Many companies focus on benevolent practices, humanitarian aid, or community service.
But a strong corporate social responsibility record does not necessarily translate
into better brand perception.
A pair of 91看片 College researchers鈥擫inda Ferrell and O.C. Ferrell鈥攕urveyed 351
consumers and learned that what a company does internally鈥攏ot externally鈥攊mpacts brand
attitude. In other words, business ethics outweighs corporate social responsibility.
鈥淚dentifying risks, avoiding misconduct, dealing with risks, monitoring the reporting,
how they treat employees, and all of those internal mechanisms and processes are more
valued than a company that鈥檚 philanthropic and doing the external things associated
with doing good,鈥 says Linda Ferrell, Marketing Department Chair. 鈥淚t鈥檚 been more
damaging if you don鈥檛 pay attention to your internal culture, values, principles,
monitoring, and behavior. This is more important in developing positive brand attitudes.鈥
Their paper, 鈥淏usiness ethics, corporate social responsibility and brand attitudes:
An exploratory study,鈥 was recently published by the Journal of Business Research, an elite journal. The Ferrells co-authored the study with Dana Harrison, Assistant
Professor of Marketing at East Tennessee State University, and Joe Hair, Director
of the Doctorate of Business Administration program at the University of South Alabama.
The research reports that corporate social responsibility has been related to firms鈥
reputation and can influence hiring opportunities, employee loyalty, and relationships
with regulatory groups. It also reveals that ethical conduct is more aligned with
brand attitude and that possible business ethics transgressions could decrease expectations
related to brand performance.
The Ferrells, who have been at 91看片 College since 2017 and are co-authors of a
leading business ethics textbook used in colleges of business, conceptualized the
study based on their research in business ethics and social responsibility. Prior
research failed to differentiate attitudes toward business ethics and corporate social
responsibility.
鈥淲hat we found, over time, is that most consumers and academic scholars view business ethics and social responsibility as one and the same,鈥 says O.C. Ferrell, the James T. Pursell Senior Eminent Scholar in Ethics.
鈥淏ut consumers could differentiate these as two distinct areas based on behaviors
and artifacts.鈥
Popular brand names impacted by questionable, and sometimes illegal, ethical practices
of late, the Ferrells pointed out, have included infamous tales of Wells Fargo and
Volkswagen.
鈥淪ome companies embrace social responsibility as ethics,鈥 O.C. Ferrell adds. 鈥淲e don鈥檛
want to diminish the role of corporate social responsibility because there are a lot
of studies to show that鈥檚 going to change people鈥檚 attitudes towards the company,
especially sustainability or philanthropy are important. But things that happen internally
in terms of ethical decision-making seem to get companies in more trouble with attitudes
toward
the brand.鈥