Moderating effects of similarity on the relationship between CSR efforts and anger felt during a product-harm crisis

• Main Authors: Ang, Hiang Ling, Chia, Zi Yan, Phua, Mei Qi
• Other Authors: Lam Shun Yin
• Format: Final Year Project
• Language: English
• Published: 2012
• Subjects: DRNTU::Business::Marketing::Consumer behavior; DRNTU::Business::Management::Crisis management
• Online Access: http://hdl.handle.net/10356/48169
• Institution: Nanyang Technological University

Companies today have branched into Corporate Social Responsibility (CSR) in an attempt to appear ‘responsible’ to consumers but despite much of the documented researches on its benefits, the area of CSR acting as ‘reputation insurance’ in times of product-harm crisis have not been greatly explored. In addition, will this be subjected to changes if there is similarity between the CSR efforts the firm undertakes and the nature of the product-harm crisis? This study focuses on exploring the moderating effects of similarity between CSR efforts and crisis on the relationship between prior CSR efforts and anger felt by consumers in a product-harm crisis. Correlations between anger and trust, as well as between trust and purchase intentions will also be analyzed and discussed in this study to link the negative repercussions of product-harm crises on organizations to the impact on their bottom line - profits. Our findings reveal that anger felt during a crisis for companies with positive CSR is lower than companies with negative CSR regardless of the level of similarity (high or low). Correlation analyses conducted also showed that feelings of anger are negatively correlated with consumer trust and that consumer trust is positively correlated with purchase intention. The hypotheses of moderating effects of similarity were unfortunately unsupported. Our study faced several limitations in areas such as the usage of a fictitious survey scenario and survey guidelines. However, our findings have brought out a few key takeaways. In order to utilize CSR as a ‘reputation insurance’ effectively, managers must constantly manage and review the quality of their CSR efforts, and more importantly, ensure that consumers view them as meaningful and positive. Corporate communication of these CSR efforts as well as managing anger in times product-harm crisis needs to be done adequately in order to insure companies from a bad name. All of these directly impact a firm’s profitability and are difficult to rebuild in consumers’ mind once lost.