Effects of social contributions on social values and WOM in firm and product level

Abstract

Purpose - As recently social contributions of firms are positioned as key strategic actions, it is demanding to review the effects of social contributions on overall corporate management. The research aims to effects of social contributions on social values and word of mouth in firm level and product level. Further roles of consumer identification with firm and product eco-friendliness are also analyzed. Research design, data, and methodology - The paper conducted a survey in which two scenarios are used for manipulating the degree of corporate social contributions. The survey sample consist of 165 undergraduate and graduate students in a university, located in Seoul. For analyzing data, analysis of variance is applied, in conjunction with analysis of moderating effects, through version 23 of SPSS statistical package. Results - In the firm level, social contributions by firms have a positive effect on social values of firms. Consumer identification showed a moderating role in the effect. Social value of the firm with passive social contribution perceived by respondents with a high degree of identification was higher than social value of the firm with active social contribution perceived by respondents with a low degree of identification. Corporate social value has positive effect on word-of-mouth of firms. In the product level, social contributions by firms has a positive effect on social values of product. Product eco-friendliness showed a moderating role in the effect. For eco-friendly product, social values are higher in the firm with active social contributions than in the firm with passive social contributions. However, for non eco-friendly product, the difference in social values between the two firms does not exist. Product social values has positive effect on intention for WOM of products. WOM of eco-friendly products with low social value showed no difference with WOM of non eco-friendly products with high social value. Conclusions - These results imply that firms should enhance consumer identification with firm in making social contributions for optimizing corporate social value and enhancing word-of-mouth(WOM). Managerial implications of the results suggest it would be more effective to improve social value of product by active social contributions for increasing word-of-mouth(WOM) of product.