Corporate Social Responsibility And Financial Performance From The Consumer Perspective

With the economic globalization speeding up, market competition is increasingly fierce, and corporate social responsibility (CSR) has become an important strategy for companies to gain competitive advantages. At the same time, both consumers’ expectations and demands for corporate social responsibility are further improved, not only consumers expect companies to handle issues related to the products and services, but also require companies to deal with social and environmental issues. Although previous fruitful studies have shown that positive CSR activities can improve corporate performance, in reality, negative and low levels of CSR activities that companies have done, forming a gap between theoretical results and practical applications. One reason for this phenomenon is corporates’ consideration between costs and benefits of CSR, but more important, the other reason is that most businesses do not know how to do CSR activities efficiently. Most companies neither know the consumers’ expectation of CSR, nor know the gap between the CSR activities they do and consumers’ expectations. Besides, they even don’t know how to make up for this gap. More practical guidance is needed for companies now. Urgent needs from practical level also make theoretical study of CSR need to shift its focus from the past "what" and "why" to "how".In order to solve the problem of how to fulfill corporate social responsibility better, this article is aimed to provide more practical research result for companies. From a consumer perspective, this paper combines the consumer expectations of CSR with the relationship research between CSR and corporate performance by innovative use of Value Engineering (VE) methods and thoughts. This paper also proposes a new concept, named "CSR expectation deviate level", as a new measure of CSR level, and then tests the relationship between this new concept and corporate financial performance. The moderate effect of marketing capability is tested too. The final results show that:(1) differences of consumers’ attention and emphasis exist among all aspects of CSR, and consumers’ expectations of all aspects of CSR will differ depending on the industry, therefore, companies should choose the right domains of CSR to do;(2) the "total CSR expectation deviate level" has negative effect on financial performance, therefore, companies should make overall planning of CSR activities with reasonable allocation of CSR resources to reduce the overall CSR gap with consumer expectations;(3) marketing capability has a significant moderate effect on the relationship between corporate social responsibility and financial performance, as a consequence, companies have to enhance their marketing capability in order to get more in return from effective CSR activities;(4) methods and thoughts of Value Engineering enable companies to examine their own lack of CSR, and provide practical ideas and methods for CSR improvement solutions design.