Customer awareness and corporate social responsibility
As per the definition of Sims (2003) corporate social responsibility is the continual commitments by businesses to contribute for the economic development of the region where they operate, and putting efforts for the improvement of standards of employees and society. Since CSR activities have significant impact on the value enhancement of an organization (Servaes and Tamayo 2013); Organizations need to create customer awareness about the firms CSR performances through proper advertisement. Consumers purchase decisions are influenced by the intensity of advertisements regarding CSR benefits (Brown and Dacin 1997). In this regard different researches suggest different consumer behaviors towards the CSR activities. Most of the customers prefer to buy goods from the firms who are more engaged in CSR. Furthermore, there are few customers who are willing to pay higher prices for the products offered by SCR engaged firms (Servaes and Tamayo 2013). Baron (2001) deduced that organizations practices for social responsibility positively affect the demand of its products which consequently leads to profit maximization. As far as customers awareness regarding CSR is concerned, organizations CSR initiatives must be communicated properly to their potential customers. McWilliams and Siegel (2001) suggested that the correlation between organizations social initiatives and advertisement is positive and organizations need to put maximum efforts to highlight their CSR differentiations. Similarly, Schuler and Cording (2006) inferred that the awareness of customers regarding firms CSR initiatives is the key factor to get positive response and rewards of CSR activities. Above mentioned all authors suggested that companies need to emphasis on increasing the awareness level of CSR activities in order to make it profitable strategic investment. Furthermore, Servaes and Tamayo (2013) argued that the information environment of the firm is enhanced by advertisement which leads to increase the awareness among customers that helps organization to spread information about itself, its products, practices and CSR initiatives. These practices of increasing customer awareness towards corporate social performance of the firm increases demand of social responsible behavior in return (Servaes and Tamayo 2013). On the other hand, Schuler and Cording (2006) highlighted another phenomena that firms prior reputation should be concerned in this regard. They aligned CSR information of the firm with their previous image. Schuler and Cording (2006) suggested if the firm has good image in past, its position is strong in order to create positive socially responsible information. In contrast, organizations having poor reputation in past may face difficulty to impress their customers by CSR activities. Similarly, Barnett (2007) argued that customers responses against CSR activities vary from case to case. Results of the same CSR activity from different organizations may be opposite because of the prior reputation of the organization.
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Sims, RR 2003, Ethics and corporate social responsibility, Greenwood, USA