Business Law, Public Responsibility, and Ethics Commons^™

Csr Initiatives Mitigate Negative Reactions To Service Failures When Customers Share The Firm’S Values, Jeff Joireman, Dustin Smith, Richie L. Liu, Jonathan Arthurs

Academic Conference on Good Business

The present paper investigates whether corporate social responsibility (CSR) promotes positive responses to service failures among value-aligned customers. Study 1 finds that customers are less likely to experience anger and spread negative word of mouth following a service failure when a firm engages in high (donating 15% of profits to environmental conservation) but not low levels of environmental CSR (donating 2% of profits), but only if customers are high in environmental concern. Study 2 explores the benefits of CSR policies targeting a broader range of beneficiaries and CSR policies offering customers choice over the firm’s CSR allocations. Results demonstrate that, …