Does corporate social responsibility cushion unethical brand behavior? Insights from chocolate confectionery

• Author: Andrea Insch,Tessa Black
• Published date: 01 August 2018
• Date: 01 August 2018
• DOI: http://doi.org/10.1002/pa.1853

ACADEMIC PAPER

Does corporate social responsibility cushion unethical brand

behavior? Insights from chocolate confectionery

Andrea Insch

1

|Tessa Black

2

1

Department of Marketing, School of

Business, University of Otago, Dunedin, New

Zealand

2

Personal Care, Unilever Australasia Ltd.,

Sydney, New South Wales, Australia

Correspondence

Andrea Insch, Department of Marketing,

School of Business, University of Otago, PO

Box 56, Dunedin 9054, New Zealand.

Email: andrea.insch@otago.ac.nz

Food and agribusiness companies face increasing scrutiny of their corporate social

responsibilities (CSRs) due to the impacts of their business activities on the environ-

ment and in society. In particular, the procurement practices of some companies in

the commercial food industry have been linked to unsustainable farming, deforesta-

tion, and loss of biodiversity. This study investigates the extent to which a positive

CSR reputation influences consumers' evaluations of a company and its new products

following brand misconduct involving unethical procurement of palm oil. The results

of an experiment revealed that a positive CSR reputation prior to the misconduct

enhanced consumers' evaluations of the company and their support for its new

products, thereby facilitating its recovery. These findings extend understanding of

the potential insurance afforded by a positive CSR reputation and its halo effect in

situations of brand misconduct in the food industry, in this case where a brand has

failed to meet consumers' expectations of its obligations to avoid commercial

activities that threaten the natural environment.

1|INTRODUCTION

Companies' responsibilities that extend beyond their economic and

financial goals are increasingly relevant to many consumers (Arli,

Grace, Palmer, & Pham, 2017; Mohr, Webb, & Harris, 2001; Wagner,

Lutz, & Weitz, 2009). This trend is attributed to the expanding amount

of information available about companies' investments and impacts in

society and the effects of their corporate social responsibility (CSR)

actions and behavior (Dalman, Buche, & Min, 2017). In particular, the

use of the Internet and social media by the mass media, non‐govern-

mental organizations and consumers alike have enabled extensive

reporting on firms' corporate social irresponsibility and their admirable

conduct (Wagner et al., 2009). The substantial increase in communica-

tion about CSR has also elevated stakeholder skepticism, especially

when they are confronted with conflicting accounts and instances of

inconsistent CSR policies and actual behavior (Wagner et al., 2009).

Facing the coincidence of rising interest and scrutiny of their activities

and access to information about such practices, there is a growing

need to understand how a company's CSR reputation influences

consumers' responses toward a company in the wake of unethical

brand behavior (Huber, Vogel, & Meyer, 2009; Huber, Vollhardt,

Matthes, & Vogel, 2010).

Business activities that affect the natural environment face increas-

ing scrutiny as the need for a transition toward a sustainable society is

apparent (Schwaiger & Sarstedt, 2011; Viswanathan & Varghese,

2018). One issue that has gained substantial attention is the ethics

of procurement and sourcing practices of companies intimately

connected to the physical environment—the natural resource‐based

industries and the secondary industries that rely on them for inputs.

Like other natural resource‐based industries, such as mining, oil, and

gas extraction, food and agribusiness industries face numerous

challenges to achieve sustainable operations (Lingard, 2012). Maloni

and Brown (2006) identified the environment as a major area of respon-

sibility for food companies and several other issues that by the nature of

their activities overlap with sustainability as a core issue (i.e., animal

welfare, biotechnology, fair trade, procurement, and community). As

Forsman‐Hugg et al. (2013, p. 31) explain, companies operating in the

food sector face rapid changes “due to the growing concern and rising

awareness among consumers of traceability in the food chain, the

origin of raw materials and food safety, environmental impacts of prod-

ucts and processes as well as societal issues such as animal welfare.”

Even though many consumers are becoming more aware of

corporate activities that impact the environment and some are

demanding that companies take responsibility for their actions

Received: 19 March 2018 Revised: 10 July 2018 Accepted: 13 July 2018

DOI: 10.1002/pa.1853

J Public Affairs. 2018;18:e1853.

https://doi.org/10.1002/pa.1853

© 2018 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/pa 1of11