Substantive Action and Communication in Corporate Philanthropy: Implications of Hypocrisy and Stakeholder Type

ABSTRACT This study investigates the differential effects of corporate philanthropy (CP) on internal and external stakeholders. Specifically, it examines how substantive CP actions (hereafter CP), communication about CP (hereafter CP communication) and hypocritical CP (the gap between communication and action) influence corporate reputation and employee job satisfaction, and how these effects are moderated by the firm's primary customer type (B2B vs. B2C) for both outcomes. This study collects and analyses data on Korean companies. Specifically, the corporate reputation scores from Korea's Most Admirable Company survey and the job satisfaction scores from Job Planet for listed companies in Korea are used for empirical analysis. Finally, 615 company‐years are analysed using partial least squares structural equation modelling. Multigroup analysis was employed to compare B2B and B2C companies. The research indicates that both CP and CP communication positively influence corporate reputation and employee job satisfaction. However, hypocritical CP negatively affects only employee job satisfaction, highlighting the differential impact of CP dimensions on different stakeholder groups. Furthermore, the negative impact of hypocritical CP on job satisfaction was found to be significantly stronger for B2C companies compared to B2B companies. No significant difference was found for the impact of hypocritical CP on corporate reputation between B2B and B2C firms. Grounded in stakeholder theory, this study advances our understanding of hypocritical CP by demonstrating its nuanced effects on different stakeholder types and across different business contexts (B2B vs. B2C). This research provides valuable insights for companies seeking to optimize their CP strategies for improved stakeholder engagement and corporate outcomes.