KOREASCHOLAR

This research examines Kang et al. (2016)’s proposal that corporate social responsibility (CSR) reputation, which was operationalized in this paper via consumers’ CSR beliefs about a brand (Du et al., 2007), could moderate the negative effect of corporate social irresponsibility (CSI) crisis on firm performance when it is used as a preventive, insurance-like measure. According to Kang et al. most companies unsuccessfully used CSR as penance mechanism to undo negative effects of a prior CSI crisis they caused by their irresponsible behavior. However, using CSR as an insurance tool before any CSI event has happened, in order to mitigate the potential negative future effect, has not been observed yet in practice. The results of this paper show that a completely CSR positioned brand has a competitive advantage over a non-CSR positioned brand. Regardless of crisis severity, the consumers’ stronger CSR beliefs triggered by the CSR brand positioning works like a preventive, insurance-like mechanism, which protects the brand in times of both non-severe and severe CSI crisis. The CSR positioned brand also suffers a damage measured in brand attitude change and negative word-of-mouth, but much less than a brand, which did not care at all about CSR positioning or engaging in any CSR activities. However, the results only hold true for consumers, who regard CSR as important. Most managers still do not even know the effects a reputation in CSR can have in face of a CSI crisis (Lenz et al., 2017). This research sheds new light on this ambiguity.

• Matthias Jaeger(Korea University, Republic of Korea)
• Tony C. Garrett(Korea University, Republic of Korea)