Chapter 1: Introduction

The introduction chapter provides the reader with a clear statement regarding the aim and objectives of the dissertation, and its relationship to the existing work. It also outlines the research questions that the paper seeks to answer and provides an explanation as to the importance of the current study. There is also a brief outline regarding the subsequent chapters of the dissertation.

 

1.1 Background

In the modern corporate world, corporate social responsibility (CSR) is regarded by many as an essential component of effective performance (Brockett & Rezaee 2012). It covers a wide scope of activities including the environment and other social factors. There is a perception that corporations should operate and engage in activities that provide a social good regardless of whether or not direct benefits can be realized from these activities (Buhr & Grafstrom 2007). The CSR activities that the companies engage in include those of an economic, legal, ethical, and philanthropic nature. The economic front follows the perception that the main aim of every corporation is to remain economically viable. As such, the company has to make money in order to remain in existence and satisfy the needs of the clients (Crifo & Forget 2015). In addition, the company has to generate revenue in order to engage in CSR activities. Therefore, corporations may engage in CSR with the aim of promoting their businesses and earning more revenue in the long-run (Crane 2010). There are also legal responsibilities associated with CSR. Regardless of the wishes of the company, as illustrated by Lambooy (2014), there are laws and regulations that require the companies to engage in CSR activities, for example, making sure that their waste products do not pollute the environment beyond a certain level. Failure to follow these rules and laws may result in heavy fines, criminal proceedings and even the closure of the business (Lambooy 2014).

There is also an ethical front in CSR where businesses engage in these activities with the sole motive being based on ethics (Crane 2010). Regardless of the other benefits that the company may realize from engaging in the CSR activities, it has to assist the people. Finally, the philanthropic front entails the involvement of a business in CSR activities as a way of promoting the welfare and goodwill of the people (Trevino & Nelson 2014). It is through philanthropy that businesses create or fund charitable foundations, which focus on alleviating a given problem affecting the people on a local or even global scale (Trevino & Nelson 2014). It is a way of giving back to society and it does not necessarily have to be related to the companys line of business. Regardless of the approach and motive of a companys engagement in CSR, the current research will seek to determine how customers perceive their activities. Previous literature has suggested that the engagement in CSR by businesses make the clients perceive the business as beneficial to them (Brockett & Rezaee 2012).

A variety of definitions of corporate social responsibility exist and they relate to the ethical practices of a business as well as the engagement of a business in the welfare of the society. According to the European Commission, CSR is a concept whereby the businesses integrate both environmental and social concerns in their operations (Islam, Haider, & Saeed 2013). The World Business Council for Sustainable Development refers to CSR as the commitment by businesses to make contributions to the sustainable development of the economy by engaging the employees, their relatives, and the local community with the aim of improving the quality of life (Islam, Haider & Saeed 2013). The companies and businesses may engage in CSR activities of their choice, but it is the clients perceptions that determine whether these activities are of economic benefits to the companies. Understanding these concepts requires research on the perceptions of a section of customers in order to understand whether they perceive CSR as of benefit to them, and whether it impacts on their purchasing behaviours. In China, CSR has gained significant attention by the corporations and businesses in the recent years, and it would be a great area to focus on (Lee, Ramasamy & Rhee 2014). Ideally, the area of the study will act as a representation of the activities of other customers throughout the world. For the purpose of the current study, CSR will be taken to incorporate all the possible approaches that a company may use to engage in CSR activities, whether they are voluntary or enforced by law.

1.2 Study Aim

The aim of the study is to gain more knowledge and understanding of the perception of customers towards the benefits of CSR. Therefore, the current paper will achieve this by investigating the perception that clients have about the value of CSR in businesses, and how it benefits them.

1.3 Study Objectives

1. To identify the views of previous authors and researchers regarding the perception of customers towards CSR by conducting an intensive review of related literature.

2. To analyse the perceptions of different customers regarding the value of CSR and how it may be beneficial to them by collecting data via interviews.

3. To investigate whether there is a relationship between the involvement of businesses in corporate social responsibility and the satisfaction of clients by analysing the data collected through interviews.

4. To recommend how businesses may use CSR activities to their benefit as well as that of the clients and the society.

1.4 Research Questions

1. What are the views of other authors and researchers in regard to customer perception of the benefits of CSR towards them?

2. How do customers perceive CSR in businesses, and how it may be of benefit to them?

3. Is there a relationship between the involvement of businesses in CSR activities and the satisfaction of customers?

4. What are the recommendations to the businesses on how CSR activities may benefit them and at the same time satisfy the customers?

1.5 Rationale of the Study

Diverse perceptions exist on the relationship between the CSR and businesses. Individuals supporting the use of CSR believe that businesses end up making more money when they use CSR (McElhaney 2008). This is attributed to increased attraction of clients to businesses that have CSR programs (McElhaney 2008). However, the opponents have the perception that when businesses engage in CSR, it only creates a distraction from their main economic purpose in business, which is to generate profits (Buhr & Grafstrom 2007; Banerjee 2007). Regardless of the different perspectives offered, it is evident that CSR has become increasingly incorporated in todays business world. There is an existing perception among most businesses that involvement in the CSR will impact positively on their revenue by attracting more clients (Pedersen 2015). Previous research has indicated that consumers care about CSR and they expect corporations to have well-defined levels of CSR (Mohr, Webb & Harris 2001).

The satisfaction of the clients in not inherent in the product or service, but instead comes from the perception that a client has towards the given product (Mohr, Webb & Harris 2001). Consequently, for a similar product, different consumers may express diverse degrees of satisfaction. In addition, literature based on marketing has recognised that the satisfaction of clients is a key component of the corporate strategy. It is also a key driver of a business long-term market value and profitability. Therefore, it is expected that the perception of the clients towards CSR has a positive influence on their satisfaction. In addition, businesses seek to build client loyalty by making sure that they are satisfied. It is an approach that is also seen to be influenced by the CSR activities of a business. Consistent satisfaction is a major contributor to the loyalty of the customers. Thus, it is important to understand the link between the CSR activities of a company and the perception as well as the satisfaction of the customers. Therefore, it is vital to research the topic and provide up to date information regarding the perception of the corporations regarding the importance of CSR.

1.6 Study Outline

Chapter 2: Literature Review This involves a critical review of the relevant academic literature, which identifies the relevant theoretical and conceptual ideas, issues as well as debates regarding the research topic.

Chapter 3: Methodology This outlines and justifies the approach that the paper will adopt in regard to the collection of data as well as research approaches. It also discusses the strategies adopted during the sampling of the participants. It also discusses the reliability, validity and generalization of the study.

Chapter 4: Findings and Data Analysis This section of the dissertation presents the findings of the study including themes as well as the interpretations of the data.

Chapter 5: Conclusions and Recommendations This section establishes a link between the findings of the others reviewed in the second chapter, and expressing to what extent the studys findings agree or disagree with their findings. It also includes recommendations for future research and actions.

Chapter 6: Personal Reflection This entails giving a personal reflection regarding the entire process of writing the dissertation as well as the authors personal reflection regarding the topic.

1.7 Summary

This chapter provides an introduction of what the research is about. It offers a background of the corporate social responsibility concept. It also provides information on the importance of the research including the research aim, objectives and questions. The studys rationale is that as corporations throughout the world adopt the concept of CSR, it would be important to understand whether the clients perceive it as an important concept. In order to determine this, the paper will include various sections including a literature review, a methodology section, findings and analysis of data, conclusions and recommendations, and personal reflections.

Chapter 2: Literature Review

2.1 Introduction

This chapter has an aim of presenting previous research in the CSR field and its connection to the perceptions of consumers. The CSR concept will also be reviewed in relation to different authors and researchers. There will also be a discussion of relevant theories, which will begin with an explanation of theories relating to the response of customers to CSR. There will also be an exploration of Maignans (2001) research regarding CSR, as well as, Ramasamy & Yeungs (2009) research. Since the paper will focus on a social issue and seeks the perceptions of the public, it is inevitable to consider culture as a possible factor that may impact on consumer perception towards CSR. Therefore, the chapter will present the Hofstedes cultural dimensions as well as Trompenaars seven dimensions of culture. The chapters structure will include a discussion regarding the definition of CSR and its brief history. There will also be a discussion on how CSR relates to sustainability of businesses. In addition, the factors impacting on CSR and its applicability in businesses will be examined. Finally, the chapter will introduce CSR in China, which is the location where the research will be based. The paper will use a wide range of literature including books, peer reviewed articles, and internet sources. The search for relevant literature included searching through the library catalogue for various key words that relate to the current paper, including CSR, impact of CSR on customers, and perceptions of customers towards CSR.

2.2 CSR Defined

There are various definitions of CSR but they all deal with various issues including performing ethically as well as the enhancement of the welfare of the society (Khan, Khan, Ahmed, & Ali 2012). However, some people suggest that the concept of CSR has lost meaning (Tuan & Tuan 2011). It is also the opinion of others that the diverse CSR definitions are congruent to each other (Tuan & Tuan 2011). However, in general the diverse definitions relate to the impact that businesses have to the welfare of the stakeholders. CSR focuses on different aspects including the economic, legal, ethical and discretionary expectations from society. The businesses may decide to extend their contributions to the society beyond the requirements of law. Although CSR has numerous definitions, the current dissertation shall adopt the definition used by Kotler and Lee (2004), which defines CSR as the commitment to improve the well-being of a community using discretionary business practices and contribution of companys resources. The choice of this definition has been reached because the current research is focused on China, where CSR is voluntary. In addition, clients have a high preference for the businesses that have high social responsibility campaigns (Shin 2014). Globalisation and information technology has seen the competition in the market become fierce, and corporations seek every effective way to become relevant and prominent. Maneet & Sudhir (2011) also adds that the corporations can boost their image through CSR, which is among the approaches that can be adopted in order to attract more clients to the business.

2.3 CSR Concept and Origin

Although CSR has been in existence for decades, there is no consensus on its definition, as it has different meanings for different stakeholders (Jamali 2008; Jones, Bowd & Tench 2009). Katsoulakos, Koutsodimou, Matraga, and William (2004) outline three phases of the development of CSR, with phase 1 being pre CSR phase, which occurred between 1960 and 1990, while the second phase is the CSR initiation phase that occurred between 1990 and 2000. The third phase is Early CSR mainstreaming, which began in 2000 going forward (Katsoulakos et al. 2004). However, Katsoulakos et al. (2004) also trace CSR activities back in the 1800s, providing an example of Cadbury promoting housing reforms and green environment in Bournville Village. Khan et al. (2012) also discuss the history of the CSR concept and states that the general work on its evolution begins in the 1950s through the 1990s. After developing over the decades, CSR has moved into different regions and it has evolved in such a way that there exist inter-regional variations. It is evident that there has been increased presence of CSR in modern society (Caroll 2008). It can be attributed to the sustainability that businesses have realized as a result of the incorporating CSR into their operations (Aras & Crowther 2009). It is mainly to the increased perception among clients that businesses that have CSR programs are benefiting society. Despite there being different arguments for and against CSR, research indicates that customers care about it in the sense that they believe that the CSR activities may be benefiting them directly, or it shows that part of the price that they pay for commodities or services is channeled towards socially responsible activities (DAstous & Legendre 2009). Thus, it is in the best interest of the company to put additional focus on the CSR (DAstous & Legendre 2009). In an agreeing tone, Mohr, Webb & Harris (2001) state that the consumers gave high expectations that the companies will increase the levels of CSR that they have within their operations. One issue that has been raised despite significant research focusing on the CSR show that there is still no generally accepted definition (Pedersen 2015). The lack of a general definition creates a bit of confusion, and it hinders its implementation by the corporations and also debates by academicians (McWilliams, Siegel & Wright 2006). Carroll (2008) also states that the CSR in business has been a concern for businesses for a long time.

Most literature refers to CSR as a voluntary activity conducted by corporations (Carroll 2008). However, recent developments have seen companies being required to demonstrate their responsibility to society. For example, about seventy percent of the large companies in Europe and Americas report their CSR initiatives (Karnani 2013). Indian companies that generate a net revenue of 500 million rupees or more or a net profit of 50 million rupees or more are expected by law to spend at least two percent of the net margin generated in the immediate preceding years on CSR initiatives (KPMG 2014). Some countries nations have mandatory CSR reporting requirements including Norway, Sweden, France, Denmark, and Australia (Karnani 2013).

Almost all modern enterprises have incorporated a CSR policy in their operations with the main reasons being defence, altruism and strategy (Crifo & Forget 2015). A majority of the executives believe that it creates a competitive advantage for the firms, and it leads to a greater market share. It also provides a competitive advantage for a company through the engenderment of the clients and employees benevolence (Crifo & Forget 2015). Branco and Delgado (2012) make a similar argument, but add that although the CSR initiatives can offer a competitive advantage to the organisations, if not well-managed they may actually develop some competitive disadvantages. For example, they require financial investment, which can potentially be a burden to the business. Sometimes the CSR may involve misleading reports, where they indicate that a lot has been achieved while in actuality, what was done beyond the requirements of the law is limited (Branco & Delgado 2012). Various approaches are discussed by researchers on how CSR should be conducted, in particular the shareholder perspective, stakeholder perspective and societal perspective (Pedersen 2015). Shareholder approach focuses on CSR activities that will promote the maximisation of profits while the stakeholder perspective has its focus on the company has to be accountable to all the stakeholders, including clients, communities, employees, and government officials (Pedersen 2015). Finally, the societal approach shows that the corporations are responsible to the community as a whole. Hence, their operations should satisfy the needs of society (Pedersen 2015).

2.4 Corporate Social Responsibility

Diverse perspectives have been used in the analysis of the CSR (Russel & Russel 2010). For instance, finance research has mainly dealt with the relationship between the efforts of the corporate social responsibility in relation to corporate financial performance (Munoz, de Pablo & Pena 2015). On the other hand, the marketing researchers focus on the impact that the CSR efforts have on consumer reactions, as well as, the optimization of CSR efforts based in the expectations of clients and perceptions of business to customer, and business to business approach (Hildebrand, Sen & Bhattacharya 2011). The CSR efforts have also gained importance in the functional operations of the corporates. For instance, it is viewed as a way of attracting employees in the area of human resource management, most employees like working for a company that is socially responsible (Strandberg 2009). According Russel and Russel (2010), the management focuses in the importance of CSR as a developer of opportunities, which also implies a perpetual change from what is deemed right to what is the smart thing to do. Porter and Kramer (2006) state that if corporations were to make an analysis of their social responsibility prospects using the same framework that they use to analyse their core operations, they would realise that it is not only a constraint, a cost or just a charitable act, but it is also an opportunity to develop opportunities, competitive advantage as well as innovation.

2.5 Responses of Consumers to CSR

Throughout the world, the concept of CSR has become an important facet of the operations in different organizations. However, it has become the case after numerous years of rejection from leaders in the business world. The concept has progressed from an inapt idea and to becoming an orthodox issue in the business world (Lee 2008). The issue of CSR was litigated in a court of law for the first time in a case Dodge v. Ford Motor Co. in 1919. It related to the main role of businesses and the majority has a conservative perception regarding the CSR. The companys founder Henry Ford believed that each person ought to afford a car. His plan was to reduce the price of a car to a level where almost every person could afford one. However, the shareholders did not support the move and they argued that the purpose of a company was to make profits and provide value on their investment (Adams, Licht & Sagiv 2011). However, these perceptions have changed over the years, and companies have moved from mere financial incentives for their CSR involvement to also include the wellness of the society (Spector 2008).

2.6 Factors Impacting on CSR Perception of Consumers

It is important to discuss what other authors consider as the factors that impact on the perception of consumers in relation to CSR; it is part of the current papers research questions. These factors are classified as core, central and peripheral factors.

2.6.1 Core factors to consumers CSR perception

There are a number of factors that assist in determining whether CSR has been taken into account when clients make their decision to purchase a given product or service. These factors are outlined by Oberseder, Schlegelmilch and Gruber (2011) include awareness, personal concerns and information. The analysis indicates that whenever these factors play part, the CSR concept will not play a role in the decision making.

In relation to the awareness, Pomering and Dolnicar (2009) state that CSR impacts on consumer purchasing behaviour if such an individual is aware of the companys work with CSR. However, the literature available providing information on the consumer awareness of CSR is minimal (Du, Bhattacharya & Sankar 2010). Such low awareness may be problematic for the businesses that may be focusing on the use of CSR to generate revenue. In addition, some studies have indicated that information regarding the CSR of a company may not lead to increased sustainability of the responsibility when purchasing a service or a product. Previous research provides attention to the fact that information is essential when consumers decide on the ethical features of a service or a product (Bray, John & Kilburn 2011). Information is provided in two dimensions, which include the information level and the information type. Oberseder, Schlegelmilch and Gruber (2011) defines the level of information as the extent of knowledge that a consumer has regarding the work of a company involving CSR, while the information type focuses on either the positive or the negative impact of information on CSR.

In relation to personal concern, Du, Bhattacharya & Sankar (2010), state that individuals evaluate themselves differently from how they evaluate others. Through analysing a persons social orientation, a connection to corporate social responsibility may be made. Three individual social value orientations exist in the form of pro-social, individualistic and competitive. Pro-social individuals care about others as much as they care about themselves, while individualistic people care about their well-being more than that of others (Du et al. 2010). Competitive people place themselves at the centre and will always take advantage of others. A consumer who has the pro-social personality is most likely to support CSR more than other consumers (Du et al. 2010).

2.6.2 Central factors to consumers CSR perception

Central factors, as defined by Oberseder, Schlegelmilch and Gruber (2011), are the perceptions of the consumers towards the monetary state of a buyer as the determiner of their assessment of CSR as a purchasing criterion. The consumer price perception plays a significant role in the choices made by a client. Some studies have shown that the consumer's decision to buy a given product is determined by the social engagements of a company, while the others indicate that it is determined by the convenience, quality, brand, and price (Janssen & Vanhamme 2015). However, Oberseder, Schlegelmilch and Gruber (2011), also state that price is the most important criterion when clients are making decisions on what to purchase. It is required that a client has sufficient financial resources when making a decision to purchase a product or a service. Additionally, some consumers make an assumption that the products or services that are provided by companies engaging in CSR are expensive; thus, price is their only justification for not purchasing from such socially responsible companies. Therefore, such clients will be willing to purchase from the companies engaging in CSR companies provided that the products are not more expensive compared to other products in the market (Janssen & Vanhamme 2015). However, there are wrong decisions made by consumers when they assume that they are not in a position to purchase from socially responsible companies. On the other hand, there are some companies that include their CSR work into the price; as a result, there are consumers who are unable to purchase such products due to the high prices (Palmer 2015).

2.6.3 Peripheral factors to consumers CSR perception

There are factors that exist regarding the decisions made by consumers in relation to the CSR. Such factors comprise of the credibility of the CSR activity, the companys image, and the impact of peer. However, these peripheral factors on their own cannot trigger CSR as a decision making criterion in relation to purchasing by a consumer. However, when the core and central factors have been met, the peripheral factors must also be met so as to consider CSR.

The CSR initiatives credibility is influenced by the companies CSR activities and its core business. Most consumers consider a CSR initiative to be credible as long as it is aligned with a companys core business. When this is not the case, clients may view it as a marketing trick used by the company. Additionally, the image that the clients have in regard to the company also impacts on the purchase criterion (Oberseder, Schlegelmilch & Gruber 2011). When the clients have a positive perception of the company, it influences their use of CSR as a purchase criterion. When there is a positive image, it means that the company is acting socially responsible. It may influence the choices of the clients for companys products. In addition, when there is close interaction among friends and family, they share their perceptions of a company (Oberseder, Schlegelmilch & Gruber 2011). In a situation where they share positive feedback, there is a high tendency that the consumers perception will be influenced in a manner that they may purchase from the company. On the other hand, the reverse is also true (Oberseder, Schlegelmilch & Gruber 2011).

2.7 Impact of Culture on the Perception of Consumers on CSR

Maignan and Ferrell (2003), after conducting a research on cultural issues, suggested that culture can have an impact on the way people perceive CSR. Similarly, Ramasamy and Yeung (2009) researched on the influence of culture on CSR, but their focus was on Hong Kong and Shanghai, but the researched within the same scope as Maignans study in 2001.

The study by Maignan (2001) investigated whether there is any difference between consumers support of CSR activities based on their evaluation of law, ethics, economy and philanthropy that an organisation ought to adhere to. The findings of the study indicated that there was a potential gain for a company that positioned itself as socially responsible. In addition, the respondents from France and Germany stated that they had a higher likelihood to support the companies that engage in CSR as they purchase. Cavusgil, Knight, Riesenberger, Rammal, and Freeman (2015) indicate that organisations engaging in CSR initiatives may benefit from marketing their brand. However, it was noted in their conclusion that each of the companies ought to understand how the consumers in its market perceive CSR before engaging in activities with the hope of attracting clients (Maignan 2001). A similar point is raised by Louche, Idowu and Leal (2010) where they state that profitable organisations ought to analyse the risk involved in the CSR initiatives they take in order to make sure that they will generate the intended outcome.

The study by Ramasamy and Yeung (2009) was based on the Maignans study, but with a focus on Hong Kong and Shanghai. The aim of the researchers was to provide insight on the extent of Chinese consumers willingness to purchase from firms that engage in CSR activities. They also analysed their extent of support compared to Western consumers and whether Chinese consumers differentiate the diverse responsibilities that business have. They also analysed why there were differences in the perceptions of Western consumers versus Chinese consumers (Ramasamy & Yeung 2009). The researchers describe the degree of social and economic development that can assist to make an explanation of the perception that consumers have in relation to CSR. There is a general belief that consumers in developing nations that have low income underrate their role in the market, and as such, they do not recognize CSR. In such nations, the consumers place an emphasis on the economic purpose of companies as it assists in making sure that there are job opportunities and income. In addition, in such developing nations, consumers have a tendency to rely on the government to exact pressure on the companies to conduct CSR activities (Ramasamy & Yeung 2009). The authors also state that the level of development of institutions impact on the expectations of consumers from societies. In their findings, Ramasamy and Yeung (2009), state that Chinese consumers perceive CSR as important as the collective culture shows their support. In addition, their findings do not show any relationship between a countrys development and support for CSR. Ramasamy and Yeung (2009) also indicated that there were differences among the findings from the two cities, Hong Kong and Shanghai. The differences show that it is vital for multinational companies to adapt their CSR activities to the needs of the local people (Ramasamy & Yeung 2009).

2.7.1 National culture

The ideologies of a people are also influential on their perception of CSR. Culture has massive influence on their perception of ethics and ethical actions (Rawwas, Ziad & Mine 2005). The consumers ethics vary from one country to another as a result of various behavioural patterns. Hofstedes framework and Trompenaars seven dimensions of culture have been applied to make comparisons between cultures, and it is widely used in marketing studies. At the same time, it is useful when making comparisons on different cultures (Soares, Farhangmehr & Shoham 2007). The culture of a people is relevant influences their perceptions of the CSR, and thus, understanding the classifications of cultural analysis is useful in the current paper.

Hofstedes framework makes an analysis of culture based on five dimensions, which are power distance, avoidance of uncertainty, femininity and masculinity, individualism and collectivism, and short-term and long-term orientation. The framework has its basis on the idea that individuals throughout the world are guided by their diverse beliefs, morals, beliefs, attitudes, morals and ethics. Similarly, society is based on religions, rituals and traditions. In addition, the diverse groups promote varied perceptions of the family, society, personalities, and work (Blodgett, Bakir & Rose 2008). Figure 1 presents Hofstedes Framework.

Figure 1: Hofstedes Framwork. Source: Hofstede (2011).

Individualism refers to the preference for a loosely knit social framework where the individual are more concerned about their needs and those of their immediate family. On the other hand, collectivism refers to a tightly-knit society, where the common good of the group takes priority over that of the individual (Hofstede 2011). In societies that are individualistic, the stress is on short-term gratification, while in societies that adhere to communistic principles, the emphasis is on communal betterment (Hofstede 2011).

Feminism represents the societal preference for modesty, lifes quality and cooperation. On the other hand, masculinity represents factors such as effectiveness, heroism, achievement, material rewards for success (Hofstede 2011). Avoidance of uncertainty relates to the degree to which the society feels uncomfortable with various ambiguities and uncertainties. It entails the manner in which the society deals with uncertainties in the future (Hofstede 2011). Societies that have short-term orientation tend to be concerned about the establishment of absolute truth; they think normatively and respect tradition (Hofstede 2011). Conversely, societies with long-term orientation believe that the truth is reliant on the circumstance, time and situation. The power distance offers an explanation of the extent to which less powerful individuals within the society expect and accept that power is distributed unequally. It relates to the way a society deals with inequalities (Hofstede 2011).

Trompenaars and Hampden-Turner (1997) describe seven dimensions of culture based a number of scales. The first scale is universalism versus particularism where universalism defines all circumstances as either good or bad, while particularism analyses the situation with each unique relationship. The second scale is individualism versus collectivism, which is similar to what is described by Hoftede (2011). Collectivism relates to shared benefits, while individualism leaves people free to make their contributions as they wish (Trompenaars & Hampden-Turner 1997). The third scale is neutral versus emotional, where neutral cultures develop business relationships based on objectives, while emotional cultures have business dealings that involve the display of feelings. Specific versus Diffuse is the fourth scale and specific relates putting contractual before personal needs, while diffuse overlaps contractual and personal functions and weaves them together wish (Trompenaars & Hampden-Turner 1997). The fifth scale is achievement versus ascription, and in achievements, attitudes are applied in judging what has been achieved while ascription relates to the awarding of status according to categories such as gender, age, school, birth, and kinship among others (Trompenaars & Hampden-Turner 1997). The sixth scale is sequential versus synchronic and it relates to whether things are done one at a time or various things at once. Finally, internal versus external control is the seventh scale and it relates to whether we control the environment or we are controlled by the environment (Trompenaars & Hampden-Turner 1997).

2.8 CSR in China

Over the past few years, China's implementation of CSR has been questioned due to increased rates of employee suicide, poor quality imitations of consumer goods, and toxic emissions (Sarkis, Ni & Zhu 2011). Due to the negative publicity that the nation has received over the years, there have been massive changes by the Chinese government and the industrial organizations. Larson (2013) also states that in the past decade there has been increased adoption of CSR initiatives by Chinese corporations. In the report, Larson (2013) states that in 2006, the only company that filed a CSR report was State Grid, but by 2012, there were 1,722 Chinese companies that filed CSR reports. However, there were questions on whether the corporations that filed the CSR reports really followed on with the initiatives, with sentiments being raised showing that the corporations did not do the actual CSR work (CSR Asia n.d.). Chung, Yu, Choi, and Shin (2014), state that there has been increased positive response from clients for the companies that engage in CSR initiatives in China. However, there is a gap in the research available relating to the perception of consumers regarding CSR in the Chinese market (Chung et al. 2015)

2.9 Summary

This chapter analysed existing literature relating to CSR and the perceptions of clients about CSR. Maignans (2001) research and Ramasamy and Yeungs (2009) research were analysed, in addition to analysis of Hofstedes cultural dimensions as well as Trompenaars seven dimensions of culture. In order to understand the concept of CSR, the paper sought to understand the definitions of other authors. The history of CSR was also analysed based on what other authors have described. Finally, there was a review of literature expressing their opinions and facts on CSR in China, which is the area of study of the current paper. The current research will seek to fill the gap in the research regarding to consumer perceptions of CSR in China.

Chapter 3: Methodology

3.1 Introduction

The methodology chapter outlines the process of data gathering for the study. It offers an explanation of all the methodological decisions, which are also justified through the use of existing research methods literature. The chapter starts by introducing the purpose and chapter content, followed by an explanation of the research process. The process of data collection is also discussed as well as the sample used to provide data for the research. There is also a section discussing the approach that will be used in the analysis of the data. The current research aim is to gain more knowledge and understanding of the clients perception towards the benefits of corporate social responsibility. Therefore, the choices of the methodologies used in paper are guided by the choice of the study. The research methodology references the overall approach and procedural rules to be applied in the valuation of the research claims, along with the validation of the knowledge gathered. On the other hand, the research design functions as the researches blueprint (Bellamy 2012). For most researchers, determining which of the research methodologies to use can be a challenge. It is mainly because on one hand, the quality and value of a research is determined to a large extent by the clarity of the researchers articulation of the research methodology, and on the other hand it is the decision by the researcher to choose an appropriate research strategy (Della Porta & Keating 2008). Nonetheless, due to the importance of the research methodology, the current chapter offers an outline as well as a justification of the selected methodology, research approach and design. In order to explain and define other sections of the methodology, it is vital to understand the purpose of the research.

3.2 Purpose of the Research

There are three different purposes of research, which include exploratory, explanatory and descriptive studies (Yin 2009). The overall research strategy and data collection method are determined through making a decision on the appropriate strategy for conducting the research. Table 1 describes the different research purposes.

Exploratory

Explanatory

Descriptive

To investigate a phenomenon that is not understood well

To explain the forces that cause a given phenomenon, and also to recognise the possible causative networks that shape the identified phenomenon

To document a certain phenomenon of interest

To make a discovery or an identification of vital variables

   

To assist in the generation of a hypothesis for further research

   

Table 1: The Different research purposes: Source: (Yin 2009)

The purpose of an exploratory study is to investigate a matter through a situation or a given problem so as to gain a better understanding of the phenomenon (Malhotra 2007). It makes use of field studies and case studies as research strategies. Some of the widely-used data collection methods for exploratory studies include observations and in-depth and elite interviewing (Malhotra 2007). An explanatory study aims at explaining a phenomenon, and it makes use of case studies, history and ethnography as research strategies. It entails analysis of previous documents, questionnaires, and interviews (Malhotra 2007). On the other hand, a descriptive study provides patterns and trends (although not the links between them) related to a given situation or phenomenon. In most cases, it is used in the research of market functions and features. It is a strict approach in its structure and it involves the presentation of detailed information for the given problem. In order to collect data for a descriptive study, observations, analysis of secondary data, surveys, and panels. The descriptive methods can be classified into two designs: longitudinal and cross-sectional (Malhotra 2007). Longitudinal design describes a situation where the data is collected only once from the respondents. However, longitudinal design entails a fixed sample group of a given population and the study elements are measured continually over the same variables (Malhotra 2007).

With respect to the preceding discussion, the current paper will use an explanatory approach. The current study aims at describing the relationships regarding diverse dimensions of CSR and perceptions of consumers within the given study area. It is appropriate as the study aims at describing the perceptions of the clients in the given area. The cross-sectional design will be used as the study seeks to collect data from a given sample within the population, to be done on a one-time basis only.

3.3 Research Philosophy

Bryman and Bell (2003) explain and use the positivist approach in their work and it is commonly associated with sciences. Positivism is an epistemological position that promotes the use of scientific methods in the research of social realities and beyond (Bryman & Bell 2003). It is a principal tenet that researchers use as a scientific approach when making an observation of a social phenomenon. The basic idea of positivism is that in order to gain true knowledge, it has to be derived from experience, and it is made up of facts (Bellamy 2012). In the research, there are no personal biases from the researcher, and there is accurate collection of data, and complete analysis is conducted in order to reach a conclusion. The perception of consumers on the use of corporate social responsibility by businesses is a social aspect. The positivism approach is appropriate in the application of social sciences context and it makes a general indication of the researchers beliefs, which can be observed using human senses, and it can be driven using mechanism. A social phenomenon can be explained through the understanding of the device between influential factors and given outcomes through the application of an objective view to fact gathering and answering of questions. Objectivism refers to an ontological position that infers the social phenomena being studied results from external facts that are beyond the influence or reach of the researcher (Bryan & bell 2003). The social phenomenon presented in the current paper is the CSR perception by the consumers. The objectivism perception has been selected as the most appropriate philosophical approach as it enables the researcher to generate knowledge objectively via diverse debate and discourse on the topic.

3.4 Research Approach

Research has both theoretical and methodological elements. The theoretical elements render the research to be either inductive or deductive, while the methodological elements render it as either qualitative or quantitative. The inductive approach entails a logical process of establishing general preposition based on observations or given facts (Yin 2009). The deductive approach entails a logic process of deriving a conclusion from a known premise (Salkind 2010). The inductive approach relates to the development of theory from a real situation and move into theory. On the other hand, the deductive approach relates to the testing of an existing theory and a hypothesis is developed in order to test the reality. Kuman (2011) states that the subjective view relates to the respondents of the study, which is done via the inductive form, meaning that the research starts with given observations, and a hypothesis formation follows. Finally, there is an evaluation of the collected data in order to enable the formation of conclusions. The deductive approach entails the presentation of the main idea, which revolves around the notion that there is the existence of an external social world, which makes it possible to measure through the use of objective methods. The current research uses the deductive approach as the conclusion is reached based on the general assumptions in order to reach to understand the perceptions of the consumers regarding CSR.

The qualitative approach is considered a relatively unstructured measurement that permits a given range of plausible responses in addition to a creative approach to ascertaining perceptions of the perceptions of consumers that may otherwise be difficult to identify (Kotler & Keller 2009). According to Zikmund (2003), qualitative marketing research is an approach that addresses the objectives of a market via techniques that enable the researcher to provide elaborate interpretations of a market phenomenon without reliance on numeric measurements. The focus is mainly on discovering the true inner meaning, as well as new discernments (Salkind 2010). On the other hand, the quantitative research approach addresses the objective of a research using empirical assessments, which involve numerical measurements and analysis (Zikmund 2003). It is used to quantify the data and it mainly applies to statistics. In the case of the current paper, in order to answer the research questions, it is important to focus on quality of the responses as opposed to quantity. Therefore, the selected approach for the study will be qualitative. It will assist in collecting ample data that will express the perceptions of the consumers depending on their responses.

3.5 Research Strategy

According to Kotler and Keller (2009), there are five different approaches to collect data: surveys, experiments, behavioural data, focus data, and observations. In observational research, the data is collected through conducting observations on the relevant people or settings. For instance, through anthropologic observations, it is possible to conduct an ethnographic research that is used in the description of the manner in which people work and live (Huberman & Miles 2009). The focus group research entails focus groups where a gathering of about six to ten individuals is selected using a given criterion, which may include demography or psychographs. The members of the group meet and discuss the topic of interest through the guidance of the researcher (Yin 2009). Surveys enable corporations to learn about the beliefs, preferences, knowledge, and satisfactions of the people. Behavioural data, on the other hand, involves the fact that customers leave traces of their behaviour through a number of means including databases and online purchasing records. Such data may be analysed so as to gain a deeper understanding of the consumers preferences. Experimental research is conducted when there is a need to explore a cause and effect relationship. In scientific research, it is the most valid approach to collect data, and it is done through the elimination of competing explanations of the observations or results (Kotler & Keller 2009).

As highlighted by Malhotra (2007), the use of the survey method in collecting data is appropriate when conducting research based on questioning a group of respondents. The respondents answer a number of questions concerning their attitudes, behaviour, motivations, intentions, awareness, and personalities. The use of surveys is common during researches on marketing research. For the purpose of the current study, interviews will be done on different consumers in order to collect the data.

3.6 Data Collection

Collection of data can be done either through primary or secondary means. Primary data is the first hand data that a researcher collects in order to answer research questions, while secondary data involves information that has been previously collected by other researchers. When conducting research, it is vital to consider the two factors in relation to what the researcher aims to do (Saunders, Lewis & Thornhill 2009). In the current study, the data collection approach is primary. As explained by Stokes (2014), primary data enables the researcher to address target issues, and there is efficient use of information. It also promotes greater control on the data collection process. There are various methods that can be applied in the application of primary data according to Zikmund (2003). However, the current study focused on interviews in order to collect primary data. Interviews can be conducted in a number of ways. They can be conducted face to face, or through other means, such as, telephone calls, or electronically, for example, through Skype. The interviews will be conducted mainly through face-to-face, telephone and Skype. These approaches will enable a wider reach of the participants, as well as, flexibility in conducting the research.

3.7 Sampling

The main purpose of sampling is to select the target population for the respondents to participate in the survey. Sampling is any procedure that assists in the development of conclusions that are based on measurements of a proportion of a given population. The current studys population is Chinese consumers, but due to the large number of individuals, the research will focus on university students and staff. Additionally, the sampling frame avails a list of elements from which it is possible to draw a sample, which is also referred to as a working population (Zikmund & Babin 2009). The sample was taken from population elements with different elements in order to be as representative to the target population as possible. Three different types of sampling units can be used including random selection, probability sampling and non-probability sampling (Stokes 2014). Random selection involves a selection where every unit within a population has an equal opportunity to be selected. Non-probability entails a situation where the units of the sample are selected based on convenience and personal judgement. There is unknown probability of the selection of any member of the population. On the other hand, in probability sampling each member of a population has a known probability to be selected (Zikmund & Babin 2009). The study used probability sampling as the people who participated were 300 university students and lecturers who were invited to the study, but they had different personalities and consumer needs, which made their responses unpredictable.

3.8 Data Analysis

Flick (2014) states that qualitative data analysis involves the interpretation and classification of lingual or visual material with the aim of making statements regarding the implicit or explicit dimension and structures of meaning that makes the material. Analysis of data has three flows of activities that take place simultaneously, which include condensation of the data, display of the data and drawing and verification of conclusions (Huberman & Miles 2009). Data condensation is the process of selecting, simplifying, focusing, transforming, and abstracting the data that is collected through field notes, interview transcripts, questionnaires, and other empirical materials. Flick (2014) describes data display as the organization of information, which enables the drawing of a conclusion and action. Finally, the data that has been collected, analysed, interpreted, and elaborated is used to draw a conclusion for the study (Huberman & Miles 2009). The same approach will be applied in the analysis of the data in this research.

3.9 Reliability, Validity and Generalizability

Reliability is a measure of internal consistency and precision (Zikmund & Babin 2009). A measure is said to be reliable of diverse attempts to measure something give the same result. Where there is a random error, the reliability of the study is compromised. Validity, on the other hand, is a representation of the accuracy of a measure or the extent to which a given score makes a truthful representation of a concept (Salkind 2010). Validity can be assessed through content, criterion, and construct. Construct validity refers to the characteristics of what a given scale is measuring. The criterion variables include demographics, psychographic and behavioural measures. In order to ensure that there was reliability and validity, the study used a wide selection of participants. In addition, the interview questions were open, which enabled the respondents to provide their opinions without limitations. Generalisability is applied by scholars and researchers in academic setting, and it may be defined as an extension of the findings and conclusions. It entails the applicability of the findings of a study applied on a sample population to a larger population. It is a vital aim of any researcher. In order to ensure generalizability similar criteria for validity is applicable, which is the use of constant comparison and sampling.

3.10 Potential Limitations and Ethical Issues

The sample size for the study was not large enough, which means that it would be important for a similar study to be conducted in the future on a larger scale. In addition, the sample of the study is limited to university students and staff, which may limit the generalizability of the study. Since the study involved the use of self-reported data, it is difficult for it to be verified independently. In order to overcome the limitation, the value of honesty was applied during the study, and data was presented truthfully, without bias or exaggeration. Language was also a limitation, and consequently it was necessary to make translations, in some cases, which may have led to unintentional change of meaning. In order to promote ethics the research applied a number of issues. First, no personal information about the participants would be publicized or shared without their consent. Second, the research strived to safeguard the dignity, rights, safety and well-being of the participants.

3.11 Summary

The chapter presents the process applied in the gathering of data for the study. It provides an explanation of all the methodological decisions, and justifies them through the use of supportive literature. It provides the philosophies used in research and concludes that an objective approach will be applied. In addition, the research applies a deductive approach and a qualitative research method. The data collection method selected is interviews, which will include open-ended questions. The chapter also discusses the reliability of the study, in addition to, the ethics and limitations.

Chapter 4: Findings and Data Analysis

This chapter provides a clear presentation of the findings of the study as well as the interpretation and themes of the data. The purpose of this chapter is to present the answers to the research questions in the first chapter of this study. It seeks to analyse the data collected, and through the analysis of the conclusion and findings from the empirical data. The chapter will also develop a relationship between the research findings and the literature that has been reviewed. There will be a discussion on whether the findings present new material to the existing literature. The findings will enable the identification of the perceptions of the consumers regarding the value of CSR. It is through the presentation and analysis of the findings the research questions will be answered, and ultimately, conclusions and recommendations will be derived. The presentation of the findings will be done by presenting each interview question, and summarising the responses given.

4.1 Basic Information about Respondents

There were a total of 42 respondents out of whom 24 (57.1%) were female, and 18 (42.9%) were male. Out of all the respondents, 25 were between the ages of 18 and 24, while 8 were between 25 and 30. Out of the remaining 9 respondents, two were between 31 and 35, while the rest were above 35 years old. None of the respondents were below the age of 18.

4.1.1 What do you understand by the phrase corporate social responsibility?

There were diverse responses to the question, which sought to understand whether the respondents comprehended the concept of CSR. Out of the total respondents, only one said that it was a new term that were not aware. After some probing and elaborating it as a way that a company involves itself in activities that provide for the common good, the respondent stated that they understood it. The rest of the respondents understood the concept, but they had varied levels of understanding. One of the respondents said, It is a way for corporations to give back to the community according to the laws set by the government. Another respondent said that it was a way for firms to share their income with the society by being involved in environmental conservation activities. The responses covered almost all the different aspects of CSR, but only a few of the respondents gave detailed descriptions of CSR, that seemed to cover all parts. One of the respondents brought up the concept of CSR being either voluntary or mandatory. They also explained that depending on the laws of the country, a company could be compelled to share their CSR report or have a budget channelled towards CSR. One of the respondents seemed to believe that it was compulsory for companies to invest in CSR activities, but due to corruption, most of the companies did not adhere to the law.

4.1.2 Are you aware of any CSR initiatives that a corporation or business has engaged in? If so, could you provide some examples?

The question sought to identify the CSR initiatives that the interviewees were aware of, and what they thought companies should get involved in as social responsibility. The responses provided can be categorised in different ways in order to be analysed with ease. The responses can be categorised as corporate philanthropy, corporate social marketing, community volunteering, and socially responsible business activities. One of the respondents said, A company should adopt and conduct discretionary business and investments that support social causes in order to improve the well-being of the community and environment. They added, In the recent months, we have witnessed the extent of the impact of scrupulous industries leading to environmental pollution in our country. It would not be happening if each corporation took the responsibility of safeguarding the environment. Some of the respondents referred to volunteer programs where companies have their employees use some of their time to participate in activities that promote the well-being of the environment. The volunteering approach was seen as both satisfying ad genuine, and the respondents stated that it assisted in developing strong relationships with the local communities, and it improves the image of the company. The contribution of companies to different initiatives in monetary grants was also one of the main channels of CSR that the respondents discussed. In response, one of the interviewees said, When a company makes a monetary contribution into a given community activity, it demonstrates their engagement and willingness to assist the society.

4.1.3 As a consumer, do you have certain expectations regarding the social obligations of companies?

The respondents provided a variety of answers to this question, which sought to identify the social actions of companies that interest the consumers. The intention was to understand the social issues that the consumers feel concerned with. According to the responses given, it was a highlight of the expected CSR dimensions and comparison levels that consumers use in their evaluation of the CSR activities of the companies. The different responses indicated that consumers believe that companies have responsibilities to the society. One of the interviewees stated, Some companies make their money by mistreating consumers. It is their responsibility to the society to respect their rights by offering good quality products and services, and being honest in their dealings. At times, companies sell their products at high prices even as their quality is substandard. It was also evident from some of the interviewees that the way that companies treated their employees was a social obligation. They ought to treat them with respect, offer them proper working conditions, remunerate them fairly, and make sure that there is security.

However, the environment was a concern of most of the interviewees, and they offered diverse explanations on how they expected the companies to engage in the conservation of the environment. Some of the issues that were raised in regard to environmental conservation included reduction of resources waste, reduction of pollution, and investment in environmentally friendly products. One of the interviewees said, I enjoy and feel obliged to select environmentally-friendly products as I do my shopping. However, it is the responsibility of the businesses to stock such products. The respecting of human rights and investment in good causes we also brought up as obligations that consumers expected companies to perform. In addition, some of the interviewees added that the companies had an obligation to take into account the perspectives of other stakeholders, such as, consumers and governments, when making decisions. However, it is worth noting that some of the respondents did not view social and environmental responsibilities to be the obligations of the companies. They were of the opinion that the government has the responsibility of creating legal requirements to be met by companies in respect these factors.

4.1.4 Can you identify any companies or businesses that you consider as socially responsible? Why do you consider them to be responsible?

The question focused on identifying the areas where the consumers felt that there was some level of corporate social responsibility, as well as, the sectors that they were concerned by the CSR activities implemented by companies. Based on their feedback, none of the respondents had a spontaneous answer to the question on a company that they really considered to be socially responsible. After reflecting for a while, some of the interviewees cited their employers, perhaps as a way of rationalising their belonging to the company. However, some of the interviewees were quick to mention companies that they deemed to be irresponsible. One company that was mentioned was Nike due to its relationship to children labour as well as Volkswagen due to its scandal on cheating emission tests.

4.1.5 Why do you think organisations engage in CSR activities?

The question sought to identify the views that consumers had in regard to the companies engagement in CSR. In the responses given, it is possible to deduce three main categories of reasons for companies engagement in CSR: economic, moral and legal. Some of the interviewees believed that companies engaged in CSR in order to attract and retain clients, which would lead to increased business, and profits. They would also attract and retain employees and investors, and it would lead to stability in the business. The business would be benefit from economic progress. One of the interviewees said, Companies engage in CSR as a way of promoting their image, and it will make clients want to buy from them. In addition, the employees will have pride in the dealings of their company and will be willing to remain working there. Investors also like companies that have a good public image and CSR is one of the ways that such an image is developed. Another interviewee said, There are areas where companies benefit from tax relief based on their involvement in CSR activities. As a result, many of the companies do it solely for the aim of tax breaks. Morality and ethics also emerged as one of the main reasons for company engagement in CSR. The interviewees suggested that some companies have it within their values to participate in the betterment of the community. In addition, adhering to the law in areas where it is mandatory to engage in CSR also emerged as a reason for companys engagement in CSR.

4.1.6 When you perceive a certain investment in CSR activities by a company, to what extent does it impact on your buying? For what types of purchases is CSR important?

The question sought to have the customers talk about the diverse criteria that they apply when making choices on products. The responses given included the product quality, price, design, and product security. There was little concern about the ethical, social and environmental criteria. It became evident that the CSR activities of a company have little impact on the decision making patterns of an individual when making a purchase. This could be explained by the fact that price and quality feel like superior criteria to the consideration of CSR actions. Regardless of a companys investment in CSR, a customer will consider the price and quality of its products and services first, before considering other factors. In addition, some consumers have the impression that the products, which are produced in a socially responsible manner, will cost more than others even if they have the same quality. One more issue that was evident from the responses given by the interviewees is the level of mistrust that they have regarding the information given by companies. One of the interviewees said, Most companies hardly ever tell the truth. In most cases they exaggerate their CSR actions, and when they communicate about given positive actions, it means that that are hiding other things on the other side. As a result, most clients do not take CSR reports by companies as a criterion that would impact their buying.

In addition, some consumers stated that it would be difficult for one to change their buying habits in favour of a new product from a socially responsible company. Therefore, receiving positive and credible information about the CSR activities of a company may not impact on their buying. However, even though there was less consideration about CSR for the consumers, it emerged that for a few of them, it had started becoming a basis of reasoning when buying. For instance, an interviewee stated, If I were to buy a new car today, I would avoid Volkswagen altogether. The statement was guided by the companys admission to cheating in emission tests, and the consumer felt that it would be wrong to be associated with a company that maliciously contributes towards the pollution of the environment. When prompted about the types of purchases for which CSR is important, the consumers did not give direct answers or insinuations towards a given class of products. In fact, most of them stated that large companies that have presence internationally should get involved in CSR. However, others suggested that all products and services should have some aspect of CSR, and it is the responsibility for the government to ensure that they are adhered to.

4.1.7 Do you think CSR among companies should be mandatory or voluntary? Why?

The views of the respondents regarding CSR being mandatory were extensive with each side of the argument receiving substantial support. However, more than half of the respondents stated that the CSR should be mandatory. Some of the reasons given were that each company has the responsibility to make a positive contribution to society, and when it is left to their discretion, most companies avoid it. Therefore, there should be minimum requirements, especially in relation to the environment. However, the supporters of the voluntary CSR said that it would be more sustainable for a company to contribute to the society voluntarily as opposed to doing it due to legal coercion. One of the respondents said, When a company participates in CSR willingly, there is a high chance that it will maintain its contribution, whereas if it is made mandatory, most companies will just meet the requirements of the law, and not push to make an impact in the society.

4.1.8 Do you think there are problems related individuals buying products that have been produced in a socially responsible manner? If yes, please explain a few examples.

The question sought to understand the perceptions of the consumers in regard to social responsibility of companies, and the problems that they believe exist in relation to social responsible commodities and services. A number of problems were identified by the customers. One of the reasons was the lack of alternatives at the same level of quality. One of the respondents pointed out about the production of trainers. He said, When you consider the production of trainers, almost all companies that I am aware of use the cheapest workforce in Asia, and they have little difference in their behaviour. Therefore, it is difficult to choose between these companies based on social responsibility. Some of the consumers stated that they expected that the process of the socially responsible products would be more expensive compared to other products of the same quality. Therefore, it is evident that consumers think that the production of socially responsible products cost more, and they are not willing to pay a higher price if they can purchase same quality product more cheaply. Some respondents stated that they would only consider the product produced in a socially responsible manner if the difference in price is trivial. The research also identified an existing problem in relation to information availability. A high number of the respondents could not differentiate what products were made by socially responsible companies, and those that were not. In addition to insufficiency of information, the consumers do not trust the information that they receive from companies. Therefore, lack of adequate information is a problem in reference to decision making of the consumers about CSR.

4.1.9 How has the consideration or importance of CSR changed to you over the past year or two? Would you say it is more important, less important or has not changed? Why?

According to most of the respondents, CSR has become more prominent and there is more information about it. One of the respondents said, After witnessing the smog all over the city due to environmental pollution, I became more interested in what companies do in relation to environmental protection. Therefore, CSR has become more important to me as I understand that the actions of industries and businesses can have a direct impact on my health. Similar reasons were given by most respondents that said that they believe that their consideration for CSR has improved. However, some of the respondents said that their CSR consideration had not changed as their consumer behaviours were not influenced by the CSR actions of companies. None of the respondents said that their consideration of CSR was less important.

4.1.10 What impact does CSR have upon your relationship, loyalty, perception of the brand?

The respondents had varied answers to the question. Most of them stated that they would be willing to support and be loyal to a brand that engaged in CSR activities. In response to the question, one of the interviewees said, I understand the importance of CSR to my life and the environment. It would only be fair to support companies that are striving to make the lives of people better by conducting their business activities in a socially responsible manner. I would be willing to develop a long term relationship with such a company. In addition, I would also like to be associated with the brand of a social responsible company. However, some of the respondents said that it was difficult to trust the actions of the socially responsible companies. They said that they were willing to purchase quality products if they considered them to be affordable. Therefore, they would only consider the companies purporting to be socially responsible only if their products were of high quality, and they were not overpriced.

The respondents answered the questions adequately and would enable the development of a discussion based on the results. The respondents were aware of the CSR concept, but most of them only possessed general knowledge. The identified answers indicate that the Chinese consumers are willing to purchase from socially responsible companies, but the price and quality of the products have to be conducive. In addition, the impact of environmental pollution by companies in the region seemed to have made most people rethink the concept of CSR, and also become more interested in it. It is the main reason that most of them believed that stringent measures needed to be put in place by the government in order to ensure that minimum requirements were met by companies in order to safeguard the health of the people. The findings will assist in the development of the following section that includes conclusions and recommendations.

Chapter 5: Conclusion and Recommendations

This chapter will establish a link between the main findings of the paper and the findings of other researchers described in the literature review. In addition, it will show to what extent the findings agree or disagree with the results and discussions of other researchers from the literature review. Therefore, it will lead to an increase in the available literature, by either agreeing to existing findings or disagreeing, and giving reasons for the same. It will also develop recommendations for future action and future research. The recommendations are both for research to be conducted in the future as well as the areas in which businesses should focus on in order to improve their CSR engagements. It shows how companies can benefit from engaging in CSR. The discussion will also assist in the development of the personal reflection section, which will follow.

5.1 Conclusions

5.1.1 CSR definition

The definition of CSR varies significantly depending on the author giving the definition. However, in order to identify the understanding of CSR according to the consumers who participated in the study, they were asked to describe their understanding of CSR. They offered a variety of responses, but most of them described it as a way of a corporation giving back to the society. The concepts of it being voluntary or mandatory were also presented in the responses by some of the interviewees as they gave their definitions. The concept of profit sharing also emerged with some interviewees saying that the companies had the responsibility of sharing profits with the society, which formed part of their clients or workforce. The definitions also brought up the concept of the government being responsible for setting laws to govern the concept of CSR among the companies. These descriptions given by the interviewees can be categorised in the classifications of economics, legal, ethical, and discretionary stated by Tuan and Tuan (2011). In addition, Kotler and Lee (2004) define CSR as a commitment by a business towards the improvement of the communitys well-being through discretionary business practices, as well as, through the contribution of company resources. This definition agrees to some of the descriptions given by the respondents who believe that CSR should be a discretional move by a business towards assisting the community. In addition, some of the respondents stated that CSR is used by companies to improve their image in order to attract and retain clients, investors and employees. It is consistent with the description given by Maneet & Sudhir (2011) who states that corporations can use CSR as a way of boosting their image, which is also one of the approaches applied in the attraction of clients. Similar to the way there are varied definitions of CSR as stated by Khan et al. (2012), the interviews emerged with similarly many descriptions of CSR according to the understanding of the interviewees. In addition, the definitions seemed to complete one another as stated by Tuan and Tuan (2011).

5.1.2 General perception of consumers towards CSR

The concept of CSR has developed greatly in the past few years, mainly boosted by technological development and globalisation. Lee (2008), states that CSR has transformed from an inapt idea into an orthodox issue in the global business arena. The respondents confirm that there has been increased attention in CSR. In addition, there is also a lot of information in the media regarding the responsibilities of the companies towards the community and the environment. As one of the respondents stated, companies increase their income through the mistreatment of customers. The statement indicates that clients have become more aware of the situation, and responsibilities of companies to them. However, there is also the perception that CSR is mainly practiced by companies as a way of attracting clients rather than mere philanthropy. Whereas Spector (2008) believes that companies have moved from getting involved in CSR initiatives merely for financial reasons and now do so for the benefit of the society, it is clear that consumers still believe that the main reason for the involvement of companies in CSR is financial gain. The same argument may be supported by the shareholder theory as explained by Adams et al. (2011) who state that the main purpose of a company is to make profits and increase returns on their investment. It could be the reason for why most consumers believe that companies engage in CSR activities only when they are sure that they will benefit financially, either directly or indirectly. In addition, the consumers seem to have more interest in the quality and price of commodities as opposed to their being produced in a socially responsible manner. Therefore, even if a company may be socially responsible, most individuals would not purchase from them if the price of the products is high, and the quality is low. In addition, the consumers do not believe the information that they receive from the companies regarding their CSR involvement. As such, although most consumers would be interested in associating with CSR responsible companies, they do not trust the information given by the companies. Since China is a developing country, it may be argued in agreement with Ramasamy and Yeung (2009) that the consumers may not recognise or have a lot of interest in CSR due to their low-income levels.

5.1.3 Consumer expectations regarding social obligations of companies

Consumers are expected to have varied expectations from companies, especially on the issue of social responsibility. In this case, most consumers believe that there should be a way for the companies to give back to the community as a measure of sharing their profits. Surprisingly, not all clients think that companies should do so by engaging in charitable activities. Many of them tend to agree that the companies should offer high quality products at a cheap price in order to benefit the consumers. Additionally, due to low awareness about different CSR activities adopted by companies as explained by Du et al. (2010), it may be costly for companies to get involved in costly initiatives with the intention of generating returns. The findings of the research also indicate that most clients believe that the companies have the responsibility to assist the communities in which they operate, and it is not necessarily a two-way process. It means that consumers expect charitable actions from companies, but they do not feel obliged to buy exclusively from socially responsible companies. In the recent years, China has experienced situations where the adverse effects of environmental pollution by industries have been extensively witnessed. As a result, consumers have become more concerned with the environmental policies of companies, especially manufacturing industries. However, not all consumers believe that it is the sole responsibility of the companies to produce in a socially and environmentally responsible manner. In essence, they believe that the government has a responsibility of setting laws that need to be adhered to by the companies. In addition, it is the government that should enforce the laws, and enforce punitive measures for the companies that fail to adhere to the set regulations. It is a notion that agrees with the findings of Ramasamy and Yeung (2009) who state that most consumers expect their governments to exact pressure on companies so that they can conduct CSR activities. The companies are expected to be socially responsible, but the government has to make sure that it is enforced.

According to other researchers, the involvement of companies in CSR activities is vital, but it only impacts on consumers, when such information reaches them. Therefore, a company may be socially responsible, but if the consumers do not have such knowledge, they cannot make decisions to purchase from the said company based on its being socially responsible. As discussed by Pomering and Dolnicar (2009), CSR only affects a consumers purchasing behaviour if they have the awareness about the given companys involvement in CSR. However, the findings add a new twist to the argument in regard to the sources of information that consumers are willing to trust. In this case, most consumers believe that when consumers share their information on CSR activities, they may be exaggerating or they may have ill-motives. The responses given by consumers indicate that companies may provide false information about their involvement in CSR activities with the aim of luring clients into believing that they are socially responsible, whereas that may not be the case. Thus, other sources of information that the consumers may trust, such as government bulletins, may be more acceptable as a way of measuring the social responsibility of companies.

5.1.4 Personalities and support for CSR

It is also evident that there are pro-social, individualistic and competitive personal orientations as described by Du et al. (2010). These perceptions may be applied in the cases of individual consumers, as well as, institutions. The results of the paper indicate that the pro-social persons care about themselves in the same way that they care about others. Therefore, it may relate to a company that engages in CSR activities with the main motive being to benefit the community while also benefiting the company. The company will get involved in genuine CSR activities and as a result, it may lure in more investors, employees and retain clients, which will improve its financial well-being. At the same time, it will have a genuine positive impact on the society at large. It also relates to the individual consumers in that some consumers need to receive the best from the companies, and they are also willing to pay the price for the effort made by these companies. For example, when a company makes genuine contributions to the wellness of the community, a pro-social consumer is willing to purchase from such a company provided the quality of the products meets their demand, based on the understanding that the company has made an effort to improve societal well-being, and this should be reciprocated to them. It may lead to increased number of consumers being willing to purchase from socially responsible companies. In the case of an individualistic perspective, the person cares more about their well-being than those of others. It is a case that can be well-related to the companies that will get involved in CSR activities but compromise on the quality of their products, or extort the consumers on the price. It is a case that most consumers believe exists as companies invest in CSR activities, but also increase the prices of their products in order to recoup back the funds that they invested in the CSR activities. Similarly, it may be seen in consumers who believe that companies have to get involved in CSR, but they are not willing to purchase from such companies.

Finally, there is the competitive personality where the individual places him or herself at the centre and they take advantage of other individuals (Du et al. 2010). In the case of companies, they may be seen to possess the competitive personality if they get involved in CSR activities only when they are getting direct benefits from their involvement and will not get involved when such benefits are not available. Similarly, the consumers who possess the competitive personality may be willing to purchase from a company that is involved in CSR, but only when the price is low. Similarly, their recognition of the CSR effort made by a company only exists when they do not have to pay more than what they would pay for products from a company that is not socially responsible. The results agree with the conclusion of Du et al. (2010) who said that a pro-social individual may have the highest tendency to support corporate social responsibility compared to other consumers.

5.1.4.1 Relationship between the involvement of companies in CSR and consumer satisfaction

Consumer satisfaction is central in the CSR activities of any company. Therefore, the main aim is to have the consumers satisfied by the products or services provided by the companies, and doing so in a socially responsible manner. However, there is a tendency by companies to focus on CSR, especially, when it is mandatory, without the concern on the satisfaction of the consumers. For instance, in relation to emissions, even though a company may be meeting the minimum requirements set by the law, but it might not be sufficient for the well-being of the community. They may be doing so in order to reduce their costs, and as a result, their products may be cheaper. However, if consumers became aware of such motives, they may be less willing to purchase from them. The findings of the study indicate that the choice made by most consumers in China involve two other factors other than social responsibility. For a client, the price and quality of a product are the main factors that lead their decisions into making a purchase. As seen in the results of the studies, consumers are more willing to purchase a high quality product at a cheap price regardless of its producers involvement in CSR. In addition, there is an existing notion that products that are produced in a socially responsible manner are expensive. Therefore, the knowledge of a producers involvement CSR activities may mislead some consumers into believing that the product is expensive compared to products or services offered by non-socially responsible peers in the market. The notion of price as a criterion of making a decision before buying a product has been documented by Janssen and Vanhamme (2015), who indicate that the decision by a consumer to buy a product is informed by the brand, price and quality. Similar observations are made by Oberseder, Schlegelmilch and Gruber (2011) where they indicate that price is the most important criterion applied by consumers as they make their decisions to purchase a product.

Palmer (2015) also contributes to the same argument by adding that some companies add the cost of their CSR work into the price of their products or services, which have an inflating effect. Consequently, consumers are unable to purchase from such companies as the prices are higher than the market average. These illustrations from existing literature agree with the findings of the study where some respondents had the belief that products and services that are produced in a socially responsible manner usually cost more than other products with the same quality, but not produced in a socially responsible manner. Although it may be concluded as the general notion and perception of the consumers in regard to social responsibility in business, there is also a group of customers who derive satisfaction from socially responsible production and business dealings. It is evident from the research findings where respondents expressed their willingness to be associated with companies that engage in CSR activities. As one of the respondents gave an example of Microsoft and Facebook in CSR, they also explained their satisfaction in using the products and services of these companies as they know that part of their purchase price goes towards worthy causes to improve the societal well-being. There is also a notion that when companies express their CSR involvement through their CSR reports, they exaggerate so that they may trick consumers into thinking that they are socially responsible. In addition, some consumers believe that such reports act as a way of hiding other negative things from the public. Therefore, a conclusion can be developed by stating that the understanding of consumers about CSR is vital for them to use it as a criterion during their decision making procedures. Understanding the effect of the practices of companies during the production process may lead to increased need by the consumers to have CSR involved in all business aspects. For instance, as one of the respondents stated, almost all trainer makers use the cheap labour available in Asia, and at times exploit the employees by paying them low wages. Consequently, such individuals may be willing to purchase trainers from a company that does not exploit their employees. Therefore, increased knowledge about CSR activities of companies could be the motive for increased adoption of CSR as a criterion for decision making when making purchases.

5.2 Recommendations

The main reason of existence for businesses is to make money. However, in the modern day business environment, the concept of socially responsible businesses has grown and developed globally. Therefore, it would be important for any business that intends to extend its existence to have appropriate measures relating to CSR in place. In the case of Chinese businesses and global businesses at large, contributing to the environment and protecting the consumers should be part of their CSR initiatives. There is increased attention to the environment in recent years with China experiencing hazardous emissions and smog in 2015. When consumers have such attention towards the environment, the companies should make sure that their activities conform to the needs of the consumers. It is expected that such CSR initiatives when genuinely applied would have a positive influence on the consumer loyalty. The government has a role to play in educating the consumers about the impact of industrial activities on the environment. Using the environmental friendly approaches, it is possible for the companies to increase their popularity among consumers, while at the same time improving the wellness of the community. There is high potential for businesses to take advantage of CSR as a way of creating a positive image and attracting and retaining investors, employees and consumers. It can be used in the development of brand loyalty, as stakeholders get satisfied. When the consumers have increased expectations from the business in relation to CSR initiatives, they also have a strong evaluation procedure of the corporate image. Therefore, it is important for the firms to make sure that they maximize their budget allocations towards CSR. In order to increase the customers intentions for repeat businesses, the CSR activities selected by firms should be favourable. The focus should be on environmental support, consumer relations and community support. Whereas the firms have the responsibility of promoting social welfare and good citizenship, it is vital that they spend the resources allocated to CSR initiatives in ways that they yield maximum benefits for the society, as well as, other stakeholders. There has been rapid economic growth in China in the recent years, which has sparked increased interest by consumers on the CSR initiatives of businesses. Since the growth of the Chinese economy has been influential in the global economic development, the involvement of Chinese firms in CSR activities is likely to influence foreign companies on CSR policies (Noronha 2015). Therefore, the focus on any businesses that intend to have an influence on future businesses should incorporate CSR in their activities.

The concept of CSR is wide and scope of the current research can be increased by applying additional steps in research or focusing on a different region. During this research, there has been the development of awareness on the complexity of the concept of consumer satisfaction, as well as, the application of corporate social responsibility for companies whose main role is profit making. The sustainability of business activities should be a focus of any business, and it would be interesting to find out whether companies can blend social value into their core business activities. In addition, a comparison between the activities of not for profit organisations and profit-making businesses should be done in order to analyse their actions, and how they can complement one another. Comparing the perceptions of consumers towards the benefits of CSR activities to them may also be done in a developed nation. It would provide an opportunity to compare and contrast the findings against those of the current research. As increased attention is channelled towards CSR throughout the world, a similar research should be done in the next three to five years in order to identify whether the perceptions of the consumers will have changed, and also identify whether they will be more satisfied by purchasing socially responsible products. It would also be interesting to conduct a study focused on the perception of businesses towards CSR. Whereas the focus on businesses is mainly profit making, it would be interesting to identify whether they have identified ways through which they can incorporate CSR into their core activities in order to be socially responsible while engaging in business. In addition, it would be interesting to identify the perceptions of the management towards the value added on the business when they engage in CSR activities. It would be an opportune moment to identify whether there is foreseeable sustainability in CSR and businesses. Finally, the concept of CSR being voluntary or mandatory as well as the role of governments in the engagement of businesses in CSR should be researched. Although most definitions of CSR refer to it as a voluntary engagement in socially responsible initiatives beyond the legal requirements, it would be interesting to discuss whether mandatory CSR can be termed as a social initiative in the respect of this research. The personal reflection section that follows also delves more on the possibilities of these future researches and the general feedback from the investigations.

Chapter 6: Personal Reflection

The problems facing the corporate world cannot be solved by CSR alone, but is a way that companies may benefit themselves while benefiting the society too. CSR provides sustainability in business, which is essential for the businesses that may be willing to invest in social responsibility and receive the benefits in the long-term. CSR involves a wide range of activities including innovations, cost savings, differentiation of brands, long-term goals, client engagement, and the engagement of employees.

Innovation is one of the most discussed terms in the education and business sector. However, it is still one of the best approaches that companies can use in order to have sustainable and socially responsible businesses. Innovation can spawn ideas that will enable the companies to use more economical methods of production, and it will also enable them to avoid resource wastage. For instance, China is one of the countries with numerous manufacturing plants globally, which means that it needs to remain sustainable by developing new ways that will ensure that the production is done in a sustainable manner. For instance, companies may adopt new approaches of production, for example, the use of renewable energy or use of less water in their production, which would in turn conserve the environment. It should be a sustainable approach that will promote the societal well-being. Sustainability within the company can also be done through the use of cost saving approaches. It may be done through the use of less packaging or use of less energy. Such saving of costs may enable the company to channel more resources towards CSR and as a result benefit the society and become sustainable.

As a personal belief, CSR promotes brand differentiation for a company within an industry. It is also possible that most companies engage in CSR primarily as a way of brand differentiation. In the competitive business world that most companies are operating in makes it necessary to have a brand identification and visibility. Companies should focus on it as a way of ensuring that they are visible to the consumers. On the other hand, the consumers will benefit directly by getting high-quality products that have been sustainably manufactured. In addition, there will be benefits relating to the conservation of the environment that relate to sustainable production. The consumers require to understand that a company that they relate to will be in existence for a long time. Therefore, long-term thinking should be applied in the development of business ideas. Indeed, whenever a company invests in CSR, the clients trust its existence in the foreseeable future, which will promote their loyalty to the company. The engagement of the customers is also central in the CSR initiatives of companies. Through the use of CSR, the company can engage with the customers in new ways. For instance, other than seeing the business as a profit-oriented institution, the clients may start seeing the company as an environmental conservation party that has the people at heart. Furthermore, in addition to having a business to client relationship, the client and the business also have a relationship where they are involved in a conservation or any other form of CSR. The engagement of employees is also central to the issue of CSR as employees are ambassadors of the company. In addition, the employees enjoy it when they work in an organisation that is engaged in the CSR and sustainability. It benefits the company in that there is reduced turnover of employees, which also benefits the relationships with the clients, as they do not have to deal with different people every time they need to engage with a company. Likewise, there is an aspect of cost saving as the company does not have to keep hiring and recruiting new people as it would be the case if there was a high turnover rate. Therefore, CSR is a beneficial concept for the consumers and the company too. It needs to be applied in a way that will guarantee these benefits, which in the long-run will assist the environment.

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