To Profit or Not to Profit? The Role of Greed Perceptions in Consumer Support for Social Ventures
71 Pages Posted: 7 Jun 2017
Date Written: May 2017
An increasing number of social ventures are for-profit companies (i.e., for-profit social ventures) that seek to advance a social cause while making a profit. In a series of seven studies, this research investigates consumer support for organizations as a function of their social mission and profit orientation. The impact of profit orientation on consumer support depends upon the prominence of the organization’s social mission. For organizations with a prominent social mission, profits are interpreted as a signal of greed; absent a prominent social mission, a for-profit orientation can instead imply greater competence. As a result, consumer support of for-profit social ventures suffers in comparison to both nonprofits and for-profits — a downside to the organizational benefits of for-profit social ventures identified in prior research. In addition, this research investigates organizational factors that alter greed perceptions and consequently support for for-profit social ventures, including excessive organizational spending, profit perceptions, and operational efficiency cues. Together, this research sheds light on consumer reaction to organizations that support social causes, with implications for the social venture marketplace — including the nonprofit versus for-profit quandary faced by social entrepreneurs.
Keywords: For-Profit Social Ventures, Nonprofit, Greed, Social Mission, Profit Orientation, Communal Norms
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