Presenters

Ahmad Rohan
Tusbeeh
Akhtar Amjad
Adnan

Business Ethics: A European Review

Volume 17 Number 1 January 2008

The impact of corporate social responsibility on

consumer trust: the case of organic food
Sergio Pivato,Nicola Misaniand &
AntonioTencatin

In the last 30 years, the traditional approach has been to

look for a direct relationship between the (CSP) & (CFP).

As many authors have suggested in (1997, 2000, 2001)

this
approach has often produced inconclusive and
inconsistent
results.

What is CSR?
Relationship between CSP and CFP
CSR activities and stakeholder trust.
Consumer perceptions about a socially oriented
company
Trust types and its antecedents
Typologies of trust
Organic products in Europe
Analysis of consumer behavior towards organic
products in Europe
Role of trust in business relationships

Literature review regarding consumers trust

CSP and consumer purchasing intentions.
Retailers CSR policy in Europe for organic products
Research conducted on a sample of 400 customers
buying organic products.
Researchers choose to focus on consumer behavior/trust.
Model and findings

 Dilemma
1953 to nowadays discussions about CSR
Usually CSR looks like is the practicing for
environment but in real it is a Marketing
strategy instrument which is used for
competitor advantages over customers.

Five dimensions
Environmental
Social
Ethical
Legal
Philanthropic

Factors
Cluster , Country

Knowledge about corporate and CSR

Awareness about CSR

Perceptions of the consumers

Organic Food or Products

Organic food refers to the way agricultural products are

grown and processed. Organic crops must be grown without
the use of synthetic pesticides, bioengineered genes
petroleum-based fertilizers, and sewage based fertilizers.

Organic livestock raised for meat, eggs, and dairy products

must have access to the outdoors and be given organic
feed. They may not be given antibiotics, growth hormones,
or any animal-by-products

Organic vs. Non-organic Product

Organic product

No Pesticides in production

Non-organic Product

Pesticides used

Grown with natural

fertilizers.

Grown with synthetic or

chemical fertilizers.

Weeds are controlled

naturally crop rotation, hand
weeding.

Weeds are controlled with

chemical herbicides.

Insecticides are used to

manage pests and disease

Insects are controlled using

natural methods (birds,
good insects, traps).

The benefits of organic food

Organic produce contains fewer pesticides
Organic food is often fresher
Organic farming is better for the environment.
Organic food is GMO-free.
Organic meat and milk are richer in certain nutrients.
Organically raised animals are NOT given antibiotics,
growth hormones.

Organic Products

Organic Products in Europe

Organic farming originated in the first part of the 20th

century, in Germany, the United Kingdom and Switzerland.

The number of producers increased and new initiatives

were undertaken for processing and marketing organic
products largely due to the growing consumer need for
wholesome, environ- mentally friendly and sustainable
products.

In 2003, worldwide, the total turnover of organic food

products was around 26 billion US dollars.

In Europe, the EU was quick to recognize the consumer

potential of organic products and in 1991 adopted the
Council Regulation on standards and control measures for
organic farming. The regulation ensures the authenticity of
organic farming methods, defining specific requirements,
and a focused inspection system

In 2000 the EU label for organic products was introduced

In order to increase the credibility of organic products

among European consumers

To ensure better identification of these products in the

market

Logo of EU

Public Perception

Public belief that organic food is safer, more

nutritious, and better tasting than conventional
food.

Consumers purchase organic foods for different

reasons, including concerns about the effects of
conventional farming practices on the
environment, human health, and animal welfare.

Role of trust in business

relationships

Trust
An expectation that the trustee is willing to
keep promises and to fulfill obligations

Role of trust in business relationships

The fundamental yet immediate consequence of Companys social

performance.
Inter-personal, intra and inter-organizational, social business.
Crucial when the one who trusts is in a high risk position.
Antecedents of trust are level of competencies, honesty and
goodwill of the trustee, and also with her non opportunistic
behaviors
Trust and loyalty can build firms competitive performance.

Different Typologies of Trust

Calculative trust (or rational or deterrence-based)

Trust based on knowledge of the trustees profile (defined
usually as cognitive trust)
The trust founded on identification and personal values
(defined sometimes as normative trust, goodwill trust, or
value-based trust).

Distinguishing Trust
Calculative /
Rational Trust

exclusively
founded
on economic
convenience

Cognitive
Trust

Knowledge
of the trustees set
of competencies
allows for trust on a
rational (but, in this
case,
non-economic)
basis.

Normative / Good
Will
Trust

based on
identification and
personal values

Model & Findings

whether a retailers CSR policies influence consumer trust of the
organic
products it sells

Reasoning
A company perceived to have a high CSP should
nurture trust of all typologies (calculative, cognitive, valuebased)

Hypothesis
Hypothesis 1 (H1):Consumer perceptions of a retailers CSP are
positively related to consumer trust in the organic products sold by
that retailer
Hypothesis 2 (H2):Consumer trust in the organic products sold by a
retailer is positively related to the consumer trust in the private label
organic products sold by that retailer

Hypothesis 3 (H3):Consumer trust in the private-label organic

products sold by that retailer correlate positively with brand loyalty
towards those products

Findings

Trust is a key mediator capable of measuring and explaining the

success
(or the failure) of the CSR policies adopted by a company

Socially oriented companies can achieve competitive advantage in

those business areas where trust is crucial in determining consumer
choices

Limitation

Study do not discriminate between companies that are

actually
socially oriented and those that create a facade of this
quality

The more a company is

committed to developing a broad CSR policy, and the
more it is able to correctly communicate this to
stakeholders, the more customers reward its concrete
actions through specific behaviors.