activities may end up hurting the company in terms of sales loyalty and other

Activities may end up hurting the company in terms of

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activities may end up hurting the company in terms of sales, loyalty, and other behavioral outcomes. This is likely to be underscored by the competitors’ mar­ keting strategies, not only in terms of their quality and price relative to the focal firm, but also in terms of their communication of their CSR activities. In other words, price-cutting by a competitor may outweigh a consumer’s CSR-based input into a product purchase decision, just as a competitor’s clear communica­ tion of its CSR activities at the point of product purchase may overpower exist­ ing positive attitudes towards the focal firm due to its CSR activities. Implications for CSR Strategy With increasing and widespread commitment of corporate resources to CSR, attention is now shifting to the strategic formulation, implementation, and measurement of the market returns to CSR initiatives. Of particular concern to companies, as they focus more on “doing good,” is the persistent lack of a clear sense of the positive returns to their CSR actions. This underscores the need for better measurement models of CSR that capture and estimate clearly the effects of a company’s CSR actions on its stakeholders, including its consumers. Given the crush of popular evidence linking CSR activity to consumers’ increased pur­ chase propensities, there exists the possibility that academics and practitioners alike may liken CSR to marketing mix instruments (such as advertising) and thus estimate CSR effectiveness using market response models. 23 Moreover, the tendency to equate CSR to cause marketing 24 reinforces the belief that the returns to CSR initiatives are easily measured. However, CSR initiatives are more complex. Beyond the obvious considerations of the amount of monetary and per­ sonnel resources a company wants to (or can) devote to CSR, the reputation of the company, its core values, its core competencies, 25 and its business strategy all have a bearing on its CSR initiatives. In terms of the link to strategy, Brown and Dacin argue that a company’s CSR record, instead of providing information about the attributes or overall quality of its products, creates a general context for their evaluation. 26 Using both hypothetical and real companies, they show that CSR’s effect on consumers’ preference for a new product occurs through their overall evaluation of the company itself. Sen and Bhattacharya extend these findings to further show that that perceived interdependencies between CALIFORNIA MANAGEMENT REVIEW VOL. 47, NO. 1 FALL 2004 22
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Doing Better at Doing Good product quality and CSR initiatives also affect consumers’ intentions to purchase the company’s products. 27 Competitive and category-level forces may also have a bearing on the type and intensity of a company’s CSR efforts. Some industries that are more vulnerable to criticism because of the inherent nature of their operations (e.g., oil, alcohol) may need to engage in higher levels of CSR activity to appease a variety of stakeholder groups. Similarly, industries such as outdoor apparel (e.g., Timberland and Patagonia) and athletic footwear (e.g., Nike and Reebok)
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