Corporate Social Responsibility - Term Paper Example

Investigate consumer intention from a company on the basis of their CSR Table of Contents Section 3 Section 2 6 Section 3.3 8 Theory of planned behaviour 10 Attitude towards behaviour 11 Subjective norm 11 Perceived or Apparent behavioural control 12 Section 3.4 13 References 14 Section 1 Corporate social responsibility is the corporate initiative to take responsibility and assess impact and effect of company on social welfare and environment (TCNJ, 2014, p.1). Furthermore, it is viewed as the management theory which company incorporates environmental and social concerns in interaction with stakeholders and integrates in business operation. It is understood that corporate social responsibility is the process by which company achieves balance of societal, environmental and economic necessities (Institute for PR, 2014, p.1). Likewise, the company also addresses the prospects and expectations of stakeholders and shareholders. In other words, corporate social responsibility is referred to as the corporate social conscience that promotes environmental and social change rather than providing immediate financial profit to the corporation (Stanford, 1999, p.1). This corporate citizenship is expressed by companies by earning adequate returns, by contribution to social and educational programs and through their pollution and waste reduction processes (Academia, 2012, p.2). According to Better Business Journey, the survey states that 88 percent of the consumers are more likely to admit and accept a company that engages and maintain execution of ethical business practices related to enhancement of the society (Conference-Board, 2012, p.9). This augmented growth has been achieved by execution of sustainable business which resulted in to upsurge of employee engagement, fostered innovation, reduction of risk and attracting more investors. This is the prime reason why international and even smallest organization implemented corporate social responsibility at the core of their industry process (Warner, 2009, p.1). The implementation of CSR policies and methods can benefit organization to enhance customer retention, improve business standing, generate innovation, maintain happy workforce, provides access to funding prospects, enhanced effective relationship with supplier and customers differentiate from competitors (Harvard, 2011, p.1). According to Sankar Sen and CB Bhattacharya, it is vital for organization to develop and implement effective enthralling social responsibility programs that could act as pivotal factors for rapid upsurge of value for company and stakeholders (Bhattacharya and Sen, 2001, p.1). Bhattacharya and Sen articulated framework which is based on interpreting the reactions of stakeholders towards implementation of corporate social responsibility. The awareness of execution of corporate social responsibility within the organization will be effectively related towards the associations of stakeholders that the corporation is communally accountable (ACCO, 2012, p.1). Moreover, this can maximize the relationship between stakeholders. Consumers or individuals have to be aware of the CSR initiative of a company to develop a CSR acceptance. In the year 2012, Cone Communications Corporate Social Return Trend Tracker released new statement which based on survey hold about execution of CSR policies. It has been revealed that more than 84% of Americans that have a grip on organizations are responsible for increase rate of CSR commitments (SMG, 2004, p.9). Companies are effectively engaged in corporate social responsibility activities, as there is a rapid shift on expectations of stakeholders. Marketing agency, public relations and Cone Communications are regarded as the pioneer in CSR and cause marketing (Energy Star, 2013, p.85). Unilever is of the organization that has not been championing sustainable business by execution of effective marketing and business strategies. The executive on Sustainable Living Plan has been vital for Unilever Company to increase their profits and growths. According to Urip, the consumer perception of corporate social responsibility performance of a company is manipulated by the use of CSR halo (Insead, 2014, p.1). According to Schwartz, consumers are not only viewed as the only stakeholders of an organization (Carroll and Shabana, 2010, p.86). The CSR initiatives are implemented by organization to different product offerings and influence consumers. According to Sen and Bhattacharya, consumers have increased their level of satisfaction and expect that business should go further than delivering economic consequences (Sen and Bhattachary, 2001, p.75). Consumer expects that business should contribute to sustainability and welfare of society. Sen and Bhattacharya suggests that CSR claims are some of the pivotal social-responsible activities that expected to be implemented by organization to enhance customer loyalty and build brand equity to bring positive outcome to the growth of business. According to Grunewalder, the execution of CSR in organization can reduce the focus of company towards profit maximization (Brooklyn, 2012, p.1). Some of the managers and corporations are not competent enough to involve in social concerns and subjects. Some of the critics even go beyond the argument and states that investing on implementation of CSR such as promotion of community development plans, charitable contribution and formation of environmental fortification can put organization and managers at economic loss (Korkchi, 2007, p.23). According to Paetzold, corporate social responsibility is viewed as the dilution for chief purpose of business. Furthermore, it is regarded as the social involvement process that can hinder profit maximization and often can be viewed as the costly strategy (Flack and Heblich, 2007, p.1). The drastic change in climate has been prime reason behind the execution of corporate social responsibility on basis of geographic areas. The local corporate social responsibility can enhance the reciprocal behaviour on the portion of egocentric tendencies of customers. The authors could not find any appropriate explanation other than that of egocentric motives which can be viewed as the primary origin for consumers to respond in a different way towards the implementation of corporate social responsibility undertakings (Orey, 2010, p.38, ). Section 2 According to Bueble, consumers have become more social aware about their buying criteria (Carrigan, 2005, p.561). Socially responsible is regarded as the duty of business or an individual to maintain balance between ecosystems and economy. It is suggested as framework to sustain the equilibrium of economy and ecosystems that can be beneficial for society. Organizations can secure their businesses by using ethical decision making process that allows governmental interventions to lessen their participation through the process (HM Government, 2013, p.1). According to the study of customer intention, Consumer behaviour is defined as the process in which consumers search their particular and suitable goods and service in gratification and satisfaction and of consumer desires and needs. Furthermore, it is defined as the behaviour of consumers to evaluate, search, purchase and positioning of products and services that can help to satisfy and gratify needs of the consumers (UKBC, 2014, p.1). Consumer behaviour can be effectively influenced by sustainable products. The introduction of analysis of consumption method and expansion of innovative products can play significant role towards influencing the preferences of individuals. Consumer behaviour is regarded as pivotal part for maintain sustainability of the organization. The implementation of CSR can effectively influence consumer behaviour and enhance financial performance of the organization. Every consumer expects good products with better quality. Moreover, this can influence consumers to buy products. According to study of Sen and Bhattacharya, there are number of studies that show that corporate social responsibility plays a pivotal role to influences the buying behaviour of consumers. The buying decisions of consumers are based on certain traditional standards such as conveniences, price and quality. Furthermore, second criteria for buying decisions of consumers are based on benefits and damage to the public. According to study of Maziah Ismail and Lee, it is vital for company to improve financial performance and customer satisfaction of company by emphasizing on corporate social responsibilities events (Ismail and Lee, 2013, p.280). Sen and Bhattacharya stated that word-of-mouth, product evaluation, consumer attitude and consumer loyalty are four primary aspects that shows that corporate social responsibility of company can heavily impact buying behaviour of consumers. Several studies implemented by Sen and Bhattacharya proves that corporate social responsibility can effectively influence behaviour of buyers by product evaluations, purchase intent, product selection and brand recommendations. Friedman reported that the analysis of Lee is based on the evolutionary pathway of corporate social responsibility. The study of the Lee signifies that CSR managers are viewed as the liability with high ambiguous consequences. The study also incorporates that the view of managers towards their customers and employees is that they are much easier to manage and visualize than their accountabilities towards the development of the society. The prime reason is that responsibilities of the managers on stakeholders are visualized and structured in the vision and mission statement of the enterprises. The studies of Ismail and Lee are based on improvement of the financial performance of the corporation and enhancement of the customer satisfaction. There is a link between studies of Sen, Bhattacharya and Ismail, Lee. Both of the studies in based on providing effective way of implementation of social responsibilities activities. The study of Lois and Deborah states that the number of studies provides a vivid explanation about the importance of CSR on influencing the buying behaviour of consumers. On the other hand, Sawandi and Mohammed stated on their studies that before the purchasing decision, negative CSR activities can have a considerable amount of effect on consumers. Consumers are less sensitive towards progressive CSR activities (Wrap, 2014, p.1). Environmental degradation, carbon emissions and climate change issues is on top of the agendas of business and government. Nowadays, several organizations have designed strategy for environmental protection in to the business operation. The primary purpose of the initiation of environmental protection is to maximize profit and be responsible for the benefit of the home-grown community. Consumer trust is one of the pivotal factors in encouraging long-term relationships and suitable development of the organization. Delgado-Ballester states that trust is viewed as the expectation of customer towards the brand. It is also defined as the set of accumulated assumption, desire and beliefs of consumers that brand is dependable. Therefore, it is vital for organization to implement CSR activities within their business process to satisfy and fulfil the satisfaction of customers. This process can help to build trust of consumers towards a brand (Zero carbon, 2014, p.1). Section 3.3 The Body Shop is also known as The Body Shop International PLC which sells cosmetics and inspired beauty products. The company was founded in 1976 and headquartered in England, West Sussex. The Body Shop Company is known as one of the famous leaders in corporate transparency and CSR. 30 years after the opening of first The Body Shop store in Brighton, the company is viewed as the one of the prominent multi local business which serving more than 77m customers in more than 25 different languages and 52 different marketplaces (Action sustainability, 2013, p.1). Additionally, the company offers alternative option of customer by opening on-line sales channel. The business philosophy of the company is to offer customers an efficient experience of shopping which is combined with excellent service. The ethical responsibilities of the company is based on introduction of effective ethical trade program to enhance the working conditions of the employee and build close relationships with suppliers to work together (Apple, 2014, p.1). The corporate social responsibility is thoroughly linked to the company. Furthermore, the CSR is defined by company as the way of being a member of the society, way of doing business and way of being a good citizen in the society. The ethical responsibilities of The Body Shop are financially supporting human rights organization and NGOs, building fair trade and choosing right elements for packaging. The five prime business policies of the company are against Animal Testing, Defending human Rights, Protection of Planet, Activation of Self-Esteem and supporting Community trade. In the year 1997, The Body Shop signed with the Humane Cosmetics Standard (Cslondon, 2012, p.1). The prominent international protection groups for animals support the Cosmetics Standard. Several campaigns have been initiated by the company to reduce the experimentation of animal and save community from environmental issues. The company also engages in number of initiatives with suppliers to ensure ethical agreement (Sridhar and Jones, 2012, p.1). The company believes that execution of CSR under ethical norms and regulations can help to gain trust of shareholders, customers, stake and employees. According to Ciletti, the consumer behaviour has been progressively sensitive towards the performance of CSR of the organizations. This is the reason where organizations have been pressured to operate in environmental, socially and economically sustainable approach (Allenj, 2010, p.2). Theory of planned behaviour The concept of theory of planned behaviour is proposed by Icek Ajzen which is regarded as the link between behaviour and beliefs (Roberts and Amit, 2012, p.1). Furthermore, the prime purpose of the theory is to improve and enhance the prognostic supremacy of the theory of reasoned act. According to the theory of planned behaviour, the behavioural intentions of individuals can be shaped by apparent behavioural mechanism, subjective standards and attitude towards behaviour (Cob, 2014, p.1). Moreover, this theory is applied to various fields such as advertising campaigns, healthcare, public relations and advertising. The theory of planned behaviour is regarded as one of the utmost analytical persuading philosophies which are also implemented to the lessons of the associations amongst theories, behaviours and behavioural intentions (Depaul, 2006, p.4). The purchasing intention of consumers is related with the attitude, perception and behaviour of consumers (Heraldsun, 2013, p.1). Consumer intention is defined as the plan a consumer to buy particular product or service. According to Sadler, the consumer purchasing intention is dependent upon value perception, quality and price. The theory of planned behaviour has been implemented many times for the research of consumer behaviour. Stephan Broucke and Helmut Paris have implemented the theory of planned behaviour to measure the cognitive determinants (Koppel and Reynolds, 2001, p.1). Verbeke and Vermeir have applied the TPD model to study the sustainable consumption of food. On the other hand, Sparks and Guthrie implemented modified TPB model to study on consumer behaviour and actions on low nutrition in animal fats (MIIS, 2004, p.6). Self-identity is the measure which is added on the model to facilitate the theory of attitude. The variable of moral norms is added by Tessler and Schwartz which is based to the donation of organs. The TPB and TRA remain on the prevalent framework to understand and explore the social behaviour of human beings (Pakham and Li, 2010, p.1). Subjective norm, attitude towards behaviour and apparent behavioural control are three elements of the theory of planned behaviour model (Sema, 2000, p.1). Attitude towards behaviour Attitude towards behaviour is described as the overall evaluation of behaviour of the person. According to Azjen, the attitude is defined as the negative or positive feeling of individual that is related with execution a definite behaviour (Richmond, 2012, p.1). A favourable attitude will be hold by an individual, if they believe that the effective execution of performance of the behaviour can lead to constructive result (Pinceton, 2013, p.1). It is assumed by Azjen that there are two constituents such as the corresponding undesirable or optimistic findings and behavioural beliefs. There is direct and positive effect of attitude towards the purchasing power of consumer from the body shop. This effect is based on the implementation of CSR activities (Perdiguero and Jimenez, 2012, p.1). Subjective norm Subjective norm is defined as the observed and perceived social pressure of individual to not involve or engage in a performance. According to Ajzen, total set of available normative beliefs determines the subjective norms (Umass, 2014, p.1). Furthermore, it is concerned with the expectancy of significant referents. According to Young and Simon, in United States and Greece, the subjective norms are related to the intention (Rimal, 2013, p.1). According to Ajzen, the subjective norms are believed to have two components such as normative beliefs and belief of other people who may be significant to the individual (Bumc, 2014, p.1). The purchasing power of individual to buy products or services from a company is believed to have positive subjective effect on the basis of corporate social responsibilities activities (Classon, 2006, p.16). The perception of individual regarding particular behaviour can be heavily influenced by the decision of other such as friends, parents and spouse. Perceived or Apparent behavioural control Perceived or apparent behavioural control is one of the elements of TPB model which is the extent and magnitude to which an individual perceive that they are able to ratify the behaviour and performance (Cryptome, 2014, p.1)). This behavioural control has two aspects which includes how an individual feels that they are confident that they are able to perform the task or how much an individual has control over their performance. Apparent behavioural control is linked with intention and CSR activities as it is determined by control of beliefs about the power of together inner and situational factors. Moreover, this determines to facilitate and inhibit the rate of performance of the behaviour. It is referred to as the perception of people to have the ability to perform given behaviour and performance. The power of each beliefs is weighed by the distinguish control. High perceives behavioural control means that customers are motivated to buy products from the Body Shop. This resembles the fact that, it is vital for organization to implement effective CSR activities that are beneficial for the society and business. The Body Shop must enhance the control beliefs of individual to enhance the perception of customers about their brands. The upsurge of apparent behavioural control can enhance the purchasing the powers of buyers. Section 3.4 Loyalty is defined as the crucial aspect which helps to dominate and represent the purchasing behaviour of customers and signify behavioural tendency. Furthermore, this tendency of customers is based towards the service or merchandise (Csustan, 2012, p.1). Price tolerance and passing on of customers are main two factors to evaluate loyalty of customers towards The Body Shop. The brand loyalty is defined as the final purpose of the brand administration. It provides opportunity for company to evaluate the strength and weaknesses of the corporation based on customer loyalty (The Body Shop, 2011, p.3). Attitude and behaviour factors are included to the brand loyalty. Long-term commitment of the brand towards consumer satisfaction can enhance the brand loyalty. It is crucial for organization to implement effective CSR activities and framework to upsurge brand loyalty (Hohnen, 2007, p.9). This can benefit organization to increase their profit and maintain sustainability. According to Griffin, loyalty includes succeeding attitude of customers such as willing to use varied kinds of services or products, regular repetitive purchasing. Bae states that customer loyalty is signified as the purchasing behaviour (Bae, 2012, p.5). Furthermore, customer loyalty is defined as the mediating variable which helps to explain the customer retaining. Additionally, it is concerned with creation business referrals, probability of a customer returning and providing publicity and references. It is true that loyal purchaser is less likely to change their brands and taste. The purchase behaviour determines the loyalty of customers. The execution of effective corporate social responsibility practices can determine the buying decision of customers. Customer would feel that company is doing their best to look after the environmental and social concerns (HP, 2014, p.1). The individual commitment towards achieving goal is linked with the customer loyalty towards the company. In the word of increasing interest of CSR activities, the factors of corporate social responsibility influence the loyalty and customer intention. According to gray and Quaddus, the perception of customer on CSR can effectively influence the intention of customers (Kim, 2011, p.1). 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