Market Orientation and CSR: Performance Implications

Abstract

Corporate social responsibility (CSR) has become of great interest to both researchers and practitioners alike with much discussion on whether the costs outweigh the performance implications. CSR has become a firm strategic tool (not only an ethical concept) as firms recognize that the customer value proposition and CSR is integrated with the focus on how to differentiate the firm from the view of the customer. We utilized market orientation (MO) theory as our foundation for our research as it explains how organizations adapt to their customer environment to develop competitive advantages. With the current customer focus on CSR, MO assists the field in identifying a possible firm differentiation. Our research found that firms that ranked high on CSR correlated positively to performance. We also found our theoretically developed constructs of firm customer orientation (CO) and firm market orientation correlated with the firm adopting CSR. The results also indicated that CSR positively mediates CO and MO to firm performance. As past research had mixed results over the direct relation of MO to performance, our research suggests that CSR may be the missing variable to explain the MO/Performance relationship.

The Impact of Health Corporate Socıal Responsıbılıty (CSR) Actıvıtıes on Brand Attıtude and Customers’ Loyalty in Two Bıg Cıtıes of Indonesıa

“…Kiessling, Isaksson, and Yasar (2015) explained that although many companies conducted CSR activities, it must be recognized that such activities were driven directly or indirectly by the stakeholders. The stakeholders might have different perceptions of reasons why a company engaged in CSR activities (Ellen et al, 2006;Bronn and Vidaver-Cohen, 2008;Feldman and Vasquez-Parraga, 2013;Cantrell et al 2014 …”

“…Not only that CSR can increase profit but it also has impacts on social and environmental issues (Peloza and Shang, 2011). Many CSR activities are driven directly or indirectly by stakeholders (Kiessling, Isaksson, and Yasar, 2015). CSR and sustainability are the two themes commonly used in discussions about the economic contribution of business, social, and environmental as consequences of business activities (Torugsa, O'Donohue, and Hecker, 2013).…”

Prosocial Compensation Following a Service Failure: Fulfilling an Organization’s Ethical and Philanthropic Responsibilities

“…Companies are under increasing pressure from shareholders, customers, employees, and society to enhance their social activities (Cantrell et al 2015;Kiessling et al 2016;Pérez and del Bosque 2015). CSR initiatives are a corporate response to this environment in which regulations, non-governmental actors, and institutionalized norms set expectations about appropriate organizational behavior (Campbell 2007).…”

“…CSR initiatives are a corporate response to this environment in which regulations, non-governmental actors, and institutionalized norms set expectations about appropriate organizational behavior (Campbell 2007). As such, CSR has transformed from being a 'goodwill' concept into a mainstream development (Bolton and Mattila 2015;Kiessling et al 2016) and a key determinant of long-term performance and corporate success (Kiessling et al 2016). First, by engaging in CSR, companies face fewer risks, and avoid customer and activist boycotts (Groza et al 2011;Pérez and del Bosque 2013a).…”

“…CSR is increasingly becoming a mainstream corporate development (Bolton and Mattila 2015) and seen as a determinant of an organization's success (Kiessling et al 2016). It is important to distinguish the ethical and philanthropic dimensions of companies' CSR responsibilities from the economic and legal dimensions (Carroll 1991;Wood 2010).…”