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r Academy of Management Journal 2019, Vol. 62, No. 5, 1609–1642. https://doi.org/10.5465/amj.2014.0795

MICROFOUNDATIONS OF CORPORATE SOCIAL RESPONSIBILITY AND IRRESPONSIBILITY

CATHERINE T. SHEA Carnegie Mellon University

OLGA V. HAWN University of North Carolina, Chapel Hill

This study examines the importance of social perception of corporate social responsibility (CSR) and irresponsibility (CSI). Drawing from social psychology literature on stereotypes, we argue that two fundamental dimensions of social perception—warmth and competence—help explain the underlying processes and conditions under which CSR leads to specific outcomes. We propose that firms engaging in CSR are perceived as higher in warmth and, by default, competence; moreover, different perceptions of the organiza- tion’s warmth and competence can moderate CSR rewards and CSI penalties. To dem- onstrate this, we conduct three experiments. Experiment 1 links CSR with perceptions of warmth and competence, showing that warmth perceptions mediate the relationship be- tween CSR and important outcomes, such as purchase intentions and reputation. Exper- iment 2 adds information on firms’ countries of origin, revealing that CSR rewards and CSI penalties differ depending on the (mis)alignment of CSR strategy with country stereotypes. Experiment 3 replicates these findings using behavioral paradigms. We find that firms from high-warmth countries (the United States, Sweden, Portugal) receive lower CSR rewards and pay higher CSI penalties than firms from low-warmth countries (Germany, Pakistan) but this effect is moderated by competence. Our micro–macro study advances social evaluation, strategic CSR, and international management literatures.

Corporate social responsibility (CSR) has grown markedly in the past decade both as an important phenomenon in practice and as a critical field in academia (Wang, Tong, Takeuchi, & George, 2016). We have theorized about its institutional (Campbell, 2007; Ioannou & Serafeim, 2012) and organizational drivers (Aguilera, Rupp, Williams, & Ganapathi, 2007; McWilliams & Siegel, 2001) as well as exam- ined its effect on firm performance (Berman, Wicks, Kotha, & Jones, 1999; Cochran & Wood, 1984;

McGuire, Sundgren, & Schneeweis, 1988; Orlitzky, Schmidt, & Rynes, 2003; Russo & Fouts, 1997) and other outcomes (Berrone & Gomez-Mejia, 2009; Flammer, 2013; Turban & Greening, 1997; Yoon, Gürhan-Canli, & Schwarz, 2006). Yet CSR is primarily studied at the macro level (i.e., institutional or orga- nizational level) compared to the micro level (i.e., individual level) of analysis: a recent review of the CSR literature shows that only 4% of all studies ex- amine the individual level, while only 5% address CSR at two or more levels of analysis (Aguinis & Glavas, 2012). Therefore, what is lacking in CSR re- search is deeper appreciation, at the individual level, of how CSR makes an impact (Wang et al., 2016). Accordingly, this paper addresses the need for micro studies of CSR with a multilevel approach (Morgeson, Aguinis, Waldman, & Siegel, 2013) in order to un- derstand the underlying processes (i.e., mediating effects) and conditions under which (i.e., moderating effects) CSR leads to specific outcomes.

In particular, we still know very little about the microfoundations of CSR (for the most recent review, see Gond, El Akremi, Swaen, & Babu, 2017): how CSR and, importantly, corporate social irresponsibility

The authors thank anonymous reviewers and confer- ence participants at 2014 Academy of Management, Academy of International Business, and Strategic Man- agement Society annual meetings, as well as Sinziana Dorobantu, Sanjay Patnaik, Elena Kulchina, Nel Dutt, Elena Vidal, Amandine Ody-Brasier, Marlo Raveendran, Zach Burns, and the brown-bag participants at Boston University for comments on the early version of this paper. An earlier version of this manuscript was a Finalist for 2014 AIB Haynes Prize for the Most Promising Scholar. Please address all correspondence to Catherine Shea: Tepper School of Business, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA, 15213, email: [email protected]

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(CSI) (Lange & Washburn, 2012; Surroca, Tribó, & Zahra, 2013) are perceived by individuals, and what effect this perception might have on the relationship between CSR and specific outcomes at individual and organizational levels of analysis. Forexample,we know that CSR positively affects company reputation (Turban & Greening, 1997)—one of our outcomes— but why and what mediates this relationship at the individual level is still unclear. A small but growing literature on the micro approaches to CSR shows that involvement in CSR positively influences employee performance, behaviors, and attitudes (Burbano, 2016), such as employee engagement (Caligiuri, Mencin, & Jiang, 2013), organizational citizenship behavior (Rupp, Shao, Thornton, & Skarlicki, 2013), identification with the firm (Farooq, Rupp, & Farooq, 2017), retention (Jones, 2010), in-role performance, and commitment, as well as attractiveness to pro- spective employees (Jones, Willness, & Madey, 2014; Turban & Greening, 1997). Yet, few studies go beyond employees (i.e., providing information on other stakeholders) or seek to unpack the processes of CSR evaluations by individuals more generally (Gond et al., 2017). Our study applies to a larger number of stakeholders—which may include employees, customers, environmentalists, suppliers, the commu- nity as a whole, and owners/shareholders—because it examines general individual judgments and percep- tions of warmth and competence.

Warmth and competence serve as universal di- mensions of social judgment (Cuddy, Fiske, & Glick, 2004; Fiske, Cuddy, & Glick, 2007; Fiske, Cuddy, Glick, & Xu, 2002). “Warmth” is defined as percep- tions related to intent, including friendliness, trust- worthiness, helpfulness, sincerity, and morality, whereas “competence” is conceptualized as percep- tions related to ability, including skill, intelligence, creativity, and efficacy (Cuddy, Fiske, & Glick, 2008). With the help of these two dimensions, one can por- tray social perceptions of activities, individuals, or- ganizations, and even countries (Cuddy, Fiske, & Glick, 2007). Moreover, social judgment of various degrees (i.e., high or low) of warmth and/or compe- tence can predict a distinct emotion and behavior toward a target; for example, being perceived as high on warmth and/or competence is beneficial, while being low on one of the dimensions is costly (Aaker, Vohs, & Mogilner, 2010). Importantly, compared to other potential mechanisms, warmth and compe- tence help predict specific behavioral outcomes from these social perceptions (e.g., helping those higher in warmth; Cuddy et al., 2007), adding a more nuanced mechanism between CSR, social perception, and

behavior toward the firm, which can ultimately affect more macro-level outcomes (e.g., reputation, sales, stakeholder and shareholder value).

While previous research mainly examines CSR, we apply these two fundamental dimensions of social perceptiontounderstand themicrofoundationsof CSR and CSI. Naturally, our basic argument is that firms with CSR generate a greater warmth and (by default, without any other information) competence percep- tion than control firms or firms engaging in CSI. We extend this logic to argue that this perception of warmth in turn mediates CSR and CSI effects on vari- ous outcomes (i.e., CSR rewards and CSI penalties— theeffectsforCSRandCSIaboveandbelowthecontrol condition). Importantly, we then argue that different perceptions of warmth and competence of the organi- zation from other sources (in this paper, based on its country of origin) moderate CSR rewards and CSI penalties depending on the (mis)alignment of CSR strategy with the (home country) stereotype. Using three experiments with 774 participants and the warmth and competence variation across five coun- tries (i.e., the United States, Sweden, Germany, Portu- gal, Pakistan), we show that warmth and competence perceptions explain causal effects of CSR and CSI on purchase intentions, price, reputation, and quality as- sessments. Moreover, consistent with the stereotype content model (SCM), firms from high-warmth coun- tries pay a higher price for CSI than firms from low- warmth countries (Germany, Pakistan), yet this effect changes when combined with perceptions of high competence (the United States, Sweden).

Our study has several important theoretical im- plications for the management literature on CSR, social cognition, and international business, as well as practical applications. First, we develop a deeper understanding of the microfoundations of CSR and CSI—by examining their social perception by in- dividuals. We extend existing individual-level CSR research that relies on a different set of theoretical frameworks, such as system justification theory (Hafenbrädl & Waeger, 2016), organizational justice, social influence, needs, and self-determination the- ories (Aguinis & Glavas, 2012), by drawing from the social psychology research on social perception and stereotypes and arguing that CSR influences and is influenced by two fundamental dimensions of social perception—warmth and competence—which me- diate and moderate the effects of CSR (and CSI) on different outcomes. Our work is important because, in comparison to objective CSR ratings, the “sub- jective” evaluations of CSR likely matter more for individual reactions to CSR (Rupp et al., 2013),

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which in turn lead to different outcomes (Gond et al., 2017). For example, employees’ exposure to CSR initiatives does not directly translate into favorable CSR attitudes (Glavas & Godwin, 2013). Thus, it is important to understand how the social perception of CSR is formed more generally.

Second, we advance prior literature examining different mediators and moderators of CSR at the individual level, such as trust (or whether, how, and when consumers’ perceptions of motives directly influence consumer responses to CSR) (Vlachos, Tsamakos, Vrechopoulos, & Avramidis, 2009), cus- tomer satisfaction (Luo & Bhattacharya, 2006), and organizational pride and identity (Jones, 2010; Jones et al., 2014), by conducting a multidisciplinary multi-experimental analysis of the role of warmth and competence in the CSR context. If we under- stand how the average individual perceives CSR and CSI and how these social perceptions may coincide (or diverge) with (from) their expectations (stereo- types) of organizations, we can understand more about how the value from CSR is generated more broadly for a variety of stakeholders. In addition, since most firms try to avoid CSI, we can understand which firms will not suffer from CSI as much as others and why.

Third, while most prior studies focus on only one organizational practice, we distinguish between CSR and CSI—crucial for moving the CSR literature for- ward. Another important contribution to the CSR lit- erature, prone to endogeneity and causality issues, is empirical: by utilizing controlled experimental methods, we are able to isolate discrete mechanisms linking CSR/CSI to organizational outcomes. This gives managers unequivocal insights into which “le- vers to pull” when activating a CSR/CSI strategybased on their current organizational context, and, impor- tantly,thishelpsspecifyconditionsunderwhichCSR/ CSI does not reap the expected benefits/costs. Finally, we extend the international management literature by showing that initial social judgments about the origin of the firm may improve or worsen outcomes based on the choice of CSR strategy. This has important practi- cal implications, particularly for managers of firms that expand abroad for the first time.

THEORY AND HYPOTHESES

Social Perception

The ability to quickly judge another individual is a fundamental evolutionary skill. It helps us to ascer- tain whether “they” are a part of our social group and

to assess the goodness of their motives and compe- tence to enact these good motives (see Fiske et al., 2007, for a review). Despite common beliefs that we need (and use) a wealth of knowledge to form judg- ments about other individuals, research shows that we make trait inferences spontaneously (Newman & Uleman, 1993; Winter & Uleman, 1984; Winter, Uleman, & Cunniff, 1985). For instance, when ob- serving a fictional character, Donald, help an old lady cross the street, we quickly (and somewhat permanently) conclude that Donald is a kind and helpful individual—despite our having only limited information about him. Related work on “thin slic- ing” shows that a mere 30 seconds watching a college professor teach is sufficient to predict their end-of- term teaching evaluations (see Ambady & Rosenthal, 1992, for a review). Thus, despite the wealth of social information at our disposal, individuals primarily rely on quick social judgments of others, and filter all subsequent social information based—barring a major behavioral change—on the first impression of someone (Newman & Uleman, 1993; Ross, Lepper, & Hubbard, 1975).

Many of these quick social judgments about other individuals result from stereotypes. Stereotypes are cognitive beliefs about the characteristics of another group (Fiske, 1998). Fiske and colleagues (Cuddy et al., 2008; Fiske et al., 2007; Fiske et al., 2002) identified two fundamental dimensions of all stereo- types used to evaluate people and social groups: warmth and competence. The SCM posits that all social groups fit into one of four quadrants based on whether they are high or low on warmth and com- petence. Further research (Cuddy et al., 2008; Fiske et al., 2007; Fiske et al., 2002; Fiske, Xu, Cuddy, & Glick, 1999) has demonstrated the robustness of the warmth and competence dimensions, and the fact that they can be used to classify not only individuals but also social groups (e.g., elderly people, Jews, housewives, immigrants, and the homeless) and even national cultures.

Importantly, this work on social perception has a behavioral analog, the “behaviors from intergroup affect and stereotypes” (BIAS) map framework (Cuddy et al., 2007). Based on the dimensions of warmth and competence, the BIAS map predicts not only cognitions derived from group stereotypes but alsospecificbehaviorstowardthe group. Warmthand competence evoke active and passive behaviors, re- spectively: in particular, while high-warmth targets are helped, low-warmth targets are harmed, and whereas high-competence targets are passively facil- itated, low-competence targets are neglected (Cuddy

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et al., 2007). Furthermore, each combination of the two trait dimensions predicts a distinct emotion or behavior toward the target: people admire those who are high in both competence and warmth, they feel contempt toward those who are low competence and low warmth, they envy those who are competent but not warm, and they pity those who are incompetent but warm (Fiske et al., 2002; Lee & Fiske, 2006).

Firms as Subject to Stereotypes

Although originally developed to explain personal and social group perception, the SCM has been ex- trapolated to non-human objects. Kervyn, Fiske, and Malone (2012), in their “brands as intentional agents” framework, showed that consumers perceive brands in the same way they perceive people. Cuddy et al. (2007) used the SCM to map social perceptions of European Union countries. Aaker et al. (2010) applied the SCM to organizations, explaining for- profit and not-for-profit firms’ success and failure, and showing that not-for-profit organizations are associated with higher warmth and lower compe- tence than for-profit firms.

It is not surprising that organizations are often anthropomorphized into human beings—famously so in the movie The Corporation and in recent de- cisions by the U.S. Supreme Court, such as in the Citizens United case. In management studies, orga- nizations are often perceived to possess actions, thoughts, opinions (Knobe & Prinz, 2008), goals, tastes, styles, personalities (Pfeffer, 1981), and even attention (Ocasio, 1997). In fact, they are viewed as social actors similar to individuals precisely because the features that distinguish humans as actors are functionally equivalent to the features common to organizational actors (King, Felin, & Whetten, 2010). Yet, when compared to human beings, organizations are thought to have equal capability for agentic (i.e., competence) behavior (Gray & Wegner, 2010; Haran, 2013; Knobe & Prinz, 2008) but are less likely to be seen as experiencing emotions and feelings (Gray & Wegner, 2010).

Nonetheless, a large literature in marketing dem- onstrates that people perceive brands to have per- sonalities (Aaker, 1997) and that people form “relationships” with various brands and products (Aaker & Fournier, 1995; Fournier, 1998). We build off this previous literature by going beyond brands and products and examining the perceptions of or- ganizational practices. Specifically, in this paper, we will compare perceptions of socially responsible and irresponsible organizations, predicated on

social perception dimensions developed to classify individuals and social groups. Before we discuss how socially (ir)responsible activities may generate social perceptions of warmth and/or competence, we need to define CSR and CSI.

Main Effect: CSR, CSI, and Social Perception

CSR, sustainability, corporate citizenship, and other terms are generally used to describe a portfolio of socioeconomic activities, including environmen- tal, social, and corporate governance actions of the firm (Gardberg & Fombrun, 2006). Because these voluntary actions are aimed at improving social or ecological conditions (McWilliams & Siegel, 2001), many observers regard CSR as an activity that bene- fits firms, markets, and societies (Orlitzky, 2013).

We propose that CSR represents organizational behavior that connotes warmth, and that, as such, it should lead to perceptions of greater warmth. Why should CSR be associated with warmth? Individuals and social groups associated with high warmth are associated with behaviors that are trustworthy and moral (Fiske et al., 2007). Additionally, warmth has both a moral dimension (e.g., good intentions) as well as a relational component (e.g., can successfully work with allies) (Goodwin, 2015). By definition, CSR in- cludes a trustworthy behavior (i.e., “responsible” in its name); furthermore, CSR involves working with others (e.g., stakeholders; Harrison & Freeman, 1999). Prior literature distinguishes CSR—social actions motivatedby moral obligation—from corporate social performance—social actions of firms—to highlight that CSR is a moral behavior (Baron, 2009).

In turn, to distinguish between CSR and CSI, we will follow Campbell’s (2007) threshold: if corporations (a) knowingly do something that could harm their stakeholders—their investors, employees, customers, suppliers, or the local community within which they operate—and (b) do not rectify the harm caused by them (whenever it is discovered and brought to their attention), the minimum behavioral standard with re- spect to the corporation’s relationship to its stake- holders is broken, and such corporate behavior becomes socially irresponsible. For example, CSI be- havior includes using child labor, sweatshops, and polluting facilities in manufacturing operations. CSR behavior, on the other hand, includes charity, volun- teering, community engagement, fair labor practices, andenvironmentallyfriendlymanufacturingfacilities. In comparison to CSI and other organizational behav- ior, CSR behavior resembles the same set of attributes that social psychologists traditionally associate with

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being high in warmth. Therefore, as our baseline hy- pothesis, we propose:

Hypothesis 1. Ceteris paribus, firms engaging in CSR (CSI) will be perceived as having higher (lower) levels of warmth.

Mediating Effect: Spillover and Primacy Effects of Warmth Judgments

Warmth perceptions have two effects that are worth discussing: halo effects (Nisbett & Wilson, 1977) and the primacy of warmth over competence. First, let us discuss the “halo effect”—that is, when the presence (or lack) of warmth spills over into our judgments of competence (Cuddy et al., 2008; Fiske et al., 2007; Singh & Teoh, 2000; Tausch, Kenworthy, & Hewstone, 2007). This effect is particularly salient when we have no information beyond that on warmth. Thus, we automatically assume—in the absence of further information—that an individual possessing warmth also possesses some degree of competence.

In our setting, this will mean that, in comparison to CSI firms, in the absence of further information, be- cause CSR firms are associated with higher warmth they will also be associated with higher competence. We argue that this will be the case because the lim- ited information on CSR practices suggests to the evaluator that the organization mastered at least one skill and therefore is intelligent and competent. Competence is conceptualized as perceptions re- lated to ability, including skill, intelligence, crea- tivity, and efficacy; therefore, in comparison to firms engaging in CSI demonstrating their inability to be a corporate citizen and behave in socially responsible ways, the perception of competence will be greater for firms engaging in CSR.

This prediction is consistent with recent work in consumer research: products of companies engaged in prosocial activities are perceived as performing better—due to the moral undertone of the com- pany’s motivation for engaging in socially re- sponsible behavior; more importantly, this effect holds even when consumers can directly observe and experience the product and when the acts of social goodwill are unrelated to the company’s core business (Chernev & Blair, 2015). Another alterna- tive explanation for why CSR engagement may be perceived to be high in competence is that, in com- parison with CSI, it can improve firm reputation, performance, and other outcomes (Choi & Wang, 2009; Yoon et al., 2006) traditionally associated with competence.

A counterargument will require a discussion of the purpose of the firm (Friedman, 1970), market actors as social evaluators, and more information on other or- ganizational practices, activities, or performance. For example,ifevaluatorsweremarketactors(particularly in earlier years), they might have assumed that firms engaging in CSR were less competent because CSR investment requires diverting scarce resources from other more strategic or core business activities of the firm. However, in comparison to CSI, recent strategy work shows that CSR engagement is now making or- ganizations more competent because they perform better even in financial markets (Cheng, Ioannou, & Serafeim, 2013; Eccles, Ioannou, & Serafeim, 2014; Ioannou & Serafeim, 2015). Therefore, due tothe “halo effect” of warmth, as well as other alternative expla- nations listed above, we propose:

Hypothesis 2. Ceteris paribus, firms engaging in CSR (CSI) will be perceived as having higher (lower) levels of competence.

Second, let us discuss the primacy effect of warmth judgment. Although the SCM is predicted on two dimensions—warmth and competence—when it comes to forming a social perception, a large body of research highlights the primacy of warmth (Cacioppo, Gardner, & Berntson, 1997; Kenworthy & Tausch, 2008; Wojciszke, Bazinska, & Jaworski, 1998). That is, we anchor on perceptions of warmth and adjust, albeit insufficiently, based on percep- tions of competence. At the individual level, this happens because information needed to determine warmth (e.g., facial expressions, interpersonal skills) is simply more readily available during the begin- ning of social interactions than information needed to determine competence (e.g., skills, knowledge, and abilities). Hence, when it comes to initial social judgments, warmth information carries more weight than competence information (Cuddy et al., 2008: 89–92; Singh & Teoh, 2000; Tausch et al., 2007).

At the level of organizations, we argue that this primacy effect will be important in the relationship between CSR and organizational outcomes, partic- ularly those that involve a single immediate evalua- tion or a first encounter with the firm, because, just like at the individual level, information needed to determine warmth is simply more readily available during the beginning of social interactions with this social actor (King et al., 2010) than information needed to determine competence. CSR studies have long examined the effect of CSR on firm performance (Cochran & Wood, 1984; Waddock & Graves, 1997) among other outcomes (Sen & Bhattacharya, 2001;

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Turban&Greening,1997),generallyfindingasignificant positive effect (Margolis, Elfenbein, & Walsh, 2009). We distinguish between outcomes that involve a single immediate evaluation (i.e., a purchase in- tention or reputation assessment based on the first encounter with the firm) and those involving an ongoing evaluation (e.g., by market analysts and investors who collect information over time, accu- mulate more information contributing to a compe- tence perception of the firm, and value competence over warmth in their judgment).

We argue that, for first-time encounters, the warmth perception that CSR generates could in fact act as the mechanism by which CSR affects these outcomes. In particular, we suggest that, in the ab- sence of further information, the primacy of warmth over competence will play a mediating role in the relationship between CSR and the outcome of the first encounter. We previously argued that, when individuals evaluate CSR, they perceive greater levels of warmth and, by default, competence than when they evaluate CSI (Hypotheses 1 and 2). Now, we argue that, when observers make single imme- diate evaluations of CSR/CSI behavior, they will pay more attention to the warmth than to the competence perception. There are three reasons for this. First, cognitively, people prove more sensitive to warmth information than to competence information. Sec- ond, they judge warmth faster than they do compe- tence (Cuddy et al., 2008: 90). Third, higher warmth leads to higher levels of helping behavior (Cuddy et al., 2007); in an organizational context, help can be conceptualized as positive evaluations and willing- ness to purchase from the firm. Therefore:

Hypothesis 3. Warmth perceptions will mediate the relationship between CSR/CSI and outcomes that involve single immediate evaluation.

Moderating Effect: Stereotype Fulfillment and Violation

While Hypotheses 1–3 posit CSR as a source of warmth and, by default, competence perception, and warmth as a potential mediator between CSR and outcomes that involve single immediate eval- uation, we next discuss how other sources of warmth perception in an organizational context can interact with CSR and potentially moderate the re- lationship between CSR/CSI and organizational outcomes. In doing so, we assume, based on prior literature, that engaging in CSR leads to rewards (Margolis et al., 2009) and engaging in CSI leads to penalties for the focal organization (Salaiz, 2016).

Thus, we theorize about organizational contexts in which the rewards/penalties to a CSR/CSI strategy are amplified/mitigated, answering the following question: “Is it always useful to engage in CSR and/ or avoid CSI?”

We propose that the answer to this question is grounded in the literature on stereotype fulfillment and violation. When we evaluate people from other social groups or cultures, stereotypes act as cognitive shortcuts. For instance, we meet a rule-abiding, for- mal German and our stereotype of German people is confirmed (i.e., high competence, low warmth; Cuddy et al., 2007). But, what happens when we meet a bubbly, scatterbrained German? Social judg- ments broadly fall into two categories: assimilation and contrast (Biernat, 2005; Newman & Uleman, 1993; Sherif & Hovland, 1961). “Assimilation” oc- curs when we judge the target according to the held stereotype (e.g., rule-abiding, formal German), and “contrast” occurs when we differentiate the target from our traditionally held stereotype (e.g., bubbly, scatterbrained German). In the absence of contra- dictory evidence, assimilation is relatively auto- matic (Dijksterhuis, Spears, & Lépinasse, 2001); otherwise, contrast takes place.

The effect of contrasting social judgments can be both positive and negative. For instance, professionals—perceived as highly competent— receive differential treatment based on their gender after having a baby (Cuddy et al., 2004). Professional women are seen as less competent and do not expe- rience a boost in perceived warmth from mother- hood to make up for their newly perceived lack of competence. Men, on the other hand, receive in- creased perceptions of warmth and maintain their competence, gaining a net benefit from parenthood (Cuddy et al., 2004). Likewise, agentic women— violating the female stereotype—experience a back- lash when they apply for feminized jobs, whereas prototypical women do not (Rudman & Glick, 1999, 2001). These studies suggest that additional infor- mation on other sources of warmth and/or compe- tence perception for the subject of interest (e.g., gender) can help explain the benefits and detriments of certain behavior. The mechanism is that additional information may strengthen the original stereotype through assimilation, or change it through contrast.

In order to examine under what conditions CSR and CSI behaviors generate greater (lower) out- comes, we add another piece of information about the firm that exogenously changes perceptions of its warmth and competence. As discussed in Studies 2 and 3, we achieve this by adding cues on the firm’s

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origin; Cuddy and colleagues (2007) portrayed ste- reotypes of countries on the two dimensions of warmth and competence, finding significant varia- tion. In this section, to further our understanding of CSR as a warmth strategy, we mainly focus on the warmth dimension of the firm (or its origin); this helps to disentangle the mediating or supplemental warmth effects, if any, of CSR. This also helps ad- dress a potential reverse-causality issue: if firms perceived to be high in warmth are the ones who engage in CSR in the first place, this section of our theory (and analysis) helps to identify the leftover effect, if any, of CSR as a warmth strategy.

We are interested in how social perception of the firm based on other sources of information (i.e., its origin) moderates CSR and CSI outcomes. In par- ticular, if firms that engage in CSR are perceived to be higher in warmth and this warmth perception mediates the effect of CSR on our outcomes (Hy- potheses 1 and 3), does an exogenous increase (decrease) in warmth of the firm help improve (at- tenuate) these outcomes for firms engaging in CSI (CSR)? We suggest that, because of assimilation with the existing stereotype (i.e., a match between low-warmth country of origin and low-warmth practice of CSI), firms perceived to be low in warmth will be forgiven for CSI behavior, and, therefore, will not be punished as harshly. High- warmth firms, on the other hand, assimilate with CSR, not CSI, so, when they engage in socially ir- responsible practices, contrast occurs and the pen- alty is high (i.e., a mismatch between high-warmth country of origin and low-warmth practice of CSI results in greater punishment).

A similar logic applies to CSR: if a high-warmth firm engages in CSR, this demonstrates stereotypical behavior for this kind of a firm (i.e., assimilation occurs); hence, the benefits are mediocre. If a low- warmth firm engages in CSR, on the other hand, that contradicts the stereotype and, as a result, generates greater rewards from the surprised but positive re- action of the firm’s observers. Importantly, stereo- type match and violation based on the fit between the social perception of the firm and its behavior (CSR/ CSI) help advance our understanding of the cogni- tive mechanisms behind the efficacy of CSR in- vestments, suggesting that not all firms engaging in CSR/CSI reap the same benefits/costs.

Hypothesis 4. The higher the perception of warmth of the firm, the higher the penalties for CSI.

Hypothesis 5. The higher the perception of warmth of the firm, the lower the rewards for CSR.

Our key hypothesis is that CSR is predominantly perceived as influencing warmth. However, individ- uals do not only evaluate organizations on warmth but also competence, and thus we need to consider competence in our predictions. Prior research found that, although not-for-profit organizations were per- ceived to be high in warmth, consumers were less willing to buy from them unless they perceived them to be highly competent (Aaker et al., 2010). Therefore, we speculate that the presence of high (low) levels of perceived competence in addition to high (low) warmth may affect the above relationships.

As we consider CSR and CSI, it is important to ex- amine how the valence of these actions interacts with both warmth and competence. While warmth has a moral dimension (e.g., good intentions) and a re- lational component (e.g., can successfully work with allies) (Goodwin, 2015), competence relates directly to ability to execute a plan, positive or negative. In the case of CSI, organizations are behaving negatively, and we know that negative news generates stronger ob- serverreactionsthanpositiveeventsintheCSRcontext (Lange & Washburn, 2012). As per Hypothesis 1, these negative events should bear negatively on warmth, particularly the moral aspects of warmth (Goodwin, Piazza, & Rozin, 2014), thus canceling out the positive effects of warmth on organizational outcomes. More- over, negative behaviors are diagnostic of competence (Fiske et al., 2002), or lack thereof, and, per Hypothesis 2, CSI should decrease competence evaluations. Thus, a firm caught engaging in CSI will be perceived to be low on both competence and warmth.

However, when additional information on warmth and competence stemming from other sources than organizational behavior (e.g., origin) is revealed, it may change the observers’ reaction to CSI, and, in fact, if the levels of both warmth and competence are high from this additional source, it could potentially buffer the firm against negative effects of CSI (Koh, Qian, & Wang, 2014; Shiu & Yang, 2017). This is once again due to the stereotype fulfillment and violation mechanism: observers expect high-competence– high-warmth firms to solve CSI issues much faster than low-competence–high-/low-warmth firms, and therefore do not punish them as harshly for CSI. Therefore, high competence and warmth of the home country of the firm that engages in CSI will buffer it from the negative effects of its poor behavior when we assess both dimensions of social perception (compared to firms high only on warmth).

In turn, in the case of CSR, if a firm from a low- competence–low-warmth country is found to engage in CSR, observers may perceive it as an exemplar in

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that country (due to the stereotype violation on both warmthandcompetencedimensions).Asaresult,this perception will increase their helping behaviors and positive evaluations toward such firms because they aredoingthe“mostgood”(namely,helpingthosewho need it the most). Moreover, becauseCSR engagement is costly—as it may divert scarce resources from other more strategic or core business activities of the firm (Friedman, 1970)—engaging in CSR when low in both warmth and competence provides a stronger positive signal compared to firms low only on warmth. To summarize, we predict that the simultaneous pres- ence of high warmth and high competence will lower the negative impact of CSI (attenuating Hypothesis 4), while the simultaneous presence of low warmth and low competence will amplify the positive effect of CSR (strengthening Hypothesis 5).

Hypothesis 6. The perception of competence of the firm moderates the relationships in Hypotheses 4 and 5, such that (a) the higher the perception of warmth and competence of the firm (as opposed to lower), the lower the penalties for CSI, and (b) the lower the perception of warmth and competence (as opposed to higher), the higher the rewards to CSR.

METHODS

Given the plethora of empirical challenges in CSR research, it was important to conduct experiments to examine and establish the causal links between CSR/CSI, social perceptions, and different out- comes. Experiments allowed us to make causal statements based on control of the environment (Shadish, Cook, & Campbell, 2002), making them ideal for testing our theory. They helped isolate our theoretical mechanisms and, therefore, advance theory (Haslam & McGarty, 2004; Mook, 1983). Moreover, as we test our hypotheses using multiple paradigms and outcomes, multiple experiments allow for conceptual replication and extension, highlighting the robustness of the effects. We con- ducted three experiments.

In Study 1, we manipulated CSR and CSI to ex- amine perceptions of warmth and competence as well as such outcomes as reputation and purchase intentions. In addition, thanks to the temporal order in our experimental design, we were able to infer warmth mediation. In Study 2, owing to the differ- ences in the domain of the country of origin— organizational context—we were able to manipulate warmth and competence of the organization, and examine them as moderators in the relationship be- tween CSR, CSI, and firm outcomes. Specifically, we

examined four countries representing each quadrant ofthewarmth–competenceBIASmap(i.e.,theUnited States, Germany, Portugal, and Pakistan) and three conditions (i.e., CSR, CSI, and control). Finally, in Study 3, we replicated and extended these effects in a behavioral experiment measuring helping and pur- chasing behaviors using a within-subjects design.

STUDY 1

Study 1 examines the relationship between CSR activities and perceptions of warmth and compe- tence (Hypotheses 1 and 2). It also examines whether warmth and competence serve as mediating mech- anisms between CSR and important organizational outcomes (Hypothesis 3), such as purchase inten- tions (Sen & Bhattacharya, 2001) and reputation (Wagner, Lutz, & Weitz, 2009).

Sample and Procedures

Participants and design. One hundred and two participants (66 males, meanage 5 31, SD 5 10.11) were recruited from Amazon’s Mechanical Turk (Buhrmester, Kwang, & Gosling, 2011; Horton, Rand, & Zeckhauser, 2011; see also O’Reilly, Robinson, Berdahl, & Banki, 2015, for recent management re- search using this data source; Paolacci & Chandler, 2014) in exchange for $0.30 in Amazon credits. All participants were based in the United States and were employed full-time. All participants passed attention filters embedded in the survey (i.e., “I will choose ‘disagree’ to demonstrate that I am paying attention”), and all participants had a unique IP ad- dress located within the United States. We used a one-factor design that assigned participants to either a CSR, CSI, or control condition randomly.

Procedure. Participants were told that they would read a brief business scenario and provide their opinions. Participants completed the study online.

CSR manipulation. Participants read about “Company X,” a fictitious company that engaged in either CSR or CSI activities, involving fair/unfair manufacturing processes overseas—the vignette had been established in prior literature (Sen & Bhattacharya, 2001). We also included a control condition with no information on CSR (see Appendix A for full vignettes).

Measures

Warmth and competence. Immediately following the CSR manipulation, participants rated whether

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they believed Company X to possess various attri- butes. Specifically, they rated whether Company X was tolerant, warm, good natured, and sincere (Fiske et al., 2002), and competent, confident, independent, competitive, and intelligent (Fiske et al., 2002). These items were randomly embedded in other, unrelated attribute items. Confirmatory factor analysis sup- ported a two-factor solution that explained 72.2% of the variance. The four warmth items loaded onto Factor1withloadingsrangingfrom.80to.85.Thefive competence items loaded onto Factor 2 with loadings ranging from .77 to .84. The internal consistency co- efficient of the warmth and competence items, mea- sured using Cronbach’s alpha, were .93 and .86 respectively. In the control condition, warmth and competence were not correlated (r 5 .19, p 5 .26).

Additional dependent variables. After rating Company X on the dimensions of warmth and com- petence, participants answered questions about two additional dependent variables. First, participants indicated their purchase intentions. Specifically, they were asked: “If the products from Company X were available for purchase, what is your likelihood of purchasing a product from Company X?” (1 5 not at all likely, 7 5 very likely) (see Chandon, Morwitz, & Reinartz, 2005, for a discussion of external val- idity). Additionally, participants rated their percep- tions of the firm’s reputation: favorable, good, pleasant, positive (reputation a 5 .97; Homer, 1995; Wagner et al., 2009). Then, participants completed another manipulation check, regarding the content of the CSR scenario, and provided demographic data.

Results

Hypothesis 1: Warmth. A one-way analysis of variance (ANOVA) showed that participants who were assigned to CSR, CSI, or control manipulations were more likely to judge the firm as possessing

significantly different levels of warmth, F(2, 99) 5 133.43, p , .000, hp

2 5 .73 (see Table 1). Results of planned comparisons indicated that participants assigned to the CSR condition (M 5 4.33, SD 5 0.58) were more likely to view the firm as warm than were participants assigned to the CSI condition (M 5 2.02, SD 5 0.61), F(1, 67) 5 265.25, p , .000, hp

2 5 .80, d 5 3.95, 95% CI [3.74, 4.17], or to our control condition (M 5 3.20, SD 5 0.59), F(1, 67) 5 66.71, p , .000, hp

2 5 .50,d5 1.96,95%CI[1.76,2.18].Moreover,participants in the control condition perceived the firm as having significantly higher levels of warmth than did those in the CSI condition, F(1, 64) 5 64.32, p , .000, hp

2 5 .50, d5 2.00,95%CI[1.79,2.22].Themeansaredisplayedin Table 1 and provide support for Hypothesis 1.

Hypothesis 2: Competence. A one-way ANOVA showed that participants who were assigned to CSR, CSI, or control manipulations were more likely to judge the firm as possessing significantly different levels of competence, F(2, 99) 5 15.65, p , .000, hp

2 5 .24 (see Table 1). Results of planned comparisons in- dicated that participants assigned to the CSR condi- tion (M 5 4.14, SD 5 0.48) were more likely to view the firm ascompetent thanwereparticipants assigned to the CSI condition (M 5 3.30, SD 5 0.88), F(1, 67) 5 24.68, p , .000, hp

2 5 .27, d 5 1.21, 95% CI [1.03, 1.52],and thecontrol condition (M 5 3.93, SD5 0.50), F(1, 67) 5 3.18, p 5 .08, hp

2 5 .05, d 5 0.44, 95% CI [0.26, 0.61], while participants in the control condi- tion perceived the firm as having significantly higher levels of competence than did participants in the CSI condition, F(1, 64) 5 12.70, p 5 .001, hp

2 5 .17, d 5 1.28, 95% CI [1.10, 1.46]. The means are displayed in Table 1 and provide support for Hypothesis 2.

Reputation. To check the validity of our assump- tion that CSR generates rewards and CSI generates penalties (Margolis et al., 2009; Salaiz, 2016), we ran the same analysis on Reputation. Participants who were assigned to CSR, CSI, or control manipulations

TABLE 1 Summary of Results for Experiment 1

Condition

Study 1 (one-way ANOVA)

Warmth (1–5 scale) Competence (1–5 scale) Purchase Intentions (1–7 scale) Reputation (1–5 scale)

CSR 4.33 (0.58)*** 4.14 (0.48)*** 5.61 (1.15)*** 4.57 (0.63)*** CSI 2.02 (0.61)*** 3.3 (0.88)*** 2.7 (1.38)*** 1.84 (0.73)*** Control 3.2 (0.59)*** 3.93 (0.5)* 4.82 (1.03)** 3.48 (0.72)***

Notes: Table 1 shows means with standard deviations in brackets. CSR 5 corporate social responsibility; CSI 5 corporate social irrespon- sibility (see Appendix A for scenarios).

*p , .10 **p , .05

***p , .01

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perceived significantly different levels of firm reputa- tion, F(2, 99) 5 134.71, p , .000, hp

2 5 .73 (see Table 1). Results of planned comparisons indicated that partici- pants assigned to the CSR condition (M 5 4.57, SD 5 0.63) perceived the firm as having a better reputation than did participants assigned to the CSI condition (M5 1.84,SD5 0.73),F(1,67)5 279.94,p, .000,hp

2 5 .81, d 5 4.07, 95% CI [3.85, 4.33], or to our control condition (M 5 3.48, SD 5 0.72), F(1, 67) 5 45.12, p , .000, hp

2 5 .40, d 5 1.64, 95% CI [1.41, 1.90]. Partici- pants in the control condition perceived the firm as having a significantly better reputation than did partic- ipants in the CSI condition, F(1, 64) 5 83.73, p , .000, hp

25 .57,d5 2.30,95%CI[2.04,2.56].Resultsfromthis test support our assumption that rewards are above and penalties are below the control condition—see Table 1.

Purchase intentions. Similarly,aone-wayANOVA showed that participants who were assigned to CSR, CSI, or control manipulations were more likely to report different levels of purchase intentions, F(2, 99) 5 52.15, p , .000, hp

2 5 .513 (see Table 1). Results of planned comparisons indicated that partic- ipants assigned to the CSR condition (M 5 5.61, SD 5 1.15) were more likely to have higher purchase in- tentions than participants assigned to the CSI condi- tion (M 5 2.70, SD 5 1.38), F(1, 67) 5 91.11, p , .000, hp

2 5 .58, d5 2.33,95%CI[1.92, 2.82]ortoourcontrol condition (M 5 4.82, SD 5 1.03), F(1, 67) 5 8.49, p 5 .005, hp

2 5 .11, d 5 0.74, 95% CI [0.32, 1.10]. More- over, participantsin thecontrol condition had higher purchase intentions than participants in the CSI condition, F(1, 64) 5 47.57, p , .000, hp

2 5 .43, d 5 1.77, 95% CI [1.40, 2.26]. These results support our assumption that CSR generates rewards, and CSI penalties (i.e., rewards are above and penalties are below the control condition—see Table 1).

Hypothesis 3: Warmth and competence as mediators. Using Hayes’s (2013) process macros and the bootstrap method, we ran mediational analyses, predicting two dependent variables: firm reputation and purchase intentions. We used the bootstrap model of Preacher and Hayes (2004) to estimate the indi- rect effect of warmth and competence based on 10,000 bootstrap samples. This method is preferred to the tra- ditional method proposed by Baron and Kenny (1986), as it does not rely on the assumption that the sampling distribution of the mediation effect is normal. We un- dertook multiple sets of analyses. First, we looked at mediation of CSR versus Control, and CSI versus Con- trol for warmth while controlling for competence1 to

predict reputation and purchase intentions.2 Next, we looked at a sequential mediation model between warmth, competence, reputation, and purchase in- tentions. This allowed us to examine the distinct effects of warmth and competence in both socially responsible and irresponsible firms.

Results for reputation. We first constructed two mediation models in which CSR versus control, CSI versus control predicted reputation, with warmth as a mediator (controlling for competence).3 We then examined the indirect pathway comparing CSR and control (i.e., CSR influences reputation through in- creased warmth). The 95% CI for the bootstrap esti- mation of the indirect pathway did not overlap with 0 when examining warmth in the CSR condition, b 5 0.91, 95% CI [0.59, 1.19], indicating mediation.4

Next, we examined the indirect pathway comparing CSI and control (i.e., CSI influences reputation through decreased warmth controlling for compe- tence). The 95% CI for the bootstrap estimation of the indirect pathway did not overlap with 0 when ex- amining warmth in the CSI condition, b 5 20.95, 95% CI [21.28, 20.67].5 This indicates that warmth mediates the relationship between CSR/CSI and firm reputation, further substantiating Hypothesis 3.

Results for purchase intentions. We constructed two mediation models in which CSR versus control, CSI versus control predicted purchase intentions, with warmth as mediator controlling for compe- tence.6 First, we examined the indirect pathway comparing CSR and control (i.e., CSR influences

1 We footnote results for mediations with both warmth and competence as simultaneous mediators.

2 We code such that the control condition is the refer- ence group in each separate analysis.

3 When examined as joint predictors with the three ex- perimental conditions, warmth, b 5 0.75, t 5 2.63, p 5 .009, predicted reputation, while competence, b 5 0.04, t 5 0.44, p 5 .44, did not.

4 According to the same analysis where Competence serves as a joint mediator with Warmth, a significant in- direct effect emerges for warmth, b 5 0.83, 95% CI [0.51, 1.10], but the 95% CI for competence contains 0, b 5 0.05, 95% CI [20.02, 0.16], suggesting warmth, not competence, mediates this relationship.

5 According to the same analysis where Competence serves as a joint mediator with Warmth, a significant in- direct effect emerges for warmth, b 5 20.93, 95% CI [21.28, 20.66], but the 95% CI for competence contains 0, b 5 20.02, 95% CI [20.15, 0.12], suggesting warmth, not competence, mediates this relationship.

6 When examined as joint predictors with the three ex- perimental conditions, both warmth, b 5 0.50, t 5 2.48, p 5 .01, and competence, b 5 0.73, t 5 3.99, p 5 .001, predicted purchase intentions.

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Purchase Intentions through increased warmth controlling for competence). The estimation of the indirect effect did not overlap with 0, b 5 0.83, 95% CI [0.15, 1.46], indicating mediation of purchase in- tentions by warmth.7 Next, we completed the same analyses for CSI versus control (i.e., CSI influences Purchase Intentions through decreased warmth controlling for competence). The estimation of the indirect effect did not overlap with 0, b 5 20.98, 95% CI [21.84, 20.33], indicating mediation of purchase intentions by warmth.8

Sequential mediation. We constructed sequential mediation models including reputation (a cognitive evaluation) to predict purchase intentions (a behav- ioral intention). We examined purchase intentions as the final dependent variable as it is the most dis- tant variable and represents a behavioral intention. We also tested primacy of warmth assumptions by adding in competence as a sequential mediator fol- lowing warmth. We examined the indirect pathway (i.e., CSR/CSI influences purchase intentions through warmth, competence, and reputation; PROCESS, Model 6). Using three mediators, seven potential in- direct effects were calculated. The 95% CI for the bootstrap estimation of the indirect pathway between CSR → Warmth → Competence → Purchase Inten- tions excluded 0, b 5 0.34, 95% CI [0.09, 0.64], in- dicating sequential mediation. Likewise, the 95% CI for the bootstrap estimation of the indirect pathway between CSR → Warmth → Reputation → Purchase Intentions excluded 0, b 5 0.64, 95% CI [0.19, 1.11], indicating sequential mediation as well. No other in- direct effects excluded 0.

Next, we examined the indirect pathway with CSI. The 95% CI for the bootstrap estimation of the in- direct pathway between CSI → Warmth → Compe- tence → Purchase Intentions excluded 0, b 5 20.49, 95%CI[20.82,20.19], indicatingsequential mediation. Likewise, the 95% CI for the bootstrap estimation of the indirect pathway between CSI → Warmth →

Reputation → Purchase Intentions excluded 0, b 5 20.81, 95% CI [21.42, 20.43], indicating se- quential mediation as well. No other indirect effects excluded 0. We ran equivalent models changing the order of the potential mediators. Importantly, ana- lyses in which competence preceded warmth in the model did not produce indirect effects excluding 0, suggesting the primacy of warmth as a mediating mechanism in our data set. Overall, our results indi- cate that warmth consistently mediates the relation- ship between CSR/CSI and purchase intentions (on its own and when predicting Purchase intentions in conjunction with Reputation), whereas competence does not consistently mediate it, supporting Hy- pothesis 3.

Discussion

Study 1 provides support for Hypotheses 1 through 3. When “Company X” engaged in CSR activities, it was judged to be significantly higher in warmth than both control and CSI firms (supporting Hypothesis 1). In addition, per traditional halo effects in psycholog- ical research (Ross & Nisbett, 1991) as well as other alternative explanations, we observed a positive re- lationship between CSR and competence ratings (supporting Hypothesis 2). However, although ratings of competence differed between CSR and CSI condi- tions, the control condition was not significantly dif- ferent from the CSR condition, p . .08, indicating that competence may not be directly related to the pres- ence of CSR activities but is rather related to their absence (i.e., CSI). This finding is consistent with Fiske et al. (2007), which found that negative behav- iors are more indicative of competence while positive behaviors are more indicative of warmth. Next, we established further evidence of CSR as a warmth strategy in our mediational analyses. Specifically, warmth mediates the relationship between CSR/CSI and the control condition to predict reputation and purchase intentions (supporting Hypothesis 3). When examined as a sequential mediator, warmth is nec- essary to mediate the relationship between CSR/CSI and purchase intention while including measures of competence and reputation. This evidence confirms previous research on the primacy of warmth when forming social judgments (Cuddy et al., 2008; Fiske et al., 2007; Singh & Teoh, 2000; Tausch et al., 2007).

Although this study represents, to our knowledge, one of the first empirical links between corporate strategy and social perception, many questions re- main. These results are about “Company X”—a fic- titious organization used to maintain experimental

7 According to the same analysis where Competence serves as a joint mediator with Warmth, the 95% CI for the bootstrap estimation of the indirect pathway did overlap with 0 when examining warmth and competence together in the CSR condition, bwarmth 5 0.43, 95% CI [20.18, 1.008]; bcompetence 5 0.20, 95% CI [20.02, 0.53].

8 According to the same analysis where Competence serves as a joint mediator with Warmth, the 95% CI for the bootstrap estimation of the indirect pathway did overlap with 0 when examining warmth and competence together in the CSI condition, bwarmth 5 20.47, 95% CI [21.29, 0.07], but not for competence, bcompetence 5 20.50, 95% CI [20.86, 20.19].

2019 1619Shea and Hawn

control. Typically, we know more about an organi- zation when making a purchase and evaluating firm reputation (e.g., country of origin, size, status/brand of the firm). Much of this auxiliary information can be related to the dimensions of warmth and compe- tence. Our results so far suggest that, just like ste- reotypes of organizations (Aaker et al., 2010), stereotypes of organizational practices indeed exist, and warmth and competence are in fact organizing dimensions that help individuals categorize com- panies and their strategies (i.e., CSR or CSI). More- over, warmth perceptions mediate the relationship between CSR/CSI and outcomes. However, if this is the case, do warmth and competence perceptions of organizations from other sources of evaluation color the way in which CSR and CSI are evaluated? Could they shift individual willingness to buy or evaluation of firm reputation or other behavioral outcomes of CSR and CSI? Experiments 2 and 3 were designed to address these questions.

STUDY 2

Study 1 examined the relationship between a firm’s CSR activities and perceptions of warmth and com- petence, establishing CSR as a warmth strategy via mediation. Study 2 shifts our focus to the warmth– competence moderating effect: in particular, do warmth and competence perceptions of the organi- zation from other sources (i.e., country of origin) moderate the effects of CSR (CSI) on different out- comes? In other words, under what conditions do firms achieve greater rewards (penalties) for CSR (CSI) in terms of favorable (unfavorable) evalua- tions? To test this, we manipulated the perception of the organization by changing a firm’s country of or- igin to reflect different levels of warmth and com- petence (i.e., high or low). Just as the national origin of immigrants guides majority members’ perceptions of them (Lee & Fiske, 2006), we expect the country of origin to affect the social perception of the firm and of its strategic choices.

Sample and Procedures

Participants and design. Five hundred and seventy-two participants (357 males, meanage 5 32.13, SD 5 11.12) were recruited from Amazon’s Mechanical Turk (Buhrmester et al., 2011) in ex- change for $0.50 in Amazon credits. To avoid the out-of-group bias (e.g., rating a U.S. firm differently if you were based outside the United States), all par- ticipants were based in the United States and passed

attention filters embedded in the survey. We used a three-factor design that randomly assigned partici- pants to a CSR state (i.e., CSR, CSI, or control), country-of-origin warmth (i.e., high, low), and com- petence (i.e., high, low). We also included a pure control condition that did not manipulate country of origin; its inclusion did not change the significance or pattern of our results. However, because this ex- periment tests Hypotheses 4 through 6 using warmth and competence perceptions of the countries of ori- gin and the control condition does not specify any country (and, hence, warmth or competence), we did not include it in the final analyses.

Procedure. Participants completed the study online. They were asked to read a brief business scenario and to provide their opinions by rating the warmth and competence of the firm’s country of or- igin as well as their perceptions of the firm based on the CSR vignette.

CSR manipulation. Participants read the same vignettes as in Study 1 (Sen & Bhattacharya, 2001), modified to manipulate warmth and competence via country of origin.

Warmth and competence manipulations. Based on previous research, we chose the in-group to represent the high-warmth, high-competence country (in our sample, the United States, as all participants were based in the United States) (e.g. Cuddy et al., 2008). We chose Germany (low warmth, high competence) and Portugal (high warmth, low competence) as the two countries far- thest from each other on the BIAS map (see Cuddy et al., 2007). Finally, because there was no Euro- pean low–low country and it has the lowest ranking on the BIAS map, we chose Pakistan as our low- warmth, low-competence country (see Cuddy et al., 2007). To manipulate warmth and competence, we changed the name of the organization in the vi- gnette to include the country of origin: thus, U.S. Tech Corp., Pakistan Tech Corp., German Tech Corp., Portugal Tech Corp., and Company X for the control condition.

Measures

Measures of warmth and competence. Partici- pants completed the same warmth and competence items as in Study 1 (warmth, a 5 .94; competence, a 5 .84) (Fiske et al., 2002). In our pure control condition (no CSR/CSI, or country of origin), we performed a confirmatory factor analysis, which supported a two-factor solution that explained 75.69% of the variance. The four warmth items

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loaded onto Factor 1 with loadings ranging from .73 to .97. The five competence items loaded onto Factor 2 with loadings ranging from .40 to .92. Warmth and competence were not significantly correlated in our control condition, r 5 .35, p 5 .12.

Additional dependent variables. After rating the firm on the dimensions of warmth and competence, participants answered the same questions consti- tuting our two dependent variables as in Study 1. Participants then completed a manipulation check regarding the content of the CSR scenario and pro- vided demographic information.9

Results

Data analysis strategy. To test Hypotheses 4 and 5, we analyzed the two-way interaction effects be- tween Warmth (high, low) and CSR/CSI conditions (vs. control), collapsing across firm competence. To test Hypothesis 6, we conducted pairwise compari- sons regarding whether changes in competence moderate the effects of warmth on CSR/CSI out- comes. Table 2 presents our results.

Reputation. Table 2a presents the means with standard errors across all conditions predicting reputation. Table 2b collapses across our warmth conditions. We ran a three-way ANOVA to analyze the effect of Condition (CSR, CSI, Control) by Warmth (high, low) and Competence (high, low) on Reputation. A significant main effect emerged for CSR condition, F(2, 494) 5 613.94, p 5 .000, hp

2 5 .71. Interaction effects emerged between Warmth 3 Condition, Competence 3 Condition, and Warmth 3 Competence, Fs . 2.4, ps , .10, hp

2 . .009. These effects were qualified by a significant three-way in- teraction, F(2, 494) 5 4.37, p 5 .01, hp

2 5 .017. The main effect of CSR condition once again confirms our initial assumption about rewards to CSR and penal- ties to CSI: firms engaging in CSR (M 5 4.27, SD 5 0.69) attained higher levels of reputation than firms engaging in CSI (M 5 1.67, SD 5 0.79), F(1, 351) 5 1068.95, p 5 .00, hp

2 5 .75, d 5 3.52, 95% CI [3.41, 3.63], and control firms (M 5 3.58, SD 5 0.69), F(1, 331) 5 83.64, p 5 .00, hp

2 5 .20, d 5 1.00, 95% CI [0.90, 1.11). Control firms had higher reputation than CSI firms, F(1, 326) 5 530.55, p 5 .00, hp

2 5 .62, d 5 2.58, 95% CI [2.48, 2.70] (Figure 1a and Figure 1b).

To test Hypothesis 4 (comparing CSI outcomes across high- and low-warmth firms), a two-way

ANOVA was run to analyze the relative effect of Condition (CSI, control) by Warmth (high, low) on Reputation. A main effect for CSI emerged,

TABLE 2b Mean Levels of Reputation by Warmth

(Hypotheses 4 and 5)

CSI Control CSR

High Warmth 1.56 (0.07) 3.63 (0.07) 4.25 (0.08) Low Warmth 1.78 (0.09) 3.52 (0.09) 4.30 (0.07)

Notes: Reputation was measured on a 5-point scale. Standard errors in brackets.

TABLE 2a Mean Levels of Reputation by Country (Hypothesis 6)

CSI Control CSR

United States (high, high)

1.60 (0.11) 3.54 (0.10) 4.16 (0.12)

Germany (low, high) 1.82 (0.15) 3.85 (0.08) 4.25 (0.10) Portugal (high, low) 1.51 (0.11) 3.75 (0.10) 4.34 (0.10) Pakistan (low, low) 1.74 (0.12) 3.20 (0.14) 4.35 (0.09)

Notes: Reputation was measured on a 5-point scale. Standard errors in brackets.

TABLE 2 Summary of Results for Experiment 2

TABLE 2c Mean Levels of Purchase Intentions by Country

(Hypothesis 6)

CSI Control CSR

United States (high, high)

2.32 (0.19) 4.70 (0.13) 5.43 (0.18)

Germany (low, high) 2.41 (0.25) 4.81 (0.16) 5.40 (0.18) Portugal (high, low) 2.32 (0.35) 4.75 (0.17) 5.36 (0.21) Pakistan (low, low) 2.74 (0.21) 4.11 (0.18) 5.52 (0.20)

Notes: Purchase Intentions was measured on a 7-point scale. Standard errors in brackets.

TABLE 2d Mean Levels of Purchase Intentions by Warmth

(Hypotheses 4 and 5)

CSI Control CSR

High Warmth 2.28 (0.14) 4.73 (0.11) 5.39 (0.13) Low Warmth 2.57 (0.16) 4.45 (0.12) 5.46 (0.14)

Notes: Purchase Intentions was measured on a 7-point scale. Standard errors in brackets.

9 In our pure control condition, purchase intentions and reputation were not significantly correlated, r 5 .29, p 5 21.

2019 1621Shea and Hawn

F(1, 324) 5 533.72, p 5 .000, hp 2 5 .62, and this effect

was qualified by a significant interaction between CSI x Warmth, F(1, 324) 5 4.37, p 5 .04, hp

2 5 .01, suggesting moderation. No significant differences emerged in the control condition between high (M 5 3.63, SD 5 0.62) and low (M 5 3.52, SD 5 0.75) warmth firms, F(1, 152) 5 1.12, p 5 .29, hp

2 5 .007, d 5 0.17, 95% CI [0.03, 0.44]. However, when high- warmth firms engaged in CSI (M 5 1.56, SD 5 0.70), they received lower reputation evaluations than low- warmth firms (M 5 1.78, SD 5 0.88), F(1, 172) 5 3.58, p 5 .06, hp

2 5 .02, d 5 0.31, 95% CI [0.15, 0.45]. This provides support for Hypothesis 4 for reputation: high-warmth firms face a larger reputation penalty (Δ2.07) for engaging in CSI than low-warmth firms (Δ1.74).

To test Hypothesis 5 (comparing CSR outcomes across high- and low-warmth firms), a two-way ANOVA was run to analyze the relative effect of Condition (CSR, control) by Warmth (high, low) on Reputation. The interaction was not significant, F(1, 328) 5 1.18, p 5 .28, hp

2 5 .004, and, thus, we do not find support for Hypothesis 5 for reputation: high- and low-warmth firms had equivalent out- comes for engaging in CSR compared to control firms.

Next, to test Hypothesis 6 (comparing CSI out- comes for Germany–Pakistan, United States– Portugal), a Condition (CSI, control) by Competence (high, low) ANOVA was run within both high- and low-warmth conditions. At low levels of country warmth (Germany–Pakistan), a Condition (CSI, control) by Competence (high, low) ANOVA revealed an interaction between CSI and compe- tence, F(1, 157) 5 5.00, p 5 .02, hp

2 5 .03. Specifi- cally, while firms from Germany (M 5 1.83, SD 5 0.99) and Pakistan (M 5 1.74, SD 5 0.75) do not differ when they engage in CSI, F , .18, p . .67, a significant difference emerges in the control con- dition, F(1, 72) 5 16.31, p 5 .000, hp

2 5 .19, d 5 0.97, 95% CI [0.82, 1.24], such that firms from Germany (M 5 3.85, SD 5 0.47) have higher reputation than firms from Pakistan (M 5 3.20, SD 5 0.84). This suggests that competence may not buffer reputation when low-warmth firms engage in CSI in terms of the relative losses to reputation (ΔGermany 5 2.02; ΔPakistan 5 1.46). At high levels of country warmth (United States–Portugal), the interaction between CSI and competence is not significant, F , .02, p . .88; therefore, we find no support for Hypothesis 6a regarding reputation.

Next, to test Hypothesis 6b (comparing CSR outcomes for Germany–Pakistan, United States– Portugal), a Condition (CSR, control) by Compe- tence (high, low) ANOVA was run within both high and low warmth conditions. At low levels of coun- try warmth (Germany–Pakistan), a Condition (CSR, control) by Competence (high, low) revealed an interaction between CSR and competence, F(1, 159) 5 12.59, p 5 .001, hp

2 5 .07, d 5 0.98, 95% CI [0.83, 1.13]. Specifically, while Germany (M 5 4.25, SD 5 0.66) and Pakistan (M 5 4.35, SD 5 0.63) do not differ when they engage in CSR, F , .18, p . .67, the interaction is driven by the relative differences (ΔGermany 5 0.41; ΔPakistan 5 1.14) gained from en- gaging in CSR versus control (Germany: M 5 3.84, SD 5 0.47; Pakistan: M 5 3.20, SD 5 0.84). When engaging in CSR, a firm from Pakistan, a low–low country, made higher relative gains compared to

FIGURE 1a Results of Study 2: Average Effect of Warmth and

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FIGURE 1b Results of Study 2: Average Effect of Warmth and

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1622 OctoberAcademy of Management Journal

that from Germany (low-warmth–high-competence country), suggesting that initial competence did not have an additive effect, but, rather, low–low firms are seen as exemplars and get higher returns to CSR, supporting Hypothesis 6b. At high levels of country warmth (United States–Portugal), however, the in- teraction between CSR and competence is not significant, F , .02, p . .88, suggesting that the additive benefits of competence are limited to low- warmth firms engaging in CSR (which violates the stereotype of low–low organizations).

Purchase intentions. Table 2c presents the means with standard error bars across all conditions pre- dicting purchase intentions. Table 2d includes a separate plot collapsing across our warmth- competence conditions. First, a three-way ANOVA was run to analyze the effect of Condition (CSR, CSI, Control) by Warmth (high, low) and Competence (high, low) on Purchase Intentions. While the three- way interaction did not reach statistical signifi- cance, F(2, 494) 5 2.00, p 5 .14, hp

2 5 .008, we tested our hypotheses using a series of two-way ANOVAs reported below. A significant main effect emerged for CSR condition, F(2, 494) 5 266.50, p 5 .000, hp

2 5 .52. Once again, the main effect of CSR condition supported our assumption: firms engag- ing in CSR (M 5 5.43, SD 5 1.28) attained higher levels of purchase intentions than firms engaging in CSI (M 5 2.43, SD 5 1.42), F(1, 351) 5 434.86, p 5 .00, hp

2 5 .55, d 5 2.23, 95% CI [2.04, 2.44], and control firms (M 5 4.59, SD 5 1.01), F(1, 331) 5 42.82, p 5 .00, hp

2 5 .43, d 5 0.73, 95% CI [0.54, 0.88]. Control firms had greater purchase intentions than CSI firms, F(1, 327) 5 245.99, p 5 .00, hp

2 5 .12, d 5 1.76, 95% CI [1.61, 1.97].

To test Hypothesis 4 (comparing CSI outcomes across high and low warmth), a two-way ANOVA was run to analyze the effect of Condition (CSI, control) by Warmth (high, low) on Purchase In- tentions. A main effect for CSI emerged, F(1, 324) 5 246.41, p 5 .000, hp

2 5 .432, and this effect was qualified by a significant interaction between CSI 3 Warmth, F(1, 324) 5 4.41, p 5 .04, hp

2 5 .01. When firms high (M 5 2.28, SD 5 1.30) or low (M 5 2.57, SD 5 1.52) in warmth engage in CSI, purchase in- tentions are not significantly different, F(1, 172) 5 1.93, p 5 .16, hp

2 5 .01, d 5 0.21, 95% CI [0.12, 0.48]. However, marginally significant differ- ences emerged between high (M 5 4.73, SD 5 0.94) and low (M 5 4.45, SD 5 1.07) warmth firms in the control condition, F(1, 152) 5 2.95, p 5 .09, hp

2 5 .02, d 5 0.28, 95% CI [0.07, 0.52]. Thus, when high- warmth firms shift from no strategy to CSI (Δ2.45),

compared to low-warmth firms (Δ1.88), they face a bigger deficit in purchase intentions. This provides support for Hypothesis 4.

To test Hypothesis 5 (comparing CSR outcomes across high and low warmth), a two-way ANOVA was run to analyze the effect of Condition (CSR, control) by Warmth (high, low) on purchase in- tentions. The interaction was not significant, F(1, 328) 5 1.84, p 5 .18, hp

2 5 .006, and does not provide support for Hypothesis 5 for purchase intentions.

Next, to test Hypothesis 6a (comparing CSI outcomes for Germany–Pakistan, United States– Portugal), a condition (CSI, control) by Competence (high, low) ANOVA was run within both high and low warmth conditions. At low levels of country warmth (Germany–Pakistan), an interaction be- tween CSI and competence emerged, F(1, 157) 5 6.18, p 5 .01, hp

2 5 .04. Specifically, while Ger- many (M 5 2.41, SD 5 1.64) and Pakistan (M 5 2.74, SD 5 1.38) do not differ in purchase intentions when they engage in CSI, F , 1.05, p . .30, a sig- nificant difference emerges in the control condi- tion, F(1, 72) 5 8.68, p 5 .004, hp

2 5 .11, d 5 0.69, 95% CI [.38, 1.05], such that Germany (M 5 4.81, SD 5 0.95) has higher purchase intentions than Pakistan (M 5 4.11, SD 5 1.09). When low-warmth firms engage in CSI, competence does not buffer the negative impact leading to greater relative decreases in purchases intentions (ΔGermany 5 2.40; ΔPakistan 5 1.37). At high levels of warmth, the interaction be- tween CSI and competence is not significant, F , .02, p . .91. Therefore, just like for reputation, we do not find support for Hypothesis 6a for purchase intentions.

Next, to test Hypothesis 6b (comparing CSR outcomes for Germany–Pakistan, United States– Portugal), a Condition (CSR, control) by Compe- tence (high, low) ANOVA was run within both high and low warmth conditions. At low levels of warmth (Germany–Pakistan), an interaction be- tween CSR and competence emerged, F(1, 159) 5 5.11, p 5 .03, hp

2 5 .03, d 5 0.56, 95% CI [0.28, 0.87]. Specifically, while Germany (M 5 5.40, SD 5 1.18) and Pakistan (M 5 5.52, SD 5 1.34) do not differ when they engage in CSR, F , .21, p . .64, the interaction is driven by the relative differences gained (ΔGermany 5 .59; ΔPakistan 5 1.41) versus control (Germany: M 5 4.81, SD 5 0.95; Pakistan: M 5 4.11, SD 5 1.09). At high levels of warmth, the interaction between CSR and competence is not significant, F , .12, p . .77. Thus, our findings suggest that low-warmth–low-competence firms receive a larger relative benefit when engaging in

2019 1623Shea and Hawn

CSR—supporting Hypothesis 6b—even though high-warmth firms do not see differences with the addition of competence.

Discussion

There are several implications of Study 2, with the main one being that we find no support for Hy- potheses 5 and 6a for both outcomes (reputation and purchase intentions). Hypotheses 4 and 6b demonstrated consistent results for both outcomes for firms from a low–low country (Pakistan), sug- gesting that, in comparison to Hypothesis 5, which only considers warmth perception, both high com- petence and warmth help a low–low company achieve higher rewards for CSR. Thus, the effec- tiveness of a CSR strategy is contingent on the warmth and competence perception of the organi- zation’s country of origin (Hypothesis 6b), while firms from high-warmth countries received harsher evaluations for engaging in CSI (Hypothesis 4). We theorize that these effects are driven by assimilation (CSI) and contrast (CSR) effects from the stereo- types associated with low-warmth countries. Im- portantly, this study provides insight into why some organizations fare better or worse in observer reactions to their corporate strategies. The attri- butes of the firm—conceptualized as country- of-origin warmth and competence—influenced important organizational perceptions, such as rep- utation and purchase intentions.

In addition, Study 2 helps explore the question of endogeneity regarding whether high-warmth orga- nizations are more likely to engage in CSR behavior in the first place—to earn greater benefits from it. We find consistent marginal support for Hypothesis 4 that states that firms with higher warmth will pay a higher cost for CSI, and no support for Hypothesis 5 about lower rewards for CSR. Likewise, we do not find support for the argument that the costs for en- gaging in irresponsible behavior are lower for orga- nizations from high–high countries. In fact, firms from Pakistan (a low-warmth and low-competence country) experienced the greatest rewards for CSR engagement, due to stereotype violation. To con- clude, Study 2 demonstrates that a firm’s country of origin (manipulating warmth and competence per- ceptions) influences the success or failure of its CSR strategies relative to its baseline state. Specifically, we find that CSR can supplement for low-warmth (and low-competence) country of origin, and that low-warmth country of origin shields organizations from harsher judgments of CSI.

STUDY 3

Studies 1 and 2 showed how CSR and CSI affect the perceived warmth and competence of an organiza- tion, andthattheseeffectsareamplifieddependingon the firms’ country of origin. Study 3 aims to replicate and extend these findings while addressing various shortcomingsof Studies 1 and 2. First,while Studies 1 and 2 measure perceptions, Study 3 uses behavioral measures (Colquitt, 2008), adding external validity to our previous measures. Specifically, participants used their own money to purchase products from firms with differing social strategies and also pro- vided help (e.g., feedback) to the organizations. Second, to ensure that our high-warmth–high- competence results are not an artifact of an in-group bias, Study 3 uses Sweden as the high-warmth– high-competence country.10 Third, we switched our CSR manipulations to a fact-sheet format that in- cluded information on both labor and environmental

10 Prior to running Study 3, we sought to validate previous research on the BIAS map (Cuddy et al., 2007) with regard to where countries fall on the warmth and competence di- mensions.Inaddition,wesoughttoreplacetheUnitedStates in the final study. Using a unique sample of 95 Mechanical Turk workers, we assessed the warmth and competence of seven countries (Germany, Iran, Pakistan, Portugal, Spain, Sweden, and the United States) previous research had clas- sified into one of the four quadrants on the BIAS map. We first asked about the warmth and competence of each country (Fiske et al., 2002) and then had participants rank order the countries in terms of their warmth and compe- tence. Pairwise comparisons, rank order, and correlational evidence support the classification in our experimental paradigm. First, ranked from highest to lowest warmth, were Sweden, the United States, Spain, Portugal, Germany, Pakistan, and Iran; and, second, ranked from highest to lowest competence were Germany, the United States, Swe- den, Spain, Portugal, Iran, and Pakistan. Looking at corre- lations between warmth and competence, the United States, r 5 .55, p , .000, and Sweden, r 5 .70, p , .000, are seen as high warmth and competence. Given that our study com- prises U.S. participants, we used Sweden to mitigate in- group bias concerns and “Made in America” preferences in our Study 3. Pakistan is viewed as low warmth and compe- tence,r5 .50,p, .000,ascomparedtoIran,r5 .21,p, .000, given the high correlation between warmth and competence as well as low means. Germany is viewed as high compe- tence and low warmth, r 5 .21, p 5 .04, given the smaller correlation. Portugal is viewed as high warmth and low competence. r 5 .48, p , .000, as compared to Spain, r 5 .63, p , .000; although not as cleanly manipulated, we believe that Portugal represents the better manipulation of low competence and high warmth, given the smaller correlation coefficient and previous research on the BIAS map.

1624 OctoberAcademy of Management Journal

performance to ensure that the effects were not idio- syncratic to our Study 1 and 2 materials. And, finally, to provide a conservative test of our hypotheses, we modified our design to assess these behaviors within subjects; that is, all participants engaged with firms from four countries within CSR and CSI conditions.

Sample and Procedures

Participants. We recruited 100 participants from a paid student research lab at a private Midwestern university. We excluded one participant due to ex- pletive language in all of our written prompts, and 11 participants who failed the manipulation check. In- cluding these participants in analyses does not alter the direction of effects.

Design. Study 3 employed a mixed design method- ology; in particular, 3(CSR, CSI, control condition) by2 (Order: Pricing first, Feedback first) between-subjects factors across a four-factor country-of-origin warmth by competence (HH 5 Sweden; HL 5 Germany; LH 5 Portugal; LL 5 Pakistan) within-subjects factor. We randomized the order of our country of origin manip- ulation as a repeated measure across all conditions.

Procedure. The study was advertised as a 30-min- ute product development study. Participants received $8inexchangefortheirparticipationandanadditional $1 for a purchase decision. The study asked partici- pants to test, evaluate, and make purchase decisions about a series of pens. We chose pens as an experi- mental stimulus because pens have been used suc- cessfully in previous research (e.g., Shah & Wolford, 2007). We purchased four types of pens priced $0.78–$0.83 from a wholesaler. The pens did not differ on measures of quality or looks. Upon arrival to the lab, each participant was seated at a computer station where they received a plastic bag containing four “prototype” pens to evaluate as well as $1 in coins for the pricing task (in addition to the $8 payment). They also received a notepad to test out each pen. Partici- pants completed the entire study at a computer station.

Warmth–Competence manipulation. To manip- ulate country of origin we had the pens labeled as “Made in Sweden,” “Made in Germany,” “Made in Portugal,” and “Made in Pakistan” in a 1-millimeter font. We then used neutral labels on each pen to serve aslogosandtranslatedtheword“fine”intoeachof the four languages to put on the logo. Each participant received and rated each of these four pens as a within- subjects variable.

Social responsibility manipulation. Participants were randomly assigned one of three experimental conditions: CSR, CSI or control. We provided them

withbackgroundinformationabouteachofthefourpen manufacturers whose products they would be testing. Embedded within neutral performance information was information on environmental impact and labor practices of each of the manufacturers. In the CSR con- dition, participants read that all four pen manufacturers were going out of their way to promote strong environ- mental protection and repair, as well as employee standards. In the CSI condition, pen manufacturers were stated to be poor in environmental standards and not desirable in terms of their labor practices. In the control condition, participants were provided with neutral information. All companies were established in their industries and in good financial standing. Each conditionhadthesamenumberofcategoriestodescribe the organization.11 Please see Appendix B.

11 As a manipulation check, participants rated both the warmth and competence of the pen manufacturing organizations using a single-item measure (“The pen manufacturing organizations seem to be warm/compe- tent”). A three-cell (CSR, CSI, control conditions) between- subjects analysis of variance on perceptions of Warmth revealed a significant effect of social responsibility condi- tion, F(2, 81) 5 5.73, p 5 .005, hp

2 5 .12. Specifically, in- dividuals in the CSR condition (M 5 4.56, SD 5 1.41) had significantly higher perceptions of warmth than individ- uals in the CSI condition (M 5 3.33, SD 5 1.42), F(1, 53) 5 10.18, p 5 .002, hp

2 5 .16, d 5 0.88, 95% CI [0.38, 1.39]. Individuals in the Control condition (M 5 3.97, SD 5 1.18) had marginally higher perceptions of warmth than individ- uals in the CSI condition, F(1, 57) 5 3.44, p 5 .07, hp

2 5 .06, d 5 0.50, 95% CI [0.08, 1.01]. Individuals in the CSR con- dition had marginally higher perceptions of warmth than individuals in the control condition, F(1, 52) 5 2.82, p 5 .09, hp

2 5 .05, d 5 0.46, 95% CI [20.04, 0.88]. This replicates our previous studies that found CSR and CSI are linked with perceptions of warmth, supporting Hypothesis 1. A three- cell(CSR,CSI,controlconditions)between-subjectsanalysis of variance on perceptions of Competence revealed a sig- nificant effect of social responsibility condition, F(2, 81) 5 5.14, p5 .008, hp

2 5 .11. Specifically, individuals intheCSR condition (M 5 5.56, SD 5 0.82) had significantly higher perceptions of competence than individuals in the CSI condition (M 5 4.70, SD 5 1.26), F(1, 53) 5 8.56, p 5 .005, hp

2 5 .14, d 5 0.82, 95% CI [0.53, 1.27]. Individuals in the Control condition (M 5 5.31, SD 5 0.93) had significantly higher perceptions of competence than individuals in the CSI condition, F(1, 57) 5 4.44, p 5 .04, hp

2 5 .07, d 5 0.56, 95% CI [0.23, 1.01]. Individuals in the CSR and control conditions did not differ significantly in perceptions of competence, F(1, 52) 5 1.08, p 5 .30, hp

2 5 .02, d 5 0.29, CI [0.00, 0.62]. This replicates our previous studies that found CSR and CSI are linked with perceptions of competence while control conditions oftentimes do not differ from CSR, supporting Hypothesis 2.

2019 1625Shea and Hawn

Measures

Participants completed a feedback task set and a purchasing task. The two tasks were counter- balanced.12 When relevant, we controlled for order. Each participant completed each dependent mea- sure across the four country of origin manipulations.

Feedback task. The first set of tasks examined the time and effort that participants devoted to providing feedback to each pen manufacturing organization. Participants were told that the pens were prototypes and that the organizations would like feedback on the pen designs. We encouraged participants to try out each pen in order to form an opinion of each product. Participants were given a blank essay box to provide feedback to the organization on their pen design. We measured the number of words written (M 5 21.87, SD 5 10.42) as a measure of helping (adapted from Porath & Erez, 2007). We also measured the subjective quality of each pen (“The pen is of high quality,” “The pen is desirable”; as 5 .72–.76).

Purchasing task. The second task was a purchas- ingtaskusingtheBecker–DeGroot–Marschakmethod (Becker, DeGroot, & Marschak, 1964), which has been used to reveal true reservation prices in a variety of contexts (Burbano, 2016; Kahneman, Knetsch, & Thaler, 1991; Lerner, Small, & Loewenstein, 2004). In this task, participants were given an additional dollar and were told that they could use this money to purchase the pens from the experiment and to keep whatever money they did not use. Participants were told that the computer program would randomly se- lect one pen and a random price at which they had the opportunity to purchase it. If their stated price was below the randomly generated price, they would not have the opportunity to purchase the pen. If their stated price was above the randomly generated price, they would have the opportunity to purchase the pen.

Participants had to successfully recall these in- structions prior to continuing to ensure that they understood the experimental paradigm. This goes above traditional willingness-to-pay measures by forcing participants to forgo some of their bonus pay to make a purchase. Likewise, the random lottery nature of the task ensures that participants reveal their true purchase prices (Becker et al., 1964). Par- ticipants stated a purchase price for each of the four pens on a sliding scale between $0.01 and $1.00 (M 5

$0.33, SD 5 $0.17). No pens significantly differed from this price and no pen was consistently priced as the “top” pen across the entire sample. After partic- ipants stated their price for each pen, a random payment price was generated, they took the pen (if purchased), and left the purchase price at the com- puterstation at the end of the study. Participantsthen completed a manipulation check about the social practices of the pen manufacturers, as well as de- mographic questions.

Results

Data analysis strategy. We ran a series of re- peated measures ANOVA across dependent mea- sures. We first ran a CSR condition (three: CSR, CSI, Control) by Order (two: Pricing first, Feedback first) across the four country of origin manipulations (separately as well as grouped together by high and low warmth) as a repeated measures ANOVA.13 To directly test hypotheses, we re-ran models with a series of planned comparisons to probe statistically significant mean differences both within and be- tween conditions (see Table 3). Assumption of sphericity was not violated in any of the analyses; therefore, we report the sphericity-assumed results.

Number of words. A three-cell (CSI, CSI, control condition) by two (Order: Pricing first, Feedback first) repeated measures ANOVA was run on the number of words written for the high- and low-warmth firms, as well as the Sweden, Germany, Portugal, and Pakistan country of origin conditions. No significant differences emerged in the models, Fs , 2.02, ps . .11. When examined as a between-subjects analysis, a significant effect emerged for the social responsibility condition, F(2,78) 5 3.46, p 5 .04, hp

2 5 .08. Specifically, in- dividuals in the CSR condition (M 5 26.28, SD 5 14.10) wrote marginally more words than individuals in the CSI condition (M 5 20.53, SD 5 7.22), F(1,53) 5 3.81, p 5 .05, hp

2 5 .07, d 5 0.52, 95% CI [24.52, 3.11], and individuals in the control condition (M 5 19.45, SD 5 8.48), F(1,52) 5 4.80, p 5 .03, hp

2 5 .09, d 5 0.60, 95% CI [24.45, 3.63]. The CSI and control conditions did not significantly differ, F , .3, p . .60. Although we did not see variation within our country of origin manipulation, individuals offered more help to organizations that engaged in CSR, providing be- havioral replication and extension of Hypothesis 1 as

12 Pre-tests indicated that licensing effects may occur when tasks were sequential (i.e., “I did not help the orga- nization, so I supplement by overpaying for their product,” or vice versa).

13 We re-ran analyses excluding the control condition as it did not produce any significant effect, nor were there any significant interactions between the control condition and other conditions. We report both sets of ANOVAs below.

1626 OctoberAcademy of Management Journal

well as support for our initial assumption about CSR generating rewards.

Subjective quality. To test Hypotheses 4 and 5, a two-cell (CSI or CSI) by two (Order: Pricing first, Feedbackfirst)repeatedmeasuresANOVAwasrunon subjective quality in high- and low-warmth firms.14

The three-way interaction was significant, F(1, 51) 5 4.71, p 5 .04, hp

2 5 .08. When participants completed the feedback tasks first,15 an interaction emerged, F(1, 23) 5 6.51, p 5 .02, hp

2 5 .22, suggesting moderation. While no differences between high- and low-warmth

FIGURE 2a Results of Study 3: Average Effect of Warmth and

Condition on Perceived Quality

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TABLE 3 Summary of Results for Experiment 3

TABLE 3c Mean Levels of Subjective Quality by Country (Hypothesis

6)

CSI Control CSR

Sweden (high, high) 3.19 (0.22) 3.09 (0.21) 3.00 (0.26) Germany (low, high) 2.88 (0.16) 2.94 (0.25) 3.00 (0.20) Portugal (high, low) 2.88 (0.21) 3.03 (0.19) 2.83 (0.19) Pakistan (low, low) 2.54 (0.18) 3.12 (0.27) 3.58 (0.25)

Notes: Subjective quality was measured on a 5-point scale. Standard errors in brackets. CSI, Control, and CSR are between- subjects factors, while country of origin is a within-subjects factor.

TABLE 3d Mean Levels of Subjective Quality by Warmth (Hypothe-

ses 4 and 5)

CSI Control CSR

High Warmth 3.04 (0.20) 3.06 (0.18) 2.92 (0.21) Low Warmth 2.71 (0.21) 3.03 (0.19) 3.29 (0.22)

Notes: Subjective quality was measured on a 5-point scale. Standard errors in brackets. CSI, Control, and CSR are between- subjects factors, while warmth is a within-subjects factor.

TABLE 3a Mean Levels of Purchase Price by Country (Hypothesis 6)

CSI Control CSR

Sweden (high, high) 0.43 (0.07) 0.35 (0.06) 0.31 (0.08) Germany (low, high) 0.25 (0.03) 0.26 (0.05) 0.35 (0.06) Portugal (high, low) 0.37 (0.08) 0.32 (0.06) 0.27 (0.06) Pakistan (low, low) 0.31 (0.05) 0.29 (0.05) 0.37 (0.05)

Notes: Purchase Price was measured on a $1 scale. Standard errors in brackets. CSI, Control, and CSR are between-subjects factors, while country of origin is a within-subjects factor.

TABLE 3b Mean Levels of Purchase Price by Warmth (Hypotheses 4

and 5)

CSI Control CSR

High Warmth 0.40 (0.06) 0.33 (0.06) 0.29 (0.06) Low Warmth 0.28 (0.05) 0.28 (0.05) 0.36 (0.06)

Notes: Purchase Price was measured on a $1 scale. Standard errors in brackets. CSI, Control, and CSR are between-subjects factors, while warmth is a within-subjects factor.

14 Including all CSR/CSI/control conditions, the three- way interaction is not significant, F(2, 78) 5 1.68, p 5 .19, hp

2 5 .041. 15 When participants completed the pricing task first, a

main effect for factor emerges, F(1, 28) 5 4.45, p 5 .04, hp

2 5 .137, such that participants had a preference for high- warmth firms (M 5 3.20, SD 5 0.64) over low-warmth firms (M 5 2.88, SD 5 0.70) across conditions.

2019 1627Shea and Hawn

firms emerged in the CSR condition, t(11) 5 1.62, p 5 .13, within the CSI condition, paired samples t tests revealed that high-warmth firms (M 5 3.09, SD 5 0.45) hadmarginallyhigherqualityratingsthanlow-warmth firms (M 5 2.71, SD 5 0.50), t(12) 5 2.10, p 5 .06, failing to provide support for Hypothesis 4. However, exploring the moderation effect between conditions, no significant differences emerged for high-warmth firms, F , .3, p . .59, while low-warmth firms saw significant gains between CSI (M 5 2.71, SD 5 0.50) andCSR(M 5 3.29,SD5 0.54),F(1,23)5 7.78,p5 .01, hp

2 5 .25,d5 1.16,95%CI[0.86,1.44].Takentogether, the significant moderation effect suggests that, while low-warmth firms receive equivalent outcomes for CSR, but not CSI, they significantly increase their outcomes as they changed strategies from CSI to CSR (Δ 5 .58), while high-warmth firms did not (Δ 5 .12). This provides indirect support for Hypothesis 5 that low-warmth firms reap higher gains from CSR.

To test Hypothesis 6, a two-cell (CSI or CSI) by two (Order: Pricing first, Feedback first) repeated

measures ANOVA was run on subjective quality in the Sweden, Germany, Portugal, and Pakistan country of origin conditions.16 The three-way in- teraction was significant, F(3, 153) 5 3.46, p 5 .02, hp

2 5 .06. When the feedback task came first, a sig- nificant interaction emerged between CSR/CSI and country of origin, F(3, 69) 5 3.90, p 5 .01, hp

2 5 .25. We report paired samples t tests across countries of origin within the feedback task first condition.

In the CSI condition, a paired samples t test indi- cated that Pakistan (M 5 2.54, SD 5 0.66) had a sig- nificantly lower subjective quality than Sweden (M 5 3.19, SD 5 0.78), t(12) 5 2.85, p5 .02, d 5 0.94, 95%CI [0.50, 1.31]. No significant effects were observed be- tween other countries, all ts , 1.67, ps . .12. This does not provide clear support for Hypothesis 6a.

In the CSR condition, a paired samples t test indicated that Pakistan (M 5 3.58, SD 5 0.87)17 had a significantly higher subjective quality than Portugal (M 5 2.83, SD 5 0.65), t(11) 5 2.37, p 5 .04, and a marginally significant higher subjective quality than Sweden (M 5 3.00, SD 5 0.90), t(11) 5 1.83, p 5 .09. No significant effects were observed between other countries, all ts , 1.74, ps . .11.18 This provides support for Hypothesis 6b, which predicted higher rewards to CSR for low–low firms. These results—obtained within subject—suggest that a low-warmth–low-competence firm gains significantly higher benefits for doing CSR than high-warmth firms.

Purchase price. To test Hypotheses 4 and 5, a two- cell (CSI, CSI) by two (Order: Pricing first, Feedback first) repeated measures ANOVA was run on Pur- chase Price in the high- and low-warmth firms.19 A marginaleffectemergedforCondition,F(1,51)5 3.08,

FIGURE 2b Results of Study 3: Average Effect of Warmth and

Condition on Purchase Price

0.000 0.050 0.100 0.150 0.200 0.250 0.300 0.350 0.400 0.450 0.500

CSI Control CSR

P u

rc h

as e

P ri

ce

Evaluation Task First

High Warmth Low Warmth

0.000

0.100

0.200

0.300

0.400

0.500

CSI Control CSR

P u

rc h

as e

P ri

ce

Pricing Task First

High Warmth Low Warmth

16 Including all CSR/CSI/control conditions, the three- way interaction is marginally significant, F(6, 234) 5 1.83, p 5 .09, hp

2 5 .045. 17 Probing this interaction between conditions, a one-

factor ANOVA on Pakistan’s subjective quality revealed a significant effect, F(1,23) 5 11.48, p 5 .003, hp

2 5 .333, d 5 1.37, 95% CI [1.06, 1.61]. Specifically, subjective quality for the Pakistani pen was significantly higher in the CSR condition (M 5 3.58, SD 5 0.87) than in the CSI condition (M 5 2.54, SD 5 0.66).

18 While not directly testing a hypothesis, a one-factor ANOVA between CSR and CSI conditions on Pakistan’s subjective quality revealed a significant effect, F(1,23) 5 11.48, p 5 .003, hp

2 5 .333. Specifically, subjective quality for the Pakistani pen was significantly higher in the CSR condition (M 5 3.58, SD 5 0.87) than in the CSI condition (M 5 2.54, SD 5 0.66).

19 Including all CSR/CSI/control conditions, the three- way interaction is marginally significant, F(2, 78) 5 2.68, p 5 .07, hp

2 5 .064.

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p 5 .09, hp 2 5 .06. This effect was qualified by a

significant three-way interaction, F(1, 51) 5 5.69, p 5 .02, hp

2 5 .10. When participants completed the feedback tasks first,20 an interaction emerged, F(1, 23) 5 7.04, p 5 .01, hp

2 5 .23, suggesting moderation. Exploring these interactions, in the CSI condition, paired samples t tests revealed that high-warmth firms (M 5 0.40, SD 5 0.07) and low-warmth firms (M 5 0.28, SD 5 0.03) had significantly different purchase prices, t(12) 5 2.44, p 5 .02, with high- warmth firms having significantly higher prices, which does not support Hypothesis 4. However, in the CSR condition, we observed no differences be- tween high- and low-warmth firms, t(11) 5 1.35, p 5 .20. Looking between conditions, no significant dif- ferences emerged for high- or low-warmth firms, F , 1.8, p . .19. Thus, the interaction term reaches sig- nificance, driven by the difference in prices in the CSI condition, with the means crossover: when high- warmth firms switch from CSI to CSR, their purchase price decreased (Δ 5 .11), while low-warmth firm’s price increased (Δ 5 .08). Taken together, these re- sults suggest that low-warmth firms closed the gap as they changed strategies from CSI to CSR, while high- warmth firms surprisingly saw a decrease in terms of pricing (between conditions), providing indirect support for Hypothesis 5.

To test Hypothesis 6, a two (Condition: CSI or CSI) by two (Order: Pricing first, Feedback first) repeated measures ANOVA was run on Purchase Price in the Sweden, Germany, Portugal, and Pakistan country of origin conditions.21 The three-way interaction was significant, F(3, 153) 5 2.61, p 5 .05, hp

2 5 .05. Probing this interaction further within Order condi- tions, when purchase price was determined after the feedback task, a significant interaction emerged be- tween CSR/CSI and country of origin, F(3, 69) 5 3.45, p 5 .03, hp

2 5 .13.22 In the CSI condition, a paired samples t test indicated that Sweden (M 5 0.43, SD 5 0.25) had a significantly higher price than Germany (M 5 0.25, SD 5 0.12), t(12) 5 2.69, p 5 .02, d 5 0.94, 95% CI [0.83, 0.99]; likewise, Sweden had a higher price than Pakistan (M 5 0.31, SD 5 0.17), t(12) 5 2.70,

p 5 .02, d 5 0.58, 95% CI [0.47, 0.65]. No significant effects were observed between any other conditions, ts , 1.87, ps . .15. In the CSR condition, no signifi- cant differences in purchase price emerged, all ts , 1.55, ps . .14, providing no evidence to support Hypothesis 6b. The finding that our high-warmth, high-competence country of origin (Sweden) was able to maintain a higher purchase price than the two low- warmth countries while acting irresponsibly provides some support to Hypothesis 6a.

Discussion

Study 3 replicates and adds nuance to effects ob- served in Studies 1 and 2. When it came to helping behaviors, participants in the CSR condition wrote longer explanations regarding how organizations could improve their product offering, further sug- gesting that people are more willing to help organi- zations that engage in CSR (see also Burbano, 2016). Although we observed this helping behavior as a main effect, the country of origin manipulation highlighted how CSR and CSI can interact to produce different types of behavior within subjects. Specifi- cally, after playing with pen prototypes and in- advertently receiving information on the country of origin, this new piece of information affected the quality assessments of the pens and pricing. That is, low-warmth firms made significant gains in their perceived quality after switching from a CSI to CSR strategy, while high-warmth firms did not see such gains. Likewise, low-warmth firms have purchase prices on a par with high-warmth firms when engaging in CSR, but not CSI. This suggests that low- warmth firms may receive a higher payoff from en- gaging in a CSR strategy relative to high-warmth firms, consistent with Hypothesis 5.

Likewise, we observed purchasing behavior con- tingent on CSI, CSR, and country of origin. In the CSI condition, Swedish pens were priced higher than Pakistani and German pens (low-warmth countries), which were statistically comparable to Portuguese pens (high-warmth–low-competence country), sug- gesting that both high warmth and competence may be necessary to buffer negative effects of CSI for purchasing behavior, in line with Hypothesis 6a. This effect emerges only after participants had spent a good portion of the experiment carefully evaluating the product and not as spontaneously as we observed in previous studies. This could be due to our more subtle manipulation of country of origin, which may not have been very apparent while making pric- ing decisions immediately. When pricing decisions

20 When participants completed the pricing task first, participants had higher purchase prices, F(1, 28) 5 3.74, p 5 .06, hp

2 5 .117, for high-warmth firms (M 5 0.37, SD 5 0.20) than low-warmth firms (M 5 0.31, SD 5 0.20).

21 Including all social responsibility conditions, a mar- ginally significant interaction effect between Order and country of origin emerged, F(3, 234) 5 2.56, p 5 .08, hp

2 5 .028.

22 Including control, F(6, 114) 5 1.99, p 5 .07, hp 2 5 .095.

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were made first, participants priced and evaluated pens from high-warmth firms above those of low- warmth firms (see note 20), suggesting that move- ment between high- and low-warmth firms after careful evaluation of the pens is meaningful. These behavioral outcomes add robustness to our percep- tual results of Studies 1 and 2.

We note that some of our results in this study provide mixed evidence for our hypotheses. One reason for these results may be due to the subtlety of our manipulations; while Studies 1 and 2 explicitly manipulated social responsibility, Study 3 used a subtler approach by embedding this information into a broader information set about the organizations. The control condition contained neutral information about social practices in order to match the amount of information given in the CSR and CSI conditions. In this situation, it is perhaps easy for participants to “fill in the blanks” with their lay theories of organi- zations, which could have led to the mixed results. Likewise, many of the measures in Study 3 involved more costly behaviors to participants (e.g., spending increased time helping, giving up bonus pay), which provide more conservative tests of hypotheses, in addition to the fact that we tested our hypotheses using within-subject analyses. Given that this was an initial study about the microfoundations of social responsibility and irresponsibility, we have repli- cated and extended previous research looking at corporate reputations and pricing using discrete be- haviors. Although the results are not entirely con- sistent, our aim was to present the data based on a priori hypothesizing. We find that people help or- ganizations that are socially responsible, but their financial behavior has more nuances.

GENERAL DISCUSSION

Microfoundational thinking can help us do better and more practically important research by forcing us to look across levels of analysis (Devinney, 2013). Our research seeks to achieve this by studying how CSR relates to the two fundamental dimensions of social perception—warmth and competence—and how these microfoundations of CSR mediate and moderate its effects on specific outcomes. We propose and test the idea that the evaluation of a corporate strategy (i.e., CSR/CSI) is contingent on the context in which it is enacted. Our findings advance the understanding of how CSR and CSI operate across different levels of analysis—from individual perceptions to organiza- tional outcomes—and how a variety of stakeholders

perceive the organization and its CSR. Obviously, fu- ture research can examine various boundary condi- tions across levels of analysis—for example, individual preferences (Carnahan, Kryscynski, & Olson, 2017), morality(Goodwin,2015),orideology(Briscoe,Chin,& Hambrick, 2014; Hafenbrädl & Waeger, 2016)—but the theory and empirics presented in our study provide a solidbaseforfurtherstudyingmicrofoundationsofCSR (and CSI).

Importantly for the area of CSR, in order to estab- lish causality and ensure rigorous multidisciplinary multilevel research, we conducted three experi- ments. We found that, when it comes to CSR, warmth is of particular importance (see Table 4 for a sum- mary of our results): CSR connotes warmth, and warmth perceptions mediate CSR effects on specific outcomes (such as reputation, purchase intentions, perceived quality, and helping behaviors). In addi- tion, by exploiting variation in country-level warmth and competence as alternative sources of social perceptions of organizations, we also found that warmth moderates the effects of CSR and CSI on these outcomes. Thus, regardless of CSR strategy (i.e., CSR or CSI), low-warmth firms tend to be better off than high-warmth firms with regard to CSR/CSI effects on various outcomes. In particular, low- warmth and low-competence firms that engage in CSR are not consistent with their stereotype, and, as a result, they get higher relative gains for engaging in CSR (in terms of purchase intentions and evaluations of firm reputation and product quality) than do high- competence firms. On the other hand, due to their consistency with the stereotype, low-warmth firms are not punished as harshly for CSI behavior as high-warmth firms. These findings demonstrate the importance of social judgment and underlying di- mensions of social perception for CSR/CSI effects on various outcomes, including behavioral outcomes, such as helping behavior and purchase prices.

Although we found mixed support for some of our hypotheses, the effects were most consistent when firms exhibited negative behaviors (CSI) and when country of origins were low in warmth. This is in line with extensive research in psychology about the existence of a general negativity bias in information processing (e.g., Cacioppo & Gardner, 1999; Taylor, 1991). Through this bias, individuals perceive neg- ative information as more diagnostic (Herr, Kardes, & Kim, 1991; Skowronski & Carlston, 1987) and in- fluential (Ito, Larsen, Smith, & Cacioppo, 1998) than positive information. This tendency leads individuals to weigh negative information more heavily when forming evaluative judgments

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(Baumeister, Bratslavsky, Finkenauer, & Vohs, 2001; Rozin & Royzman, 2001; Skowronski & Carlston, 1989). When firms behave badly, or come from less stereotypically privileged places, they gain our in- creased attention.

These negativity findings add to the burgeoning literature contrasting the dimension of moral char- acter in people against the dimension of warmth (Goodwin, 2015; Goodwin et al., 2014). Previous re- search has found that warmth and moral character predict unique variance in judgments regarding good intentions and good relations, respectively (see Goodwin, 2015, for a summary). In post-hoc ana- lyses, we found no differences in warmth items re- lating to higher or lower morality in CSR or control conditions, but a few differences when firms en- gaged in CSI. Specifically, warmth items connoting higher morality (e.g., good natured, tolerant) were rated lower than items of warmth connoting lower morality (e.g., warm, sociable) in CSI conditions. This suggests that CSR is a more multifaceted warmth strategy (e.g., morality and cooperation), while CSI carries higher judgments of morality.

Theoretical Implications

The most important theoretical contribution of this paper is outlining and understanding the microfoundations of CSR—a notorious “black box” in CSR research (Morgeson et al., 2013). As Devinney (2013: 84) noted:

Microfoundations can bea key platform in moving the management field forward. It opens up the possibili- ties of bridging the macro–micro divide that pervades management research by serving as a conceptual fo- rum to debate whether it is possible for us [to] come up with a more unified and parsimonious characteriza- tion of our field.

By developing a deeper insight on the cognitive and motivational conditions that lead stakeholders to evaluate firms’ social activities differently (Wang et al., 2016), the present study helps tease out the conditions under which the link between CSR and different outcomes could be weaker or stronger (i.e., moderators), as well as demonstrate the un- derlying mechanisms linking CSR with outcomes (i.e., mediators). We show that, first of all, CSR

TABLE 4 Summary of Experimental Design and Support for Our Hypotheses

H # Design:

Experiment 1 Experiment 2 Experiment 3

3 (CSR, CSI, Control) between subjects

3 (CSR, CSI, Control) 3 2 (Warmth: high, low) 3 2 (Competence: high, low)

between subjects

3 (CSR, CSI, Control) 3 2 (Order: Pricing First, Feedback First) between

by 2 (Warmth: high, low) 3 2 (Competence: high, low) within

subjects

1 Support? Yes Yes Yes DV: (incl. proxies for warmth)

Warmth Reputation Purchase Intentions

Reputation Purchase Intentions

Warmthc

# of Words

2 Support? Yes NA Yes DV: Competence Competencec

3 Support? Yesa NAb NAb

DV: Reputation Purchase Intentions

4 Support? NA Yes No DV: Reputation

Purchase Intentions 5 Support? NA No Yes

DV: Willingness to Pay Perceived Quality

6 Support? NA Mixed Mixed DV: H6a: No support

H6b: Reputation, Purchase Intention H6a: Purchase Price

H6b: Perceived Quality

Notes: H 5 hypothesis. DV 5 for dependent variable, NA 5 not applicable. a Sequential mediation. b In Studies 2 and 3, we manipulated warmth and thus did not run mediational analyses. c Manipulation checks.

2019 1631Shea and Hawn

increases our warmth perception of the firm, and, second, increased warmth perception from other sources than CSR yields lower rewards for CSR and higher penalties for CSI, yet this effect can sometimes be rendered if the firm is also perceived to be high in competence.

Another important contribution stems from uncovering the underlying processes and conditions that help explain the causal linkages between CSR and specific outcomes at the individual level of analysis—a significant knowledge gap in this area of research (Aguinis & Glavas, 2012). We contribute to this limited but growing literature by going beyond existing theoretical frameworks, including organi- zational justice, social influence, needs, and self- determination theories, and introducing the concepts of warmth and competence from the social psychology literature. These concepts help un- derstand the underlying mechanisms of value crea- tion from CSR activity and the factors that affect individual perceptions of CSR, another significant gap in our knowledge (Morgeson et al., 2013). Ad- ditionally, varying the dimensions of warmth and competence by using other sources (i.e., home country of the firm) produces discrete interactions that explicate the link between corporate strategy, cognitions, and behaviors toward the firm (Fiske et al., 2002), offering multilevel mechanisms. To social evaluators, CSR represents warmth and, as a result, competence (due to halo effects and other mechanisms); moreover, due to the primacy of warmth in social judgment, all effects of CSR on outcomes are mediated by warmth perceptions. This means that, at least for outcomes that involve immediate first-time evaluations, CSR as a high- warmth strategy can be helpful. Nonetheless, even for these outcomes, firms may be judged on warmth and/or competence from other sources: thus, CSR can be viewed as a potential supplement for low- warmth (and low-competence) firms—an important strategic tool, as discussed below.

Another crucial implication of this study lies in separating the effects and determining the micro- foundations of CSR and CSI. Previous research mainly focuses on CSR or, in rare cases, CSI, while we provide a more grounded understanding of both types of activities, and, thus, help explain how so- cial perception of such activity is formed and how it may affect different organizations in different ways. Our results suggest that CSR and CSI have strong links to warmth, which, as seen in Experiment 3, is an important mechanism as it motivates helping behaviors (Cuddy et al., 2007). Moreover, CSI may

have unique links to competence and morality, where we highlight a negative bias in the attention focused on negative acts (CSI) and actors (low warmth, particularly low morality dimensions of warmth).

We make contributions to the social cognition and strategy literatures by building a cross- disciplinary bridge between corporate strategy and the SCM: to our knowledge, this is one of the first studies to suggest such a link (in comparison, Aaker et al., 2010, showed a link between the type of the organization—for-profit or not—and warmth/ competence perceptions). Our two constructs of interest—CSR/CSI and social perception—have originated in organizational science and social psychology, respectively. Cross-fertilization be- tween these micro–macro disciplines can add micro-level mechanisms to macro-level effects, and, likewise, macro-level processes (such as per- ception of the country of origin) can shape the cog- nition of individual actors. We confirm that social perception matters with regard to CSR strategy, es- pecially judgments about perceived warmth. Our effect sizes pertaining to warmth are consistently large (Cohen’s d greater than 0.8), which has been shown to reliably translate into field data (Mitchell, 2012). Moreover, engaging in high-warmth strate- gies, such as CSR, leads to better outcomes, in terms of perceived reputation and purchase intentions/ behaviors, especially for firms lacking warmth in the first place. These findings contribute to the burgeoning literature on the anthropomorphizing of organizations that suggests firms have individual- level characteristics (King et al., 2010). In partic- ular, we argue and demonstrate that firms, like individuals, can be subject to stereotypes.

Finally, our research is also important to the international management literature. By drawing from the SCM to explain how firms from different countries are perceived, based on warmth and com- petence stereotypes of their countries of origin, we add another dimension to country distance (as per- ceived by social evaluators) and discuss a potential strategy with which to deal with such perceptions. Thus, firms from low-warmth countries may find it helpful to engage in CSR if their managers have the necessary resources and aim for higher rewards than their competitors from high-warmth countries. Ironically, if low-warmth firms lack these resources, it will not hurt them as much to engage in CSI as it would firms from high-warmth countries. This asymmetry of benefits and costs of CSR/CSI behavior is important to understand and explain, not only to

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academics seeking to find a uniformly positive link between CSR and various outcomes but also to managers.

Practical Implications

It is no secret that managers should be and are aware of their CSR choices, as institutional (Lim & Tsutsui, 2012; Marquis & Qian, 2013) and stake- holder pressures for CSR are ever increasing (Kassinis & Vafeas, 2006; Surroca et al., 2013). However, they have limited resources to respond to such pressures (Delmas & Toffel, 2008; Durand, Hawn, & Ioannou, 2019; Weaver, Trevino, & Cochran, 1999), and understanding how CSR and CSI choices will be perceived is important in their decision-making. Thanks to the use of experiments in our study, we are able to make more candid recommendations to managers. We find that CSR connotes warmth and therefore might be helpful in times of crisis, as a risk-management strategy (Godfrey, 2005), or at the time of the first interaction with the firm when the other party has no prior in- formation about the organization (e.g., start-ups or new multinationals from emerging markets; Hawn, 2016). In addition, if the firm is perceived to be low in warmth, CSR may help boost its perceived com- petence, whereas CSI may not hurt the firm as much as if it was perceived to be high in warmth. We be- lieve the awareness that firms are evaluated on warmth–competence dimensions for other firm attributes—beyond their CSR/CSI behavior (e.g., country of origin)—can help managers make more thoughtful decisions, allocating those scarce resources.

Methodological Contribution

By conducting laboratory studies, we answer the call for more experimental work that makes the kind of contribution to management scholarship that Academy of Management Journal values (Morrison, 2010). Notwithstanding their limitations, experi- ments have the important advantage of controlling for extraneous factors that would be difficult to isolate in a field setting (Schilke, 2018). Impor- tantly, by incorporating experimental techniques into CSR research, our study helps establish causality—the gold standard of science and the key element in providing reliable managerial recom- mendations. Moreover, by using different dependent variables from different disciplines (i.e., behavioral outcomes as well as subjective evaluations), the

three experiments in this study promote multidis- ciplinary research and show that the experimental manipulation can successfully induce CSR and CSI, and, in turn, different levels of warmth and com- petence. Finally, by connecting the country of ori- gin of the firm, its corporate strategy, and individual perceptions, this multilevel study answers the call for more micro–macro research to build theoretical and empirical bridges across levels and, thus, ad- vance management as a field (Hitt, Beamish, Jackson, & Mathieu, 2007). This narrowing of the micro–macro gap highlights the importance of context (Bamberger, 2008).

Limitations and Directions for Future Research

There are several limitations in this study that we hope will provide direction for future research. First, even though the choice of our method (i.e., controlled experiments) is one of strengths of our study, it has some weaknesses that may offer several future re- search avenues. These could include using other sce- narios (e.g., firms in other industries, engaging inCSR/ CSI behavior outside of overseas manufacturing), other social evaluators (e.g., external or internal stakeholders with a direct interest/stake in the com- pany), other CSR/CSI activities (e.g., internal and ex- ternal actions; Farooq et al., 2017; Hawn & Ioannou, 2016), other outcomes (e.g., regulatory approval, analyst ratings, employee satisfaction), and other methods. For additional suggestions, see Clarkson (1995). One context that might be useful for testing our ideas at the organizational level is among multina- tionals that transfer socially irresponsible practices to their subsidiaries (Surroca et al., 2013) or highly diversified firms that (given current levels of out- sourcing) can no longer ascertain whether all of their suppliersare socially responsible (Kim & Davis,2016).

Second, by examining individual judgments and perceptions, we build a more general theory in this paper. We acknowledge, however, that, even though social judgment by all stakeholders matters for the ultimate success of the firm, some stakeholders may have more say (Harrison & Freeman, 1999; Mitchell, Agle, & Wood, 1997), particularly for firm perfor- mance (Berman et al., 1999; Schuler & Cording, 2006). Thus, future research could examine how particular/different stakeholder judgments can in- fluence CSR/CSI outcomes.

Third,byusingactualcountriesversusmanipulated facts (e.g., “this country is friendly”), we made a trade- off between experimental precision and ecological validity. The limited choice of countries in our second

2019 1633Shea and Hawn

and third studies could be expanded to include more countriesalongthewarmth–competencecontinuums. In addition, given that firms cannot control their ori- gin, examining other firm-level and country-level at- tributes (e.g., size, status) that could moderate the effect of warmth and/or competence is warranted. We hope that, by collecting “real-world” data, future research could also examine whether warmth– competence perceptions of countries affect country- level social evaluations, such as ratings on the Cor- ruption Perception Index (published by Transparency International) or Bloomberg’s Most Innovative Coun- tries list, among others. Obviously, since first-time judgments are crucial to regulatory approval in in- ternational expansion of firms, another intriguing area of research includes testing the ideas presented in this paper in a large-scale quantitative study (e.g., in the context of cross-border mergers and acquisitions).

Fourth, our study was tested in technology and manufacturing industries. Thus, another research opportunity lies in adding industry stereotypes to the existing study: this kind of information (e.g., “dirty” vs. “clean” industry) canprovide additionalinsight on the process of generating social perception. Impor- tantly,ourstudyprovidesabasisfortestingtheseideas in other industry settings with longitudinal or exper- imental data. We note that this and additional social and historical information (Love & Kraatz, 2017) on organizations that is available to stakeholders in practice may moderate the magnitude of our findings.

Finally, the issue of decoupling (Crilly, Zollo, & Hansen, 2012; Weaver etal., 1999) by design could not have been sufficiently addressed in this study: future research could look into the social perception or potentially even a stereotype that “green-washing” firms generate in the minds of various stakeholders. Based on our study, we would predict that such be- havior would almost certainly generate the percep- tion of CSI; however, the mechanisms by which this happens and the dynamics by which stakeholders receive information about a firm’s symbolic and substantive CSR actions require further attention. In addition, future research would benefit from disen- tangling the effects of the various CSR actions on social perception as well as various outcomes: while some activities (e.g., philanthropy) may generate the perception of warmth, others may relate to compe- tence more directly (e.g., cutting waste).

CONCLUSION

This cross-disciplinary research (spanning manage- ment, strategy, marketing, psychology, international

management, and organizational behavior disciplines) shows that social perception serves an important role in organizational life, as it affects not only perceptions of but also behaviors toward the firm. By introducing the concepts of warmth and competence from the so- cial psychology literature to the management area of CSR, this study extends the boundaries of existing re- search to develop the microfoundations of corporate strategy and our understanding of the differential ef- fects of certain activities on organizational outcomes. These findings create broad implications for CSR, in- ternational business, and management scholarship by highlighting the critical importance of social percep- tion of the firm based on several of its attributes. Our hope is that this study will spark interest in comparing thedifferential impactsofsocialperceptionofdifferent practices on distinct performance outcomes as well as move the CSR field forward by addressing knowledge gaps regarding the underlying processes and mecha- nisms at multiple levels of analysis.

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Catherine Shea ([email protected]) is an assistant professor of organizational behavior at the Tepper School of Business, Carnegie Mellon University. She earned her PhD from Duke University. Her research interests include social perception, motivation, and social networks.

Olga Hawn ([email protected]) is an assistant professor of strategy and entrepreneurship, faculty director of the Center for Sustainable Enterprise, and Sustainability Dis- tinguished Fellow at the Kenan–Flagler Business School, University of North Carolina at Chapel Hill. She earned her PhD from Duke University. Her research interests include corporate social responsibility, sustainability strategy, and international business.

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APPENDIX A

VIGNETTES FOR STUDIES 1 AND 2

CSR VIGNETTE

Most people associate Company X with calculators and computers. Little known, however, is that Company X is a pioneer in its active role as a corporate champion of fair overseas manufacturing practices. Unlike most of its major competitors, Company X has taken an active stand against the “sweatshop” conditions that often prevail in the over- seas, third-world facilities where most of its calculators are manufactured. Company X is one of the few major elec- tronics companies to adopt the Business for Social Re- sponsibility guidelines for manufacturing practices in the overseas operations of major companies, and has allocated significant human or financial resources to monitor and enforce these guidelines in its own overseas calculator- manufacturing operations. Company X is also far ahead of its competitors in providing its overseas factory workers with compensation packages (including health, retirement, and educational benefits) that are well above the “basic needs”- based recommendations of the International Labor Organi- zation. Moreover, Company X makes every effort to ensure that no underage children are employed in its overseas fa- cilities.Thus,itisnotsurprisingthat,unlikesomeofitsmajor competitors, Company X is prominently present on the 2012 Trendsetters List (compiled by the human rights group Witness)—an exclusive list of manufacturers who have been exemplaryininstitutinghumaneworkingconditionsintheir overseas facilities. In sum, Company X has always been a believer and supporter of fair overseas manufacturing prac- tices, and its values come through amply in its grassroots support as well as its corporate championship of this issue.

CSI VIGNETTE

Most people associate Company X with calculators and computers. Little known, however, is that Company X is a laggard in ensuring fair overseas manufacturing practices. Unlike most of its major competitors, Company X has never taken a stand against the “sweatshop” conditions that often prevail in the overseas, third-world facilities where most of its calculators are manufactured. Company X is one of the few major electronics companies that have yet to adopt the Business for Social Responsibility guidelines for manufacturing practices in the overseas operations of major companies, and has allocated no human or financial re- sources to monitor and enforce these guidelines in its own overseas calculator-manufacturing operations. Company X is also far behind its competitors in providing its overseas factory workers with compensation packages (including health, retirement, and educational benefits) that are in line with the “basic needs”-based recommendations of the International Labor Organization. Moreover, Company X

makes no efforts to ensure that underage children are not employed in its overseas facilities. Thus, it is not surprising that, unlike some of its major competitors, Company X is prominently absent from the 2012 Trendsetters List (com- piled by the human rights group Witness)—an exclusive list of manufacturers who have been truly exemplary in in- stituting humane working conditions in their overseas fa- cilities. In sum, Company X has never been a believer and supporter of fair overseas manufacturing practices, and its values come through amply in its lack of both grassroots support and corporate championship of this issue.

CONTROL VIGNETTE

Company X produces calculators and computers. It is an established electronics company in the world. It un- dertakes manufacturing at various locations in the world, and hires employees from multiple countries.

APPENDIX B

MATERIALS FOR STUDY 3

In this study, you will be evaluating new products that are on or about to be on the market for purchase. This study will proceed as follows. First, we will provide some in- formation about the pens. Second, you will be asked for your opinions of various business decisions and product testing. We will put up a picture of each pen for you to evaluate. Some pens you will see in the pictures will be a different color, but the logos and styles will be the same.

Manufacturing organizations introduce new products in a series of steps. Depending on the size and complexity of the product they are creating, new models or lines of products are introduced every two years (for small prod- ucts, such as pens) to every 10 years (for large products, such as cars). These four pen brands were selected due to the similarity in the organizations that produce them.

Specifically:

• These pens are brand new prototypes/models for the producing organizations. These products are in “Stage 1” of their development and get revised as they are tested and sold in the marketplace.

• They use similar technology for their logos; namely, they use stickers as well as directly embedding the logo onto the pen. This gives flexibility to customers or third parties who would like to customize. These pens have stickers; other models may not.

• These organizations bring their products to mar- ket in the United States, among other countries.

On the next page, you will receive detailed information on these organizations. Please familiarize yourself with this information in order to develop a better understanding of the organizations.

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TABLE B1 CSR Condition

Bem Brand Bikhayr Brand Geldbube Brand Boter Brand

Manufacturing Plant

20,000 ft2 15,000 ft2 17,500 ft2 21,000 ft2

17 production lines 12 production lines 14 production lines 17 production lines Employee

Demographics 1,200 full-time employees 1,370 full-time employees 1,000 full-time employees 1,100 full-time employees City population of 250,000 City population of 175,000 City population of 215,000 City population of 205,000 45% female 42% female 52% female 48% female

Financial Performance

Profitable for 7 years Profitable for 12 years Profitable for 6 years Profitable for 9 years 13% profit margins 9% profit margins 11% profit margins 10% profit margins

Environmental Impact

Top 5% of environmentally friendly organizations in region; donates to environmental charities

Notable cleanup in local rivers; cleanup not related to manufacturing processes, but to benefit local communities

Cleaned up community around facility; facility 100% green

On list of top environmental performers in plastics industry

Employment Conditions

Rated as a top employer in the region with exemplar worker benefits; perfect safety record

Invests heavily in worker benefits, including paid maternity leave, education funding, and generous health coverage

Rated as top employer in the region; cited in media for its worker benefits

Top 10% of employers in region; “Best Employer” award winner

Year of Founding

2001 1997 2005 1999

TABLE B2 CSI Condition

Bem Brand Bikhayr Brand Geldbube Brand Boter Brand

Manufacturing Plant

20,000 ft2 15,000 ft2 17,500 ft2 21,000 ft2

17 production lines 12 production lines 14 production lines 17 production lines Employee

Demographics 1,200 full-time employees 1,370 full-time employees 1,000 full-time employees 1,100 full-time employees City population of 250,000 City population of 175,000 City population of 215,000 City population of 205,000 45% female 42% female 52% female 48% female

Financial Performance

Profitable for 7 years Profitable for 12 years Profitable for 6 years Profitable for 9 years 13% profit margins 9% profit margins 11% profit margins 10% profit margins

Environmental Impact

Top 5% of polluting organizations in region; pending financial penalties in litigation

Notable chemical spill in river adjacent to facility; cleanup responsibilities disputed

Toxic plastic by-product left upon ending lease at former manufacturing plant

On watch list for waste disposal and pollution violations due to plastic processing

Employment Conditions

Lagging behind comparable employers in terms of employee work conditions and safety; 54 accidents in 2014

Litigation by employees citing long-term health issues due to workplace conditions

Bare minimum compliance with national standards; multiple health and safety issues

Bottom 10% of employers in the region

Year of Founding

2001 1997 2005 1999

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TABLE B3 Control Condition

Bem Brand Bikhayr Brand Geldbube Brand Boter Brand

Manufacturing Plant 20,000 ft2 15,000 ft2 17,500 ft2 21,000 ft2

17 production lines 12 production lines 14 production lines 17 production lines Employee

Demographics 1,200 full-time

employees 1,370 full-time employees 1,000 full-time

employees 1,100 full-time employees

City population of 250,000

City population of 175,000

City population of 215,000

City population of 205,000

45% female 42% female 52% female 48% female Financial Performance Profitable for 7 years Profitable for 12 years Profitable for 6 years Profitable for 9 years

13% profit margins 9% profit margins 11% profit margins 10% profit margins Environmental Impact Never been fined No penalties, obeying

laws Compliant with laws No incidents, average

Employment Conditions

Compliant Meets standards No issues, strikes Average

Year of Founding 2001 1997 2005 1999

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