THE BUYER’S TURN: CORPORATE SOCIAL
RESPONSIBILITY IN THE DUTCH RETAIL SECTOR
MARK HESSELS MSc (5936055)
Supervisor
MW. DR. K.J.P. QUINTELIER
Master Thesis
Business Administration Amsterdam Business School
University of Amsterdam
June 29, 2015
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Statement of Originality
This document is written by Student Mark Hessels who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of the completion of this work, not for its content.
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ABSTRACT
The purpose of this thesis is to explore whether companies that communicate motives (self-centred, win-win, and other-centred motives) for engaging in Corporate Social Responsibility (CSR) activities influence the equity of other companies. Earlier research indicates that the motives that a company communicates for the reason that it influences the consumers’ willingness to buy products from that company. This study questioned professional buyers that purchase products for Dutch retailers. Suppliers that have various motives for engaging in CSR sell these products to the buyers. Three scenarios are designed with each consisting of one motive for engaging in CSR. The buyers had to read a text about a fictitious supplier with one of the three motives implicitly stated. After that, the buyers had to answer a couple of questions. It is found that people that were presented the win-win vignette or the other-centred vignette have a higher equity than people that read the self-centred vignette. This is also true when the buyers’ perceived motive of the supplier is added as a mediator. No evidence is found for the hypothesis that the price segment the buyer is purchasing products for moderates the effect from perceived motives on equity. Further research should determine whether the results of this study are also applicable to other business sectors and countries.
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CONTENT
ABSTRACT... 3
1. INTRODUCTION ... 5
2. LITERATURE REVIEW ... 9
2.1 CORPORATE SOCIAL RESPONSIBILITY AND MOTIVES ... 9
2.2 INFLUENCE CSR ON STAKEHOLDERS ... 11
2.3 INFLUENCE PERCEIVED MOTIVES ON STAKEHOLDER TRANSACTIONS ... 11
2.4 INFLUENCE COMMUNICATED CSR MOTIVES ON STAKEHOLDER TRANSACTIONS 12 2.5 PRICE SEGMENT ... 13
2.6 LITERATURE GAP AND RESEARCH QUESTION ... 13
3. THEORETICAL FRAMEWORK... 16
3.1 COMMUNICATED MOTIVES FOR CSR AND EQUITY ... 16
3.2 PERCEIVED MOTIVES AS MEDIATOR ... 19
3.3 PRICE SEGMENT AS MODERATOR ... 20
4. METHODOLOGY ... 22
4.1 METHOD ... 22
4.2 EXPERIMENTAL DESIGN AND PROCEDURE ... 22
4.3 OPERATIONALIZATION OF THE VARIABLES ... 23
5. RESULTS ... 26 5.1 SAMPLE ... 26 5.2 MANIPULATION CHECK ... 26 5.3 RELIABILITY ANALYSIS... 27 5.4 NORMALITY ANALYSES ... 27 5.5 DESCRIPTIVE STATISTICS ... 28 5.6 HYPOTHESIS TESTS ... 29 6. DISCUSSION ... 37 6.1 RESULTS ... 37 6.2 IMPLICATIONS ... 40
6.3 LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH ... 40
7. CONCLUSION ... 42
REFERENCES ... 43
APPENDIX A: QUESTIONNAIRE ... 46
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1. INTRODUCTION
According to preliminary figures of Statistics Netherlands (2015), people bought almost eleven percent less clothes, shoes and textiles in the Netherlands during 2014 compared to 2010. The average price of these products rose only one percent in four years. Therefore, the turnover of Dutch retailers selling clothes, shoes and/or textiles dropped almost ten percent in four years. The turnover is even less in 2014 than in 2005. Therefore, it is understandable that many clothing companies became bankrupt in the Netherlands in the last few years, as these retailers could not cope with such fierce competition.
To be successful in the clothing industry, it is important to have a high enough margin on products to sell for profit. To increase the margin on a product, a company can negotiate towards a lower price per unit. Whilst also increasing the selling price of the product. On the one hand, consumers are very price sensitive (see for instance the success of Primark), so the selling price of clothes cannot be too high. Otherwise, consumers will buy their clothes elsewhere. On the other hand, a lower purchase price can result in less favourable labour.
To overcome this dilemma, a company can increase its margin through product differentiation. It can participate in corporate social responsibility (CSR) and ask for a higher price for its products. It can also participate in CSR and continue with the same margin while making more profit by selling more units. Hence, companies can use CSR to achieve higher profits (Brønn & Vidaver-Cohen, 2009), since earlier research has shown that participating in CSR has a positive effect on consumer behaviour. For instance, it influences the attitudes of consumers (Lichtenstein et al., 2004), their satisfaction (Bhattacharya and Sen, 2004) or product evaluation (Brown and Dacin, 1997). In other words, participating in CSR can be a successful strategy for a fashion retailer.
However, the reasons for participating need not be purely economic. It can also be for moral reasons or a combination of economic and moral reasons (Drumwright, 1996).
6 For instance, stakeholders are important for a company (Donaldson & Preston, 1995; Mitchell, Agle & Wood, 1997). Being among the company’s shareholders, employees, and consumers buying its products. A high level of CSR activities can mean better working conditions for employees. It can also result in less external costs, for instance a reduction in the company’s ecological footprint. A company can value this even though decreased external costs does not necessitate a reduction in expenses.
If a company communicates its CSR behaviour, it can have a positive effect on the consumers’ willingness to buy (McWilliams & Siegel, 2001). However, it depends among other things on the particular motive communicated. Earlier research has shown that a win-win motive has a positive effect on the consumer’s willingness to buy (Ellen et al., 2006). A win-win motive means that a company argues to participate in CSR for the best interest of the company as well as the company’s stakeholders. This motive has a more positive effect than a self-centred one (a company communicates that it participates in CSR for increasing its profit) or other-centred motive (a company communicates that it participates in CSR for the only reason that it is good for its stakeholders) (Ellen et al., 2006). The influence of a company’s communicated CSR motives on the consumer’s willingness to buy (a business-to-consumer context) results in a question: What effect do communicated CSR motives have on business-to-business context?
There is almost no research conducted on CSR in a business-to-business environment. In a meta-analysis, Vaaland, Heide and Grønhaug (2008: 947) state that “whereas CSR is an issue in relation to all business partners, the empirical studies focus on consumer marketing and consumer responses, thereby excluding B2B marketing.” Only one known paper considers business-to-business relationships in a CSR context (Homburg, Stierl, and Bornemann, 2013). The writers found that there is a positive relationship between the degree of CSR of a supplier and the trust of a professional customer of a company. However, what about the influence of the communicated motives of suppliers on the willingness to buy of those professional customers?
7 This thesis studies whether different communicated CSR motives from suppliers’ influences the equity of professional buyers from Dutch retailers. These buyers decide, among other things, which factories make the ordered products. Are different communicated motives from different factories influencing the buyers’ equity?
Furthermore, different buyers can have different perceived values from a supplier that tells why it engages in CSR. Becker-Olsen, Cudmore and Hill (2006) showed that people give one of two general attributions to a company when it tells to engage in CSR, either self-centred or other-centred motives. This thesis studies whether perceived motives is a mediator for the relation between communicated CSR motive and equity.
In addition, various retailers aim to sell their products to different price segments. For instance, a discount retailer such as Action aims to sell its products on a lower price segment than Louis Vuitton. The professional buyers know for which price segment(s) they order products for. If there is an effect of the suppliers’ communicated motives on the buyers’ equity, is the company’s price segment the buyer is ordering products for a moderator? Since there are various price segments retailers focus on, the expectation is that the price segment of the company a buyer is working for moderates the possible influence from the suppliers’ communicated motives and the buyers’ equity. This thesis tests the possible relation between communicated CSR motives from suppliers on the equity of professional buyers from Dutch retailers. Additionally the moderator price segment is tested.
Answering these questions makes several valuable contributions to the literature. First of all, although there are many B2B-transactions, the influence of the companies’ motives for CSR on other businesses’ behaviour is yet unknown. Retailers decide where to buy their products, in mass amounts. This means that the influence of one company is much greater than that of one consumer. Therefore it is important to understand in which way a business finds CSR more essential. If this thesis can make clear which motives are most influential for other businesses’ behaviour, consequently stakeholder groups, policy
8 makers, scholars, and other groups can develop more effective strategies for increasing the CSR scores of companies.
In the next section, previous research on the topic of CSR and the possible influence of CSR (motives) on willingness to buy of various stakeholders is reviewed. The method of this thesis is shown and the results are presented. This thesis concludes after that with the implications and findings and directions for future research.
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2. LITERATURE REVIEW
Corporate social responsibility (CSR) is an important construct in business, academia (Lee et al., 2011) and society (Davis, 1973). Most firms engage in CSR to improve stakeholder behaviour. However, they differ in their communicated motives (Brønn & Vidaver-Cohen, 2009). How do these motives influence stakeholder behaviour? We investigate this question in a business-to-business context. This chapter shows previous research on this topic of interest.
2.1 CORPORATE SOCIAL RESPONSIBILITY AND MOTIVES
CSR is defined in many different ways (Dahlsrud, 2008). According to Laudal (2010: 64) “[d]efinitions of CSR refer normally to the company as the main actor, operating within a framework of public regulations and social norms”. Dahlsrud (2008) argues that most definitions “describe CSR as a phenomenon” (Dahlsrud, 2008: 6) rather than defining the social responsibility of a firm. Van Marrewijk (2003) states that a CSR definition should be context-specific. Most definitions are therefore describing a phenomenon, since including the context-specificity would make a CSR definition automatically inapplicable, in general.
This thesis selects a context-specific CSR definition to make it applicable for testing. As is shown in the literature review, there is only one article known by the author concerning CSR in the business-to-business context, namely the article from Homburg, Stierl and Bornemann (2013). Therefore, this thesis uses the same definition of CSR as they have used, being: “We define CSR as a firm’s voluntary consideration of stakeholder concerns both within and outside its business operations” (Homburg, Stierl, and Bornemann, 2013: 54).
CSR is voluntary, however it does not mean that a firm implements a CSR strategy without a goal-orientated reason. Motives for CSR can be classified in economic and social objectives (Drumwright, 1996). Economic objectives are “objectives that involved
10 increasing sales, building brand equity, or enhancing image” (Drumwright, 1996: 76) without a social agenda. Campaigns with social objectives are “campaigns with objectives related solely to a social agenda – to provide individual benefits, societal benefits, or both” (Drumwright, 1996: 76).
Becker-Olsen, Cudmore and Hill (2006) classify these objectives as firm serving versus society serving objectives. Correspondingly, Ellen et al. (2006: 147) shows four types of motives, classified in self-centred (strategic and egoistic motives) and other-centred (value driven and stakeholder driven motives). The former motivations could been seen as economic objectives and the latter as social objectives. The authors adds the win-win motives to the list of reasons to engage in CSR. Hence, besides self-centred and other-centred, there is the combination of these motives: win-win motives.
Drumwright found in her study that managers had mainly a combination of social and economic objectives for “advertising with a social dimension” (Drumwright, 1996: 71). Drumwright classifies mixed objectives when economic and social objectives are for a campaign. Drumwright argues against seeing economic – social objectives as a continuum. Instead, arguing in favour of categorization, since “the differences are of kind rather than of degree” (Drumwright, 1996: 77).
Brønn and Vidaver-Cohen (2009) asked managers from more than 500 Norwegian companies why their firms engage in CSR. Respondents were asked to rate 16 motives on a 7-point Likert scale. With a principal component analysis, the motives loaded on three different factors. These are “sustainability motives”, “legitimacy motives” and “profitability motives” (Brønn & Vidaver-Cohen, 2009: 101). The authors see the last two both as strategic (other scholars call this ‘instrumental’) factors for engaging in CSR. In the article they show that the motives for engaging in CSR is very different between different Norwegian industries. For instance, respondents from the Service Sector agreed significantly more on the “profitability motives” than respondents from other sectors. The authors argue that “[c]onsidering the nature of businesses represented in this sector (professional, medical, home, and personal services) it is possible that this group finds
11 more immediate strategic relevance for engaging in social initiatives than do members of industries that have less direct customer involvement” (Brønn & Vidaver-Cohen, 2009: 104).
The ‘real’ reasons for CSR could correspond to the company’s communicated motives for CSR, however this is not necessarily the case. In the next section, the influence of CSR on stakeholders is considered.
2.2 INFLUENCE CSR ON STAKEHOLDERS
The influence of a company’s CSR activities on consumers is shown in various studies, mostly in a business-to-consumer context. For instance, it influences the attitudes of consumers (Lichtenstein et al., 2004), consumers’ satisfaction (Bhattacharya and Sen, 2004) or product evaluation (Brown and Dacin, 1997).
Homburg, Stierl, and Bornemann (2013) studied CSR in business-to-business markets. They “collected dyadic data on such relationships by surveying purchasing managers from the customer firm and the respective marketing/sales contact from the supplier firm” (Homburg, Stierl, and Bornemann, 2013: 61). The authors surveyed suppliers to answer several statements about their CSR engagement. These scores of ‘Business practice CSR engagement’ have a significant influence on the ‘Business practice CSR reputation’. The former and the latter are the same questions, however the latter is asked to professional customers of firms working with those suppliers. This CSR reputation has a significantly positive influence on ‘trust’ and trust has a positive influence on ‘customer loyalty’.
2.3 INFLUENCE PERCEIVED MOTIVES ON STAKEHOLDER TRANSACTIONS When a company communicates about its engagement in CSR, it is likely that people link it to a perceived motive for engaging in CSR. Attribution theory is a basis for this argument (Becker-Olsen, Cudmore and Hill, 2006). Commonly, people give one of
12 two primary types of motives that we can classify as either self-centred motives or other-centred motives of the firm. These perceived motives influence people’s attitudes towards firms and its CSR initiatives. Becker-Olsen, Cudmore and Hill (2006: 47) argue that “[a]lthough the act of supporting a social initiative may seem to be a public serving action, consumers’ perceptions of the underlying motivations for the act may drive their evaluations of the firm and impact beliefs, attitudes and intentions”.
Ellen et al. studied the consumer’s perceived motives for CSR of corporations. They performed two studies in which it was shown that people attributed motives to the CSR activities of a company. Therefore, their “research suggests that [global evaluations and intent] are likely to be mediated by attributions of firms’ motives for CSR” (Ellen et al., 2006: 155).
In the first study, they showed with an open-ended survey, that most people evaluate CSR activities of a firm with a combination of self-centred and other-centred motives. A smaller group gave only self-centred or only other-centred motives. The respondents from the mixed group had a higher purchase intention compared to the respondents that attributed only self-centred motives and the respondents that attributed only other-centred motives. This means that consumers accept and will believe sooner win-win motivations of the company compared to purely other-centred motives.
2.4 INFLUENCE COMMUNICATED CSR MOTIVES ON STAKEHOLDER TRANSACTIONS
The influence of communicated CSR motives on stakeholders is demonstrated with consumers as stakeholders. Vlachos et al. (2009) found that there is a mediating role of consumer trust in the evaluation of different communicated CSR efforts of companies and different consumer responses. It can be argued that win-win motives are therefore the best communicated motives for the highest willingness to buy of consumers, for the reason that consumers trust win-win motives over moral motives.
Kim (2014) studied the effects of the communicated motives of engaging in CSR on stakeholder responses. The author studied two communication strategies, namely the
13 combination of self-serving and serving motives on the one hand, and only society-serving motives on the other hand. The results were that a combination (in other words acknowledging that you are also engaging in CSR for self-serving reasons) has a positive influence on stakeholder responses. The other researched motive (communicating only society-serving motives) has a negative influence on stakeholders when a company lacks a credible corporate reputation.
2.5 PRICE SEGMENT
All studies known by the author about the relationship between companies’ CSR motives and purchase behaviour are in the business-to-consumer market. However, this thesis studies the communicated CSR motives of companies and its possible influence on the equity of professional buyers from other companies.
In the B2C-market it is shown that there are various groups of consumers that react differently to CSR in general. For instance, in the hotel business, Kang et al. (2012) tested whether people react differently on CSR in different price segments of hotels. They concluded that “when the degree of environmental concern and other demographic factors remain constant, luxury and mid-priced hotel customers show, on average, a higher willingness to pay a premium for the green initiatives than economy hotel customers” (Kang et al., 2012: 570). Furthermore, other research has shown that CSR activities have more effect when people buy luxury products (premium segment) than when they buy basic products (Strahilevitz and Myers, 1998).
2.6 LITERATURE GAP AND RESEARCH QUESTION
The literature shows an influence from the CSR of a firm on the consumer behaviour, not only if the consumer is a person that buys jeans in a store, but also a professional consumer buying their products from a supplier. Hence, much research in the CSR literature concerns the effects of a company’s CSR score on stakeholder behaviour. Other research has shown that companies’ communicated motives have an effect on the
14 willingness to buy in a B2C-market. However, there is no (known) research conducted on the effects of a companies’ communicated motives and the willingness to buy products from that company by other companies.
Do communicated motives from companies have an influence on the equity from other companies? This thesis studies this question in a B2B-market, namely a market with suppliers making products and retailers buying products from suppliers. The purchase power of retailers is high compared to that of a single customer. Therefore, it is essential to test whether different communicated motives for CSR have an influence on the purchase behaviour of retailers. It is interesting to know whether buyers of firms where they sell products (for instance clothes) think about external shareholders and human rights, environment, and/or corruption when making their buying decisions. A retailer that switches from supplier can have a significant impact on the supplier’s performance. Therefore, it is also relevant for suppliers to know retailers’ reactions.
This thesis tests in addition the perceived motives of a supplier as a mediator. As shown in section 2.3 consumers give one of two primary motives for a company that discloses that it engages in CSR. These motives have an effect on the willingness to buy products from that company. Therefore, a certain given motive leads to a certain perceived motive. This leads subsequently to equity. In other words, the perceived motive of a firm is an indirect relationship between communicated motive of the firm and the equity from the buyer.
Furthermore, the possible moderating effect of production for different price segments will be tested as well. As outlined in an earlier paragraph, Brønn & Vidaver-Cohen (2009) show that employers from different industries have different motives for engaging in CSR. Combined with the results in the B2C-market (consumers in luxury and mid-priced hotels have a higher willingness to pay for CSR initiatives than consumers in the economy hotels have) (Kang et al, 2012), this thesis expects a moderated effect between perceived motives of the firm and the buyer’s equity. This means that buyers that purchase products for the premium segment have a higher equity than buyers for the lower
15 and medium price segment have, holding all other variables constant. If this is true, advisory groups for instance know better which supplier would be best helped with which specific CSR motives.
This thesis tests the relationship on a homogeneous group of professional buyers from Dutch retail companies. However, the buyers are purchasing products for different price segments. Also, a difference with the B2C studies is that professional buyers have to comply with agreed budgets and the money they spend is not their own, but their employers. Thus, it might be that the relationship is different from what earlier research has shown.
The following research question is proposed for this thesis:
To what extent have different motives for suppliers to engage in corporate social responsibility an effect on the equity of professional buyers from Dutch retailers?
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3. THEORETICAL FRAMEWORK
The literature review has shown that there are various motives for engaging in CSR (for instance see Brønn & Vidaver-Cohen, 2009; Donaldson & Preston, 1995; Drumwright, 1996; Ellen et al., 2006; Mitchell, Agle & Wood, 1997). These ‘real’ reasons are not always the same as the communicated reasons from firms for engaging in CSR activities. However, this thesis focuses on communicated motives of engaging in CSR activities. Based on the motives applied in the study of Ellen et al. (2006), this thesis studies the relationship of communicated motives and equity, with the buyers’ perceived motive of the firm as mediator. Besides, the price segment the buyer is purchasing for moderates the effect of the buyers’ perceived motive of the firm on equity. The three motives are the self-centred, the win-win, and the other-centred. The conceptual model is shown in figure 1. The theoretical underpinnings for this model are presented in section 3.1, 3.2 and 3.3.
Figure 1: The conceptual model
3.1 COMMUNICATED MOTIVES FOR CSR AND EQUITY
In line with stakeholder culture (Jones et al., 2007), this thesis views firms “as a collection of internal and external groups (e.g., shareholders, employees, customers, suppliers, creditors, and neighboring communities) – that is, “stakeholders,” originally defined as
Suppliers' communicated CSR motive Buyers' perceived motive Equity Price segment
17 those who are affected by and/or can affect the achievement of the firm’s objectives” (Jones et al., 2007: 137).
Different firms have different stakeholder cultures (Jones et al., 2007). Firms deal differently with their stakeholders. Due to these differences in cultures, it could be understood that firms are also different in what they communicate. For instance, the communicated motives for CSR do not have to be the same due to differences in business cultures.
The definition of stakeholder culture is:
“Stakeholder culture represents a firm’s collective reconciliation of these contradictory motives in the past and, as such, consists of its shared beliefs, values, and evolved practices regarding the solution of recurring stakeholder-related problems. Often, the “solution”, found in the firm’s stakeholder culture, is a relatively clear set of prescriptions about whether self-regarding or other-regarding norms will prevail, or whether some compromise between the two will hold sway” (Jones et al., 2007: 142).
Instrumental stakeholder theory argues that companies with their different stakeholder cultures, ranging from self-regarding through other-regarding, should keep their stakeholders in mind for the sake of profitability. Therefore, other-regarding behaviour should be part of a firms’ behaviour to be profitable besides the self-regarding motives of the firm.
Porter and Kramer (2011) argue that companies should do business in a way that is good for all of its stakeholders. Furthermore, a company should also make a profit. Therefore, Porter and Kramer argue that there should come a new paradigm: ‘shared value creation’. This paradigm means that there should be a combination of self-regarding and other-regarding motives be present in a company, hence the win-win motive.
The shared value creation paradigm and the instrumental stakeholder theory argue for a win-win motive to be present in companies. However, with the motives of the firms (a combination of other-regarding and self-regarding motives), the stakeholders should
18 react positively to these motives. Otherwise, a company would partly have other motives for keeping their stakeholders in mind.
As a result, the following question becomes salient: is communicating a combination of other-regarding and self-regarding motives better than only communicating other-regarding or self-regarding motives for engaging in CSR?
Ellen et al. (2006) have shown that consumers who attribute win-win motives to companies’ CSR activities have a higher willingness to buy than consumers that attribute self-centred or other-centred motives. Hoffman, Yoeli and Nowak (2015) argue that people want to cooperate with others who have done things for them in the past (reciprocity). Whilst they are less likely to cooperate with people that have not helped them before.
In addition, a professional buyer keeps the interests of his or her employer in mind. It is better to deal with a supplier who makes a profit than with a supplier that does not make a profit, since the latter supplier is more likely to go bankrupt. Hence, a professional buyer understands a degree of self-centred motives. This is due to the fact that a company should make a profit in order to survive long-term. Therefore, it is understandable that buyers want to work with suppliers that have a combination of self-centred and other-centred motives, hence win-win motives.
Hypothesis 1a: The equity from professional buyers is higher when suppliers communicate win-win motives instead of self-centred motives.
Hypothesis 1b: The equity from professional buyers is higher when suppliers communicate win-win motives instead of other-centred motives.
Furthermore, the other-centred motives and self-centred motives are also expected to differ. As Hoffman, Yoeli and Nowak (2015) argue, people prefer to work with other-centred people than self-centred people. Therefore, it is expected that professional
19 buyers have a higher equity for suppliers that are other-other compared to suppliers that are self-centred.
Hypothesis 1c: The equity from professional buyers is higher when suppliers communicate other-centred motives instead of self-centred motives.
3.2 PERCEIVED MOTIVES AS MEDIATOR
Earlier research has shown that consumers assign motives to firms that engage in CSR. This can be the same motive as communicated by the firm. However, this need not be the case. When a company does not communicate a motive, consumers still assign motive(s) for engaging in CSR to that firm. This thesis expects that professional buyers will also assign motives to suppliers that engage in CSR. It is expected that the relation between communicated motive of the supplier and the equity of the professional buyer is mediated by the perceived motive of the buyer for that supplier.
Hypothesis 2a: The equity from professional buyers is higher when suppliers communicate win-win motives instead of self-centred motives.
This effect will be mediated by perceived motives from the professional buyers.
Hypothesis 2b: The equity from professional buyers is higher when suppliers communicate win-win motives instead of other-centred motives.
This effect will be mediated by perceived motives from the professional buyers.
Hypothesis 2c: The equity from professional buyers is higher when suppliers communicate other-centred motives instead of self-centred motives.
20 3.3 PRICE SEGMENT AS MODERATOR
Different buyers can purchase products meant for different price segments. Most buyers from most companies have one or two price segments they purchase products for to sell to consumers. Buyers working for luxury brands purchase products for the high end segment. Buyers working for discount retailers buy products meant for a lower price segment. Fashion retailers such as H&M and Zara are classified as ‘fast fashion’. This means that these companies are able to have a short life cycle from producing a product through selling it in the retail shops. Joy et al. (2012) define ‘fast fashion’ as “low-cost clothing collections that mimic current luxury fashion trends” (Joy et al., 2012: 273). They show that people buy more fashion products. On the other hand, the products meant for the high end market are not mass products. Partly, those products are handmade, craftwork. Companies selling those products have no objective to sell these products in a large amount. For these companies it is better to sell less products, to be more exclusive and therefore to be able to ask a higher price. Joy et al. (2012) compare luxury brands with the fast fashion brands and they conclude that fast fashion has a limited durability and luxury products are more durable. The fast fashion companies ask suppliers to produce their products so that they be ready for retail as soon as possible. Instead, if you want to buy a particular bag from Hermès, you might wait for a couple of years (Joy et al., 2012: 276).
Earlier research in the hotel area shows that CSR activities are more positive assessed in the luxury hotel segment compared to other segments (Kang et al., 2012). Other research has shown that CSR activities have more effect when people buy luxury products (premium segment) than when they buy basic products (Strahilevitz and Myers, 1998).
It is expected that buyers from fast fashion retailers, or from the lower price segment, are less inclined towards CSR activities than buyers from the higher segment. The model of fast fashion is less sustainable as it “encourages disposability” (Joy et al., 2012: 275). So it will be tested whether buyers have also less interest in CSR activities.
21 Becker-Olsen et al. (2006) have shown that the expected fit between a cause and the firm’s products is important. If consumers see a low fit between CSR activities and the firm, they will be less positive towards that firm. As a result, the willingness to buy declines. On the other hand, if there is a high fit between cause and firm, the willingness to buy increases. The authors argue that “a good fit between prior expectations, knowledge, associations, actions, and competencies of a firm and a given social initiative […] can be more easily integrated into the consumer’s existing cognitive structure, strengthening the connection between the firm and the social initiative” (Becker-Olsen et al., 2006: 47). This expected fit can be translated to a supplier-buyer relationship. It can be predicted that buyers from different stakeholder cultures will perceive the given motives of suppliers differently. High end brands possibly care more about their consumers, as they ensure that all their products are of the best quality.
Based on the previous paragraphs, it is expected that the price segment the buyers are purchasing products for moderates the linkage between communicated motives from suppliers and the equity from professional buyers.
Hypothesis 3: The relationship between perceived motives and equity will be moderated by the price segment the buyers are purchasing for in such a way that the relationship is stronger for buyers purchasing products for the high price segment than for buyers purchasing products for the lower or medium price segment.
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4. METHODOLOGY
This thesis studies whether the communicated CSR motives from suppliers of products have an influence on the equity of professional buyers of Dutch retail companies. To give an answer to the research question and to test the hypotheses, a survey has been conducted consisting of three different vignettes, questions about the topic of interest and background questions. The conducted method is explained in the first section. In the second section, the experimental design and procedure is presented. Finally, in the last section the operationalization of the variables is explicated.
4.1 METHOD
This thesis performs a vignette study with equity as dependent variable. Alexander & Becker (1978) describe vignettes as “short descriptions of a person or a social situation which contain precise references to what are thought to be the most important factors in the decision-making or judgment-making processes of respondents” (Alexander & Becker, 1978: 94). A vignette study is chosen to understand the judge making processes of buyers. It is advisable if one wants to avoid social desirable answers instead of asking directly the opinion of a respondent (Alexander & Becker, 1978). A multiple regression analysis will be used to estimate the effects of the suppliers’ communicated motive on the equity of professional buyers from Dutch retailers with price segment as moderator.
4.2 EXPERIMENTAL DESIGN AND PROCEDURE
This experimental design consists of three different hypothetical situations about a fictitious supplier with different motives for engaging in CSR activities. Each respondent gets only one hypothetical situation. The respondents are therefore randomly assigned to each situation. The hypothetical situations are almost identical. However, they differ in the manipulated communicated motive. Therefore, there are three groups of respondents for this vignette survey. After reading the text, there are two control questions. First, they have
23 to answer which statement was part of the text. Second, the respondents should answer whether one, two or none of the two motives are spoken out in the text.
The sample consists of professional buyers working (mostly) in the Netherlands. I contacted many buyers from many retail organizations in the Netherlands via email, telephone, friends and directly. I asked them to fill in the survey and to send the link of the survey to other buyers. An invitation to fill in the survey was sent to approximately 350-400 buyers, directly or via the company, they work for. The questionnaire was in Dutch (see Appendix A). The questionnaire was open from May 19 to June 25, 2015.
The first question in the survey asked whether the respondent was a buyer (yes or no). If the respondent answered ‘no’, the survey automatically went to the exit screen. Therefore, all filled in surveys are from professional buyers, the target group of this thesis.
Professional buyers were chosen as the target group in this thesis, since they buy products from suppliers and purchase products meant for different price segments.
4.3 OPERATIONALIZATION OF THE VARIABLES
DEPENDENT VARIABLE. The dependent variable is equity, adapted from Yoo, Donthu & Lee (2000). The variable consists of four items; measured by means of four 7-point Likert scale questions in the survey (see Appendix A). Respondents were asked to rate the statements with respect to the hypothetical ‘Supplier A’: “It makes sense to buy products from Supplier A instead of any other supplier, even if the products are the same”, “Even if another supplier offers the same service as Supplier A, I would still prefer to buy from Supplier A”, “If there is another supplier as good as Supplier A, I still prefer to buy from Supplier A”, and “If another supplier is very similar to Supplier A, it still seems smarter to purchase from Supplier A”.
INDEPENDENT VARIABLE. The independent variable is the communicated CSR motive (self-centred, other-centred, and win-win). Each vignette consists of a different supplier motive for engaging in CSR activities. The given motives in the vignettes are not
24 explicit in the texts but are implicitly stated based on the attributions from Ellen et al. (2006). For instance, in the self-centred vignette, Supplier A engages in CSR because “it brings more profit and it creates more value for our shareholders”. In the other-centred vignette, Supplier A engages in CSR because “it protects our planet and the people living on it”. The win-win vignette consists of both statements.
MEDIATOR. The mediator in this thesis is perceived otherness. The variable consists of two items, measured by means of four 7-point Likert scale questions in the survey. Respondents were asked to rate the statements with respect to the hypothetical ‘Supplier A’: “The supplier engages in CSR since it is socially motivated”, and “The supplier engages in CSR since it is in the interest of society”.
MODERATOR. The moderator in this study is price segment. In the survey, every buyer is asked for which price segment they are mostly purchasing products for. The buyers can choose one of the three price segments: lower price segment (budget price segment), a medium price segment, and a premium price segment. It is expected that this is a better proxy for price segment than asking for which company the buyer is working for and coding the companies into different price segments. For instance, a buyer in a company can purchase products for one price segment and his or her colleague can buy products for another price segment. Furthermore, not every buyer wants (or is permitted) to tell which company he or she is working for.
Another way of using price segment as a moderator was to randomly allocate buyers to price segments. In this case, the vignette consists of a sentence for which price segment the buyer purchases products for. However, this thesis chose to stay closer to the everyday practice of the respondent. Therefore, the respondents fill in the price segment they purchase most products for.
25 CONTROL VARIABLES. The following background variables are included in this study: how realistic the respondents found the given vignette, gender, age, a dummy variable consisting of all respondents that studied economics and business versus the rest, and the number of years of experience as a professional buyer.
MANIPULATION CHECKS. After the text, respondents get two control questions. These are to check whether the respondents have read the description of the supplier accurately.
26
5. RESULTS
5.1 SAMPLE
There are 95 attempts to fill in the survey, with 48 questionnaires completely filled in. The rest consists of 12 non-buyers and 35 respondents who stopped before the last question. 75% of the buyers is female, and 25% male. The average age is 35 years, with a large variation (SD=8,1). The buyer’s average experience is 8,5 years (SD=8,0). Two third (66,7%) completed a study with economics, business administration, or management as subject.
41,7% of the buyers that completely filled in the survey had a win-win vignette, where 35,4 had the other-centred vignette, and 22,9% the self-centred vignette. The dropout rate is higher for people that started the survey and randomly had the self-centred vignette (namely 54,2% of that group stopped before the end of the survey), than for the other-centred vignette (32,0%) and win-win vignette (20%).
Most buyers purchase products from a medium price segment, namely 64,6%. 20,8% buys products for the higher price segment and 14,6% for the lower price segment. The lower price segment group is small, with only one respondent given an other-centred vignette. Therefore, this lower price segment group will be combined with the medium price segment group. As a result, 79,2% of the buyers is classified in the lower/medium price segment and 20,8% in the higher price segment.
5.2 MANIPULATION CHECK
A check was carried out whether respondents read the text on Supplier A carefully. The first question consisted of one statement. This statement was that Supplier A has products that the buyer can purchase for his or her price segment. This was true for all vignettes, with 94% of the buyers answering correctly. The second question consisted of two phrases and it was asked whether one, two or none of these phrases were in the text that the
27 respondent had read. The phrase ‘creates more profit and creates value for shareholders’ was answered correctly by 81,3% of the respondents. The phrase ‘it protects our planet and the people living on it’ was answered correctly by 95,8% of the respondents.
5.3 RELIABILITY ANALYSIS
The dependent variable equity is measured through four questions in the survey. To examine the dependent variable, it must be checked whether it is proper to make a scale of these four items. The reliability of the four items should be high enough to make a scale. Therefore, a Cronbach’s α analysis was carried out. The Cronbach’s α is .94, which is very high. Therefore, the four questions are combined and divided through four, with one (low equity) through seven (high equity).
A second scale was formed of two questions about perceived motives. The Cronbach’s α is .69, which is just high enough to properly make a scale of these two items, with one (not other-centred motivated) through seven (other-centred motivated). This scale is named ‘perceived otherness’.
A third scale was formed of two questions about how realistic the respondents found the given vignette. The Cronbach’s α is .80, which is high enough to properly make a scale of these two items, with one (not realistic) through seven (realistic). The respondents with the other-centred vignette were most positive (M=4,1), then the win-win group (M=3,8) and the self-centred group (3,8).
5.4 NORMALITY ANALYSES
To assess whether the dependent variable is normally distributed, a normality test was carried out for all three vignettes. For the self-centred vignette, equity has a mean of 2,77 (SE=,30). There is a slightly negative skewness and kurtosis. This means that the scores are slightly skewed to the left and slightly less peaked than a Gaussian distribution. For the win-win vignette, equity has a mean of 4,10 (SE=,35). The distribution is slightly skewed to the left and it is less peaked than a Gaussian distribution. For the other-centred
28 vignette, equity has a mean of 4,37 (SE=,33). There is a slightly positive skewness and kurtosis. This means that the scores are slightly skewed to the right and slightly more peaked than a Gaussian distribution. The skewness was for all three vignettes not substantial (a range of -,15 and +,08) and the kurtosis is also within an acceptable bandwidth (-,85 and +,03). The Kolmogorov-Smirnov test of normality shows that the distribution of all motives is not significantly different from a normal distribution. This means that the assumption of normality is not violated.
5.5 DESCRIPTIVE STATISTICS
The correlation matrix shows several significant correlations. Equity is negatively correlated with the self-centred vignette. This means that the higher the equity, the lower the chance that somebody had a self-centred vignette. Equity is positively correlated with the degree of perceived otherness and with the degree of how realistic the respondents found the vignette. This means that if people believe more that a supplier has other-centred motives for engaging in CSR, the equity also increases. This is the same with how realistic people found the motive.
Perceived otherness is negatively correlated with the self-centred vignette. This means that the higher the perceived otherness, the lower the chance that somebody had a self-centred vignette. Variables M SD 1 2 3 4 5 6 7 8 9 10 11 1 Equity 3,89 1,48 - 2 Win-win vignette 0,42 0,50 0,12 - 3 Self-centred vignette 0,23 0,42 -0,42* -0,46* - 4 Other-centred vignette 0,35 0,48 0,24 -0,63* -0,40* - 5 Perceived otherness 4,80 1,23 0,54* 0,14 -0,38* 0,19 - 6 High price segment 0,21 0,41 -0,20 -0,02 0,21 -0,17 -0,25 - 7 Realistic 3,89 1,48 0,29* -0,06 -0,04 0,10 0,34* -0,40* - 8 Male 1,25 0,44 -0,25 -0,10 0,03 0,08 -0,14 0,18 0,00 - 9 Age 34,85 8,11 -0,05 -0,15 0,25 -0,06 -0,01 0,06 -0,18 0,06 - 10 Economics and Business 0,67 0,48 0,07 0,24 -0,14 -0,12 0,05 0,04 -0,18 0,00 -0,21 - 11 Working experience 8,48 7,98 -0,12 -0,24 0,36* -0,07 -0,05 0,09 -0,08 -0,04 0,85* -0,38* -
*. Correlation is significant at the 0.05 level (2-tailed). Table 1: Means, Standard Deviations, Correlations
29 5.6 HYPOTHESIS TESTS
This section will show the results of the hypotheses tests. Hypothesis 1a predicts that the equity from professional buyers is higher when suppliers communicate a win-win motive instead of a self-centred motive. Two regression analyses are conducted to test this hypothesis. The first model consists of control variables and the dependent variable equity. The second models includes the win-win dummy-variable. Table 2 shows the results of the regression analyses.
Model 1 Model 2
Predictors B Sig. B Sig. Win-win vignette - - 1,20 ,03 * Controls Other-centred vignette 0,73 ,09 1,52 ,01 ** Realistic 0,32 ,03 * 0,31 ,03 * Male -1,05 ,03 * -0,94 ,04 * Age 0,07 ,17 0,06 ,26
Economics and Business 0,27 ,58 0,23 ,63 Experience as a buyer -0,07 ,19 -0,04 ,48 Number of respondents 48 48 Explained variance ,26 ,34 F 2,37 * 2,95 * Adjusted R2 ,15 ,23 Change in R2 ,08 F change 5,04 * *p < 0.05 **p < 0.01
Table 2: Results of the regression analyses testing the effect of the win-win motive versus the self-centred motive on equity
The first model is significant (F=2,37, p<0,05). The control variables could explain 26% of the variance in the dependent variable equity. Adding the win-win dummy-variable increases the explained variance with 8% to 34%. The second model is also significant (F=2,95, p<0,05)., with a significant F change of 5,04 (p<0,05). The dummy-variable is significant and in the hypothesized direction (B=1,20, p<0,05). This means that, holding all other variables equal, respondents that were given a win-win vignette have a higher equity than respondents that were given the self-centred vignette. Therefore, we can accept hypothesis 1a.
30 Hypothesis 1b predicts that the equity from professional buyers is higher when suppliers communicate a win-win motive instead of an other-centred motive. Two regression analyses are conducted to test this hypothesis. The results are presented in table 3.
Model 1 Model 2
Predictors B Sig. B Sig. Win-win vignette - - -0,32 ,48 Controls Self-centred vignette -1,36 ,01 ** -1,52 ,01 ** Realistic 0,32 ,02 * 0,31 ,03 * Male -,90 ,05 * -0,94 ,04 * Age 0,05 ,27 0,06 ,26 Economics and Business 0,18 ,70 0,23 ,63 Experience as a buyer -0,04 ,49 -0,04 ,48 Number of respondents 48 48 Explained variance ,33 ,34 F 3,40 ** 2,95 * Adjusted R2 ,23 ,23 Change in R2 ,01 F change ,52 *p < 0.05 **p < 0.01
Table 3: Results of the regression analyses testing the effect of the win-win motive versus the other-centred motive on equity
The first model is significant (F=3,40, p<,01). The control variables can explain 33% of the variance in the dependent variable equity. Adding the win-win dummy-variable to the model results not in a significant F change. This means that model 2 and model 1 are not significantly different from each other. The explained variance is only 1% higher in model 2 compared to model 1. The independent variable is not significant (B=-,32, p=0,48). There is not a significant difference between the group that was shown a win-win vignette and the group that was shown an other-centred vignette. Therefore, we cannot accept hypothesis 1b.
31 Hypothesis 1c predicts that the equity from professional buyers is higher when suppliers communicate an other-centred motive instead of a self-centred motive. Two regression analyses are conducted to test this hypothesis. The results are presented in table 4.
Model 1 Model 2
Predictors B Sig. B Sig. Other-centred vignette - - 1,52 ,01 ** Controls Win-win vignette 0,20 ,65 1,20 ,03 * Realistic 0,34 ,03 * 0,31 ,03 * Male -,97 ,05 -0,94 ,04 * Age 0,07 ,18 0,06 ,26
Economics and Business 0,11 ,82 0,23 ,63 Experience as a buyer -0,08 ,18 -0,04 ,48 Number of respondents 48 48 Explained variance ,21 ,34 F 1,79 2,95 * Adjusted R2 ,09 ,23 Change in R2 ,13 F change 8,09 ** *p < 0.05 **p < 0.01
Table 4: Results of the regression analyses testing the effect of the other-centred motive versus the self-centred motive on equity
The first model is not significant (F=1,79, p=0,13). Adding the other-centred dummy-variable to the model results in a significant model (F=2,95, p<0,05). The second model is a significant better model than the first model, the F change is 8,09 (p<0,01). The explained variance is 13% higher in the second model than in the first model (34% compared to 21%). The dummy-variable is significant and in the hypothesized direction (B=1,52, p<0,01). This means that respondents that were given the other-centred vignette have a higher probability on a higher equity than respondents that was shown the self-centred vignette. Therefore, we can accept hypothesis 1c.
32 The rest of the hypotheses are tested through a tool for regression analyses called ‘PROCESS’ (Hayes, 2012) in order to test mediated and moderated effects. Hypothesis 2a predicts that the positive effect to communicate a win-win motive instead of a self-centred motive on equity is mediated by perceived motives from the professional buyers.
Perceived
otherness Equity Model 1 Model 2
Predictors B Sig. B Sig. Win-win vignette 1,08 ,02 * 0,77 ,16 Mediator Perceived otherness 0,40 ,03 * Controls Other-centred vignette 1,18 ,01 * 1,05 ,06 Realistic 0,31 ,01 * 0,19 ,18 Male -0,42 ,28 -0,77 ,08 Age 0,03 ,45 0,04 ,37
Economics and Business 0,26 ,52 0,12 ,78 Experience as a buyer 0,00 ,93 -0,04 ,48 Number of respondents 48 48 Explained variance ,30 ,42 F 2,45 * 3,48 ** Change in R2 0,12 *p < 0.05 **p < 0.01
Table 5: Results of the regression analyses testing the effect of the win-win motive versus the self-centred motive on equity mediated by perceived otherness
Table 5 (model 1) shows the regression results of the perceived degree of other-centred motives of the firm from the win motive versus self-other-centred motive. The win-win motive is significant, with b = 1,08, t = 2,37, p = ,023. The explained variance is 30%. Since the beta of win-win is positive, the group respondents with a win-win motive have a higher degree of perceived other-centred motives of the firm than respondents that was presented the self-centred motive.
33 Table 5 (model 2) shows the regression results of equity from both the win-win motive versus the self-centred motive and the perceived degree of other-centred motives of the firm. The direct effect of the win-win motive versus the self-centred motive on equity is not significant anymore with perceived motives in the model, with b = ,77, t = 1,42, p = ,164. Perceived motives on the other hand significantly predicts equity, with b = ,40, t = 2,25, p = ,030. The explained variance is 41,6%, which means that 41,6% of the variance in equity can be explained with this model.
Effect LLCI ULCI
Win-win vs self-centred on equity 0,43 ,08 1,50
Win-win vs other-centred on equity -0,04 -,36 ,27 Other-centred vs self-centred on equity 0,47 ,08 1,31
Number of bootstrap samples for bias corrected bootstrap confidence intervals: 1000 Level of confidence for all confidence intervals: 95,00
LLCI=Lower Limit Confidence Interval ULCI=Upper Limit Confidence Interval
Table 6: Results of the indirect effects of motive on equity via perceived otherness
When perceived motives is not in the model, we saw before that win-win significantly predicts equity. The indirect effect of the win-win motive versus the self-centred motive on equity is a beta of ,43 (with a confidence interval of 95% between ,08 and 1,50) (Table 6). The confidence interval does not include zero, therefore it is likely that there is a genuine indirect effect. In other words, perceived values is a mediator of the relationship between the win-win motive versus the self-centred motive and equity.
Hypothesis 2b predicts that the positive effect to communicate a win-win motive instead of an other-centred motive on equity is mediated by perceived motives from the professional buyers.
Table 7 (model 1) shows the regression results of the perceived degree of other-centred motives of the firm from the win motive versus other-other-centred motive. The win-win motive versus other-centred motive is not significant, with b = -,08 , t = -,26, p = ,799. This means that there is not a significant difference between the group with the win-win
34 motive and the group with the centred motive in the degree of perceived other-centred motive of the firm.
Perceived
otherness Equity
Model 1 Model 2 Predictors B Sig. B Sig. Win-win vignette -0,10 ,80 -0,28 ,51 Mediator Perceived otherness 0,40 ,03 * Controls Self-centred vignette -1,18 ,01 * -1,05 ,06 Realistic 0,31 ,01 * 0,19 ,18 Male -0,42 ,28 -0,77 ,08 Age 0,03 ,45 0,04 ,37
Economics and Business 0,26 ,52 0,12 ,78 Experience as a buyer 0,00 ,93 -0,04 ,48 Number of respondents 48 48 Explained variance ,30 ,42 F 2,45 * 3,48 ** Change in R2 0,12 *p < 0.05 **p < 0.01
Table 7: Results of the regression analyses testing the effect of the win-win motive versus the other-centred motive on equity mediated by perceived otherness
Table 7 (model 2) shows the regression results of equity from both the win-win motive versus the other-centred motive and the perceived degree of other-centred motives of the firm. The direct effect of the motive on equity stays not significant, with b = -,28 , t = -,66, p = ,511. The degree of other-centred motives of the firm predicts significantly equity, with b = ,40, t = 2,25, p = ,030. This is logically the same result as in model 2 in Table 5. Therefore, the explained variance is also the same with 41,6%.
When perceived motives is not in the model, the win-win motive versus the other-centred motive predicts not significantly equity. The indirect effect of the win-win motive versus the other-centred motive on equity is also not significant, with a beta of -,04 (Table 6). It is not significant, since the confidence interval of 95% is between -,36 and ,27: it is not significantly different from zero. This means that it is not significantly different from ‘no effect’. Therefore, perceived values is not a mediator of the relationship between the win-win motive versus the other-centred motive and equity. Hypothesis 2b is rejected.
35 Hypothesis 2c predicts that the positive effect to communicate an other-centred motive instead of a self-centred motive on equity is mediated by perceived motives from the professional buyers.
Perceived
otherness Equity Model 1 Model 2 Predictors B Sig. B Sig. Other-centred vignette 1,18 ,01 * 1,05 ,06 Mediator Perceived otherness 0,40 ,03 * Controls Win-win vignette 1,08 ,02 * 0,77 ,16 Realistic 0,31 ,01 * 0,19 ,18 Male -0,42 ,28 -0,77 ,08 Age 0,03 ,45 0,04 ,37
Economics and Business 0,26 ,52 0,12 ,78 Experience as a buyer 0,00 ,93 -0,04 ,48 Number of respondents 48 48 Explained variance ,30 ,42 F 2,45 * 3,48 ** Change in R2 0,12 *p < 0.05 **p < 0.01
Table 8: Results of the regression analyses testing the effect of the other-centred motive versus the self-centred motive on equity mediated by perceived otherness
Table 8 (model 1) shows the regression results of the perceived degree of other-centred motives of the firm from the other-other-centred motive versus the self-other-centred motive. The other-centred motive versus the self-centred motive is significant, with b = 1,18, t = 2,59, p = ,013. The significant positive beta means that the group respondents with an other-centred motive have a higher degree of perceived other-centred motive of the firm than respondents that saw the self-centred motive.
Table 8 (model 2) shows the regression results of equity from both the other-centred motive versus the self-other-centred motive and the perceived degree of other-other-centred motives of the firm. With perceived motives as possible mediator, the direct effect of the other-centred motive versus the self-centred motive becomes not significant, with b = 1,05, t = 1,91, p = ,063. Perceived motives significantly predicts equity, as can be seen in model 2 in Table 5 and model 2 in Table 7.
36 The indirect effect of the other-centred motive versus the self-centred motive on equity has a beta of ,47 (with a confidence interval of 95% between ,08 and 1,31). This is significantly different from zero, therefore it is likely that there is a genuine indirect effect. In other words, perceived values is a mediator of the relationship between the other-centred motive versus the self-other-centred motive and equity.
Hypothesis 3 predicts that perceived motives on equity is moderated by the price segment the professional buyer is purchasing for. The results are shown in Table 9.
Model 1 Model 2
Predictors B Sig. B Sig.
Mediator
Perceived otherness 0,40 ,03 * 0,36 ,10
Moderator
High price segment 0,32 ,54 -0,41 ,84 Perceived otherness * High price segment 0,16 ,70
Number of respondents 48 48
Explained variance ,42 ,42
F 3,08 ** 2,73 *
Change in R2 0,00
Model is including all control variables *p < 0.05
**p < 0.01
Table 9: Results of the analyses testing whether the buyers’ price segment moderates the effect from perceived otherness on equity
The first model in Table 9 is only different from the second model of Table 8 due to the inclusion of the price segment dummy. This dummy is not significant, with b = ,32, t = ,61, p = ,543. Adding this dummy in model 2 of Table 9 as moderator is in addition not significant. This means that the perceived degree of other-centred motives of the firm on equity is not significantly different for professional buyers that purchase products for the high price segment versus buyers that purchase products for the lower and medium price segment. Therefore, hypothesis 3 is neglected.
37
6. DISCUSSION
This thesis connected the business-to-consumer CSR research to the larger world of business-to-business transactions. There was almost no research conducted in a business-to-business environment. Vaaland, Heide and Grønhaug (2008: 947) indicated that most studies excluded business-to-business transactions. Therefore, this thesis investigated to what extent different motives for suppliers engaging in CSR effect the equity of professional buyers from Dutch retailers.
Earlier research has indicated that the communicated motives of a business have an effect on consumers’ willingness to buy. This thesis studied a possible effect on the equity of professional buyers for a supplier of products in their price segment. Professional buyers decide where they order the products they want to sell to consumers. Studying whether CSR motives have an effect on consumers is vital, since it is important to know to what extent this has an effect on the consumers’ willingness to buy. However, studying whether CSR motives have an effect on professional buyers is perhaps even more important. Specifically as professional buyers decides which products a consumer is able to buy. Hence, it is crucial to know to what extent different CSR motives have an effect on professional buyers.
6.1 RESULTS
The first block of hypotheses was about a direct influence of the suppliers’ communicated motive for engaging in CSR and equity. Both the win-win motive as the other-centred motive were significant different from the self-centred motive. This means that as it was hypothesized, there was a positive influence of those two motives compared to the self-centred motive on equity. However, the motives win-win and other-self-centred were not significantly different from each other. This means that based on the analyses for the first hypotheses we can conclude that the motive for engaging in CSR matters. It is advisable to communicate a win-win or other-centred motive instead of a self-centred motive. The
38 results of the first hypotheses (direct effect of communicated motive on equity) show that if a supplier communicates a win-win or other-centred motive, the professional buyers have a higher equity compared to the case that the supplier communicates a self-centred motive for engaging in CSR.
The second block of hypotheses was about the possible mediated effect of perceived motives. Earlier research had indicated that people assign one of two primary types of motives when a company tells that it engages in CSR (Becker-Olsen, Cudmore and Hill, 2006). This is also true when a company gives a motive for engaging in CSR. However, is this relationship also present in a B2B environment?
The results indicate that in two of the three cases, there is a mediated effect of perceived motives. In the cases that the win-win motive was compared to the self-centred motive as well as the other-centred motive to the self-centred motive, there was a significant effect on perceived motives. This means that people that read a win-win motive or an other-centred motive perceived a higher degree of other-centred motives of the supplier than people that read the self-centred motive. However, there was not a significant effect when the win-win motive was compared to the other-centred motive. Just as in the case with the first hypotheses, these two motives were not significant different from each other.
In the cases that the win-win motive is compared to the self-centred motive and the other-centred motive with the self-centred motive, the direct link between the motive and equity is not significant anymore. However, the indirect effect is significant. This means that a higher equity is significantly caused by the perceived degree of other-centred motives of the supplier. This perceived degree of otherness is significantly caused by the given motive of the supplier to engage in CSR activities.
The group that was presented the win-win motive was not significantly different on equity from the group who saw the other-centred motive, as the results of the first hypothesis have shown. This is also true for the effect on perceived otherness: these two vignettes are not significantly different from each other.
39 The research from Becker-Olsen, Cudmore and Hill (2006) has shown that people assign one of two primary motives. In their case, consumers have a higher willingness to buy if they assign other-centred motives to a firms’ CSR engagement. This thesis has shown that in a B2B-environment, professional buyers also assign a degree of perceived otherness to a suppliers’ CSR engagement. This in turn leads to a higher degree of equity. Kim (2014) compared win-win motives to respondents that only were exposed to self-centred motives or other-centred motives. Kim concluded that respondents that were exposed to win-win motives had a higher degree of support for the company and to purchase products from that company compared to respondents who saw only one of the two types of motives. In addition, Kim (2014) found that a firm should have a good image to communicate only other-centred motives. If companies have poor reputations, it can have backlash effects. People have a higher level of scepticism if a firm with a poor reputation communicates only other-centred motives for engaging in CSR. Kim argues that it is therefore better to communicate a combination of self-centred and other-centred motives for engaging in CSR: win-win motives. The research of Kim indicates that there is a significant difference between the win-win motive and the other-centred motive under consumers. However, in this thesis it was not the case under professional buyers. Further research should study whether this is due to the specific sample of this thesis or that the motives functions differently in a B2B environment.
The third hypothesis was about the expected moderated effect of the price segment of the buyers. Adding the price segment dummy to the model as moderator between perceived otherness and equity showed that there was not a significant difference between buyers that purchase products for the lower and medium price segment compared to buyers that purchase for the higher segment. As indicated earlier, too few buyers purchased products for the lower price segment. Therefore, buyers from the lower price segment and the medium price segment were combined in all analyses. It can be that this has influenced the results.
