Tag Archives: #MGMTResearch

Can Corporate Social Responsibility save firms from negative customer feedback?

New research by Birkbeck’s Dr Benedetta Crisafulli and co-authors Dr Paolo Antonetti and Professor Stan Maklan adds insight to the relationship between company failure, CSR and customer response.

Picture the scene: you’re at a restaurant and your order is taking longer than expected to arrive. The waiter has been steadfastly ignoring your gaze since you sat down and when you finally do manage to flag him down, he is rude and unapologetic.

How would you respond?

Anger, frustration and a desire to tell your friends never to dine in that restaurant are all common responses. At the same time, you might feel a desire for reconciliation – to receive an apology and be offered a discount on your bill.

Would your reaction be different if you knew the restaurant was committed to Corporate Social Responsibility (CSR)? Would the fact that the restaurant is a morally responsible business excuse them from your harshest criticism?

This is the question that researchers from Birkbeck’s Department of Management, NEOMA Business School and Cranfield University sought to answer in their latest study on the relationship between company failures, CSR and consumer response.

CSR and consumer behaviour: what we know so far

Prior research suggests that CSR acts as a reservoir of goodwill that companies can draw on following a crisis. If we believe that a company is caring and well-intentioned, we are more willing to give it the benefit of the doubt in the event of a brand failure such as poor product performance.

However, existing evidence from research is less clear on whether CSR does indeed mitigate the negative impact of failed service delivery.

How does CSR impact consumer reactions to failed service delivery?

The results from an online experiment showed that the nature of the failed service is key in determining consumer response:

  • when competence-based, CSR is an effective service recovery strategy
  • when integrity-based, CSR is unable to inoculate the negative effect of poor service performance

In the case of a competence failure, a company’s CSR generated impressions of warmth , which softened the negative impact of the failure.

In the case of an integrity failure, the service failure contradicted the impression of warmth conveyed by CSR; as a result, CSR fails to save the company from consumers’ retaliation.

Does a consumer’s relationship with a company matter?

Of course, not all consumers are alike. The researchers found that the nature of the relationship between consumer and company has an impact on consumer response to CSR.

Consumers with high communal orientation, that is those who are concerned for others’ interests and benefits and value a company that is caring are less likely to feel betrayed by the company and CSR would reinforce the positive relationship. A less positive effect would be felt for consumers with an exchange orientation, who are concerned about individual gains from the relationship.

What does this mean for managers?

For managers looking to mitigate the impact of service failures, it is essential to monitor the types of service failures in their organisation to assess the likely impact of CSR initiatives.

When it comes to communicating CSR activities, firms are advised to focus on communicating the altruistic objectives of their CSR initiatives.

In the event of a competence failure, CSR can buffer negative effects, Explanations and apologies should focus on reassuring customers that the company did not intentionally cause the failure.

It would also be helpful for companies to capture consumers’ level of communal orientation as part of their market research and to target CSR messaging to the segments aspiring to a communal relationship.

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Why are social networking sites so reluctant to ban hateful users?

The right to free speech is not an excuse for turning a blind eye to online aggression.

Picture of Donald Trump giving a speech

Social networking sites have been both the heroes and villains of the COVID-19 pandemic, connecting loved ones across Tiers and time zones while simultaneously providing a safe haven for fake news and hate speech.

This latter is perhaps best illustrated by none other than the former President of the United States, Donald Trump, whose tweets following the presidential election have been widely condemned for inciting the January Capitol riot, which led to the deaths of five people.

While Trump is the most eminent figure to have been banned by the social media giant, he is by no means the first. In November 2018, the Canadian journalist Meghan Murphy was banned permanently from Twitter for hateful speech towards transgender people. Murphy’s response was to launch a legal dispute contesting her right to free speech.

When right-wing commentator Katie Hopkins suffered a similar fate in June 2020, BBC News drew comparisons between Hopkins and Trump, but commented that ‘leaving such tweets up in the public interest is an exception Twitter makes for world leaders – other accounts like Ms Hopkins’ risk being suspended when they break Twitter’s rules.’

Is the right to free speech, even if it constitutes hateful abuse, really in the public interest? And, if so, will it always take a riot to prompt social media giants to act?

Social media – a censorship free zone?

We have no problem identifying aggression or unacceptable conduct in real life. When it comes to social networking sites, however, the boundaries seem more blurred.

A lack of clarity and universality when it comes to bans is certainly not helping, as more than 70% of Americans, and more than 80% of Republican-leaning voters, believe that social networking sites intentionally censure opinions they do not agree with. Even scholars in Law and Ethics disagree on what constitutes harmful speech and whether such forms of speech should be restricted.

When Meghan Murphy accused Twitter of stifling her right to free speech, she tapped into the heart of the issue that is tying Twitter’s hands. Does permanently removing an individual from a social media platform stifle necessary debate? In the interests of avoiding a repeat of Capitol Hill, it is essential that we clarify the boundaries between free speech and hate speech and/or the processes necessary to define acceptable speech.

Consensus and consistency

One concern for social networking sites is the public backlash they might receive for ‘no-platforming’ controversial speakers. In the first study to model the factors that influence the acceptance of restrictions on free speech by social media sites, we find that users closely scrutinize how social networking sites handle controversies arising from political debates. Findings from our research show that observers of online aggression make trade-offs between free speech and the desire to punish aggression. Our findings show that, while observers of social media interactions dislike aggression and are willing to see it punished, the rhetoric of free speech is systematically employed to justify aggression that come from the observer’s own political side. In other words, free speech concerns are leveraged to foster partisan interests. .

The importance of preserving public trust means that social media sites should evaluate each banning case cautiously. In circumstances where banning an individual is inevitable because of high levels of online aggression, it is essential that the sites justify their decision to observing users and explain why the ban should not be interpreted as a limitation to users’ right to free speech.

The controversy that currently surrounds social media bans highlights the need for wider and more transparent discussions on what kind of speech should be restricted on social media, especially when it comes to political debates. Embedding rules against online aggression into public policy, rather than relying on the discretion of tech giants, would be one way to ensure a consistent approach to banning decisions. A clear policy, with buy-in from users, could prevent scepticism around bans that emerges from inconsistently and unfounded application of censorship.

We have seen the deadly consequences that can result from online aggression. Policy makers must exercise their power to make sure there are no safe spaces for hate speech.

Professor Paolo Antonetti, Professor in Marketing at NEOMA Business School and Dr Benedetta Crisafulli, Senior Lecturer in Birkbeck’s Department of Management are co-authors of the paper “I will defend your right to free speech, provided I agree with you”: How social media  users react (or not) to online out-group aggression recently published by Psychology & Marketing.

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The surprising impact of innovation on reducing climate change

New research by the Department of Management’s Dr Fred A. Yamoah and colleagues explores the relationship between innovation input, governance and carbon dioxide emissions.

Picture of a wind farm

There is no doubt that the humanitarian and economic impact of climate change is a matter for global concern. However, prior research tells us that it is emerging and developing economies that are likely to be hit hardest by the impact of global warming.

In their 2019 report, the Intergovernmental Panel on Climate Change (IPCC) found that emerging and developing economies, with their heavy reliance on agriculture, forestry and tourism, were more at risk from the adverse impact of climate change than more developed economies. Indeed, the IPCC found that every one-degree centigrade increase in temperature would lead to a 1.3% drop in economic growth in an emerging economy.

What role does innovation play in the fight against climate change?

Typically, the fate of countries in this position has been viewed somewhat fatalistically, with little known about what can be done to mitigate the damage caused by the poor climate choices of more developed countries. However, since innovative technologies are known to have a positive impact on climate change factors by conserving energy and reducing emissions, we wanted to know whether increased innovation input could support developing economies in the fight against climate change.

Our study involved an analysis of data from the World Bank database on 29 emerging countries over the period from 1990 to 2018. My colleagues Godfred Adjapong Afrifa, Gloria Appiah (both Kent Business School), Ishmael Tingbani (Bournemouth University) and I examined whether investment in cutting-edge technologies could help address climate change problems in emerging economies, and how this relationship is supported or mitigated by governance factors.

The impact of governance

Why is it important to consider governance alongside innovation and climate change? First of all, it is good for business: stakeholder theory tells us that organisations that please their stakeholders by following ethical norms of fairness, trustworthiness and respect are likely to see improved overall performance in the long term.

When it comes to climate change targets, governments and international governing bodies such as the EU or ECOWAS are among the most critical stakeholders, as they are more likely to take a long term view and possess the necessary regulatory powers to ensure best practices are upheld.

How innovation benefits emerging economies

The introduction of innovative technologies and practices can benefit emerging economies in a number of ways. For farmers, genetic technologies can develop resilient crops that adapt to environmental challenges in agriculture. New technologies also typically conserve energy and reduce harmful fuel emissions.

Looking at the data, our results suggest that emerging countries with high innovative competencies reduce climate change problems by approximately 26.8%, with a 10% increase in cutting-edge technology.

While these findings show the dramatic impact of innovation on mitigating the negative effects climate change, it is important to note that the positive results were moderated by governance factors, as the quality of governance influences countries’ investment in innovative technologies towards curbing environmental damage.

Contrary to the typically deterministic view of climate change, our results suggest that emerging economies’ innovation efforts could have a significant impact on national and global success in the fight against climate change.

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COVID-19 induced travel restrictions are not enough to mitigate crises like climate change. Could a circular economy be the answer?

Research by the Department of Management’s Dr Fred Yamoah and colleagues points to a new way to rebuild the global economy in the wake of the coronavirus pandemic.

Image of a reuse logo

There is no doubt that COVID-19 is first and foremost a human tragedy, resulting in a massive health crisis and huge economic loss.

While the impact on life as we know it has been unthinkable, a side effect of the way of life forced upon us by the pandemic is an unprecedented reduction in global carbon dioxide emissions, which are projected to decline by 8%. If achieved, this will be the most substantial reduction ever recorded, six times larger than the milestone reached during the 2009 financial crisis.

However, these changes should not be misconstrued as a climate triumph. They are not due to the right decisions from governments, but to a temporary status of lockdown that will not linger on forever; economies will need to rebuild, so we can expect a surge in emissions in the future. Indeed, the relatively modest reduction in emissions prompted by the COVID-19 pandemic has proven that zero-emissions cannot be attained based on reduced travel alone; structural changes in the economy will be needed to meet this target.

The case for a circular economy

Before coronavirus prompted this dramatic shift in our way of life, it seemed that the world had been waking up to the need for change to protect our environment. The linear model of our industrial economy – taking resources, making products from them and disposing of the product at the end of its life – jeopardizes the limits of our planet’s resource supply. Girling (2011) found that around 90% of the raw materials used in manufacturing become waste before the final product leaves the production plant, while 80% of products manufactured are disposed of within the first six months of their life. Similarly, Hoornweg and Bhada-Tata (2012) reported that around 1.3 billion tonnes of solid waste is generated by cities across the globe, which may grow to 2.2. billion tonnes by 2025.

Against this backdrop, the search for an industrial economic model that satisfies the multiple roles of decoupling economic growth from resource consumption, waste management and wealth creation, has heightened interests in concepts about circular economy.

What is circular economy?

Circular economy emphasises environmentally conscious manufacturing and product recovery, the avoidance of unintended ecological degradation and a shift in focus to a ‘cradle-to-cradle’ life cycle for products.

In our current situation, there has never been a better time to consider how the principles of circular economy could be translated into reality when the global economy begins to recover. Strategies to combat climate change could include:

  • material recirculation (more high-value recycling, less primary material production)
  • product material efficiency (improved production process, reuse of components and designing products with fewer materials)
  • circular business models (higher utilisation and longer lifetime of products through design for durability and disassembly, utilisation of long-lasting materials, improved maintenance and remanufacturing).

Building back better

A circular economy could also act as a vehicle for crafting more resilient economies. The pandemic has forced a rethink of the way our global economy operates, revealing the inability of the dominant economic model to respond to unplanned shocks and crises. The lockdown and border restrictions have reduced employment and heightened the risk of food insecurity for millions.

To prevent a repeat of the events of 2020, it is necessary to devise long-term risk-mitigation and sustainable fiscal thinking, moving away from the current focus on profits and disproportionate economic growth. Circular economy concerns optimised cycles: products are designed for longevity and optimised for a cycle of reuse that renders them easier to handle and transform. Future innovations under this model would focus on the general well-being of the populace, alongside boosting the market and competitiveness.

This economic model would also support the achievement of social inclusion objectives, for example by redistributing surplus food from the consumer goods supply chain to the local community.

The benefits of a circular economy are therefore obvious in that it strives for three wins in terms of social, environmental and economic impact. The pandemic has instigated a focus on the importance of local manufacturing for a resilient economy; fostered behavioural change in consumers; triggered the need for diversification and circularity of supply chains and evinced the power of public policy for tackling urgent socio-economic crises.

Governments are recognising the need for national-level circular economy policies in many aspects, such as:

  • reducing over-reliance on other manufacturing countries for essential goods
  • intensive research into bio-based materials for the development of biodegradable products
  • legal frameworks for local, regional and national authorities to promote green logistics and waste management regulations which incentivise local production and manufacturing
  • development of compact smart cities for effective mobility.

Post COVID-19 investments needed to accelerate towards more resilient, low carbon and circular economies should be integrated into the stimulus packages for economic recovery being promised by governments, since the shortcomings in the dominant linear economic model are now recognised and the gaps to be closed are known. The question is no longer should we build back better, but how.

This blog was adapted from T. Ibn-Mohammed, K.B. Mustapha, J. Godsell, Z. Adamu, K.A. Babatunde, D.D. Akintade, A. Acquaye, H. Fujii, M.M. Ndiaye, F.A. Yamoah, S.C.L. Koh, ‘A critical analysis of the impacts of COVID-19 on the global economy and ecosystems and opportunities for circular economy strategies’ in Resources, Conservation and Recycling, 164. Available at: https://doi.org/10.1016/j.resconrec.2020.105169

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