'Halo effect' can distort consumer view of CSR

A company acting responsibly in one part of its business is likely be regarded by consumers as doing so in other connected areas - even if it isn't.

Researchers at the Insead international business school have found a 'halo effect' at work which means that members of the public are inclined to believe, without any real evidence, that a business's CSR activities in one domain means it is behaving responsibly in other similar areas.

Their study, Consumer perceptions of corporate social responsibility: the CSR halo effect, concludes that consumers may make assumptions about a company's corporate responsibility performance 'on the basis of very limited information'.

In a controlled experiment, Insead researchers briefed 165 undergraduates at a large French university about a fictitious manufacturer of printers and printer cartridges modelled on Hewlett-Packard.

Some participants were given a description of a corporate responsibility project undertaken by the company, while others were given no such information.

When they were all asked 20 questions about the company's social responsibility, researchers found those exposed to details of a CSR programme in a certain area - either community, environment, customers or work-life balance - were significantly more likely to credit the business with behaving responsibly in other ways in that area than those without any information.

For example, undergraduates who were informed about the company's recycling programme credited the business with working on the eco-friendly production of its goods.

The researchers conclude that the findings 'are clearly supportive of a 'halo effect' and that 'consumer awareness of one set of company corporate responsibility actions will influence their perceptions of company CSR performance in other areas in the same domain about which they have little or no information'.

However, they found the halo effect worked only within domains, so that participants told of a community project were likely to assume only that the company was also conducting other community activities, and not to assume that its responsible policies extended to the environment, work-life balance or to customers.

Marc Hunter, adjunct professor at Insead, said the findings were potentially disturbing, as they show companies, if they so desire, can easily influence consumers into thinking they are doing more than they are.

'What the study suggests is that a well-targeted corporate responsibility communication can be used to manipulate opinion far more than I ever expected,' he said. 'That scares the hell out of me.'
 
The researchers also express concerns that unscrupulous companies could 'attempt to use the CSR halo effect to manipulate consumer perceptions of corporate responsibility performance.'