Kumar, Pozza, and Jaishankar Ganesh 2013). This role for warmth is consistent with prior research suggesting that caring perceptions are a key driver of satisfaction in a service encounter (e.g., Mattila, Grandey and Fisk 2003; Parasuraman, Zeithaml, and Berry 1985). Interestingly, prior research has proposed a dominant role for competence in commercial relationships (Aaker, Vohs, and Mogilner 2010). However, our findings suggest a more balanced perspective inasmuch as emphasis on warmth and competence varies as a function of the buyer–seller relationship (cf. Scott, Mende, and Bolton 2013). Moreover, framing CSR can shift its impact from warmth to competence as a function of buyer–seller relationship norms. Our research finds evidence for the effectiveness of CSR across several types of service failure (e.g., outcome failure in study 1, process failure in study 2). Although we find robust effects, future research is merited to investigate whether characteristics of the experience alter the impact of CSR. For example, is CSR more effective for outcome (vs. process) failures or for

149

product (vs. service) failures, perhaps due to hypocrisy when the nature of the failure (e.g., rude employee behavior) is especially inconsistent with CSR? Importantly, our research focuses solely on service failure and begs the question: What is the impact of CSR when service experience is positive? On the one hand, a positive experience that already provides evidence of a firm’s warmth and competence could minimize any additional impact of CSR; on the other hand, a positive (rather than negative) experience could amplify CSR’s signal of a firm’s competence (vis-a-vis warmth). That is, experience valence may alter the impact of CSR via warmth and competence. Future research might also investigate the impact of CSR beyond warmth and competence inferences and their downstream impact on customer satisfaction and loyalty. For example, does CSR cue costs and reduce profit perceptions, with corresponding improvements in perceived price fairness? Buyer–Seller Relationships. Research on the role of relationship norms in customer satisfaction is scant—and, as the present findings attest, can account for mixed findings regarding the impact of CSR. Indeed, our research suggests that consumers, guided by relationship norms, appear to interpret the same marketing action in different ways (cf. Scott, Mende, and Bolton 2013). Communal customers view CSR as evidence that the company cares about others, which aligns with communal (but not exchange) norms. Moreover, framing CSR can imply competence and increase its alignment with, and effectiveness under, exchange norms. Future research might investigate whether characteristics of CSR interact with the buyer–seller relationship. To illustrate: CSR activities that emphasize warmth may be especially effective at enhancing consumer response under communal relationship norms. If so, then CSR activities that directly affect people (e.g., helping others vs. helping things, such as the environment or historic buildings) or that directly involve people (e.g., companies donating employees’ time vs. money vs. products; cf. Ellen, Mohr, and Webb 2006) may be stronger signals of warmth and thereby heighten the impact of CSR in communal relationships. (Our own research, omitted for brevity’s sake, suggests that communal consumers are more receptive to company donations of time vs. money.) On the flip side, what aspects of CSR (in addition to framing) might lead to effectiveness within exchange relationships? For example, CSR activities that emphasize core competencies of the company (e.g., a law firm donating legal services) may be more effective if competence receives greater emphasis (relative to warmth) under exchange (vs. communal) relationship norms. One cautionary note is that CSR appears relatively ineffective when consumers suspect self-serving (rather than societyserving) CSR motives. Specifically, communal consumers who perceive company CSR motives as self-serving resist making inferences about company warmth—with no corresponding increase in customer satisfaction. If so, then engaging in CSR may backfire on companies if consumers become aware of its purpose in service recovery. More generally, future research is needed to understand how companies can credibly convey CSR activities in ways that do not raise suspicion about company motives.

150


Limitations We acknowledge several limitations of the present research. First, our research relies upon the use of hypothetical scenarios describing retail service failure. There is ample precedent for doing so in the literature and, indeed, we draw upon such research in designing our stimuli. We augment this approach by using a video simulation in study 2, and encourage further research to examine service failure and CSR in the field. Second, our research relies upon self-reported measures of loyalty intentions toward the company rather than actual behavior. Doing so allows us to gain insight into the psychological processes (warmth and competence perceptions) that underlie consumer response to CSR, and we rely upon past research that has established the link between satisfaction/intentions and actual behavior. Finally, our research makes no overarching claims regarding generalizability of our findings pertaining to CSR. We do, however, provide some evidence of generalizability within the context of service failure across industry (e.g., restaurant, hotel), across consumer samples (e.g., experienced adult consumers from paid commercial panels in studies 1 and 2), across communal/exchange relationship (by varying operationalizations across studies), and across CSR (e.g., philanthropy, sustainability). Managerial Implications The present research contributes to a better understanding of managerial practice related to CSR and service recovery. Prior literature has examined organizational response to customer complaints and categorized six domains: facilitation, timeliness, redress, apology, credibility (explanations), and attentiveness (Davidow 2000, 2003). Most studies suggest that some form of compensation and apology are prerequisites for an effective service recovery strategy (e.g., Smith, Bolton, and Wagner 1999; Wirtz and Mattila 2004). Although beyond the scope of the present work, future research on the relative impact of CSR versus other recovery methods, both socio-emotional (e.g., apology) and financial (e.g., financial compensation), is merited. (Our own research, omitted for brevity’s sake, suggests that CSR may be as effective as standard recovery in the form of an apology and discount, even though consumers perceive it as less costly.) Past research finds customers prefer recovery resources that “match” the type of failure they experience (Smith, Bolton, and Wagner 1999). In an analogous fashion, our research finds that CSR as a recovery method is more effective when it “matches” the norms of the buyer–seller relationship. Likewise, past CSR research suggests that CSR activities that “match” consumer CSR attitudes, values, and lifestyle are also more effective (e.g., Barone, Norman, and Miyazaki 2007). In sum, our findings suggest that CSR activities are more effective when they match consumers’ communal orientation (i.e., in a broader sense, reflecting their sensitivity toward the needs of others in social relationships). In terms of CSR messaging, service providers and retailers should take into account the type of relationship their company promotes to customers. Within the context of service failure,

our work suggests that CSR will be advantageous to companies that foster communal relationships with customers—but have minimal impact for companies that foster exchange relationships with customers. Companies should, therefore, assess and pursue CSR opportunities in light of their brand positioning on communal versus exchange norms. Moreover, firms that foster communal relationships with customers would benefit from targeted CSR messages embedded in their communications with customers. For example, Sheraton Hotels was a global sponsor of the 2007 Special Olympics, consistent with its communal positioning on warmth, connectedness, and community. Sheraton broadcast Special Olympics public service announcements on its internal television channel and ran a promotional campaign to raise money for the Special Olympics. Using CSR messaging appealing to communal values might also be beneficial to build deeper customer relationships and to reinforce brand positioning in a fiercely competitive retail environment where service failure is inevitable. However, framing CSR to signal competence and increase its appeal in exchange relationships can undermine its effectiveness in communal relationships. Thus, framing CSR messaging should be limited to exchange customer segments to avoid negative spillover. For example, business travelers are an important hospitality segment that may tend to endorse exchange norms and be more receptive to CSR framed in ways that signal competence; however, women who tend to be more communally oriented may respond less favorably to such messaging. Negative effects of framing CSR will be less likely in industries where exchange norms tend to be more prevalent, such as utility companies and network and communication providers. For example, Duke Energy describes sustainability as “no longer optional” and “the way we work; it is a competency that leads to improved risk management, efficiency and innovation” (Smith 2010, italics added). We note that framing CSR as sound business strategy is frequent among its promoters (e.g., World Business Council for Sustainable Development) and, to the extent that such efforts trickle down to influence consumers, may shift consumers’ perceptions away from warmth and towards competence for firms engaging in CSR. Finally, CSR programs need to be perceived as motivated by society-serving, rather than self-serving, interests, to be effective. Hence, there could be a risk in re-framing CSR too emphatically to link it to sound business strategy—if doing so could also undermine perceptions of company motives for engaging in CSR. Likewise, tying CSR activities too closely to service recovery could increases suspicion and lead consumers to infer that the service provider is acting mainly out of selfinterest. For example, concerns about sustainability motives may be especially prevalent in industries that have received media attention for green-washing practices (such as hospitality services or energy)—especially among communally-oriented consumers who are sensitive to self-serving firm motives. Perhaps ironically, a final pragmatic implication of our work is to demonstrate that CSR does indeed serve the interests of the company—by showing how CSR can mitigate dissatisfaction following (inevitable) service failure, thereby adding to a


company’s array of recovery techniques. When things go wrong, good deeds (via CSR) can shed light.

Construct

Wording of measurement items

Acknowledgements Competence

The authors gratefully acknowledge financial support from the Smeal College of Business, the Marriott Foundation, and the Harrah Hospitality Research Center.

How would you rate the hotel as. . . (five-point scales with endpoints “not at all/very”) • Capable • Competent Correlation (r)

151

Study 1

2

3

× × .72

× × .81

× × .85

Appendix A. Measurement items by study Appendix B. Mediation analyses Construct

Satisfaction

Loyalty intentions

Warmth

Wording of measurement items

How satisfied are you [with Hotel XYZ/your dining experience]? (seven-point scales) • very dissatisfied/very satisfied • disappointed/pleased Correlation (r) How likely are you to. . . (seven-point scales with endpoints “very unlikely/very likely”) • stay at this hotel again/dine at this restaurant again • recommend this hotel/restaurant to others • consider this hotel your first choice • continue to [stay at this hotel/dine at this restaurant] if prices increase somewhat • pay a higher price than competitors charge to stay at this hotel • discourage others from patronizing this hotel/outlet (reverse-coded) Coefficient alpha Please indicate whether you agree or disagree with the following statements. (five-point scales with endpoints “disagree/agree”) • This hotel/restaurant is concerned for others • This hotel/restaurant cares about its customers How would you rate the hotel/restaurant as. . . (five-point scales with endpoints “not at all/very”) • Caring • Helpful Correlation (r)/Coefficient alpha

Study 1

2

3

× × .80

× × .83

– –

Tables in this appendix report the indirect effects via warmth and competence on loyalty intentions for CSR as a function of experimental manipulations (e.g., communal/exchange relationship norms). Indirect effects in bold exclude zero and are consistent with predictions. The study header summarizes the conclusion of each study’s mediational analyses. Study 1: Mediation of CSR by warmth under communal norms. Relationship norm

Indirect effect of CSR on intentions via warmth

Indirect effect of CSR on intentions via competence

Exchange Communal

−.1703 (−.5386, +.0695) +.5646 (.1999, 1.1694)

−.0034 (−.1149, +.0645) −.0353 (−.2973, +.3869)

×

×

×

×

×

×

×

×

×

Study 2: Mediation of CSR by warmth for communal consumers.

–

×

–

Communal orientation

Indirect effect of CSR on intentions via warmth

Indirect effect of CSR on intentions via competence

–

×

–

−1SD +1SD

−.015 (−.240, +.083) +.336 (+.017, 1.04)

−.090 (−.588, +.178) −.099 (−.197, +.360)

×

×

–

.75

.92

.94

×

–

–

×

–

–

× × .89

× × .71

× × .79

Study 3: Mediation of framed CSR by warmth and competence as a function of communal orientation. Communal orientation

Indirect effect of framed CSR (vs. none) on intentions via warmth

Indirect effect of framed CSR (vs. none) on intentions via competence

−1SD +1SD

.053 (−.007, +.183) .184 (.028, .434)

.368 (.130, .662) .207 (.070, .432)

Communal orientation

Indirect effect of framed CSR (vs. CSR) on intentions via warmth

Indirect effect of framed CSR (vs. CSR) on intentions via competence

−1SD +1SD

+.011 (−.183, +.197) −.243 (−.669, −.009)

−.036 (−.315, +.217) −.060 (−.307, +.135)

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