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CSR Determinants of Consumers' Purchase of Organic Food

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CSR Determinants of Consumers' Purchase of Organic Food Master’s thesis CSR determinants of consumers’ purchase of organic food A cross-cultural comparison between China and Sweden Author: Mohamad Khair Jandali Rifai and Yong Wang (Group 7) Supervisor: Rana Mostaghel Examiner: Anders Pehrsson Term: VT19 Subject: Business Administration with specialization in Marketing, Degree Project Level: Master of science Course code: 5FE05E This page is intentionally left blank. 2 Abstract The purpose of this thesis is to describe the determinants of corporate social responsibility (CSR) that are: community support, diversity, employee support, environment, overseas operations, and product, on consumers’ attitude towards purchasing of Organic food brands with Individualism as a moderator. It obtains a quantitative method by the deductive approach. Also, the probability and non-probability sampling select random Chinese and Swedish people above the age of 18. Data collection is by a survey using online questionnaires. Independent sample T-Test compare the means of two samples, factor analysis determines CSR activities and dimensions, and multiple regression employs a description of determinants of CSR dimensions on consumers attitude and purchase. Not to mention the factor analysis and regression analysis are on both samples separately to demonstrate a cross- cultural comparison. The results support previous studies that CSR activities play a crucial role in consumers’ attitude. However, not purchase. Individualism has no impact that moderates this role. Also, demographics do not impact consumers’ purchase, but income impact consumers’ attitude. Cross-cultural comparison for this role shows that it is convergent in Overseas operations and income groups among Chinese consumers. However, it is not convergent among Swedish consumers. Also, the higher the income group of Chinese consumers, the better is their attitude. The thesis gains knowledge that Organic food brands can use CSR activities to influences consumers’ attitude but not purchasing behavior, and organic food brands can tailor their CSR activities according to the target market income group. There is no prior research covering Individualism as a moderator to this influence coupled with Chinese and Swedish as a cross-cultural comparison. Therefore, this thesis is a unique, original, and valuable opportunity to cover this limitation. 3 Keywords Corporate social responsibility, Organic food, Attitude, Purchase, Individualism. Acknowledgments We want to thank Professor Anders Pehrsson, lecturer Pejvak Oghazi, Setayesh Sattari, and Rana Mostaghel. Also, we thank the LNU library and the academic support center at LNU. We want to thank professor Sankar Sen who is an author of one of the cited articles, we would like to thank Eva Fröman from Eko-mat centrum who is also an author of one of the cited articles, and we also would like to thank Robin Juhl from Statista for all their interaction with us. Finally, we thank all the participants in the survey. We very appreciate their support, advice, and time. 4 This page is intentionally left blank. 5 Table of contents 1 Introduction 1 1.1 Background 1 1.2 Problem discussion 5 1.3 Purpose and delimitation 8 1.3.1 Purpose 8 1.3.2 Delimitation 8 1.4 Report structure 9 2 Literature review 10 2.1 Purchase and Attitude 10 2.2 Purchase of organic food 11 2.3 Determinants of organic food purchase 13 2.4 CSR activities in the organic food industry and market 14 2.4.1 Community support 15 2.4.2 Diversity 16 2.4.3 Employee support 17 2.4.4 Environment 18 2.4.5 Overseas operations 20 2.4.6 Product 21 2.5 Individualism 22 2.5.1 Horizontal Individualism 23 2.5.2 Vertical Individualism 24 3 Theoretical framework 25 3.1 Frame of reference 25 3.2 Conceptual model 29 4 Methodology 31 4.1 Research approach 31 4.1.1 Inductive versus deductive research 31 4.1.2 Quantitative versus Qualitative research 32 4.2 Research design 33 4.3 Data sources 34 4.4 Research strategy 35 4.5 Data collection method 36 4.6 Sample and population 37 4.7 Sampling frame and size 39 4.8 Data collection instrument 42 4.8.1 Questionnaire design 43 4.8.2 Pre-test 44 4.8.3 Operationalization 45 4.9 Survey design 51 4.10 Data analysis method 52 4.10.1 Data Coding 53 4.10.2 Sample demographics and descriptive analysis 53 4.10.3 Exploratory factor analysis 54 4.10.4 Regression analysis 56 6 4.11 Moderating and mediating effects 57 4.12 Quality criteria 58 4.12.1 Validity 58 4.12.2 Reliability 60 5 Results and analyses 63 5.1 Pilot study 63 5.1.1 Reliability 63 5.1.2 Validity 66 5.2 Descriptive statistics 69 5.2.1 Socio-demographic profile of respondents 69 5.2.2 Descriptive for other variables 72 5.3 Exploratory factor analysis from the Chinese cluster 79 5.4 Exploratory factor analysis from the Swedish cluster 84 5.5 Multiple regression analysis 90 6 Discussion 96 7 Conclusion 99 8 Implications 101 8.1 Theoretical implications 101 8.2 Managerial implications 101 9 Limitation and suggestion for future research 103 9.1 Limitation 103 9.2 Future research 104 10 Bibliography 105 7 Figure 1: Conceptual model ..................................................................................... 29 Figure 2: Simplified conceptual model .................................................................... 30 Figure 3: Gender ...................................................................................................... 69 Figure 4: Age ........................................................................................................... 70 Figure 5: Education .................................................................................................. 71 Figure 6: Income ...................................................................................................... 72 Equation 1: Actual sample size (Saunders, et al., 2016). ........................................ 40 Equation 2: Rule of thumb (Green, 1991). .............................................................. 41 Equation 3: Composite reliability (Raykov, 1997). ................................................ 61 Equation 4: Error variance (Raykov, 1997). ........................................................... 61 Table 1: Operationalization. ..................................................................................... 46 Table 2: Rules of thumb of correlation coefficient size (Hair Jr, et al., 2015). ....... 59 Table 3: Rules of thumb of Cronbach's alpha coefficient size (Hair Jr, et al., 2015). ................................................................................................................................... 62 Table 4: Cronbach's alpha reliability ....................................................................... 63 Table 5: Factor analysis for composite reliability .................................................... 65 Table 6: Composite reliability.................................................................................. 66 Table 7: Pearson’s Validity test 1 ............................................................................ 67 Table 8: Pearson’s Validity test 2 ............................................................................ 67 Table 9: Pearson’s Validity test 3 ............................................................................ 68 Table 10: Descriptive statistics ................................................................................ 73 Table 11: Rotated loadings 1 from the Chinese cluster ........................................... 80 Table 12: Rotated loadings 2 from the Chinese cluster after removing E 3 ............ 81 Table 13: Principle component from the Chinese cluster ........................................ 83 Table 14: Rotated loadings 1 from the Swedish cluster........................................... 84 Table 15: Rotated loadings 2 from the Swedish cluster after removing Diversity 186 Table 16: Rotated loadings 3 from the Swedish cluster after deleting CS 2 ........... 87 Table 17: Principle component from the Swedish cluster ....................................... 89 Table 18: Multiple regression from the Chinese cluster .......................................... 90 Table 19: Multiple regression from the Swedish cluster ......................................... 93 Appendix 1: Survey ............................................................................................... 122 Appendix 2: Independent sample T-Test ............................................................... 129 Appendix 3: Descriptive statistics for Chinese cluster .......................................... 131 Appendix 4: Descriptive statistics for Swedish cluster ......................................... 132 Appendix 5: Regression coefficients of model 7 from the Chinese cluster........... 133 Appendix 6: Regression coefficients of model 10 from the Chinese cluster......... 134 Appendix 7: Regression coefficients of model 7 from the Swedish cluster .......... 135 Appendix 8: Regression coefficients of model 10 from the Swedish cluster ........ 136 8 This page is intentionally left blank. 9 1 Introduction This chapter will introduce the background of the thesis and its related problem, by illustrating previous examples and statistics to give the reader a general idea of the topic and discover the gap, which leads to the purpose and research question, followed by the delimitation that clarifies the chapter. Then, report structure that conveys the main points and emphasizing on the structure of the thesis. 1.1 Background As the reaction to the adverse health and environmental effects of the genetically
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