Answer

Minor, D. and Morgan, J., 2011. CSR as reputation insurance: Primum non nocere. California Management Review, 53(3), pp.40-59.

This paper presents a summary of the case study titled “CSR as Reputation Insurance” by Minor and Morgan (2011).  The case study revolves around how strategic Cooperate Social Responsibility (CSR) operates as insurance for reputation with the aim of improving financial performance in California. According to California Management Review on Corporate Social Responsibility as Insurance for Financial Performance, all companies can assist in reputation improvement while reducing all negative impacts through direct investment in social strategies. High dedication and commitment, modest promotion of  CSR and provision of core support to business strategies are some of the outlined factors that allow leveraging of insurance to companies (Peloza et al. 2006, pg.54-57). They further aid in reputation building, sales maintenance and enhancement of customer goodwill for purposes of third party promotion. This study aims at addressing the existing gap on how insurance leveraging can mitigate harms with the aim of protecting a firm’s financial system.

All firms with a weak CSR are bound to decline in stock compared to organizations with a stronger CSR. The consumers’ intentions for purchase for firms with a weak CSR were half the quality of those with a stronger CSR reputation with regard to a product recall (Shiu et al. 2017, p. 460). Finally, by any chance publicity is inhibited, the firm’s value is provided by CSR through insurance programs despite the existence of a neutral relationship between financial performance in a firm and CSR.

Building a firm’s reputation can be facilitated through recurrent advocacy and regulation of resource access, modesty in promotion of CSR into developing customers’ goodwill and uncovering of instances when CSR reputation is protected and when it is not (Vidaver-Cohen et al. 2016, pg. 51-60). Among them are all variables that affect the nature of CSR, whether positive on basis of commitment and effort, or negative ones like blaming of a firm’s stakeholders, event severity or negative CSR initiatives.