C ONSUMER  SOCIAL  RESPONSIBILITY

2.8.1  The  ethical  consumer    

There  have  been  several  attempts  to  define  and  codify  who  the  ethical  consumer  is.  Low  and   Davenport   (2007)   note   that   ethical   consumption   is   a   loose   term   as   it   implies   the   idea   of   personal  consumption  where  a  choice  of  products  and  services  exits  that  supports  a  specific   ethical  issue  such  as  human  rights,  the  environment,  or  animal  welfare.  Likewise  Carrington   et   al.,   (2010)   argue,   “ethically   minded   consumers   feel   a   certain   responsibility   towards   the   environment  and/or  to  society  and  seek  to  express  their  values  through  ethical  consumption  and   purchasing  (or  boycotting)  behaviour”.  As  such,  ethical  consumers  see  themselves  as  part  of  a   larger  collective  group  that  is  guided  by  the  same  moral  principles.  While  it  has  been  difficult   through  previous  studies  to  profile  the  typical  ethical  consumer,  the  most  consistent  results   have  been  identified  through  gender  and  educational  status  suggesting  that  ethical  consumers   are  often  female  with  a  high  educational  status  (Papaoikonomou  et  al.,  2011).  While  difficult   to  define  and  profile  completely,  in  theory,  this  group  represents  the  consumer  equivalent  of   social   responsible   corporations   and   Devinney   et   al.   (2006)   have   coined   their   actions   as   consumer  social  responsibility.  The  concept  is  defined  as  “the  conscious  and  deliberate  choice   to   make   certain   consumption   choices   based   on   personal   and   moral   beliefs”   (Devinney   et   al,   2006,  p.  3)  and  are  often  expressed  in  three  different  ways:  Firstly,  consumers  may  choose  to   involve   themselves   in   activities   with   respect   to   specific   causes   and   donate   money   or   contribute   in   other   ways.   Secondly,   consumers   may   change   purchasing   or   non-­‐purchasing   behaviour  and  finally,  they  can  express  opinions  in  surveys  or  other  forms  of  market  research   (Devinney  et  al,  2006).  However,  they  note  that  consumer  may  express  different  viewpoints   depending   on   their   actions.   Contributions   are   more   and   more   often   seen   in   connection   to   large-­‐scale   protests   directed   at   multinational   corporations   and   international   organisations.  

Changes  in  purchasing  behaviour  can  be  seen  in  the  low  levels  of  purchasing  of  ‘ethical’  goods.  

Devinney  et  al.  (2006)  refer  to  the  external  pressure  that  led  Starbucks  to  introduce  fair  trade   coffee,  which  has  seen  surprisingly  low  sales  levels  since  the  introduction  in  2001.  The  third   option   has   become   the   most   common   as   well   as   the   most   dubious   means   to   measure   consumer  social  responsibility.    

2.8.2  Consumer  purchase  intentions    

Much   of   the   current   literature   on   consumer   decision-­‐making   takes   its   starting   point   in   psychology   and   with   cognitive   approaches.   This   section   will   not   go   into   depth   with   the   psychological   aspects   of   the   theory,   but   will   focus   on   the   functional   aspects   of   how   the   consumer  intention-­‐behaviour  gap  may  be  related  to  the  rest  of  the  thesis.

As   mentioned   earlier,   the   modern   consumer   is   both   more   informed   and   have   access   to   a   greater  variety  of  products  than  ever  before.  Not  only  do  consumers  today  have  high  demand   for  these  things,  but  they  also  have  high  expectations  to  companies,  when  it  comes  to  their   CSR  practices  (Devinney  et  al,  2006).  Furthermore,  there  is  a  growing  societal  tendency  to  act   responsible  and  be  seen  by  others  as  sensible  and  rational  human  beings.  (Papaoikonomou  et   al,  2011).  Finally,  consumer  behaviour  is  often  a  result  of  what  the  individual  deem  rational   and   common   sense   (Thøgersen,   2011).   In   2014,   The   Nielsen   Company   surveyed   consumer   intentions  via  online  access  from  60  countries.  There  were  over  30.000  respondents,  and  the   results  were  arguably  positive.  55%  of  the  respondents  said  they  were  willing  to  pay  extra  for   products   and   services   from   companies   committed   to   positive   social   and   environmental   impact.   52%   stated   they   check   product   packaging   to   ensure   sustainable   impact   and   49%  

volunteer  and/or  donate  to  organisations  engaged  in  social  and/or  environmental  programs   (Nielsen   Company,   2014).   The   results   of   such   surveys   would   indicate   that   the   ethical   consumer   segment   is   worth   investing   in   and   offer   premium   products.   Schaltegger   and   Synnestvedt   (2002)   note   that   whether   CSR   e.g.   within   environmental   protection   results   in   improved   financial   performance   depends   on   a   variety   of   factors   such   as   the   consumers'   willingness   to   pay   for   environmentally   friendly   goods   in   a   given   market,   the   stakeholder   pressure  in  different  industries  etc.    

It  seems,  however,  that  surveys  as  the  one  The  Nielsen  Company  carried  out  in  2014  lack  the   coverage  of  actual  behaviour.  The  report  states  that  survey  responses  are  based  on  claimed   behaviour  rather  than  actual  metered  data.  Auger  and  Devinney  (2007)  note  that  the  lack  of   ethical   and   general   consumer   decision-­‐making   studies   that   measure   and   observe   actual   buying   compared   to   state   intentions   or   self-­‐reported   behaviour   is   a   substantial   methodological   limitation   to   such   studies.   Studies   may   end   up   presenting   socially   biased   results   due   to   how   many   respondents   may   feel   a   social   pressure   to   respond   in   a   way   they   believe  to  be  socially  acceptable  (Auger  &  Devinney,  2007).            

Carrington  et  al  (2010)  proposed  a  cognitive  framework  of  ethical  consumer  decision  making   with  the  relevant  elements  of  the  internal  and  external  environment  integrated  to  show  the   complexity  of  real-­‐life  purchase  decision-­‐making.  The  integrated  factors  are  referred  to  as  the  

‘cognitive’   and   ‘behaviourist’   traditions   and   cover   respectively   both   internal   and   environmental  factors.  The  cognitive  aspects  of  human  behaviour  are  covered  to  determine   what  role  they  play  in  actual  behaviour.    

According   to   Carrington   et   al,   these   elements   may   help   explain   the   gap   between   consumer   purchase  intentions  and  actual  purchase  behaviour  and  why  ethical  minded  consumers  rarely   follow  through  with  their  ethical  intentions  at  the  cash  register  (Carrington  et  al,  2010).    

They   argue   for   the   importance   of   a   mental   implementation   plan   –   how   to   put   one’s   good   intentions   into   action   –   as  intentions  only   cover   the   desired   end   goal   and   a   commitment   to   achieve   this   goal,   but   it   doesn’t   include   a   plan   that   specify   how   to   achieve   this   goal.  

Furthermore,  this  plan  needs  to  be  cognitively  developed  in  advance  of  the  purchase  decision   in  order  for  intentions  to  translate  to  behaviour.  This  furthermore  helps  individuals  to  start   their   wanted   behaviour   as   well   as   ‘shield   the   intentions’   from   negative   influences   that   may   interrupt  the  behaviour.  However,  people  often  have  problems  in  initialising  their  intentions   and   especially   if   the   behaviour   is   unfamiliar,   one   might   forget   to   act   accordingly.   This   forgetfulness  is  especially  relevant  for  ethical  minded  consumers  as  ethical  products  may  be  a   new  addition  to  their  purchase  repertoire  (Carrington  et  al,  2010).  Thus,  the  implementation   plan   may   be   crucial   for   ethical   consumers   as   their   intentions   are   often   competing   against   long-­‐term  habitual  non-­‐ethical  shopping  behaviour  (Carrington  et  al,  2010).  

Figure  9:  Intention-­‐behaviour  mediation  and  moderation  model  of  the  ethical  minded  consumer  by  Carrington  et   al,  2010  

2.8.3  Consumer  behaviour    

In   continuation   of   the   theory   of   intentions,   the   following   will   review   studies   of   actual   behaviour  in  order  to  provide  a  picture  of  whether  the  studies  of  intentions  match  reality.    

One  of  the  most  widely  used  theories  for  behavior  is  the  theory  of  planned  behaviour,  which   has   largely   been   applied   by   Chatzidakis   (Papaoikonomou   et   al,   2011).   In   short,   the   theory   suggests   that   attitudes   toward   behaviour   along   with   subjective   norms   and   perceived   behavioural   control   shape   the   behaviour   intentions   and   behaviour.   This   has   therefore   been   used  to  study  the  intentions  of  ethical  consumers.      

In   2005,   Futerra   carried   out   a   study   of   consumer   behaviour.   Based   on   a   model   used   to   determine  consumer  behavior  in  relation  to  intentions,  the  research  data  found,  that  30%  of   consumers  had  ethical  purchase  intentions,  but  only  3%  behaved  accordingly.  Thus,  models   that   predict   ethical   intentions   may   be   wrong   90%   of   the   time.   It   is   a   serious   situation   for   marketers  of  ethical  products,  as  new  product  launches  based  on  such  model  will  often  result   in  costly  failures  (Carrington  et  al,  2010).  In  general,  there  is  a  tendency  in  empirical  studies   in   the   field   of   consumer   behaviour   that   suggest   that   purchase   intentions   do   not   translate   literally  into  purchase  behaviour  (Morwitz  et  al.,  2007;  Young  et  al.,  1998).  

“Although  corporations  and  policy  makers  are  bombarded  with  international  surveys  purporting   to  show  that  average  consumers  do  care  for  ethical  products,  lingering  doubts  remain  as  survey   radicals  turn  into  economic  conservatives  as  the  checkout”  (Devinney  et  al,  2006,  1).  

There   have   been   several   studies   with   different   variables   about   the   willingness   of   ethical   consumers   to   buy   ethical   and   social   responsible   products   instead   of   the   cheaper   and   more   common  products.  In  general,  they  suggest  that  between  30-­‐50%  of  respondents  increasingly   care   about   the   ethical   components   of   products   and   business   processes   and   that   these   concerns  have  financial  implications  for  the  businesses  involved  (Devinney  et  al,  2006).  This   evidence   is   supported   if   consumer   behaviour   is   measured   through   the   lenses   of   the   above-­‐

mentioned  consumer  donations  and  survey  responses.  However,  if  the  actual  sales  figures  of   ethical   products   are   measured   compared   to   non-­‐ethical   products,   the   results   are   entirely   different  and  suggest  that  consumers  are  not  actually  willing  to  put  their  money  where  their  

mouths  are  and  thus  the  ethical  consumer  segment  may  not  display  as  much  consumer  social   responsibility  as  they  claim  to  do.    

2.8.4  Geographic  responsibility      

As  previously  mentioned,  globalisation  is  the  process  and  result  of  how  the  world  has  become   increasingly   interconnected   due   to   intense   trade   and   cultural   exchange   (Guttal,   2007).   To   elaborate  on  this,  many  companies  have  today  expanded  their  business  and  are  working  with   subsidiaries  in  multiple  countries,  hence  the  production  of  goods  and  services  have  increased.

Given   company   expansion   and   the   access   to   overseer   their   business   activities   through   advanced  technology,  companies  will  impact  a  higher  number  of  stakeholders  and  therefore   have  the  ability  to  foster  national  and  international  CSR  programs  (Groza  et  al,  2011).  

Nevertheless,  consumers  have  also  been  highly  influenced  by  the  era  of  globalisation.  Russell   and  Russell  (2009)  argue  that  there  has  been  a  change  in  the  nature  of  citizenship.  Compared   to  consumers’  previous  viewpoint  of  being  a  traditional  citizen,  they  are  today  challenged  and   remoulded  by  international  activities  in  which  they  feel  obligated  to  respond.  In  its  pure  form,   this   means   that   some   individuals’   identify   themselves   as   global   citizens   who   are   concerned   with   their   fellow   global   citizens.   Companies   should   therefore   focus   on   their   CSR   initiatives,   both   local   and   foreign,   as   they   strategically   should   demonstrate   society   attachment   and   concern  for  community  welfare  (Russell  &  Russell,  2009).

However,   consumers   feel   and   act   differently.   While   some   individuals   are   low   in   global   citizenship  behaviour,  and  therefore  identify  more  with  their  home  country,  others  are  high  in   global   citizenship   behaviour   and   therefore   care   equally   about   what   happens   within   and   beyond   one’s   national   borders   (Groza   et   al,   2011).   Because   of   this,   the   location   of   CSR   initiatives  is  less  important  to  the  individuals  who  are  high  in  global  citizenship.    

In  another  study  done  by  Russell  and  Russell  (2009)  in  the  US,  the  two  authors  address  the   effect   of   CSR   activity’s   geographic   focus,   as   initiatives   that   are   focused   in   the   individual’s   home  country  will  increase  consumer  stated  intentions  to  patronize  the  business  in  the  future   compared   to   CSR   activities   focused   in   a   foreign   country.   They   discovered   that   consumers   actual  behaviour  increases  when  CSR  activities  focused  locally  in  their  home  state,  compared  

to   CSR   initiatives   focused   in   a   distant   state.   Explained   differently,   it   seems   that   individual   consumers  care  more  about  CSR  initiatives  and  arguably  the  missing  actions  on  these  in  close   proximity  to  their  own  country  compared  to  those  who  may  be  on  the  other  side  of  the  world.