Examining Primacy and Recency Effects in Hypocritical CSR News: An Abstract

Abstract

In their interactions in the business environment, consumers are placing an increased importance on the social actions with which firms are involved. Typically, research has focused on the positive benefits of corporate social responsibility (CSR) or how consumers respond to negative CSR. Negative CSR involves the presence of a transgression, usually some violation of what is generally acceptable in terms of ethics, society, and the consumer–firm relationship. It occurs when a firm engages in activities that are damaging to communities, customers, employees, and/or the natural environment. These failures are often accompanied by positive CSR declarations and activities, creating inconsistent or contradictory information (Wagner et al. 2009). However, little research exists that investigates how consumers react to contradictory CSR information and what firms can do to mitigate its effects. Therefore, this study seeks to understand the impact of contradictory CSR information on consumers and identify communication strategies firms can employ to promote their positive CSR outcomes to alleviate any negative effects from CSR failures. Drawing on research that demonstrates the influence of primacy and recency effects on the success of a firm’s CSR strategy (Wagner et al. 2009), this study explores how a consumer’s experience with the firm and the firm’s CSR reputation impact the consumer’s response to contradictory CSR information. Using a longitudinal design, this study tests the impact primacy and recency effects have in three different ethical failures. The findings show that multiple past experiences with the firm facilitates a “primacy effect” so that when negative CSR occurs, the prior positive experiences mitigate negative consequences. Moreover, a well-known and positive reputation causes a primacy effect to occur, as the strong reputation works as a signal for how the firm will behave in the future. Thus, the results suggest that firms benefit most from a proactive CSR communication strategy with their current customers and a reactive CSR communication strategy with consumers who have little to no experience with the firm (general public).