Does being socially responsible buffer reputation loss in a product crisis? The moderating role of lay theory of corporate social responsibility

Abstract

A company’s emphasis on corporate social responsibility (CSR) signals its concern with benefits for society, whereas a company’s emphasis on corporate ability (CA) signals its expertise in delivering good quality products. Product-harm crises often put companies at serious risk. Would a company’s prior emphasis on CSR versus CA mitigate the potential reputation damage of a product-harm crisis? In an experiment, we found that when a product-harm crisis occurred, having a CSR focus softened the public’s negative evaluation of the focal company, but this protective function of CSR was found only among people who had the lay theory that CSR and CA are compatible. The joint effect of CSR focus and the lay theory was mediated by the tendency to exonerate the focal company for the causal responsibility of the crisis.