Corporate social responsibility in the retail business model: Four modes from skeptic penny-pinchers to proficient utilizers

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School of Economics | Master's thesis
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CORPORATE SOCIAL RESPONSIBILITY IN THE RETAIL BUSINESS MODEL: Four modes from skeptic penny-pinchers to proficient utilizers This study explores corporate social responsibility (CSR) as a part of retail firms’ business models. Specifically, the objective was to investigate how corporate social responsibility is implemented in the retail business model to create competitive advantage. This problem was first approached through previous literature on CSR and business models as well as through secondary data analysis of retailers’ CSR documentation. A quantitative empirical investigation was conducted based on the theoretical discussion and qualitative findings. The empirical data was collected through an online survey aimed at the senior managers of Finnish retail companies. The questionnaire reached 2061 executives, of which 183 completed the survey, yielding a response rate of 8.5%. Several multivariate data analysis techniques were used to address the research questions. First, the data was analyzed with the exploratory factor analysis to identify the components that form a retail business model from a corporate social responsibility perspective. Second, these components were used to further categorize firms into groups based on the approach towards corporate social responsibility they adopt as a part of their business model. Finally, these groups were examined with the analysis of variance to discover whether the differences between the groups could be explained through the competitive strategy they follow. The findings of this study identify five underlying components. These are sustainable offering, responsible corporate image, CSR-based competitive advantage, fair pricing model and strategic philanthropy, which manifest the role corporate social responsibility as a part of the retail business model. These components were found to be emphasized differently in the four identified groups of firms. The groups were labeled as silent do-gooders, skeptic penny-pinchers, cosmetic communicators and proficient utilizers, based on their distinctive characteristics. The competitive strategy dominant in each group could explain some of the differences between these groups. This study provides an overall view of how corporate social responsibility is implemented in the Finnish retail industry. For the business practitioners it provides evidence on how decisions on various responsibility issues should be considered with regard to the firm business model and based on their chosen (competitive) strategy. This approach helps to realize the potential CSR has to offer both as an investment and as a platform for business innovations. Finally, this study offers ground for future studies that would more thoroughly explore the performance implications of different CSR approaches as a part of firm business models as well as conduct comparisons between different industries and countries.
Corporate social responsibility, business model, competitive advantage, competitive strategy, retail, multivariate analysis
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