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Chapter 2: Literature Review

Introduction

The chapter is concerned to develop understanding of various concepts and theories regarding the relationship between CSR and consumer buying behavior. The review of literature related to importance of CSR strategy on consumer perception and behavior will be carried out under this chapter. The chapter would be carried out on the basis of objectives defined for the research. As a part of this chapter, different books, journals, articles will be reviewed to develop understanding of the use of CSR practices as marketing strategy. Theoretical background of different research topics will be provided under this chapter to develop understanding of different aspects associated with this research. The chapter would also be quite effective to gather necessary data regarding research problem to accomplish the research successfully.

Reasons of increasing use of CSR

In the views of Ali, et al. (2010), CSR can be referred as the integration of self-regulation in the business activities that ensure social welfare and support to reduce the adverse effect of the businesses processes on the society and people.  According to Jennings (2011), the current business environment is changing and consequently the needs and requirements of the customers are also changing at regular level. It is also affecting the organizational significance to make the customers loyal and to ensure the organizational sustainability. Due to this, the huge efforts are made by the businesses towards the strategies for creating a significant brand image and develop brand loyalty and achieve their sustainable success. At the same time, Beristain and Zorrilla (2011) portray that due to change in the environment, the perception and requirements of the customers are also changing as they prefer to purchase from the firms, which contribute towards the social welfare as it enables the customers to relate themselves with the firm. It has a positive influence on the consumers and causes an increase in their attraction towards the firms due to development of positive brand image.

In a follow-up study, He & Li (2011) find that the motivation for creating a positive brand image, most of the firms in the current environment are moving towards the corporate social responsible (CSR) activities due to their impact on the consumer perceptions. CSR practices are considered as effective marketing tool for the firms as they are used to promote the products and services to the consumers effectively through positive attitude among the customers. In respective to this, Ihlen, et al. (2011) state that by focusing on CSR practices, firms invest in effective R&D to bring innovative and green products and services to the customers. It means innovation is also a significant reason that encourages the firms to invest in CSR practices. Through CSR, firms develop their product strategy for green products by focusing on the development of features and elements of their products to enhance the satisfaction of the customers. Beside from this, Ye, et al. (2014) opine that CSR contributes in significant marketing mix element i.e. place strategy by improving the performance of supply chain. Under CSR framework, firms are enabled to evaluate the activities and performance of their supply chain members to protect the community and environment that enhance the effectiveness of their distribution channel and improve customer satisfaction by positioning the products in their mind.

But, the research of Xie (2014) recognizes different cause behind the attraction towards CSR by the retail firms in current business environment. According to this research, the increasing competition in retail industry causes an increase in the focus towards CSR activities because it has a significant influence on the consumer perception and consequently it creates a positive brand image of the firm among the customers to handle the increasing competition.

In the views of Visser, et al. (2010), many firms avoid the high investment on CSR practices due to conflict with the stakeholders’ interests.  Due to high investment on CSR, firms face issue to provide adequate returns to the shareholders that may cause disinterest among them for further investment and affect the organizational performance. On the other hand, Schwartz, (2011) also states that stakeholders are also major reasons for adopting the CSR practices by the firms due to their interests and rights in the business decisions. As per stakeholder theory described by Edward Freeman, the actions of the business have significant influence on individuals and groups within and outside of the company. Due to this, these individuals and groups hold a right and obligation to participate in directing it. For instance, it is ethical obligation of a firm to dispose the industrial waste safely because the community members have a right to clean air and water and may raise their voices if the firm disposes waste without safety (Roberts, 2010)

References

Abdullah, M.H. & Rashid, N.R.A. (2012) The Implementation of Corporate Social Responsibility (CSR) Programs and its Impact on Employee Organizational Citizenship Behavior. International Journal of Business and Commerce, 2(1), pp. 67-75.

Ali, I., Rehman, K.U., Ali, S.I., Yousaf, J. & Zia, M. (2010) Corporate social responsibility influences, employee commitment and organizational performance. African Journal of Business Management, 4(12), pp. 2796-2801.

Alvarez, I. G., Lorenzo, J. M. P. & Sanchez, I. M. G. (2011) Corporate social responsibility and innovation: a resource-based theory. Management Decision, 49 (10), pp. 1709 – 1727.



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