This document summarizes research on the relationship between corporate social responsibility, community engagement, and consumer preference. Interviews with business owners found that while some see profit benefits to CSR, most see it as "the right thing to do" or a part of their mission. A consumer survey found that most consumers prefer socially responsible companies and a company's reputation impacts purchase decisions. However, price and quality remain the top factors for consumers. The research supports that CSR positively influences consumer preference.

1. Corporate Social Responsibility, Community
Engagement and Consumer Preference
Laura Oblinger, Todd Sanders & Alex Zelinski

2. Agenda
• Introduction & Overview
• The Problem & Our Objectives
• Literature Review & Insights
• Our Research Plan & Methods
• Interview Insights
• Consumer Survey Insights
• Conclusion

3. Introduction & Overview
• “What impact does social responsibility
and community engagement have on a
business?”
• Led to:
– How do companies do this?
– Why do companies do this?
• Team believed social responsibility and
community engagement are important –
to us…
– Are they important to others?

4. Statement of Problem &
Research objectives

5. Statement of the Problem
Corporate social responsibility positively
influences consumer preference.
• Corporate social responsibility (CSR) – “The obligation
or duty of the organization to positively affect and
impact the environment, community and people in
which it operates”
• Community engagement (CE) – “Planned process that
businesses use to work with identified groups and
causes”
• CSR ~=~ CE
• How? and Why?

6. Research Objectives
Identify a relationship between corporate
social responsibility and consumer
preference
1. Most consumers prefer companies that are
recognized as being socially responsible over
companies that are not. (Research claim)
2. Why do companies choose to be socially
responsible and engaged in their community
and how is this involvement executed?

7. Literature Review & Insights

8. Literature Review
• Very popular subject!
– Abundance of studies, books, and case
studies
– Exploration into different demographic
variables
• gender, age, geographic location, beliefs, values,
etc.
– Conscious Capitalism
– Firms of Endearment
– What Matters Most

9. Insights
• Tsoutsoura – Performance of the S&P 500 companies
from 1996-2000
– “Positive association” between socially responsible
companies and profitability
– “…Companies analyzed were large and financially secure
already…allowing them to more easily implement a more
socially responsible strategy”
• Grewal and Levy – Looked at TOMS Shoes
– Existence is to put shoes on the feet of the less fortunate
– Don’t just engage in charitable acts; the charitable acts
are the company

10. Insights
• Bateman and Snell – “Difficult for businesses
to see a positive correlation between social
responsibility, a bigger bottom line and
consumer preference”
– Socially responsible actions can have long-term
benefits
• Avoid unnecessary and costly regulation
– “Honesty and fairness may pay great dividends
to the conscience, to the personal reputation,
and to the public image of the company as well
as in consumer preference and brand loyalty”

11. Insights
• Sisodia, Sheth and Wolfe – Demonstrated
companies that changed culture to focus
on CSR experienced greater long-term
success
– Explored shift from stereotypical self-serving
to passionate and purposeful
– “…[O]utperformed the S&P 500 by 14 times
and Good to Great companies by 6 times over
a period of 15 years”…!!!

12. Insights
• Hollender and Fenichell – Is CSR realistic or
just a marketing tactic?
– Looked at Nike, Ben & Jerry's and Starbucks
• Mackey, co-founder and co-CEO of Whole
Foods Market –
– Ground ones business in values and ethics
– Make conscious decisions that do not harm people
or the environment, profits, prosperity
– Growth will follow

13. Insights
• Hirschberg – Environmentally conscious business can
increase their bottom line
– Patagonia: credo is “to make the best product, cause no
unnecessary harm, and use business to inspire and
implement solutions to the environmental crisis”
• Aburdene – Companies that implemented practices in
their business that promote ethics and values
– 3M, Chiquita, Timberland
– Data suggests values driven consumer (conscious
consumer) spends money on brands that share the same
values

14. Insights
• Eggers & MacMillan – Look at why big businesses have
become so philanthropic
– Microsoft
– “Solution revolution” - big and small businesses have decided
to focus on finding solutions for the world's most pressing issues
• Weeden – Businesses should attempt to extract as much
business value as possible from “social investing”
– Cause-related marketing: business donates % of their profits to
another organization
– Business should engage in these types of activities if the values
and beliefs of business and charity organization align

15. Research Plan & Methods

16. Research Plan
• Gain insights from business owners &
consumers
– Why do businesses support CSR?
– How do they do it?
– Does it influence consumers?
• Consumer Preference Survey
• Business Owner Interviews

17. Methods - Survey
• 10 questions
• Survey Monkey – 110 responses (n)
• Distributed via link / social media / email
• “Please rank the options below in order of why
you choose to do business with a particular
company. (1 first choice, 4 last choice)”
– Price (Best value / lowest prices)
– Location (Closeness / convenience)
– Perception of their community engagement and
social responsibility
– Quality of products and/or services

18. Survey
• “Does a business’s reputation for being socially
responsible or involved in its community impact
your decision on doing business with them?”
• “Have you ever avoided a business because of a
bad reputation in social responsibility?”

19. Methods - Interviews
• Spent ~1 hour with 6 company leaders
• 6 guiding questions, meant to spark discussion
• “How does your company invest in the
community?”
• “Does your company have a community-giving
budget? Either in number of hours volunteered
and/or financial budget for giving”
• “How do you keep the staff aligned with this
culture?”

20. Interview Insights

21. Interview Insights
• Many identified profit benefits of CSR /
CE
– But not a driver of why they do it
• Some companies created specifically for
this purpose

22. Interview Insights
• “What goes around, comes around”
• “The right thing to do”
• “Investing in the community is a part of
the company mission”

23. Consumer Survey Insights

24. Survey Insights
• Hypothesis Test
(Claim) “Most consumers prefer companies
that are recognized as being socially
responsible over companies that are not.”
• Evaluated Reputation Influence variable:
“Does a business’s reputation for being
socially responsible or involved in its
community impact your decision on doing
business with them?” (yes / no)

25. Survey Insights
• REJECT the Null Hypothesis:
Total responses (N): 110
“Yes” (X): 91
“No”: 19
Test and Confidence Interval for One Proportion:
Test of p = 0.5 (50%) vs p > 0.5 (50%) (e.g. “most”)
X N Sample p 95% Lower Bound Z-Value P-Value
91 110 0.827273 0.767989 6.86
0.000
Using the normal approximation.
Sample data supports the claim that
most consumers prefer companies that
are recognized as being socially
responsible over companies that are not.

26. Survey Insights
• CSR is important
– Not the most important
“Good rep”
important -
“Yes”

27. Survey Insights
• “Reputation” is important
“Avoid” - “Yes”
“Research CSR policy” - “Yes”

28. Survey Insights
• No correlation between Age and
Increased Price
– “If a business had a great reputation for
being socially responsible and involved in its
community, how much more (%) would you
pay for their products or services?”
Correlation: Age, Percentage greater
Pearson correlation of Age and Percentage greater = -0.080
P-Value = 0.403

29. Conclusion
• Consumers choose based on price and quality
– Top factors
– But…corporate social responsibility is important
• A business that adds value to the community
may have that value assigned to its brand
– Converse?
• We want more businesses to understand the
opportunity and incorporate it into its
strategies