How does corporate hypocrisy undermine corporate reputation? The roles of corporate trust, affective commitment and CSR perception
| Date | 05 June 2024 |
| Pages | 654-667 |
| DOI | https://doi.org/10.1108/JPBM-07-2023-4605 |
| Published date | 05 June 2024 |
| Author | Luri Lee,Won-Moo Hur |
How does corporate hypocrisy undermine
corporate reputation? The roles of corporate
trust, affective commitment and CSR perception
Luri Lee
Division of International Trade, Incheon National University, Incheon, Republic of Korea, and
Won-Moo Hur
College of Business Administration, Inha University, Incheon, Republic of Korea
Abstract
Purpose –Corporate hypocrisy occurs when a discrepancy exists between corporate talk and actions. As companies assume more extensive
economic, societal and global roles, they are more likely to encounter situations in which their words and actions are inconsistent. Therefore, a
company’s ability to cope with such situations is becoming increasingly important. This study aims to examine the negative effects of corporate
hypocrisy on corporate reputation. First, it reveals the underlying mechanisms by presenting corporate trust and affective commitment as parallel
mediators. Additionally, it explores how corporate social responsibility (CSR) perceptions mitigate the indirect effects of corporate hypocrisy.
Design/methodology/approach –Data were collected through an online survey conducted at two time points in the context of Korean retail
banking companies. A total of 313 respondents participated in a two-wave online survey using a multistage sampling technique to ensure a
representative population sample. This study used the Mplus-based Hayes’PROCESS Macro to test the research hypotheses.
Findings –The results show that corporate hypocrisy negatively affects corporate reputation by impedingcustomers’corporate trust and affective
commitment. These negative indirect effects are mitigated when customers’perceptions of CSR are high.
Originality/value –By establishing a parallel moderated mediation model that captures the impact of corporate hypocrisy. To the best ofthe
authors’knowledge, this study presents important academic and managerial implications that have not been provided in the literature.
Keywords Corporate hypocrisy, Corporate reputation, Corporate trust, Affective commitment, CSR perception, Commitment-trust theory,
Moral licensing theory, Moderated mediation model, Corporate banking brand
Paper type Research paper
1. Introduction
The importance of corporate brands and corporate marketing
hasbeenontherise(
Laforet, 2015;Yakimova et al.,2017). The
emphasis on corporate brand-level issues comes from the belief in
the effectiveness of building a strong corporate brand to benefit
all products and services of a corporation (Brexendorfand Keller,
2017) by gaining support from different stakeholders (Hatch and
Schultz, 2003). Corporate branding has provided companies
with a wide range of marketing opportunities (Brexendorf and
Keller, 2017), and many scholars have begun studying its
effectiveness (Balmer, 2017;Fisher-Buttinger and Vallaster,
2011;Muzellec and Lambkin,2009).
One primary stream of literature oncorporate branding
explores the impact of corporate misbehavior, such as
hypocrisy, on corporate reputation (Fetscherin and Usunier,
2012). This emerging research streamfocuses on external
responses to corporate brands in the market (Fetscherin and
Usunier, 2012). As a major outcome of brand-building work
(Veloutsou, 2022), brand reputationis built based on the total
knowledge customers gain about a brand (Highhouse et al.,
2009;Veloutsou and Delgado-Ballester,2018). It is enhanced
or undermined whenever customers recognize new brand-
related information (Veloutsou, 2023). Considering that
customers tend to quickly accuse brands of misbehavior
(Guèvremont, 2019), corporatehypocrisy may quickly damage
the reputation of a corporatebrand.
Corporate hypocrisy occurs when corporate talks and actions
are considered discrepant or inconsistent (Jung et al.,2021;Wei
and Jung, 2022). Companies are increasingly facing situations in
which corporate hypocrisy is likely to occur. With the increase in
globalization over the past few decades, national regulations have
been limited; instead, companies play more extensive rolesas
global, societal and economic actors (Jauernig and Valentinov,
2019). Such multiple roles may sometimes elicit conflict and
seem inconsistent, leading to a perception of corporatehypocrisy
among customers (Christensen et al.,2020). Furthermore,
corporate hypocrisy tends to be criticized more than an obvious
lie because it is believed to be misleading (Jordan et al., 2017).
Thus, corporate hypocrisy may be considered one of the most
challenging issues in brand management.
The current issue and full text archiveof this journal is available on Emerald
Insight at: https://www.emerald.com/insight/1061-0421.htm
Journal of Product & Brand Management
33/6 (2024) 654–667
© Emerald Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-07-2023-4605]
Received 12 July 2023
Revised 7 February 2024
3 May 2024
Accepted 3 May 2024
654
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