Be bad but (still) look good: Can controversial industries enhance corporate reputation through CSR initiatives?.

Abstract

Even though the link between perceived corporate social responsibility fit (PCSR-fit) and corporatereputation has received much attention from scholars, this tradition has ignored that the underpin-nings of this association vary depending on the particular characteristics of each industry understudy. To delve into this matter, we investigate in the increasingly relevant context of controversialindustries (CIs) how PCSR-fit could enhance corporate reputation and which are the mediatingmechanisms of this association. Our academic contribution is twofold. First, we find that contro-versial sectors indeed can increase corporate reputation through CSR activities. However, we findthat to achieve this goal, the nature of PCSR-fit should be different than what extant literatureindicates, because companies in these settings should directly focus on avoiding or reducing theirinherent controversial harm or impact. Second, we evidence that “CSR initiatives’ legitimacy” and“situational skepticism” mediate the PCSR-fit and corporate reputation relationship in CIs. There-fore, we further unravel the underpinnings of this association to advance what we know on thematter and aid practitioners in this particular context.