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Blinds up or down? The influence of transparency, future orientation, and CSR on

sustainable and responsible behavior

Purpose: One of the critical goals of this research is to explore how and when a business’

transparency leads to greater willingness to engage in sustainable and responsible

consumption by consumers.

Design/methodology/approach: Data were collected in two studies. Study 1 collected data

from 219 consumers in a large shopping mall. Study 2 followed an experimental approach

and employed data from 327 participants.

Findings: The current research contributes to theory by hypothesizing and demonstrating

when transparency is associated with higher willingness for sustainable and responsible

consumption. Critically, the positive benefits of transparency vary according to a business’

future orientation, corporate social responsibility, and levels of customer involvement. An

important societal and practical implication of the current research is that business should not

be expected to focus on transparency in isolation but rather also needs to consider levels of

perceived future orientation, corporate social responsibility, and levels of customer

involvement to strengthen sustainable and responsible behavior effectively.

Originality/value: This research builds on and extends current knowledge by exploring the

key role of business’ transparency in influencing sustainable and responsible customer

behavior and examines critical boundary conditions for the observed effects.

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Blinds up or down? The influence of transparency, future orientation, and CSR on

sustainable and responsible behavior

The vast amount of products and services available to people today presents a

paradoxical situation. On the one hand, customers and other stakeholders may want to engage

in sustainable and responsible consumption, whilst on the other hand, the abundance of

product offerings and information available often overwhelms them, thus making marketing

communications appear more opaque and confusing. As a result, customers may give up,

become cynical and reject calls for more responsible consumption behaviors altogether.

Given this context, calls have intensified for greater business transparency, to help people

make sense of the available information and focus on what matters most. However, it is

unclear what business transparency entails, and to what extent transparency leads to enhanced

customer willingness to engage in sustainable and responsible consumption, if at all. In the

context of company-customer relationships, this study explores the critical boundary

conditions of the effects of transparency on sustainable and responsible consumption. An

important finding of our research is that the positive benefits of business transparency vary

according to a business’ future orientation, corporate social responsibility, and levels of

customer involvement. The findings offer important implications for theory and practice, and

facilitate avenues for further research.

Keywords: sustainable, responsible, consumption, transparency, future orientation, corporate

social responsibility

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Introduction

“If people are good only because they fear punishment, and hope for reward, then we are a

sorry lot indeed.” (Albert Einstein)

Often people want to do what is right, but feel lost because there is simply too much

information to process. Information proliferation is a modern phenomenon that presents

customers with a paradoxical situation (Chernev et al., 2015). On the one hand, people need

and want more information to scrutinize and evaluate the business with which they interact to

facilitate sustainable and responsible consumption (Davies and Gutsche, 2016); for example

to ensure that a purchase decision is informed by its long-term consequences for the natural

and social environment (Epstein, 2008; das Neves and Vaccaro, 2013; Trifts and Häubl, 2003;

Stewart, 2009; Wilkin, 2009). On the other hand, facing overwhelming amounts of

information, customers spend considerable time and energy assessing and filtering accurate

information, and ultimately may become more confused (Broniarczyk and Griffin, 2014).

Worse still, customers may become cynical and less willing to consider sustainable and

responsible consumption behaviors altogether (Brei and Tadajewski, 2015; Epstein, 2008).

The information overload effect is a well-documented phenomenon, where an

excessive amount of information negatively impacts decision making (e.g., Jacoby et al.,

1974; Van Herpen and Pieters, 2002). Due to cognitive limitations, people confronted with

information overload may be unable to process all relevant information, and end up making

less informed and less responsible consumption decisions (Lee and Lee, 2004; Lurie, 2004).

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Business can avoid the negative effects of information overload by employing transparency

initiatives designed to help customers find accurate, helpful and valuable information quickly,

and to establish trust, so that customers feel no need to carry out convoluted and extensive

information-search processes.

In this research, we define business transparency as the offering of critical

information about the pros and cons of a business’ products/services that is easily accessible

to and easily understood by customers. Our definition of business transparency is in line with

the literature (Liu et al., 2015). Consistent with the seminal work by Epstein (2008) and

Follows and Jobber (2000), we define sustainable and responsible consumption behavior as

customers’ willingness to consider the long-term consequences and the impact of their

consumption on society, as well as their consideration for ethical issues when making a

consumption decision. Thus, such transparency policies include offering unbiased

information, disclosing customer reviews, using easily-understood language, and providing

accessible information (e.g., Bohner et al., 2003; Crowley and Hoyer, 1994; Kamins and

Assael, 1987; Pechmann, 1992).

These initiatives may have several beneficial outcomes for business and customers

alike. More specifically, such transparency policies may have a positive effect on customers’

willingness to engage in more sustainable and responsible consumption. First, customers may

interpret transparency efforts as a signal of the firm’s general good intentions and goodwill,

which may be rewarded with greater customer trust in the firm (Eisingerich and Bell, 2008).

Second, customers who think a business is withholding information about something often

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tend to infer a lower value for that attribute or issue, and evaluate the firm less favorably than

if it had provided the focal information (DeKinder and Kohli, 2008). Third, the provision of

accessible and objective information acts as a cue that the business has nothing to hide and

that its objectives are aligned with those of customers (Hennig-Thurau et al., 2010; Liu et al.,

2015). As a consequence, customers are more likely to see the organization as credible,

honest and trustworthy (Kamins and Assael, 1987), they may be less inclined to search for

and process additional information, and may undergo a simpler decision-making process (e.g.,

Auh et al., 2007; Eisingerich and Bell, 2008; Trifts and Häubl, 2003).

Importantly, because transparent businesses act as good role models for customers,

they may reciprocate and their willingness to engage in sustainable and responsible

consumption may go up. The good deeds of companies, for instance, have been shown to

encourage pro-social behavior by customers (Chatzidakis et al., 2016; Romani and Grappi,

2014). Furthermore, prior work suggests that consumers’ conservation behavior is

significantly affected by the extent to which consumers perceive the firm as being visbily

green (Wang et al., 2017). However, it remains unclear whether greater transparency by

business might enhance customers’ sustainable and responsible consumption or reduce it.

As prior work shows, sharing negative information might have a negative effect on

customers’ attitudes toward a particular business or business in general (Pechmann, 1992)

and reduce willingness to engage in responsible behavior (Epstein, 2008). That said,

trustworthiness may also be enhanced if a business is seen as sharing a weakness early on;

especially when customers are becoming aware of it (e.g., by third parties such as media,

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NGOs, etc.) (Crowley and Hoyer, 1994; Eisend, 2007; Etgar and Goodwin, 1982; Kamins

and Assael, 1987). In order to better understand what drives customers’ willingness to

engage in sustainable and responsible consumption, some critical questions remain to be

addressed. This research contributes to the extant body of literature on sustainable and

responsible consumption (e.g., Davies and Gutsche, 2016; Follows and Jobber, 2000;

Hildebrand and Bhattacharya, 2011) and extends current knowledge in important ways by

addressing the following questions.

First, how can sustainable and responsible consumption be facilitated? We address

this question by examining the extent to which business transparency plays a role in

enhancing sustainable and responsible consumption. Second, are there any boundary

conditions to the impact of transparency? More specifically, what are some of the key factors

that influence the effectiveness of business transparency in strengthening sustainable and

responsible consumption? We address these critical questions by theorizing and empirically

testing how transparency interacts with other relevant constructs, such as a business’

corporate social responsibility and future orientation. Thus, we explore what boundary

conditions may affect the impact of transparency. Third and finally, we examine how

customer involvement affects the effectiveness of business transparency in enhancing

customer willingness to engage in sustainable and responsible consumption given a business’

corporate social responsibility and future orientation.

In the next sections we review extant research, elaborate on the transparency construct,

discuss a set of key boundary conditions affecting the outcomes of transparency, and offer

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formal hypotheses accordingly. We then provide two studies (one field study and one lab

experiment) that test the proposed hypotheses, discuss implications for theory and practice, as

well as explore avenues for future research.

Conceptual background and hypotheses

Conceptual model

Our model (depicted in Figure 1) examines the relationship between business

transparency and customer willingness to engage in sustainable and responsible consumption.

Furthermore, we test the two-way interaction effect between transparency and future

orientation as well as transparency and corporate social responsibility. It also explores a

three-way interaction effect, whereby levels of customer involvement affect the interaction

between transparency, future orientation, corporate social responsibility and customers’

sustainable and responsible consumption. We explain our rationale below.

“Insert Figure 1 About Here”

Theoretical background

Given dramatic population growth in parts of the world (The Economist, 2015),

reported wastage of resources such as food and resources (Financial Times, 2016; Wagner et

al., 2012), and socially irresponsible behaviors by business and customers alike (Epstein,

2008; Davies and Gutsche, 2016), the call for more sustainable and responsible consumption

has become louder and more urgent (Burke et al., 2014; Simpson and Radford, 2014). While

previous work shed light on a number of important issues related to sustainable and

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responsible consumption (see Davies and Gutsche, 2016 for a recent review), important

questions remain about some of the key drivers that influence customers’ pro-social behavior

(Chatzidakis et al., 2016) and willingness to engage in such sustainable and responsible

consumption (Abosag et al., 2016).

Furthermore, one wonders what some of the boundary conditions are that influence

the effectiveness of various responsible consumption drivers (Abosag and Farah, 2014; Brei

and Tadajewski, 2015; Burke et al., 2014). One key concern has been customers’ frustration

with information available about business and in particular the availability of clear and

simple information that can be used to inform sustainable and responsible consumption

(Simintiras et al., 2015). Often too much or too little information exists. As a result,

customers are left in the dark as to what constitutes or how they might go about sustainable

and responsible consumption.

As information sharing has become increasingly more important, research has

examined it in several different contexts, such as in academia (Haeussler, 2011, Haeussler et

al., 2014), in the provision of nutritional information by companies to customers (Li et al.,

2000; Howlett et al., 2009), in firm and market-related information exchanges by sellers and

buyers in B2B and B2C (Cannon and Perreault Jr, 1999; DeKinder and Kohli, 2008; Hung

and Wong, 2009), in organizational information-sharing among managers, employees and

other stakeholders (O’Toole and Bennis, 2009), and even in the context of costs (e.g.,

Simintiras et al., 2015), and negative information disclosure (Kamins and Assael, 1987).

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Researchers have called upon the transparency concept in organizational-stakeholder

relationships and suggested that transparency helps to create, maintain, and re-establish trust

(e.g. Bennis et al., 2008). Transparency has been examined across different academic

disciplines (Schnackenberg and Tomlinson, 2016). Finance and accounting has examined

transparency to a great extent in the context of financial markets, corporate disclosures, and

monetary policy decision making (e.g. Bushman et al., 2004; Madhavan et al., 2005). The

organizational literature has studied transparency in the context of leadership and

organizational culture building (e.g. Clair et al., 2005; Fombrun and Rindova, 2000; Pirson

and Malhotra, 2011).

The innovation management literature has examined transparency in the context of

openness or scientific disclosure in innovation activities (Laursen and Salter, 2014; Henkel et

al., 2014; Simeth and Raffo, 2013). Social psychologists have explored transparency in the

context of negotiations (e.g. Garcia, 2002; Vorauer and Claude, 1998; Vorauer and Ross,

1999). In the information systems literature, researchers have explored transparency in the

context of business to consumer relationships and digital markets (e.g. Granados et al., 2010).

In the marketing field, relevant concepts have been examined too, such as information

disclosure in the context of customers’ responses to nutritional information and drug risk

information (Cox et al., 2010; Howlett et al., 2009). Liu et al. (2015) examined the concept

of transparency in the context of services.

The construct of business transparency

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There are several definitions of transparency, as researchers from different fields have

focused on different aspects of transparency. However, there are also some similarities

among the definitions that have been provided. First, transparency is about disclosing

information to another party. Researchers have adopted the concept of transparency to

capture the degree of information flow within a business (Lin et al., 2017; O’Toole and

Bennis, 2009) and between firms and customers (Liu et al., 2015). Second, transparency

entails information that is shared voluntarily and intentionally. Third, transparency is based

on high-quality information. Forth, transparency is a perception, as it rests on the receiver’s

perceived quality of the shared information.

Several researchers have argued that similar concepts are pivotal to transparency. For

example, they agree that transparency is a multidimensional construct. A close examination

of the various conceptualizations of transparency reveals that information accessibility and

objectivity are two particularly important dimensions of firm transparency directed at

customers (Liu et al., 2015).

Accessibility. Different terms have been used to describe the fundamental aspects of

transparency. Disclosure and availability, for example, are frequently used to describe a key

characteristic of transparency (Bushman et al., 2004; Granados et al., 2010; McGaughey,

2002). Clarity, simplicity and understandability have also been used to capture a key property

of transparency (Briscoe and Murphy, 2012; McGaughey, 2002; Street and Meister, 2004).

For information to be transparent, it should have the characteristic of being both reachable

and easily understood (i.e., accessible). Specifically, to be transparent, firms should share

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information that is clear and easily understood. Our conceptualization of transparency is

consistent with this view. Too much (Ziamou and Ratneshwar, 2002) or too complex

information (Cox and Cox, 1988; Lowrey, 1998) increases consumer uncertainty and may

cause undesirable responses. At the same time, accessibility is only one important component

of transparency.

Objectivity. To be transparent, firms should disseminate relevant and valid

information that embodies truth, honesty, frankness, candor, and that is shared “without guile

or concealment” (Bennis et al., 2008; O’Toole and Bennis, 2009). As information sharing

websites and social media proliferate, transparent firms should for example enable customers

to access third-party information (e.g., online consumer reviews). That is, we highlight the

importance of information not only being ‘easily understood’ by customers but also enabling

customers to make informed decisions (e.g., being in a position to evaluate the pros and cons

of business offerings more confidently). Because some reviews may be posted by businesses

themselves (rather than customers), we posit that objectivity goes a step further and includes

a business openly comparing the pros and cons of its products/service offerings with that of

competitor offerings. Thus, business transparency is not about feeding customers with over-

simplified information but rather allowing customers to access critical information that

empowers them to make informed decisions in the marketplace.

Business transparency and customer sustainable, responsible consumption

Signaling theory has been employed to explain how transparency benefits business

(Liu et al., 2015). In a market characterized by information asymmetries, one exchange

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partner communicates unobservable elements (e.g., intentions, ability, skill level, quality,

performance, etc.) by providing an observable signal (Erdem and Swait, 1998; Kirmani and

Rao, 2000; Rao et al., 1999), including for example advertising campaigns and use of

warranties, and deployment of brands (Erdem and Swait, 1998; Fischer et al., 2010; Kirmani

and Rao, 2000).

Transparency may also serve as a powerful signal. It communicates a firm’s

confidence in its own products, because a firm that has something to hide has less motivation

to be transparent (Doorey, 2011). And because the business signals that it has nothing to hide,

customers are more likely to find the information helpful in their decision making process.

Moreover, transparency enables customers to obtain valuable information (by directly

providing clear and relevant information, or by facilitating consumer access to information

from third parties), thus reducing customers’ perceived risk of dissatisfaction with a purchase,

strengthening customers’ trust in the expected performance of an exchange partner or product,

and simplifying the decision-making process (Lin, 2007).

Furthermore, customers interpret the extra effort undertaken by a transparent

company as a signal that the firm has customers’ interests at heart and that its objectives are

in line with those of its customers. Customers are well-known to value the extra effort made

by a company to help them in their decision-making process (Fritz et al., 2017; Park et al.,

2010; Pechmann, 1992; Trifts and Häubl, 2003). As customers see that a company’s interests

and perspectives are aligned with their own, they may begin to view the company as part of

their self (Aron et al., 1991; Park et al., 2016).

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In addition if a business acts itself responsibly (i.e., being transparent), customers may

be encouraged to act responsibly themselves (Romani and Grappi, 2014). Transparent

companies may also be recalled more easily by customers, since the provision of objective

information such as two-sided information motivates customers to attend and process the

information more deeply (Crowley and Hoyer, 1994). Taken together, we predict business

transparency to be positively associated with customer willingness to engage in sustainable

and responsible consumption. Therefore:

Hypothesis 1: Business transparency is positively associated with sustainable and

responsible consumption by customers.

The effect of business transparency interacts with future orientation and corporate social

responsibility

In this research, we consider willingness to engage in sustainable and responsible

consumption as the key outcome variable. In order to unpack the mechanisms behind

transparency and sustainable and responsible consumption, we explore the role of two

essential elements of strong customer relationships, namely a business’ future orientation and

corporate social responsibility (Davies and Gutsche, 2016; Follows and Jobber, 2000;

Hillebrand et al., 2011; Luo and Bhattacharya, 2006; Sen and Bhattacharya, 2001). This

impact of transparency, however, is likely to depend on the involvement, knowledge or key

existing associations that customers have with a firm. We therefore expect the return on

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transparency to be more pronounced in certain conditions than others. We detail our thinking

in the following paragraphs.

The moderating role of future orientation in the relationship between transparency and

customer sustainable and responsible consumption

Associations held in people’s memory reflect the perception of an organization

(Keller, 1993) and there is evidence which suggests that consumers are encouraged to act

responsibly when they observe a firm’s own efforts to help the environment or society (Wang

et al., 2017). Key associations that have been highlighted in the literature are (1) future

orientation or the extent to which a business is seen as caring about the future, taking a long-

term view, planning ahead, etc., (Hillebrand et al., 2011; Wallace et al., 2017) and (2)

corporate social responsibility or the degree to which a business cares about its customers,

tries to serve their needs, etc. (Berens et al., 2005; Brown and Dacin, 1997; Luo and

Bhattacharya, 2006; Sen and Bhattacharya, 2001).

We define future orientation as a company’s focus on fulfilling customers’ future

needs and attracting new customers. This definition is consistent with prior research

(Hillebrand et al., 2011). A business’ future orientation matters to customers (Grinstein, 2008;

Ren et al., 2016). First, customers will have greater certainty about the likely success of a

purchase experience when they purchase from a firm which they perceive to have stronger

future orientation, because they feel that the business takes the long-term, sustainable view

and is more likely to exist in the future as a result of it (Erdem and Swait, 1998; Simpson and

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Radford, 2014). Indeed, a future oriented business can be characterized as a sustainable

business that does not view profit as its sole motive (Simpson and Radford, 2014). Instead, it

shifts from a focus on immediate or short-term growth (the aim to grow big fast) towards a

longer-term view and continuous development (the aim to get better). As a result its corporate

image should be enhanced in the eyes of customers.

We use signaling theory to suggest that transparency has a strong, positive effect on

customers’ willingness to engage in sustainable and responsible consumption when the

business’ future orientation is seen as high rather than when it is low. Future orientation may

be perceived as an intuitive bond in light of the apparent investment that the firm has made to

stay with the customers and be there for them in the future (Kirmani and Rao, 2000). Thus,

one might argue that the future orientation of a firm could make the transparency signal

become even more credible. Specifically, when a firm is perceived to have future orientation,

customers may be more dependent on transparency to judge the company’s activities,

because the signals of transparency are more credible when they are “bonded” (Bell and

Eisingerich, 2007).

Moreover, there might be a halo effect in this case due to future orientation (Sohn and

Lariscy, 2014), i.e., future orientation could become a cognitive bias for a consumer’s overall

impression of a firm, influencing his or her thoughts about that firms’ character or attribution.

For example, the firm may be seen as more creative or innovative (Berthon et al., 2004) when

it is highly future oriented. Previous research has highlighted the relationship between future

orientation and business innovativeness on numerous occasions (Lafferty and Hult, 2001) and

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such innovative actions may result to a general opinion of a business. This is similar to

“evaluative consistency” inferences (Broniarczyk and Griffin, 2014) in a way that consumers

infer that a firm with a higher level of future orientation also has relatively positive intentions

of being transparent in most cases. That is, forward-looking businesses may be seen as having

good intentions and caring about customers and society and hence liked more and perceived

as good role models more generally (Hillebrand et al., 2011; Wallace et al., 2017). In

contrast, when customers view a firm as low in future orientation, they may be more likely to

be suspicious of the firm’s intention in general and the firm’s intention to be transparent more

specifically. Therefore, customers’ reliance on transparency will be higher for future oriented

firms, resulting in a greater impact of transparency on their willingness to engage in

sustainable and responsible consumption. Based on the above arguments, we propose the

following hypothesis:

Hypothesis 2: Business future orientation moderates the relationship between

transparency and sustainable and responsible consumption by customers, such that

transparency has a greater positive effect on sustainable and responsible consumption

for firms high (vs. low) in future orientation.

The moderating role of corporate social responsibility in the relationship between

transparency and customer sustainable and responsible consumption

Corporate social responsibility (CSR) reflects the status and the specific activities of

an organization regarding its perceived customer obligations (Brown and Dacin, 1997; Luo

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and Bhattacharya, 2006; Sen and Bhattacharya, 2001) and the extent to which it is seen as

caring about its customers. (Follows and Jobber, 2000). This view is consistent with prior

research (e.g., Brown and Dacin, 1997). To build positive corporate social responsibility,

firms have adopted strategies that focus on factors such as environmental friendliness,

commitment to diversity in hiring and promotion, community involvement, sponsorship of

cultural activities, and corporate philanthropy (Brown and Dacin, 1997; Sen and

Bhattacharya, 2001).

Although these corporate social responsibility policies may create a general context

for customers’ evaluations (Sen and Bhattacharya, 2001), and influence how customers think

about a firm, they sometimes offer little information that is directly related to the business

offering (Brown and Dacin, 1997; Eisingerich et al., 2011; Hildebrand et al., 2011). In

contrast to future orientation, corporate social responsibility may carry little or no

information about the likelihood of a positive purchase experience. That is, corporate social

responsibility reflects the organization’s commitment to social causes, and not necessarily to

an excellent product offering (Hildebrand et al., 2011; Powell, 2011). Since corporate

associations that are less product-relevant may have less influence on customers’ evaluations

than those that are more product-relevant (Brown and Dacin, 1997; Sen and Bhattacharya,

2001), social responsibility associations may not influence the impact of transparency on

customers.

Put differently, transparency operates to reduce uncertainty about product purchase

outcomes (i.e., an “informational” effect). Its effect might be independent of perceived social

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responsibility, since the latter carries little information that would reduce uncertainty about

the consumption experience. However, there is also a large body of literature which suggest

the strong positive impact corporate social responsibility has on customer trust, loyalty,

willingness to pay, and to engage with a business (e.g., Hildebrand et al., 2011; Luo and

Bhattacharya, 2006; Powell, 2011; Sen and Bhattacharya, 2001). The evidence based on prior

research therefore seems inconclusive. Thus, we offer two hypotheses. One indicates a

positive moderating effect of CSR on the relationship between transparency and customer

sustainable and responsible consumption. And a second hypothesis, which states that

transparency positively impacts sustainable and responsible consumption irrespective of the

levels of corporate social responsibility. Accordingly:

Hypothesis 3a: Transparency will be more positively associated with sustainable and

responsible consumption when a firm is high (vs. low) in corporate social

responsibility.

Hypothesis 3b: Transparency will be positively associated with sustainable and

responsible consumption irrespective of corporate social responsibility.

Three-way interaction: The moderating role of customer involvement in the relationships

between transparency, future orientation, and corporate social responsibility on sustainable

and responsible consumption

Customer involvement is defined as the extent to which consumers consider risk

importance, probability of purchase error, the product’s pleasure value, and the product’s sign

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or symbolic value, which has been shown to influence consumer decisions, including the way

information is processed (Laurent and Kapferer, 1985; Saqib et al., 2010). Our definition of

involvement is consistent with the literature (Laurent and Kapferer, 1985). Because

customers may arrive at different decisions in conditions exhibiting varying levels of

involvement (Merlo et al., 2014; Saqib et al., 2010; Walsh et al., 2008; Bian and Wang,

2015), the moderating roles of future orientation and social responsibility perceptions may be

influenced by how involved customers are in a particular purchase. Since perceived risk, the

product’s or service’s benefits value, etc. differ across contexts (e.g., the purchase of a coffee

drink is generally perceived as less risky than the purchase of a smartphone based on the

financial cost, the product’s sign or symbolic value involved, etc.), customers may engage in

different information searching and processing activities across high and low involvement

conditions (Walsh et al., 2008). High involvement can increase customers’ perceived

importance of gains and losses and enhance customers’ loss aversion (Bell and Eisingerich,

2007; Saqib et al., 2010). When customers are less involved, they are not as strongly

motivated to search and process additional data that would inform their purchase decision

(Berens et al., 2005; Walsh et al., 2008), and thus will be satisfied with and rely on easily

accessible information without additional information-search effort (Seifert et al., 2015).

Hyper-involved consumers have also been shown to act as potent influencers, shaping public

opinion online and offline (Eisingerich et al., 2010). Consequently, we predict that future

orientation and social responsibility associations are more likely to influence the relationship

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between transparency and sustainable and responsible consumption when customer

involvement is low rather than high. Stated formally, we hypothesize that:

Hypothesis 4: The moderating effect of future orientation on the relationship between

transparency and sustainable and responsible consumption is stronger when

involvement is low (rather than high).

Hypothesis 5: Social responsibility associations will moderate the relationship

between transparency and sustainable and responsible consumption when

involvement is low (rather than high).

It is interesting to note that compared with Hypothesis 3b, Hypotheses 5 states that

social responsibility moderates the transparency effect on sustainable and responsible

consumption only if we consider the condition of involvement. Briefly, our expectation is

that once customers start to be involved in searching for product information, they become

more aware of corporate social responsibility, since the improvement to the quality of life and

societal environment that result from businesses’ ethical commitment is an inevitable

consideration in today’s world. For example, a company with good CSR will spend time to

communicate with customers who care about negative public information before their trust is

destroyed (Lin et al., 2011).

Study 1

The aim of Study 1 is, firstly, to test the extent to which transparency impacts

sustainable and responsible consumption by consumers (Hypothesis 1). Secondly, Study 1

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tests the moderating effects of future orientation and corporate social responsibility on the

relationship between transparency and sustainable and responsible consumption (Hypotheses

2-3).

Method

Data collection. Over the course of four days in spring 2016 consumers were

approached outside a big shopping mall in an international city in Europe and invited to

participate and answer questions about the current maker of the smartphone they are using

(e.g., Apple, Samsung, LG, Sony, Huawei, Microsoft, Lenovo, etc.). Companies producing

smartphones were chosen as focal firms because a pretest (N = 88) showed that the majority

of consumers already possess a smartphone (>85%), use it frequently (>95% use it daily),

and a whopping 69% indicated that they “could not live without it”. They were informed that

their responses will be treated with strict confidentiality. Two hundred twenty three

participants took part in Study 1. Four participants stopped after a few questions and thus

their responses could not be included in the final dataset. Thus, two hundred nineteen

participants completed the questionnaire in Study 1. 54% of the final sample were female.

Measurement. All measures are adapted from published scales in the existing

literature, using “1” = “strongly disagree”, and “7” = “strongly agree” as anchors. Business

transparency was captured adapting four items from Liu et al.’s (2015) published

performance transparency scale (e.g., “Company X offers access to other customers’

comments or ratings of its products/services”, “Company X openly compares the pros and

cons of its products/services versus competitor offerings”, “Information provided by

22

Company X about its products/services is easily understood”, “Information about Company

X’s products/services is easily accessible”; α = .92).

We measured future orientation by adapting four items from Hillebrand et al.’s (2011)

future market focus scale (e.g., “Company X thinks about new products/services and products

that may fill customers’ future needs”, “Company X constantly thinks about new services and

products that may fill the needs of customers that will come up only a couple of years from

now”, “Company X thinks about attracting new customers”, “Company X considers how to

attract new customers with future needs”; α = .95).

Corporate social responsibility was measured by adapting three items from Brown

and Dacin’s (1997) published CSR scale (e.g., “Company X is a socially responsible

business”, “Company X contributes positively to society”, “Company X is more beneficial to

society’s welfare than other businesses”; α = .96).

We captured sustainable and responsible consumption by adapting four items from

Epstein (2008) and Follows and Jobber’s (2000) seminal work on sustainable and responsible

consumption (e.g., “I am willing to engage in sustainable and responsible consumption for

my next smartphone purchase”, “I am willing to consider the long-term consequences of my

next smartphone purchase for the natural or social environment”, “For my smartphone

purchase I am willing to consider the impact of my consumption on society”, “I have a strong

consideration for ethical consumption”; α = .89). All measured scales possessed high

Cronbach’s alphas (> .85).

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Finally, we captured customers’ attitude toward (“1” = “dislike/unfavorable”, “7” =

“like/favorable”; r = .88) and familiarity with (“1” = “not at all familiar/not very

knowledgeable”, “7” = “very familiar/very knowledgeable”) their smartphone company,

gender (“1” = “female”, “0” = “male”), and customer age (in years), as control measures.

“Insert Figure 2 and Figure 3 about here”

Results

To test Hypothesis 1 and Hypothesis 2, a regression analysis was performed on

willingness to engage in sustainable and responsible consumption with the independent

variables (1) transparency, (2) future orientation, and (3) their interaction (transparency ×

future orientation), and the controls. In support of Hypothesis 1, the results show a significant

positive effect of transparency on customers’ willingness to engage in sustainable and

responsible consumption (β = .36, t = 6.19, p < .001). Furthermore, we observed a significant

two-way interaction between transparency and future orientation (β = .30, t = 5.06, p < .001),

lending support to Hypothesis 2. The controls did not significantly impact sustainable and

responsible consumption (p = ns).

To further explore the nature of the interaction, we conducted slope test at different

levels of future orientation (see Figure 2). Specifically, we calculated the slope of

transparency on sustainable and responsible consumption at a “high value” (1 SD above

mean) and at a “low value” (1 SD below mean) of future orientation. The slope of

transparency is not significant when future orientation is low (β = .06, t = .74, p = ns). But the

slope of transparency is significant and positive when future orientation is high (β = .67, t =

24

8.31, p <.001). In addition, a spotlight analysis at one standard deviation above the mean of

transparency shows a significant difference (β = .33, t = 3.77, p < .001) such that when

transparency is high, sustainable and responsible consumption is higher when future

orientation is high versus when future orientation is low. A spotlight analysis at one standard

below the mean of transparency shows no significant difference (β = -.09, t = -1.07, p = ns)

such that when transparency is low there is no significant difference in sustainable and

responsible consumption between high future orientation and low future orientation.

Similar regression analyses were performed on sustainable and responsible

consumption with the independent variables (1) transparency, (2) social responsibility, and (3)

their interaction (transparency × social responsibility) (see Figure 3). The results show that

there is no significant interaction between transparency and social responsibility associations

(β = -.01, t = -.05, p = ns). This finding lends support for Hypothesis 3b, which predicted that

transparency will be positively associated with sustainable and responsible consumption

irrespective of corporate social responsibility levels.

Discussion

Study 1 demonstrates that transparency has a direct and positive effect on customers’

willingness to engage in sustainable and responsible consumption. This finding is noteworthy.

That is, when a business itself is seen as transparent, customers are more likely to consider

engaging in sustainable and responsible consumption themselves. Furthermore, the results of

Study 1 show that a business’ future orientation and social responsibility play different roles

in the relationship between transparency and the sustainable and responsible consumption by

25

customers. More specifically, high transparency leads to greater sustainable and responsible

consumption when future orientation is high (vs. low). Interestingly, we find that social

responsibility has no significant moderating effect on the impact of transparency on

sustainable and responsible consumption.

These findings are potentially provocative. That is, when a business is viewed by

customers as future oriented, firms’ transparency efforts have a strengthened effect on

sustainable and responsible consumption. The benefits of transparency are limited, however,

when customers view a business as low in future orientation. Moreover, Study 1 findings

suggest that social responsibility of a business has no significant impact on the relationship

between transparency and sustainable and responsible consumption. One wonders whether

the effects of transparency, future orientation, and social responsibility depend on how

involved customers are in a purchase decision. We thus conducted Study 2 to shed additional

light on customers’ willingness to engage in sustainable and responsible consumption.

Study 2

Study 2 aims to explore how involvement influences the effects of transparency,

future orientation, and social responsibility on sustainable and responsible consumption.

Specifically, we test consumer involvement as an additional boundary condition of the impact

of transparency for brands with varying degrees of future orientation and social responsibility.

As noted in prior research, involvement is a key factor in consumer decision-making (Laurent

and Kapferer, 1985; Saqib et al., 2010; Walsh et al., 2008) and we investigate whether the

26

moderating role of future orientation and social responsibility is affected by consumer

involvement contexts.

“Insert Table 1 about here”

Method

Data collection. Three hundred and twenty-seven graduate students took part in Study

2 as part of a regular course. Based on a pretest (N = 93), we selected smartphones as

products that are high in consumer involvement and instant coffee drinks as low in consumer

involvement. We adopted four different businesses to represent different levels of future

orientation and social responsibility for each product category based on a pretest (N = 88)

(for details, see Table 1). Note that Study 2 was conducted in two waves. In the first wave

(Time T1), participants were asked to report their perception of transparency, future

orientation, and social responsibility for one of the eight businesses as well as their

involvement. Six days after the first wave (Time T2), participants were then asked to report

their willingness to engage in sustainable and responsible consumption. Prior research has

shown that 5-7 days as a time window between the data collected at T1 and T2 is appropriate

to enhance confidence in the obtained results (Chun et al., 2015).

Measurement. The measures were identical to those in Study 1. Additionally, we

employed Laurent and Kapferer (1985)’s published six-item scale to measure consumer

involvement (“1” = “strongly disagree” and “7” = “strongly agree”; α = .97).

“Insert Figure 4 and Figure 5 about here”

Results

27

Preliminary checks. As expected, we observed a significant difference in involvement

for smartphones and instant coffee (Msmartphones = 5.46, Minstant coffee = 2.47; t(325) = 18.31, p

< .001) (see Panel A of Table 1). We conducted a series of ANOVAs to examine the

differences in transparency, future orientation, social responsibility, attitude, and familiarity

across the four different businesses for each product category. The results are in accordance

with our expectation for both smartphones and instant coffee (for details, see Panel B and C

of Table 1): Significant differences are found in both future orientation and social

responsibility, whereas no significant differences were found in the other variables.

Test of the moderating role of customer involvement. We estimated a SEM using

AMOS 20.0 and a multi-group latent variable (future orientation as grouping factor)

modeling approach to examine the differences in the effects of transparency on sustainable

and responsible consumption. The results were as follows: When consumer involvement is

high, transparency has a significant positive effect on sustainable and responsible

consumption both when future orientation is high (β = .64, p < .001) and low (β = .24, p

< .05), and the effect is significantly stronger when future orientation is high than low (p

< .05).

Interestingly, when consumer involvement is low, transparency is positively

associated with sustainable and responsible consumption when future orientation is high

(β = .48, p < .001) but negatively associated with sustainable and responsible consumption

when future orientation is low (β = -.25, p < .05). The moderating effect of future orientation

28

is stronger when involvement is low (rather than high). These findings lend support for

Hypothesis 4.

Furthermore, SEM results using multi-group latent variable (social responsibility as

grouping factor) modeling approach, suggest that when consumer involvement is high,

transparency is positively associated with sustainable and responsible consumption both

when social responsibility is high (β = .42, p < .001) and low (β = .55, p < .001), which is in

line with and a replication of our results in Study 1. That is, no moderating effect of social

responsibility is identified. However, when consumer involvement is low, transparency is

positively associated with sustainable and responsible consumption when social

responsibility is high (β = .41, p < .001) but not when social responsibility is low (β = -.15, p

= ns), indicating a significant moderating effect of social responsibility. The results

demonstrate the moderating effect of involvement, supporting Hypothesis 5. Figure 4 and

Figure 5 further illustrate the moderation effects.

Discussion

The results in Study 2 provide support for the existence of important additional

boundary conditions for the effects of transparency on sustainable and responsible

consumption. It is important to note that the results regarding the moderating effect of future

orientation largely replicate the findings in Study 1. That is, the impact of transparency on

sustainable and responsible consumption is stronger when future orientation is high rather

than low. Interestingly, the impact of transparency on sustainable and responsible

consumption becomes negative when both involvement and future orientation are low.

29

When taking involvement into account, social responsibility moderates the effect of

transparency on sustainable and responsible consumption. Study 2 shows that the impact of

transparency on sustainable and responsible consumption becomes negative when both

involvement and social responsibility are low. Furthermore, when both involvement and

social responsibility are high, the positive effect of transparency seems to be weakened.

Critical implications seem to come out of the Study 2 findings. First, regardless of

whether involvement is high or low, high future orientation or high social responsibility

perceptions of a business strengthen the positive effect of transparency on sustainable and

responsible consumption. When future orientation is low or social responsibility is low and

customer involvement is also low, then transparency weakens customers’ willingness to

engage in sustainable and responsible consumption.

General Discussion and Implications

Given the general depletion of resources, rising pollution levels, wastage of limited

resources such as food, raw materials, etc. (Financial Times, 2016; The Economist, 2015), the

study of sustainable and responsible consumption is desperately needed. There is a particular

sense of urgency in terms of identifying ways of how customers can be encouraged to engage

in sustainable and responsible consumption. In this research we study some of the potential

drivers of customers’ willingness to engage in sustainable and responsible consumption and

explore some of the critical boundary conditions.

Contribution to theory and practical implications

30

Transparency is a topic that has risen to the top of the corporate agenda in recent years,

whether because of ethical considerations, tough financial times, the proliferation of

information, rising customer expectations, or other reasons. However, the evidence

supporting the adoption of transparency policies is still largely anecdotal and mainly focused

on universal relationships rather than subject to contingency tests. Our goal, thus, was to

examine a set of important boundary conditions (namely future orientation, social

responsibility, and involvement) of the impact of transparency on sustainable and responsible

consumption by customers. That is, we explore under which circumstances transparency is

beneficial to sustainable and responsible consumption, and when transparency is less

effective in impacting such behavior.

We found support for our hypotheses across different service and product industries

(Studies 1-2), and our findings held in a field study context (Study 1) and even when we took

a stringent conservative approach by using delayed measures of the main dependent variables

(Study 2). The current study empirically demonstrates that transparency policies do not

always pay off. The impact of transparency is influenced by corporate associations such as

future orientation and social responsibility associations, and these effects vary across product

categories displaying varying levels of involvement. The findings contribute to theory by

enhancing our understanding of how information affects people’s responses in different

marketing contexts.

Specifically, sustainable and responsible purchase is often widely explored through

the lens of consumers’ altruism or self-transcendence (Follows and Jobber, 2000), as well as

31

by considering the added value from ethical product offerings, for example better product

quality and improved customer health (Davies et al., 2016). However, our findings further

underscore the role of some key corporate associations that may be important in people’s

willingness to engage in sustainable consumption behavior. The current findings thus extend

the important work in prior research, which noted how company actions may guide

consumers’ behavioral choices (Romani and Grappi, 2014; Wang et al., 2017).

While some studies found mixed reactions to extensive communication (e.g., organic

or fair trade labelling) and associated quality concerns (e.g., Burke et al., 2014; Pechmann,

1992; Epstein, 2008), our research suggests that there may be strategic benefits in extensively

communicating transparent information. The provision of critical information about the pros

and cons of product offerings encourages consumers to act responsibly themselves in

response to companies with a focus on building sustainable competitive advantage over a

period of time to meet consumers’ future needs (Chataidakis et al., 2016) or with a focus on a

commitment to improve community well-being through business practices and contributions

of corporate resources (Hildebrand and Bhattacharya, 2011; Romani and Grappi, 2014).

Importantly, the role of future orientation in the relationship between transparency

and sustainable consumption is thought-provoking. A company with high future orientation,

which considers the needs of future generations, shows a firm’s temporal view that the future

matters more than the immediate, and concern or long-term initiative predominates a focus on

short-term gains (Hillebrand et al., 2011; Lafferty and Hult, 2001). By implication, future

orientation involves persistence and patience and the commitment of dedicated resource

32

investments over a longer time horizon, thereby sustaining the bonded relationships with

consumers in the long run (Bell and Eisingerich, 2007). In this regard, consumers may be

aware of the salience of future, looking upon such open and lasting businesses as “role

models” by mutually considering the subsequent consequences of their consumption on

society (Simpson and Radford, 2014; Welsch and Kühling, 2009). In line with Romani and

Grappi (2014), people’s consumption related intention and behavior could be the direct

outcome of their learning experiences from the observation of a business, causing a symbolic

coding of future orientation to be reproduced in consumer’s memory and then motivating

consumers to imitate decisions toward sustainability and responsibility.

In addition to contribution to theory, the study raises a set of important messages for

policy makers and company managers in terms of how to deal with information-sharing

practices with customers. In high-involvement categories, business have much to gain from

being transparent, regardless of whether a firm benefits from a good reputation of being

future oriented and whether customers perceive it to be highly socially responsible or not. In

this context, customers will appreciate an organization’s effort to help them “see through” it

and quickly identify and process valuable information. When the stakes are high and

customers face a complex decision making process, we find that a combination of high

business transparency with high future orientation and corporate social responsibility leads to

the highest level of willingness to engage in sustainable and responsible consumption by

consumers.

33

A key practical implication of this finding is that those businesses that might be most

afraid of transparency (perhaps because they know that their customers do not see them as

particularly socially responsible or able to deliver outstanding products and services), do not

have to wait until these negative perceptions dissipate and then they start acting more

transparently. Instead, they might want to consider being open and candid about their

weaknesses, and actively share the exact steps they are going to take in order to address these

customer concerns. In a sense, in a high involvement category, transparency can actually help

those businesses that often think they have much to hide.

With regard to low involvement product categories, emphasizing business

transparency could backfire when companies are perceived as either less future oriented or

relatively low social responsibility. This finding is noteworthy. And this might be one of the

reasons why consumers who are not strongly motivated to process additional information are

inundated by the overload of messages causing consumers to be overwhelmed– rather than

disinterested – and begin to view businesses as unhelpful and annoying (Burke et al., 2014;

Park et al., 2013). As such, association with both long-term and accountable business

practices only adds to people’s cynicism or skepticism, ultimately reducing their willingness

to engage in sustainable and responsible consumptions.

Interestingly, an increased number of companies, including electronics companies and

manufacturers of smartphones (e.g. Apple, Acer, Nokia, Samsung, Sony) have taken steps to

reduce the impact of their mobile phone products on the environment from design innovation

to improved production processes, including design for disassembly and repair to reuse

34

components, eliminating hazardous substances, technology advances on energy-saving

batteries, cut down on packaging or accessories, and improvement in manufacturing

workplace (Greenpeace, 2014). Several initiatives about eco-ratings and sustainability

certification models of mobile phones (e.g. Lumia 625, Galaxy S4, Fairphone and

Phonebloks) have been publicized on the markets for prospective consumers to make more

informed decisions.

Limitations and avenues for future research

The findings of this research should be viewed in light of the following limitations,

which may also point to promising avenues for further research that would enable us to gain a

better understanding of when to implement transparency, future orientation, and social

responsibility for enhanced sustainable and responsible consumption. We identify future and

social responsibility as two key moderators in the relationships between transparency and

responsible consumption. However, we did not examine other potential moderators that can

impact the effects of transparency on sustainable consumption. In Study 2, we proposed

consumer involvement as a boundary condition of the moderating effects of future orientation

and social responsibility. Research has demonstrated that the role of future orientation and

social responsibility varies across different product categories (Brown and Dacin, 1997;

Walsh et al., 2008). This suggests that moderating variables other than consumer

involvement might exist.

In our research, we studied business with which respondents were fairly familiar and

towards which they had moderately favorable attitudes. Future research on the potential

35

moderating role of other factors, such as product category familiarity or consumer expertise,

could yield interesting insights. What about when consumers strongly dislike a business? One

wonders whether and to what extent transparency has an effect when consumers have a very

bad opinion about a business.

Transparency has a positive impact on customers because it can reduce perceived risk

and increase trust. We have already tested some of the elements of perceived risk across

product categories by assessing consumer involvement. However, individual customers have

different degrees of risk aversion, which could influence their perceived risk, and their

evaluations of companies that have varying levels of transparency. Therefore, further

research could uncover how personal characteristics, such as risk aversion for example, may

influence customers’ responses to transparency.

Another worthwhile avenue for further research is to generalize our results to

stakeholders other than customers, such as a business’ own employees and their loyalty to the

company they are working for. Studies have already highlighted the importance of

transparency in different business contexts (O’Toole and Bennis, 2009). Ability and social

responsibility may play important roles in a variety of contexts, such as in evaluating

employee performance or attachment to a firm for example (Berens et al., 2005). Thus,

further research could examine how transparency impacts employees’ or investors’ reactions,

and whether the effects and boundary conditions investigates in the current study may be

extended or not to other stakeholder groups and contexts.

36

Furthermore, we studied sustainable consumption through the lenses of business

transparency, future orientation, and social responsibility; however, as Popper (1972)

famously noted “Whenever a theory appears to you as the only possible one, take this as a

sign that you have neither understood the theory nor the problem which it was intended to

solve”. We invite future research to extend our work by integrating additional theory. One

might envision scenarios in which transparency leads to greater customer confusion and

reduced willingness to buy ethically. Under which conditions does confusion lead to greater

unethical consumption? We find this question intriguing. Additional research on testing when

transparency indeed enhances and when it might lower ethical consumption is richly

deserving.1 Since there may be a discrepancy between intention and actual behavior, one

wonders to what extent willingness to engage in sustainable and responsible consumption

converts to actual behavior or under what circumstance intentions can be fortified to

overcome potential behavioral hurdles. Finally, different types of customers may appreciate

information transparency differently. For example, one wonders whether older (vs. younger)

customers or high (vs. low) self-esteem (Bian and Wang, 2015) and optimistic (vs.

pessimistic) (Burke et al., 2014) customers value transparency more (or less)? One also

wonders whether transparency, if mismanaged, may enhance consumer cynicism and backfire

in terms of lowering customers’ perceptions about an organization. We invite further research

to examine some of these issues in greater detail.

1 We thank an anonymous reviewer for this point.

37

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Figure 1.

Conceptual Model

46

Figure 2.

Study 1: Effects of transparency and future orientation on sustainable and responsible

consumption

3.43 3.62

2.96

4.90

1.00

2.00

3.00

4.00

5.00

low transparency

(1 SD below mean)

high transparency

(1 SD above mean)

Su

sta

ina

ble

an

d r

esp

on

sib

le c

on

sum

pti

on

low future orientation

(1 SD below mean)

high future orientation

(1 SD above mean)

47

Figure 3.

Study 1: Effects of transparency and social responsibility on sustainable and responsible

consumption

3.07

4.22

3.25

4.39

1.00

2.00

3.00

4.00

5.00

low transparency

(1 SD below mean)

high transparency

(1 SD above mean)

Su

sta

ina

ble

an

d r

esp

on

sib

le c

on

sum

pti

on

low social responsibility

(1 SD below mean)

high social responsibility

(1 SD above mean)

48

Figure 4.

Study 2: Effects of transparency, future orientation, and involvement on sustainable and

responsible consumption

2.1

4.39

2.29

3.31

2.68

4.42

2.35

2.02

1

2

3

4

5

low transparency high transparency

Su

sta

ina

ble

an

d r

esp

on

sib

le c

on

sum

pti

on

high involvement, high future

orientation

high involvement, low future

orientation

low involvement, high future

orientation

low involvement, low future

orientation

49

Figure 5.

Study 2: Effects of transparency, social responsibility, and involvement on sustainable and

responsible consumption

2.47

3.96

1.79

3.83

2.38

3.97

2.99

2.59

1

2

3

4

5

low transparency high transparency

Su

sta

ina

ble

an

d r

esp

on

sib

le c

on

sum

pti

on

high involvement, high CSR

high involvement, low CSR

low involvement, high CSR

low involvement, low CSR

50

Table 1.

Study 2: Means across product categories and businesses

A: Product Categories

Smartphones Instant Coffee

N 163 164

Involvement 5.46a 2.47b

B: Smartphones

Apple Samsung Nexus LG

N 43 37 41 42

Future Orientation 4.79a 4.84a 2.50b 2.87b F (3, 159) = 17.20***

Social Responsibility 5.48a 3.88b 4.72a,b 3.45b F (3, 159) = 8.40***

Transparency 4.35a 4.32a 4.87a 4.25a F (3, 159) = .71

Attitude 4.94a 4.88a 5.16a 5.02a F (3, 159) = .42

Familiarity 5.58a 5.49a 5.93a 5.55a F (3, 159) = 1.11

C: Instant Coffee

Nescafé Maxwell

House

Kenco Folgers

N 43 39 42 40

Future Orientation 5.14a 4.76a 2.53b 3.12b F (3, 160) = 17.85***

Social Responsibility 5.86a 3.78b 5.28a 3.73b F (3, 160) = 13.70***

Transparency 4.83a 4.22a 4.96a 4.51a F (3, 160) = .93

Attitude 5.19a 4.87a 5.04a 4.90a F (3, 160) = .73

Familiarity 5.79ab 6.15a 5.43b 5.53ab F (3, 160) = 2.76*

* p < .05; *** p < .001; Means with different superscripts are significantly different (p < .05).