The Perception of Deception

Publicity for corporate citizenship initiatives has increased, as firms try to mitigate the damage done by revelations of corporate malfeasance over the past few years. At the same time, consumers have become increasingly skeptical, if not cynical, about the true goals of these corporate social responsibility (CSR) efforts. Skeptics feel that all too often corporate altruism is a veiled attempt to grow markets or increase profitability. A paper to be published in a forthcoming issue of the Journal of Consumer Psychology explains how consumers become skeptics and how firms can win them over.

“A lot of firms engage in social responsibility not only because it could improve their image or create a connection with the customer base but because it also helps society,” says coauthor Mark R. Forehand, assistant professor of marketing and international business at the University of Washington Business School. These dual motivations can get them in trouble. Take the example of an athletic shoe manufacturer's initiative to improve public health and safety by promoting athletics among youth. Skeptics might say the firm is simply trying to build a larger user base for its products. While there may also be real social benefits to the initiative, if consumers are skeptical, it undercuts both the social and firm-serving goals.

“It's not the tactic [of CSR] that makes consumers skeptical, it's the perception of deception” in the firm's communications, says co-author Sonya A. Grier, assistant professor of marketing at the Stanford Graduate School of Business. In the authors' surveys of 160 students at a West Coast university, the perception of deception arose only when consumers were told the altruistic goals but not the profit-seeking ones. Not all consumers were sensitive to the perception of deception, according to the paper, “When Is Honesty the Best Policy? The Effect of Stated Company Intent on Consumer Skepticism.” Skeptics were primarily consumers who first put some thought into the firm's profit motive but then heard the company tout only its altruistic goals.

On the other hand, consumers who were initially oblivious to the profit motive received the altruistic messages very well. This puts firms in a quandary: If consumers are predisposed to second-guess their motives, firms should be forthright about the profit motive in their altruistic programs. But if consumers are oblivious, firms are marginally better off stating only the social benefits.

Forehand suggests that a firm research its image and decide whether consumers are going to lend a skeptical ear to its promotional messages. He adds that communicating a CSR program's benefit to society — while very subtly acknowledging the firm-serving motivations — might be the best way to go.

The authors are also quick to point out that corporate social responsibility is a good thing, even when there are skeptics. “It can really be a win-win for the company and society,” says Grier, and their research points to how firms can maximize the potential gains for both.

For more information contact the authors at forehand@u.washington.edu and sgrier@gsb.stanford.edu.