The Role of Proactive and Reactive Corporate Social Responsibility as an Extrinsic Cue in Mitigating Consumers’ Privacy Concerns: An Abstract

Abstract

Data breaches have resulted in massive corporate and consumer losses. According to the Breach Level Index, 1.9 billion data records were compromised worldwide during the first half of 2017 due to 918 data breaches. Both businesses and consumers have incurred massive losses from companies’ inadequate privacy protection measures. Cases of data and information use infringement have resulted in reduced consumers’ confidence in the data security measures that most companies provide. Information privacy is one of the most essential issues facing managers (Mason 1986; Safire 2002), and if a firm is not careful, it might face the repercussion for overstepping the bounds of expected information practices (Awad and Krishnan 2006). One of the reasons for rising privacy concerns can be attributed to the firms’ negligence and the tendency to act only after privacy has been breached or until some external event such as a threat of legislative action forces them to take action (Smith 1993). Even with efforts that take a regulatory approach to address privacy issues, incorporation and acceptance of privacy regulations are still not a reality. Consumers’ privacy research recommends companies to take online privacy as a form of corporate social responsibility (Pollach 2011). This study explores three objectives; first, what is the role of proactive and reactive corporate social responsibility (CSR) as an extrinsic cue in mitigating privacy concerns? Second, how online vs. offline channels influence consumers’ privacy concerns? Most of the focus regarding consumer privacy has been directed to online transactions; however, most incidences of identity fraud originate from offline traditional channels (Better Business Bureau, 2004). Third, how the size of the firm (small vs. large) influences the consumers’ privacy concerns? Small- and midsized businesses are now the preferred targets for cybercriminals, since they are easy targets and less secure, and automation allows modern cybercriminals to mass produce attacks for little investment. In addition, this study examines the relationship between privacy concerns and the adoption of privacy-protecting behaviors such as refusal to provide personal information, misrepresentation, request for removal from a mailing list, anonymity, and less disclosure. These protective behaviors limit marketers’ data access. Lastly, we investigate the relationship between privacy concerns, trust toward a company, and purchase intent.