Journal of Business Ethics

, Volume 84, Issue 1, pp 1–15 | Cite as

The Missing Link Between Corporate Social Responsibility and Consumer Trust: The Case of Fair Trade Products

  • Sandro Castaldo
  • Francesco Perrini
  • Nicola Misani
  • Antonio Tencati
Article

Abstract

This paper investigates the link between the consumer perception that a company is socially oriented and the consumer intention to buy products marketed by that company. We suggest that this link exists when at least two conditions prevail: (1) the products sold by that company comply with ethical and social requirements; (2) the company has an acknowledged commitment to protect consumer rights and interests. To test these hypotheses, we conducted a survey among the clients of retail chains offering Fair Trade products. The results show that socially oriented companies can successfully leverage their reputation to market products with high symbolic values.

Keywords

consumer behavior Corporate Social Responsibility Fair Trade retail structural equation models trust 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Bagozzi R. P., H. Baumgartner 1994. The Evaluation of Structural Equation Models and Hypothesis Testing, in R. P. Bagozzi (ed.), Principles of Marketing Research (Blackwell, Cambridge, MA), pp. 386–422Google Scholar
  2. Bagozzi R. P., Y. Yi 1988, On the Evaluation of Structural Equation Models. Journal of the Academy of Marketing Science 16(2), 74–94CrossRefGoogle Scholar
  3. Bagozzi R. P., Y. Yi, L. W. Phillips 1991, Assessing Construct Validity in Organizational Research. Administrative Science Quarterly 36(3), 421–458CrossRefGoogle Scholar
  4. Barber B. 1983 The Logic and Limits of Trust. Rutgers University Press, New Brunswick, NJGoogle Scholar
  5. Barbetta, G. P. 2006 ‹Il commercio equo e solidale in Italia’, Working paper n. 3, CRC – Università Cattolica, Milan, Italy.Google Scholar
  6. Barnett M. L. 2007 Stakeholder Influence Capacity and the Variability of Financial Returns to Corporate Social Responsibility. Academy of Management Review 32(3), 794–816Google Scholar
  7. Bentler P. M. 1992 On the Fit of Models to Covariances and Methodology to the Bulletin. Psychological Bulletin 112, 400–404CrossRefGoogle Scholar
  8. Bhattacharya C. B., S. Sen 2004 Doing Better at Doing Good: When, Why, and How Consumers Respond to Corporate Social Initiatives. California Management Review 47(1), 9–24Google Scholar
  9. Blomqvist K. 1997 The Many Faces of Trust. Scandinavian Journal Management 13(3), 271–286CrossRefGoogle Scholar
  10. Boulstridge E., M. Carrigan 2000 Do Consumers Really Care About Corporate Responsibility? Highlighting the Attitude–Behaviour Gap. Journal of Communication Management 4(4), 355–368CrossRefGoogle Scholar
  11. Bowen H. R. 1953 Social Responsibilities of the Businessman. Harper and Brothers, New York, NYGoogle Scholar
  12. Brown T. J., P. A. Dacin 1997 The Company and the Product: Corporate Associations and Consumer Product Responses. Journal of Marketing 61, 68–84CrossRefGoogle Scholar
  13. Browne M. W., R. Cudeck 1993 Alternative Ways of Assessing Model Fit, in K. A. Bollen, J. S. Long (eds.), Testing Structural Equation Models (Sage, Newbury Park, CA), pp. 136–162Google Scholar
  14. Byrne B. M. 1998 Structural Equation Modeling with Lisrel, Prelis, and Simplis. Erlbaum, Mahwah, NJGoogle Scholar
  15. Carrigan M., A. Attalla 2001 The Myth of the Ethical Consumer – Do Ethics Matter in Purchase Behaviour? Journal of Consumer Marketing 18(7), 560–577CrossRefGoogle Scholar
  16. Castaldo, S.: 2007, Trust in Market Relationships (Edward Elgar Publishing Ltd, Cheltenham, UK).Google Scholar
  17. Castaldo, S. and F. Perrini: 2004, ‹Corporate Social Responsibility, Trust Management, and Value Creation’, presented at EGOS 2004 “Trust in Hybrids”, Ljubljana, Slovenia.Google Scholar
  18. Chaudhuri A., M. B. Holbrook 2001 The Chain of Effects from Brand Trust and Brand Affect to Brand Performance: The Role of Brand Loyalty. Journal of Marketing 65, 81–93CrossRefGoogle Scholar
  19. Commission of the European Communities: 2001, Green Paper ‹Promoting a European Framework for Corporate Social Responsibility’, COM (2001) 366 final, Brussels, Belgium.Google Scholar
  20. Commission of the European Communities: 2007, Opportunity and Responsibility. How to Help More Small Businesses to Integrate Social and Environmental Issues into What they do (Commission of the European Communities, Brussels, Belgium).Google Scholar
  21. Coop: 2005, ‹Prospettive per il Commercio Equo e Solidale in Italia e in Europa’, Coop Meeting, Genoa, Italy.Google Scholar
  22. Creyer E. H., W. T. Ross 1997 The Influence of Firm Behavior on Purchase Intention: Do Consumers Really Care About Business Ethics? Journal of Consumer Marketing 14(6), 421–432CrossRefGoogle Scholar
  23. Crosby L. A., K. R. Evans, D. Cowles 1990 Relationship Quality in Services Selling: An Interpersonal Influence Perspective. Journal of Marketing 54, 68–81CrossRefGoogle Scholar
  24. Donaldson T., L. E. Preston 1995 The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications. Academy of Management Review 20(1), 65–91CrossRefGoogle Scholar
  25. Dwyer R., P. Schurr, S. Oh 1987 Developing Buyer–Seller Relationships. Journal of Marketing 51, 11–27CrossRefGoogle Scholar
  26. EFTA (European Fair Trade Association): 2002, EFTA Yearbook: Challenges of Fair Trade 2001–2003 (EFTA, Maastricht, Netherlands), http://www.european-fair-trade-association.org/Efta/Doc/yb01-en.pdf.
  27. EFTA (European Fair Trade Association): 2007, Annual Report 2006, http://www.eftafairtrade.org.
  28. Ellen P. S., L. A. Mohr, D. J. Webb 2000 Charitable Programs and the Retailer: Do they mix? Journal of Retailing 76(3), 393–406CrossRefGoogle Scholar
  29. FLO (Fairtrade Labelling Organizations International): 2007, Shaping Global Partnerships. Annual Report 2006/2007, http://www.fairtrade.net.
  30. Fornell C., D. F. Larcker 1981 Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Marketing Research 18, 39–50CrossRefGoogle Scholar
  31. Freeman R. E. 1984 Strategic Management: A Stakeholder Approach. Pitman, Boston, MAGoogle Scholar
  32. Garbarino E., M. S. Johnson 1999 The Different Roles of Satisfaction, Trust, and Commitment in Customer Relationships. Journal of Marketing 63, 70–87CrossRefGoogle Scholar
  33. Gebben C., M. Gitsham 2007 Food Labeling: Understanding Consumer Attitudes and Behaviour. Ashridge Business School, Berkhamsted, UKGoogle Scholar
  34. Goodman M. K. 2004 Reading Fair Trade: Political Ecological Imaginary and the Moral Economy of Fair Trade Foods. Political Geography 23, 891–915CrossRefGoogle Scholar
  35. Hagen J. M., S. Choe 1998 Trust in Japanese Interfirm Relations: Institutional Sanctions Matter. Academy of Management Review 23(3), 589–600CrossRefGoogle Scholar
  36. Harford T. 2005 The Undercover Economist. Oxford University Press, Oxford, UKGoogle Scholar
  37. Hira A., J. Ferrie 2006 Fair Trade: Three Key Challenges for Reaching the Mainstream. Journal of Business Ethics 63(2), 107–118CrossRefGoogle Scholar
  38. Hyscox, M. J. and N. F. B. Smyth: 2007, ‹Is There Consumer Demand for Improved Labor Standards? Evidence from Field Experiments in Social Product Labeling’, Working paper, Department of Government, Harvard University, Cambridge, MA.Google Scholar
  39. Ims K. J., O. D. Jakobsen 2006 Cooperation and Competition in the Context of Organic and Mechanic Worldviews – a Theoretical and Case Based Discussion. Journal of Business Ethics 66(1), 19–32CrossRefGoogle Scholar
  40. Joreskog K. G, D. Sorbom 1993 Structural Equation Modeling with the SIMPLIS Command Language. Scientific Software International, Chicago, ILGoogle Scholar
  41. Joreskog K. G, D. Sorbom 2002 LISREL 8: Structural Equation Modeling with the SIMPLIS Command Language, 5th printing. Scientific Software International, Lincolnwood, ILGoogle Scholar
  42. Kennedy M. S., L. K. Ferrel, D. T. LeClair 2001 Consumers Trust of Salesperson and Manufacturer: An Empirical Study. Journal of Business Research 51(1), 73–86CrossRefGoogle Scholar
  43. Low W., E. Davenport 2006 Mainstreaming Fair Trade: Adoption, Assimilation, Appropriation. Journal of Strategic Marketing 14(December), 315–327CrossRefGoogle Scholar
  44. Margolis J. D., J. P. Walsh 2003, Misery Loves Companies: Rethinking Social Initiatives by Business. Administrative Science Quarterly 48, 268-305CrossRefGoogle Scholar
  45. Mayer R. C., J. H. Davis, F. D. Schoorman 1995, An Integrative Model of Organizational Trust. Academy of Management Review 20(3), 709–734CrossRefGoogle Scholar
  46. McWilliams A., D. Siegel 2000, Corporate Social Responsibility and Financial Performance: Correlation or Misspecification? Strategic Management Journal 21, 603–609CrossRefGoogle Scholar
  47. McWilliams A., D. Siegel 2001, Corporate Social Responsibility: A Theory of the Firm Perspective, Academy of Management Review 26(1), 117–127CrossRefGoogle Scholar
  48. Mohr L., D. Webb, K. Harris 2001, Do Consumers Expect Companies to be Socially Responsible? The Impact of Corporate Social Responsibility on Buying Behavior, Journal of Consumer Affairs 35, 45–72CrossRefGoogle Scholar
  49. Moore G. 2004, The Fair Trade Movement: Parameters, Issues and Future Research. Journal of Business Ethics 53(1–2), 73–86CrossRefGoogle Scholar
  50. Morgan R. M., S. D. Hunt 1994, The Commitment–Trust Theory of Relationship Marketing. Journal of Marketing 58, 20–38CrossRefGoogle Scholar
  51. Oliver, R. L.: 1999, ‹Whence Consumer Loyalty’, Journal of Marketing, Special Issue, 33–44Google Scholar
  52. Orlitzky M., F. L. Schmidt, S. L. Rynes 2003, Corporate Social and Financial Performance: A Meta-Analysis, Organization Studies 24(3), 403–441CrossRefGoogle Scholar
  53. Page G., H. Fearn 2005, Corporate Reputation: What do Consumers Really Care About? Journal of Advertising Research 45(3), 305–313CrossRefGoogle Scholar
  54. Perrini F., S. Pogutz, A. Tencati 2006, Developing Corporate Social Responsibility. A European Perspective. Edward Elgar Publishing Ltd, Cheltenham, UKGoogle Scholar
  55. Porter M. E., M. R. Kramer 2006, Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review 84(12), 78–92Google Scholar
  56. Potts, N. J.: 2004, Fairness with your Coffee? (Ludwig von Mises Institute, Auburn, AL), http://www.mises.org/.
  57. Rotter J. B. 1971, Generalized Expectancies for Interpersonal Trust. American Psychologist 26, 443–452CrossRefGoogle Scholar
  58. Rubbens, C. and C. Wessels: 2004, ‹The Business Case for CSR: In What Way does CSR Contribute to Competitiveness?’, E-discussion, The World Bank, Washington, DC.Google Scholar
  59. Schoorman F. D., R. C. Mayer, J. H. Davis 2007, An Integrative Model of Organizational Trust: Past, Present, and Future. Academy of Management Review 32(2), 344–354Google Scholar
  60. Schuler D. A., M. Cording 2006, A Corporate Social Performance–Corporate Financial Performance Behavioral Model for Consumers. Academy of Management Review 31(3), 540–558CrossRefGoogle Scholar
  61. Sellers, F. S.: 2005, ‹Gift-Wrapped Guilt?’, Washington Post, December 18, B01.Google Scholar
  62. Sen S., C. B. Bhattacharya 2001, Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Social Responsibility. Journal of Marketing Research 38, 225–243CrossRefGoogle Scholar
  63. Smith N. C. 2003, Corporate Social Responsibility: Whether or How? California Management Review 45(4), 52–76Google Scholar
  64. Taylor P. L. 2005, In the Market but not of It: Fair Trade Coffee and Forest Stewardship Council Certification as Market-Based Social Change. World Development 33(1), 129–147CrossRefGoogle Scholar
  65. Tencati A.: 2002, Managing Sustainability, in L. Zsolnai (ed.), Ethics in the Economy. Handbook of Business Ethics (Peter Lang Academic Publisher, Oxford and Bern), pp. 187–209Google Scholar
  66. Vitell S. J. 2003, Consumer Ethics Research: Review, Synthesis, and Suggestions for the Future. Journal of Business Ethics 43(1–2), 33–47CrossRefGoogle Scholar
  67. Waddock S. A., S. B. Graves 1997, The Corporate Social Performance–Financial Performance Link. Strategic Management Journal 18, 303–319CrossRefGoogle Scholar
  68. Weber J. 2007, Fair Trade Coffee Enthusiasts Should Confront Reality. Cato Journal 27(1), 109–117Google Scholar
  69. Wong A., A. Sohal 2002, An Examination of the Relationship Between Trust, Commitment and Relationship Quality. International Journal of Retail and Distribution Management 30(1), 34–50CrossRefGoogle Scholar
  70. Wood D. J. 1991, Corporate Social Performance Revisited. Academy of Management Review 16(4), 691–718CrossRefGoogle Scholar
  71. Yoo B., N. Donthu 2001, Developing and Validating a Multidimensional Consumer-based Brand Equity Scale. Journal of Business Research 52, 1–14CrossRefGoogle Scholar
  72. Zadek, S., S. Lingayah and M. Forstater: 1998, Social Labels: Tools for Ethical Trade, Final Report (Commission of the European Communities, Brussels, Belgium).Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2008

Authors and Affiliations

  • Sandro Castaldo
    • 1
  • Francesco Perrini
    • 2
  • Nicola Misani
    • 2
  • Antonio Tencati
    • 3
  1. 1.Department of Management/CSR UnitInstitute of Marketing, Bocconi UniversityMilanItaly
  2. 2.Department of Management/CSR UnitInstitute of Strategy, Bocconi UniversityMilanItaly
  3. 3.Department of Management/CSR UnitInstitute of Technology and Innovation Management, Bocconi UniversityMilanItaly

Personalised recommendations