‘Chimneys don't belch out carnations!’ The (in)tolerance of corporate hypocrisy: A case study of trust and community engagement strategies

Abstract

The relationship between corporate hypocrisy and legitimacy has been articulated paradoxically in the Corporate Social Responsibility (CSR) literature. On the one hand, this literature articulates that when corporations engage in hypocrisy it erodes trust and encourages attacks upon legitimacy. On the other hand, CSR statements decoupled from core functions are an example of corporate hypocrisy that is justified through maintaining legitimacy in certain conditions. These diverse approaches in the literature are evidenced further in our case study analysis. We present a qualitative case study of how local community judgements of a corporate hypocrisy event and consequent community engagement strategies affect trust and corporate-community relations. The analysis shows that the community tolerates corporate hypocrisy to a degree. However, when hypocrisy becomes intolerable, and with the firm in question reverting to an absent community engagement strategy, this erodes legitimacy. This has implications for society's trust in business, corporate sustainability, and managerial practice.