The negative impact of market-discrimination CSR: How do consumers respond to perceived company greed?

Abstract

Corporate social responsibility (CSR) is reported to have a positive effect on corporate image. However, if companies that have entered different markets implement market-discrimination CSR, which refers to unfairly applied CSR policies in the intermarket, and if the consumer recognizes this fact, the CSR effects will be diminished. To prove this, this research investigated consumers’ adverse reactions when a company that implements market-discrimination CSR faces a crisis. According to the results of this study, consumers who perceived company greed as evidence of a company practicing market-discrimination CSR activities experienced pleasure at the misfortune which called schadenfreude when the company faced a crisis and schadenfreude positively affected the argument strength of a rumor. Finally, the argument strength of a rumor has a positive effect on the consumer’s intention to spread the rumor as an act of revenge against the company. The results of this research suggest that CSR, which aims to build a positive corporate image, can have an adverse effect when it is felt that it is used to discriminate against consumers. Based on these results, this research presents theoretical and practical implications.