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Corporate Social Responsibility in the B2B Market: How Supplier Actions Influence Buyer Expectations



This research investigated the effects of supplier corporate social responsibility (CSR) on buyer expectations
of corporate brand performance as well as the mediating effects of brand equity on buyer expectations of
brand performance. For decades, organizations have integrated CSR as a business strategy to engage multiple
stakeholders in a favorable manner. Extensive literature has revealed how CSR drives brand equity to sustain a
brand’s competitive advantage through improved protability and reputation in the market; it also has indicated
the value of CSR as inuencing brand performance. This research successfully closed gaps in the extant literature
by addressing the inuence of CSR as viewed by U.S. buyers in the business-to-business environment, thus
explaining value creation and redistribution through the inuence of stakeholder theory. Analysis revealed that
supplier CSR signicantly inuenced brand performance expectations of buyers, with brand equity working to
enhance brand performance expectations. Conrming that supplier CSR investment translated to a competitive
advantage with business-to-business customers highlighted the available potential of targeted spending by
supplier organization marketing divisions to key stakeholder groups.
Corporations today focus on integrating corporate social responsibility initiatives as a business strategy to engage
multiple stakeholders in a favorable manner. This commitment is a dynamic contrast to 20th-century businesses’
concentration on prot margins that were derived from rened industry production or management standards.
Famed economist Milton Friedman (1970) reinforced this last-century operational standard by insisting that
corporate America was obliged to focus on shareholder prots and nothing more. He expanded on this stated
obligation, suggesting that to spend on social and environmental concerns was to deny shareholders their rightful
returns on their investment in the company.
At about the same time as Friedman’s declaration, classic thinking about organizational theory was impacted
by new ideas such as stakeholder legitimacy in management (Freeman & Reed, 1983), stakeholder negotiation
processes (Charan & Freeman, 1980), and specic techniques of stakeholder management (Emshoff & Freeman,
1981). In opposition to Friedman’s (1970) claim that a company’s sole responsibility was to its shareholders,
Freeman (1984) summarized this new thinking, terming stakeholders as any entity affected by or able to impact
the rm’s strategic objectives. Explaining, Freeman indicated that each of these entities had a stake in the
company’s actions as well as claims on the company; therefore, the company incurred certain responsibilities to
each entity or stakeholder.
As Freeman’s (1984) stakeholder theory recognized the shift of business from an industrial structure to an
economic one, the theory responded as well to growing communications abilities, an increased interest in
environmentalism, and a rapidly globalizing market. For example, managers and executives responsible for
designing and implementing strategic plans based on internal knowledge began spending greater levels of effort
reacting to intrusive challenges from media, international competition, consumer advocates, environmentalists,
and the like (Freeman, Harrison, Wicks, Parmar, & de Colle, 2010).
In recent decades, methods to address challenges regarding elements of stakeholder theory included stakeholder
prioritization and corporate responsibility. For example, managers found it necessary to determine stakeholders
to which they were responsible and the extent of their obligation to address those stakeholders’ claims (O’Riordan
& Fairbrass, 2014). To reinforce the future of the organization in a responsible manner, company representatives
managed equitably the competing interests of what amounted to a stakeholder democracy in which every
entity possessed rights and claims (O’Riordan & Fairbrass, 2014). No longer optional, stakeholder engagement
became a vital business activity (Noland & Phillips, 2010) that was used to achieve mutual objectives such
as consent, accountability, trust enhancement, or improved governance (Greenwood, 2007). Ongoing equitable
Corporate Social Responsibility in the B2B Market:
How Supplier Actions Inuence Buyer Expectations
Susan Saurage-Altenloh,
treatment of stakeholders extended the ideal of organizational justice, strengthening stakeholders’ commitment
to organizations that treated them fairly and degrading commitment to rms perceived as having unfair practices
(Mason & Simmons, 2014). Recognition of the need to balance reinforcement and reward between stakeholders
and organizations illustrated the integral and ongoing role of CSR in a company’s relationships with its various
constituent groups.
Stakeholder theory and CSR have enjoyed a close relationship since their recognition a few short decades ago.
Harrison, Freeman, and Cavalcanti Sá de Abreu (2015) showed that stakeholder theory created value for CSR
by identifying and acting on the nancial and societal issues outlined by Parmar et al. (2010). Harrison et al.
(2015) conjectured that stakeholders are dissimilar, stakeholder theory is many-sided, and the world in which
stakeholders function is extremely complex. Cantrell, Kyriazis, and Noble (2015) recognized that stakeholder
theory helps determine and comprehend who is important to an organization and how they create value through
the application of CSR. Despite these denitional complications, stakeholder theory’s foundation as both an
ethical theory and a management theory revealed that it was well positioned, especially in CSR literature, to
validate its assertion that organizations performed well in terms of societal issues. According to Harrison et
al. (2015), a more pertinent objective was to explain value creation and redistribution through the inuence of
stakeholder theory.
To this end, extensive literature exists on CSR and how it relates to brand equity and brand performance in the
stakeholder theory framework. Despite decades of research about CSR, causal links have remained unconrmed
and denitions have continued to evolve. As business dynamics have adjusted to economic pressures and global
trends across the decades, the application of CSR has adjusted to respond to improved methods of measurement,
savvier stakeholders, and increased competition. This study of the inuence of supplier corporate social
responsibility (CSR) initiatives on buyer expectations of brand performance, mediated by brand equity, reveals
the nature of CSR’s inuence. Further, this research attaches a metric to the value of CSR’s leverage of brand
equity and brand performance with its target market of corporate buyers, thereby explaining value creation and
redistribution through the inuence of stakeholder theory.
Signicance of the Study
Understanding how the theory informs the impact of CSR on brand performance is as revealing as learning how
CSR advances the legitimacy of the stakeholder theory construct. At the earliest stage of the global business era,
stakeholder theory was posited by Freeman (1984) in response to shifts in how businesses managed relationships
under expanding capitalism while ensuring ethical interactions and optimal performance with a variety of
stakeholders. Stakeholder theory directed unique communications and distinct relationship benets to selected
constituent groups while encouraging an extensive network of relationships with multiple internal and external
entities (Ferrell, Gonzalez-Padron, Hult, & Maignan, 2010; Harrison et al., 2015).
In terms of engagement, organizations prioritized key stakeholder groups—whether political, environmental,
social, or prospective customer—based on the group’s likelihood of affecting or reecting the organization’s
purpose (Brower & Mahajan, 2013). Stakeholder theory focused also on the structured and managed relationship:
it advocated carefully selecting key groups according to legitimacy, prioritizing stakeholders in terms of value,
managing multiple complex relationship strategies with and among stakeholders, and acting in the best interests
of its shareholders as well as all other stakeholders (Freeman, Harrison, & Wicks, 2008) while creating unique
ties with groups rather than single customers.
As relationships with stakeholder groups lengthened, the value of intangible assets such as corporate marketing
developed into an expectation that required complex management procedures (Brower & Mahajan, 2013).
In this way, stakeholder theory experienced challenges that required corporate resources to ensure the value
gained in the improved relationship did not leach away as stakeholders and customers raised their expectations.
Stakeholder theory operated on a formally constructed economic benet model wherein the stakeholder and
customer recognized the economic benets and consequences. This recognition of the nancial nature of the
relationship drives changes within the relationship over time.
Organizations that invested in CSR to improve the quality of a community or population expected a return on their
investment in the form of improved brand consideration in the competitive environment. Homburg, Stierl, and
Bornemann (2013) determined that CSR inuenced client trust through loyalty and that integrating instrumental
stakeholder theory with social exchange theory undergirded this link between CSR and trust. Maignan and Ferrell
(2004) encouraged marketers to proactively manage CSR by concentrating on stakeholders beyond the traditional
consumer and by aggregating social responsibility initiatives as an integrated effort. While it had been shown
that CSR inuenced brand trust and brand equity, the need to examine the inuence of CSR and its brand equity
inuence on B2B customer loyalty across industries was evident.
Corporate social responsibility has a proven role in developing audience trust that increases brand equity among
target audiences, thus ensuring that the brand sustains its competitive advantage through improved protability
and reputation in the market. Not only does business have a social responsibility to the community from which it
secures revenues, but buyers expect ethical businesses to have an established CSR program in place. Businesses
that engage in CSR activities within the process of corporate brand management experience stronger reputation
that drives loyalty and sales, resulting in a competitive, sustainable market advantage. The research closes the
existing gaps in the body of literature by addressing the inuence of CSR as expressed by U.S. buyers in the
business-to-business environment. It also quanties the link between CSR and brand performance, mediated by
brand equity.
Theoretical Orientation for the Study
Supplier CSR initiatives serve as a corporate investment in improving a brand’s value to its various internal
and external stakeholders. Numerous studies have shown that CSR favorably enhances consumer relationships,
improves supplier reputation with B2B decision makers, establishes brand equity with customers, and inuences
consumer trust. Previous research articles recognize the irrelevance of existing consumer studies in understanding
U.S. buyers in the corporate supplier-buyer environment. Additionally, there is little mention of CSR’s inuence
on corporate buyer expectations of brand performance and no literature yet discovered on U.S. buyer responses
as they relate to supplier CSR and brand performance (Aguinis & Glavas, 2012).
This study is founded on the impact of CSR behaviors on brand equity recognition and expected brand
performance metrics. CSR initiatives improved a rm’s stakeholder relationships (Brown, 1995) by validating
the organization’s citizenship commitment in a measurable form. In this way, a company used CSR as a vehicle
to meet its societal obligations, thereby proving its accountability to stakeholders (Brown & Forster, 2013).
Aguinis and Glavas (2012) conrmed that CSR embraced shareholder value while inuencing a company’s
long-term élan. Additionally, CSR was determined to impact brand equity through its perceptual and behavioral
components (Hur, Kim, & Woo, 2014). The inuence of CSR on decisions made by U.S.-based buyers has been
neither tested nor reported.
Regarding brand equity, Yoo and Donthu (2001) dened the concept as the total value contributed to a product by
its brand, with the concept consisting of brand awareness, brand association, and brand loyalty components (Aaker,
1996). Staudt, Shao, Dubinsky, and Wilson (2014) reported that CSR favorably inuenced brand equity elements
such as brand awareness and brand association; Rust, Zeithaml, and Lemon (2000) reported that CSR impacted
brand association. Further, Hur et al. (2014) suggested that CSR inuenced corporate brand credibility which
affected brand equity. Brand equity was shown to impact anticipated future revenues and cash ow (Srivastava &
Shocker, 1991), sustainable competitive advantage (Bharadwaj, Varadarajan, & Fahy, 1993), stock values (Simon
& Sullivan, 1993; Lane & Jacobson, 1995), and marketing achievement (Ambler, 1997). As a result, customers
recalled increased value in a positive fashion (Aaker, 1992) and organizations competitively leveraged their brand
equity to increase prots (Yoo & Donthu, 2001) and, therefore, brand performance. Consumer perceptions of the
relationship between CSR and brand equity have been veried, but the perceptions of U.S.-based businesses
about the relationship remained unexplored before this research study.
Brand performance was described as the cumulative value of awareness, reputation, and customer loyalty, sales
growth, prot margin, and share of market (Luu, 2012a). A supplier’s CSR activities have been acknowledged
as critical factors in dening corporate reputation (Worcester, 2009; Arendt & Brettel, 2010). Analyses of brand
performance, however sparse, have related to the supplier’s reputation, wherein CSR inuenced corporate
identity-building to generate increased company performance (Arendt and Brettel, 2010). Buyers represent a key
stakeholder role in that suppliers seek to improve their competitive positioning and overall company performance
in an effort to attract buyers.
CSR’s inuence on brand equity and brand performance in the consumer market has been explored, revealing
corporate American as an avenue for further research. While corporate brand performance is well-reported,
research regarding its relationship to supplier CSR is limited to small and mid-sized companies in geographic
regions and market segments that are not generalizable to U.S. organizations. Research on brand equity as it relates
to brand performance and to CSR is extensive for consumers, but not among corporate buyers. Therefore, this
research addresses the value of CSR’s leverage of brand equity and inuence on brand performance expectations
with the target market of U.S.-based corporate buyers, explaining value creation and redistribution through the
inuence of stakeholder theory.
Theoretical Considerations
Extensive literature exists regarding CSR and its relationship to brand equity and brand performance within
the stakeholder theory framework. Research has revealed both the nature of these relationships in scholarly
works and the notable gaps in the body of literature. The overwhelming and multi-dimensional body of research
associated with CSR reects the kinetics of dening, applying, and measuring CSR’s role in the business world.
As business dynamics respond to economic pressures and global trends, the application of CSR continues to
reect improved methods of measurement, savvier stakeholders, and increased competition.
The concept of stakeholder theory is rooted in the academic spheres of sociology, economics, politics, and
ethics, with emphasis in the literature regarding strategic organizational planning, systems theory, CSR, and
organizational theory (Mainardes, Alves, & Raposo, 2011). Following a decade of working with other researchers
to describe stakeholder legitimacy in management (Freeman & Reed, 1983), stakeholder negotiation processes
(Charan & Freeman, 1980), and specic techniques of stakeholder management (Emshoff & Freeman, 1981),
Freeman delivered Strategic Management: A Stakeholder Approach (1984), a pivotal perspective that summarized
the ideas of many organization thinkers about stakeholder theory while recognizing transformational corporate
changes. Challenging Friedman’s (1970) declaration that shareholders were a company’s sole responsibility,
Freeman (1984) dened stakeholders as any entity affected by or able to impact the rm’s strategic objectives,
describing the relationship of an organization with its external domain as well as the organization’s behavior
within that domain. Explaining, Freeman (1984) indicated that the company incurred certain responsibilities to
each entity or stakeholder as they had a vested interest in the company’s actions as well as obligations incurred on
behalf of the company, drawing from a frame of reference that held companies beholden to the external domain
comprised of external entities. Numerous studies have recognized Freeman’s (1984) denition of stakeholders
as individuals or groups that can motivate or be inuenced by an organization’s scope of objectives (Mainardes
et al., 2011). This innite breadth of stakeholders was protracted in the 1990s to be recognized as a multilateral
accordance between a company and its identied stakeholders (Mainardes et al., 2011).
Stakeholder theory confers value on CSR as proof to stakeholders and customers of a rm’s citizenship
commitment. Although Brown and Forster (2013) differentiated CSR and stakeholder theory with the former
representing a company’s obligation to society and the latter establishing a rm’s accountability to its stakeholders,
the researchers recognized that companies used CSR initiatives to improve their stakeholder relationships.
Stakeholder theory presents an effective model explaining the relationship between CSR and brand performance.
Stakeholder theory has promoted long term relationships established by organizations with multiple stakeholder
entities that maintained a stake in the organization’s success (Ferrell et al., 2010; Harrison et al., 2015), founded
on developing a unique communications strategy that resonates with each key party (Noland & Phillips, 2010;
O’Riordan & Fairbrass, 2014). While the theory prioritized serving the interests and needs of each and every
stakeholder (Freeman et al., 2008), the singular effort of investing in CSR directly benets at least one stakeholder
beyond the acting rm. In this manner, a company complies with its social responsibilities via CSR while
substantiating its accountability to stakeholders (Brown & Forster, 2013). Stakeholder theory has concentrated on
value creation, the relationship between ethics and capitalism, and how management considers the two elements
(Parmar et al., 2010). In this manner, stakeholder theory functions well in a B2B environment through its ability
to ethically approachcapitalist pragmatism, its commitment to value creation, and a longtime afliation with
Stakeholder theory and CSR have been closely associated since their inception in the late twentieth century.
Harrison et al. (2015) illustrated that stakeholder theory created value for CSR by clarifying and acting on the
nancial and societal issues outlined by Parmar et al. (2010). Harrison et al. (2015) hypothesized that stakeholders
were dissimilar, stakeholder theory was multifaceted, and the environment in which stakeholders functioned was
exceptionally complicated. Despite these challenges, stakeholder theory’s basis as both an ethical theory and a
management theory was well positioned in CSR literature to validate its assertion that organizations performed
well in terms of societal issues.
Relationship of CSR, Brand Equity, and Brand Performance
Corporate Social Responsibility
Organizations that invest in corporate social responsibility (CSR) to improve the quality of a community,
population, or stakeholder group expect a return on their investment in the form of improved brand equity,
expanded brand performance, moral agency, and greater consideration in the competitive environment. Since
its initial framing by Bowen (1953) more than 60 years ago, the exact denition, level of inuence, and
optimal beneciary of CSR initiatives remain in contention today. In the early part of the twentieth century,
the responsibility of business both to society and to the corporate bottom line was formalized as a management
obligation (Bowen, 1953) with key tenets of corporate philanthropy, distribution of corporate resources, and
managerial responsibilities to serve as public trustee (Carroll & Shabana, 2010). Howard Bowen’s seminal 1953
work, entitled Social Responsibilities of the Businessman, addressed the new doctrine of social responsibility
arising postwar, exhorting corporate managers to take actions that advanced societal values (Acquier, Gond, &
Pasquero, 2011). Bowen (1953) cited social responsibility as a single lever that enhanced social welfare among
the many that might improve interactions between business and the public. Bowen (1953) declared that business
leaders must appreciate their need to serve society, and recognize that the freedom and power accorded them in
their role represented great responsibility. Further, Bowen (1953) described two social products of business: the
goods or services it produced and the conditions under which those goods or services were produced. Bowen
(1953) conrmed that employees, shareholders, suppliers, customers, and the local community were affected by
the actions of the enterprise in delivering the dened social products. When the company was poorly managed
in terms of social responsibility, or when one stakeholder group suffered, the other groups were negatively
inuenced, thus giving rise to the benets of socially responsible actions by corporations. Bowen’s (1953) work
attached a name to the growing sense of civic duty avenues that businesses had begun to investigate.
In 1960, Davis expanded on Bowen’s 1953 ideas and challenged business decision makers to determine their
responsibility to society, clarify the reasons they had responsibility, and dene consequences of not participating.
Davis (1960) argued that the reciprocal elements of social power and social responsibility not only countered
impending social bankruptcy but leveraged business power for economic gain. He also determined that CSR was
almost never the sole basis for business decision making.
Davis (1960) established that, over time, socially responsible decisions by business leaders created social power
that represented a set of socially responsible beliefs and actions on behalf of the organization. Davis (1960)
concluded that leaders with this social power spoke for their organizations, thus developing a balance of social
responsibility and social power that accrued to the business’ equity and inuence in the community.
In response to corporate America’s enthusiastic interest in CSR, economist Milton Friedman famously declared
in 1970 that business’ only responsibility was to its shareholders, differentiating shareholders from stakeholders
as referenced in most scholarly literature at that time. Friedman (1970) insisted that the business decision maker
was an agent and employee of the business whose sole responsibility was to his employer. Friedman (1970)
declared social responsibility a subversive doctrine, a political effort, an act of deception and fraud, and an affront
to capitalism that must be rejected for free society to engage in open competition.
As the concept of CSR began to form, its relationship to marketing and business was claried in articles by the
leading marketing luminaries of the time. Kotler and Levy (1969) authored a seminal article that recognized the
need for nonbusiness organizations to apply marketing functions with the same enthusiasm as business entities.
In similar fashion, Lavidge (1970) recognized the new reality that marketing was seen as failing to address social
problems, predicting that marketing’s societal inuence would drive marketers’ social actions.
Once the denition began to stabilize, scholars sought ways to strategically develop the concept of CSR in
terms of corporate social performance (McWilliams & Siegel, 2001), business ethics (Carroll, 2015), corporate
citizenship (Maignan, Ferrell, & Hult, 1999), and stakeholder theory (Carroll, 1999; Jones, 1995; Jones &
Wicks, 1999). Development of the CSR concept shifted quickly through the decades to encompass denition,
acknowledgement, understanding, and inclusion in strategic planning.
The nal years of the twentieth century reected a major shift in the focus of CSR research from external
normative in the form of understanding how to dene and engage in CSR to empirical normative through the
measurement of corporate performance, stakeholder management, and CSR efcacy.
Theorists and business thought leaders have endeavored to explain how CSR improves corporate standing, even
without the oft-reported direct positive correlation between CSR investment and corporate nancial performance.
Notably, Porter and Kramer (2011) subscribed to the idea of moving beyond CSR for prot’s sake to achieve
shared value between business and society. Continuing with an exploration of value, Izzo (2014) noted that
successfully integrating CSR reected changes in the inuence of social and environmental responsiveness on
corporate social reputation, highlighted the reduced risk experienced by rms, and created value for stakeholders.
Karim, Suh, Carter, and Zhang (2015) revealed that CSR behaviors integrated social concerns into management
convention, generating elevated reputations and economic benets. In contrast, Hildebrand, Sen and Bhattacharya
(2011) credited CSR as both a driver and a result of interactions among the multiple forms of corporate identity,
identied as company traits (actual identity), subjective aspects by internal stakeholders (perceived identity), and
how the company sees itself and wants others to view it (intended identity). These identities were found to inform
selection of socially responsible activities which, in turn, characterized an organization’s faceted identity.
Corporate social responsibility has become an integral part of maintaining corporate brands in the eyes of target
stakeholder audiences. Engaging in CSR involved raising the prole of a business, its beliefs, its people, and its
brand in the eyes of customers, shareholders, community, and society according to Vallaster et al. (2012). In its
role of supporting the management of the corporate brand, marketing was part of this process in that it created,
communicated, and delivered customer value that beneted the corporation (Vaaland et al., 2008). Conrming
the marketing link, Vallaster et al. (2012) recognized that corporate marketing focused on customer, stakeholder,
societal, and ethical philosophies through a rm’s philosophical orientation. Considering the constituent groups
engaged by a rm’s social benet activities, CSR has become a critical element in the corporate marketing and
branding model.
The role of CSR in the marketing and branding model cannot be overstated. Since the initial denition of CSR, the
number of companies adopting socially responsible practices to inuence their image, encourage their employees,
and connect with their customers has signicantly increased (Creel, 2012). In an effort to engage target audiences,
organizations have communicated regularly about their CSR commitment to earn recognition for their good
behavior (Eberle, Berens, & Li, 2013). As a result, companies that invested in CSR programs increased their
corporate brand equity, thus securing a sustainable competitive advantage in the market (Creel, 2012; Eberle et
al., 2013; Lai, Chiu, Yang, & Pai, 2010), expanded their awareness among consumers in a favorable manner (Du,
Bhattacharya, & Sen, 2007), and provided brand building that favorably inuenced brand preference (Liu, Wong,
Shi, Chu, & Brock, 2014). Further, evidence revealed that CSR signicantly impacted national competitiveness
on a global scale (Boulouta & Pitelis, 2013). Without CSR, companies imperiled their brand, reputation, and
protability; CSR had transformed from a competitive advantage into a strategic fundamental (Story & Neves,
2014) and business imperative (Helmig, Spraul, & Ingenhoff, 2016).
Despite the proliferation of CSR globally, evaluative literature remained highly fragmented in terms of individual
and organizational analysis levels as well as poorly integrated into organizations, primarily because of the
numerous, conicting objectives, disciplines, and audiences involved (Aguinis & Glavas, 2012). Considering
these inuences, the need to integrate social responsibility throughout the organization served as leverage for
leaders to require the process be managed and its benets quantied as a sustainable value that beneted the
corporate brand and the company’s stakeholders. A review of available literature and research suggests that much
remains to be learned about CSR’s impact on business relationships in the U.S. Crafting an appropriate strategy
to discover the inuence of supplier CSR on U.S.-based business prospects and customers contributes learning
that benets both buyers and sellers.
Brand Equity
Researchers have worked to clarify the elusive essence of brand equity over the past four decades. Brand equity
has been described most consistently as the incremental market value derived from the aggregate effect of brand
awareness, brand associations, brand loyalty, and perceptions of quality on the brand name (Hsu, 2012; Yoo,
Donthu, & Lee, 2000) and quantiable through the measurement (Srinivasan, 1979) of the four attributes.
In the late 1980s and early 1990s, brand equity’s role was dened and referenced in a variety of ways as researchers
and marketers began to focus their attention on the burgeoning concept of brand equity. The business concept
of brand equity rose to the forefront of corporate interest as a result of widespread mergers and acquisitions
transactions in the 1980s, during which purchase prices reected brand values, revealing that brands were critical
intangible assets (Leone et al., 2006). In a seminal article on managing brand equity, Farquhar (1990) recognized
brand equity as the incremental cash ow derived from a brand’s association with a product, resulting in a rm’s
competitive advantage. Farquhar concluded that creating positive brand evaluations, generating accessible brand
attitudes, and maintaining a consistent brand image assured brand equity and avoided product failure, brand
confusion, and negative associations.
Brand equity is relevant in B2B situations as well as consumer relationships. Keller (1993) presented the two
dimensions of brand image and brand awareness as comprising the incremental difference in how consumers
viewed the marketing of a brand. Srivastava and Shocker (1991) expanded consumer-based brand equity to
include channel partners. In the business and professional services environment, the challenge of differentiating
intangible service offerings revealed the need to leverage competitive advantage using brand equity in the
forms of brand differentiation, brand loyalty, and improved customer retention (Aaker, 1996; Berry, 2000;
Davis, Golicic, & Marquardt, 2009). Bendixen, Bukasa, and Abratt (2004) concurred with Hague and Jackson
(1994) in recognizing that buyers focused less on products and more on corporate brand identity, with the latter
comprised of differentiating values of highest corporate priority. Berry (2000) recognized that brand equity was
the differentiating factor in a market in which it was difcult to isolate competitive service offerings. Davis et al.
(2009) afrmed that industrial markets, and therefore industrial brands, were exemplied by their buyers rather
than by their products, suggesting that brand equity accrued to the corporate entity instead of its products and
services. Lai et al. (2010) determined that industrial rms invested in branding with the goal of achieving the
benets of brand equity. Pai, Lai, Chiu, and Yang (2015) reported that Taiwanese industrial buyers associated
brand advocacy and brand equity with supplier CSR positioning, identifying external motives of suppliers as
driving CSR investment.
To form appropriate metrics, Aaker (1996) measured both perceptual and behavioral elements by exploring the
categories of customer loyalty, perceived quality, brand awareness, brand associations, and market behavior.
Myers (2003) conrmed the brand equity dimensions outlined by Keller (1993) and Aaker (1996), and determined
the necessity of measuring both nancial and customer related (perceptual or behavioral) aspects for a clear
calculation of brand equity. The brand equity construct derived from four dimensions (Aaker, 1991; Keller, 1993;
Zaichkowsky, Parlee, & Hill, 2010) and included brand loyalty, brand quality perceptions, brand awareness, and
brand associations, with each dimension contributing value to a rm’s set of assets. Aaker’s (1991) and Keller’s
(1993) propositions that these dimensions claried research results as they related to consumer behavior, brand
importance, and brand value remain valid today.
Brand loyalty, one of the four elements of the brand equity construct, was dened as a brand’s ability to inuence
repeated purchases over time without shifting to competitors’ brands, thus serving to generate prot (Severi
& Ling, 2013). Schultz and Block (2013) suggested that brand loyalty, combined with increased purchase
commitment, represented brand sustainability that increased overall brand value. From the B2B point of view,
while stakeholders of an organization and its brand effectively created brand loyalty through their commitment,
some researchers argued that loyalty derived from brand equity, inuencing customers to remain with, repeatedly
purchase, and refer a brand (Juntunen et al., 2011).
Perceived brand quality, a second element of the brand equity construct, comprised the combination of experience
with the service and perceptions of the corporate service provider according to González, Comesaña, and Brea
(2007) while Ha, Janda, and Muthaly (2010) dened perceived quality as the subjective evaluation of an overall
experience as considered by a customer. Chomvilailuk and Butcher (2010) determined that perceived brand
quality directly inuenced brand preference and reafrmed the association between brand equity and perceived
brand quality.
Brand awareness, a third element included in the brand equity factor, was dened by Aaker (1991) as the linked
memory formed around a brand. Brand awareness was composed of the two components of brand recognition
(coming to mind easily) and brand recall (ability to remember a brand name), therefore being associated
with the ease that a brand name came to mind or was recalled (Jara & Cliquet, 2012). Increased incidents of
communications exposure contributed to brand knowledge and resulted in stronger associations (Yoo et al.,
2000). In a B2B environment, brand awareness cued higher quality and supplier commitment, reduced risk for
decision makers, established a greater organizational investment in its products and processes, and inuenced
brand choice (Homburg, Klarmann, & Schmitt, 2010).
Brand associations, or image, were recognized as a fourth core aspect of brand equity (Ha, Ling, & Muthaly, 2010)
and included the concepts of brand awareness, brand image, and familiarity (Keller, 1993). Brand association
had a signicant, favorable relationship with brand equity (Pouromid & Iranzadeh, 2012; Severi & Ling, 2013)
and inuenced brand differentiation (Sasmita & Mohd Suki, 2015). Yoo et al. (2000) cited brand associations as
a more robust concept than brand awareness, recognizing that the two concepts together formed a unique brand
image. Severi and Ling (2013) concurred, indicating that brand awareness in the buyer’s mind occurred before
brand association was embedded in the buyer’s memory.
Since their respective formative years, the close association of brand equity and CSR initiatives has contributed
strategically to product differentiation, brand differentiation, and favorable brand image that inuences reputation
(Hsu, 2012). CSR’s favorable inuence was linked empirically with brand-related aspects such as corporate
reputation (Bendixen & Abratt, 2007), improved brand attitude (Khojastehpour & Johns, 2014; Rundle-Thiel,
2009), brand credibility and corporate reputation (Hur et al., 2014), positive corporate image (Benavides-Velasco,
Quintana-García, & Marchante-Lara, 2014; Blumrodt, Bryson, & Flanagan, 2012; Du, Bhattacharya, & Sen,
2010; Melo & Garrido-Morgado, 2012), and brand equity (Blumrodt et al., 2012; Lai et al., 2010; Luu, 2012b;
Nguyen & Oyotode, 2015).
Branded socially responsible behaviors contribute to brand equity in myriad ways. CSR activities were cited by
Melo and Garrido-Morgado (2012) as an effective strategy to secure competitive advantage, ultimately beneting
corporate reputation. Reputation and corporate brand equity were related to each other and reected the inuence
of CSR (Hur et al., 2014). Similarly, Staudt et al. (2014) recognized evidence of a positive relationship between
CSR and customer brand equity. Halliburton and Bach (2012) cited corporate values as driving brand personality,
culture, personality, and behavior, all of which dened corporate behavior and determined brand equity. Lai et al.
(2010) suggested that perceptions regarding a brand’s CSR initiatives were positively linked to favorable brand
awareness and brand association—two key elements of brand equity. CSR initiatives to address all stakeholders
positively affected brand equity according to Torres, Bijmolt, Tribó, and Verhoef (2012).
Brand Performance
Brand performance, also recognized as a form of corporate nancial performance, has been shown to be
favorably impacted by CSR. Lai et al. (2010) specied brand performance as “nancial performance brought
by the supplier’s brands and perceived by buyers” (p. 460), suggesting that supplier CSR induced buyer actions,
resulting in the creation of brand performance. Brand performance was measured intrinsically through awareness,
reputation, and customer loyalty as well as nancially in terms of market strength, sales growth, prot margin,
and share of market (Luu, 2012a). In research, brand performance relied on strong brand equity that encouraged
higher customer revenues (Chirani, Taleghani, & Moghadam, 2012; Lai et al., 2010). Further, CSR activities
improved corporate identity through the asset of reputation, dened as buyer perceptions of supplier fairness and
honesty, and concern about the buying rm (Wagner, Coley, & Lindemann, 2011). Improved reputation served
as a source of competitive advantage, strengthened the buyer-supplier relationship, and led to better nancial
performance (Leppelt, Foerstl, & Hartmann, 2012).
During the past ve decades, the premise of social responsibility has worked its way into the functional structure
and brand management of organizations. Based on the interrelationship of performance, ethics, social need,
and brand reputation, it was inevitable that theorists would seek to link CSR to marketing, brand management,
employee performance, and reputation using measurement strategies.
Van Beurden and Gössling (2008) explored the relationship between CSR and corporate nancial performance
to realize a positive relationship. Luo and Bhattacharya (2006) found that companies with CSR initiatives
favorably impacted customer satisfaction which inuenced nancial success. Taghian, D’Souza, and Polonsky
(2015) determined that a stakeholder-dened CSR strategy developed a favorable corporate reputation that,
in turn, beneted business performance. Zhu, Sun, and Leung (2014) cited CSR as favorably impacting rm
reputation and rm performance, but moderated by ethical leadership. Saeidi, Soan, Saeidi, Saeidi, and Saaeidi
(2015) indicated the complexity of the CSR-nancial performance relationship required mediating variables to
favorably link the effects of CSR to improved nancial performance. Wang and Qian (2011) demonstrated that
CSR, or corporate philanthropy, inuenced improved stakeholder responses and political resources, resulting in
stronger corporate nancial performance.
Across cultures, CSR behaviors affected nancial outcomes in various ways (Scholtens & Kang, 2013), including
redemption of socially irresponsible actions as a route to recovered trade relationships (Cai, Jo, & Pan, 2012),
greater prots during Spain’s economic crisis for banks committed to CSR (Escobar Pérez & Mar Miras Rodríguez,
2013), government involvement and support of Asian enterprises engaging in CSR programs (Moon & Shen,
2010), and improved CSR-related standards for Chinese workers’ health, safety, and wages (Wang & Juslin,
2009). In their empirical study, Zhang and He (2014) determined that value co-creation among stakeholders
worked to elevate industrial customer perceptions of brand value that led to higher brand performance. Therefore,
it might be proposed that investing in CSR initiatives increased a company’s brand equity and inuences brand
performance. Considering this, much remains to be learned about the role of brand equity as it relates to CSR
and brand performance.
It is evident that corporate citizenship, through its inuence on brand equity and reputation, was an integral
element in sustaining a competitive advantage through brand performance in the business environment (Lai et
al., 2010; Wang, Chen, Yu, & Hsiao, 2015). Additionally, it appears that increased brand performance advances
the supplier-buyer relationship, thus reducing customer acquisition and retention costs. As businesses have
integrated CSR into their organizational and brand structures, implementation of socially responsible activities
has exerted increasing inuence and generated greater value across numerous dimensions of brand management.
Organizations continued to focus on integrating CSR into their marketing and management processes to
balance stakeholder and shareholder expectations (Maignan, Ferrell, & Ferrell, 2005) although research had
yet to quantify conclusive causal links between CSR and corporate prot (Lee, 2008). Research revealed that
corporate brand managers relied on measures of brand equity, brand personality, and brand value to determine
how effectively CSR initiatives developed brand trust (Ghosh, Ghosh, & Das, 2013). Further, brand equity
mediated the relationship between CSR and perceived value (Staudt et al., 2014). Large organizations continued
to invest heavily in socially responsible activities (Luo & Bhattacharya, 2006); companies presented a favorable
image that promoted corporate reputation and strategically differentiated the brand from competitors (Hsu, 2012).
Perceptions of nancial performance and ethical behavior inuenced perceptions of CSR, resulting in corporate
reputation and trust, both of which inuenced consumer loyalty (Stanaland, Lewin, & Murphy, 2011). In total,
scholarly research recognized the continued organizational interest and commitment in effectively integrating
CSR into the corporate structure.
Brand equity was linked to brand performance within the CSR framework (Davcik, Vinhas da Silva, & Hair,
2015; Lai et al., 2010). Further, brand performance was recognized as the outcome of brand equity by Chirani et
al. (2012) through increased awareness, quality, and loyalty that strengthened customer preference for the brand.
In similar fashion, Lai et al. (2010) recognized the positive inuence of CSR initiatives on brand equity and brand
performance. Oliveira-Castro et al. (2008) outlined a relationship between consumer based brand equity and
brand performance that differed by product category yet was measurable.
Extensive research has been conducted regarding CSR and its relationship to brand equity and brand performance
within the stakeholder theory framework. The diverse and multi-dimensional body of research associated with
CSR reects the kinetics of dening, applying, and measuring CSR’s role in the business world. Numerous
studies have detailed CSR’s inuence on brand equity in narrow industrial segments, limited geographic markets,
or consumer-only markets. However, there is no evidence of research that addresses the impact of CSR and
brand equity on perceptions by B2B customers representing the breadth of industries that comprise the U.S.
market in a generalizable way.
Researchers whose work has addressed the triumvirate B2B relationship among CSR, brand equity, and brand
performance variables have noted several study limitations and recommended future directions. Delimiters
such as ndings focused on narrow industry sectors, the absence of cross-cultural research comparisons, studies
limited to one size of enterprise, research conducted outside the U.S., and results generated for a sole organization
have ensured that ndings were not generalizable to a broader B2B environment, especially one focused on
U.S.-based purchasing decision makers. These limitations formed an opportunity to examine the U.S. market’s
consideration of CSR, brand equity, and brand performance in the B2B environment.
In summary, suppliers invest in CSR initiatives to enhance brand value with selected stakeholder groups. Brand
value can assert itself in the form of reputation, acceptance, competitive preference, reduced negative public
relations, and stronger brand performance through increased prots. Numerous studies have shown that CSR
favorably enhances customer relationships, preserves supplier reputation with B2B buyers, foments brand equity
with customers, and inuences trust in the market.
Research Results
A quantitative, non-experimental design study queried a random sample of 400 U.S.-based buyers employed
at companies with at least 100 full-time employees, drawn from a commercially maintained B2B panel using
probability sampling. Established, validated survey instruments for CSR, brand equity, and brand performance
were elded to test the relationship among the three variables. Regression analysis was used to calculate the
presence of statistically signicant contributions by CSR and brand equity to changes in the dependent variable
of brand performance.
RQ1: What are the effects of supplier CSR on buyer expectations of corporate brand performance?
A regression analysis was conducted to explicate the relationship between CSR and brand performance. When
brand equity is not present in the model, CSR signicantly predicts brand performance, b = .965, t = 21.27,
at p < .001. The model explains 53.0% of the variance in brand performance expectations, indicating CSR
signicantly inuences buyer expectations of brand performance. These results illustrate that supplier CSR
positively inuences buyer brand performance expectations; the null hypothesis H01 is rejected.
RQ2: What are the mediating effects of brand equity on buyer expectations of corporate brand performance?
A regression analysis was conducted to determine the effects of brand equity on the relationship between CSR
and brand equity. CSR signicantly predicts brand equity, b = .808, t = 21.18, at p < .001. The model explains
64.8% of the variance in brand equity, indicating CSR signicantly affects brand equity. These results show that
supplier CSR is positively related to brand equity; the null hypothesis H02 is rejected.
A second hypothesis queried the relationship between brand equity and brand performance expectations. CSR
signicantly predicts buyer brand performance expectations, with brand equity in the model, b = .531, t = 7.41, at
p < .001. Brand equity is shown to predict brand performance, b = .536, t = 7.51, p < .001. The model explains
58.8% of the variance in brand performance, indicating that an increase in brand equity relates to an increase in
brand performance expectations. These results show that brand equity is positively related to brand performance
expectations; the null hypothesis H03 is rejected.
The mediating effect of brand equity on the relationship of CSR and brand performance was further examined
using Sobel’s test (Sobel, 1982), revealing a signicant indirect effect of CSR on brand performance expectations
through the brand equity mediator, b = .434, BCa CI [.240, .600] at p < .001. This represents a relatively large
effect of 43.4%. Results of regression analyses using Sobel’s test are illustrated in Figure 1.
Figure 1. Regression analysis model of CSR inuence on brand performance, mediated by MBE. Sobel’s test
generates indirect effect of MBE as mediating variable. * measured direct effect, p = .001.
These results clarify that supplier CSR inuences brand performance expectations of buyers, with brand equity
working to enhance brand performance expectations. Results of the study substantiate the hypothesis that CSR,
via brand equity, inuences brand performance expectations as causatum.
This study measured the positive inuence of supplier CSR activities on B2B buyer expectations of brand
performance, and determined that the mediator brand equity favorably inuenced brand performance
expectations. Organizations that engage in CSR to secure approbative response from stakeholders seek a return
on their investment in the form of improved, sustainable brand consideration in the competitive environment.
These results reveal that CSR inuences buyer expectations of brand performance, which increase B2B customer
loyalty, resulting in a competitive, sustainable market advantage for suppliers that invest in CSR. The research
closes the gap in the body of extant literature by addressing the importance of CSR in the B2B relationship as
recognized by U.S. corporate buyers. Finally, the study incontrovertibly quanties the positive inuence of CSR
on brand performance expectations, mediated by brand equity, as measured among U.S. corporate buyers.
This study represents a starting point for understanding how CSR, brand equity, and brand performance relate
within the B2B environment. Propositions to inform the direction and quality of future research expand the
target market or rene the homogeneity of units under analysis. Future studies might examine how other B2B
stakeholders—examples include smaller rms, non-buyer personnel, shareholders—respond to CSR and brand
equity inuences. They might consider how well the model ts when measuring CSR activities rather than
perceptions of buyers about CSR commitment. Researchers might test this study’s model using alternative survey
instruments to test the character of predictive strength among the study variables. Analysis might incorporate
ndings from multiple countries to understand differences across business cultures. Research might explore
alternate methods of calculating brand performance and it might examine the model t and predictive strength
for segments within the larger U.S.-based B2B buyer universe to reveal variances in the predictive value of CSR
within the model.
Measures of the buyer-supplier relationship serve to focus supplier CSR investment that encourages purchaser
interest, improves buyer loyalty, reinforces client condence, extends the buyer-supplier relationship, and
generates a marketable metric that addresses supplier social responsibility. Additionally, this study offers
proof of the value of corporate marketer investment in the marketing and communications of CSR initiatives to
educate and inuence business-to-business customers. Findings afrm the business case for extending beyond
the traditionally targeted consumer and internal markets to communicate corporate social commitment to the
growing stakeholder segment populated by B2B customers responsible for signaling purchase decisions. While
research has shown that consumers value corporate focus on social issues, ndings from this study generate
incontrovertible evidence that business buyers in the U.S., across industries, expect brand performance to improve
as a result of doing business with companies that invest in social initiatives. Armed with these results, corporate
marketers are able to make a strong case for their rm to invest in business-to-business marketing budgets and
Overall, the conclusive ndings of this research conrm that corporate buyers respond to CSR initiatives, a
relationship formerly dened for consumers, narrowly dened industries, and businesses in international markets.
Thus, CSR activities contribute to achieving sustainable competitive advantage with B2B clients while enhancing
brand equity and expanding the favorable effects of improved expectations of brand performance. Findings from
this broad study reafrm corporate commitment to leverage CSR in a meaningful way that can be translated into
more effective spending by the marketing divisions of supplier organizations.
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Keywords: CSR, B2B, brand equity, brand performance, business-to-business marketing, corporate social
Relevance to Marketing Educators, Researchers and Practitioners: This research paper examines the heart
of U.S. industry to understand how to leverage CSR initiatives through more effective spending by corporate
marketers. The quantitative evidence of CSR’s inuence in business-to-business relationships reveals that
supplier CSR investment piques buyer interest, increases purchaser loyalty, reinforces buyer condence, extends
the buyer-supplier relationship, and provides a marketable measure of supplier social awareness.
Author Information:
Susan Saurage-Altenloh has managed thousands of studies to help clients understand marketing issues. Susan’s
rm has won numerous awards for her unique approach to gathering insights. She is past president of AAF-Tenth
District, AMA Houston, and QRCA. Susan serves as Managing Editor of QRCAs VIEWS magazine, judges
annual entries for several national marketing awards, and authors two blogs.
TRACK: Business-to-Business Marketing / Supply Chain Management
Purpose This paper aims to examine the B2B advertising effect on firm’s market value and whether/how its effectiveness can be enhanced with corporate social responsibility (CSR) strengths. Design/methodology/approach The authors propose that CSR can be a strategic complement to advertising and reinforce the latter’s positive effect on a firm’s performance in two logics: signaling mechanism and defensive mechanism. Using the Kinder, Lydenberg, and Domini database and final data obtained from Compustat, the authors applied fixed effect regression analysis to test the interaction effect of advertising expense and CSR strengths on firms’ market performance as operationalized in Tobin’s Q. Findings The result confirms that CSR moderates the B2B advertising effect on a firm’s market value. More importantly, the authors find that internal CSR activities that are closely related to a firm’s core business, compared to external CSR activities, more significantly enhance the advertising effectiveness on a firm’s market value. Practical implications This research provides guidelines for B2B firms to better prioritize resource allocation to CSR practices for achieving a better financial outcome. Originality/value The current study on the joint effect of advertising and CSR has important theoretical and managerial implications, given both tools are commonly used by most B2B firms but not necessarily integrated into one corporate marketing strategy.
Full-text available
In recent years, firms have been pressured by stakeholders to undertake additional corporate social responsibility investments. Some firms have taken the initiative to allocate additional resources to CSR investments, while others argue that these investments conflicts with the firms' objectives to maximize profits. This controversy has piqued researchers' interests as they explore and study the linkage and relationship between CSR and firm performance. As such, we seek to contribute to this literature by studying the sensitivity of changes in CSR perceptions on brand equity, a noted measure of firm performance. We also take the resource-based view perspective to introduce marketing capabilities as a possible moderator for the CSR-brand equity relationship. Using data from 134 firms, we run a structured equation model (SEM) path analysis and find a positive relationship between changes in CSR perceptions and brand equity, significant at the 5% level. We also find that not only is there a positive and significant (p< .01) link between the marketing capabilities and brand equity, but also that marketing capabilities positively and significantly (p< .05) moderate the changes in CSR-brand equity relationship. With our significant results, we provide actionable information for managers and decision makers, as well as make theoretical contributions to literature.
Full-text available
According to Marketing Science Institute (2002), one of the major objectives of marketing research is to assess the strength of brand equity. It is imperative to acknowledge that brand equity is an inseparable part of marketing and essential to the companies to create core-competencies and build strong brand experience that will impact the consumer decision making process (Norjaya Mohd. Yasin & Abdul Rahman Zahari, 2011). The aim of this study is to find out the indirect relationship amongst the brand equity dimensions on brand equity. For the purpose of this study, brand equity dimensions include brand association, brand awareness, brand loyalty, perceived quality and brand image. In this study, a sum of 300 usable questionnaires were gathered. The result indicates a mediating relationship amongst the dimensions of brand equity on brand equity.
The impact of marketing on society is increasing as marketing becomes broader in function and scope. The social responsibilities of marketing practitioners and educators are also expanding. These responsibilities and related dangers and opportunities for service to society during the next decade are discussed in this article.
Corporate social responsibility (CSR) expresses a fundamental morality in the way a company behaves toward society. It follows ethical behavior toward stakeholders and recognizes the spirit of the legal and regulatory environment. The idea of CSR gained momentum in the late 1950s and 1960s with the expansion of large conglomerate corporations and became a popular subject in the 1980s with R. Edward Freeman’s Strategic Management: A Stakeholder Approach and the many key works of Archie B. Carroll, Peter F. Drucker, and others. In the wake of the financial crisis of 2008–2010, CSR has again become a focus for evaluating corporate behavior. First published in 1953, Howard R. Bowen’s Social Responsibilities of the Businessman was the first comprehensive discussion of business ethics and social responsibility. It created a foundation by which business executives and academics could consider the subjects as part of strategic planning and managerial decision–making. Though written in another era, it is regularly and increasingly cited because of its relevance to the current ethical issues of business operations in the United States. Many experts believe it to be the seminal book on corporate social responsibility. This new edition of the book includes an introduction by Jean–Pascal Gond, Professor of Corporate Social Responsibility at Cass Business School, City University of London, and a foreword by Peter Geoffrey Bowen, Daniels College of Business, University of Denver, who is Howard R. Bowen’s eldest son. © 2013 by the Estate of Howard R. Bowen and 1953 by the Federal Council of the Churches of Christ in America.
Strategic Management: A Stakeholder Approach was first published in 1984 as a part of the Pitman series in Business and Public Policy. Its publication proved to be a landmark moment in the development of stakeholder theory. Widely acknowledged as a world leader in business ethics and strategic management, R. Edward Freeman’s foundational work continues to inspire scholars and students concerned with a more practical view of how business and capitalism actually work. Business can be understood as a system of how we create value for stakeholders. This worldview connects business and capitalism with ethics once and for all. On the 25th anniversary of publication, Cambridge University Press are delighted to be able to offer a new print-on-demand edition of his work to a new generation of readers.