All Are Not Saints, Who Go to Church: Corporate Hypocrisy, Corporate Social Responsibility and the Impact on Customer Satisfaction

Abstract

We adopt a customer point of view and investigate the impact of perceived corporate hypocrisy on customer satisfaction in the context of corporate social responsibility (CSR). We argue that when customers perceive discrepancies between commitment and implementation of CSR initiatives, they make negative judgements about the focal firm and accordingly, they report lower levels of customer satisfaction. Using data for U.S. companies for the period 2008–2016, we confirm that when customers perceive corporate hypocrisy related to environmental product (or service) innovation they report lower customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI). Moreover, we find that brand value mitigates the negative effect of perceived corporate hypocrisy on customer satisfaction, suggesting that positive perceptions of a company’s brand may act as a buffer against customers’ negative judgements of corporate hypocrisy. In contrast, our results reveal that when customers perceive corporate hypocrisy in the presence of customer satisfaction monitoring systems, they are likely to report even lower levels of customer satisfaction. We conclude by discussing limitations and implications for future research.