The value of Corporate Social Responsibility for consumers

Transcription

1 Faculty of Economics & Management Commercial Sciences & Management Field of Study Master of Science in Business Administration Programme Internally organised master thesis The value of Corporate Social Responsibility for consumers Master thesis by Liesbet VAN DER SMISSEN Submitted for the Degree of Master of Science in Business Administration Graduation Subject: International Relations Supervisor: Christel CLAEYS Academic Year: Defended in: September 2012 Hogeschool-Universiteit Brussel, Warmoesberg 26, 1000 Brussel Tel: , Fax: ,

2 Hogeschool - Universiteit Brussel F a c u l t e i t E c o n o m i e & M a n a g e m e n t Master Thesis - Summary THE VALUE OF CORPORATE SOCIAL RESPONSIBILITY FOR CONSUMERS Summary Liesbet VAN DER SMISSEN Degree Programme: Master of Science in Business Administration Graduation Subject: International Relations Type of Master Thesis: internally organized master thesis Confidential: no 1. Problem definition and research question There are different views on the relationship between corporate social responsibility (CSR) and business: by operating with a CSR perspective, proponents believe that companies are capable of making more long term profit and increasing long term success, while the opponents argue that CSR would only distract firms from the economic role of businesses, namely profit generation (Buhr & Grafström, 2007). Both the proponents as well as the opponents present a list of sound rational reasons do defend their viewpoint. Despite the ongoing debate as to whether or not social responsibilities should be the concern of corporate decision makers, it cannot be denied that corporate social responsibility has been increasingly present in today s world. Research indicates that consumers care about it and that nowadays most consumers expect companies to have fairly high levels of CSR (Boulstridge & Carrigan, 2000; Mohr, Webb, & Harris, 2001). Consumers are very important stakeholders for companies and the success of a company s CSR policy is to a large extent determined by these consumers. Hence, understanding them is critical. Part of understanding these customers relates to trying to find out why they buy from companies which incorporate social responsibilities into their business practices. Green and Peloza (2011) believe that consumers only support firms that engage in CSR, if they receive some kind of value from the exchange. Green and Peloza also point out that consumers usually don t view CSR as one overall impression of a firm, but that they look instead to how each CSR activity can add to their overall value proposition when making a purchase. This seems to indicate that consumers are still more motivated by self-interest than by the interest of society, which is exactly what D Astous and Legendre (2009) mentioned. Consequently companies try to understand consumers through analyzing what kind of value(s) these consumers derive from CSR, which brings us to the research question of this thesis: What is the value of corporate social responsibility for consumers? Before trying to understand the value consumers derive from CSR, it is important to know what CSR is. Despite the significant amount of research, literature has not succeeded in providing one generally accepted definition on CSR. The definitions offered in literature can be confusing and sometimes even contradicting. Therefore taking a consumer s point of view to analyze how they see CSR and what the value is they derive from it, can be very useful. 1

3 Hogeschool - Universiteit Brussel F a c u l t e i t E c o n o m i e & M a n a g e m e n t Master Thesis - Summary 2. Research method In first instance, a literature study is carried out to gain understanding of the main theoretical concepts related to the research and to examine to which extent existing literature already covers the subject. Subsequently, a combination of quantitative and qualitative research is conducted to investigate the opinions and behaviors of the respondents in relation to CSR and the value that could be derived from it. Our research approach is mainly deductive as we start from a literature review to find a problem definition and consequently design a research strategy to try and formulate an answer to the research question and the separate research objectives (Saunders, Lewis, & Thornhill, 2003). Our research combines elements of descriptive and explanatory research to report on what CSR is and the value consumers derive from it (Saunders et al., 2003). a. Justification of the research method As a result of the limited amount of available data regarding this topic, we felt the collection of primary data to be useful. We reasoned that for some questions a qualitative approach was more appropriate, whereas for other questions a quantitative approach was best. Saunders et al. (2003) stress that it is often beneficial to combine quantitative and qualitative methods. Saunders et al. (2003) also believe the deductive approach to be the most appropriate when dealing with a topic on which there is a wealth of literature from which you can define a theoretical framework (p. 90), which is certainly the case for CSR. b. Collection and processing of the data Due to the limited time and resources, purposive sampling was used to select the respondents. Our sample consists of men and women of different ages who shop at Bio-Planet in Ghent. We chose to work with them because we believe them to be particularly informative for our research purpose. This method of sample selection, however, limits the generalizability of our research. The research is executed with the help of interview-administered questionnaires. Our research consists of three parts. For parts one and three, the participants are given a written survey they have to fill out, while part two consists of some oral questions, which Saunders et al. (2003) label structured interviews. The questionnaire mainly consists of closed questions, but also includes a few open questions. The closed questions consist of a variety of multiple choice questions and some scale questions related to all of our research objectives. The processing of the data is done using the statistical program SPSS and some of the tables are constructed using Excel. We mainly use descriptive statistics, but we also execute a factor analysis to analyze the different types of value consumers derive from CSR. 3. Findings and conclusions The results of this study show that consumers associate CSR most often with the environment. This is not in line with Dahlsrud s (2008) study which actually found that the environmental dimension is the one the least present in all the existing definitions in literature. The fact that literature and the view of the consumers are not in line, only adds to the confusion companies are already experiencing. We also discovered that consumers don t always recognize the CSR activities of companies as CSR activities. The CSR activities in the product-related activities category seem to be the ones that the respondents most often recognize, while the activities of the philanthropy category are recognized the least. Consumers indirectly indicate that they find CSR important as the activities they perceive 2

4 Hogeschool - Universiteit Brussel F a c u l t e i t E c o n o m i e & M a n a g e m e n t Master Thesis - Summary as most important for companies to engage in, are also the ones they indicate as being an expression of CSR. We felt that the level of awareness among respondents regarding the different CSR activities of Bio-Planet was rather low. We believe there to be five distinct types of value consumers can derive from CSR, being: social value, emotional value, functional value, supply value and egocentric behavior value. The results regarding the two latter types of value are rather weak, so further research will be necessary in this area. We came to the conclusion that demographics are not a good predictor of the type of value consumers derive from CSR. Also the level of knowledge people have of CSR and the frequency of their shopping at Bio-Planet do not seem to have a significant impact on the value they derive from CSR. Nevertheless, the results indicate that the higher the influence the CSR policy has on a consumer s decision to shop at Bio-Planet, the higher the social, emotional and functional value they derive from it. The same goes for the importance of CSR: the more important the consumer finds CSR, the higher the emotional, functional and social value they derive from it and the lower the supply value. We have to be careful with these conclusions though because there was no significant difference found between all the different groups. Another important question which we also focused on in one of our research objectives is the question whether the CSR policy of a company really has an influence on a consumer s purchase decision and behavior. The results regarding this issue are inconsistent and contradictory to a certain extent. Whereas 82.7% of the respondents indicate indirectly that they consider CSR to be their main motivator to shop at Bio-Planet, we question this result as it seems that a lot of consumers indicated an offer of organic products as their main motivator to shop at Bio-Planet, but they don t really seem to be aware that organic products are a form of CSR. Hence it is arguable whether the CSR policy really influenced their decision. We believe our research to contribute to a better understanding of the complex consumer regarding the value they derive from CSR. 3

5 Preface Writing my master thesis was a very challenging and enriching experience. I would like to thank a few people who helped me during the process. First of all I would like to thank my supervisor, Christel Claeys, for her advice and support throughout the whole master thesis process. Secondly I would like to express my gratitude to Philip Sterck, Ruth Evenepoel and all the other people at Bio-Planet who made it possible for me to execute my research at Bio-Planet in Ghent. I would like to thank them for the nice welcome, the smooth cooperation and the sponsoring such that all respondents were offered a drink while participating in my research. I would also like to thank my boyfriend, Maxime Vandenbussche, and my mom, Marijke Gyns, who helped me with the collection of my data. Without their help it would have taken a much longer time to collect the necessary data for my research. Finally I would like to thank my family and friends for all the support they have given me throughout the whole process of writing my master thesis.

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7 Table of contents Overview of tables and figures... 3 List of appendices... 3 List of abbreviations... 3 Introduction... 5 PART I: LITERATURE REVIEW... 7 Chapter 1: Defining CSR Introduction The history of corporate social responsibility Prior to The 1950s The 1960s The 1970s The 1980s The 1990s The 21 st century To whom is an organization expected to have responsibility? Definitional clarity of CSR Synonyms Business ethics Corporate citizenship Corporate accountability (Corporate) sustainability Conclusion Chapter 2: Different views on CSR Introduction Different views on CSR Proponents Arguments in favor of CSR Opponents Arguments against CSR The link between corporate social performance and corporate financial performance The emergence of a new view Conclusion Chapter 3: CSR from a company s point of view Introduction Importance of, and motivation for incorporating CSR Return on CSR Different types of CSR activities Conclusion

8 Chapter 4: CSR from a consumer s point of view Introduction Importance of CSR for consumers The value of CSR for consumers Conclusion Chapter 5: Identifying and targeting the ethical consumer Introduction Identifying and targeting the ethical consumer Conclusion PART II: RESEARCH Chapter 6: Research design Introduction Development of the research question The concretization of the research question through research objectives The research design What will be observed? Who will be observed? How will the observation take place? Where will the data collection take place? When will the data collection take place? Data processing Expressing the research objectives in operational terms Conclusion Chapter 7: Analysis of the research results Introduction Description of the respondents Analysis of the research results Conclusion Chapter 8: Discussion of the research results Introduction Discussion of the research results Contribution to science and practice Limitations and future research Conclusion General conclusion Reference list Appendices A. Questionnaire B. Tables concerning the description of the respondents C. Tables concerning the analysis of the research results

9 Overview of tables and figures Table 1: The multi-faceted customer value of CSR activities Table 2: frequency table of the different age groups in our sample Table 3: frequency table presenting how often the respondents shop at Bio-Planet Table 4: frequency table presenting to which extent these activities are considered to be an expression of CSR List of appendices Appendix A: Questionnaire Appendix B: Tables concerning the description of the respondents Appendix C: Tables concerning the analysis of the research results List of abbreviations BSR Business for Social Responsibility CED Committee for Economic Development CFP Corporate Financial Performance CS corporate sustainability CSP Corporate Social Performance CSR Corporate Social Responsibility CSV Creating Shared Value ICSD Interdepartmental Commission for Sustainable Development SR Social Responsibility WCED World Commission on Environment and Development 3

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11 Introduction The fact that corporate social responsibility has been increasingly present in today s society cannot be denied (Carroll, 2008). Despite the continuous debate as to whether or not firms should have social responsibilities, research indicates that consumers seem to care about CSR and therefore it is in the best interest of the company to do so as well (Boulstridge & Carrigan, 2000; D Astous & Legendre, 2009) We say seem to care because the concept of CSR is characterized by a significant attitude-behavior gap (Roberts, 1996; Simon, 1995). Nevertheless, studies indicate that nowadays most consumers expect companies to have fairly high levels of CSR (Mohr, Webb, & Harris, 2001). Even though consumers indicate they expect fairly high levels of CSR, this does not clarify what exactly they expect from companies as the concept of CSR is not clearly defined in literature. Despite the significant amount of research, literature has not succeeded in providing one generally accepted definition on CSR (Clarkson, 1995). The lack of a general definition leads to confusion, but also hinders academic debate and corporate implementation. This makes it harder for companies to create effective and efficient CSR programs (McWilliams, Siegel & Wright, 2006). Mohr et al. (2001) and Riddleberger and Hittner (2009) don t believe this to be the only problem. They also point out that there has been little research on what the public expects. As a result those who run corporations lack a clear understanding of what the public wants from them and how far they are expected to go toward helping their communities (Mohr et al., 2001, p. 45). Understanding consumers is crucial for companies as they are considered major stakeholders for the company. The question today is also no longer whether companies should incorporate CSR into their activities, but rather how they should do this. Marketers try to target the consumers who take into account CSR in their purchase decisions and purchase behavior. If companies go through the lengths of incorporating CSR, they want to make sure that the right consumers, the ones that care, are made aware of this and know about it. But to be able to target these consumers they need to understand why consumers buy from companies which engage in CSR. Green and Peloza (2011) believe that consumers only support firms that engage in CSR, if they receive some kind of value from the exchange. This seems to indicate that consumers are still more motivated by self-interest than by the interest of society (D Astous & Legendre, 2009). With this thesis we want to contribute to a better understanding of the complex consumer. We want to take the consumer s point of view and increase understanding of on the one hand, what CSR actually means to them, given the definition in literature is unclear, and on the other hand the value they derive from CSR. We will use a combination of a literature review and research, in which we collect primary data, to formulate an answer to the research question What is the value of corporate social responsibility for consumers? and to the research objectives we will stipulate throughout this thesis. In first instance, a literature study is carried out to gain understanding of the main theoretical concepts related to the research and to examine to which extent existing 5

12 literature already covers the subject. Our literature review consists of five chapters. A first chapter focusses on defining CSR. We provide a short history on CSR, talk about to whom an organization is expected to have responsibility, talk about the definition(s) of CSR and point out some synonyms which are often used. In a second chapter we deal with the different views on CSR. We list some proponents and opponents and discuss the arguments which both groups use to defend their viewpoint. We also briefly discuss the link between social performance and corporate financial performance and talk about the emergence of a new view. In the third chapter we look at CSR from a company s point of view, whereas we do the same in chapter four, but then from a consumer s point of view. In both chapters we will analyze the importance of CSR for the company/consumer and we will talk about the value both companies and consumers derive from it. A last chapter briefly deals with identifying and targeting the ethical consumer. Chapters six, seven and eight deal with our research. In chapter six we will outline the research design, in chapter seven we analyze the research results, and chapter eight focuses on the discussion of these results. 6

13 PART I: LITERATURE REVIEW Chapter 1: Defining CSR 1.1 Introduction In this first chapter we try to understand what corporate social responsibility is and where it comes from. We will start off with some history of CSR. In a next section we will discuss the different views on to whom an organization is expected to have responsibility. Afterwards we will devote some time to the definitional aspect of CSR and then at the end of the chapter we will shortly look at some concepts which are often used interchangeably to talk about corporate social responsibility. 1.2 The history of corporate social responsibility Corporate social responsibility is a popular topic nowadays. Its phenomenal rise to prominence in the 1990s and 2000s suggests that it is a relatively new area of academic research (Crane, McWilliams, Matten, Moon, & Siegel, 2008, p. 3). Although it is true that CSR is mainly a product of the second half of the twentieth century, the roots of the concept, as we know it today, have a long and wide-ranging history (Carroll, 2008). The business community s concern for society is certainly not a new thing and can be traced back for centuries (Carroll, 2008). CSR is originally considered an American concept (Craps, 2012a). It came into existence at the beginning of the 20 th century and was at that time mainly linked to philanthropy. Even though the CSR concept did not originate in Europe, social entrepreneurship, which can be considered a form of CSR, exists even longer, already since the industrial revolution (Craps, 2012a) Prior to 1950 There is not a lot of literature on CSR found prior to 1950, but this doesn t mean that this period was lacking social initiatives and practices. During the Industrial Revolution there was a strong trend of emerging businesses, whose main concern during the midto-late 1800s was the employees and more specifically how to make them more productive workers (Carroll, 2008). In that time, but also still nowadays, it is often difficult to distinguish between what organizations are doing for social reasons and what they are doing for business reasons (Carroll, 2008). In the late 1800s philanthropy, or corporate contributions, gained importance. Here it was difficult to distinguish whether this was actually individual philanthropy or business philanthropy. According to Carroll (2008) corporate contributions have assumed a central role in the development of CSR since the beginning of the time periods being examined (p. 23). Before the 1900s corporate contributions were perceived in a more negative light as they were being seen as giving away stockholder s assets without their approval (Carroll, 2008). However, later on, they were perceived as a positive thing and something a company should do. Carroll (2008, pp ) talks about several initiatives taken by business owners and entrepreneurs, prior to 1950, in which they use their own money to support social 7

14 causes. One of these initiatives is for example providing money for various community projects (Carroll, 2008). Many of those initiatives would probably be categorized as socially responsible nowadays. It is apparent that even prior to 1950 some degree of social responsibility was being taken on by companies though they were never called social responsibility (Carroll, 2008, p. 22). Even though there is evidence of socially responsible business behavior, it was definitely not a wide-spread practice in those days. It is important to keep in mind that in those days the term social responsibility (SR) was more often used than corporate social responsibility (CSR). According to Carroll this use of SR instead of CSR may have been because the age of the modern corporation s prominence and dominance in the business sector had not yet occurred nor been noted (p. 25). Whereas the largest part of the period prior to 1950 was dominated by concern for how to make the employees more productive, starting in the 1920s-1930s corporate managers slowly started taking on responsibility to balance competing claims from other stakeholders (Carroll, 2008). Hay and Gray (1974) claim this to be a result from some structural changes both in business institutions as well as in society. This change in mindset among business executives, called businessmen in those days, is made tangible in the results of a study of Fortune magazine in 1946, Carroll (2008) refers to. One question these businessmen were being asked was whether they were responsible for consequences of their actions in a sphere wider than that covered by their profit-andloss statements (Carroll, 2008, p. 24). Of the respondents, 93.45% said yes. This result seems to support the idea that the mindset among business leaders was changing The 1950s The 1950s are the time in which the first important literature on CSR started to appear (Carroll, 2008). According to Carroll (2008) Howard R. Bowen s publication of his landmark book Social Responsibilities of the Businessman (1953) best marks the beginnings of the modern period of literature on this subject (p. 25). Bowen was also the first one to formulate a definition on CSR, which we will discuss later in more detail, in the section definitional clarity of CSR. Frederick (2006) summarizes the meaning of CSR in the 1950s by three core ideas. A first idea is that business managers should consider themselves as trustees of the public interest. A second one is the idea of business managers balancing competing claims to the resources of the corporation. A third and last idea is the acceptance of philanthropy as a manifestation of business support of good causes (Carroll, 2008, p. 26). The 1950s were characterized by a lot of talk about CSR, but not a lot of action. Carroll (2008) talks about a period in which attitudes were changing and business executives were learning to get comfortable with talking about CSR, but he also points out that there were very few corporate actions other than philanthropy The 1960s This period is similar to the previous one as it was characterized by more talk than action regarding CSR and as philanthropy continued to be the most noticeable manifestation of CSR (Carroll, 2008). However, according to Carroll (2008) the 1960s marked a momentous growth in attempts to formalize or more precisely state what CSR meant (p. 27). Some important contributors of that time include Keith Davis (1960), William C. 8

15 Frederick (1960) and Clarence Walton. (1967) Each of them set forward their own definition on CSR and their works contributed significantly to the CSR literature The 1970s The 1970s are an important period for the development of CSR literature. Carroll (2008) labels it a period of CSR acceleration. Some of the most important contributors of that time include Morrell Heald (1970), Harold Johnson (1971), George Steiner (1971), Richard Eels and Clarence Walton (1974) and many others. Carroll (2008) believes that a ground-breaking contribution to the concept of CSR came from the Committee for Economic Development (CED) in its 1971 publication, Social Responsibilities of Business Corporations (p. 29). The CED (1971) started from the observation that business functions by public consent and its basic purpose is to serve constructively the needs of society to the satisfaction of society (p. 11). The CED also pointed out that the social contract between business and society was changing substantially in a way that business is being asked to assume broader responsibilities to society than ever before and to serve a wider range of human values (p. 16). The CED made a distinction between three kinds of social responsibilities, which it visualizes by using three concentric circles. The inner circle refers to the basic responsibilities for the efficient execution of the economic function. The intermediate circle represents the responsibility for the execution of the economic function, but with respect for changing social values and priorities. Lastly, the outer circle refers to the newly emerging responsibilities that business should assume. This publication, regarding the CED s view of CSR, was considered especially influential because the CED was composed of business people and educators. Therefore the publication reflected an important practitioner view of the changing social contract between business and society and businesses newly emerging social responsibilities (Carroll, 2008, p. 29). We previously mentioned that SR was more often used than CSR in the early days. However, in the 1970s increasing reference is being made to corporate social responsibility (Carroll, 2008). The 1970s are also the period during which many articles began suggesting a managerial approach to CSR. A managerial approach to CSR refers to the idea of applying traditional management functions to deal with CSR issues (Carroll, 2008). This period is still characterized by more talk from an academic side than action at company level. But slowly legislative initiatives start to emerge dealing with certain aspects of CSR. These initiatives mandate that companies create organizational mechanisms for complying with federal laws dealing with the environment, product safety, employment discrimination, and worker safety (Carroll, 2008, p. 34) The 1980s Up till the 1980s there had been a strong focus on the definitional aspect of CSR. Many academics tried to formulate new or refined definitions (Carroll, 2008). The 1980s, however, became known as the period in which research became more important and as the period in which writings emerged on alternative or complementary concepts and 9

16 themes such as corporate social responsiveness, corporate social performance, public policy, business ethics, and stakeholder theory/management to mention a few (Carroll, 2008, p. 34). We will not further explore these concepts, even though they are linked to CSR, as they fall outside our scope of focusing on CSR. However, later on we will shortly discuss some of them when talking about synonyms of CSR. These writings about alternative or complementary concepts did not mean that the interest in CSR diminished. The CSR debate continued throughout the 1980s. Thomas M. Jones (1980) was one of those writers who participated in the debate in those days. One of his major contributions is his emphasis on CSR as a process instead of as a set of outcomes (Jones, 1980). He believes that corporate behaviour should not, in most cases, be judged by the decisions actually reached, but by the process by which they are reached (Jones, 1980, p. 65). Jones (1980) also already pointed out in 1980 that one of the arguments used by those opposed to CSR is that social responsibility is too vague to be useful (p. 60). This argument is still present in the debate regarding CSR which takes place nowadays. The 1980s are also the period in which research started taking place on the relationship between corporate social responsibility and firm profitability (Carroll, 2008). This relationship continued to be debated over time and is still controversial nowadays. We will discuss it in chapter The 1990s During the 1990s the trend of the 1980s continued as a lot of attention was given to concepts complementary to CSR. Carroll (2008) states that the CSR concept served as the basepoint, building block, or point-of-departure for other complementary concepts and themes, many of which embraced CSR thinking and were quite compatible with CSR (p. 37). The prominent themes of that period include corporate social performance (CSP), stakeholder theory, business ethics, sustainability, and corporate citizenship 1 (Carroll, 2008). The 1990s were also characterized by a considerable expansion of philanthropy. In those days companies also evolved in how they were dealing with CSR. It was the period in which we start to see management positions solely dedicated to corporate giving on the organizational charts of major companies. Carroll (2008) mentions a few examples: managers of corporate giving, corporate social responsibility, and public/community affairs (p. 38). These management positions, dedicated to corporate giving, contributed to another trend of the 90s, which still continues today, namely the appearance of distinct companies which have developed outstanding reputations for CSR practices. Despite the skepticism regarding the nature of some of their practices, certain companies are often associated with having good CSR practices. A few examples include The Body Shop, Ben & Jerry s, and Johnson and Johnson (Carroll, 2008). 1 Here again we will not further explore these concepts as they fall outside our scope of focusing on CSR. However, later on we will shortly discuss some of them when talking about synonyms of CSR. 10

17 Carroll (2008) believes that the most significant advances to CSR in this period came in the business practice territory and more specifically due to the creation of a non-profit organization called Business for Social Responsibility (BSR) in BSR was the first of its kind and was founded by a group of entrepreneurs and businesses who sought to create an organization that could help companies act in a more responsible manner (Business for Social Responsibility [BSR], 2012a, how and when was BSR founded). The founders wanted to bring together on the one hand the businesses which still had to embrace corporate responsibility and on the other hand the organizations promoting corporate responsibility (BSR, 2012a). The official mission on the website of BSR says the following: our mission is to work with business to create a just and sustainable world (BSR, 2012b, what is the mission of BSR). BSR is still active today and while their mission hasn t changed throughout their 20-year history, how they pursue their mission evolves continuously The 21 st century During the 21 st century the emphasis, so far, remains on empirical research of CSR and into related topics instead of on theoretical contributions to the concept, which dominated a few decades before (Carroll, 2008). This emphasis however does not mean that there has been no evolution on the conceptual front the past decade. Writers continued their work on definitions, concepts, frameworks, approaches, Carroll (2008) believes that the interest and growth of CSR has been most evident in the European Community (p. 41). From a business-point-of-view this period is characterized by an increased interest in CSR best practices. Carroll (2008) refers to a book, targeting a business audience, written by Kotler and Lee (2005) cataloguing these best practices. In their book the authors present 25 best practices which could be very valuable in assisting companies with their own CSR programs. Among the best practices are examples from The Body Shop, Ben & Jerry s, Johnson and Johnson, and many more (Kotler & Lee, 2005). A lot of these companies already developed an excellent reputation for CSR practices in the 90s, as mentioned before. The growing interest of businesses in CSR has been driven by a number of factors. One of those factors is a reaction to the scandals, during the 21 st century, such as Enron and Worldcom, which led to diminished public support for businesses. Another factor is the increased pressure from non-governmental organizations and trade unions to respect human rights and adopt good practices. A last factor is the belief that there is a business case 2 for ethical management (corporate social responsibility, 2008, para. 1). Especially since the beginning of the 21 st century, the CSR movement has been a global phenomenon. But even though it s a global phenomenon, there are important inter- and even intra-regional variations in practice (Carroll, 2008). There appears to be some divergence of commitment and management practices. Carroll (2008) also points out that some initiatives are more voluntary than others as some companies have been under legal and regulatory pressure to adopt them (p. 41). 2 This refers to the justification of ethical management in terms of its contribution to business performance (Business case, 2008) 11

18 Nonetheless, 2012 is not the year in which the development of CSR stops, CSR is still a developing field of research. The delineation of the field is not easy as it is interrelated with so many other concepts. Carroll (2008) states the following: the field of scholarship that CSR represents is a broad and diverse one, encompassing debates of many perspectives, disciplines and ideological positions; it is located at an intersection of many contributing disciplines (p. 7), which clearly makes it hard to study. 1.3 To whom is an organization expected to have responsibility? The different views on to whom an organization is expected to have responsibility have not been constant over time. Van Marrewijk (2003) acknowledges a sequence of three approaches to CSR that has been referred to by various authors in academic literature. Each approach includes and transcends the previous one and tries to formulate the subject of responsibility for the organization (Van Marrewijk, 2003). A first approach is the shareholder approach. Van Marrewijk (2003) quotes Friedman (1962), who says that according to the shareholder approach the social responsibility of business is to increase its profits (p. 96). This approach starts from profit maximization as an ultimate goal and believes that socially responsible activities don t belong to the domain of organizations but are a major task of governments (Van Marrewijk, 2003, p. 96). This approach states that organizations should only be concerned with CSR to the extent that it contributes to the profit maximization goal of the business (Van Marrewijk, 2003). A second approach is the stakeholder approach. This approach indicates that an organization should not only be accountable to its shareholders, but that it should also take into consideration the interests of all its stakeholders which might be affected by the organization trying to achieve its objectives (Van Marrewijk, 2003). Under this definition an organization is accountable to all its stakeholders, which are according to Jensen (2002) all individuals or groups who can substantially affect the welfare of the firm not only financial claimants, but also employees, customers, communities and government officials (p. 236). A third and last approach is the societal approach. Van Marrewijk (2003) considers this to be the broader view on CSR, but not necessarily the contemporary one. This approach indicates that companies are responsible to society as a whole, of which they are an integral part (Van Marrewijk, 2003, p. 97). It means that an organization should operate in a way that serves and satisfies the needs of society. Where Van Marrewijk (2003) talks about three approaches to CSR, Hay and Gray (1974) talk about three different phases over time and did this already 30 years before Van Marrewijk. Despite the different choice of wording, both frameworks are very much alike. Hay and Gray (1974) labeled the first phase profit maximization management. The phase I concept was the belief that business managers have but one single objective to maximize profits (Hay & Gray, 1974, p. 135). Hay and Gray state that there is only one constraint to this pursuit of profit maximization, namely the legal framework within which the firm is operating. This view was widely accepted throughout the nineteenth century and the beginning of the twentieth century (Hay & Gray, 1974). 12

19 A second phase introduced by Hay and Gray (1974) is called the Trusteeship management. According to Hay and Gray this phase emerged in the 1920s and 1930s. They claim this second phase to be a result of some structural changes both in business institutions as well as in society. According to this concept, corporate managers were responsible not simply for maximizing stockholder wealth but also for maintaining an equitable balance among the competing claims of customers, employees, suppliers, creditors, and the community, as well as the stockholders (Hay & Gray, 1974, p. 136). In this view, the manager is no longer considered simply as an agent of the owners, but he is more seen as a trustee for the various contributor groups to the firm (Hay & Gray, 1974, p. 136). A third phase is labeled quality of life management which arose in the 1950s. Just like Van Marrewijk s (2003) societal approach, the socially responsible firm under phase III reasoning is one that becomes deeply involved in the solution of society s major problems (Hay & Gray, 1974, p. 138). Society s major problems refers to social problems which had developed as direct and indirect results of economic success of the preceding years. Hay and Gray (1974, p. 137) give the following examples: air and water pollution, deteriorating cities, disregard for consumers, 1.4 Definitional clarity of CSR Many definitions of CSR can be found throughout literature. According to Carroll (2008) one of the first people to articulate a definition on CSR was R. Bowen. He did this in his book Social Responsibilities of the Businessman of We previously mentioned that in those days the term social responsibility (SR) was more often used than corporate social responsibility (CSR), therefore that s also the term that Bowen used in his definition. Bowen s definition stated the following It (SR) refers to the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society (Carroll, 2008, p. 25). Since then many more have tried to formulate a clear and unbiased definition of CSR (Dahlsrud, 2008) Despite the high amount of studies empirically examining CSR and the numerous efforts to bring about this definition, Clarkson (1995) believes there has not yet been established a satisfactory and generally accepted definition for CSR, which still leads to great confusion (Dahlsrud, 2008). The confusion stems from the fact that without a clear definition theoretical development and measurement are difficult (McWilliams, Siegel, & Wright, 2006). Banerjee (2001) expresses the same idea by saying that corporate social responsibility is too broad in its scope to be relevant to organizations (p. 42). This is not a new idea as we previously pointed out that Jones (1980) already said in 1980 that social responsibility is too vague to be useful (p. 60). Hence, even though there is 20 years between both articles, the problem remains current. Part of the difficulty in defining CSR lays in the fact that it is unclear whether CSR is really a concept. In their book The Oxford Handbook of corporate social responsibility Crane, McWilliams, Matten, Moon and Siegel (2008) suggest that CSR should not be considered a concept, but rather a field of scholarship. Various authors have developed important and influential concepts, constructs, and theories of CSR, these are competing with many other concepts, constructs, and theories of CSR (Crane et al., 2008, p. 6). 13

20 Crane et al. believe that a closely defined term is not the solution because these differences should be accommodated for in CSR and not avoided to obtain a narrow definition. Kakabadse, Rozuel and Lee-Davies (2005) also believe that CSR should be seen as a process rather than a set of outcomes. They state that CSR cannot be a static concept because the environment society members live in is dynamic (Kakabadse et al., 2005, p. 285). Kakabadse et al. were not the first ones to come up with this. We previously mentioned Jones (1980) who also believed that CSR should be considered a process instead of a set of outcomes. Another part of the difficulty in defining CSR lays in the fact that different types of organizations present different views on CSR. According to Van Marrewijk (2003) their different views on CSR are based on the specific situation and challenges that distinct types of organizations are facing. This is in line with the view of Kakabadse et al. (2005) who state the following: CSR in practice tends to be very contextual, very sensitive to environmental, organisational, even individual specificities (p. 286). They continue: this characteristic makes CSR a very rich, but highly complex concept, and certainly difficult to define once and for all (Kakabadse et al., 2005, p. 286) Because of this Van Marrewijk (2003) believes that the current concepts and definitions are often biased towards specific interests (p. 96) He does, however believe in the importance of a definition, but argues that that one solution fits all definition for CS(R) should be abandoned, accepting various and more specific definitions matching the development, awareness and ambition levels of organizations (Van Marrewijk, 2003, p. 95). The reason why Van Marrewijk is not in favor of one definition is because it would be too broadly defined and too vague, which would make it useless in academic debate or in corporate implementation. He believes that each company should choose from the many opportunities which concept and definition is the best option, matching the company s aims and intentions and aligned with the company s strategy, as a response to the circumstances in which it operates (Van Marrewijk, 2003, p. 96). Despite the various definitions and the confusion that comes with it, Dahlsrud (2008) came to an interesting conclusion. He recognizes the wide array of definitions available, but shows in his analysis that the existing definitions are to a large degree congruent (Dahlsrud, 2008, p. 1). Dahlsrud came to this conclusion by looking for similarities and differences between existing definitions and executing frequency counts. Through a content analysis of existing CSR definitions he reasoned that all of them were consistently referring to five dimensions, being: the environmental dimension, the social dimension, the economic dimension, the stakeholder dimension and the voluntariness dimension. Afterwards he used frequency counts from Google to analyze how often the different dimensions were invoked. Dahlsrud (p. 5) found that four out of five dimensions have a comparable dimension ratio above 80% (the stakeholder dimension: 88%, the social dimension: 88%, the economic dimension: 86%, the voluntariness dimension: 80%). The fifth dimension, which is the environmental one, has a significantly lower dimension ratio of 59%. It is important however that all the dimensions have dimension ratios above 50%, which indicate that they are more likely than not to be included in a random definition (Dahlsrud, 2008, p. 5). In a next step Dahlsrud (2008) studied the consistency between the definitions by looking at how many of the five different dimensions each definition used. He found that eight of the definitions he worked with include all five dimensions. These eight, account 14

21 for 40% of the total frequency count. When looking at the definitions including three or more dimensions, he counted 31 definitions, constituting 97% of the total frequency count. Based on his research Dahlsrud concluded that although they apply different phrases, the definitions are predominantly congruent, making the lack of one universally accepted definition less problematic than it might seem at first glance (Dahlsrud, 2008, p. 7). Dahlsrud therefore concludes that the confusion is not so much about how CSR is defined, as about how CSR is socially constructed in a specific context (p. 1). It is interesting to see how the first definition of (corporate) social responsibility we discussed before, formulated by Bowen, mainly focusses on the social dimension. As mentioned before: in the days in which the definition was published, 1953, social responsibility (SR) was more often used than corporate social responsibility (CSR) (Carroll, 2008). It is therefore not surprising that most attention in this definition is given to the social dimension and that the other dimensions, more related to the corporate aspect, are not really present. As SR evolved more into CSR over time, the definitions in literature started to include more dimensions. From Dahlsrud s (2008) study we could conclude that the definition of CSR, formulated by the Commission of the European Communities in 2001, is the best one. We do this based on the fact that this definition has the highest frequency count and because it includes all 5 dimensions. Their definition on CSR is the following: A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (Commission of the European Communities, 2001, p. 6; Dahlsrud, 2008, appendix). Unfortunately Dahlsrud s paper wasn t the solution to the problem regarding the CSR definition; many definitions on CSR have continued to exist. Even the European Commission altered its definition in 2011 and put forward a new, simpler, but also vaguer definition on CSR being the responsibility of enterprises for their impacts on society (European Commission, 2011, p. 6). The Commission then defines, in more generic terms, what enterprises should undertake to meet this responsibility. As mentioned before, the lack of a general definition leads to confusion, but also hinders academic debate and corporate implementation. Nevertheless, for companies it is critical to know what consumers consider to be CSR or CSR related activities. To say it with the words of Dahlsrud (2008): the challenge for business is not so much to define CSR, as it is to understand how CSR is socially constructed in a specific context and how to take this into account when business strategies are developed (p. 1). For the remainder of this thesis we will work with the initially proposed definition by the Commission of the European Communities in We already motivated why we believe this to be an appropriate choice. 1.5 Synonyms We previously mentioned that the lack of a satisfactory and generally accepted definition for CSR leads to great confusion (Clarkson, 1995; Dahlsrud, 2008). Furthermore there is a long list of concepts which are often used synonymously for CSR, which leads to an even greater amount of confusion. 15

22 Carroll (2008) provides a list of some of the terms which are often used interchangeably to talk about corporate social responsibility. They include the following: business ethics, corporate citizenship, corporate accountability, and sustainability (Carroll, 2008, p. 38). There are many other synonyms or related concepts which might be used to talk about CSR, including: conscious capitalism, corporate governance, and ecological economics (Craps, 2012b). However, we believe Carroll (2008) captures the most important ones and that s why we will focus on his list. Just as CSR is not clearly defined and delineated, the concepts below suffer from the same problem. Therefore it is important to keep in mind that the explanations below are not absolute and just views of different writers Business ethics According to the dictionary of human resource management by Oxford University Press (2008), business ethics is the application of ethical reasoning to the situation of business organizations (Business ethics, 2008). While CSR requires ethical reasoning, business ethics and CSR are not completely the same. Business ethics can be considered part of CSR, which is clearly illustrated in the hierarchical approach to CSR by Archie Carroll 3. Carroll (2001) talks about the pyramid of corporate social responsibility and suggests that four kinds of social responsibilities constitute total CSR: economic, legal, ethical, and philanthropic (p. 40). He believes that there is a hierarchy in these company responsibilities and that s why his framework is often referred to as the hierarchical approach to CSR (Craps, 2012a). Carroll (2001) believes that the main responsibilities of companies lay in the economical field and more precisely through being profitable. It is often argued that the economic responsibilities refer to what a business does for itself, and that the legal, ethical and philanthropic components refer to what businesses do for others. Carroll (2008), however, argues that economic viability is also something business does for society as it contributes to maintaining the business system. It is therefore that Carroll includes economic responsibilities in its view on CSR. A next set of responsibilities a company has to fulfill, are labeled legal responsibilities. This means that they are required to obey the law. Following the legal responsibilities are the ethical responsibilities, which refer to business ethics. It is clear from this that business ethics are only a part of CSR. Ethical responsibilities are the obligation to do what is right, just and fair (Craps, 2012a). These three aforementioned responsibilities are however not enough to constitute CSR. CSR also requires philanthropic responsibilities, which means that the company has to be a good corporate citizen. Carroll (2001) describes this as contribute resources to the community, improve the quality of life (p. 42). Within the field of business ethics, a range of competing positions can be found. These different positions are grounded in different schools of moral philosophy. The dictionary of human resource management by Oxford University Press mentions three positions, 3 Whereas the framework as a whole explains CSR, it is discussed in this section to illustrate how business ethics is only just a part of CSR. 16

23 being deontology, utilitarianism, and justice-based theories of ethics. Essentially, these positions consist of arguments for identifying ethical or desirable management practice (Business ethics, 2008, para. 1). They provide the following example: Action (HR policy) may be considered desirable because it treats employees as ends-in-themselves with rights to dignity, privacy, and respect (deontology); because it promotes the greatest good of the greatest number (utilitarianism); or because it satisfies the tests of procedural and distributive justice (justice-based theory) (Business ethics, 2008, para. 1) Corporate citizenship Corporate citizenship is another concept which is often used synonymously for CSR. The Canadian Oxford dictionary by the Oxford University press defines a corporate citizen as a business corporation considered in term of its responsibility to society as a whole (corporate citizen, 2004). Carroll (2008) states that corporate citizenship may be broadly or narrowly conceived (p. 37). Hence, depending on which way it is defined, the concept seems to overlap more or less with the concept of CSR. Here again we can make a link with the hierarchical framework by Carroll (2001). The philanthropic responsibilities, mentioned before, refer to being a good corporate citizen. On the one hand, if corporate citizenship is broadly conceived, it might be that it refers to philanthropic responsibilities and all the other responsibilities (ethical, legal and economic) which precede in the hierarchy. Hence it refers to CSR. On the other hand, if corporate citizenship is narrowly conceived, it might be that it refers only to the philanthropic responsibilities. In that case, corporate citizenship cannot be considered a synonym for CSR as you need all four kinds of responsibilities to constitute total CSR Corporate accountability Corporate accountability is often used to talk about CSR and sometimes used as a synonym for it. However, Craps (2012b) states that corporate accountability is actually part of CSR. If a company wants to be socially responsible, it has to be accountable (M. Craps, 16 February, 2012). According to Craps, accountability refers to the recognition by an organization of the impact it has on the external environment. On top of that the organization has to assume responsibility for those effects to all involved parties/stakeholders (Craps, 2012b, slide 13). Corporate accountability also requires a willingness of the company to report to all its stakeholders in a transparent way (Corporate) sustainability Sustainability is often used to describe a type of development. Sustainable development is a development which meets the needs of the present without compromising the ability of future generations to meet their own needs (World Commission on Environment and Development [WCED], 1987, article 27). According to the WCED (1987), the concept of sustainable development implies limits. These limits are not necessarily absolute, but limitations imposed by the present state of technology and social organization on environmental resources and by the ability of the biosphere to absorb the effects of human activities (WCED, 1987, article 27). Whereas the C in CSR clearly refers to social responsibility at a company level, sustainability is a term often used at a societal level. Therefore in the following 17

24 paragraphs we will talk about corporate sustainability (CS), to make the two concepts, CS and CSR, comparable at a company level. Even though CSR and CS are often used as synonyms, Olawale (2009) says they are not exactly identical. According to Olawale: CS seems to concentrate more on the impact of a company on its environment and vice-versa, whilst CSR seems to focus on the benevolent and beneficial activities of the company to society (p. 4). Olawale believes that the major difference is the type of equity on which both focus. CSR is more focused on stakeholder benefit or stakeholder equity considerations, while CS more focusses on social equity and more specifically how to foster socio-economic development. Sustainability is characterized by the fact that generally a reference is made to the notion of inter-generational equity. When we talk about corporate sustainability, this means a reference to inter-generational equity between present and future shareholders and stakeholders of companies (Olawale, 2009, p. 7). We can argue that the link between CSR and sustainability is that CSR should be considered part of sustainability. To achieve sustainable development efforts at company level, in the form of CSR, are a necessary condition, but not sufficient. Sustainable development also requires efforts at other levels, such as by the government, by society as a whole, on individual level, The Interdepartmental Commission for Sustainable Development (ICSD, 2006) agrees with this to a certain extent. The ICSD also believes that sustainable development is much wider than CSR and that it does not just concern companies. They say the following: sustainable development has a generally transversal character, which means that all actors in society are involved (ICSD, 2006, p. 8). However, they don t consider CSR to be part of sustainability. Rather they see CSR as an application of sustainable development to the activities and accompanying responsibilities of businesses (ICSD, 2006, p. 8). Each of the aforementioned topics or concepts has their own extensive literature, which overlaps to a certain extent with the CSR literature. However, it is beyond the scope of this thesis to further elaborate on those areas of research. 1.6 Conclusion It is clear that the origins of CSR can be traced back for centuries. Despite its longranging history, no consensus has been reached yet on the definition of CSR, due to the complexity of the subject matter. This lack of satisfactory and generally accepted definition together with a variety of concepts which are often used interchangeably to describe CSR, leads to great confusion. For the remainder of this thesis we will work with the initially proposed definition by the Commission of the European Communities in We believe it to be a good choice because Dahlsrud s (2008) study indicated that this definition includes all five dimensions of CSR and he pointed out that it s the definition with the highest frequency count in his study. 18

25 Chapter 2: Different views on CSR 2.1 Introduction In this chapter we take a look at the different views on CSR. We will list a few of the proponents and opponents and we will look into the arguments which they generally use to defend their positions. We will talk a little about the link between corporate social performance and corporate financial performance and in a last section we will briefly discuss the emergence of a new view. 2.2 Different views on CSR As discussed before there are three approaches to CSR: the shareholder approach, the stakeholder approach and the societal approach. Van Marrewijk (2003) however does not state that the latter is also the contemporary one. The problem is that there are different views on the relationship between CSR and business and that there is still an on-going academic debate as to whether corporate decision makers should be concerned with issues other than profitability (Mohr, Webb, & Harris, 2001, p. 46). This debate is not a recent phenomenon, but is as old as CSR itself. To understand the different views it is useful to look at the two extreme cases. A first view is formulated by the proponents or advocates of CSR. They believe that companies are capable of making more long term profit and increasing long term success by operating with a CSR perspective. Opponents or critics, on the other hand, argue that CSR would only distract firms from the economic role of businesses, namely profit generation (Buhr & Grafström, 2007). Jensen (2002) also describes these two competing views. He claims that the proponents of CSR usually support the stakeholder theory, while the opponents support the value maximization proposition. Stakeholder theory says that managers should make decisions so as to take account of the interests of all stakeholders in a firm (p. 236). On the other hand, value maximization states that managers should make all decisions so as to increase the total long-run market value of the firm (p. 236). According to Mohr et al. (2001), Adam Smith (1863) argued in 1863 that the pursuit of profit generation and doing well for society can go together, it doesn t have to be one or the other. Smith believed that business owners, in pursuit of profit, will ultimately produce the greatest social good because of the invisible hand of the marketplace (Mohr et al., 2001, p. 46). The view of Adam Smith was, and still is, subject to a lot of critique because many contemporary thinkers believe in the presence of several conditions which actually hinder the effectiveness of the invisible hand (Mohr et al., 2001). According to Mohr et al. some of these conditions include the lack of consumer information and imperfect competition (p. 46). Because many believe the view of Adam Smith to be unrealistic, we will now take a look at the views formulated by the proponents and opponents of CSR. 2.3 Proponents Keith Davis (1960) is one of the proponents. He believes that the primary economic objectives of a business have to come first, because otherwise the business will lose its 19

26 reason for existence (Davis, 1960). However, while he believes that economic functions are the most important for business, he also states that this does not negate the existence of non-economic functions and responsibilities (Davis, 1960, p. 76). Carroll s (2001) hierarchical approach is in line with the view of Davis (1960). Carroll is also an advocate of CSR, but as previously discussed, economic responsibilities are found at the bottom of Carroll s pyramid of CSR. Hence, just as Davis, Carroll considers the economic functions to be the most important ones. Among the advocates of CSR we also find John Elkington (1997), who is an important European scholar in the field of CSR. Elkington is often compared to Carroll. Whereas both of them agree on the importance of CSR in business, both take a different view on how to approach it. We previously discussed the hierarchical view of Carroll. Elkington s view is often labelled the horizontal view, the triple bottom line or PPP. It is called the horizontal view, because whereas Carroll talks about a hierarchy in responsibilities, Elkington believes that all P s, which stand for people, planet and profit, are equally important (Craps, 2012a). Labelling it a horizontal view is not completely correct though. Elkington (1997) stated that society depends on the economy and the economy depends on the global ecosystem, whose health represents the ultimate bottom line (p. 73). Hence, Elkington does believe in a kind of hierarchy because he believes there is an environmental bottom line, which is the most important one, so not all P s are equally important. His environmental bottom line starts from the idea that you cannot negotiate with the environmental system because there are limits. Where two P s or two bottom lines come together, is what Elkington labels the shear zones. He believes that CSR is put into practice in those shear zones because the P s that come together often contradict. Post and Sachs (2002) are also found among the proponents. They talk about the new stakeholder view and state the following: the new stakeholder view posits that the capacity of a firm to generate sustainable wealth over time, and hence its long-term value, is determined by its relationships with critical stakeholders (p. 9). The exact details of how the new stakeholder view differs from the traditional stakeholder view are irrelevant for our CSR discussion. The essence here is that Post and Sachs believe that focusing on the interests of the shareholders alone won t be sufficient to increase long term success Arguments in favor of CSR While we briefly mentioned a few of the proponents in the previous section, it is more interesting to look at some of the arguments used by the proponents to defend their position. Davis (1973) documented the CSR debate and provided an overview of arguments for corporate social responsibility and arguments against corporate social responsibility. Even though his article was written in 1973, many of the arguments are still relevant in the current CSR debate. Jones (1980) is another writer who briefly documented the debate in his article corporate social responsibility revisited, redefined. The view of the proponents, he labels prosocial responsibility position, which means that corporations have an obligation to constituent groups other than shareholders (p. 61). The view of 20

27 the opponents, he labels the antisocial responsibility position, which refers to the idea that corporations have an obligation to stockholders alone (p. 61). A first argument Davis (1973) discusses is long-run self-interest (p. 313). This argument states that spending money on social programs is actually in the long-run interest of the business itself. It might seem contradictory that spending money will increase profit, but the idea behind it is that there is a strong link between business and society. By creating a better community and a better society, through these social programs, the firm will benefit as well. In that way companies create a better environment for their business. Davis gives a few examples: labor recruiting will be easier, and labor will be of higher quality, turnover and absenteeism will be reduced, crime will decrease, less taxes will have to be paid to support police forces, (p. 313). A second argument is public image, which is closely related to the previous one (Davis, 1973). Each individual firm aims at enhancing its own public image and hopes it leads to an increase in customers, better employees, and other benefits. A firm that wishes to capture a favorable public image will have to show it supports the social goals that the members of the public find important. Another argument is labeled by Davis (1973) as viability of business. It relates to the Iron Law of Responsibility, which says in the long run, those who do not use power in a manner which society considers responsible will tend to lose it (Davis & Blomstrom, 1971, p. 95). It is reasoned that business, as an institution, only exits because it performs valuable services for society (Davis, 1973). Davis states: Society gave business its charter to exist, and that charter could be amended or revoked at any time that business fails to live up to society s expectations. Therefore, if business wishes to retain its present social role and social power, it must respond to society s needs and give society what it wants (p. 314). Hence, if businessmen do not accept social-responsibility obligations, other groups will eventually step in and assume those responsibilities. The power that comes with those obligations will then be assumed by those other groups. A fourth argument in favor of CSR has to do with the avoidance of government regulation (Davis, 1973). It is argued that if the businessman on his own engages in socially responsible behavior, he can prevent the government from introducing new regulations. Businesses are not in favor of new regulations because they are costly to the business and they restrict their flexibility in decision making. A fifth argument deals with sociocultural norms (Davis, 1973). The idea is that the operations of a businessman are subject to a set of cultural constraints in the same way as any other person in society operates under a set of cultural constraints. Davis (1973) says that research shows that those cultural norms are powerful tools in determining behavior. Consequently, as the norms in society change, the businessman will adapt his behavior as well. For example: if society moves toward norms of social responsibility as it is now doing, then the businessman is subtly and inevitably guided by these same norms (Davis, 1973, p. 315). 21

28 Another argument in favor of the business engaging in CSR is that it is in the interest of the stockholder (Davis, 1973, p. 315). This argument is of course strongly linked to all the other ones. Davis (1973) lists another argument: many other institutions have failed in handling social problems, so why not turn to business (p. 316). This argument, however, is not a very strong one as it is made more out of desperation and frustration than out of reason. A related argument is that business has valuable resources which could be applied to social problems, so society should use them (Davis, 1973, p. 316). Resources does not only refer to money, but also to management talent, functional expertise, and innovative abilities. If business were to use these innovative abilities to deal with social problems, many of these problems could be handled in a profitable way according to the traditional business concepts. In that way problems can become profits, which is another argument by Davis (1973, p. 317). A final argument in favor of CSR is that prevention is better than curing (Davis, 1973, p. 317). The social problems will not go away by themselves and will have to be dealt with at some point in time. It is argued that it is actually more economical to deal with them now before they grow into bigger problems. If business postpones dealing with these problems now, it might have to spend a lot more time on them in the future, which will leave less time to achieve its primary objectives. 2.4 Opponents Milton Friedman (1962, 1970) is one of the most notorious opponents of incorporating CSR into business practices. He clearly formulated his opinion on CSR in the title of one of his works, being: the social responsibility of business is to increase its profits (Friedman, 1970, p. 1). He already expressed his opinion before, in his work of 1962, by saying: few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible (Friedman, 1962, p. 133). Friedman (1970) believes that only people have responsibilities. He states that a corporation is an artificial person and in this sense may have artificial responsibilities, but business as a whole cannot said to have responsibilities, even in this vague sense (Friedman, 1970, p. 1). In his paper Friedman (1970) makes a distinction between the business, the owners of the business and corporate executives. These three are linked by the fact that Friedman defines a corporate executive as an employee of the owners of the business. In this way the corporate executive has direct responsibility to his employers (Friedman, 1970). This responsibility entails conducting the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom (Friedman, 1970, p. 1). Of course in some cases the employers might have a different objective other than making as much money as possible. Putting aside the issue of the objective of the owners, the general idea is that the corporate executive, also called the manager, is the agent of the individuals who own the corporation and his primary responsibility is to them (Friedman, 1970, p. 1). 22

29 Friedman believes that a distinction should be made between a person in his role of corporate executive, as discussed before, and as a person in his own right (Friedman, 1970, p. 2). As a person, he may have other responsibilities, for example: to his family. It might be that he devotes part of his income to some of these responsibilities, also referred to as social responsibilities. This situation has to be distinguished from the previous one as in this case he is not acting as an agent, but as a principal because he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes (Friedman, 1970, p. 2). Therefore these are social responsibilities of an individual and not of a business. According to Friedman, a corporate executive can spend his own money on general social interests, but he should not spend the money of his employers on this. Because if he does, he is acting in a way that is not in the interest of his employers, as they wish to make as much money as possible. He should not spend the money in a different way than the employers would have spent it. Porter and Kramer (2011) refer to the fact that the reasoning above doesn t suggest that businesses shouldn t contribute to social benefit. But the belief here is that CSR shouldn t be incorporated into business practices because business already contributes to society by making profit. In its turn, profit generation leads to employment, wages, purchases, investments and taxes. Hence Porter and Kramer state conducting social business as usual is sufficient social benefit (Porter & Kramer, 2011, p. 66) according to this view. This statement of Porter and Kramer (2011) is in line with the idea of the invisible hand, introduced by Adam Smith (1863). Jensen (2002) is one of those critics who believes that social responsibility shouldn t be incorporated into the business because business already contributes to society by making profit. He states that 200 year s (sic) worth of work in economics and finance indicate that social welfare is maximized when all firms in an economy maximize total firm value (p. 239). Jensen acknowledges that in order to succeed, companies must address multiple constituencies. However, he believes that it is logically impossible to maximize along more than one dimension at the same time, so he claims that there will always be trade-offs. He believes that maximizing the total market value of the firm is one objective function that will resolve the tradeoff problem among multiple constituencies (p. 239). Margolis and Walsh (2003) state that those subscribing to the view of Jensen believe that if shareholder wealth is maximized, social welfare is maximized as well (p. 271). Another early opponent is Theodore Levitt (1958). In his article he points out the dangers of social responsibility (Levitt, 1958). He believes that CSR leads to the profit motive being compromised. Levitt states that business will have a much better chance of surviving if there is no nonsense about its goals that is, if long-run profit maximization is the one dominant objective in practice as well as in theory (p. 49). He believes that businesses should let the government take care of the general welfare and the business should take care of more material aspects of welfare. 23

30 2.4.1 Arguments against CSR After briefly discussing the ideas of Friedman (1970), Jensen (2002) and Levitt (1958), we will take a look at the arguments which are generally used by opponents to defend their viewpoint. The most prevailing argument against CSR is the classical economic doctrine of profit maximization (Davis, 1973, p. 317). According to this point of view, business only has one function, being an economic one. Therefore success will be measured by only using economic values as criteria. The manager is the agent of the stockholders, and all of his decisions are controlled by his desire to maximize profits for them (Davis, 1973, p. 317). Jones (1980) even labels it as theft when social responsibility reduces stockholder equity. This should sound familiar as we previously discussed Friedman (1970), who is the chief proponent of this view. A second argument relates to the costs of social involvement (Davis, 1973). Social programs do not pay for themselves; they are very costly for business. While business usually has very substantial economic resources, they are not infinite and they must be spent wisely. The additional costs of social programs are especially critical for marginal firms, which only achieve little or zero profit. If business is pushed into social obligations, these additional costs will drive out marginal firms in various industries (Davis, 1973, p. 318). An additional reason why business should not deal with social responsibility goals is because many businessmen might not be qualified to do the job. The outlook of businessmen is primarily economic and so are their skills. They are not trained to pursue social goals. Therefore they may lack the necessary skills and perceptions do deal with social matters. If they are forced to do so, it may lead to serious consequences (Davis, 1973; Jones, 1980). Another argument is the dilution of business s primary purpose (Davis, 1973, p. 319). The idea here is that CSR would only distract firms from its economic role. It would also divide the interests of its leaders, and weaken business in the marketplace (Davis, 1973, p. 319). As a result the business would perform poorly both in its economic role as in its social role. Jones (1980) states that the successful functioning of our society depends on the role specialization of institutions (p. 61). A weakened international balance of payments is another argument against CSR (Davis, 1973, p. 320). Social programs are costly for business and they will look for ways to recover those costs. Generally the recovery of the costs will be done by adding them to the price of the product. The problem with a higher price is that business loses some competitiveness in the international environment. They will have fewer sales internationally, which leads to a weakened international balance of payment for the country in which the business is located. On top of that, fewer sales also mean fewer jobs in that country. Another argument against CSR is the belief that business already has enough social power (Davis, 1973). Business is already a powerful institution as its influence is felt throughout society. Taking steps to increase its social power, would lead to a 24

31 concentration of power for business and it would threaten the democracy and political pluralism (Davis, 1973; Jones, 1980). Davis (1973) mentions lack of accountability as another argument (p. 320). It is stated that accountability and responsibility should always go together. In that sense, businessmen should not be given responsibility for people because they have no direct accountability in that area. Another argument against CSR is that business social involvement may lack a broad base of support among all groups in society (Davis, 1973, p. 321). There is a lack of agreement on whether business should become more socially involved. Therefore, if a business does decide to become socially involved, some groups would be opposed and the business would operate in a somewhat hostile environment (Davis, 1973). This might lead to tension between the parties concerned, a failure of the social mission, and it might also cause severe side-effects. Jones (1980) and Banjeree (2001) pointed out another argument, which Davis (1973) did not mention. Jones (1980) stated the following: Those opposed to corporate social responsibility have one final argument in their intellectual arsenal, that social responsibility is too vague to be useful (p. 60). Also Banjeree (2001) stated that CSR is too broad in its scope to be relevant to organizations (p. 42). Crane et al. (2008) are amazed that: for a subject that has been studied for so long, it is unusual to discover that researchers still do not share a common definition or set of core principles, that they still argue about what it means to be socially responsible, or even whether firms should have social responsibilities in the first place (p. 4). 2.5 The link between corporate social performance and corporate financial performance A lot of time has been devoted on empirical research focussing on establishing a link between corporate social performance (CSP) and corporate financial performance (CFP). Proponents believe this link to be positive, while the opponents argue it is negative. The aim of the proponents has largely been to demonstrate that corporate attention to human misery is perfectly consistent with maximizing wealth (Margolis & Walsh, 2003, p. 273) Margolis and Walsh (2003) provide a brief overview of the empirical search for a link between CSP and CFP between 1972 and They state that there are 127 studies published in that period, which examine the relationship between companies socially responsible conduct and their financial performance. They made a distinction between studies in which CSP has been treated as an independent variable and studies in which CSP has been treated as a dependent variable. Margolis and Walsh published the following findings: Corporate social performance has been treated as an independent variable, predicting financial performance, in 109 of the 127 studies. In these studies, almost half of the results (54) pointed to a positive relationship between corporate social performance and financial performance. Only seven studies 25

32 found a negative relationship; 28 studies reported non-significant relationships, while 20 reported a mixed set of findings. Corporate social performance has been treated as a dependent variable, predicted by financial performance, in 22 of the 127 studies. In these studies, the majority of results (16 studies) pointed to a positive relationship between corporate financial performance and social performance. Four studies investigated the relationship in both directions, which explains why there are more results than studies (p. 274). The summary of the findings of these 127 studies suggest a positive association between a company s social performance and its financial performance and indicate very little evidence for a negative association. Orlitzky, Schmidt and Rynes (2003) came to the same conclusion. They wanted to execute their study to show that the mainstream claim that we have little generalizable knowledge about CSP and CFP is built on shaky grounds (p. 403). Therefore they conducted a meta-analysis of 52 studies. Their results show, just like the results of Margolis and Walsh, that there is a positive association between CSP and CFP. Griffin and Mahon (1997) reviewed 51 papers on this topic, but their results were less positive. They found 33 papers which reported a positive relationship, 9 which reported no relationship, but also 20 which reported a negative relationship, which is quite a significant number. Also here the numbers add up to more than 51 because some papers found the relationship in both directions. Based on their results they concluded that even though there is hope in the large number of studies that have shown a positive relationship, academics and practitioners alike should be concerned with the variability and inconsistency in these results (Griffin & Mahon, 1997, p. 7). Whereas the results of both Margolis and Walsh (2003) and Orlitzky et al. (2003) seem more promising than the ones of Griffin and Mahon (1997), Margolis and Walsh also acknowledge the inconsistencies in different research studies. Margolis and Walsh refer to other authors who also executed a kind of meta-analysis of the different research studies. The big problem is that many of these review studies point out flaws in the different research studies. The existing research studies seem to suffer from reliability and validity issues of the CSP and CFP measures, sampling problems, a lack of causal theory to link CSP and CFP, (Margolis & Walsh, 2003). Or as Griffin and Mahon state: some of the reasons for these contradictory results stem from conceptual, operationalization, and methodological differences in the definitions of social and financial performance (p. 7). The imperfect nature of the different studies undermines the positive link between CSP and CFP. Peloza and Shang (2011) point out the two most important problems of research studies examining the link between CSP and CFP. A first problem is the following: the relationship between CSR activities and financial performance is typically affected by many other mediating variables, which are not always thoroughly considered by researchers (p. 1). A second problem is that the metrics used to define CSR vary widely among researchers (p. 1). In a way the link between CSP and CFP suffers from the same problem as CSR. After decades of research, no definitive consensus has been reached yet. Because of this lack 26

33 of proof the debate as to whether companies should be concerned with issues other than profitability still continues nowadays. 2.6 The emergence of a new view Adam Smith (1863) argued that it doesn t have to be one or the other, that the pursuit of profit generation and doing well for society can go together. Despite all the critique to this view, there has started to emerge a new view based on a similar idea. This new view is what Porter and Kramer (2011) call creating shared value, CSV. Creating shared value represents a broader conception of Adam Smith s invisible hand (Porter & Kramer, 2011, p. 77). Porter and Kramer define the principle of shared value as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates (p. 66). The main focus of creating shared value is trying to identify and expand connections between economic and societal progress (Porter & Kramer, 2011). The idea of the creating of shared value is that companies can actually create economic value by creating societal value. Therefore Porter and Kramer point out that it is not philanthropy, but self-interested behaviour to create economic value by creating societal value (p. 77). Porter and Kramer see the creation of shared value as a new way to achieve economic success. 2.7 Conclusion In this chapter we discussed different view on CSR. While we listed some proponents and opponents, we mainly focused on the arguments they use to defend their viewpoint. Both groups present a set of sound rational reasons. Despite the different views, the reality today is that social responsibility is incorporated into our business environment. However, still today not everyone agrees with this. Boulstridge and Carrigan (2000) point out that the long established views of Friedman and Levitt are still echoed today by cynics who agree with their proclamations that long-run profit maximisation is the only true key to success (p. 6). Towards the end of the chapter we discussed the link between corporate social performance and corporate financial performance, which is still debated today. We ended the chapter with a brief section on the emergence of a new view, which Porter and Kramer (2011) label creating shared value. 27

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35 Chapter 3: CSR from a company s point of view 3.1 Introduction In this chapter we will shortly take a look at CSR from a company s point of view. We will briefly talk about the importance of CSR for a company, the motivation for companies to incorporate CSR, the return of CSR for companies, and the different types of CSR activities. This thesis, however, focuses more on the consumer s point of view, so we will not elaborate extensively in this chapter. 3.2 Importance of, and motivation for incorporating CSR There has been a lot of research on CSR ranging from a company perspective (what are the outcomes from CSR, how much to invest in CSR, the effectiveness of CSR...) to a consumer perspective (consumer awareness, who is this socially responsible consumer?, consumer responses to CSR,...). Despite the different views on CSR, research has proven that consumers do care about CSR 4 and therefore it is the best interest of the company to do so as well. According to Smith (2008) companies incorporate CSR because consumers, employees, and investors care in ways that create economic incentives for companies to give attention to corporate responsibility (p. 282). Van Marrewijk (2003) identifies three reasons as to why companies adopt CSR practices. Simply stated: they either feel obliged to do it; are made to do it or they want to do it (Van Marrewijk, 2003, p. 99). Companies might feel obliged to adopt CSR practices because they are under increasing external pressure from their customers and from society as a whole. Companies might be made to do so by government regulations. And a last reason to adopt CSR practices is because the companies want to do it out of genuine concern for society and the environment. According to the Interdepartmental Commission for Sustainable Development. (ICSD, 2006) the motivation of companies to implement CSR can be influenced by both internal and external, as well as positive or negative factors. Internal driving forces have to do with the people working in the company. The motivating force to engage in CSR can come from the management, the directors, employees, and shareholders because each of them will have their own values and will have a vision on sustainable development, ethics and their role in society. According to the ICDS more and more companies implement CSR because of intrinsic and ethical convictions and thus intend to be good corporate citizens (pp ). External driving forces can take a variety of forms, but have to do with pressure from outside the company. The ICDS (2006) gives a few examples. A positive factor can be the demand of stakeholders for more socially responsible conduct of a company (p. 17). A negative factor can for example be when there is a public boycott or a scandal which can cause damages to the company s image. The company can then decide to incorporate CSR into its business to improve its image again. Other external driving forces are laws and regulations regarding CSR. 4 We will elaborate on this further in the next chapter 29

36 Going back to Van Marrewijk s (2003) three reasons as to why companies adopt practices, we see that because they feel obliged to do so and because they might be made to do so refer to external driving forces, whereas because they want to refers to internal driving forces. Mohr et al. (2001) executed interviews to investigate what consumers believe to be the real motives of firms to engage in CSR. Mohr et al. created four categories of company motives based on the answers of the respondents: (1) rewards sought for the firm itself, (2) rewards sought mostly for the firm but partly for others, (3) rewards sought mostly for others but partly for the firm, and (4) rewards sought solely for others (p. 59). The results of Mohr et al. (2001) indicate that only 7% (3 out of 41 respondents) considers the motives of the firm to be truly altruistic. 29%, almost one third, believes that firms only incorporate CSR out of totally self-interested behavior. However, most of the respondents believe that there are mixed motives as to why firms engage in CSR. A consumer s perception on the motives of the firm is very important. Yoon, Gürhan- Canli and Schwarz (2006) conclude based on one of their experiments that CSR activities are futile, or even counterproductive, unless consumers perceive the activity as driven by a sincere interest in the supported cause (p. 383). The question for companies today is no longer whether they should incorporate CSR into their activities, but rather how they should do this. Despite the significant amount of research some companies still fail to develop and implement successful CSR programs. Part of this problem is according to Clarkson (1995) due to the fact that there is no general definition for CSR, which could provide a framework for the systematic collection, organization and analysis of data relating to this concept. Another part of the problem might be because there is still a lack of complete understanding of the consumer. This lack of understanding is due to the fact that the consumer is very complex. Not all consumers will react in the same way to certain CSR programs. Bhattacharya and Sen s (2004) research states that consumer reactions to CSR are not as straightforward and evident as the marketplace polls suggest; there are numerous factors that affect whether a firm s CSR activities translate into consumer purchases (p. 10). It is also not because a certain company has a certain CSR program, that all consumers will react to it in the same way. This is in line with what Yoon et al. (2006) refer to, the fact that despite increasing research efforts investigating the effects of CSR on consumers attitudes, extant research does not explain why consumers respond differently to companies that operate in the same industry and support similar CSR activities (p. 377). We will continue to talk more about the importance of understanding the consumer towards the end of the next section. 3.3 Return on CSR Bird, Hall, Momentè and Reggiani (2007) state that there are various ways in which expenditures on CSR activities may translate into increases in value for the company (p. 191). Or in other words, there are several ways in which return on CSR can be created. 30

37 First of all they point out that there are activities which result in an immediate cost saving. This cost saving does then lead to an increased profitability and will increase the company s market valuation. Bird et al. (2007) provide the example of a company which decides to become more energy efficient. This is a CSR activity as it will have a positive impact on the environment. But at the same time it will reduce the costs of the company and consequently lead to a higher profitability. Another way in which expenditures on CSR can translate into an increased value for the company is through reputational benefits, also called goodwill. Bird et al. (2007) give improving product quality as an example. Even though improving the product quality will initially lead to an extra cost and a negative impact on profitability, it will contribute to an improvement of a company s reputation, which in its turn may lead to an increased profitability and market valuation in the longer term. A last idea introduced by Bird et al. (2007) refers to companies voluntarily undertaking CSR activities, which discourage future action in that territory by the government and other regulatory bodies. Bird et al. use as an example companies which might be taking action to voluntarily control pollution emission. Just as the previous example this will also lead to a cost, which might initially decrease profitability. But as companies engage in this voluntarily, it might dissuade government from introducing regulations and/or taxes on the company which may have imposed even greater costs on the company and so resulted in even a greater erosion in the company s market value (p. 191). These ways of creating value through CSR are clearly linked to the arguments in favor of CSR, which we discussed in chapter 2. Peloza and Shang (2011) also executed research on CSR outcomes and their results show that CSR leads to outcomes such as increased customer loyalty, willingness to pay premium prices, and lower reputational risks in times of crisis (p. 1). Green and Peloza (2011) pointed out a few other outcomes, such as: positive company evaluations, higher purchase intentions, resilience to negative information about the company and positive word-of-mouth (p. 48). Each of these outcomes in turn has the potential to increase long term profitability. Positive outcomes of CSR are not only found in literature. According to Martens, Schilder and Stigson (2001) companies themselves have said that reporting a coherent CSR strategy has clear business benefits, such as a better alignment of corporate goals with those of society, an enhanced reputation, and reduction of risk and its associated costs (toward responsible entrepreneurship, para. 2). As noted above, there is a variety of outcomes from CSR. However, increasing long term profitability is clearly the ultimate goal. Companies hope that there is a strong positive relationship between corporate social performance and corporate financial performance. We already talked about this association in the previous chapter. Unfortunately there is still no consensus on the existence of this link. In recent times companies have been investing a lot of money into their CSR programs. The ultimate goal is to create return from these CSR programs. But as mentioned before, some companies still fail to turn their CSR programs into successful ones. Peloza and Shang (2011) state that investments in CSR activities are under scrutiny. Boards and 31

38 shareholders want these outcomes from CSR activities to be measured so they understand if and how they positively impact the profitability of the firm. We already briefly mentioned this in the previous section as well. Mohr et al. (2001) point out that there has been little research on what the public expects. As a result, those who run corporations lack a clear understanding of what the public wants from them and how far they are expected to go toward helping their communities (Mohr et al., 2001, p. 45). Riddleberger and Hittner (2009) also refer to this lack of understanding what the public expects. They refer to an IBM survey of 2009, which was aimed at finding out how senior executives around the world were handling CSR issues in their corporate strategies. The study found that companies do want to make a difference, but that they aren t taking the necessary steps (Riddleberger & Hittner, 2009). One of the main findings was that most companies still don t understand the concerns of their key stakeholders, particularly customers, and they re not actively engaging them to find out (Riddleberger & Hittner, 2009, para. 9). Bhattacharya and Sen (2004) mention in their paper how important it is to understand the consumer because only when companies are aware of what consumers consider to be CSR-related activities 5 they can ascertain clearly and concretely the value of the resources devoted to these activities and as a result they can measure the effectiveness of their CSR programs. The ICDS (2006) also points out the importance of understanding the consumer by stating that a company performs less well economically, socially and environmentally if it is not aware of the needs and expectations of the society around it and its stakeholders (p. 9). Measuring the return and effectiveness of their CSR programs is a key challenge facing companies nowadays, but to achieve that they need to increase their understanding of the customers first. The return of CSR for companies is an important topic. Because as Carroll (2008) says: in today s world of intense global competition, it is clear that CSR can be sustainable only so long as it continues to add value to corporate success (p. 42). Carroll (2008) also notes that nowadays not only business executives determine business success. Society plays an increasing role in the business success determination. 3.4 Different types of CSR activities Peloza and Shang (2011) describe CSR the following way: it consist of specific firm investments called activities. Collectively, over time, these activities can lead to a reputation for social responsibility-a valuable business asset of its own (p. 2). Peloza and Shang (2011) categorize CSR activities into three categories, being: philanthropy, business practices and product-related activities. Under philanthropy we can find for example: donation of sales, donation of products and charity events (p. 2). Under business practices some of the examples include reduced energy consumption, recycling, employee relations, animal testing and ethical conduct (p. 2). And under product-related activities we find examples such as energy efficiency, product quality and organic products (p. 2). According to the categorization by Peloza and Shang most activities fall under the business practices category. 5 We will discuss a few classifications of CSR activities in the section different types of CSR activities of this chapter. 32

39 Kotler and Lee (2005), on the other hand, use six categories to split up CSR activities or CSR initiatives, as they label it. According to them, the six major types of social initiatives are: (1) cause promotion, which refers to the activities that increase awareness and concern for social causes, (2) cause-related marketing, in which contribution to social causes is based on the level of sales, (3) corporate social marketing, which are initiatives that try to change behavior, (4) corporate philanthropy, which is the direct contribution to social causes, (5) community volunteering, in which employees donate their time and talents to work on a social cause, and (6) socially responsible business practices, which are discretionary practices and investment to support social causes (Kotler and Lee, 2005; Carroll, 2008). The classification of different CSR activities is important because as Green and Peloza (2011) indicate: research suggests that consumer responses to CSR depend on how CSR is manifested (p. 48). Hence, different CSR activities might lead to different results. Green and Peloza emphasize that consumers don t view CSR as one overall impression of a firm. Instead, they view each CSR activity in relation to how it can add to their overall value proposition for a purchase. To illustrate Green and Peloza (2011) refer to an article by Creyer and Ross (1996) who found that consumer s perceptions of a company and its products, after the firm committed an unethical act, are positively influenced by ethical behavior, corporate philanthropy, and cause-related marketing. However, they found that cause-related marketing is less effective at countering negative news about a firm than for example unrestricted cash donations (Creyer & Ross, 1996; Green & Peloza, 2011). Green and Peloza (2011) also emphasize that the consumer response is not only determined by the different CSR activities themselves, but also by the way consumers perceive these activities. The inconsistent results from studies analyzing how distinct forms of CSR can impact consumer behavior suggest that consumers do not perceive all forms of CSR in the same manner (Green & Peloza, 2011, p. 48). Green and Peloza reformulate this by saying that the social performance of the firm is about the evaluation of the actions, and not the actions themselves (p. 49). 3.5 Conclusion Considering that consumers care about CSR, it is in the best interest of companies to do so as well. In this chapter we discussed the distinct motivations of companies for incorporating CSR and briefly looked at what consumers believe to be the real motives. We talked about the different positive outcomes CSR can lead to, but saw that the ultimate target is increasing long term profitability. In section 3.4 we mentioned different classifications of CSR activities introduced by Peloza and Shang (2011) and Kotler and Lee (2005). The most important item that we stressed throughout the entire chapter is the importance for companies to understand their consumers. We also pointed out that improvement in this area is needed. 33

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41 Chapter 4: CSR from a consumer s point of view 4.1 Introduction Whereas in the previous chapter we focused on CSR from a company s point of view, in this chapter we look at the consumer s point of view. We will start off this chapter with analyzing the importance of CSR for consumers. Afterwards we will try to find out more about the value consumers derive from CSR by discussing some existing value classification frameworks. 4.2 Importance of CSR for consumers The big question is whether consumers really care about CSR. d Astous and Legendre (2009) come to the conclusion that CSR matters to the consumer. They summarize saying that: studies have shown that consumers have developed favorable attitudes towards ethical products and companies with socially responsible practices (p. 255). Smith (2008) agrees and points out that survey data suggest that up to 90% of consumers consider corporate responsibility in their purchase and consumption behaviors (p. 285). In the eyes of consumers CSR is no longer something extra a company has. Nowadays most consumers expect companies to have fairly high levels of CSR. This is also what Mohr et al. (2001) found in their study: at a general level, most of the interviewees where found to expect a fairly high level of CSR (p. 70). According to Bhattacharya and Sen (2004) this shifts the debate about CSR from whether to how (p. 9). The question for companies should no longer be about whether they should incorporate CSR into their activities, but rather how they should do this. It is also no longer sufficient to just have any kind of CSR program because consumers evaluate them critically. Even though Boulstridge and Carrigan (2000) acknowledge the research confirming consumers care about CSR, they still ask themselves the question whether consumers really do care. To justify their doubts they refer to the gap between attitude and purchase behavior which has been noted by Simon (1995) and Roberts (1996) and many others throughout literature. The attitude-behavior gap refers to the phenomena that what people say regarding purchase decisions and what people ultimately do and show in their purchase behavior, are often two completely different things (Roberts, 1996). Roberts refers to several studies which discover that people do not actually buy what they claim to prefer (p. 80). Simon states in his article that actual purchase behavior, however, still lagged significantly attitudinal statements (p. 23). He made this comment based on a benchmark study of US consumer attitudes towards cause marketing of 1993 conducted by Roper Starch Worldwide and Cone/Coughlin Communications (Simon, 1995). Roberts (1996) lists several reasons for this attitude-behavior gap. Some of these reasons are specific for the United States, whereas we will only point out the more general ones here. A first reason is that green products are too expensive. A second reason is that price, quality, and convenience are still the most important decision factor (Roberts, 1996, p. 80) and another reason is that consumers are confused about green products. Where Mohr et al. (2001) also refer to the issue of buying decisions 35

42 based on traditional criteria like price, quality and convenience and to the issue of consumers being confused, they also add another cause for the attitude-behavior gap, namely being that survey data typically suffers from a social desirability response bias (p. 50). The idea behind this is that when respondents are asked about their reactions to CSR, they may want to make a good impression and appear thoughtful and concerned both to the person conducting the interview as to themselves. Mohr et al. believe that because the cost of answering questions is lower than the cost of actual behavior, surveys probably overestimate the potential impact of CSR on purchase decisions (p. 50). While the first and second reason stated by Roberts (1996) are rather self-explanatory, we would like to elaborate a little more on the third one. Throughout literature it can be found that the consumers are confused about green products due to a lack of information and awareness. Mohr et al. (2001) point out that this inhibits consumer responsiveness to CSR. Simon (1995) points out that while consumers have become quite receptive to corporate philanthropy, they are insufficiently informed about its actual practice by specific firms (p. 24). It is important for communication strategies to be reassessed to increase the awareness levels among consumers so they know which firms operate with CSR perspectives. Mohr et al. also point out that there is a low level of knowledge regarding CSR records of companies and that it is difficult to obtain such information. It makes sense that consumers first need to become aware of a firm s level of social responsibility before this factor can impact their purchasing (Mohr et al., 2001, p. 47). Even though the attitude-behavior gap, discussed before, has been described by many throughout literature, Boulstridge and Carrigan (2000) believe that not all research suffers from this problem. To illustrate this they state that there was no attitudebehavior gap in their own small scale qualitative study. They believed there to be a great deal of openness and honesty in their study given that these respondents openly declared little interest in corporate behavior in relation to their purchasing (p. 15). They acknowledge the fact that their study is not representative of the population, but their study does raise some questions as to whether corporate behavior really influences purchasing and whether the attitude-behavior gap still exists. Unfortunately this seems to be a never-ending discussion throughout literature for which no clear answer can be formulated yet. 4.3 The value of CSR for consumers A lot of research has been done on the value of CSR from a company point of view. The consumer side however has been less investigated. Green and Peloza (2011) believe that in order for consumers to support firms that engage in CSR, they must receive value from the exchange (p. 48). Murray and Vogel (1997) agree and describe it the following way this exchange is one in which the firm offers something of value typically a social benefit or public service to an important constituency and, in turn, anticipates receiving the approval and support of key individuals (p. 142). Green and Peloza see it as a kind of win-win situation for the company and the consumer. The win for the company is the consumer s approval and support, whereas the win for the consumers is the value they receive from CSR activities. Therefore, the exchange will only take place when both parties perceive value. 36

43 It is important to note that the statement by Green and Peloza (2011): in order for consumers to support firms that engage in CSR, they must receive value from the exchange (p. 48) is not only relevant to firms engaging in CSR. In literature it can be found that in order for consumers to support any kind of firm, regardless of whether that firm engages in CSR or not, they must receive value from the exchange (Sheth, Newman & Gross, 1991; Lai, 1995). Lai emphasizes this by saying that creating customer value is fundamental to both profit-seeking companies and nonprofit organizations (p. 381). Sheth et al. (1991) point out that customer value and consumer value are not exactly the same. Customer value is most often used in marketing literature, whereas consumer value is more often used in consumer behavior research. Lai (1995) explains this difference by stating that customer value focuses on the buyers evaluation of product purchase at the time of buying, while consumer values stress people s valuation on the consumption or possession of products (p. 381). This thesis, however, focusses on investigating the value consumers derive from CSR, irrespective of whether it is derived at the time of buying or afterwards. Therefore we will not make this distinction between customer value and consumer value as in a way we investigate both at the same time. To avoid confusion, for the remainder of this thesis, we will use these two concepts interchangeably, as is also often done in literature (Sheth et al., 1991; Lai, 1995). Holbrook (2006) defines this value, whether it is derived from CSR or not, as an interactive, relativistic preference experience. Value is interactive because it can only be created in a situation where a company and its customer come together. Value is also considered to be relativistic because a customer s perception will always be influenced by several external factors. These factors depend on the environment in which the customer lives. Value is also based on preferences because each customer will respond differently, according to his or her subjective taste, to a product, service or corporate initiative (Holbrook, 2006; Peloza & Shang, 2011). Both Sheth et al. (1991) and Lai (1995) worked out a theory of consumption values in their articles. Sheth et al. talk about five distinct types of consumption values influencing consumer choice behavior, whereas Lai talks about eight consumption values which he labels generic product benefits. Even though their classifications of value show some similarities with the ones we will discuss later in relation to CSR, their frameworks were not designed specifically to deal with value derived from CSR. Therefore the value classifications by Sheth et al. and Lai are less relevant to us as we want to take a look at the value derived from CSR and not just the value derived from any kind of product from any kind of company. Peloza contributed to two articles in which CSR value for the consumer has been classified in different ways. A first article by Green and Peloza (2011), states that CSR can provide three forms of value to the consumer, being: emotional value, functional value and social value. Green and Peloza believe that each of these enhances or diminishes the overall value proposition for consumers (p. 48). In general, emotional value refers to the perceived utility acquired from an alternative s capacity to arouse feelings or affective states (Sheth et al., 1991, p. 161). When talking about emotional value derived from CSR, Green and Peloza (2011) illustrate it by saying 37

44 that emotional value is for example the good feeling or the warm glow which is perceived by a consumer when making a purchase with a social or an environmental attribute. A concrete example might be the warm glow people get when they buy a product which is completely made out of recycled materials because they feel good about contributing to the preservation of the environment. A second source of value, which can be derived from CSR, is social value. Generally speaking, social value is the perceived utility acquired from an alternative s association with one or more specific social groups (Sheth et al. 1991, p. 161). In relation to CSR, social value can originate when consumers make purchases from firms active in CSR. The way in which this social value is constructed, is because people make judgments about others based on the purchases they make (Green & Peloza, 2011, p. 50). To give a concrete example: someone might derive social value from a purchase from a firm active in CSR because he/she feels he/she will make a good impression on others when they find out he/she bought something from that firm. A last type of value is functional value. Overall, functional value refers to the perceived utility acquired from an alternative s capacity for functional, utilitarian, or physical performance (Sheth et al., 1991, p. 160). Concerning CSR, this type of value is created when the consumer receives an actual benefit from the product or service through certain aspects of CSR (Green & Peloza, 2011). One of the participants in the research of Green and Peloza (2011) gives a concrete example by saying that fuel efficiency standards save the environment, but after a few years, long term, it saves you money (p. 51). In their paper, Green and Peloza (2011) investigated which form of value received from CSR people find most important and also whether this changes during recessionary times. They found that a large majority of informants suggested that functional value is the leading (and in many cases, the sole) driver behind integrating CSR into their decision-making process (p. 51). Another finding was that emotional and social value appear to be somewhat expandable with consumers in a context of economic uncertainty, while CSR that provides functional value can become an even more salient criteria for decision making (p. 52). Green and Peloza explain this by stating that the recession affects consumers in a way that they have to prioritize and make trade-offs. The fact that the main decision criteria for consumers, regarding CSR, is the functional value, was also found by Essoussi and Zahaf (2008). They executed research on what consumers understand to be organic food and why they buy it. They found that one third of all respondents ranked health as the main reason of buying organic food (p. 99). While there were other criteria involved, health turned out to be the main decision criteria. Health has to do with an actual benefit the consumers receive. Hence this suggests that functional value is the main driver behind integrating CSR into the decision-making process. A second article written by Peloza together with Shang (2011) also states that corporate social responsibility (CSR) activities have the potential to create several distinct forms of value for customers (p. 1). However, they work with four distinct types of consumer value in their article instead of three. The model of Peloza and Shang, labeled the multifaceted customer value of CSR activities, is illustrated in the table below and is based on some ideas of Holbrook (2006). 38

45 Multi-faceted Customer Value Self-oriented value (i.e., only directly enjoyed by the customer) Other-oriented value (i.e., not only directly enjoyed by the customer) Intrinsic value (i.e., does not require the involvement of a third party to be enjoyed) Quadrant 1 Efficiency or excellence Quadrant 2 Joy or aesthetics Table 1: The multi-faceted customer value of CSR activities Extrinsic value (i.e., does require the involvement of a third party to be enjoyed) Quadrant 3 Status or esteem Quadrant 4 Ethics or spirituality Each of the four quadrants in table 1 represents a form of value that could potentially result from a certain CSR activity. The model works with two dichotomies. On the vertical axis we find the self-oriented or other-oriented value dichotomy. This refers to whether the value resulting from the CSR activity is self-serving to the customer or can be enjoyed even by others (Peloza & Shang, 2011, p. 3). On the horizontal axis we find the extrinsic or intrinsic value dichotomy. This one illustrates whether the perceived value by the customer is a direct result from the CSR activity itself or whether the involvement of a relevant third party is required (Peloza & Shang, 2011, pp. 3-4). Peloza and Shang (2011) applied this model in their article to CSR activities in the form of organic agricultural practices. We will do the same below to illustrate the different types of value which can be derived from CSR. The first quadrant refers to self-oriented intrinsic value, which is the efficiency or excellence of the product or service offered by the business (Peloza & Shang, 2011, p. 3). Peloza and Shang (2011) give as an example that organic agricultural products are considered healthier products, which are free from pesticide residues and other contaminants. We believe this self-oriented intrinsic value to correspond best to the functional value discussed before by Green and Peloza (2011). A second quadrant contains other-oriented intrinsic value, which is the personal joy or aesthetic appreciation resulting from consuming the product or using the service (Peloza & Shang, 2011, p. 3). Peloza and Shang (2011) exemplify this by referring to organics as a simple product, representing a slow-food quality of living (p. 4). Slow food is used as an opposite for the culture of fast food. The idea is that the movement known as Slow Food seeks to encourage the enjoyment of regional products. Their aim is to defend agricultural biodiversity. The heart of slow food is local ingredients and supporting the local farmers who produce them (Slow food, 2010). These local ingredients are often grown organically. We believe, this classification of other-oriented intrinsic value to be more or less in line with what Green and Peloza (2011) labeled emotional value. The third quadrant refers to self-oriented extrinsic value, which is the status or esteem associated with consuming the product or using the service (Peloza & Shang, 2011, p. 3). Peloza and Shang (2011) illustrate this by saying that organics can be used as a way to represent to others one s concern for the environment (p. 4). This type of value corresponds best to what Green and Peloza (2011) refer to as social value. 39

46 A last and fourth quadrant contains other-oriented extrinsic value, which is the ethical or spiritual benefit of the product consumption or service use (Peloza & Shang, 2011, p. 3). Peloza and Shang (2011) illustrate this by representing organics as a way to contribute to environmental conservation. This type of value is very similar to the otheroriented intrinsic value, but here it is considered extrinsic because it is necessary that the environmental standards are defined by a third party in order for the consumer to perceive value. After looking at the distinct classifications of CSR value proposed by Green and Peloza (2011) and Peloza and Shang (2011), we decided to focus on the framework proposed by Green and Peloza (2011) for the remainder of this thesis, as we feel it is the clearest and most straightforward one and therefore the most appropriate one for our research. 4.4 Conclusion At the beginning of this chapter we analyzed the importance of CSR for consumers. Even though many writers point out that consumers do care about CSR, there are still some that argue that this might not be the case. We came to the conclusion that no uniform opinion exists on this issue and that further research is therefore necessary. Afterwards we talked about the consumer value which can be derived from CSR. Whereas there are many articles dealing with consumer and customer value, we only discussed the ones of Green and Peloza (2011) and Peloza and Shang (2011) because they specifically focus on value derived from CSR. We decided to continue with the framework proposed by Green and Peloza (2011) for the remainder of this thesis. They identify three types of consumer value which can be derived from CSR, being: emotional value, social value, and functional value. 40

47 Chapter 5: Identifying and targeting the ethical consumer 5.1 Introduction Identifying and targeting the ethical consumer is the goal of many marketers. If companies go through the lengths of incorporating CSR, they want to make sure that the right consumers, the ones that care, are made aware of this and know about it. In this chapter we will therefore briefly define the ethical consumer. Afterwards we will discuss whether the ethical consumer can be identified based on demographic characteristics. 5.2 Identifying and targeting the ethical consumer According to Cowe and Williams (2000) ethical consumers are people who are influenced by environmental or ethical considerations when choosing products and services (p. 4). They state that ethical is used to cover matters of conscience such as animal welfare and fair trade, social aspects such as labour standards, as well as more self-interested health concerns behind the growth of organic food sales (p. 4). This is just one of the many existing definitions of the ethical consumer. Freestone and McGoldrich (2008) provide a brief overview in their article on the different writers in literature defining the ethical consumer. Just as for CSR there are several synonyms for the ethical consumer. Smith (2008) refers to the conscience consumer and the green consumer. De Pelsmacker, Driesen and Rayp (2003) point out that they are all different though. According to them it started in the seventies with the socially conscious or socially responsible consumer, whose range of action did not reach further than his own community (p. 2). This socially conscious consumer was followed by the green consumer in the eighties. The green consumer s range of action focussed more on the environmental aspects. De Pelsmacker et al. believe that the ethical consumer only emerged in the nineties. According to them the ethical consumer incorporates environmental issues but extends the concern to animal welfare, human rights, and working conditions in the Third World (p. 2). Shaw and Shiu (2003) agree with De Pelsmacker et al. (2003) that these concepts are not all synonyms. Shaw and Shiu identify green consumerism as consumers who incorporate their environmental concerns into their purchase decision process. Ethical consumerism, on the other hand, is not that narrow according to them. Shaw and Shiu believe that in addition to environmental concerns, ethical consumers are also concerned about other areas such as animal issues, irresponsible selling, Smith (2008), however, does not make the distinction between the different concepts. He believes that the idea of all these synonyms is essentially the same that consumers care about issues of corporate responsibility and that this will influence their purchase and consumption behaviors and this, in turn, provides incentives for companies to be socially and environmentally responsible (pp ). For the remainder of this thesis we will talk about the ethical consumer and ethical consumerism as it encompasses both the socially conscious consumer and the green consumer according to De Pelsmacker et al. (2003) and as to Smith (2008) they all mean the same anyways. 41

48 Ethical consumer behavior has been growing over the years (Laroche, Bergeron, & Barbaro-Forleo, 2001; Roberts, 1996; Smith, 2008). Globalization is often mentioned as the main driver behind this growth (Shaw, Newholm, & Dickinson, 2006). The idea here is that globalization led to an increased exposure to and accessibility of information. As consumers become more aware about what is going on around them and the difference they can make through their buying and consumption behavior, the power of the consumer increased. The result is an increasingly informed, empowered consumer (Shaw et al., 2006). The internet has been a crucial development contributing to this increase in ethical consumerism as it allows instant dissemination of information. This increase in consumer power does not necessarily mean that the consumers use this power. The real ethical consumer is one that puts his or her beliefs into action. Regarding CSR, however, not all consumers act this way. As mentioned before, there is a significant attitude-behavior gap. Roberts (1996) acknowledges this gap in the results of his study by saying expressed environmental or social concern does not translate directly into consumer behavior (p. 82). Also Smith (2008) points out this gap by saying that survey findings are suggestive of widespread ethical consumerism, however, for all these expressions of good intentions, the evidence for extensive practice of ethical consumerism is less readily available. (p. 287). D Astous and Legendre (2009) refer to the fact that consumers agree that companies must engage in socially responsible practices but they refuse to assume the possible consequences, namely higher prices, lower quality and wasted time (p. 256). It is useful here to repeat a point made by Green and Peloza (2011) which we mentioned before. They emphasize that consumers don t view CSR as one overall impression of a firm, but instead they view each CSR activity in relation to how it can add to their overall value proposition for a purchase. It seems that consumers are still more motivated by self-interest than by the interests of society (D Astous & Legendre, 2009). Marketers continuously try to identify these socially conscious/ green/ ethical consumers so they can target them and attract them to their products, services or causes. Webster (1975) already tried doing this in 1975 in his article determining the characteristics of the socially conscious consumer. Since not every consumer has the same level of sensitivity to ethical consumption, marketers try to classify them into consumer segments and subsequently identify the consumer segments which are sensitive to ethical concerns. Unfortunately for marketers, these ethical consumers and ethical consumer segments are not easily identified. Roberts (1996) mentions that marketers prefer focusing on demographics because they are often used as initial market segment criteria and are much easier to make operational. If demographics turn out to be effective in distinguishing between consumers who demonstrate different levels of ethical consumer behavior, this will be a great help for marketers in their segmentation and overall marketing efforts. Nevertheless, Roberts points out that many of the previous attempts to segment the market for ethical products and services by using demographics have produced conflicting results. Roberts (1996) executed his own study on the subject and one of his main results is that demographics are not good predictors of ethical consumer behavior. Roberts points out that only 8% of the variation in ethical consumer behavior of his sample can be explained by demographics. Webster (1975) already came to this conclusion in

49 based on the results of his research in which he tried to determine the characteristics of, what was at that time labeled, the socially conscious consumer. He found that personality and attitude measures tended to be somewhat better predictors than socioeconomic and demographic variables, but personality and attitude variables do not easily lead to segmentation strategy (p. 196). He also added that even the relationships with personality and attitude measures were rather weak. Many more (De Pelsmacker et al. 2003; McGoldrick & Freestone, 2008) have tried identifying this ethical consumer based upon demographic factors. However, research seems to indicate that demographics are not good predictors of ethical consumer behavior. 5.3 Conclusion In this chapter we defined the ethical consumer and saw that other concepts such as the socially responsible consumer and the green consumer are closely linked and according to some (Smith, 2008) even indicate the same. We pointed out that marketers have tried identifying the ethical consumer for many years, but that it is not an easy job. Research seems to indicate that demographics are not good predictors of ethical consumer behavior so other segmentation criteria will have to be investigated in the future. 43

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51 PART II: RESEARCH Chapter 6: Research design 6.1 Introduction In this chapter the different steps of our research process will be discussed. First of all a short summary of the executed literature review will be given. This is our starting point for formulating the problem definition and developing the research question. Subsequently, we make the research question more concrete through the articulation of different research objectives. Afterwards follows a description of the research design and the research method. In the last section of this chapter we express each research objective in operational terms. 6.2 Development of the research question Despite the ongoing debate as to whether or not social responsibilities should be the concern of corporate decision makers, it is clear from our literature review that the importance of CSR has been growing over the past years. Consumers seem to show increasing interest in the social programs of companies. From a company point of view it is crucial to understand the consumer because these consumers are the ones that buy the products/services of the company and are very important stakeholders for the company. Therefore, the success of a company s CSR policy is to a large extent determined by these customers; hence, understanding them is critical. A key challenge facing companies nowadays is measuring the return of their CSR programs. Boards and shareholders want these outcomes from CSR activities to be measured so they understand if and how they positively impact the profitability of the firm. The problem is that some companies still fail to develop and implement successful CSR programs because they lack a clear understanding of the consumer. Only when companies are aware of what consumers consider to be CSR-related activities, they can assess clearly and concretely the value of the resources devoted to these activities and as a result they can measure the effectiveness of their CSR programs (Bhattacharya & Sen, 2004, p. 14). This again emphasizes the importance of understanding the consumer. Part of understanding these consumers relates to trying to find out why they buy from companies which incorporate social responsibilities as part of their business practices. Green and Peloza (2011) believe that consumers only support firms that engage in CSR, if they receive some kind of value from the exchange. From Green and Peloza we also learn that consumers usually don t view CSR as one overall impression of a firm, but that they look instead to how each CSR activity can add to their overall value proposition when making a purchase. Thus in other words, companies try to understand consumers through analyzing what kind of value(s) they derive from CSR. This brings us to the research question of this thesis: What is the value of corporate social responsibility for consumers? 45

52 Before trying to understand the value consumers derive from CSR, it is important to find out what these consumers understand under corporate social responsibility and how they define it. As pointed out during the literature review, despite the significant amount of research, literature has not succeeded in providing one generally accepted definition on CSR. The definitions offered in literature can be confusing and sometimes even contradicting. Therefore taking a customer point of view and looking at how they see CSR, can be very useful. Consequently the goal of my research is twofold. On the one hand I want to find out what corporate social responsibility actually means for consumers, given the definition in literature is unclear, and on the other hand I want to find out what the value is consumers derive from CSR. 6.3 The concretization of the research question through research objectives Our research question What is the value of corporate social responsibility for consumers? is made more concrete through the formulation of several research objectives. In this part we will formulate the different research objectives and later on, in section 6.5, the methods used to investigate each of these research objectives will be explained. Research objective 1: Identify the perception consumers have of CSR nowadays. Corporate social responsibility is widely discussed among scholars, scientists, business executives, But literature clearly points out the importance for companies to understand the consumer s point of view on CSR. This is so important because these consumers or customers are the ones who may or may not take into consideration the CSR programs of companies when making a purchase decision. The consumers usually don t get to participate in the debate about the CSR definition. Consequently, few studies seem to take into account the consumer s point of view when trying to achieve a consensus regarding the definition of CSR. This suggests it is necessary to take their point of view and increase understanding of how they see CSR. Research objective 2: Which activities of companies do consumers really consider to be CSR activities? In the literature review we talked about Bhattacharya and Sen (2004) who pointed out how important it is for companies to be aware of what consumers consider to be CSRrelated activities. Only when companies understand the view of the consumers on these activities, they can alter and adapt their CSR programs to make them as effective and efficient as possible. Hence, with this question, we try to find out which activities consumers really consider to be CSR activities. To deal with this question a list of CSR activities provided by Peloza and Shang (2011) will be used. But the exact method to tackle this question will be discussed in section

53 Research objective 3: To which extent are consumers aware of the different CSR activities? This third research objective is strongly linked to the previous one. Not only do we want to find out which activities consumers consider to be CSR related, we also want to find out whether the consumer is aware of the level of execution of these activities by companies. Our literature review referred to the gap between attitude and purchase behavior which has been extensively discussed in many articles. As we have previously mentioned, one of the reasons for this attitude-behavior gap is the lack of awareness of a firm s level of social responsibility among consumers (Roberts, 1996; Mohr et al., 2001). It makes sense that a consumer s purchase decision can only be influenced by CSR if they are aware of the company s CSR activities. Therefore, with this research objective, we will investigate the level of awareness, regarding CSR activities, among consumers. Research objective 4: Investigate which types of value consumers derive from CSR. Green and Peloza (2011) believe that consumers only support firms that engage in CSR, if they receive some kind of value in return. Therefore, with this question, we aim to find out what kinds of value these consumers derive from CSR. From the literature review we know that there are different ways to classify the distinct types of value. We previously mentioned we would work with the value classification proposed by Green and Peloza (2011) because this classification seemed clearest and most straightforward one and therefore the most appropriate one for our research. A sub-question related to this fourth research objective will be to explore whether the value consumers derive from CSR is linked to demographic characteristics or whether different groups can be distinguished based on other characteristics. In the literature review we said that Roberts (1996) claimed that demographics are not good predictors of ethical consumer behavior. But maybe they are a good predictor of the value consumers derive from CSR. Research objective 5: Does the CSR policy of a company have an influence on a consumer s purchase decision and behavior? This research objective is again linked to the gap between attitude and purchase behavior. Literature indicates that the social responsibility programs of companies play an increasing role in a consumer s purchase decision. We decided to cooperate with Bio- Planet because we assume that the people who go there are socially conscious consumers to a certain extent 6. But with this research objective we want to find out whether the CSR policy of Bio-Planet is really a determining factor in the consumer s decision to shop at Bio-Planet or whether our assumption was a little premature. 6 We will elaborate on this reasoning further in the next section. 47

54 Research objective 6: Identify the perception people who buy at Bio-Planet have about other people who buy at Bio-Planet. With this research objective we want to find out what people who buy at Bio-Planet think about other people who buy at Bio-Planet. From the answers we hope to get a result that can be linked to the concept of CSR, but it might also be that the result of this research objective has nothing to do with CSR. 6.4 The research design The research design provides more insight into the practical implementation of the research. Based on het onderzoeksplan by Waege (2006) my research design will be discussed by addressing several questions regarding what, who, how, where, and when. More specifically, we will identify what and who will be observed, the method of data collection, and where and when the observation will take place What will be observed? This section deals with identifying what exactly needs to be observed during the research in order to answer the research objectives and formulate an answer to the research question (Waege, 2006). Our research combines elements of descriptive and explanatory research to report on the value consumers derive from CSR (Saunders et al., 2003). The type of CSR activities that will influence our observations are the ones executed by Bio-Planet as they agreed to cooperate in our research. Quantitative and qualitative data will be collected about the opinions of the respondents and their behavior in relation to CSR and the value that could be derived from it Who will be observed? In this part we deal with identifying the sample and the appropriate sample size. The sample Our sample consists of men and women of different ages who shop at Bio-Planet in Ghent. The selection of this sample is based on the assumption that most people who go to Bio-Planet are probably already more aware of CSR than people going to other grocery stores. The aim here is to focus on consumers who already express ethical buying behavior. To link it with our literature study, we hope most customers of Bio- Planet to be ethical buyers. To find out what people understand under CSR, we could have opted for a broader public, but considering this might have resulted in a lot of useless answers, we decided not to. This type of sampling is a form of non-probability sampling and more specifically called purposive sampling. Saunders, Lewis and Thornhill (2003) define it in the following way: purposive or judgmental sampling enables you to use your judgment to select cases which will best enable you to answer your research question(s) and meet your objectives (p. 175). This is exactly why we select Bio Planet customers, because we believe they are particularly informative for our research. 48

55 It is important to note that such samples cannot, however, be considered to be statistically representative of the total population (Saunders et al., 2003, p. 175). Therefore this form of sampling limits the external validity, also called generalizability, of our research as it does not allow us to make statistical inferences to the whole population. Saunders et al. (2003) state: research at a particular store would allow us only to make inferences about that store (p. 87) Despite the lack of generalizability we will keep an eye on the ages of the respondents during our research to make sure we reach respondents from different ages. Even though at that point in our research we are not sure yet whether age will play a role in explaining the results, we feel it is safer to do it this way than to regret it later. The sample size Determining the sample size is not straightforward as the research consists of a combination of quantitative and qualitative research. According to Delice (2010) the researcher should decide on the appropriate sample size while taking into consideration several elements, such as: the research topic, population, aim of the research, analysis techniques, sample size in similar research, the number of the subgroups in the sample, population variability and research design (p. 2007). It is difficult for us to take the population into account when determining the sample size as our population consists of consumers at Bio-Planet, which cannot be found back in the general statistics. Due to a lack of information regarding the population, we don t really take this aspect into account. Saunders et al. (2009) state that for all non-probability sampling techniques, other than for quota samples, the issue of sample size is ambiguous and, unlike probability sampling, there are no rules (p. 233). Due to a lack of rules they believe the sample size should depend on your research question and objectives. Others, however, do refer to some rules that could be used to determine the minimum sample size for nonprobability research. Among them: Cohen, Manion and Morrison (2007), Delice (2010), and Sudman (1976) who refer to the rule of having a sample of 20 to 50 elements for each minor sub-group. These numbers usually refer to quantitative research. Considering that part of our research is also qualitative and hence more time consuming, we will work with the lower end of this rule, namely 20 elements for each sub-group. We decided to take age groups of 10 years as sub-groups, starting at the age of 20. The composition of the sub-groups might be altered throughout the research depending on the youngest respondent in our research. If we work with six different age groups, starting at the age of 20 and going till the age of 80 and we want to reach 20 respondents in each age group, we will have to aim for a total sample of 120. The ages of the different respondents will be monitored throughout the research to make sure we reach 20 respondents in each age category. Delice (2010) also refers to the fact that analysis techniques should be taken into account when determining the sample size. Israel (2009) points out that if descriptive statistics are used, which is the case for most of our research, nearly any sample size will suffice. He also points out that for other types of analysis a good size sample of 200 to 500 is needed. However, later on when dealing with the analysis of the results for 49

56 research objective 4, we will motivate why we believe 120 respondents is enough for a factor analysis How will the observation take place? This question deals with the applied research method. There are numerous methods to execute research. Our research approach is mainly deductive as we start from a literature review to find a problem definition and consequently design a research strategy to try and formulate an answer to the research question and the separate research objectives (Saunders et al., 2003). Saunders et al. (2003) believe this to be the most appropriate approach when dealing with a topic on whish there is a wealth of literature from which you can define a theoretical framework (p. 90), which is certainly the case for CSR. In first instance, a literature study was carried out to gain understanding of the main theoretical concepts related to the research and to examine to which extent existing literature already covers the subject. The rest of the research is split up into three parts. Parts one and three are quantitative, whereas part two is qualitative. Saunders et al. (2003) stress that it is often beneficial to combine quantitative and qualitative methods (p. 99). The qualitative part, which is part two, mainly focuses on the definitional aspect of CSR and on the awareness of customers of the different CSR activities of Bio-Planet. Part one consist of some more general questions, which don t go into detail about CSR in much debt so that the responses to the qualitative part two won t be biased by things people read in the questions before. Lastly, part three consists of a set of questions further digging into the CSR concept and of some demographical questions. Our research will be executed with the help of interview-administered questionnaires (Saunders et al., 2003). An advantage of this approach is that interviewer-administered questionnaires will usually have a higher response rate than self-administered questionnaires (Saunders et al., 2003, p. 283). According to Saunders et al. (2003) a disadvantage is that interviewer-administered questionnaires increase the risk of socially desirable answers given by the respondents. This is because the respondents may want to make a good impression and appear thoughtful and concerned to the interviewer. Worcester and Dawkins (2005) claim that the social desirability bias can be reduced through impartial questioning. This refers to carefully considering the wording of your questions and working with balanced response scales, such as Likert scales, to avoid directing respondents towards giving a particular answer. Therefore we will pay extra attention to the wording of my questionnaire and the scales we use. For parts one and three, the participants will be given a written survey they have to fill out, while part two will consists of some oral questions, which Saunders et al. (2003) label structured interviews (p. 282). The questionnaire will consist mainly of closed questions, but will also include a few open questions. The closed questions consist of a variety of multiple choice questions and some scale questions related to all of our research objectives. According to Saunders et al. (2003) uninformed responses might occur when respondents have insufficient knowledge or experience and because of that guess at the 50

57 answer. We try to eliminate these uninformed responses by including a filter question 7 in which people are asked to assess their own knowledge of CSR. If people indicate that they have never heard of CSR they will not be asked to complete the rest of the questionnaire as it is most likely that this would lead to uninformed responses. However, uninformed responses cannot be fully eliminated as social desirability might lead people to represent their knowledge about CSR more positively. Saunders et al. (2003) indicate that the length of a structured interview depends on the location. We do realize that we will have to keep the whole process as short as possible since the participants will most likely be in a hurry to get into the store, buy what they need and return home. Therefore the formulation of the questions is critical such that we can obtain the right information in a short time frame. The recruitment of the respondents will take place at the entrance of the Bio-Planet store in Ghent. In the next section we will motivate why we chose Bio-Planet in Ghent. The possible participants will be informed that the research is executed for a master thesis at the HUB and will be given an estimated length of the questionnaire, which turned out to be 13 minutes after some initial tests. The participants will also be informed that they ll receive a drink during their participation and will be kindly asked to consider participating Where will the data collection take place? As mentioned before, the data collection will take place at Bio-Planet in Ghent. Bio- Planet is a small chain of supermarkets that is part of the Colruyt group and focuses on organic and ecological shopping. In their stores they offer food products which are 100% organic and with regard to non-food products they opt for products which have the least negative impact on the environment. After consultation with the department manager of Bio-Planet, he suggested we would execute our research at the store in Ghent. He believed this store to be the most ideal for our purpose because of two reasons. A first reason is because the store in Ghent is the Bio-Planet with the greatest diversity of customers. It is clearly more interesting for our research to get respondents from different ages and with a wide variety of different demographic characteristics. A second reason relates more to practical considerations. Bio-Planet Ghent is the only location which also has a Bio-Planet restaurant. This restaurant is the perfect setting to collect our data as people have the possibility to sit down while answering the questions and Bio-Planet proposed to offer them a drink while participating in our research When will the data collection take place? The timeframe in which the research will be conducted is two weeks. Since the research is conducted over a short period of time, Saunders et al. (2003) label it a crosssectional study (p. 96). The exact number of days that will be spent at Bio-Planet will be determined based on the response rate and the fluency of collecting the data and reaching the right number of people. 7 To be found in the questionnaire in appendix A under part 1, question 5. 51

58 6.4.6 Data processing My qualitative and quantitative research will be processed and analyzed using the statistical program SPSS. We will also make use of Excel to construct some tables. 6.5 Expressing the research objectives in operational terms In this section we operationalize the research objectives by stipulating how they will be incorporated in the questionnaire. Different questions of the questionnaire will be aimed at gathering information on consumer s opinions and behaviors to answer different research objectives. The complete questionnaire can be found in the appendix A of this thesis. Research objective 1: Identify the perception consumers have of CSR nowadays. This research objective will be answered by using an open question 8 during the structured interview in which people are asked to give the first three words that come to mind when they hear corporate social responsibility. However, the questionnaire is set up in Dutch. In our questionnaire we decided to work with duurzaam ondernemen as a Dutch equivalent for the English corporate social responsibility. We based this decision on a report of the Interdepartmental Commission or Sustainable Development (ICSD, 2006) who points out that in the Dutch language, terminology such as sustainable business (duurzaam ondernemen) and MVO (maatschappelijk verantwoord ondernemen) is used as an equivalent for the phenomenon called corporate social responsibility in English. Whereas the ICSD (2006) opted to use MVO because it is more closely linked to the French word for CSR, we decided to work with duurzaam ondernemen because duurzaam (sustainable) also comes back in our list of synonyms for CSR. In the literature review we saw that Dahlsrud (2008) believes that all existing definitions consistently refer to five dimensions, being: the environmental dimension, the social dimension, the economic dimension, the stakeholder dimension and the voluntariness dimension. Consequently we will link the three words that the respondents provide to the five dimensions. We want to find out which dimensions are most often mentioned and associated with CSR by consumers. From there we can try to increase our understanding of how consumers define CSR. Research objective 2: Which activities of companies do consumers really consider to be CSR activities? A question 9 is included in the questionnaire in which respondents are given a list of activities and are being asked to indicate which activities they believe to be an expression of CSR. They won t be informed of the fact that all the activities in the list are CSR activities, based on the article by Peloza and Shang (2011). We just try to find out which ones they believe to be CSR activities. 8 To be found in the questionnaire under part 2, question 1. 9 To be found in the questionnaire under part 3, question 1. 52

59 The CSR activities in the list can be classified into three categories, being: philanthropy, business practices and product-related activities. Based on the answers provided by the respondents we will investigate whether there are certain categories of activities they consider to be more an expression of CSR than others. In a next question 10 the participants will be given the same list of activities and they will be asked to indicate how important they find it that companies engage in each of these activities. They will be asked to rate each activity using a five point Likert-scale ranging from 0 (totally not important) to 4 (very important). These results will hopefully indicate which activities respondents perceive the most important, which could be useful information for companies in allocating their money over different CSR activities. Research objective 3: To which extent are consumers aware of the different CSR activities? We hope to answer this research objective with the help of an open question 11 in which the participants are asked whether they can give concrete examples of the CSR activities of Bio-Planet. Afterwards the respondents will be given a list of CSR activities of Bio- Planet and will be asked to indicate the ones they recognize starting from the assumption that it is always easier to recognize something than to name it yourself. This list of activities was made up based on the information found on the Bio-Planet website and was afterwards approved by the person responsible for the market research of the Colruyt Group. Research objective 4: Investigate which types of value consumers derive from CSR. To formulate an answer to this research objective a question is created in which respondents are asked to give their opinion on several statements 12. The answers to these statements can provide an indirect indicator of the value people derive from CSR. The measurement will be done by using a five point Likert-style rating scale, ranging from completely disagree to completely agree (Saunders et al., 2003). Worcester and Dawkins (2005) claim that an advantage of a five point Likert-style is that it reduces the social desirability bias in the research of sensitive issues because the scale consists of an equal number of positive and negative response options. Nevertheless, De Pelsmacker and Van Kenhove (2002) say that the downside of a five point Likert-scale is that the respondents are given the option to indicate the neutral midpoint as an answer and might do this out of convenience. Both positive and negative statements will be included. Saunders et al. (2003) say that it ensures that the respondent reads each one carefully and thinks about which box to tick (p. 296). The internal consistency of the scale will be checked by using the Cronbach s alpha coefficient (Pallant, 2010). The internal consistency refers to the degree to which the items that make up the scale hang together (Pallant, 2010, p. 97). We want to make sure that all the statements are measuring the same underlying construct. 10 To be found in the questionnaire under part 3, question To be found in the questionnaire under part 2, question To be found in the questionnaire under part 3, question 5. 53

60 We will execute a factor analysis on the results of this question. The purpose of a factor analysis is to look for a limited number of underlying dimensions or factors among a group of correlated variables (De Ridder, 2012a, slide 5). In other words, we want to find out whether different statements allow us to identify different types of value people can derive from CSR. The statements will be formulated starting from the value framework proposed by Green and Peloza (2011). Hence, we start from the assumption that there are three kinds of value people can derive from CSR, being: emotional, social and functional value. Positive as well as negative statements will be included to test for each kind of value. Previously we said that a sub-question here would be to explore whether the value consumers derive from CSR is linked to demographic characteristics or whether different groups can be distinguished based on other characteristics. Consequently, after processing the results, t-tests and Anova tables will be used to check for these relations. Another way to formulate an answer to this research question is a question 13 in which the respondents are being asked why they buy organic products. They will be given a list of possible reasons linked to the different value aspects and are asked to indicate all the ones that apply to them. Since offering organic products is a type of CSR activity (Peloza & Shang, 2011), we hope to find out which value the respondents derive from CSR and which type of value the main driver is to buy organic products. Research objective 5: Does the CSR policy of a company really have an influence on a consumer s purchase decision and behavior? There will be three questions in the questionnaire related to this fifth research objective. A first question is a multiple choice question 14 in which the participants will be asked directly how important they find CSR. The five answering possibilities allow the respondents to indicate whether they consider CSR when making a purchase decision. This question might lead to some socially desirable answers given by the respondents as they have to assess themselves and may want to make a good impression. This will have to be taken into account during the interpretation of the results. Therefore it is useful to include two other questions which relate to this research objective. The two other questions are more specifically aimed at finding out whether the fact that Bio-Planet actively engages in CSR has an influence on the respondent s decision to buy at Bio-Planet. In a first multiple choice question 15 they will directly be asked this question and are given the answering possibilities yes, a little, and no. In a second question 16 people are asked why they buy at Bio-Planet. They will be given a list of possibilities and are asked to give the most important reason the number 1, the second most important reason number 2, If there s a possibility in the list that doesn t have an influence on their decision to go to Bio-Planet, they have to indicate that by the number 13 To be found in the questionnaire under part 1, question To be found in the questionnaire under part 3, question To be found in the questionnaire under part 3, question To be found in the questionnaire under part 1, question 3. 54

61 0. One element in the list is because they spend a lot of attention to CSR. Hence, from this question we will also be able to answer our research objective. Research objective 6: Identify the perception people who buy at Bio-Planet have about other people who buy at Bio-Planet To tackle this research objective an open question 17 will be included asking people to complete the sentence: People who buy at Bio-Planet... We do realize that this question might lead to a wide variety of answers. But we are hoping that there is maybe a pattern of recurring answers and hopefully linked to the concept of CSR. The rest of the questions in the questionnaire are put in there to find out more information about the sample. These questions deal with demographic characteristics, but also with the frequency of buying at Bio-Planet, what the respondents buy at Bio- Planet and why they buy organic products. 6.6 Conclusion In this chapter the different steps of our research process were discussed. We formulated our research question based on the literature review. Our research question is the following: What is the value of corporate social responsibility for consumers? Afterwards we made it more concrete by establishing six different research objectives, being: (1) identify the perception consumers have of CSR nowadays, (2) which activities of companies do consumers really consider to be CSR activities?, (3) to which extent are consumers aware of the different CSR activities?, (4) investigate which types of value consumers derive from CSR, (5) does the CSR policy of a company have an influence on a consumer s purchase decision and behavior?, and (6) identify the perception people who buy at Bio-Planet have about other people who buy at Bio-Planet. We also talked about the research design which will be used throughout the research to formulate answers to our research question and research objectives. More specifically we identified what and who will be observed, the method of data collection, and where and when the observation will take place. We decided to use Excel and the statistical program SPSS for the processing and analyzing of our results. At the end of the chapter we briefly expressed our research objectives in operational terms. 17 To be found in the questionnaire under part 2, question 2. 55

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63 Chapter 7: Analysis of the research results 7.1 Introduction In this chapter the results of our research will be analyzed. In a first section the respondents who took part in the research will be described in more detail. In a next section the results will be presented and analyzed alongside each research objective. The discussion of the obtained results will be presented in chapter Description of the respondents Pallant (2010) points out the importance of screening data before starting an analysis. Therefore, prior to the analysis of our research results, we followed the suggested two steps of checking for errors and finding and correcting the error in the data file (Pallant, 2010, p. 43). These steps allowed us to start with the descriptive phase of our analysis. The sample of our research consists of 151 people, of which 84 (55.6%) are women and 67 (44.4%) are men. Of the 151 respondents 148 have the Belgian nationality and 3 have another nationality. Those 3 people however were also able to complete the questionnaire in Dutch without needing further clarification on the questions. The youngest person to participate in our research was 21, whereas the oldest one was 77. The average age of our sample is 46.4 years. We ended up working with age groups of 10 years, starting at the age of 21, considering the minimum age in our sample. The spread of the respondents over the different age groups is more or less equal and higher than 20 as we intended. Only the oldest age group, age is underrepresented with only six people. Therefore we combined this age group with the one before. The result can be found in the table below. Different age groups Frequency Percent Cumulative Percent age % 15.2% age % 37.1% age % 58.9% age % 78.8% age % 100.0% TOTAL % Table 2: frequency table of the different age groups in our sample Remarkable is the fact that even though the respondents are more or less equally spread out over the different age groups, 64 of them (or 42.4%) have no children, which seems a lot. Part of this number might be explained by the fact that 50% of these 64 are of age 35 or younger. There are not a lot of similarities between these 64 people. They are of different ages and of different educational backgrounds. However, 78.1% of them continued studies after secondary school. 43.8% of them are not married, 32.8% is living together, 20.3% is married, and 3.1% is divorced. 57

64 Our sample includes people with a variety of different educational backgrounds, with the largest group of people (31.1%) having obtained a master degree. For the exact results and further clarification of this question, we refer to the table in appendix B. Most of the people in our sample (64.9%) are part of the active work force, whereas the second largest group (19.9%) consists of retired people. We were also able to get seven responses from students. When asking participants to the research about the frequency of their shopping at Bio- Planet, the largest group consisting of 27.2% (41 out of 151 participants) responded they shop at Bio-Planet several times a week. This is a good result because it means we didn t just reach the occasional buyers with our questionnaires. The second largest group, of 21.2% buys at Bio-Planet once every two weeks. The results to this question can be found in the table below. How often do you shop at Bio- Planet? Frequency Percent Cumulative Percent less than once a month % 17.2% once a month % 33.8% once every two weeks % 55.0% once a week % 72.8% several times a week % 100.0% TOTAL % Table 3: frequency table presenting how often the respondents shop at Bio-Planet People were asked to indicate the most important reasons as to why they buy at Bio- Planet. 110 people (72.8%) indicated that the fact that Bio-Planet offers organic products is the most important reason for them to go and shop there. A second group, consisting of 19 people, indicated the convenient location as their main motivation. On the second most important reason, the results are less clear and more spread out over the different answering possibilities. The largest group of people, consisting of 34 respondents, specifies the fact that Bio-Planet spends a lot of time on CSR as the second most important reason. A second largest group, consisting of 32 respondents, indicates the convenient location as the second most important motivator. Fruits and vegetables seem to be very popular to buy at Bio-Planet. Only 11.9% indicated they never buy fruits at Bio-Planet and for vegetables this percentage decreases to 9.9%. Meat is less popular as also a lot of vegetarians buy at Bio-Planet. 41.4% indicated that they have never bought meat at Bio-Planet. Fish is even less popular as 74.4% indicated they have never bought it at Bio-Planet. For other food products no further classification was made, but it is clearly an important group as only 4% indicated they have never bought something out of this group. Non-food products also score relatively good as 34.4% indicated they have never bought cosmetics and other beauty products and 31.8% indicated they have never bought cleaning products. At the end of part one of our questionnaire, the respondents were asked to assess their own knowledge about CSR. They were given several answering possibilities. Out of the 151 respondents, the principal group (being 41.7%) indicated that they only know a little bit about CSR. The second biggest group, consisting of 25.2%, claimed that they 58

65 don t know a lot about the concept. There were six people who indicated they had never heard of CSR. These six people don t show a lot of similarities. The group consists of two males and four females, they range from ages 35 to 77, some have children while others don t and their educational level differs. 7.3 Analysis of the research results The relevant output related to this section can be found in appendix C. Our sample consists of 151 respondents. However, as previously stated, six of them indicated in the filter question that they had never heard about CSR. Consequently they were asked not to fill out certain parts of the questionnaire. Therefore in many of the results to the research objectives, stipulated below, only 145 cases will be dealt with, simply because the other six were asked not to fill out those questions. Research objective 1: Identify the perception consumers have of CSR nowadays. To find out what people consider to be CSR, the respondents were asked to give three words that first come to mind or that they associate with CSR. As six people indicated they had never heard about CSR, they were not asked this question and we only analyze the results of 145 respondents. Not all people were able to provide three words. All of the 145 respondents were able to at least mention one word that came to mind. Two people, however, were only able to give one word and couldn t come up with a second and a third one. 10 other people were able to give two words, but weren t able to provide a third one. During the processing of the results, the words were linked to the five dimensions of CSR definitions, introduced by Dahlsrud (2008). We also added a sixth dimension labeled long term/future because a lot of people mentioned a word related to this and it could not directly be classified under one of the five exiting dimensions. Of course when respondents further specified future for our children or future for our planet the word was classified under the social or environmental dimension respectively. Some words, however, were left out of the analysis because they could not be classified under one of the six dimensions. Words such as: my ex, good, respect, would have needed further specification to be classified under a certain dimension. Out of the 145 results we got for the first word, 129 could be classified under one of the dimensions. For the 143 results for the second word, 115 could be classified and for the 133 results for the third word, 99 were classified. When summing all the words that were given and that could clearly be classified, we end up with 56% of them referring to the environmental dimension, 16.6% to the social dimension, 13.1% to the economic dimension, 7.9% to the LT/future dimension, 5.8% to the stakeholder dimension, and 0.6% to the voluntariness dimension. When just looking at the first word that people mentioned, the results for the environmental dimension even increase to 69.8%. For the Excel tables of these results, based on the output of SPSS, we refer to appendix C. 59

66 Research objective 2: Which activities of companies do consumers really consider to be CSR activities? An answer to this question can be given by looking at the results of the question in which people were given a list of activities and were asked to indicate the ones they believe to be CSR activities. A frequency table with the results, constructed based on SPSS output, can be found below. Indicate which of the following activities you believe to be an expression of CSR no (absolute) no (in %) yes (absolute) yes (in %) TOTAL Type of activity less energy 9 6.2% % 145 BP less pollution % % 145 BP energy efficiency % % 145 PR activity recycle % % 145 BP ethical % % 145 BP child labor % % 145 BP organic products % % 145 PR activity good quality % % 145 PR activity no animal testing % % 145 BP good treatment % % 145 BP correct information % % 145 BP work environment % % 145 BP invest relations % % 145 BP recall products % % 145 BP donate products % % 145 philanthropy donating money % % 145 philanthropy volunteering % % 145 philanthropy charity events % % 145 philanthropy Table 4: frequency table presenting to which extent these activities are considered to be an expression of CSR As stipulated before, all 18 activities in the list are CSR activities, based on the article by Peloza and Shang (2011). However, the respondents were not aware of this as it would defeat the purpose of this question. For 12 out of 18 activities, the majority of the respondents indicate that they consider those to be CSR activities. The six activities which are not recognized by the majority of the respondents as CSR activities include: (1) investing in relationships with and between employees, (2) recalling products when there s something wrong with them, (3) donating products to good causes/charity, (4) donating part of the sales proceeds to good causes/charity, (5) employees of the company volunteering during their work hours, and (6) companies organizing charity events. Out of those six, the one that is recognized the least as a CSR activity is companies organizing charity events. 86.2% indicate that this is not a CSR activity according to them. The top three activities that most respondents do rightfully recognize as CSR activities are: reducing energy consumption (93.8%), reducing pollution levels (91.7%), and working in a more energy efficient way (91%). 60

67 Peloza and Shang (2011) present a list of activities in their article in which the different activities are classified into one of the three following categories: philanthropy, business practices (BP) or product-related activities (PR activity). The list of activities in our questionnaire includes four activities from the philanthropy category, three activities from the category of product-related activities and eleven activities from the business practices category. The number of activities in each category in our questionnaire is determined in proportion to the number of activities in each category in the list of activities Peloza and Shang provided in their article. When analyzing the results per category, on average 78.85% of the respondents recognized the product-related activities as CSR activities, for business practices this percentage is 66.90% and for philanthropy this percentage is reduced to only 24.83%. This last percentage is low because for all four philanthropy activities included in the list, the majority of the respondents did not recognize them as CSR activities. In a second question the respondents were given the same list of activities. They were asked to indicate how important they find it that companies incorporate those activities into their business practices. A five point Likert-scale ranging from 0 (totally not important) to 4 (very important) was used to indicate the importance. The table with the results of this question can be found in appendix C. The calculated mean is a good indicator of how important people consider the different activities. The closer it is to 0, the less people find it important that companies spend time and money on that particular activity. The closer the mean is to 4, the more people find it important that companies incorporate those activities into their business. The highest mean, of 3.77, can be found for both reducing pollution levels and avoiding exploitation and child labor. This indicates respondents consider these two activities the most important ones for companies to execute. The second highest mean, of 3.74, can be found for both recycling and reducing energy consumption. All four of these activities are categorized under business practices by Peloza and Shang (2011). Only three activities have a mean below 2, which indicates that most people don t care about these activities or consider them less important. These activities are donating part of the sales proceeds to good causes/charity, companies organizing charity events, and employees of the company volunteering during their work hours. All three of these fall in the category of philanthropy. When taking the average of the means for the different categories, we end up with a 2.01 for philanthropy, 3.60 for product-related activities, and 3.45 for business practices. This indicates that in general the respondents find it most important that companies engage in product-related CSR activities. Towards the importance of philanthropy the respondents are rather neutral oriented. Research objective 3: To which extent are consumers aware of the different CSR activities? To check whether consumers are aware of the different CSR activities, the respondents were asked during the oral part of the research to give an example of a CSR activity of 61

68 Bio-Planet. Afterwards they were given a list of CSR activities, all executed by Bio- Planet, and were asked to indicate the ones they knew Bio-Planet engaged in. Of the 145 respondents, the majority (62.1%) was not able to give an example of a concrete CSR activity of Bio-Planet. 13.1% was able to give one example, whereas 11.7% was able to give two examples, 11% was able to give three examples and 2.1% was even able to give four concrete examples. When asked to indicate the CSR activities they recognized, the respondents did a lot better. This is in line with the assumption made before that it is easier to recognize activities than to name some yourself. 8.3% (12 people out of 145) didn t recognize any activity. The 133 respondents that did recognize some of the CSR activities, indicated on average 4.9 activities out of the list of 16. The CSR activity that is known the best among the respondents, with 63.4% indicating they know about it, is the fact that Bio-Planet works with closed freezers to save on energy consumption. This is the only activity in the list that more than half of the respondents know about. Nevertheless, almost half of the respondents, more specifically 49.7%, know that Bio-Planet tries to burn the least amount possible in its waste processing and that they prefer reusing, recycling and fermentation of organic waste. Research objective 4: Investigate which types of value consumers derive from CSR. To try and formulate an answer to this research question we executed a factor analysis, using the principal component analysis method, on the question in which respondents were asked to give their opinion on several statements using a five point Likert-style rating scale, ranging from completely disagree to completely agree. For the SPSS output of the factor analysis we refer to appendix C. We opted for a factor analysis hoping to identify the different types of value people can derive from CSR. As the statements in our question were formulated starting from the value framework proposed by Green and Peloza (2011), ideally we would end up with three factors representing functional, emotional and social value. Before the start of our factor analysis there were a few limitations we had to address. A first one is regarding our sample size. The sample of our research consists of 151 respondents However, for the particular question we are dealing with we only have 145 responses. There is a wide range of recommendations regarding what the sample size should be in a factor analysis. These recommendations can usually be classified into two categories. One category says that the absolute number of cases is important, while another says that the subject-to-variable ratio is important (Zhao, 2009, para. 3). Zhao (2009) executed a brief study in which he compares the different recommendations. While our sample of 145 respondents fails to meet a lot of the recommendations, it does meet some others. For example, both Zhao and Lingard and Rowlinson (2006) refer to Gorsuch (1983) who believed that the subject-to-variable ratio should not be lower than five. In other words, Gorsuch recommends five subjects per item. As we have 24 items in this question, our minimum sample size should be

69 Our 145 respondents therefore pass the test and based on this we decided to go ahead with the execution of our factor analysis, despite the other recommendations. A second limitation or condition we need to meet is check whether factor analysis is really useful. Several tests can be executed to investigate the usefulness of a factor analysis. We used Bartlett s Test of Sphericity to see whether there is enough correlation between the observed variables (De Ridder, 2012a). Afterwards we used the Kaiser- Meyer-Olkin (KMO) measure to compare the sizes of the observed correlation coefficients to the sizes of the partial correlation coefficients (De Ridder, 2012a). Both tests indicated that it is useful to execute a factor analysis in our case. A third test we executed before the actual start of our analysis was measuring the internal consistency of our scale by checking the Cronbach s alpha coefficient after all statements were recoded 18 and poled into the same direction (Pallant, 2010). We arrived at a Cronbach coefficient with a value of DeVellis (2012) says that ideally, the Cronbach alpha coefficient of a scale should be larger than 0.7. Our scale meets this criterion and is therefore internally consistent. Consequently we know that our statements are measuring the same underlying construct. According to the analysis of the eigen values, it is suggested to work with six factors, which would explain % of the total variance. However, the scree plot analysis indicates to work with only five factors. Consequently, we decided to work with five factors as it is closer to the three types of value we want to analyze and as interpretation makes more sense. Working with five factors allows us to explain a total variance of %. We used a varimax rotation to obtain the rotated component matrix, which allows us to obtain the five different factors. This varimax rotation was used because it usually makes interpretation easier and at the same time doesn t affect the goodness of fit (De Ridder, 2012a). We decided to exclude the first statement from further analysis, even though the rotated component matrix classifies it under factor 1. This statement buying at Bio- Planet gives me a good feeling is rather vague and doesn t load extremely high on factor 1 anyways. The 23 other statements are clearly classified under the different factors, except for statement 19. Statement 19 is the following: I buy organic products because the production process is based on respect for life and for nature. This statement loaded high on factor 2 and factor 3. We decided to classify statement 19 under factor 2 as that s where it loads the highest. Afterwards during the interpretation of the different factors, we saw that this is a good fit. Costello and Osborne (2005) refer to Tabacknick and Fidell (2001) who claim 0.32 to be a good rule of thumb for the minimum loading of an item. All of our items or statements have a loading higher than 0.47 on their respective factor, which is a good result. Looking at the different statements classified under factor 1, we decided to label factor 1 social value 19. Factor 2 is labeled emotional value 20, even though statement 4, which is classified under factor 2, was intended to refer to social value when constructing the questionnaire. Statement 4 is the following: my sustainable buying behavior can be an example for others. We said that the emotional value is for example the good feeling or 18 Statements 21 and 24 had to be recoded. 19 Factor 1: statements 10, 12, 14, 15, 17, 21, 22, Factor 2: statements 2, 3, 4, 5, 18, 19, 23 63

70 the warm glow which is perceived by a consumer when making a purchase with a social or environmental attribute. The fact that this statement loads on emotions might be explained if for example people get this good feeling or warm glow through inspiring others to buy in a sustainable way. Because if they inspire others, and others start buying in a more sustainable way, in the end it will be better for the environment and the society as well. We labeled factor 3 functional value 21 and factor 4 supply value 22. Supply value could perhaps also be considered as a kind of functional value, as we intended it when making our questionnaire, but it turned out as a separate factor in the factor analysis. Factor 5 was labeled egocentric behavior value 23. We have to bear in mind that factor 4 (supply value) and factor 5 (egocentric behavior value) are considered weak and unstable factors. Costello and Osborne (2005) label them weak and unstable because both factors contain fewer than three items. After obtaining and labeling the five different factors, we checked for the internal consistency, using the Cronbach s alpha coefficient, for each factor separately. Because if the result for a factor is high enough summated scales can be used (De Pelsmacker et al., 2003). This refers to creating a new variable for that factor, which can then be used in a t-test or in an Anova table. The resulting values for the Cronbach coefficient range from to We previously mentioned that DeVellis (2012) stated that the Cronbach alpha is ideally larger than 0.7, but 0.6 is still considered high enough according to De Pelsmacker et al. (2003). Factors 1, 2, 3, and 4 have Cronbach coefficients larger than 0.6, but the coefficient of factor 5 is only Therefore new variables can be created for factors 1 through 4 by taking for each factor the average of the scores of the statements which were classified under that factor. These scores can be found in the rotated component matrix. For the 5 th factor, being egocentric behavior value, it was not possible to create a new variable because the internal consistency of the scale wasn t high enough. In a next stage t-tests and Anova tables were constructed to test for significant differences between means. We worked with a confidence level of 95% and a significance level of 0.05 (De Ridder, 2012b). With the t-test and Anova tables we want to explore whether different groups score significantly different on the distinct types of value that can be derived from CSR. First we looked at some demographic characteristics and afterwards we used some other questions of our questionnaire to split up people in different groups. The tables can be found in appendix C. The results are summarized below. The discussion of these results will be presented in the next chapter. Men and woman don t significantly differ in the social, emotional, functional and supply value they derive from CSR. People of different age categories don t significantly differ in the social, emotional, functional and supply value they derive from CSR. People with different educational backgrounds don t significantly differ in the social, emotional, functional and supply value they derive from CSR. People with children don t significantly differ from people without children in the social, emotional, functional and supply value they derive from CSR. 21 Factor 3: statements 6, 8, 11, Factor 4: statements 9, Factor 5: statements 7, 20 64

71 People with different marital statuses don t significantly differ in the social, emotional, functional and supply value they derive from CSR. People with different levels of knowledge regarding CSR, based on a question in which they self-assessed their knowledge, don t significantly differ in the social, emotional, and functional value they derive from CSR. For supply value we were not allowed to construct an Anova table due to a lack of homogeneity of variances. There is a significant difference between the five groups of respondents, classified based on how often they go to Bio-Planet, in how they score on the social value they derive from CSR. o The significant difference seems to be between groups 1 (who go to Bio- Planet less than once a month) and 2 (who go to Bio-Planet once a month) and 1 (who go to Bio-Planet less than once a month) and 4 (who go to Bio-Planet once a week) o There is no significant difference between the other groups The five different groups of respondents, classified based on how often they go to Bio-Planet, don t significantly differ in the emotional, functional and supply value they derive from CSR. The three different groups of respondents, classified based on whether the CSR policy of Bio-Planet influences their decision to shop there, significantly differ in the social, emotional and functional value they derive from CSR. o Group 0 (Bio-Planet s CSR policy does not influence my decision to shop there) and group 2 (Bio-Planet s CSR policy does influence my decision to shop there) significantly differ in how they score on social, emotional and functional value. o Group 0 (Bio-Planet s CSR policy does not influence my decision to shop there) and group 1 (Bio-Planet s CSR policy influences my decision to shop there a little) only significantly differ in how they score on social and emotional value. o Group 1 (Bio-Planet s CSR policy influences my decision to shop there a little) and group 2 (Bio-Planet s CSR policy does influence my decision to shop there) only significantly differ in how they score on social value. The three different groups of respondents, classified based on whether the CSR policy of Bio-Planet influences their decision to shop there, don t significantly differ in the supply value they derive from CSR. The three 24 different groups of respondents, classified based on how important they find CSR, significantly differ in the social, emotional, functional and supply value they derive from CSR. o Group 3 (I find CSR important, but don t consider it in my purchase decision) and group 5 (I find CSR very important and do consider it in my purchase decision) significantly differ in how they score on social, emotional, functional and supply value. o Group 4 (I find CSR important and sometimes consider it in my purchase decision) and group 5 (I find CSR very important and do consider it in my purchase decision) only significantly differ in how they score on emotional and functional value 24 There were five answering possibilities, but answering possibility 0 and 1 were not indicated by anyone, so there are only 3 real groups of respondents. 65

72 o Group 3 (I find CSR important, but don t consider it in my purchase decision) and group 4 (I find CSR important and sometimes consider it in my purchase decision) only significantly differ in how they score on emotional value. In another question, related to this research objective, people were asked to indicate several reasons as to why they buy organic products. 121 participants (80.1%) indicated that products being healthy influences their decision to buy bio-products, which can be linked to the functional value aspect. In a second place, with 64.2%, people said they do it because they are concerned about the environment, which can be linked to the emotional value aspect. The third most important reason that influences their decision to buy these products is because they taste good, which is again linked to the functional value aspect. Research objective 5: Does the CSR policy of a company really have an influence on a consumer s purchase decision and behavior? To formulate an answer to this research objective we look at the answers given to the three questions we previously explained in our methodology. The corresponding tables can be found in appendix C. In a first question people were asked how important CSR is to them. The respondents were given five answering possibilities and surprisingly two of the five answering possibilities were indicated by nobody. Those two possibilities were I don t think it s important at all and I don t find it very important. 12.4% admitted that they believe CSR to be important, but that they don t take it into account during their purchases. The majority of the respondents, (51.7%) stated that they find it important and that they sometimes take it into account in their purchase decision. The remaining 35.9% indicated that they find CSR very important and that they take it into account during their purchases. A second question related to this research objective is the question in which the respondents were directly asked whether the fact that Bio-Planet actively engages in CSR has an influence on their decision to shop there. 17.9% of the 145 respondents indicated that it does not influence their decision. 36.6% claimed it to influence their decision a little bit, whereas the largest group of people (45.5%) stated that it does influence their decision. A third and last question is less direct than the previous two we discussed. We previously mentioned this question when we described our sample. In this question people were asked why they buy at Bio-Planet. They were given a list of possibilities and were asked to indicate the most important reason by number 1, the second most important reason by number 2,, and put a 0 if there was a possibility in the list that didn t have an influence on their decision to come to Bio-Planet. One of the possibilities they were able to rate was I come to Bio-Planet because they pay a lot of attention to CSR. 9.9% of the respondents indicated that the fact that Bio-Planet pays a lot of attention to CSR is for them the most important reason as to why they shop at Bio-Planet. 22.5% stated that it is the second most important reason to them. However, 40.4% admitted 66

73 that the fact that Bio-Planet pays a lot of attention to CSR is not a reason for them to go to Bio-Planet Research objective 6: Identify the perception people who buy at Bio-Planet have about other people who buy at Bio-Planet To formulate an answer to this research objective, the respondents were given the beginning of a sentence and were asked to complete it. The sentence was the following: People who buy at Bio-Planet. As predicted this question led to a variety of answers. Nevertheless some recurring words or themes could be found. 41.4% out of the 145 respondents to this question mentioned bewust(e)(r) in their continuation of the sentence, which translates to (more) conscious or (more) aware. This was mentioned in relation to the environment, as in being more environmentally conscious or being more aware about the environment, but also in relation to many other subjects, such as buying more consciously, living more consciously, being more aware of why they come to Bio-Planet, Another recurring word is milieu translated by the environment. 20.7% made a reference to the environment when completing the sentence. Health was mentioned by 10.3% of the respondents. 8 people also referred to the fact that people who buy at Bio- Planet are rich or have a lot of money. 5 people believe the customers of Bio-Planet to be very diverse and indicate that people go there because of different reasons. 7.4 Conclusion In this chapter the results of our research have been analyzed in order to formulate answers to the six research objectives. We started off with a description of our sample, which consists of 151 people, of which 84 are woman and 67 are men. We further specified our sample by talking about some demographic characteristics such as age, nationality, educational background, work situation, and number of children. We also indicated how often our respondents shop at Bio-Planet, the most important reasons as to why they choose Bio-Planet, what they most often buy there, and how much they know about CSR. In a next section we looked at the results for each research objective separately. These results will be discussed in the next chapter. 67

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75 Chapter 8: Discussion of the research results 8.1 Introduction In the previous chapter we analyzed the results of our research alongside each research objective. In this chapter we will discuss those results. We will take a look at each research objective separately and we will try to formulate an answer to the research objective. 8.2 Discussion of the research results Research objective 1: Identify the perception consumers have of CSR nowadays Our results indicate that the environmental dimension is mostly associated with CSR by our respondents. The second dimension that most often comes to mind in association with CSR is the social one. Our results are not in line with those of Dahlsrud (2008). When he looked at the dimensions of the existing definitions in literature he found that the environmental dimension received a significantly lower dimension ration than the other dimensions (p. 5). In other words, Dahlsrud s research indicated that the environmental dimension is the one that is present the least in the exiting definitions found in literature. However, our results stress the importance of the environmental dimension as it is actually the first one that the consumers think about in relation to CSR. This indicates that the view of the consumers is not incorporated into literature enough. If scholars really hope to come up with a definition of CSR which is satisfactory and generally accepted, even though many believe this not to be the solution to the CSR debate (Crane et al., 2008; Van Marrewijk, 2003), they should take into account the view of the consumers as well. Nevertheless, we have to be careful when drawing conclusions based on the results of this question as there are two important limitations in our research regarding this research objective. A first limitation is that the classification of the words given by the respondents under the different dimensions is not an objective process. Some words such as milieu (environment) can clearly and objectively be classified under the correct dimension, the environmental one in this case. But other words are more subjectively classified. For example Fair Trade came up a few times. Fair trade could be classified under the economic dimension as it deals with giving a fair price to the producers of goods, but it could also be classified under the social dimension as it started as a kind of social initiative for farmers/producers of poor regions. We decided to classify it under the social dimension as the mission statement on the website focused more on the social aspect (Fair Trade Original, 2010). However, a different researcher might have classified it under the economic dimension. 69

76 A second limitation was already briefly mentioned before and relates to the fact that duurzaam ondernemen was used instead of CSR because the research took place in Dutch. In the question the respondents were asked to give three words that came to mind when they heard about the concept duurzaam ondernemen, but the conclusion of these results is drawn for CSR. The results might have been different when Maatschappelijk Verantwoord Ondernemen was used instead of duurzaam ondernemen or when the questionnaire would have been in English and CSR was used directly. Research objective 2: Which activities of companies do consumers really consider to be CSR activities? From the analysis of our research results we know that product-related activities are recognized the most as CSR activities by respondents and philanthropy the least. It is important to keep in mind however that these results are based on the customers of Bio- Planet and that they cannot be generalized to the whole population. It is remarkable that all four philanthropy activities included in the list of our questionnaire, are not recognized by the majority of the respondents as CSR activities. We would expect these to be the most widely known among consumers as philanthropy is the oldest form of CSR (Carroll, 2008). Of the top three activities that most respondents do rightfully recognize as CSR activities two have to do with energy and the other one has to do with pollution, in other words, all three of them are related to environmental aspects. This is in line with the results to the previous research objective as we found that most people associate CSR with the environmental dimension. Our results also indicate the activities that respondents find most important for companies to engage in. Of the four most important activities, which we mentioned in our results, three again are related to the environmental dimension. The activities that the respondents indicate as less important are also the ones that the respondents don t recognize as CSR activities. Hence, indirectly the respondents tell us that they find CSR important. Because the activities they indicate as important are generally the ones that most people also recognize as CSR activities, whereas the activities that they indicate to be less important are also the ones they don t recognize as CSR activities. However, keep in mind the attitude-behavior gap as it is not because people indicate they find those CSR activities important, that they will also act on in. Even though these results cannot be generalized to the whole population, for an individual company (Bio-Planet in our case) this can be very valuable information. Bhattacharya and Sen (2004) pointed out that when companies are aware of what consumers consider to be CSR-related activities they can ascertain clearly and concretely the value of the resources devoted to these activities and as a result they can measure the effectiveness of their CSR programs. So now that Bio-Planet knows to which extent the respondents consider the different activities to be CSR activities, they can use this information to establish the value of the resources devoted to them and measure the effectiveness of their CSR programs and use this information to improve their CSR programs. At the same time this information is useful as it points out where Bio-Planet might want to increase awareness. Bio-Planet might want to increase communication on the CSR 70

77 activities it engages in, but of which the respondents are not aware that they are CSR activities. This might be beneficial to increase the strength of their CSR reputation. The results also indicate which activities the respondents find most important for companies to engage in, which might be used as an indicator by Bio-Planet to decide on which activities they should allocate money to. Research objective 3: To which extent are consumers aware of the different CSR activities? The awareness of the different CSR activities Bio-Planet works on seems to be rather low among the respondents. 62.1% of the respondents were not able to give a concrete example when being asked, 8.3% of the respondents didn t recognize any of Bio-Planet s activities in the list, and the 133 respondents that did recognize activities on the list, only indicated on average 4.9 activities out of the list of 16. The activity that most respondents recognize is the fact that Bio-Planet works with closed freezers to save on energy consumption. It makes sense that this one is the most notorious one as it is the one people are continuously reminded of when they go to Bio- Planet (or Colruyt). Bio-Planet might consider trying to increase this awareness as we have seen that consumers first need to become aware of a firm s level of CSR before this factor can impact their purchase decision (Mohr et al. 2001). However, several people pointed out during the oral part of this question that they remembered Bio-Planet sending them folders with information about their CSR activities, but they admitted not really reading them. Research objective 4: Investigate which types of value consumers derive from CSR. Whereas Green and Peloza (2011) work with three distinct types of value, the results of our factor analysis suggest that it is more optimal to classify the value consumers derive from CSR into five categories. The five factors/categories are social value, emotional value, functional value, supply value and egocentric behavior value. It is important to keep in mind that the supply value and the egocentric behavior value are considered weak and unstable factors as they contain fewer than three items (Costello & Osborne, 2005). The three strong factors, being social, emotional and functional value correspond with the three value types Green and Peloza proposed. The meaning of social, emotional and functional value is the same in our results as in the framework of Green and Peloza (2011). The supply value refers to the perceived benefits consumers receive in relation to the supply of Bio-Planet. The statements Bio-Planet has a larger supply of organic products than other stores and at Bio-Planet I find products I cannot find anywhere else were classified under supply value. As previously mentioned, when making our questionnaire we intended these two statements to refer to functional value because they refer to an actual benefit, but it turned out as a separate factor in our factor analysis. We feel that supply value might not be a type of value which is directly derived from CSR. We believe this type of value might be derived from shopping at any kind or store, even if the store is not paying attention to CSR but just has a wide 71

78 offer of unique products. If we would have had more statements classified under this type of value we probably would have been able to draw a better conclusion on this. Egocentric behavior value refers to the value that consumers derive from acting in a selfish manner. The two statements that were classified under this type of value are: it is not my responsibility to protect and improve the environment and when I buy sustainable, in a first instance I look at the benefits for my family and only afterwards I consider the benefits for the environment and for others. The first one of these statements was intended to be a negative statement deriving emotional value, whereas the second one was intended as a negative statement related to functional value. But our factor analysis made a separate factor out of it. Just as with supply value it is debatable whether egocentric behavior value is really a type of value derived from CSR. This result might just be an indication that people act in an egocentric way when going grocery shopping. Also here it would have been useful to have more statements to come to a better conclusion. When looking at the results of a factor analysis in which we worked with three factors, interpretation did not make sense. We did not end up with the three value types proposed by Green and Peloza (2011). This seems to indicate that there must be some other kind of value besides emotional, social and functional, which can be derived from CSR. Further research is therefore necessary on supply value, egocentric behavior value and maybe other types of value. Roberts (1996) and Webster (1975) pointed out that demographics are not good predictors of ethical consumer behavior. We wanted to test whether demographics are good predictors of the types of value 25 consumers derive from CSR, but this does not seem to be the case. Sex, age, educational background, marital status, and having children or not, do not seem to have a significant impact on the different types of value consumers derive from CSR. Therefore we decided to look at other questions which could be used as a way to segment our respondents. We used Anova tables and post hoc tukey tests to check for significant differences between the different segments. Surprisingly is the fact that people with different levels of knowledge regarding CSR do not significantly differ in the social, emotional and functional value they derive from CSR. Mohr et al. (2001) pointed out that consumers first need to become aware of a firm s level of social responsibility before this factor can impact their purchasing (p. 47) In line with this reasoning we would expect that consumers first need a certain level of knowledge of CSR before they can derive certain kinds of value from it. But unexpectedly this does not seem to be the case. This seems to indicate that people actually don t need to know a lot about CSR for them to derive value from it, which leads us to believe that people derive value from CSR without even knowing what CSR exactly is. We were not able to draw conclusions for supply and egocentric behavior value. Our results indicate there to be a significant difference between the different groups of respondents, classified based on how often they go to Bio-Planet, in how they score on the social value they derive from CSR. There is no significant difference in how they score on emotional, functional and supply value. The significant difference regarding 25 We were not able to draw any conclusions for egocentric behavior value as the internal consistency of the scale was too low to create a new variable out of it. 72

79 social value only seems to be between group 1 and 2 and 1 and 4. The people in group 1, who shop at Bio-Planet less than once a month, seem to derive less social value than the people in group 2, who shop there once an month, and than the people in group 4, who go to Bio-Planet once a week. This conclusion is drawn based on the significant difference between the means. The fact that people who shop at Bio-Planet less frequently (group 1) derive less social value from CSR than groups 2 and 4 might be explained because those people in group 1 do not really consider themselves to be ethical buyers and therefore are not looking as much for the approval of others. If we pursue this reasoning it does however not make sense that there is no significant difference in the social value respondents derive between groups 1 and 3 and 1 and 5, because this reasoning implies that the more often you shop at Bio-Planet, the higher the social value you derive from CSR. Therefore we tend to believe that the social value is not really linked to the frequency of shopping behavior. The three different groups of respondents, classified based on whether the CSR policy of Bio-Planet influences their decision to shop there, significantly differ in the social, emotional and functional value they derive from CSR. They do not significantly differ regarding supply value. For social value groups 0 and 1, 0 and 2, and 1 and 2 significantly differ. We find the lowest mean for group 0 and the highest mean for group 2. This seems to indicate that the bigger the influence the CSR policy has on the decision of the consumer to shop there, the higher the social value they seem to derive from CSR. Hence, the more the CSR policy influences a consumer s decision to shop somewhere, the more that consumer wants other people to know about it. For emotional and functional value it also seems to be the case that the bigger the influence the CSR policy has on the consumer s decision to shop there, the higher the emotional and functional value they derive from CSR. The means again show an increasing trend, but for emotional value we only find a significant difference between groups 0 and 2 and 0 and 1 and for functional value only for groups 0 and 2. But why is it that the bigger the influence of the CSR policy on a consumer s decision to shop at Bio-Planet, the higher the social, emotional and functional value they derive from CSR? Further research might be needed to formulate an answer to this question. For now we can only make some assumptions. We assume that if people indicate that the CSR policy of a company influences their decision to go there, it is probably because that person cares about CSR. The reasons for caring might be different, but as they care more, that person will probably more easily feel good about helping the environment (emotional value), talk to others to inspire them to go there as well (social value) and perceive to get actual benefits from it (functional value) compared to people that care less. The three different groups of respondents, classified based on how important they find CSR, significantly differ in the social, emotional, functional and supply value they derive from CSR. The significant difference is the strongest for emotional value as groups 3 and 4, 4 and 5, and 3 and 5 significantly differ on this type of value. We see the same tendency, of increasing means, as before. This seems to indicate that the more important the consumer finds CSR and therefore the more they consider it in their purchases, the higher the emotional value they derive from it. For functional value and social value this also seems to be the case, but for functional value we only find a significant difference between groups 3 and 5 and 4 and 5 and for social value only for groups 3 and 5. For supply value we find decreasing means, which seems to indicate 73

80 that the more important CSR is to the consumer, the less supply value they derive from it. However, we only find a significant difference between groups 3 and 5. This link between the importance of CSR and supply value might be explained due to the fact that the more important a consumer finds CSR and the more they consider it in their purchases, the more likely it is that that consumer goes to stores with strong CSR policies, such as Bio-Planet. If they go to several stores with strong CSR policies they can compare the offers of the different stores more easily. They might for example feel that another store has a wider offer of organic food. People who find CSR less important and only go to stores active in CSR, such as Bio-Planet, occasionally probably perceive that Bio-Planet has a larger offer of organic products than any of the other stores they go to and probably perceive that they find products at Bio-Planet that they can t find anywhere else. Therefore the supply value they derive is higher. The results regarding emotional, functional and social value here are in line with the previous assumption we made, where we said that if people indicate that the CSR policy of a company influences their decision to go there, it is probably because that person cares about CSR. And here we indeed see that the more they care or the more important the find CSR, the higher the emotional, social and functional value they derive from it, just as the more the CSR policy influences their decision, the higher the emotional, social and functional value they derive from it. The results to the question in which the respondents were asked to indicate several reasons as to why they buy organic products indicated that 80.1% of our 151 participants answered that products being healthy influences their decision to buy organic products. Hence, the main reason that people indicate, can be linked to what Green and Peloza (2011) label functional value. Functional value being the main driver behind integrating CSR into the decision-making process is not surprising. This is in line with what Green and Peloza (2011) and Essoussi and Zahaf (2008) found in their studies. In a second place, with 64.2%, people said they do it because they are concerned about the environment, which is more related to emotional value. A third most important reason that influences their decision to buy these products is because they taste good, which is again linked to the functional value aspect. However, we need to point out that these results are a little biased. The question was designed in a way that the list of possibilities consists of almost all functional value aspects, except for one emotional value aspect and one possibility to write whatever the respondents want. The likelihood of people writing down a reason which can be linked to the social aspect is lower because then the respondents would have to come up with something themselves. However, the list of possibilities was based on logic reasoning, because as mentioned before both Green and Peloza (2011) and Essoussi and Zahaf (2008) found in their research that functional value is still the main driver behind integrating CSR into the decision-making process. Research objective 5: Does the CSR policy of a company really have an influence on a consumer s purchase decision and behavior? 74

81 The answer to this research objective cannot just be formulated by yes or no. 45.5% 26 state that their decision to go to Bio-Planet is influenced by the fact that Bio-Planet actively engages in CSR. So for these 45.5% it looks like the CSR policy of Bio-Planet really has an influence on their purchase decision. 9.9% of the 151 respondents even indicate that the fact that Bio-Planet pays a lot of attention to CSR is the most important reason for them to shop there. When not just looking at the results of Bio-Planet, but in general, 35.9% of the respondents indicate that they find CSR very important and take it into account during their purchases, whereas 51.7% state that they find it important and sometimes take it into account in their purchase decision. However, the results above might be a little overestimated as the questions might suffer from a social desirability bias. We pointed out in our literature review that Mohr et al. (2001) believe that because the cost of answering questions is lower than the cost of actual behavior, surveys probably overestimate the potential impact of CSR on purchase decisions (p. 50). In general nobody admits that they don t find CSR important. This is the result of a question in which people were asked directly to assess themselves, so this result might also suffer from the social desirability bias as we stipulated before % indicates they find CSR important, but that they don t take it into account during their purchases. When we look at the results to a different question, which is specifically directed at Bio-Planet, the results are more or less in line as 17.9% indicates that the CSR policy of Bio-Planet doesn t influence their decision to shop there. We decided to work with Bio-Planet starting from the assumption that most people who go there are probably already more aware of CSR and buy ethically to a certain extent. However, the analysis of the data shows that 61 respondents (40.4%) indicate that the fact that Bio-Planet pays a lot of attention to CSR is not a reason for them to buy at Bio- Planet. Our study does not allow for a comparison between people buying at Bio-Planet and people buying at other stores, but the assumption that most people at Bio-Planet buy ethically to a certain extent might have been a little premature considering the response of 40.4% to that question 27. However, in another question 28, only 17.9% indicates that the fact that Bio-Planet actively engages in CSR does not influence their decision to go to Bio-Planet. Hence, from this question it seems like working with Bio- Planet was a good decision. We have to pay attention though because the 40.4% is based on 151 respondents and the 17.9% is based on 145 respondents. 6 people were asked not to answer the latter question because they indicated to have never heard of CSR. Therefore they probably would have indicated no to the question whether their decision to come to Bio-Planet is influenced by the fact that they actively engage in CSR. Taking this into account, the 17.9% indicating no would increase to 21.2%, but this is still only a little more than half of the 40.4% who stated that the fact that Bio-Planet pays a lot of attention to CSR is not a reason for them to buy at Bio-Planet. The results regarding this issue are therefore not consistent and therefore we can t really draw a conclusion on whether the customers of Bio-Planet are ethical consumers or not. 26 This percentage will decrease to 43.7% when we take into account that the 45.5% is based on 145 respondents and that the remaining six respondents would have probably indicated that the CSR policy of Bio- Planet doesn t influence their decision to shop there as they stated they have never heard of CSR. 27 Question 3, part Question 4, part 3. 75

82 We believe the 40.4% from above to be closer to the truth than the 17.9% (or 21.2%) because in the former question their attitude towards CSR was tested in a more indirect way, whereas in the latter they were asked directly, which might increase the social desirability bias. In the former question the respondents were also given other reasons to take into account such as the location of the store, the fact that Bio-Planet sells organic products, customer friendliness, so a trade-off had to be made. However, in one of the next paragraphs we will discuss that this 40.4% might be too high. It is difficult to draw conclusions from these results which suffer from inconsistency and a social desirability bias. We believe the main problem might be that there is no agreement on what is understood as CSR. The respondents were not given a definition of CSR considering one of the research objectives is to find out what they understand to be CSR. Consequently when questions were asked about CSR, everyone might have had a different idea of what CSR actually means. To illustrate this: 40.4% indicated that the fact that Bio-Planet pays a lot of attention to CSR is not a reason for them to go to Bio-Planet. But 72.8% indicated that the most important reason for them to go to Bio-Planet is because Bio-Planet offers organic products. Offering organic products is also a form of CSR (Peloza & Shang, 2011). Consequently those 72.8% should not indicate that the fact that Bio-Planet pays a lot of attention to CSR is not a reason for them to shop there. So maximum 27.3% could have indicated that answer instead of 40.4%. This indicates that the respondents are not fully aware of the fact that offering organic products is also a type of CSR activity. In the results of research objective 2 we can indeed see that 21.4% don t consider offering organic products to be a CSR activity. Knowing that 9.9% indicated that CSR is for them the most important reason to go to Bio-Planet and that 72.8% indicated that Bio-Planet offering organic products is the most important reason for them, actually a total of 82.7% (9.9%+72.8%) considers CSR to be their main motivator to shop at Bio-Planet, which is an impressive percentage. So from that percentage we would definitely conclude that the CSR policy of Bio-Planet has an influence on the consumer s purchase decision even though the respondents might not be fully aware of what this CSR policy exactly entails. Research objective 6: Identify the perception people who buy at Bio-Planet have about other people who buy at Bio-Planet. It is remarkably that despite the fact that the respondents could complete the sentence whatever way they wanted, that still 41.4% refers to the (more) conscious or (more) aware aspect. Hence, 41.4% of the people that buy at Bio-Planet believe that they and also the other customers at Bio-Planet make the decision to go there consciously. The answer here seems to indicate that people don t just go to Bio-Planet out of convenience or because it s cheaper (because it isn t), but really think about their motivation to go there. The environmental aspect comes back in 20.7% of the answers. As discussed before, the environmental dimension is also the one that the respondents most often associate with CSR. Nevertheless, here we don t think people mention the environmental aspect 76

83 because they associate Bio-Planet with CSR. We believe they mention the environmental aspect because they link Bio-Planet to organic products and organic products to the environment. We have mentioned before that offering organic products is also a type of CSR activity, but we also mentioned in our previous research objective, that customers are not always aware of this. Therefore we believe CSR to be less involved in the reasoning of people linking Bio-Planet to the environmental aspect. In general the respondents are quite positive about the customers of Bio-Planet. They believe them to make their purchase decision more consciously, believe they care more about the environment, believe to live a healthier life, Nevertheless, some individuals were less positive and pointed out that in general the people who buy at Bio-Planet feel too good about themselves and are not very nice people. 8 people also indicated that people who shop at Bio-Planet are rich people because the products are expensive. A few of these 8 mentioned that they believe organic products should be available for everyone at a cheaper price. 8.3 Contribution to science and practice We believe our research to be a contribution to literature and we believe it to create added value in two distinct areas. First of all it creates added value for companies, more specifically for Bio-Planet in our case. We have mentioned several times throughout our literature review and research how important it is for companies to understand their consumers. We focused on helping them increase their understanding of consumers in several areas: what a consumer s perception is on CSR, which activities they consider to be CSR activities and which ones they find most important, the level of awareness among consumers regarding different CSR activities and the value they derive from CSR. By better understanding the consumer in these distinct areas, Bio-Planet may be able to make better investment decisions related to their CSR programs and consequently they can better develop ways to measure their return on investment from CSR. This is in line with Bhattacharya and Sen (2004) who said that by understanding consumer reactions to CSR, firms can develop CSR strategies that are optimal from not only a normative perspective, but also a business one (p. 10). A second area where we feel we created added value is through the creation of awareness among consumers on a small scale. By asking questions to the participants in our research, they were forced to think about CSR in a way they might have never thought about it before. This might encourage them to make an extra effort to work on their ethical buying behavior. We believe an increase in ethical buying behavior to be a positive evolution as it is good for the environment and society. 8.4 Limitations and future research We already pointed out several limitations during the chapters on research design, analysis of the research results, and discussion of the research results. However, we are going to repeat some of the most important ones here. These limitations are accompanied by suggestions for future research. One of the major limitations of our research is that the development of the research question is mainly based on English literature regarding CSR, that the research itself is 77

84 done in Dutch regarding duurzaam ondernemen and that the conclusions, based on the research results, are drawn for CSR. There was however no other realistic alternative approach for this research. Changing the language of the thesis to Dutch was not an option and conducting the research in English in Flanders would not have been feasible due to the fact that not everyone would have been able to understand the questions formulated in English. Due to the limited time and resources it was also not realistic to go abroad to an English speaking country to execute the research. Therefore we did the best we could, given the circumstances, but we have to keep this limitation in mind. A second limitation is that non-probability sampling and more specifically purposive sampling was used to select the respondents. This method limits the external validity of our research. The results can therefore not be generalized to the whole population. A third limitation is our sample size. We previously discussed that according to some rules of thumb a sample of 151 (or 145 considering that some questions were not answered by 6 of the respondents) is not enough to execute a factor analysis and construct t-tests and Anova tables. For future research it might be interesting to execute a similar study with a larger sample, preferably extracted with a type of probability sampling. Another limitations is the fact that we didn t provide a definition on CSR or duurzaam ondernemen to the participants. The reason why we didn t do this is because one of our research objectives was to find out what a consumer s perception is of CSR nowadays, so giving them a definition would defeat the purpose of this research objective. Nevertheless, in some questions people were asked more generally about CSR and whether it influences their decision to shop at Bio-Planet, whether they find it important, Due to the fact that not everyone answered those questions starting from having the same idea about CSR, we ended up with some inconsistent results. It would have been interesting to organize our questionnaire in a different way such that first the respondents were asked about their perception on CSR and then afterwards they would have been given a definition on CSR which they could use as a starting point to answer the rest of the questions. However, the whole process might have gotten complicated as already a lot of thought went into the order of the different questions because we had to include a filter question and we didn t want answers to later questions to be biased by information present in other questions they answered before. During the analysis of the results, some new opportunities for future research regarding the topic were identified. As demographics turned out not to be a good predictor of the value consumers derive from CSR, it might be interesting to dig deeper into other factors which could lead to a segmentation of consumers. This type of research could reveal some interesting information. It might also be useful in the future to execute more qualitative research regarding the definition of CSR and the value consumers derive from it. Obtaining some in-depth information might expose different elements than quantitative research. A last area of future research which we could advise is regarding the supply value and egocentric behaviour value. As we only had two statements for each of these factors we couldn t really draw good conclusions. It might be interesting to pay more attention to these two types of value in future research. 78

85 8.5 Conclusion After analyzing the research results in chapter 7, we discussed the research results in this chapter. Through the discussion we provided an answer to the six different research objectives. An overview of this discussion together with an answer to the research question will be provided in the next section, labeled general conclusion. At the end of this chapter we also mentioned the contribution of this research to science and practice, we repeated some of the most important limitations from which our research suffers, and we gave advice on where future areas of research may lay. 79

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87 General conclusion We mentioned several times how important it is for companies to understand consumers. One of the things companies focus on nowadays is trying to understand why consumers buy from companies which actively engage in CSR. As Green and Peloza (2011) believe that consumers only support firms that engage in CSR if they receive some kind of value from the exchange, our research objective was the following: What is the value of corporate social responsibility for consumer? Formulating an answer to this question is impossible without first looking at what corporate social responsibility actually is. As there is no one generally accepted definition on CSR in literature, we looked at the consumer s perception of CSR. It turns out that consumers associate CSR most often with the environmental dimension, so basically with all the things that have to do with the environment. Dahlsrud s (2008) research, however, indicated that this is the dimension which is the least present in all the exiting definitions in literature. Clearly literature and the view of the consumers do not seem to be in line, which even adds to the confusion companies are already experiencing due to a lack of a clear definition on CSR. While trying to identify what CSR actually means to consumers we discovered that consumers don t recognize all the CSR activities of companies as CSR activities. Out of a list of 18 CSR activities we gave them, only 12 of them were rightfully recognized as CSR activities by the respondents. The CSR activities in the product-related activities category are most often recognized, while the activities of the philanthropy category are recognized the least. We also discovered that the activities that the respondents find most important are the ones that they recognize as CSR activities, whereas the activities they claim not to be expressions of CSR are perceived less important by them. So indirectly they indicate that the find CSR important. We felt that the level of awareness among respondents regarding the different CSR activities of Bio-Planet was rather low. We mentioned the exact percentages before when we analyzed and discussed our research results. Of course it is somewhat subjective to say whether awareness is high or low, so it might be that Bio-Planet is actually fairly pleased with the given percentages. Nevertheless, assessing the level of awareness among consumers is important as Mohr et al. (2001) point out that consumers first need to become aware of a firm s level of social responsibility before this factor can impact their purchasing (p. 47). After having a better idea about what consumers understand to be CSR we turned to the essence of our research question as we investigated the different types of value consumers derive from CSR. We believe there are five distinct types of value consumers can derive, being: social value, emotional value, functional value, supply value and egocentric behavior value. The two latter ones ended up as weak and unstable factors in our factor analysis so further research on these will be necessary to verify whether they should be considered. Nevertheless when we worked with three factors, interpretation did not make sense which definitely seems to indicate that there is a type of value besides social, emotional and functional value that can be derived from CSR. Functional value was indicated as the most important type by the respondents. This result is in line with what Mohr et al. (2001) and Essoussi and Zahaf (2008) found. 81

88 After carefully analyzing all our research results, we came to the conclusion that demographics are not a good predictor of the type of value consumers derive from CSR. Also the level of knowledge people have of CSR and the frequency of their shopping at Bio-Planet do not seem to have a significant impact on the value they derive from CSR. The influence of the CSR policy on a consumer s decision to go to Bio-Planet and the importance a consumer attributes to CSR do seem to have a significant impact on the value they derive from CSR. The results indicate that the higher the influence the CSR policy has on the consumer s decision, the higher the social, emotional and functional value they derive from it. The same goes for the importance of CSR: the more important the consumer finds CSR, the higher the emotional, functional and social value they derive from it and the lower the supply value. The influence of the CSR policy on a consumer s decision to go to Bio-Planet and the importance a consumer attributes to CSR are clearly linked, so these results are consistent. We have to be careful with these conclusions though because there was no significant difference found between all the different groups. Another important question which we also focused on in one of our research objectives is the question whether the CSR policy of a company really has an influence on a consumer s purchase decision and behavior, as we started from the assumption that most people at Bio-Planet would be ethical buyers. This is very hard to investigate due to the existence of the attitude-behavior gap and therefore some of our results turned out to be inconsistent. We believe this is due to the fact that no general definition on CSR was given, so there was no agreement on what is understood as CSR when different respondents answered the questions related to this research objective. Based on our results it does seem to be the case that the CSR policy of Bio-Planet has an influence on the consumer s purchase decision as actually 82.7% of the respondents consider CSR to be their main motivator to shop at Bio-Planet. Nevertheless, we question this result as it seems that a lot of people indicated an offer of organic products as their main motivator to shop at Bio-Planet, but they are not really aware that organic products are a form of CSR. Hence it is arguable whether the CSR policy really influenced their decision To conclude, we believe that this research contributed to a better understanding of the complex consumer regarding the value they derive from CSR. Consumers clearly derive social, emotional and functional value from CSR and we believe there to be another type of value which must be considered. This other type can be supply value or egocentric behavior value or something completely else. Future research will have to investigate this. 82

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99 Appendices A. Questionnaire Vragenlijst De onderstaande vragenlijst bestaat uit drie delen: - In een eerste deel wordt u gevraagd een aantal eenvoudige vragen te beantwoorden. - Daarna komt u naar mij en afhankelijk van de antwoorden op het eerste deel van de vragen, stel ik u enkele mondelinge vragen. - Na de mondelinge vragen krijgt u een blad met het vervolg van de vragenlijst. Voor de onderstaande vragenlijst vragen wij u telkens het voor u juiste antwoord aan te duiden. Er zijn geen goede of foute antwoorden. Het gaat telkens over uw persoonlijke mening. De resultaten van dit onderzoek zullen anoniem verwerkt worden. Alvast bedankt voor uw medewerking! 93

100 DEEL 1: 1. Hoe vaak koopt u bij Bio-Planet? (Gelieve één antwoord aan te duiden.) verschillende keren per week één keer per week één keer om de twee weken één keer per maand minder dan één keer per maand 2. Waarom koopt u bioproducten? (Gelieve al de antwoorden aan te duiden die voor u van toepassing zijn.) uit bezorgdheid voor het milieu omdat het gezond is omdat het lekker is omwille van de kwaliteit omdat iemand in mijn gezin/familie vegetarisch is omdat ik (of iemand in mijn gezin) speciale voeding nodig heb (heeft) (bijvoorbeeld: glutenvrij) omwille van een andere reden:......(invullen) 3. Waarom koopt u bij Bio-Planet? (Geef de voornaamste reden het cijfer 1, de tweede reden het cijfer 2,... Indien één van de onderstaande redenen geen rol speelt, geef het dan het cijfer 0.)... Omwille van de gunstige ligging... Omwille van de lage prijzen die ze aanbieden... Omdat ze bio producten verkopen... Omdat ze veel aandacht besteden aan duurzaam ondernemen... Omwille van hun klantvriendelijkheid... Omwille van de sfeer in de winkel... Omwille van een andere reden: (invullen) 4. Bij Bio-Planet koop ik... (Gelieve aan te duiden met een x in het onderstaande rooster.) Altijd = elke keer dat u naar Bio-Planet gaat Vaak = de helft of meer dan de helft van de keren dat u naar Bio-Planet gaat Soms = minder dan de helft van de keren dat u naar Bio-Planet gaat fruit groenten vlees vis Andere voedingsproducten Cosmetica/verzorgingsproducten schoonmaakproducten nooit soms vaak altijd 94

101 5. Wat weet u over het concept duurzaam ondernemen? (gelieve één antwoord aan te duiden) Ik weet er veel over en ga actief op zoek naar informatie. Ik weet er redelijk veel over. Ik weet er een beetje over. Ik weet dat het bestaat, maar weet niet zo veel over het concept. Ik heb er nog nooit van gehoord. DEEL 2: Mag ik u nu vragen naar mij te komen en het eerste deel van de vragenlijst af te geven. Afhankelijk van de antwoorden op het eerste deel van de vragen, zal ik u enkele mondelingen vragen stellen. 95

102 DEEL 2: (dit deel wordt niet schriftelijk aan de klanten gegeven, behalve de laatste tabel met Bio-Planet activiteiten) 1. Het doel van deze vraag is om te achterhalen wat duurzaam ondernemen is volgens u. Kan u mij daarom 3 woorden geven die duurzaam ondernemen voor u beschrijven? Als mensen dit niet meteen kunnen beantwoorden, kan ik het nog op andere manieren vragen: - Kan u mij misschien één woord geven? - Waar denkt u spontaan aan als u duurzaam ondernemen hoort? - Wat betekent duurzaamheid voor u? 2. Gelieve de volgende zin aan te vullen met het eerste idee dat in u opkomt. Mensen die bij Bio-Planet kopen Is Bio-Planet volgens u bezig met duurzaam ondernemen? En hoe tonen ze dit volgens u? Kan u een aantal activiteiten noemen die ze uitvoeren om duurzaam te ondernemen? Indien mensen dit niet kunnen beantwoorden, kan ik een lijst geven met activiteiten van Bio-Planet en vragen welke ze herkennen voor Bio-Planet. Bio-Planet gebruikt waterstof als duurzame brandstof Bio-Planet werkt met tientallen initiatieven om energie te besparen zoals: Niet meer en langer verlichten dan nodig De isolatie in renovatie-en nieuwbouwprojecten gaat verder dan wettelijk verplicht Er wordt geen airconditioning gebruikt Men werkt met gesloten diepvrieskoffers Er wordt gekoeld met buitenlucht Betreffende verwarming wordt voorrang gegeven aan hoogrendementsketels op aardgas en warmterecuperatie Bio-Planet werkt alleen met groene energie, dus energie geproduceerd door de wind, de zon,... Bio-Planet probeert in zijn afvalverwerking zo weinig mogelijk te verbranden en geeft voorrang aan hergebruik, recyclage en vergisting van organisch afval. Bio-Planet bouwt duurzaam in de zin dat de renovatie-en nieuwbouwprojecten beantwoorden aan de recentste normen voor isolatie en luchtdichtheid Bio-Planet Leuven is de eerste lage-energiewinkel van België. Dit betekent dat deze winkel werd opgetrokken met ongeveer hetzelfde bouwbudget als andere vestigingen, maar dat de winkel nog een stuk energie-efficiënter is Bio-Planet gebruikt aardgas of cng (compressed natural gas) wat vandaag de motorbrandstof is met de laagste milieu-impact Bio-Planet probeert zowel het woon-werkverkeer van de werknemers als hun goederentransport te optimaliseren 96

103 Met 5% van de opbrengst van de producten met het collibri Foundation for education zegel investeert Bio-Planet in vorming en scholing in het Zuiden in samenwerking met erkende ngo s Bio-Planet heeft een gedragscode waarin duidelijke afspraken met fabrikanten en leveranciers over kinderarbeid en werkomstandigheden worden vastgelegd Bio-Planet werkt samen met de voedselbanken Mag ik u nu vragen om het vervolg van de vragenlijst in te vullen. 97

104 DEEL 3: 1. Hieronder vindt u een lijst met activiteiten. Duidt aan met een x welke activiteiten volgens u een uiting zijn van duurzaam ondernemen. Opbrengst van de verkoop aan goede doelen doneren (bv. geld doneren aan Unicef, , Kom op tegen kanker,...) Energie-efficiënt te werk gaan Juiste informatie geven in advertenties Liefdadigheidsevenementen organiseren (bv. een uitstap organiseren voor kansarme kinderen) Producten terugroepen als er iets mis mee is Minder vervuilen Klanten goed behandelen (bv. juiste informatie geven, eerlijke prijs vragen,...) Producten van een goede kwaliteit verkopen Producten niet op dieren testen Investeren in relaties met en tussen werknemers (bv. teambuilding, groepsbevorderende activiteiten) Recycleren Als werknemers van het bedrijf vrijwilligerswerk doen tijdens de werkuren (bv. meebouwen aan een weeshuis in Afrika, soep opscheppen voor daklozen) Investeren in een veilige werkomgeving Uitbuiting en kinderarbeid vermijden Minder energie verbruiken Ethisch te werk gaan (bv. geen fraude, respect voor werknemers, klanten, de natuur,...) Producten aan goede doelen doneren (bv. voedsel doneren aan de voedselbanken) Biologische producten aanbieden 2. Hieronder vindt u dezelfde lijst met activiteiten als in de vorige vraag. Schrijf naast elke activiteit een cijfer van 0 tot 4 om aan te duiden hoe belangrijk u het vindt dat een bedrijf zich bezig houdt met deze activiteit. met 0 = helemaal niet belangrijk 1 = eerder niet belangrijk 2 = neutraal 3 = eerder belangrijk 4 = heel belangrijk Het doneren van opbrengst van de verkoop aan goede doelen (bv. geld doneren voor Unicef, , Kom op tegen kanker,...) Energie-efficiënt te werk gaan Juiste informatie geven in advertenties 98

105 Liefdadigheidsevenementen organiseren (bv. een uitstap organiseren voor kansarme kinderen) Producten terugroepen als er iets mis mee is Minder vervuilen Klanten goed behandelen (bv. juiste informatie geven, eerlijke prijs vragen,...) Producten van een goede kwaliteit verkopen Producten niet op dieren testen Investeren in relaties met en tussen werknemers (bv. teambuilding, groepsbevorderende activiteiten) Recycleren Werknemers van het bedrijf die vrijwilligerswerk doen tijdens de werkuren (bv. meebouwen aan een weeshuis in Afrika, soep opscheppen voor daklozen) Investeren in een veilige werkomgeving Het vermijden van uitbuiting en kinderarbeid Minder energie verbruiken Ethisch te werk gaan (bv. geen fraude, respect voor werknemers, klanten, de natuur,...) Het doneren van producten aan goede doelen (bv. voedsel doneren aan de voedselbanken) Biologische producten aanbieden 3. Hoe belangrijk vindt u duurzaam ondernemen in zijn geheel? (gelieve één antwoord aan te duiden) Ik vind het heel belangrijk en houd er rekening mee tijdens mijn aankopen. Ik vind het belangrijk en houd er soms rekening mee tijdens mijn aankopen. Ik vind het belangrijk, maar houd er geen rekening mee tijdens mijn aankopen. Ik vind het niet zo belangrijk. Ik vind het helemaal niet belangrijk. 4. Heeft het feit dat Bio-Planet actief bezig is met duurzaam ondernemen een invloed op uw beslissing om naar Bio-Planet te komen? (gelieve één antwoord aan te duiden) Ja Een beetje Nee 99

106 Helemaal akkoord Eerder akkoord neutraal Eerder niet akkoord Helemaal niet akkoord 5. In welke mate gaat u akkoord met de volgende stellingen? Onder duurzaam kopen verstaan wij het kopen van bio-producten en het kopen van producten en diensten bij een bedrijf dat zich bezig houdt met duurzaam ondernemen. Gelieve één x te zetten in de kolom die het best uw mening weergeeft Bij Bio-Planet kopen geeft mij een goed gevoel. Door duurzaam te kopen, help ik onrechtstreeks ook andere mensen. Duurzaam kopen is belangrijk omdat ik op deze manier kan bijdragen aan een betere toekomst voor mijn kinderen en kleinkinderen. Mijn duurzaam koopgedrag kan een voorbeeld zijn voor anderen. Ik koop bio-producten omdat dit beter is voor het milieu. Ik vind het belangrijk dat mijn voedsel geen synthetische of chemische producten bevat. Het is niet mijn verantwoordelijkheid om het milieu te beschermen en te verbeteren. Ik vind het belangrijk dat mijn vlees afkomstig is van dieren die gekweekt worden in de beste omstandigheden. Bio-Planet heeft een groter aanbod bioproducten dan andere winkels. Bij Bio-Planet kopen is een manier om andere te tonen dat ik bezorgd bent om de natuur. De producten die Bio-Planet aanbiedt, zijn gezonder dan producten uit gewone supermarkten. Kopen bij Bio-Planet is een manier om te tonen wie ik ben. Bij Bio-Planet vind ik producten die ik nergens anders vind. Ik vertel vrienden en familie dat ik bij Bio-Planet koop. Ik vind het belangrijk dat anderen weten dat ik duurzaam koop. De producten die Bio-Planet aanbiedt, zijn van betere kwaliteit. Mensen die bij Bio-Planet kopen, maken een goede indruk naar anderen toe. Het behoud van de natuur is belangrijk voor mij. 100

107 Helemaal akkoord Eerder akkoord neutraal Eerder niet akkoord Helemaal niet akkoord Ik koop bio-producten omdat het productieproces gebaseerd is op respect voor leven en de natuur. Wanneer ik duurzaam koop, kijk ik in de eerste plaats naar de voordelen voor mijn gezin en dan pas naar de voordelen voor de natuur en voor anderen. Ik loop niet graag te koop met mijn duurzaam koopgedrag. Ik voel me goed wanneer anderen zien dat ik bij Bio-Planet buiten wandel. Ik voel me goed als ik bij Bio-Planet koop, want op die manier draag ik bij tot het behouden van de natuur. Andere mensen hoeven niet te zien of te weten dat ik duurzaam koop. Mag ik u vragen tot slot deze laatste vragen nog te beantwoorden. 1. Geslacht: Man Vrouw 2. Leeftijd: Nationaliteit: Burgerlijke staat: Ongehuwd Ongehuwd maar samenwonend met partner Gehuwd Gescheiden Weduwe/ weduwnaar 5. Hoogst behaalde diploma (of studieniveau indien u student bent): (Indien u deze termen niet kent, gelieve uw antwoord in vraag 6 aan te duiden) Lagere school Secundair onderwijs Professionele bachelor Academische bachelor Bachelor na Bachelor Master Master na Master Doctoraat 101

108 6. Hoogst behaalde diploma: (U hoeft deze vraag niet te beantwoorden indien u vraag 5 al heeft beantwoord) Lagere school Secundair onderwijs Hoger onderwijs korte type Hoger onderwijs lange type Postuniversitair onderwijs Doctoraat 7. Huidige beroepstoestand: Actief Student Werkloos Gepensioneerd Werkzoekende Andere:... (invullen) 8. Hebt u kinderen? Ja (en hoeveel?):... Nee Nogmaals hartelijk dank voor uw bereidwillige medewerking! 102

109 B. Tables concerning the description of the respondents Educational background: One woman in our sample refused to tell us her educational background; therefore there are only 150 results available. The respondents were given a question in which they were asked to indicate their highest obtained degree. The question was made up of the newer terms including professional bachelor, academic bachelor, master, If people were not familiar with these terms, they were referred to a next question in which they were also asked to indicate their highest obtained degree, but in which we worked with the older terms such as higher education short type, higher education long type, The table above is a result of a merger of the results of both questions. 103

110 C. Tables concerning the analysis of the research results Research objective 1: dimension 1 dimension 2 dimension 3 TOTAL LT/future environmental social economic stakeholder voluntariness TOTAL dimension 1 dimension 2 dimension 3 TOTAL LT/future 2.0% 2.6% 3.2% 7.9% environmental 26.2% 16.0% 13.7% 56.0% social 5.5% 4.7% 6.4% 16.6% economic 2.6% 5.8% 4.7% 13.1% stakeholder 0.6% 4.4% 0.9% 5.8% voluntariness 0.6% 0.0% 0.0% 0.6% TOTAL 37.6% 33.5% 28.9% 100.0% 104

111 Research objective 2: 105

112 Research objective 4: 106

113 107

114 Explanation on t-test and Anova tables: A t-test is usually used to check whether 2 groups significantly differ, whereas an Anova table is used to check whether 3 or more groups significantly differ (De Ridder, 2012b). For the execution of our independent t-test, a first step is to check whether equal variances are assumed or not. The null hypothesis is that the variances are equal and the alternative hypothesis is that the variances are not equal. If the p value (sig.) is larger than alpha, which is 0.05 in our case, then we accept the null hypothesis and equal variances are assumed. If the p value is smaller than alpha, then we reject the null hypothesis, accept the alternative hypothesis and equal variances are not assumed (De Ridder, 2012b). This gives us an indication of which line to look to when testing whether the means are significantly different. When we want to check whether the means between two groups significantly differ, we will again formulate a null hypothesis and an alternative hypothesis. The null hypothesis is that the means are equal; the alternative hypothesis is that the means are not equal. Again we will use the p value as a reference point to accept or reject the null hypothesis in the same way we explained before. For the construction of an Anova table we follow a similar process. A condition for an Anova table is homogeneity of variances. We will check whether this is the case in the same way as we explained for the t-test. For an Anova table the p value will have to be larger than alpha such that we can accept the null hypothesis and know that there is homogeneity of variances. Otherwise we are not allowed to construct an Anova table. The rest of the process is the same as for an independent t-test. The null hypothesis and alternative hypothesis are the same and the p value is again used as a reference point to accept or reject the null hypothesis. To check which groups exactly significantly differ, we can perform a post hoc test. We will use the Tukey post hoc test as it is the most conventional one. In the multiple comparisons table we will then find which groups significantly differ from each other. The p value is again used as a reference point to accept or reject the null hypothesis, which states that the means are equal. T-test value sex: 108

115 Anova table value age groups: Anova table value degree: 109

116 T-test value children: Anova table value marital status: Anova table value knowledge about CSR: 110

117 Anova table value frequency of shopping at Bio-Planet 111

118 Anova table value influence of CSR on decision to shop at Bio-Planet 112

119 Anova table value importance of CSR: 113

120 114

121 Research objective 5: o How important is CSR to you? o Does the fact that Bio-Planet actively engages in CSR an influence on your decision to come to Bio-Planet? o Why do you buy at Bio-Planet? 115