Corporate Credibility in the Pharmaceutical Industry: The Effects of Corporate Social Responsibility

Abstract

The pharmaceutical industry has a general image, credibility, and reputation problem that has led to a lack of public trust in the sector. Corporate Social Responsibility (CSR) may be valuable in changing the public’s view and the sector’s credibility. This non-experimental quantitative study examined the relationship between stakeholder perception of CSR and corporate credibility, in the pharmaceutical industry. The study also evaluated, if there are differences in perceived credibility between two organizations. Differentiation in credibility could help enhance an organization’s competitive advantage. Eighty-two members of the public in the United States were asked to complete an online survey that included two company (Z and X) descriptions, a stakeholder CSR scale, and a corporate credibility scale. Pearson’s correlational analysis was conducted to access the association between the two constructs (credibility and CSR), based on the totals of the two instruments. These results indicated that there is a significant relationship between CSR and corporate credibility scores for both companies: Z [r (81) = .80, p < .001] and X [r (81) = .89, p < .001]. Additionally, paired t-test analysis was performed to compare corporate credibility scores and to determine if one organization appeared to be more credible than the other one. The paired t-test showed that on average, participants perceived company Z (M = 34.90, SE = .592) to be more credible than company X (M = 18.01, SE = 1.079), t (81) = 14.20, p= .000, R2=.71. Therefore, there was a significant difference in credibility between the two companies. Expertise and Trust, the elements of Corporate Credibility are vital intangible assets in the pharmaceutical sector. This study has attempted to fill a gap in this area of research. It has also expanded the literature by further validating the use of the stakeholder-based CSR scale and the corporate credibility scale, in the pharmaceutical industry setting. Additionally, this study reveals how a subset of stakeholders view, evaluate, and respond to the industry’s CSR efforts; an aspect of stakeholder theory in need of more research. Furthermore, previous studies in the pharmaceutical sector have underscored a significant need for more research in the area of stakeholder trust. Future studies should implement the complete CSR scale, use a wider range of company descriptions, ensure that the sample’s demographics reflect the general population, and replicate the study in other countries.