Consumers are more reticent in their extent to which they support firms'
engagement in CSR activities particularly if they believe that such activities
reduce the company’s ability to produce high-quality products and services.
Is there a trade-off between CSR and quality ?
It may exist a trade off between CSR AND Product quality in the presence of intensive competition of market
I suggest the issue be tackled using vertical product differentiation model and considering asymmetric CSR. Let me know what you are thinking.u
This paper might be helpfull: http://facultyresearch.london.edu/docs/03-701.pdf
Unfortunately, there is no clear prescription (normative) that CSR must comply with consumer's expected or perceived quality of a product or a service. However, quality is a subjective appreciation, but CSR may encompass a quality chart. The question is very interesting and needs further attention! Thanks!
The answer depends on the lens you are using and resource alignments. Trade-offs are inevitable, unless you have unlimited resources. If the focus strategy of the company is truly the customer then most resources are aligned to that spectrum. If the focus is "product quality" and not "customer quality" then the resources shift. If the customer drives the company strategy both will occur and trade-offs are minimal. The critical component is, everyone top -down must agree that the customer is the focus. If the company is driven by independent "fiefdoms", all vying for resources then you have chaos. It is easy to say our customers are the most important component of our business, but finances, human capital, and time reveal the true source of your focus.
The study by Carrigan and Attalla (2001, p. 569) found that a company/seller’s irresponsible corporate behaviour can deter customers’ buying decision, despite price, quality, brand, fashion trend are commonly thought to be the most important factors in customers’ buying decision/product choosing. Similarly, the study by Mark-Herbert and von Schantz, (2007) found that a company’s value is not simply based on its product quality, its credence values are found to be social responsibility and business conduct.
- Carrigan, M. and Attalla, A. (2001) The myth of the ethical consumer - do ethics matter in purchase behaviour?, Journal of Consumer Marketing, 18, 7, pp. 560-578.
- Mark-Herbert, C. and von Schantz, C. (2007) Communicating Corporate Social Responsibility - Brand management, Electronic Journal of Business Ethics and Organization Studies, 12, 2, pp. 4-11.
This paper might give some info:
http://link.springer.com/article/10.1007/s10551-006-9232-0
Off the top of my head I'm aware of four meta-analyses (from 2003 to forthcoming) of Corporate Social Performance/Corporate Social Responsibility and Financial Performance (referenced below). All four of them find (with variation in how much) that CSP/CSR are good for financial performance. That indicates that while Leonard (above) is quite right that CSR doesn't have to align with customer desires, it can do so and often does. My own work suggests that CSP is of most value in industries where innovation and industry differentiation are high (Hull and Rothenberg, 2008, again consistent with Leonard's point above), and that CSP is of greatest value when pursued consistently across multiple years and aligned with the company's strengths (Tang, Hull and Rothenberg, 2012).
All of which is to suggest, as do the findings cited by Kenneth (above), that CSP/CSR is valued by customers, and tends to add value to the company's products rather than reducing value. Contingencies apply, of course (Mattingly, forthcoming, and my own work again).
META-ANALYSES
Margolis, JD, Elfenbein, HA, Walsh, JP. 2009. Does it pay to be good...and does it matter? A meta-analysis of the relationship between corporate social and financial performance http://dx.doi.org/10.2139/ssrn.1866371
Margolis, JD, Walsh, JP. 2003. Misery loves companies: Rethinking social initiatives by business. Administrative Science Quarterly, 48(2), 268-305.
Mattingly, JE. Forthcoming. Corporate social performance a review of empirical research examining the corporation–society relationship using Kinder, Lydenberg, Domini social ratings data. Business & Society, 0007650315585761.
Wang, Q, Dou, J, Jia, S. (2016). A meta-analytic review of corporate social responsibility and corporate financial performance: The moderating effect of contextual factors. Business & Society, 55(8), 1083-1121.
OTHER WORKS CITED
Hull, CE, Rothenberg, S. 2008. Firm performance: The interactions of corporate social performance with innovation and industry differentiation. Strategic Management Journal, 29(7): 781-789.
Tang, Z, Hull, CE, Rothenberg, S. (2012). How corporate social responsibility engagement strategy moderates the CSR–financial performance relationship. Journal of Management Studies, 49(7), 1274-1303.
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