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The Influence of CSR

How Consumers are Affected by Food Company’s Work with CSR

Written by Sarah Björck

Paper category

Master Thesis

Subject

Business Administration>Marketing & Sales

Year

2019

Abstract

Thesis: Corporate social responsibility 2.1.1 The concept of corporate social responsibility The concept of corporate social responsibility can be traced back to the 1930s, but was first defined in the 1950s (Carroll, 1991). In 1953, Howard Bowen wrote the article "Businessman’s Social Responsibility", describing what kind of social responsibility a company can expect, and a breakthrough was made in the discussion of corporate social responsibility (Garriga & Melé, 2004). Bowen (1953) believed that business people have an obligation to pursue ideal policies in terms of social goals and values. The famous statement of Milton Friedman (Milton Friedman) disputed this argument that the social responsibility of a company is to make a profit (Friedman, 1970). Through the influence of social media and better education, consumers are more aware of corporate responsibilities. The role of enterprises in society is no longer solely focused on creating wealth, but also on being responsible to stakeholders (Rahim et al., 2011). There are several definitions of corporate social responsibility, the most common of which is the concept that companies integrate society and pay attention to environmental issues in their business operations and in their interactions with stakeholders on a voluntary basis” (Prieto-Carrón et al. , 2006). The reason why corporate social responsibility is developed as a concept is based on the needs of society and consumers (Lii et al., 2011). If it is obvious that consumers prefer sustainable choices and are interested in social issues , Then the company that offers this choice will reflect, and therefore integrate the CSR plan (Van Marrewijk, 2003). This concept shows the result of increased profitability between companies and the potential contribution to competitive advantage. These factors motivate the company Actively use CSR as a tool for its operations (Khojastehpour & Johns, 2014). However, consumers’ emphasis on corporate social responsibility depends on their personal impact. In the food industry, ethical issues can affect the health of individuals. Individuals have a direct impact, which in turn contributes to the importance of consuming fair trade and organic food from a consumer's point of view (Joergens, 2006). Corporate social responsibility or sustainability in the food industry is a company that requires active efforts Researchers said that this will make it easier for companies to meet future challenges more proactively, Manzini & Accorsi, 2013. Several researchers have introduced different models and ranked companies’ CSR work at different levels to Consider the most important CSR dimension from a business perspective. Carroll's CSR Pyramid is one of them and is widely accepted, which is why the following parts are based on the framework of Carroll (Ibid). 2.1.2 The Carroll Pyramid of CSR Carroll's definition of CSR is one of the more popular CSR structures that have been used in literature and practice for decades. In 1979, Carol proposed his initial four levels of responsibility in 1979 (Baden, 2016). Later in 1991, Carol created a graphical depiction in the form of a pyramid, starting with economic responsibility as the basis of all business activities, followed by legal responsibility. , Moral responsibility and charitable responsibility (Carroll, 2016). The framework is shown in Figure 1 below. Economic and legal responsibility is needed, while moral responsibility is needed. Ultimately, charitable responsibility is desirable. The relationship between stakeholders and organizations (such as employees, shareholders, consumers, etc.) will affect the importance of the corporate social responsibility dimension. For example, the biggest concerns of shareholders are based on economic aspects, while consumers are more concerned about ethics (Smith et al., 2001). The best way to investigate the impact of corporate social responsibility is to define its multidimensionality according to the expectations of different stakeholders, in order to find a balance between these expectations (Maignan, 2001). This research is interested in consumers' views on corporate social responsibility, so it will focus on the relationship between corporate social responsibility and consumers as a stakeholder group. Economic dimension Economic dimension refers to a company's obligation to produce, profit and maintain financial wealth for its owners. This means that the company's main job is to produce goods and services that consumers need. This process should create profits for the company and its owners, otherwise the company will face the risk of survival in the market. Because companies have financial responsibility as the basis of their work, they can achieve the expected profitability, strong competitive position and high operational efficiency (Carroll, 1991). In contrast, Smith et al (2001) wrote in his article that consumers are not worried about the financial responsibility of the company. Ramasamy and Yeung (2009) further argued in their research that consumers believe that financial responsibility should not be classified as social responsibility, and it has no positive impact on consumers. The second level of the legal liability pyramid assumes that companies must comply with laws issued by state and local authorities. In other words, the company is expected to continue its financial distribution within the legal framework. By providing goods and services that meet the minimum legal requirements, it is also important for companies to define themselves as legal citizens (Carroll, 1991). Read Less