Influence of Companies’ CSR Ethical Values on the Country ... · Corporate Social Responsibility (CSR), Country-Of-Origin (COO), Country-of-Origin Effect (COE), Country Image (CI),

Influence of Companies’ CSR Ethical Values on

the Country-of-Origin Effect

Master Thesis Exposé

Submitted by Paul Guillot

At the University of Kassel, Germany

EMBS 7 – European Master in Business Studies

Kassel, Germany 15.12.2014

Draft of the Master Thesis Exposé – Paul Guillot

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Abstract

Keywords

Corporate Social Responsibility (CSR), Country-Of-Origin (COO), Country-of-

Origin Effect (COE), Country Image (CI), SRBC (Socially Responsible Consumer

Behavior.

Background

During the past decades, a considerable number of studies have been focusing on the

effects that a given COO could create on the purchasing behavior of the customers

when it comes to buy products. The findings show that the COO can be considered

as an extrinsic cue that will impact consumers’ purchases, in the same way price and

quality perceived could do. On another topic, consumers are becoming always more

interested in sustainable production, both gathering environmental and ethical issues.

These ones are dealt by companies when they use their CSR policies to communicate

to consumers what the firm is conducting on these aspects. The positive effect of

such communication among consumers can’t be denied and in an increasing

environment of competitiveness worldwide, companies should use all their available

resources to gain or retain market shares.

Purpose

What I want to investigate in this thesis is the influence that CSR initiatives

conducted by companies could have on the Country-of-Origin image perceived by

consumers. In other words: the thesis would deal with the possible favorable impact

that CSR policies could have on a negatively perceived Country-of-Origin.

Understanding if consumers are willing to change their mind on a Country-of-Origin

that they perceived at first negatively, when they later know that the products from

this country comply with regulated CSR ethical measures.


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TABLE OF CONTENT

ABSTRACT ........................................................................................................................................ 1

Keywords ....................................................................................................................................... 1 Background .................................................................................................................................... 1 Purpose .......................................................................................................................................... 1

I. INTRODUCTION ....................................................................................................................... 3

II. THEORETICAL BACKGROUND .................................................................................................. 5

A. COUNTRY-OF-ORIGIN EFFECT ........................................................................................................... 5 1. Term definition ..................................................................................................................... 5 2. Country-of-origin as an extrinsic stimuli .............................................................................. 6 3. COO: a three-dimensional-construct .................................................................................... 7

a) Affective and Normative ................................................................................................................ 9 b) Cognitive ........................................................................................................................................ 9 c) COO fragmented in COD, COA and COP ....................................................................................... 10

B. CORPORATE SOCIAL RESPONSIBILITY ................................................................................................ 10 1. CSR overview ...................................................................................................................... 10 2. CSR theoretical framework ................................................................................................ 12

a) Instrumental theories .................................................................................................................. 12 b) Political theories .......................................................................................................................... 13 c) Integrative theories ..................................................................................................................... 13 d) Ethical theories ............................................................................................................................ 14

(1) Normative stakeholder theory ................................................................................................. 14 (2) Universal rights ...................................................................................................................... 15 (3) Sustainable development ........................................................................................................ 17 (4) The common good approach................................................................................................... 20

3. CSR behavioral gap ............................................................................................................ 21

III. REVIEW OF LITERATURE ........................................................................................................ 22

IV. STUDY FRAMEWORK ............................................................................................................. 27

A. PROBLEM STATEMENT .................................................................................................................. 27 B. RESEARCH QUESTION AND HYPOTHESES ............................................................................................ 28

V. METHODOLOGY .................................................................................................................... 31

A. MAIN CONCERNS ......................................................................................................................... 31 B. RESEARCH MODEL ........................................................................................................................ 32 C. SAMPLE ..................................................................................................................................... 34

WORK PLAN ................................................................................................................................... 36

BIBLIOGRAPHY ............................................................................................................................... 37


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I. Introduction

"Both empirical observations and experiments indicate that country of origin has a

considerable influence on the quality perceptions of a product." (Bilkey & Nes,

1982) The starting point of this thesis begins with this assumption and with the idea

that a Country-of-Origin effect does exist and that this one has been proven to affect

consumers’ behaviors, and more specifically their behavioral purchasing process

(Morello, 1984; Pecotich & Ward, 2007). Indeed, when evaluating a product,

consumers can use the country image that they’ve been creating in regard to a

specific country to build up an associated perceived quality for the product (Han,

1989). Elliott & Cameron (1994, p. 56) argued that “information about country of

origin may indeed act as a surrogate of quality, especially where all other "intrinsic"

or "extrinsic" cues (such as brand name, technical features, or price) do not give a

more positive indication of quality." The idea was also supported by Verlegh &

Steenkamp (1999) who discussed about the fact that when evaluating a product or

perceiving it, consumers will use COO as extrinsic informational component of their

decision. It is then highly recommended that companies pay attention to the COO

and to the product CI as it is important to gain competitive advantage in a market

place that becomes increasingly more competitive (Baker & Ballington, 2002).

Laroche, Papadopoulos, Heslop, & Mourali (2005, p. 110) came up with

recommendations, and according to them, their research findings show that

marketers should "offset the negative country image by promoting other attributes."

The idea is to find a way to match the better as possible with the target market. A

market that is composed with consumers becoming always more interested in

sustainable production, both gathering environmental and ethical issues, such as eco-

friendly production for example (Koschate-Fischer, Diamantopoulos, & Oldenkotte,

2012, p. 35). COO is according to these authors "a unique selling proposition for

which consumers are willing to pay."

The idea of this thesis is then to deal with these countries that are not enjoying a

positive country image and thus less competitiveness when it comes to sell the same

products as a country that would be advantaged with its positive COO effect.

As far as consumers are concerned, Carrigan and Attalla (2001) have stated that

these ones are becoming with time more and more interested in CSR initiatives. In


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respond to this phenomenon companies are augmenting the quantity of

communication related to their CSR practices, which is answering to the developing

awareness of consumers on the subject (Snider, Paul, & Martin, 2003).

Godfrey & Hatch (2007) argued that the idea behind CSR is that companies have

more responsibilities than just making a profit. From another point of view, CSR is

defined as "a concept whereby companies integrate social and environmental

concerns in their business operations and in their interaction with their stakeholders

on a voluntary basis” (European, 2001). The interesting aspect concerning CSR is

that when it is marketing oriented and consumers are aware of CSR policies, the

reaction towards the willingness to purchase a product from that given company is

positive and the intentions stronger (Pomering & Dolnicar, 2009). In concordance

with this idea: "Developments in OECD (Organization for Economic Cooperation

and Development) markets show that, while price and quality are leading criteria in

purchasing decisions, consumers increasingly attach importance to how companies

they buy from conduct their business, and that the voluntary adoption of CSR

policies is spreading in the private sector in response to concerns from consumers

and other stakeholders." (Fliess, Lee, Dubreuil, & Agatiello, 2007, p. 5)

According to (Saran & Gupta, 2012), managers from companies should take a

careful look on the different aspects of COO. By understanding how products are

evaluated by consumers, according to the COE, marketing managers could elaborate

strategies to get more competitiveness on the market.

This thesis will take into account the COO, which is considered by (Samiee, 2010) as

the topic still being discussed with the most passion in international marketing and

the CSR that is becoming an always more important factor of evaluation of both

products and companies for consumers. The COO effect can sometimes bring a

positive image to the product but the problem comes when the country image is

negatively impacting the consumers’ purchasing behaviors. The question that will be

discussed in this work is if the positive effects related to CSR can be used as a

counter-balancer or reducer of the negative impact created by the COO.

Is communicating companies’ CSR ethical practices to consumers would counter-

balance or reduce the potentially negative COO effect?


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II. Theoretical background

A. Country-of-origin effect

1. Term definition

The country of origin is defined as being the country where corporate headquarters of

the company are marketing the product from, or where the brand is located

(Johansson, Douglas, & Nonaka, 1985). It is important to understand the notion of

COO as the thesis is dealing with the effects that directly arising from it. According

to Roth & Romeo (1992, p. 480), the country-of-origin effect is “the overall

perception consumers form of products from a particular country, based on their

prior perceptions of the country's production and marketing strengths and

weaknesses." In concordance with this definition, Gürhan-Canli & Maheswaran

(2000, p. 309) define the country-of-origin effect as being "the extent to which the

place of manufacture influences product evaluations."

The study is focusing on the COO but this concept has been also named under other

names. As an example, Elliott and Cameron (1994) are speaking about the made in

concept and this one is defined as being whether the positive or whether the negative

influence that a product having a given origin of manufacture could provoke on the

consumers' behaviors and their decision process. From another point of view,

Nebenzahl, Jaffe, & Lampert (1997) will argue that the evaluation of a product by

consumers is influenced by its COO and that this one is also known as the product-

country-image (PCI).

Samiee (1994, p. 583) has described the stereotyping effect as being "any influence

or bias resulting from COO and/or country of manufacturer. The COO stereotype

effect for consumers may be varied, some based on experience with a product(s)

from the country in question, others from personal experience, knowledge regarding

the country, political beliefs, ethnocentric tendencies, fear of the unknown etc." With

this explanation is introduced the notion of stereotyping and COO effects can be

perceived as being stereotypes (Maheswaran, 1994). Liu & Johnson (2005) will later

state that the product's evaluation that is made by consumers is driven by stereotypes

that are directly arising from COO stimuli.


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Finally, Jin, Chansarkar, & Kondap (2006, p. 285) will explain that the COO effect

concept can substitute the studies made on brand origin. These ones being defined by

the authors as: "the activities or processes that consumers are engaged in, to associate

the brand with images of a particular place or region or country."

2. Country-of-origin as an extrinsic stimuli

According to (Olson, 1972) the Country-of-Origin is an extrinsic stimuli that can be

seen and interpret as not any different from another extrinsic stimuli such as the

price, the brand name or the retailer reputation. It is then needed from a company’s

side to take it seriously into account. Cattin, Jolibert, and Lohnes (1982) added to this

idea that the COO is seen as an extrinsic informal cue and this one, as the others

extrinsic ones, are used by consumers that are not well aware about the product they

are purchasing. Johansson et al. (1985) later argued that the COO is used as a

substitute dimension to evaluate a product when consumers have little information

regarding this one. It is then clear that the COO plays a role in the way consumers

shape their perceptions of a given product and that this one is used as a decisional

purchasing tool.

Both the name of the country and where the product is originally coming from are

having an impact on the way consumers perceive the product’s quality. And a greater

importance is given to the manufacturing country rather than to the brand of origin

country when the product is bi-national (Han & Terpstra, 1988). In regard to the

same aspect, Elliott & Cameron (1994) raised the point that COE are importantly

impacting the decision making process of customers willing to purchase a given

product.

The country-of-origin is a decisional purchasing factor and Roth & Romeo (1992)

have discussed the importance about this one to be in accordance with general states

of mind. Indeed, if a country has a positive image and this one is linked to the

product's dimension: consumers will be willing to pay. From the other point of view,

a negative match between a product and a COO will forward unwillingness to

purchase. Moreover, COO effects are not only intentional but they could occur

automatically without consumers realizing about it (Liu & Johnson, 2005). From

Laroche et al. (2005), country image and product beliefs are influencing the

evaluation of product simultaneously, no matter what is the level to which a


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consumer is familiar with the product. As the product's origin is perceived as

significant for consumers, it makes it a strategic implication for companies working

both domestically and internationally. It can provide important information when

these same companies are exporting products, manufacturing in other countries, but

also competing domestically with foreign firms for example. That makes even more

sense when it is considered that we tend to a more and more global economy.

3. COO: a three-dimensional-construct

Isen (1984) early recognized the fact that consumers’ decision-making is influenced

by all cognitive, affective and normative processes. Laroche et al. (2005) will later

on argue that the country image can be sum up as a three-dimensional concept that is

gathering the same three aspects. These three dimensions have been commonly used

in the field of country-of-origin as they truly represent the way consumers are

evaluating the perceived quality of a product. Phau, Ian, & Chao (2008) described

the COO effects as being the construct of cognitive, normative and affective attitudes

that consumers have in regard of a specific country. Thus, the COO plays the role of

an indicator for product quality. It is also used to get an idea on the risk and the value

of the product, and it leads directly to the likelihood of buying or not the product.

Wang & Lamb (1983) firstly identified a constant bias that arises with the economic

development of a country. Indeed, the more this development is perceived as

advanced and the more positively the products coming from this country will be

evaluated. The economical, political and cultural characteristics of a product's COO

are then affecting the willingness for a consumer to purchase the given product (Han,

1990).

The country-of-origin impacts the way consumers analyze and evaluate a product

according to what they know, to what they believe in and to which extent they are

ready to trust a product’s COO. But it is only true that when exposed to COO cues;

consumers are likely to spontaneously develop attitudes toward a country and thus

develop their affectivity and cognition toward a brand without intentionally wanting

it (Herz & Diamantopoulos, 2012).

Papadopoulos et al. proposed that the COO is a gathering of a cognitive component:

which can be interpreted by what consumers believe about the industrial


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development of the country and its technological advancement. An affective

component, that takes into account how consumers respond to the country's people

and, differently from the other authors, a conative component that deals with how

much consumers are ready to interact with the COO (2000). This construct is also

identified by Verlegh & Steenkamp (1999, p. 523) and they illustrated that the COO

is not only related to the cognitive part of a product but also to "emotions, identity,

pride and autobiographical memories." The normative side is identified with the sort

of agreement that consumers would have with the country’s product economical and

political system. The role of affect and norm is largely important when it comes to

the self-esteem of someone. Indeed, it proves that this person is able to buy products

that are in line with personal norms. Based on this concept, Verlegh & Steenkamp

(1999, p. 537) deduced that "Country-of-origin effects are often caused by an

interplay of cognitive, affective and normative aspects" and they elaborated a table

summing up the three dimensions that are linked with the COO effect.

Table 1


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a) Affective and Normative

Fournier (1998) argued that the country of origin relates to a national identity and

though, can lead to strong emotional attachment for certain products or brands. This

depicts perfectly the affective dimension that is related with the COO from where the

product comes from. Moreover, Batra, Ramaswamy, Alden, Steenkamp, &

Ramachander (1999) consequently added that the country of origin is related with

self memories, national or ethnic identities. The possession of goods coming from

specific countries brings feelings such as "status" and "pride." Other findings

emphasize the fact that when a country is enjoying a strong affectivity; the influence

on the product's evaluation will be more important than the one on the product

beliefs. On the other way around, when the cognitive aspect is greater, the influence

will be less important on the evaluation of products but bigger on the product beliefs

(Laroche et al., 2005).

b) Cognitive

The COE has a direct impact on how consumers will later think about the

implications of the purchase they have undertaken and it will also make them

brainstorm more about the product that has been purchased (Hong & Wyer, 1989).

This dimension is affecting directly the consumers’ thoughts and the way they

mentally process products that might come from countries having an either positive

or negative image. Roth & Romeo (1992) have enlightened the relationship that

exists between country's products consumers' preferences on one side; and the

perceived country's culture, economy and politics on the other side. Showing that the

more a country’s economy is perceived as good, or the more the politics are aligned

with the convictions of consumers, and the more the country’s products will be

evaluated positively. On this regard, Samantha Kumara & Canhua (2009, p. 350)

stated that “when a consumer buys a foreign-made product, he considers the

economic value of the product, wants more information about the product, and

considers to what extent the product has an impact on social status and how the

product enhances consumer personality."


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c) COO fragmented in COD, COA and COP

One of the first author figuring out that the country-of origin effect couldn’t be

considered as coming from only one country, in some cases, was Han (1989) and the

idea that a product should be seen as a bi/pluri-national one was supported. Iyer and

Kalita (1997) later argued that COO effects need to be studied by distinguishing the

product's design country of origin and its assembly country.

More recently the evaluation that is made by consumers over a product has been

proven to be influenced by country associations, thus COO. Moreover, when COD

(Country-of-Design), COA (Country of Assembly) and COP (Country of Parts) are

available; consumers will react even differently that when having a general idea of

the COO and this will directly impact the evaluation of perceived quality for the

product (Chowdhury & Ahmed, 2009, p. 496). It is then needed to take into account

“how consumers may evaluate products in light of their awareness of where products

are sourced, designed or assembled…"

B. Corporate social responsibility

1. CSR overview

According to Carroll (1979, p. 500), the CSR is a concept that "encompasses the

economic, legal, ethical, and discretionary expectations that society has of

organizations at a given point in time.” That is to say that companies are not only

profiting to themselves but to the society widely. From a more metaphorical point of

view, (Levy, 1999 as cited in Becker-Olsen et al., 2006) explained that the

philanthropic side of companies and their social policies can be considered as being

the heart and soul of the business. The idea is that societal efforts must be aligned

with the operating goals of the company (heart) and that they should be

representative of their values (soul).

CSR policies have shown that they can improve the assessment made of a product by

comprehensively evaluating the company (Brown & Dacin, 1997). The most basic

finding is that CSR policies do have an impact on consumers and that they increase

the willingness for consumers to by the firm's goods. It is taken into account that

customers are more likely to address importance to businesses which are concerned

by both society and environment (Sen & Bhattacharya, 2001). Grieg-Gran and


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Maryanne (2002, pp. 5–6) made clear that CSR convey "cost-related advantages",

"market advantages", and "reputation advantages." As far as the reputation of

companies is concerned, this one is seen more positively if the company is running

socially responsible policies.

Öberseder, Schlegelmilch, and Gruber (2011) figured out that a great number of

determinants are at the origin of consumer’s reliance over CSR. Among these

factors, there is a clear distinction between, peripheral, core and central factors. As

far as core factors are concerned, information has been identified along with personal

concerns. As argued by Bray, Johns, and Kilburn (2011), it is necessary for

consumers entering in a buying decisions’ process to get enough information

regarding the ethical aspects of products. On a second time, the CSR practices need

to be aligned with the consumer own norms.

Regarding central factor, it has been shown that price of the product, thus the

finances of the consumer, is a great purchasing determinant the product has been

made by socially responsible companies.

After these both factors overcome, core and central, consumers focus on peripheral

ones. They can be summed up in the company's image, the credibility that consumers

will give to the CSR activities set up by the company and the influence arising from

peers. What has to be taken into account is the presence of “a positive link between

CSR and purchase behavior only when a variety of contingent conditions are

satisfied: when the consumer supports the issue central to the company’s CSR

efforts, when there is a high company to issue/cause fit, when the product itself is of

high quality, and when the consumer is not asked to pay a premium for social

responsibility" (Bhattacharya & Sen, 2004, p.18).

From the same authors, some years before, it has been argued that actions dealing

with CSR are not easily accepted by consumers as they might not trust them, which

can lead to a negative or null reward for the company (Sen & Bhattacharya, 2001).

This idea was later on dealt by Becker-Olsen, Cudmore, and Hill (2006) who agreed

on the idea that when companies have socially responsible policies that are not

corresponding to their corporate goals, consumers will perceive it negatively and it

will forward pessimist beliefs towards the company. In the contrary, an aligned CSR

strategy with the core objectives of a company would enhance a positive image

among the consumers


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2. CSR theoretical framework

Parsons, (1961) as a precursor partitioned all CSR theories in four dimensions. The

author has enlightened the existence of four aspects that are perceived as being

present in any social system. These aspects are how companies adapt to the

environment, with a focus to economics and resources. How these ones can attain a

goal, which is linked to politics. How they can integrate themselves in a social

context, and finally, how they can deal with ethical issues and values.

Through this thesis, the focus will be only put on the ethical theories related to the

corporate social responsibility. However, all four dimensions are hereunder discussed

and in order to have an overall view on all researches done on this topic, the findings

are arising from the extensive gathering of theories made by Garriga & Melé (2004).

a) Instrumental theories

They are regarded as being a tool that will create wealth by reaching some economic

goals. Three main sub-divisions are made among these instrumental theories. One

considers the profits that can be made on the short-time by paying attention to the

shareholder value and its maximization. The two other ones are focusing on the long-

term increase of profit: dealing whether on reaching competitive-advantages or

whether on the use of marketing and its benefits. Reaching competitive-advantages is

related with what Jensen (2001) considers as the “enlightened value maximization”

and the fact that an organization should not only seek for increasing its value but

should be motivated in giving its best to achieve it. From another point of view,

investing in social activities, that is to say, behaving as philanthropists would lead to

build up a better social value for the company and thus, reinforce the firm’s

competitive advantage (Porter & Kramer, 2002). In what marketing is concerned,

companies will take advantage of it by promoting what is ethically or socially

responsibly done; getting in return positive repercussions on their sales, revenues and

on the consumer-to-business relationships (Varadarajan & Menon, 1988). In other

words, by integrating socially responsible attributes to products, companies are

playing on the direct effect that these ones will have on the whole company’s

reputation (Smith & Higgins, 2000).


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b) Political theories

They are based on the links and relationships that exist between the society and

business. That is to say: the power of this business and its role in a social context.

Two main theories are discussing these ideas and there are "Corporate

Constitutionalism and Corporate Citizenship” (Garriga & Melé, 2004, p. 55).

Corporate constitutionalism has been introduced by Davis (1960) and he stated that

companies can be considered as social institutions that need to pay attention to the

power they have and how they need to use it responsibly. Firms have indeed the

power to change and influence the markets and it is their decision to act responsibly

for the society. Indeed, if a company is not willing to use the social power it

possesses, other corporations will do it and the company will be taken out from the

place it had in the society. Davis (1960) argued that the power of a company stops

where the power of other constituency groups starts and these last ones work at

defining the conditions for a company’s political power to be used responsibly.

In what Corporate Citizenship is concerned, it encloses the idea that some big

corporations have nowadays more social and economical power than some

governments. It then means that companies can’t deal with their business activities

without taking into account the communities in which they are operating (Matten,

Crane, & Chapple, 2003). This also includes the willingness from the company to

run its business responsibly in confront to the local communities and enhance the

overall economic situation.

c) Integrative theories

They are based on which way the different businesses incorporate the social oriented

demands. The reason given is that businesses wouldn't exist without society and this

latter one gives them the possibility to grow and develop. The social demands are

perceived as being the way used by society to interact with companies, which gives it

some prestige and legitimacy too. The consequence of it is that companies’

management should work on their social values in order to be in line with social

demands. "The theories of this group are focused on the detection and scanning of,

and response to, the social demands that achieve social legitimacy, greater social

acceptance and prestige" (Garriga & Melé, 2004, p. 58). Among these theories, it has

to be taken into account the notion of “issues management” introduced by Wartick &

Rude (1986). This one deals with the way of analyzing, treating and responding to a


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social issue by the corporation in order to minimize arising socio/political problems

at the company but also at the related corporation community level. From another

point of view, Preston (1975) argued that companies should be in line with “the

principle of public responsibility.” Meaning that managers should behave and follow

what is publicly done in terms of policies and that the business should be run

according to public opinions and social standard practices. Another approach that

distinguishes itself from the previous ones has been explained by Sturdivant (1979)

and relies on the “stakeholder management.” The idea is that the final objective of a

company is to facilitate the mutual aid between all its stakeholders in order to

achieve the corporation’s goals. The attention has then to be put on caring about the

stakeholders and making sure that they are stimulated to participate in accomplishing

the company’s guidelines.

d) Ethical theories

They rely on the ethical context needed from the business and the society. They take

into account what is "the right thing to do" (Garriga & Melé, 2004, p. 60), and how

to generate a good society. These ethical theories are sub-divided in four other

theories that are discussed below.

(1) Normative stakeholder theory

According to Donaldson & Preston (1995), stakeholders represent individuals having

interests in the activities held by the corporation, and these stakeholders, such as the

employees, the suppliers or the customers need to be considered properly and not

only on the basis of their potential ability to support the shareowners. Freeman &

Phillips (2002, p. 333) will later add that “organization's success is dependent on

how well it manages the relationships with key groups such as customers,

employees, suppliers, communities, financiers, and others that can affect the

realization of its purpose.”

A firm would then have to pay attention to its stakeholders’ interests and in the

meantime not privilege only the stockholders. The goal of a company is then not only

to make profit and please the stockholders but having a wider view on which are the

stakeholders taking part in the entire company’s activities and taking into account


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their needs and demands. Stakeholder management is a way to incorporate the social

demand within the business and this all concept relies on the so-called stakeholder

equity, in which companies are expected to balance properly all the interests of both

stockholders and stakeholders that are affected by the business activities.

According to Freeman, Wicks, & Parmar (2004, p. 364), the stakeholder theory can

be decomposed in two main concepts. The first one is about “the purpose of the

firm” and the way managers are more inclined to understand the shared stakeholders’

responsibility that lead to value creation, combined with the understanding of “what

brings its core stakeholders together.” The second one deals with the responsibility

that the management has in confront to its stakeholders and with the way managers

want to create relationships with their stakeholders in order to run the business

effectively and attain the corporation purpose. What follows from this is an increase

in the economic value of a firm. Indeed, the management building up an environment

in which all stakeholders can see their situation improving and in which they have

the possibility to be part of a community that is co-operating, thus helping one

another, affects the stakeholders directly and forward their willingness in giving the

best of themselves when working for the company’s objectives. Some firms such as

Google, eBay or J&J have understood this particular concept and have followed it

concisely by focusing on their stakeholders and getting the maximum performance

out of them while offering them a high-quality framework for the job they do. The

success of such firms is based on the high interest given to the relationship between

the management and the stakeholders. Adopting a vision in which the “concern for

profits is the result rather than the driver in the process of value creation,” gives the

possibility to allow high importance to the human relationships, giving a direction to

follow to the entire set of stakeholders.

(2) Universal rights

These ones have been considered as basics in the CSR environment and even more

when it comes to global business (Cassel, 2001, p. 262). One of the main point raised

is that “governments cannot by themselves guarantee social and economic rights” in

a context of international corporations based worldwide. In any case, issues such as

“the right to work, to just and favorable remuneration and working conditions, to rest

and reasonable limits on working hours, to social security, and to education […]


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child labor, forced labor, gender equality, rights of workers to organize and to

bargain collectively” lie on the hands of the businesses itself, or in a more difficult

enforcing way, in business regulations imposed by the government. What needs to be

understood is that in a context of profit maximization seeking, social and economic

rights would tend not to be respected and it is the responsibility of businesses to

insure that these notions are respected if they want to impose themselves as socially

and ethically responsible.

Some of the main ethical concepts that companies have to deal with in an increasing

globalized market, that is to say: the human rights, the labor ship rules, the anti-

corruption processes and the environment's protection, have been gathered in the UN

Global Compact, and they are based on the idea that internalization creates an unfair

distribution of wealth and profits. Another approach to it is "The Global Sullivan

Principles, which has the objective of supporting economic, social and political

justice by companies where they do business"(Garriga and Melé, 2004, p.61). These

approaches are generally all arising from the international declarations of human

rights and companies need to respect these legislations if they want to be considered

as legal. Some of the principles in which companies are highly invited to participate

in are nevertheless still not mandatory and come under the jurisdiction of the

company’s CSR policies. That is why, as argued by Welford (2002, p. 4): “the first

step to re-introducing human rights onto the globalization agenda is for countries and

companies (if necessary encouraged by civil society) to commit themselves to the

full implementation of the Universal Declaration of Human Rights in all activities.”

As already mentioned above, the globalization of markets tends to encourage rivalry

between companies, capital investments and re-organization of the known markets,

among others, but it is also a chance, “helped by globalization trends, to more fully

embed human rights into the new economic order” (Welford, 2002, p. 2). Companies

are then following these practices by implementing code of conducts, internal

corporate policies on human rights and joint work with NGOs being more aware and

specialized on the subject. What has to be monitored is the true implementation of

these concepts and not only a use of it to gain more public acceptation and

recognition. The main elaborated document that gathers all these regulations has

been issued by the United Nations and is titled the “Norms on the responsibilities of

transnational corporations and other business enterprises with regard to human

rights.”


17

It has been verified that a growing number of corporations put efforts in improving

working conditions and in developing local living quality of life, while struggling

against abuses that “affect developing countries, children, minorities, and women

who work in unsafe and poorly paid production jobs, as well as indigenous

communities and other vulnerable groups” (Weissbrodt & Kruger, 2003, p. 901). In

order to help these corporations in dealing with the amount of power they have

gained through globalization, while being in line with the level of responsibility they

are required to show, these norms reflect “a wide range of human rights, labor,

humanitarian, environmental, consumer protection, and anticorruption legal

principles, but also incorporate best practices for corporate social responsibility”

(Weissbrodt & Kruger, 2003, p. 912). The implementation of such norms has to be

internalized to the core of the business policies and practices and they have to be

adopted as a minimum standard in the corporation’s code of conduct. The business

needs to ensure that all the stakeholders are very aware of such standards and some

training should be provided to managers in order to be sure that the entire company

follows the same guidelines. Another key fact is the necessity for such a company

following these norms to do business only with other businesses that are respecting

the standards. Transparency of what is conducted and the manner in which it is done

has also to be respected and periodic assessments from both internal stakeholders and

external relevant parties must be conducted to verify the continuous respect of such

norms.

(3) Sustainable development

The concept is ever getting developed but it considers the environmental factor that

can be explained as using what is presently needed for our economical growth; while

leaving enough for the future generations. Moreover, the social dimension can't now

be excluded as it is needed for relevant judgments that will be helpful for the more or

less near future. From a basic point of view, it is about extending the bottom line

accounting and adding to the financial and social aspects also the environmental one.

Wheeler, Colbert, & Freeman (2003, p. 17) stated that sustainable development is

“an ideal toward which society and business can continually strive, the way we strive

is by creating value and creating outcomes that are consistent with the ideal of

sustainability along social environmental and economic dimensions."


18

From an interesting point of view and an enlarged stance, Stead & Stead (2000)

consider that the planet earth is the “ultimate organizational stakeholder.” The idea is

motivated by the fact that any place of business is situated on it, that all resources

and needed energies arise from it and that all environmental deteriorations caused by

corporations are impacting it directly.

When taking a look at the great industrial revolution and the nowadays always

increasing developed industries, Shrivastava (1995) points out that all the welfare

brought by such a development has environmental repercussions that lead to

ecological deterioration. Nevertheless, such issues can be handled by corporations

and benefit them on a long-term profitability basis or in cutting expenses in using

ecologically efficiency for example; and as a result bettering their image. According

to the author, four mechanisms can be set up in order to facilitate ecological

sustainability: “total quality environmental management [TQEM]”, “ecologically

sustainable competitive strategies”, “technology-for-nature swaps” and “corporate

population impact control.” Implementing them together, companies should be able

to address the main factors that lead to sustainable development.

Table 2 - Corporate Actions for Ecologically Sustainable Development


19

“TQEM” relies on the idea that the entire corporation system, phase by phase, needs

to be improved in order to reach environmental standards. This is done through a

wise management of energies and natural resources, in reducing ineffective energy

consumption, putting an emphasize on renewable components and goods, giving

attention to the suppliers and dealers policies towards environment and improving

the production in order to reduce wastes and focus on the durability of the used

materials and machineries in the production process.

The “ecologically sustainable competitive strategies” are more, than a mean of being

in line with sustainable development, a way to gain advantage over competitors by

using the same marketing strategies, such as the differentiation or the niche one, but

in making sure that the Business Charter for Sustainable Development is fully

respected.

The “technology transfer” concept is about understanding that developed and

industrialized countries possess the machinery and technologies to behave

sustainably, while developing countries possess the natural resources that the

previous ones need but they don’t have access to the infrastructures and equipments

that would allow them to produce in a sustainable way. The concept further lies on a

mutually beneficial agreement in which developed and developing countries provide

each others with what they lack in order to participate in a combined sustainable

development.

The “corporate population impact control” would be initiatives taken by the

corporations in order to “have an influence on both the problems of population

control in developing countries and the reduction of the environmental impact of

affluent populations in industrialized countries.” (Shrivastava, 1995, p. 952) Some

investments in poor rural areas in which companies are present would allow a better

optimization of the land and with educational programs, a more sensitive and trained

labor force. On the other hand, using advertisement in developed countries to

promote responsible consumption would have an impact in diminishing the mass

consumption and decreasing the amount of waste produced.


20

(4) The common good approach

This part of the theory is based on the fact that businesses, altogether with

individuals and social groups have to help forming the common good, as they are

belonging to the society as an all. "Business should be neither harmful to nor a

parasite on society, but purely a positive contributor to the well- being of the society"

(Garriga & Melé, 2004, p.62). This approach is very similar to both what can be

found in the stakeholder theory and in the sustainable development approach. It can

be seen as a combination of these two; which would result in forwarding welfare,

well-being among all parties taking part in the business process, without neglecting

the human rights of each individual. The notion of common good is presented as

abstract and plain of different interpretations according to Sulmasy (2001). However,

the author’s idea of the most traditional one, and the one that is the more reliable for

the purpose of this thesis, is the “integral common good.” This common good

approach stipulates that people come up to associate themselves, as businesses in this

case, letting each individual develop himself as he intends to do, without impacting

the purposes sought by the other individuals. This approach arises from philosophical

backgrounds but allow understanding that individuals, forming communities, should

not impact or damage what some other individuals or communities are willing to

fulfill. Nonetheless, nothing truly forces corporations to match with and to be

committed to the common good, which allow them in most cases to get some

advantages in comparison to other corporations that would pay attention to it.

(Velasquez, 1992) In the case of environmental respect as instance, it is not possible

to assure that companies will take the necessary measures not to pollute, deteriorate

and waste resources, if there aren’t any specified regulations enforced by

international entities. It is even truer in a context of competitiveness where the profit

is in most of the times considered as the only aspect that matters. What can thus

happened is that companies themselves, in line with their policies and vision of doing

business decide to implement the necessary code of conduct in order to benefit to the

common good.


21

3. CSR behavioral gap

Melé (2002) has been discussing that businesses are bringing goods but also services

that are aligned with fairness and efficiency while respecting the fundamental's rights

of every individual. When zooming out from the direct impact that CSR initiatives

have, these ones also deal with the society well-being for both the present and the

future. Directly arising from this idea, it is understandable that consumers will

declare to care about CSR activities and to take them into consideration. The gap

relies on the ground that as soon as it comes to the purchase behavior, only a little

few consumers will take into account CSR (Devinney, Auger, & Eckhardt, 2010). In

concordance with this idea: "reluctance to compromise on core attributes such as

price and quality is one of the main reasons why CSR initiatives tend to result in

positive company attitudes that do not, in turn, translate into greater purchase

behavior." (Bhattacharya & Sen, 2004, p. 18) Indeed, consumers are easily stopped

in their willingness to buy a socially responsible product because of the usually

higher amount of money that has to be spent. Van Marrewijk & Were (2003)

indicated that the choice of corporate sustainability lies on the hands of each business

and that it should be in line with the strategy of the company, in order to achieve its

expected goals. It is then the company’s concern to adapt an effective CSR

communication to its targeted consumers and position itself so it can fulfill its

objectives in terms of profit.


22

III. Review of literature

This section is dedicated to present the different articles and papers that have been

used to get some insights, ideas and concepts regarding the two main topics of this

thesis; that is to say the CSR and the COO. As these two concepts have been

extensively discussed among researchers and scholars, the amount of literature is

substantial. The literature review is then based on some previous works that

attempted to gather all the different theories applied to the topics: these ones having

brought great help in getting a wider view on the framework in which these topics

are included. Additionally to this kind of literature, some more specific articles have

also been taken into account in order to refine my ideas about the subject and get

accurate information in regard to this thesis.

The sources are here classified in alphabetical order according to the authors and

divided in two sections: one concerning the COO and another one concerning the

CSR.

Country-of-Origin effect related literature

Authors

Date

of

Issue

Title Publication Abstract

Peeter W.J.

Verlegh, Jan-

Benedict E.M.

Steenkamp

1999

A review and

meta-analysis of

country-of-origin

research

Journal of

Economic

Psychology

Vol. 20, No.5

pp 521-546

Desire to build up a comprehensive grounding

for country-of-origin research. Focus on

cognitive, affective and normative COO's

aspects.

K. Al, S.

Michael; K. Al-

Sulaiti et al.

1998

Country of origin

effects: A

literature review

Marketing

Intelligence &

Planning, Vol.

16, No.3 pp.

150 - 199

COO, also called Product Country Image, is

believed to be among the factors impacting

international competitiveness. Literature review

organized chromatically and thematically

covering the period from 1965 to 1997.


23

W. Bilkey, E.

Nes, G. Ring 1982

Country-of-origin

effects on product

evaluations

Journal of

International

Business

Studies, Vol.

13, No. 1, pp.

89-99

Review of literature dealing with the effect of

country of origin on buyer evaluations of

products. Emphasize on the importance for

resource-poor and developing countries to adapt

with this COO effect.

Appendix summing up all researches indicating

that COO affect products in general, specific

types of product and specific brands.

G. Elliott, R.

Cameron 1994

Consumer

perception of

product quality

and the country-

of-origin effect

Journal of

International

Marketing,

Vol. 2, No. 2 ,

pp. 49-62

The COO is discussed in regard to other product

attributes. The COO is then analyzed as a

substitute indicator for the products' quality and

finally, the potential effect of COO when

consumers are choosing among different product

categories is looked into.

The study aimed at understanding/exploring the

impact of "buy local" campaigns on consumers'

behavioral attitudes when offered products to

choose according to structured purchase

scenarios.

R. Saran and N.

Gupta 2012

Country of origin

vs. consumer

perception: A

literature review

The IUP

Journal of

Marketing

Management,

Vol. XI, No. 4,

pp.66-76

Extensive literature review of COO that is

dealing with COO being an important cue in the

decision-making process of consumers.

Relationship established between COO and

Brand Origin

H. Chowdhury,

J. Ahmed 2009

An examination of

the effects of

partitioned

country of origin

on consumer

product quality

perceptions

International

Journal of

Consumer

Studies, Vol.

33. No 4, pp.

496-502

The paper analyzes the partitioned country-of-

origin effect on consumers when they come to

evaluate the quality of products. The aim of this

research is to understand how consumers

evaluate a product when influenced by country-

of-origin information.

M. Laroche, N.

Papadopoulos,

L. Heslop et al.

2005

The influence of

country image

structure on

consumer

evaluations of

foreign products

International

Marketing

Review. Vol.

22, No 1, pp.

96-115

The goal of the study is to get more knowledge

on the cognitive aspect of COO and getting

some more hints on how it is used in product

evaluations.


24

E. Sundar, B.

John 2012

Implicit country

attitudes and their

spontaneous

influence on

cognitive and

affective

dimensions of the

brand image.

2012 AMA

Winter

Educators ’

Conference

Marketing

Theory and

Applications

(P.370)

Experimental research aiming at understanding

if COO can occur automatically through the

cognitive and affective dimensions related to the

brand image.

P. Samantha

Kumara, K.

Canhua

2009

Perceptions of

country of origin:

An approach to

identifying

expectations of

foreign products

Journal of

Brand

Management.

Vol. 14, No 5,

pp. 343-353

The aim of this study is to understand COO

perceptions from the expectations that

consumers have on foreign products. Consumer

expectations for foreign products have been

analyzed under 4 types: Economic, Social,

Information and Personality.

B. Martin, M.

Lee, C. Lacey 2011

Countering

negative country

of origin effects

using imagery

processing

Journal of

Consumer

Behavior. Vol.

10, No 2,

pp.80-92

This paper introduces three studies that have as

an aim to investigate how the negative COO

effects could be diminish with mental imagery.

The first one points out the fact that stereotypes

arise as soon as participants get into COO

information. The second one shows that imagery

dealing with counter stereotypes induces a

diminution in the activation of stereotypes that

would have a negative connotation. The third

one deals with the fact that reducing the

automatic negative stereotypes last in time.

N. Koschate-

fisher, A.

Diamantopoulos,

K. Oldenkotte

2012

Are consumers

really willing to

pay more for a

favorable country

image? A study of

country-of-origin

effects on

willingness to pay

Journal of

International

Marketing.

Vol. 20, No. 1,

pp. 19-41

Attention is given to the willingness that

consumers would have in paying more for a

COO that would be perceived as favorable. In a

second time, the familiarity with the brand is

taken into account in this price-related study.

The results show that the COO has indeed a

positive impact when it comes to pay.

Brand equity theoretical underpinning


25

Corporate Social Responsibility related Literature

Authors

Date

of

Issue

Title Publication Abstract

E. Garriga, D.

Melé 2004

Corporate social

responsibility

theories: Mapping

the territory

Journal of

Business

Ethics

Vol. 53, pp.

51-71

This article aims at categorizing and classifying

the diverse CSR theories in four main dimensions:

Instrumental (Long-term profits related

objectives), Political (Responsibility of the use of

business power) , Integrative (Incorporating the

social demands) and Ethical (Being an actor of

society by doing the good, what is ethically

correct)

M. Oberseder,

B.

Schlegelmilch,

V. Gruber

2011

"Why don't

consumers care

about CSR?": A

qualitative study

exploring the role

of CSR in

consumption

decisions

Journal of

Business

Ethics

Vol. 104, No.

4, pp.449-460

The article attempts to provide information on the

gap existing between consumers given interest to

CSR and the further minimal role that CSR takes

in purchase behavior. Evaluation of CSR is a

complex process in which consumers are making

the difference between core, central and peripheral

factors. A better understanding on how consumers

incorporate their evaluation of CSR in the

purchase decision is seeked.

L. Mohr, D.

Webb, K.

Harris

2001

Do consumers

expect companies

to be socially

responsible? The

impact of

corporate social

responsibility on

buying behavior

Journal of

Consumer

Affairs

Vol. 35, No.1,

pp.45-72

With the increasing pressure that leads companies

to be socially responsible while still profitable, this

study focuses on the perception that consumers

have on companies following CSR policies.A

typology of consumers in regards to their

purchasing behaviors related to CSR products is

presented according to Andreasen's (1995) model.


26

B. Fliess, H.

Lee, O.

Dubreuil et al.

2007

CSR and trade:

Informing

consumers about

social and

environmental

conditions of

globalised

production

OECD Trade

Policy Papers

Part 1, No. 47

The paper aims at gathering knowledge on the way

consumers receive information about companies'

CSR and the way they produce their goods. Four

main information strategies are perceived:

"certification and labeling, corporate reporting,

consumer guides and corporate marketing" (p.2).

These strategies are analyzed to understand to

which extent they are useful in informing

consumers. To do so, the authors used "four

sectors with globally traded products:

fisheries, cut flowers, cosmetic, and

textiles and clothing."

Solid grounding on all the CSR practices used by

companies to increase positivity toward a certain

product.

C.

Bhattacharya,

S. Sen

2004

Doing better at

doing good:

When, why, and

how consumers

respond to

corporate social

initiatives

California

Management

Review Vol.

47, No.1, pp.

9-25

Through different methodologies such as

questionnaires, focus groups and experiments, the

aim of the research was to understand how

consumers react to CSR policies and when and

why these ones have an impact.

J. Pirsch, S.

Gupta, S.

Grau

2007

A Framework for

understanding

corporate social

responsibility

programs as a

continuum: An

exploratory study

Journal of

Business

Ethics

Vol. 70, No. 2,

pp. 125-140

The article promotes the idea that CSR policies

can be seen and gathered in two main concepts:

Institutionalized programs and Promotional

programs. These two concepts are then linked with

consumers' loyalty, skepticism and the generating

purchase intention.

K. Becker-

Olsen, B.

Cudmore, R.

Hill

2006

The impact of

perceived

corporate social

responsibility on

consumer

behavior

Journal of

Business

Research

Vol. 59, No. 1,

pp. 46-53

The article deals with the low-fit and high-fit

initiatives that companies have in regard to CSR.

They result to have both impacts on consumer

beliefs, attitudes and intentions, with a generally

negative one for low-fit and much more positive

one for high-fit.


27

IV. Study framework

A. Problem statement

As the theoretical background also made it clear: COO effect prevails when the

country of origin is not well known (Kaynak & Cavusgil, 1983). Indeed, when

consumers don't know that much about a company or a brand, they will rely heavily

on the manufacturer's nationality. O’Cass and Lim (2002), in balance to these

previous ideas, emphasized the role that COO has on two main dimensions:

perception of quality and purchase value of the product. Baker and Currie (1993)

even raised the idea that COO effect would have to be integrated in the marketing

mix, all together with price, promotion, distribution and product. Indeed,

governments don’t have the fully opportunity to be the guarantors for the quality of

their citizens’ life and thus; corporations have a major role within the social context

in which they are doing business. An environment that companies having decided to

follow a certain level of societal responsibility try to enhance by implementing

socially responsible measures (Jamali & Mirshak, 2007).

The consequences that products’ COO have on consumers need to be analyzed

carefully and solutions to overcome the negative image arising from some of them

have to be found. Bilkey and Nes (1982) already introduced the problem more than

three decades ago and they were already thinking about a possible way to reduce or

compensate such a stimulus that is the COO. More recently Martin et al (2011, p.

89), introduced ideas in order to improve the positivity of a CI and stated that "the

key for managers is to translate those (for instance, the benefits of manufacturing in

China include low labor costs and speed of production) manufacturing advantages

into benefits for the consumer which can be used to generate more favorable CO

perceptions."

Some researches aiming at reducing the COO effect have already been conducted

and one example dealt with the use of "counter-stereotypical mental imagery" when

companies communicate to consumers through advertisement (Martin, Lee, & Lacey,

2011, p. 88). Results have shown that the COO negative perceptions can be more or

less reduced using such a strategy.

What is wanted to be found in this thesis is the influence that CSR policies applied to

a company from a given COO would have on the perception of its products by


28

consumers. Indeed, consumers are expecting from the firms to take care of the

environment and to behave ethically. Consumers also sometimes rely on CSR factors

when they decide on their purchases and experiments related to CSR appreciations

show that information about what the company is doing from a CSR point of view is

strongly affecting the behavioral consumers' intentions and the way products, and

also companies, are evaluated (Mohr, Webb, & Harris, 2001).

B. Research question and hypotheses

Given that the COO effect can severely and negatively impact some products and

that CSR policies, on the contrary, tend to facilitate and reinforce positive

evaluations towards a product, or a company; the idea is to test the influence that

CSR ethical values would have on a potentially negative COO.

The research question that would then be used to guide the research is the following:

RQ: To what extent CSR ethical values counter-balance the negatively

perceived COO when communicated to consumers?

Based on the previous explanations related to the degree of importance that is given

to CSR initiatives and to the bad evaluation that usually arises from a COO that has a

negative image; a first hypothesis would be:

H1: The more CSR ethical values are related to a company having a negative COE,

the more the products from this company are positively perceived.

Based on the theoretical framework provided previously, the ethical values can be

divided in two main categories that are the social attributes and the environmental

attributes of a company’s CSR. In doing so, it gives the possibility to have a better

understanding of which values within the ethical ones could have an influence on the

consumer’s decisions.

H1A: The products from a company having a negative COO are more positively

perceived when social attributes are related to this one.

As an example, it has been proven that consumers “are willing to pay attention to

standards and practices used by a business that observes human rights and may even

boycott products that are produced in violation of human rights standards”


29

(Weissbrodt & Kruger, 2003, p. 902). This is only a part of the social attributes that a

corporation can present but it reinforces the idea that consumers are becoming more

and more aware of companies’ practices and that the way in which these ones

conduct business is now taken into consideration as price and quality of the products

could be. In line with the same idea, the rising thought that companies should

“achieve ecological sustainability” through their actions is becoming unavoidable

and respect of issues such as “the ecological impacts of population, food security,

ecosystem preservation, energy use, and technological change” are perceived as

lying in the hands of corporations (Shrivastava, 1995, p. 954).

H1B: The products from a company having a negative COO are more positively

perceived when environmental attributes are related to this one.

Bhattacharya & Sen (2004) argued that the concept of awareness is fundamental

when it comes to social responsibility. Indeed, without this notion, not any change in

behaviors or attitudes from the consumers can be expected. A second hypothesis

would then be:

H2: The types of information used to communicate the CSR ethical values of a

company with a negative COE have a different influence on consumers.

Four main types of information are available to consumers in order to get

information about the CSR ethical policies held by companies (Fliess et al., 2007).

These ones are the “standards and labeling schemes”, the “CSR reporting”, the

“consumer guides” and the “CSR communication through marketing strategy.” By

the nature of these ones and the different aspects that they present; the influence that

they could have on the consumers is likely to change from one to another.

H3: The means used to communicate the CSR ethical values of a company with a

negative COE are not given the same importance by consumers.

According to the research conducted by Morsing, Schultz, & Nielsen (2008), it has

been highlighted that the means of communication that are the most generally used

are the “websites”, the “reports”, the “magazines” and “personal communication.”


30

These channels are likely not to be used in the same way by consumers and the

probability that some of them have more impact exists.

H4: Consumers that are already implicated into CSR policies will easily give

importance to CSR ethical values that are related to a company having a negative

COE.

According to Mohr et al. (2001), most of the consumers seem to be receptive to

companies that are running their business ethically, but only a little minority of them

is truly attached to purchase products that always respect CSR common policies. It is

then likely that consumers already paying attention to the ethical values associated

with the products they buy, will be the most inclined to change their minds towards a

product that is manufactured in a country for which they have a negative image.


31

V. Methodology

A. Main concerns

The main problem is not relying in assessing the willingness for consumers to choose

between a CSR and a non-CSR company, or in their preference to buy rather from a

country rather than from another, but in incorporating both of the two concepts in the

same study. Indeed, product cues such as price and quality would have a stronger and

bigger effect on the consumer's rating of the product than the COO information has

(Ettenson, Wagner, & Gaeth, 1988). Elliott and Cameron (1994) also argued that the

major difficulty when it comes to analyze the COE cue is to isolate it from all the

others that also have an impact on consumer decision making process. Intrinsic cues

such as the design, the taste, the performance and the extrinsic cues that are use prior

to the product's purchase such as the price, the brand name, the packaging,

warranties, etc.

Another fact that has to be taken into account is the way consumers perceive the

products. Indeed, the attitudes that consumers have in confront of products from a

same country change from a product to another (Etzel, Michael, Walker, & Bruce,

1974). Yaprak (1978) has also stated that the consumers from two different countries

develop specific and different attitudes regarding the same third country.

It really matters to take into account the response that consumers could adopt from a

national and cultural point of view as the study is based on a cross-cultural

comparison. In line with this idea, the model of scale equivalence developed by

Wagner, Wetzels, & Winklhofer (2005) gives the information that a concept can

influence different attributes, as a reflective model, and that different intra-related

attributes can lead to a different concept, as a formative model. This means for this

study that when dealing with people coming from different countries, their

perceptions about a concept will probably be singular and thus, need to be analyzed

with care. Moreover, no generalization is possible in regard to the perception of

foreign products by consumers as they evaluate differently products coming from a

same country (Han & Terpstra, 1988).

A last potential bias that has to be taken into account is the importance given to CSR

by consumers. According to a qualitative study conducted by Mohr et al. (2001); the

majority of consumers are interested in seeking information about CSR. The reason


32

is that they are concerned by the environment, sustainability and by health issues but

only one category defined as the SRBC (Socially Responsible Consumer Behavior)

is truly affected and involved in CSR policies conducted by companies.

To sum it up, not every consumer perceives different COO in the same way and thus,

positive and negative images arise differently for every individual. The level of

implication in being socially responsible is also specific to every consumer and

behaviors towards it are widely different. Finally, the COO effect is something

difficult to measure and it is often mistaken or under-evaluated when quality and

price become the main decisional factors.

B. Research model

The main idea to answer the research question is to use the CSR ethical values as

being an independent variable and apply it to the COO that will be a dependant

variable. What would be needed is a context in which two countries are present: one

that would benefit from a globally positive CI and another one having a negative

COE. The economic level of the countries doesn’t really matter as the COO effect

apply to both developed countries but also developing or less developed ones (Nes &

Bilkey, 1993). What really matters is the perceived images of these countries. Ideally

the country suffering from the negative perception would also be the one presenting a

strong CSR aspect.

The study would rely on understanding if consumers are changing their mind when

getting aware of the fact that the country having the potentially negative COE is

actually performing better from an ethical point of view. Of course, I’m speaking

here about countries but the study will deal with products that are issued from

companies that bare the COO effect described above. In addition; the product should

be a high-involvement one as the COE affects significantly the intention of

consumers to buy such products (Tse, Kwan, Yee, Wah, & Ming, 1996). At the same

time, it would also be appreciated as the more the product has value and the more

consumers give importance to CSR initiatives.

The research is then divided into two steps, a questionnaire and an interview, in order

to reduce at the maximum the possible bias. On a first step, a questionnaire would be


33

needed to be answered by the future interviewees in order to understand towards

which countries they have potentially positive and negative images. The

questionnaire creation relies on the work made by Jaffe & Nebenzahl (1984) and

Roth & Romeo (1992). This one will assess through a set of 7 points Likert-scale

questions, the CI that the respondents have about countries where the product, used

in the following interview, is manufactured.

On a second step and after having collected the data from the questionnaires about

the CI, semi-structured interviews will be used to incorporate the CSR ethical values.

This kind of interviews have been chosen as they “provide the best means of

identifying and describing the variety of thoughts and feelings consumers have about

CSR” (Mohr et al., 2001, p. 52). Indeed, these authors have been conducting semi-

structured interviews in trying to figure out what are the motivations that push

consumers to rely on companies’ CSR and this thesis’ interviews will be inspired by

their process. Moreover, Bilkey & Nes (1982, p. 95) had already stated that "such

research must involve more than single cue surveys and experiments; multi-cue

studies conforming as nearly as possible to real life purchasing conditions are

needed." That is the reason for such a qualitative research as it gives the possibility to

put together all the different cues that are used by consumers when making a buying

decision and understand precisely why the interviewees chose one product rather

than another.

The design of the interview is based on the model used in the quantitative research

that has been conducted by Auger, Devinney, Louviere, & Burke, (2010) in which

the respondents were exposed to several situations in which they had to choose

among several athletic shoes and where they had to make some trade-offs between

ethical and traditional features. The aim of the interview is then to re-create such

situations in which respondents would need to choose what is, according to them, the

shoe that they would be the most likely to purchase. With the difference that brands

indications won’t be incorporated in this research.

In order to come up with fictional companies that would present strong social

attributes or some less impacting ones, the index developed by Capriotti & Moreno

(2007), lately incorporated in Amaladoss & Manohar (2013) research model will be

relied on when associating the wanted social attributes with the companies (cf. Table

3).


34

Table 3: Corporate Sustainability themes and definitions

In addition to this index, the extended researches that have been conducted by

Marrewijk & Were (2003), in relation with the degree of incorporation of CSR

policies in the companies’ business models will be really helpful in building up the

different corporate sustainability of the fictional companies used for the research.

In what the high involvement product is concerned, in this case a running/athletic

shoe, indications about the way CSR ethical values are communicated to consumers

and what are the issues addressed when it comes to the textile and clothing industry

will be gathered through the report written by Fliess et al. (2007).

C. Sample

This study is considered as an exploratory one as no previous research has been

trying to understand the effect of CSR ethical policies on the COE. In order to get

some good insights, semi-structured interviews have been chosen as they give the

possibility to understand why participants have opted for some decisions and what

are their attitudes and opinions towards the concepts that are analyzed in this thesis.

Given that the purpose of this research is to explore the possible causality of one

concept over another and that no generalization is that far considered, as a possible

relation between CSR and COO still needs to be figured out; a non-probability


35

sampling method relying on an homogeneous purposive sampling will be used (M.

Saunders, Lewis, & Thornhill, 2012). Students are then going to be targeted and it is

forecasted to gather insights on the topic that could later on been used to conduct

extended researches for a larger group of respondents. Nationality of the students is

here not relevant as in any case, the positive and negative CI that they have will be

specific to each of them and their degree of involvement in taking into account CSR,

which may fluctuate from a culture to another, will be taken into account in the

analysis of the interviews.

As far as the sample size is concerned, Saunders (2012), as cited in Saunders et al.

(2012, p. 283), provide with some guidelines about how many participants are

required in a sample and highlight the fact that when considering an homogeneous

population, 4 to 12 respondents would be needed. Guest, Bunce, & Johnson (2006)

agree on saying that 12 in depth interviews should be satisfactory. This number of

interviews will then be conducted, paying attention to the data saturation arising from

the participants’ answers.


36

Work plan

Period of Time Phase Objective

01.09.2014 - 12.10.2014 Litterature Research

Reaching an overall comprehension of the thesis concepts and elaboration of

the exposé

13.10.2014 Deadline Handing in the exposé

14.10.2014 - 15.12.2014 Theory Development and adjustment of the

master thesis' theoretical part

15.12.2014 - 15.01.2014 Methodology Elaboration of the survey/interview

design

15.12.2014 Deadline Handing in a draft of the intermediate

presentation

15.01.2015 - 15.02.2015 Analysis Running the interviews and starting to

gather the results

28/29/30.01.2015 Deadline Intermediate report

15.02.2015 - 15.03.2015 Evaluation Implementing the results in the thesis

15.03.2015 - xx.xx.2015 Finalization Review and adjustment of the master

thesis + preparation of the final presentation


37

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Documents

Influence of Companies’ CSR Ethical Values on the Country ... · Corporate Social Responsibility (CSR), Country-Of-Origin (COO), Country-of-Origin Effect (COE), Country Image (CI),