Essay on CSR Impact on Consumer Behaviour
The impact of CSR on the consumer behavior includes the effect on the number of channels such as the information asymmetry reduction, organizational legitimacy increase and ethical decision making by the consumer. The legitimacy of the organization is depicted in the corporate behavior as well as in the values and beliefs that are shared with the consumers. In the light of corporate behavior and consumer perception, it means that if the CSR of the organization is well known, acknowledge, and supported by the consumers, then the organization is legitimate. It also suggests that the CSR practices of the organization are aligned to the consumer values and beliefs. The organizational legitimacy can be defined as the assumption and overall view about the business actions to be appropriate, proper, and desirable according to the beliefs, values, norms, and definitions of the socially built system. The researchers consider legitimacy to be significant because of its impact on the attitudes and behavior of the consumers. The consumers perceive legitimate organizations to be more trustworthy, predictable, and meaningful.
Another impact on consumer behavior of CSR is on the asymmetry information. As per the psychology of consumers, they place more importance to the negative information as compared to positive one. This is widely held belief that the organizations carrying out bad actions are considered to be consistently negative while those who are involved in good and moral acts are not remembered as socially responsible firms. Reasons of this dis-balance is that the organizations face the pressure of conformity and ingratiation. If the organization acts in the socially irresponsible behavior and in an unethical manner, then business is considered to be irresponsible in a confident manner as compared to the manner when organization carries out the CSR activities. It is important that the consumers are aware of the ethical behavior of the organization so that the purchasing behavior of consumer can be transformed towards ethical one. However, there are situations when the consumers have asymmetrical information to deal with.
The consumers hold the organizations responsible for the moral obligations towards the society and this is considered in broader aspects than only the legal compliance. The consumers use the ethical values for application when making an ethical decision. These values are developed on different philosophies and expectations. The organizations are expected to carry out business activities in the socially and ethically responsible manner. This is considered by the consumers as the point of reference. However, the consumers do not give high value to the ethical behavior of the organization as they expect it as the duty of organization. It implies that the organizations have to meet the consumer expectations and also the consumer point of references in order to go beyond expected ethical behavior. Only through this act, the organizations can differentiate themselves in terms of CSR. On the other hand, the consumers regard the unethical organizations to be lacking the achievement of maintenance of reference point. The consumers poorly perceive such organizations.