Elsevier

Industrial Marketing Management

Volume 93, February 2021, Pages 115-123
Industrial Marketing Management

Research paper
Does corporate social responsibility matter even in the B2B market?: Effect of B2B CSR on customer trust

https://doi.org/10.1016/j.indmarman.2020.12.008Get rights and content

Highlights

  • Previous CSR researches have focused on B2C side, but recently, CSR is becoming an important issue in the business-to-business market.

  • Business practice CSR and altruistic CSR activities have positive effects on developing business relationships.

  • Corporate social responsibility derives B2B relationship performance and trust building.

Abstract

This study attempts to understand how Corporate Social Responsibility (CSR) positively influences the quality of business relationship in the business-to-business market. The purpose of this article is to suggest the CSR model in the B2B context. First, this study discerns two dimensions of firms' CSR activities based on the previous studies in B2B area - Business CSR and Altruistic CSR. Furthermore, we tried to investigate the CSR activities affecting the result of the development of business relationships (economic and non-economic factors) and customer trust as a relationship performance in the B2B market. Managerial implications and limitation of the study were also discussed.

Introduction

Recently, Corporate Social Responsibility (CSR) has become an important social issue all over the world. Most businesses are required to take social responsibility from the perspective of all of the company stakeholders. Moreover, CSR has been recognized as one of the important marketing activities for maintenance of good relationships with consumers (Balmer & Greysner, 2006). In the past, most academic researches of CSR have been conducted in the field of business-to-consumer (B2C) side.

Characteristics of business-to-business market is very different from those of business-to-consumer market. Traditionally, price, on-time delivery, and technical quality have been recognized as the most important factors in B2B market rather than cognitive or emotional factors which are very critical factors in B2C market. However, recently, not only economic factors but also some social or non-economic factors are being recognized as important factors in the B2B industry. Homburg, Stierl, and Bornemann (2013) also noted that CSR is not only exclusively reserved for B2C companies but rather represents a universal necessity which also includes companies operating in B2B markets.

Since there are a considerable number of differences between organizational buyers and final consumers, a separate discussion regarding CSR activities in the B2B field is needed to take place. It is obvious that CSR of suppliers and the corresponding assessment of buyers have to be dealt with in a practical way because buyer's perception of supplier's CSR is becoming an important factor of supplier selection and the successful business relationship.

This study tried to extend the research field of CSR into business-to-business (B2B) context. Therefore, this study suggests that identifying the role of CSR can be an important factor of corporate marketing strategy. Even though the strategic meaning of CSR is becoming very critical, previous researches about CSR in the context of B2B market are very scarce (Homburg et al., 2013; Hutchins, Sinha, & Nandan, 2019).

Trust has been one of the most critical factors of the successful business-to-business relationship (Blenkhorn & MacKenzie, 2017; Doney & Cannon, 1997). This study ultimately aims to figure out whether CSR activities can have a positive effect on trust and the relationship performance between enterprises. Through the verification of the effect of the CSR activities in the B2B field, not only the companies which deal with consumer goods but also the industry material firms can have the opportunity to assess and consider the importance of CSR.

Today, CSR is a core concept when it comes to discussing the relationship between business and society. Kim and Yoo (2013) insisted that companies' constant growth is determined by the maintenance of stakeholders' relationships. Thus, companies should try to accord with the ethical level of stakeholders in the process of conducting business activities and implementing various CSR activities in order to improve the value of firms on a long-term perspective is very important. CSR activities are regarded as strategically important corporate activities toward a number of firms internationally. Among the Fortune 500 companies, 90% has a CSR activity plan and more than 50% publish ‘Annual CSR Report’ (Luo & Bhattacharya, 2009).

Many studies have proved that CSR activities play a pivotal role in improving the corporate value by generating a positive business environment. Thus, companies started to have more interest toward CSR and they have begun to organize the movements to devise strategic plans to take advantage of their resources effectively in the process of performing CSR activities.

Companies can achieve sustainable growth by possessing the attitude of pursuing the realization of social values and the rationality of corporate management through CSR activities. In a bid to achieve the fundamental purpose of enterprises and for them to generate social values, the roles of CSR have to be established in the society (Pracejus, Deng, Olsen, & Messinger, 2020). Companies and the society can develop further under such a management philosophy.

In the past, CSR has been viewed as some required activities of profit organizations from the public policy perspective. However, there is a wide variety of views about the meaning of CSR and one of the key issues about CSR is how the concept of CSR relates to marketing performance. In contrast to the large amount of marketing studies addressing the effects of CSR on consumer outcomes, researchers have paid only little attention toward CSR from the B2B marketing perspective (Vaaland, Heide, & Gronhaug, 2008). Considering that academic researches on B2B CSR have been limited so far, it will be worthy of conducting researches about the antecedents and outcomes of CSR in the B-to-B markets (Balmer & Greysner, 2006).

Section snippets

B2B CSR

Recently in the B-to-B market, there is a growing consensus that buyers demand social responsibility activities from their suppliers. Global companies such as IBM, Sony, and Philips recently made CSR-based procurement standards for parts and components. These companies are requiring some acceptable standards from their suppliers to continue their business relationships. Nike terminated their 30-year business relation with Daewoo International because Daewoo International did not take social

Underlying factors for successful B2B relationship and trust

Relationship is a core concept to the successful B2B transactions. A lot of researches focused on relationship marketing in B2B field. It has emphasized that relationship is very important in business to business context. Therefore, B2B companies need to make more effort to relational exchange.

When it comes to the formation and maintenance of relationships between the B2B enterprises, various variables have to be taken into consideration. Most of all, since the economic factors have to be

Supply risk

Supply risk refers to the occurrence possibility of the incidents that bring about the supply failures from either suppliers or supply markets in the process of supplying commodities from the original supplier or other suppliers to buyers and enterprises can lose competitiveness through it (Harland, Brenhley, & Walker, 2003). There are a variety of sources that bring about supply risk. The problems related to products just like the problems of suppliers – quality control, inventory control,

Corporate image

The role of corporate image has become very important in today's business environment because the image affects consumer reaction and this leads directly to corporate performance. Kotler and Pfoertsch (2007) defined image as an individual's belief, idea, and impression toward a certain object. An object's image assumes a significant role when it comes to assessment and the image is formed through various marketing channels.

Corporate image is crucial in the businesses between enterprises since

Reputation

Normally, corporate reputation shows similarities with corporate image in terms of concept. However, recently, reputation and image are translated as two individual concepts and assessed to be the factors that mutually affect each other (Cha, 2005; Gotsi & Wilson, 2001).

Previous researches have treated reputation and image as two different constructs (Fombrun, 1996; Fombrun & Riel, 1997). Especially, Balmer, 2001 (2001) distinguished image from reputation. According to Balmer (2001)’s study,

Social connectedness

Social connectedness is known as the indicator which signifies the sense of belonging with regard to how close I am mentally connected to the members of the society I belong or the group (Pretty, 2002). Social connectedness is called as the cognitive and emotional relationship through the interactions of respective subjects (Baldwin, 1994). This is assessed to be a type of social capital because there is a higher reliability when social connectedness gets higher (Woike, 1994).

The study by

Types of CSR

Since the concept of CSR is broad and the perspective differs according to respective professionals, understanding CSR as a singular concept narrows the scope of study and brings about difficulties in drawing managerial implications. Thus, comparing and examining the various forms of CSR activities is the first stage in providing significant implications.

Carroll (1979) divided CSR into four types: economic responsibility, legal responsibility, ethical responsibility, and discretionary

Scale redefine

As mentioned so far, this study tried to categorize the types of CSR into Business CSR and Altruistic CSR based on the CSR classification categories of Lantos (2001), Quazi and O'Bren (2000), Homburg et al. (2013) and establish the corresponding scale items.

Jamali (2007) posit that Carroll's four factor CSR structure can be categorized into two dimensions including voluntary CSR and mandatory CSR. Quazi and O'Bren (2000) and Homburg et al. (2013) are also trying to explain B2B CSR from the two

Methodology

The sample frame comprised 300 purchasing managers from each different business group of the various industrial companies and finally, data were gathered from 223 key informants who work in the industrial buying center. Considering the relatively high response rate, non-response bias is not an issue in this study. Each respondent answered the questions about the business relationships with the specific supplier. The characteristics of the samples of this study – respondents' gender, age,

Conclusions and implications

This study tried to identify the roles of corporate social responsibility in the business relations between companies by expanding the scope of the studies which were conducted until now. Suppliers are also perceived as very important stakeholders to enterprises and, since CSR has become a social issue recently with regard to suppliers, the significance of CSR needs to be understood in the business relations between firms.

Major findings of this study are summarized as the following. First, this

Acknowledgement

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

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