Customer Outcomes of Corporate Social Responsibility in Supplier-Customer Relationships
Christian Homburg, Marcel Stierl, and Torsten Bornemann, 2013, 13-119
A number of studies in a business-to-consumer context have established a positive link between a firm’s corporate social responsibility (CSR) activities and important consumer outcomes. Even though business-to-business companies are often at the forefront of engaging in CSR, research in a B2B environment is scarce and largely focuses on how a firm implements CSR issues within the firm’s business operations and the development and adherence to codes of conduct.
To address this research gap, Christian Homburg, Marcel Stierl, and Torsten Bornemann develop and empirically test a framework of the influence of a supplier’s CSR engagement on organizational customer outcomes, relying on instrumental stakeholder theory. Their analyses are based on 200 matched supplier–customer dyads from a broad range of B2B industries. They collect dyadic data by surveying purchasing managers from the customer firm and the respective marketing/sales person from the supplier firm.
Their findings reveal positive effects of two distinct facets of a supplier’s CSR. Business practice CSR – that is, activities within a firm’s core business operations targeted at stakeholders with whom market exchange exists – fosters customers’ trust. Philanthropic CSR – that is, activities targeted at secondary stakeholders outside a firm’s core business operations – strengthens customer–company identification.
The authors also distinguish between a supplier’s actual CSR engagement and customers’ perception of these CSR activities. In addition, they consider central contingency factors reflecting uncertainty and dependence in B2B relationships that determine CSR effectiveness.
Overall, their results clearly show that engaging in CSR-related activities is a worthwhile endeavor for B2B firms. Carefully targeted CSR activities can raise organizational customers’ trust and identification, both of which foster customer loyalty.
If the primary goal is to increase customers’ trust, managers should focus on business practice CSR engagement. If the goal is to foster customer–company identification, managers should consider activities in the philanthropic CSR domain. B2B managers should also consider contextual factors that influence the effectiveness of CSR, for example, the prevailing level of market-related uncertainty, the strategic importance of their products to customers, and the CSR orientation of their customer base.
Finally, managers must ensure that customers are aware of their CSR activities and, at the same time, avoid the perception of “greenwashing”. To achieve this, managers should proactively include CSR issues in their business strategy, engage in CSR in a continuous manner, and communicate their efforts transparently.
Christian Homburg is Professor of Business Administration and Marketing, Chairman of the Department of Marketing at the University of Mannheim, Germany, and Professorial Fellow at the Department of Management and Marketing at the University of Melbourne, Australia. Marcel Stierl is Postdoctoral Researcher at the Department of Marketing at the University of Mannheim, Germany. Torsten Bornemann is Professor of Business Administration and Marketing at the Institute of Business Administration at the University of Stuttgart, Germany.
The authors thank the Marketing Science Institute for financial support of this research.
How Corporate Social Performance Influences Financial Performance: Cash Flow and Cost of Capital
Manoj K. Agarwal and Guido Berens (2009) [Report]
- Corporate: FREE
- Academic: FREE
- Subscribers: FREE
- Public: $18.00
3 WAYS to GET CONNECTED
Employees of MSI Member Companies enjoy the benefits of complete online access to content, member conferences and networking with the MSI community.
Qualified academics benefit from a relationship with MSI through access to msi.org, conferences and research opportunities.
The public is invited to enjoy partial access to msi.org content, a free e-newsletter, selected reports and more.