Analysis of Consumers’ Perceptions and Reactions to ...symphonya.unicusano.it/public/journals/38/seminarioswaen.pdfenvironmental impacts of its activities (De Serresand Roux, 2002)

CICLO DI SEMINARI

La Metodologia della Ricerca nelle Scienze Economico-Aziendali

Analysis of Consumers’ Perceptionsand Reactions to Companies’ CSR

Initiatives

Valérie SwaenAssistant Professor

Université Catholique de LouvainIAG – Louvain School of Management

12 April 2006

ISTEI – Istituto d’Economia d’ImpresaUniversità degli Studi di Milano-Bicocca

Analysis of consumers’ perceptions and reactions to companies’ CSR

initiatives

Valérie Swaen

Assistant professor

Université catholique de Louvain

IAG – Louvain School of Management

Email: [email protected]

� Financial, social and environmental scandals largely covered by the media

� Increasing pressures from different stakeholders (NGOs, consumer associations, environmentalist groups, consumers…)

� Evolution of the institutional framework:

� Laws that force companies to include social and environmental information in annual reports

� The European commission published in 2002 a communication entitled « CSR of companies: companies’contribution to sustainable development »

Research context

« Corporate social responsibility is the voluntary integration by companies

of social and environmental preoccupations to their commercial activities

and their relationships with stakeholders(shareholders, NGOs, suppliers, clients,

governments…) »

COM(2002)347 final

Research context

� Financial, social and environmental scandals largely covered by the media

� Increasing pressures from different stakeholders (NGOs, consumer associations, environmentalist groups, consumers…)

� Evolution of the institutional framework:

� Laws that force companies to include social and environmental information in annual reports

� The European commission published in 2002 a communication entitled « CSR of companies: companies’contribution to sustainable development »

� Development of an enlarged conception of corporate responsibilities

Research context

“ Citizenship activities are no longer corporate “do goodism” but the price of admission to the twenty-

first century”

(Altman, 1998)

“Responsible corporate citizenship can enable companies to take advantage of the new business climate and be profitable” (McIntosh et al., 1998)

Research context

� Research questions

� Conceptual framework

� Research design

� Main results

� Discussion

Project 1: Outline of the presentation



� Research design

� Main results

� Discussion

Project 1: Outline of the presentation

� CSR: what does it mean for consumers? � Which criteria do they use to assess the degree of CSR? � How many and which dimensions of CSR do they consider?� Which scale using to measure consumers’ CSR perceptions?

� What are the impacts of consumers’ CSR perceptions on the relationships they establish with brands and companies?� Impact of CSR on perceived quality?� Impact of CSR on consumers’ trust?� Impact of CSR on consumers’ loyalty?� Moderating variables?

Research questions


� Conceptual framework� Definition of CSR� Impacts of CSR on consumers� Research model

� Research design

� Main results

� Discussion

Outline of the presentation

Conceptual framework: Definition of CSR

� A lot of definitions: NO CONSENSUS

Companies have only economic responsibilities

Companies are shareholders’property

Property Property rights rights theorytheory

Companies are sensitive to their societal

impacts

Companies’assets are provided by stakeholders

Contractual Contractual theory of the theory of the

firmfirm

Companies are committed to

solving social issues

Companies are public

institutions

Social Social institution institution theorytheory

« The social responsibility of business encompasses the economic, legal, ethical and discretionary

expectations that society has of organisations at a given point in time » (Carroll, 1979)

CSR is « the extent to which businesses assume the economic, legal, ethical and discretionary

responsibilities imposed on them by their various stakeholders » (Maignan, Ferrell and Hult, 1999)

Definition of CSR

Definition of CSR

� A socially responsible company:

� takes into account the economic, social and environmental impacts of its activities (De Serres and Roux, 2002)

� aligns its behaviours to its stakeholders’ norms and requirements (Gendron, 2002)

� elaborates principles and put into place processes to take into account its stakeholders’ demands in order to minimize negative impacts and maximize positive impacts on natural environment and society at large (Maignan and Ferrell, 2004)

� Impact of a lack of CSR

� In general: strong and negative impact

� Negative Corporate Social Responsibility Associations → Worse evaluation of the company →Worse evaluation of the new product (Brown and Dacin, 1997)

� Describing a company as unethical (i.e., employing child labour) → Negative consumer’s attitude toward the firm regardless of the quality of the product offered (Folkes and Kamins, 1999)

Conceptual framework: Impacts of CSR on consumers

� Impact of socially responsible corporate behaviours

� Usually a positive impact:� Conclusion of different surveys (IPSOS, 1999; CSR Europe, 2000)

� CSR associations affect consumers’ intentions to purchase indirectly but also directly for some CSR domains and for someconsumers (Sen and Bhattacharya, 2001)

� But sometimes no impact or a negative impact depending on: � Consumers’ support and product quality (Sen and Bhattacharya, 2001)

� Type of causes and investments (Mohr, Webb and Harris, 2001)

� Consumers’ attributions with respect to the company’s motivations (Ellen, Mohr and Webb, 2000)

� Perceived credibility of companies (Ellen, Mohr and Webb, 2000)

Impacts of CSR on consumers

Perceivedquality

Satisfaction Trust Commitment Loyalty

Conceptual framework: Research model

Company’s economic performance

Relational chain (Aurier, Bénavent and N’Goala, 2001)

� Perceived quality« the global evaluative judgment about a product’s or a service’s relative

superiority » (Rust and Oliver, 1994; Zeithaml, 1988)

� Customers’ satisfaction« Transaction specific satisfaction is a psychological – an relative - state

resulting from a buying and/or consumption experience » (Vanhamme, 2002)

« Overall satisfaction / brand satisfaction is an overall evaluation basedon many experiences of the same kind » (Vanhamme 2002)

� Customers’ brand trust« a psychological variable mirroring a set of accumulated presumptions

involving the credibility, integrity and benevolence that a consumer attributes to the brand » (Gurviez and Korchia, 1999)

Research model

� Customers’ brand commitment

� A rational decision of brand loyalty,� A buying habit,� A strong affective orientation,� Useful to distinguish true loyalty from spurious loyalty

« Implicit or explicit intention to maintain a durable relationship with a brand involving an affective attachment to this brand and implying positive consequences on brand loyalty » (Gurviez, 1999)

Research model

� Customers’ loyalty is (Jacoby and Kyner, 1973)

(1) the biased (i.e., nonrandom),

(2) behavioral response (i.e.purchase),

(3) expressed over time,

(4) by some decision-making unit,

(5) with respect to one or more alternative brands out of a set of such brands,

(6) and is a function of psychological (decision-making, evaluative) processes

Research model

H4 (+)

Research model

Perceived quality

Satisfaction Trust LoyaltyCommitment

Consumers’ CSR perceptions

H1 (+) H2 (+)

H3 (+)

•Sureshchandar, Rajendran and Anantharaman (2001) + « quality awards »

•Signal theory (Jacoby, Olson and Haddock, 1971; Shapiro, 1983)

•Empirically, Brown and Dacin (1997)

•Influence of company reputation on customers’ trust (Achrol, 1997)

•Signal theory (Gurviez, 1999; Frisou, 2000)

•Empirically, Kennedy, Ferrell and Thorne LeClair (2001), opinion polls (IPSOS, 1999)

•Influence of company reputation on customers’ loyalty (Beatty and Ritter, 1986; Selnes, 1993)

•Empirically, Maignan, Ferrell and Hult (1999); Maignan and Ferrell (2001)



� Research design

� Main results

� Discussion


LITERATURE

REVIEW

EXPLORATORY STAGE

CONCLUSIVE STAGE

Research design

Interviews with experts and consumers

Pilot survey

Face-to-face

survey

Exploratory stage

� Objectives� Exploring what consumers consider as CSR activities� Proposing a scale to measure consumers’ CSR perceptions� Exploring their reactions to socially (ir)responsible corporate

behaviors� Revising the research model

� Methods� Individual interviews with 5 experts and 12 Belgian consumers

and 5 focus groups of 3 to 6 Belgian consumers� Interview guide including facilitation techniques� Thematic analysis

� Pilot survey � Self-administrated questionnaire including closed and open questions

� Data collection in Belgium (81), France (174), Spain (253), Portugal (142) and Denmark (839)

Conclusive stage

� Objectives� Testing our hypotheses, our research model

� Methods� Large self-administrated pretest survey (UCL Staff)

� Face-to-face conclusive survey

� Questionnaire including mostly closed questions

� Quota sampling (gender, age, education, region)

� Data collection in Belgium (308) and in the Netherlands (217)



� Research design

� Main results� Main exploratory results� Revised research model� Main conclusive results

� Discussion


CSR

Respect of workers

Respect of naturalenvironment

Respect ofconsumers

Investissement in charities

Respect of law

Respect of humanrights and child rights

Main exploratory results: What consumers consider as CSR activities?

�� Consumers advocate issues that affect their own welfare

but also additional issues that affect other stakeholders

20 items

� Treating fairly workers independently of their gender, of their religious and ethnic group

� Ensuring respect of workers’ rights� Ensuring health and safety of workers� Helping employees develop their competencies (training)

� Rendering production process more environmentally-friendly� Rendering products as ecological as possible� Reducing consumption of natural resources

� Respecting consumers’ rights (after-sale services, warranties, information…) � Treating fairly all customers� Giving correct information to consumers about product composition� Improving products’ quality

� Helping developing countries� Giving money to social and cultural activities (arts, culture, sports)� Developing projects in poor countries� Supporting one (or more) charities

� Refusing to operate in countries where human rights violation� Respect human rights in all countries where the company is involved

� Creating employment� Respecting all laws and regulations� Making as much profit as possible

Items to measure consumers’ CSR perceptions

REACTIONS TO NONREACTIONS TO NON--CSR ACTIVITIESCSR ACTIVITIES

“it’s a shame”

“I am scandalized”

“I would buy another product when it is possible”

“it is not so positive… but on the other hand this company produces products of high quality, it is good,

then I would probably buy its products”

“it is regrettable but their shoes are of very good quality and I don’t

care about the rest”

Main exploratory results

REACTIONS TO CSR ACTIVITIESREACTIONS TO CSR ACTIVITIES

“it’s good”

“it inspires confidence”

“I would not hesitate to buy its products”

“I prefer buying products from this kind of companies”

“there are some more important criteria to take into account [price and quality] before considering social, ethical and environmental

criteria”

“when you plan to buy clothes, you don’t care about the fact that they

respect natural environment”


�� Big gap between consumers’ attitudes and behaviours withrespect to CSR


� Lack of information

� Lack of responsible companies

� Consumers’ mistrust and scepticism about companies’motivations

� Higher perceived price

� Lack of perceived control on companies’ behavior

� Lack of personal support for the cause

� Many factors listed by consumers to justify this gap

� Identification of important variables to take into account



� Research design


� Discussion


Belgium vs the Netherlands

H4 (+)

Revised research model

Perceived quality

Satisfaction Trust LoyaltyCommitment

Consumers’ CSR perceptions

H1 (+) H2 (+)

H3 (+)

�Altruistic motivations (+) / strategic motivations (-)

�Degree of consumers’scepticism (-)

H5/6/7



� Research design


� Discussion


Main conclusive results

�� Descriptive analysesDescriptive analyses

� Factor analyses

� Exploratory factor analyses� Confirmatory factor analyses

� Structural analyses

� Final model in Belgium� Final model in the Netherlands

� Moderating analyses

Descriptive analyses

� Consumers’ perceptions about CSR

59.2%from 5 to 7 (CSR)

30.8%4 (neutral)

10%from 1 to 3 (non-CSR)4.72The Netherlands (217)

54.9%from 5 to 7 (CSR)

25.6%4 (neutral)

19.5%from 1 to 3 (non-CSR)4.48Belgium (308)

PercentageMean

p = 0.033


� Descriptive analyses

�� Factor analysesFactor analyses�� Exploratory factor analysesExploratory factor analyses�� Confirmatory factor analysesConfirmatory factor analyses




Factor analyses

� Exploratory factor analyses� Dimensions of consumers’ perceptions about CSR

activities

� Confirmatory factor analyses� Measurement models

� Reliability and validity analyses

0,740,810,72Cronbach alpha

0,567

---

0,907

0,508

0,796

0,763

---

0,604

0,645

– treating fairly its workers independently of their gender, of

their religious and ethnic group

– ensuring respect of workers’ rights

– refusing to operate in countries where human rights

violation

– ensuring health and safety of workers

– rendering its production process more environmentally-

friendly

– rendering its products as ecological as possible

– respecting consumers’ rights

– treating fairly its customers

– giving correct information to consumers about product

composition

– helping developing countries

– giving money to social and cultural activities

– developing projects in poor countries

– supporting one (or more) charities

F4F3F2Items

0,80

0,777

0,707

0,409

0,639

F1

Respect of workers

Respect ofconsumersPhilanthropic activities

Respect of natural

environment

EFA in Belgium

0,800,770,78Cronbach alpha

0,535

0,503

0,835

0,553

0,549

0,740

0,725

0,547

0,830

0,745

– treating fairly its workers independently of their

gender, of their religious and ethnic group

– ensuring respect of workers’ rights

– refusing to operate in countries where human rights

violation

– ensuring health and safety of workers

– rendering its production process more environmentally-

friendly

– rendering its products as ecological as possible

– respecting consumers’ rights

– treating fairly its customers

– giving correct information to consumers about product

composition

– helping developing countries

– giving money to social and cultural activities

– developing projects in poor countries

– supporting one (or more) charities

F4F3F2Items

0,77

0,773

0,844

0,637

F1

EFA in the Netherlands Philanthropic activities

Respect of natural

environment

Respect of workers

Respect ofconsumers

Final measurement model in Belgium

Fit indices:χ²=331.97; ddl=120; p-value=0.00001; GFI=0.90; CFI=0.97; NFI=0.96;

RMSEA=0.076; χ²/ddl=2.77

0.6020.8580.850.770.780.800.75

LoyaltyFidel1Fidel2Fidel3Fidel4

0.5470.7840.780.760.720.74

Commitment Q11_8recQ11_11rec

Q11_14

0.7610.8650.860.880.87

IntegrityQ11_7Q11_12

0.5780.8010.770.620.750.89

CredibilityQ11_5Q11_9Q11_15

0.6130.7600.760.730.83

QualityQ13_4Q13_8

0.5990.8560.850.860.790.690.74

CSRWorkers

EnvironmentConsumers

Philanthropic

AVEρρρρnααααλλλλiBELGIUM

RELIABILITY

CONVERGENT VALIDITY

Final measurement model in the Netherlands

Fit Indices:χ²=237.59; ddl=103; p-value=0.00001; GFI=0.89; CFI=0.97; NFI=0.95;

RMSEA=0.078; χ²/ddl=2.31

0.6620.8870.880.790.790.850.82

LoyaltyFidel1Fidel2Fidel3Fidel4

0.6680.8010.800.800.83

Commitment Q11_13Q11_14

0.5960.7450.720.700.84

IntegrityQ11_7Q11_12

0.6360.8400.760.760.800.83

CredibilityQ11_5Q11_9Q11_15

0.6070.7550.750.730.83

QualityQ13_4Q13_8

0.6140.8630.860.830.780.680.84

CSRWorkers

EnvironmentConsumers

Philanthropic

AVEρρρρnααααλλλλiTHE NETHERLANDS

RELIABILITY

CONVERGENT VALIDITY

0.6020.637(0.406)

0.617(0.381)

0.670(0.449)

0.552(0.305)

0.622(0.387)

6. Loyalty

0.5471.000.418(0.175)

0.452(0.204)

0.570(0.325)

0.374(0.140)

5. Commitment

0.7611.000.600(0.360)

0.408(0.166)

0.678(0.460)

4. Integrity

0.5781.000.543(0.295)

0.350(0.123)

3. Credibility

0.6131.000.346(0.120)

2. Quality

0.5991.001. CSR

AVE5.4.3.2.1.BELGIUM

DISCRIMINANT VALIDITY IF (CORRELATION)²< AVE (Fornell and Larcker, 1981)

DISCRIMINANT VALIDITY IF (CORRELATION)²< AVE

0.6620.555(0.308)

0.603(0.364)

0.626(0.392)

0.486(0.236)

0.583(0.340)

6. Loyalty

0.6681.000.478(0.228)

0.567(0.321)

0.586(0.343)

0.399(0.159)

5. Commitment

0.5961.000.703(0.494)

0.478(0.228)

0.740(0.548)

4. Integrity

0.6361.000.529(0.280)

0.532(0.283)

3. Credibility

0.6071.000.522(0.273)

2. Quality

0.6141.001. CSR

AVE5.4.3.2.1.The Netherlands



� Factor analyses


�� Structural analysesStructural analyses

�� Final model in BelgiumFinal model in Belgium�� Final model in the NetherlandsFinal model in the Netherlands


Structural analyses in Belgium

0,35

H1: OK

Commitment LoyaltyPerc. CSR

Quality

Credibility

Integrity

0,24

0,63

H2: OK

Fit indices : χ²=438,74 ; ddl=125 ; p-value = 0,000001 ; RMSEA=0,090 ; CFI=0,96 ; NFI=0,94 ; χ²/ddl = 3,5

R² : quality = 12,0%; credibility = 41,6% ; integrity = 56,9% ; commitment = 25,4% ; loyalty = 64,1%.

0,24

0,35

0,25

0,52

0,33

H4: OK

0,31

0,38

H3: KO

Without CSR, R²Loylaty= 60,7%

R²Integrity=27,1%

Structural analyses in the Netherlands

0,52

H1: OK

0,39

0,69

H2: OK

Fit Indices : χ²=295,589 ; ddl=108 ; p-value = 0,000001 ; RMSEA=0,0903 ; CFI=0,96 ; NFI=0,94 ; χ²/ddl = 2,74

R² : quality = 26,8%; credibility = 42,6% ; integrity = 63,2% ; commitment = 34,6% ; loyalty = 50,1%.

H4: OK

0,19

0,47

0,18

0,36

0,23

0,33

0,31

Commitment LoyaltyPerc. CSR

Quality

Credibility

Integrity

H3: KO

Without CSR, R²Loyalty= 47,7%

R²Integrity= 49,5%

Perc. CSR

Quality0,35 Perc.

CSR Quality

0,52

BELGIUM The Netherlands

R² : quality = 12,0%; integrity = 56,9% ; commitment = 25,4%

R² : quality = 26,8%; integrity = 63,2% ; commitment = 34,6%

Differences across countries

Perc. CSR

Credibility0,24 Perc.

CSRCredibility0,39



� Factor analyses




�� Moderating analysesModerating analyses

Moderating analyses

� A moderator variable influences the direction and/or the intensity of the effect of X on Y (Baron and Kenny, 1986)

� Z is a moderator of the relationship between X and Y if the interaction between X and Z is significative, if c is significative in the following equation:

Y = a + bX + dZ + cXZ + error

� H5: Attributions of altruistic motivations (+)

� H6: Attributions of strategic motivations (-)

� H7: Degree of consumers’ scepticism (-)

are moderators of the relationships (1) between perceived CSR and perceived quality; (2) between perceived CSR and

customers’ trust

� H5 and H7 KO� H6: OK only in Belgium for the relationship between

perceived CSR and perceived quality

Moderating analyses

Moderating analyses

0.0001-3.656-1.0920.054-0.199Interaction

0.00013.9610.7940.2300.910Strategic motiv.

0.00014.8041.1430.3131.504CSR

.182-1.3371.328-1.776Constant

p-valuetStand. BStand. error.

BVariables

Regression equation on quality (in Belgium) : R²= 13%; Adjusted R² = 12.2%



� Research design


� Discussion


Discussion

� CSR activities play a role in developing and maintaining long term relationships with customers

� They form an abstract and intangible characteristic of the quality offered by a company

� They have a positive influence on customers’ trust in the company

� Contribution to economic performance of companies

� However they don’t influence – not yet – customers’ loyalty

� Is it a buffer in case of a CSR crisis ?

Limitations and further research

� Questionnaire

� Improve measures of consumers’ perceptions about CSR

� Improve measures of moderating variables

� Product categories

� Model

� Longitudinal studies

� Other stakeholders

Thank you for yourattention

Documents

Analysis of Consumers’ Perceptions and Reactions to ...symphonya.unicusano.it/public/journals/38/seminarioswaen.pdfenvironmental impacts of its activities (De Serresand Roux, 2002)