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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues
Oct 22, 2019

Microfoundations Of Corporate Social Responsibility And Irresponsibility


This study examines the importance of social perception of corporate social responsibility (CSR) and irresponsibility (CSI). Drawing from social psychology literature on stereotypes, we argue that two fundamental dimensions of social perception—warmth and competence—help explain the underlying processes and conditions under which CSR leads to specific outcomes. We propose that firms engaging in CSR are perceived as higher in warmth and, by default, competence; moreover, different perceptions of the organization’s warmth and competence can moderate CSR rewards and CSI penalties. To demonstrate this, we conduct three experiments. Experiment 1 links CSR with perceptions of warmth and competence, showing that warmth perceptions mediate the relationship between CSR and important outcomes, such as purchase intentions and reputation. Experiment 2 adds information on firms’ countries of origin, revealing that CSR rewards and CSI penalties differ depending on the (mis)alignment of CSR strategy with country stereotypes. Experiment 3 replicates these findings using behavioral paradigms. We find that firms from high-warmth countries (the United States, Sweden, Portugal) receive lower CSR rewards and pay higher CSI penalties than firms from low-warmth countries (Germany, Pakistan) but this effect is moderated by competence. Our micro–macro study advances social evaluation, strategic CSR, and international management literatures.

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