Can Doing Good Be Bad for Business?

Doing good isn’t always good for business, according to research from Assistant Professor Carlos Torelli. His discovery found corporate social responsibility (CSR) efforts have the potential to backfire for luxury brands associated with a self-enhancement concept.

“When people see brands advertised, they implicitly bring to mind abstract meanings. With BMW, for example, people think status and self-enhancement,” says Torelli, author of Doing Poorly by Doing Good: Corporate Social Responsibility and Brand Concepts. “When all of a sudden people see a message that communicates pro-social things about BMW, they feel a disconnect – there’s a sense of discomfort trying to put these two things together.”

According to Torelli and co-authors Alokparna Basu Monga (University of South Carolina) and Andrew M. Kaikati (University of Georgia), this motivational conflict is triggered by the simultaneous activation of self-enhancement and self-transcendence values and an accompanying subjective experience of disfluency (something does not feel right).

In their studies, the researchers identified familiar luxury brands such as Rolex and BMW and presented participants with information suggesting that these brands were also pro-social brands engaged in CSR. Subjects were then asked to evaluate the messages compared to a control condition where the brand only communicated what it typically does – self-enhancement and status appeal.

“What we found is that people evaluated the brands more negatively when they were communicated with a pro-social agenda compared to the control condition. Interestingly enough, brands that were not luxury in terms of their self-enhancing nature didn’t have this effect,” says Torelli.

While the study suggests CSR presents a danger to luxury brands, Torelli’s research found it is possible to counter the subjective experience of disfluency.

“If you’re a luxury brand and you’re trying to communicate your pro-social actions, you have to put people in a mindset to think carefully about the message and to be prepared to reconcile the information. If you communicate that, you don’t get the negative reaction,” he says.

For use in a television commercial, Torelli suggested this could be achieved by prior presentation of exemplars that counter the subjective experience of disfluency, such as reminding viewers of well-known philanthropists. The introduction of a sub-brand could also serve to discount it by signaling to consumers that a brand is engaging in inconsistent actions.