More from these Authors

• Working Paper | HBS Working Paper Series | 2019

  How Transparency into Internal and External Responsibility Initiatives Influences Consumer Choice: Evidence from the Field and Lab

  Ryan W. Buell and Basak Kalkanci

  Amid growing calls for transparency and social and environmental responsibility, companies are employing different strategies to improve consumer perceptions of their brands. Some pursue internal initiatives that reduce their negative social or environmental impacts through responsible operations practices (such as paying a living wage to workers or engaging in environmentally sustainable manufacturing). Others pursue external responsibility initiatives (such as philanthropy or cause-related marketing). Through three experiments, conducted in the field and lab, we compare how transparency into these internal and external initiatives affects customer perceptions and sales, and explore the psychological processes linking transparency to sales. The results provide converging evidence that transparency into a company’s internal responsibility practices can be at least as motivating of consumer sales as transparency into its external responsibility initiatives, incrementally increasing a consumer’s probability of purchase by 13.6% and 45.8% across our two field experiments, conducted in social and environmental domains, respectively. We further investigate the perceptual effects of transparency into internal and external responsibility initiatives and find that the underlying psychological mechanisms linking both types of transparency to consumer purchase intentions are highly consistent. Transparency into internal and external initiatives increases perceived altruism, cause sincerity, corporate ability, trust, favorability, and consumers’ beliefs that the company is an attractive employer, which in turn drives sales. Taken together, our results suggest that it may be in the interest of both business and society for managers to prioritize internal responsible operations initiatives, to achieve both top and bottom line benefits, while mitigating social and environmental harms.

  Keywords: Sustainable Operations; corporate social responsibility; operational transparency; Corporate Social Responsibility and Impact; Environmental Sustainability; Consumer Behavior; Perception;

  Citation:

  Buell, Ryan W., and Basak Kalkanci. "How Transparency into Internal and External Responsibility Initiatives Influences Consumer Choice: Evidence from the Field and Lab." Harvard Business School Working Paper, No. 19-115, May 2019.  View Details

  CiteView DetailsSSRN Read Now

  Related

• Case | HBS Case Collection | April 2019

  GE Appliances: Implementing Haier’s Made-In-China Management System

  Dennis Campbell, Marshall Meyer, Bonnie Yining Cao and Dawn H. Lau

  Keywords: Business or Company Management; Growth and Development Strategy; Manufacturing Industry; Retail Industry; Consumer Products Industry; China; United States;

  Citation:

  Campbell, Dennis, Marshall Meyer, Bonnie Yining Cao, and Dawn H. Lau. "GE Appliances: Implementing Haier’s Made-In-China Management System." Harvard Business School Case 119-099, April 2019.  View Details

  CiteView DetailsEducators

  Related

• Case | HBS Case Collection | October 2017 (Revised April 2019)

  Eastern Bank: Innovating Through Eastern Labs

  Karen Mills, Dennis Campbell and Aaron Mukerjee

  Eastern Bank is a 200-year-old New England mutual bank with a community focus. Eastern specializes in small business lending, having made strategic investments to become the top SBA lender in New England in the midst of the Great Recession, when other banks were pulling back. But with technology threatening to disrupt Eastern’s relationship banking model, CEO Bob Rivers is getting worried. Looking to spur innovation at the bank, he set up meetings at MIT to talk with “fintech” entrepreneurs. In a deliberate quest for innovation talent, Rivers finds his way to Dan O'Malley, co-founder of the payments division at Capital One and, most recently, CEO of a failed online bank. O'Malley agrees to join the bank as Chief Digital Officer, leading product development, customer support, and “Eastern Labs”—a new office enclosed by glass walls and located in the middle of Eastern's main lobby. Rivers provides Labs with $4 million annually—1% of gross revenues—to develop new banking technologies, and promises to help O’Malley spin out his own company if he develops product that can be monetized. O’Malley conducts tests in insurance cross-selling and small business lending, eventually launching a completely automated small business lending product. Rivers keeps the promise by helping O'Malley spin out a bank technology company called Numerated, and secures a 25% equity share for Eastern. But by the time of the spin out, Rivers is reassessing the success of the effort. Did Rivers have the right intrapreneurship model? Did he change the culture at Eastern? Did he make a mistake spinning off Numerated into a separate company? What lessons can he learn for “Labs 2.0”?

  Keywords: Banks and Banking; Technological Innovation; Entrepreneurship; Management;

  Citation:

  Mills, Karen, Dennis Campbell, and Aaron Mukerjee. "Eastern Bank: Innovating Through Eastern Labs." Harvard Business School Case 318-068, October 2017. (Revised April 2019.)  View Details

  CiteView DetailsEducatorsPurchase

  Related