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Corporate Social Responsibility as a Catalyst for Consumer Choice

Written by G. Awomodu, O. Alofoje & O. Fasehun

Paper category

Master Thesis

Subject

Business Administration>General

Year

2013

Abstract

Master Thesis: Recipients of CSR There are differences in views on who is the recipient of CSR. Amaladoss and Manohar (2013) acknowledged that scholars in different academic literature have mentioned a series of three corporate social responsibility methods. Each method includes but goes beyond previous attempts to formulate organizational responsibilities (Deng, 2012). They include shareholders, stakeholders, and social methods. In the shareholder approach, the social responsibility of any company is to increase profits. It starts from the highest goal of focusing on profit maximization, and believes that socially responsible activities transcend the boundaries of any organization and are the main responsibility of the government. Therefore, companies should pay attention to the value of corporate social responsibility, because it is related to the maximization of corporate profits. This method is mainly related to Friedman (Currás-Pérez, Bigné-Alcañiz and Alvarado-Herrera, 2009). In the stakeholder approach, the company should be accountable to its shareholders and consider the interests of all the company’s stakeholders, who may be affected by the company’s efforts to achieve its goals (Wang and Anderson, 2011). Stakeholders in this case refer to individuals or groups that have a significant impact on the company's welfare, such as financial claimants, customers, government officials, employees, and communities (Williams and Zinkin, 2008). The third method is considered to have a broader and most modern perspective on the recipients of CSR. This approach shows that companies are accountable to the entire society in which they are located (Berens, Riel, and Rekom, 2007). This means that the operation of the organization should meet and serve the needs of society. Other literature on recipients of corporate social responsibility divides them into three categories based on the period when scholars discuss the matter, including profit maximization management, custody management, and quality of life management. Guthey and Morsing (2014) stated that the latter classification is the same as the first, but uses different wording to describe similar concepts. 2.2 Motivation for Incorporating Corporate Social Responsibility Research on corporate social responsibility includes the results, effectiveness, consumer response and awareness of corporate social responsibility. Regardless of the point of view, research shows that consumers care about corporate social responsibility. This has led to more companies participating in corporate social responsibility activities. Schreck, van Aaken, and Donaldson (2013) mentioned that the reason why a company is included in corporate social responsibility is because its various stakeholders are concerned about corporate social responsibility, thereby encouraging companies to pay attention to corporate social responsibility. 2.5 Types of CSR activities Fooks et al. (2013) described CSR as a set of specific investments, these investments are called activities, over time, these activities have the potential to generate a reputation for social responsibility. Activities are divided into three categories, including product-related activities, charity and business practices. Charity includes charitable activities, sales or product donations. Business practices include reducing energy consumption, employee relations, recycling, ethical behavior, and animal testing. Product quality includes organic products, energy efficiency and improved product quality. Yin and Zhang (2012) divided CSR activities into six categories, including promotion of business, that is, activities to raise awareness and focus on social causes; business-related marketing means that participation in social causes is based on the level of sales; to change Behavior-oriented marketing; direct contribution to social undertakings; community volunteer services of company employees; and business behaviors that are socially responsible. The classification of CSR activities is critical to understanding its impact on consumer choice. According to Calabrese et al. (2013), consumers' response to corporate social responsibility activities depends on the way in which corporate social responsibility is performed. Therefore, different activities may produce different results. In addition, Lamberti and Noci (2012) report that consumers’ perceptions of corporate social responsibility are about the way in which activities add value to products. 2.6 Consumer decision-making Consumer decision-making is divided into problem identification, information search, alternative product evaluation, purchase and post-purchase. The procurement process begins with an awareness of the problem. This stimulates consumers to search for additional information. Consumers’ stimulation of information search is divided into high attention (consumers are more open to product information) and active search for information (consumers search for information from friends, various shops, the Internet, and reading materials). Lutz, 2011). The degree of influence of different information sources on consumers varies with product categories. Typically, consumers retrieve information from market-leading sources. Read Less