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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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14
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.”
Draft of the Master Thesis Exposé – Paul Guillot
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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."
Draft of the Master Thesis Exposé – Paul Guillot
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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
Draft of the Master Thesis Exposé – Paul Guillot
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.
Draft of the Master Thesis Exposé – Paul Guillot
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.
Draft of the Master Thesis Exposé – Paul Guillot
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.
Draft of the Master Thesis Exposé – Paul Guillot
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.
Draft of the Master Thesis Exposé – Paul Guillot
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.
Draft of the Master Thesis Exposé – Paul Guillot
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
Draft of the Master Thesis Exposé – Paul Guillot
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.
Draft of the Master Thesis Exposé – Paul Guillot
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.
Draft of the Master Thesis Exposé – Paul Guillot
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
Draft of the Master Thesis Exposé – Paul Guillot
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”
Draft of the Master Thesis Exposé – Paul Guillot
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.”
Draft of the Master Thesis Exposé – Paul Guillot
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.
Draft of the Master Thesis Exposé – Paul Guillot
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
Draft of the Master Thesis Exposé – Paul Guillot
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
Draft of the Master Thesis Exposé – Paul Guillot
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).
Draft of the Master Thesis Exposé – Paul Guillot
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
Draft of the Master Thesis Exposé – Paul Guillot
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.
Draft of the Master Thesis Exposé – Paul Guillot
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
Draft of the Master Thesis Exposé – Paul Guillot
37
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