Stakeholder Engagement and Sustainability 9780367211233, 9780429265518

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Stakeholder Engagement and Sustainability

This cross-disciplinary business book develops insight into the management of businesses operating in various economic sectors that take a proactive approach to the triple dimension of sustainability (economic, social and environmental), positioning itself as a key reference for both academics and practitioners in the wide area of business management. The concept of sustainability is today at the heart of international policies and debate, and plays a key role in deep changes to the organizational models of companies operating in a wide range of sectors of economic activity. In particular, this book aims to gain a deeper understanding of how stakeholder engagement can contribute to value co-creation both in the company and along the supply chain, and what distinguishes the differing involvement of stakeholders, in particular between public involvement and stakeholder participation. Each chapter of this book presents different modalities of stakeholder involvement and develops the concept of value co-creation from organizational and marketing perspectives. This book is recommended reading for those interested in the fields of stakeholder engagement and theory, sustainability, business studies, and sustainable development. S.M. Riad Shams is a lecturer at Newcastle Business School, Northumbria University, UK. Demetris Vrontis is a Professor of Marketing and the Executive Dean of Distance Learning Unit at the University of Nicosia, Cyprus. Yaakov Weber is a Professor in the Department of Strategy and Entrepreneurship in the College of Business Administration at the College of Management, Israel. Evangelos Tsoukatos is an Associate Professor in the School of Management and Economics at the Technological Educational Institute of Crete, Greece. Antonino Galati is an Associate Professor in the Department of Agricultural, Food and Forest Sciences at the University of Palermo, Italy.

The Annals of Business Research

Series Editors: S. M. Riad Shams, Ural Federal University, Yekaterinburg, Russian Federation. Demetris Vrontis, University of Nicosia. Yaakov Weber, the College of Management, Academic Studies, Israel Evangelos Tsoukatos, University of Applied Sciences, Crete, Greec

Business Models for Strategic Innovation Cross-Functional Perspectives Edited by Riad Shams, Demetris Vrontis, Yaakov Weber and Vagelis Tsou Cross-functional Knowledge Management The International Landscape Edited by S. M. Riad Shams, Demetris Vrontis, Yaakov Weber, Evangelos Tsoukatos, and Alberto Ferraris Stakeholder Engagement and Sustainability Edited by S.M. Riad Shams, Demetris Vrontis, Yaakov Weber, Evangelos Tsoukatos and Antonino Galati

For more information about this series, please visit https://www.­routledge. com/The-Annals-of-Business-Research/book-series/BUSRES

Stakeholder Engagement and Sustainability

Edited by S.M. Riad Shams, Demetris Vrontis, Yaakov Weber, Evangelos Tsoukatos and Antonino Galati

First published 2020 by Routledge 52 Vanderbilt Avenue, New York, NY 10017 and by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business © 2020 selection and editorial matter, S.M. Riad Shams, Demetris Vrontis, Yaakov Weber, Evangelos Tsoukatos and Antonino Galati; individual chapters, the contributors The right of S.M. Riad Shams, Demetris Vrontis, Yaakov Weber, Evangelos Tsoukatos and Antonino Galati to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data A catalog record for this title has been requested ISBN: 978-0-3672-1123-3 (hbk) ISBN: 978-0-4292-6551-8 (ebk) Typeset in Sabon by codeMantra

Contents

List of Figures List of Tables List of Contributors Acknowledgement Editorial Note 1 Stakeholder Engagement for a Sustainable Development of Business Models

vii ix xi xix xxi

1

S . M . R I A D S H A M S , D E M E T R I S V RO N T I S , YA A KOV   W E B E R , E VA N G E L O S T S O U K AT O S A N D  A N T O N I N O G A L AT I

2 The Contribution of Corporate Social Responsibility to Sustainability of Contemporary Businesses

14

T H A N O S K R I E M A D I S , VA I O S K Y R I A K I S , A N D  A L K I S  T H R A S S O U

3 Customer Engagement: A Critical Review of the Literature

32

E L E N I T R IC H I NA , DE M E T R I S V RON T I S A N D M IC H A E L C H R I S TOF I

4 Stakeholder Engagement for Sustainable Entrepreneurial Marketing: Theoretical Synchronization and Empirical Insights

49

S . M . R I A D S H A M S , Z H A N N A B E LYA E VA A N D S U J A R . N A I R

5 The Role of Collectivism on Positive Word-of-Mouth Persuasion in Cause-Related Marketing

62

M I C H A E L C H R I S T O F I , D E M E T R I S V RO N T I S , A N D  A N N A M A K R I DE S

6 Stakeholders in the Implementation of a Sustainable Marketing Strategy: A Comparative Analysis of Polish and Sri Lankan Markets E DY TA RU DAW S K A

81

vi Contents 7 Corporate Financial Statement Fraud in Greece and Management Engagement to Promote Sustainable Development

105

P E T RO S L O I S , A L K I S T H R A S S O U , A N D S P Y R I D O N R E P O U S I S

8 The Role of Trust among Stakeholders in Mergers and Acquisition

123

YA A KOV W E B E R

9 Stakeholder Effects on the Creation and Development of Alternative Food Networks: A Review of the Literature

136

GI USEPPI NA M IGLIOR E

10 Supply Chain Connectedness and Components of Environmental, Social and Economic Sustainability

146

J A RO S Ł AW G O Ł Ę B I E W S K I , N I N A D R EJ E R S K A , A N D M A R I A N T O N I E T TA F I O R E

11 Farmers’ Proactive Behaviour: An Overview about Theoretical Bases and Factors Affecting Sustainability

161

A N T O N I O T U L O N E , A N T O N I N O G A L AT I , M A RC E L L A G I AC OM A R R A , OR I A NA L A MON IC A , A N D M A R I A C R E S C I M A N NO

12 Innovative Partnering: The Key for a Healthy Society

177

L A R ISA M I HOR EA N U

13 How Does Stakeholder Engagement Affect Business Model Sustainability?

195

S . M . R I A D S H A M S , D E M E T R I S V RO N T I S , YA A KOV W E B E R , E VA N G E L O S T S O U K AT O S , A N D A N T O N I N O G A L AT I

Index

207

Figures

3.1 Research framework of the antecedents that affect customer engagement and outcomes 45 6.1 Relations with stakeholders as a part of companies’ mission/value system, in two groups of countries (%) (Source: own research) 93 10.1 Not-oriented simple graphs and cliques 153 10.2 Integrated order (Borys, 2011) across food supply chain, weakly connected according to stakeholders’ approximate representation within the EU food chain (EU, 2017) (Source: our processing) 155 11.1 Main factors and relative theories adopted in proactive behaviour in agriculture 163

Tables

6.1 The structure of the sample total with regard to the size of the company (Source: own research) 88 6.2 Company stakeholders among determiners of company strategy and objectives (p < 0.05) boldface indicates statistically significant differences between countries (Source: own compilation based on research) 89 6.3 Factors which have influenced the company to change marketing strategy towards sustainability (%) (Source: own compilation based on research) 91 6.4 Drivers for the implementation of sustainable marketing activities* boldface indicates statistically significant differences between countries (Source: own compilation based on research) 92 6.5 Relations with stakeholders as a focus of marketing activities (for Poland and Sri Lanka) (Source: own compilation based on research) 95 6.6 Assessment of sustainable marketing activities undertaken by companies in relation to their stakeholders a   boldface indicates statistically significant differences between countries (Source: own compilation based on research) 96 6.7 Anticipated benefits of implementing marketing activities in accordance with the principles of sustainable development (p < 0.05) (Source: own compilation based on research) 100 7.1 Descriptive statistics of all companies (N = 25,468) 111 7.2 Descriptive statistics of manipulators (N = 8,486) 112 7.3 Descriptive statistics of non-manipulators (N = 16,982) 112 7.4 Multiple regression coefficients of Beneish model for manipulators (N = 8,486) 112 7.5 Results of the first hypothesis 113 7.6 Results of the second hypothesis 114 7.7 Results of the third hypothesis 114 7.8 Results of the fourth hypothesis 114

x Tables 7.9 7.10 7.11 7.12

Results of the fifth hypothesis 115 Results of the sixth hypothesis 115 Results of the seventh hypothesis 115 Results of the eighth hypothesis 116

Contributors

Zhanna Belyaeva  is Associate Professor, Head of Research unit for the Global Social Responsibility Excellence and International Business, and Head of EPAS-accredited BA programme in International Economics and Business at the Graduate School of Economics and Management, Ural Federal University (Russia, Yekaterinburg). Her research interests and major publications as well as editorials in international refereed journals by Springer, Emerald and Taylor &Francis are in the field of smart models in international business, corporate development and global social responsibility models, sustainable development strategies and stakeholder value co-creation. She has extensive experience of academic research and teaching in several ­European universities, and has corporate experience in Canada, Russia, Switzerland and Sweden. Michael Christofi  received his Doctorate in Business Administration from University of Gloucestershire Business School, Cheltenham, UK. He is a Senior Research Fellow in Marketing Strategy and Innovation at the University of Nicosia in Cyprus. Previously, he served in various research and development (R&D), sales and marketing roles with large organizations. His research spans across the fields of corporate social responsibility, cause-related marketing, strategic marketing, product innovation, strategic agility and organizational ambidexterity, and has been published in the International Marketing Review, Journal of Services Marketing, and Marketing Intelligence & Planning, among other outlets. Michael Christofi is the corresponding author and can be contacted at [email protected]. Maria Crescimanno  is a Full Professor at the Department of Agricultural and Forest Sciences, University of Palermo (Italy, EU). She is the delegate of the Chancellor of the University of Palermo for the planning and organization of the university’s masters and a Fellow of the EuroMed Academy of Business (EMRBI). Her research interests include international and European agricultural policy, foreign agrifood trade, agribusiness, market competitiveness, logistics and fishery policy and market analysis. Her research has been published in many international peer-reviewed journals.

xii Contributors Nina Drejerska, PhD, is an Assistant Professor, lecturer and researcher at the Faculty of Economic Sciences at Warsaw University of Life Sciences-­SGGW. Her main research interests include rural and local/ regional development, bioeconomy and short supply chains. Nina has 10 years of experience in statistical analysis and reporting on economic issues, and is an author of more than 40 publications in national and international journals. She has been an associate dean for domestic and international cooperation, responsible for cooperation with domestic and international entities, including universities, scientific institutes, companies and farms. She worked for the Polish Ministry of Regional Development and as an Independent Expert in rural development in Mazovia region, Poland. She was coordinator of the project and summer school in Bioeconomy, Euroleague for Life Sciences; was project coordinator within the Jean Monnet Programme; and cooperated within COST actions. Mariantonietta Fiore is an Associate Professor in agricultural economics at the University of Foggia (Italy). She has held the positions of Expert in Agricultural economics (Ministry of Agriculture Policies), Member of the Register of scientific reviewers (Ministry of Education, University and Research), Junior Expert (Ministry of Environment, Land and Sea) and Associate Fellow of the EMRBI. She is author of 78 scientific publications and acts as Guest Editor and Editorial Board Member. She is vice-scientific coordinator of the SKIN project (H2020) and has gained several awards, including best track chair award, best reviewer, best innovation idea, award for outstanding reviewer, best research experts in environmental field and best research ideas on food losses and waste. Antonino Galati is Associate Professor of “Agricultural Economics and Valuation” and Professor in the Fundamentals of Economics, Organisation and strategic management of agro-forest business, and Environmental certifications at the Department of Agricultural, Food and Forest Sciences, University of Palermo (Italy, EU). He holds a PhD in Agricultural Economic and Policy (2007) from the University of Palermo and a Postgraduate Specialization Diploma in “Politique et choix publics en agriculture et alimentation” (2005) from Institut Agronomique Méditerranéen de Montpellier (IAM-M), and is also a Fellow of EMRBI and a Co-Chair of its Research Interest Committee in Agribusiness. His research interests include market competitiveness, agribusiness, marketing strategies, management, logistics and market analysis. His research has been published in a wide range of international peer-reviewed journals. Marcella Giacomarra is currently a post-doc researcher in the Department of Agriculture, Food and Forest Sciences at the University of Palermo. In 2006, she acquired a degree in International and Diplomatic

Contributors  xiii Sciences (University of Bologna, Italy), with a specialization in European Economic Studies. In 2015, she successfully completed her PhD studies in Statistics for Experimental and Technological Research (University of Palermo). Her main research interests are innovative business models, international relations, European Union economic policies comparison, renewable energy and sustainability issues. She is author of numerous scientific papers and a reviewer for internationally recognized scientific journals. Jarosław Gołębiewski  is a Professor in WULS-SGGW and graduated from the Faculty of Agricultural Economics at Warsaw University of Life Sciences-SGGW. He has been an Associate Professor and – since 01/09/2012 – Dean of the Faculty of Economic Science and Member of the Academic Senate and its committees. His main research interests involve organisation of the market and competition, the agricultural and food market, food chains and bioeconomy. He has been involved in a few research projects in these areas. He is an author or co-author of more than 90 scientific publications and 5 handbooks, and reviewer of 3 PhD theses and in habilitation procedures. He is a Supervisor of PhD students and a Head of division of market analysis at the Department of European Policy and Marketing. Athanasios (Thanos) Kriemadis  is Professor in Strategic Planning in Sport Organizations, Total Quality Management (TQM) in Services, Principles of Business Management and Entrepreneurship, and Management of small and medium enterprises (SMEs) in the Department of Sport Management at the University of Peloponnese. He is President of the Innovation and Entrepreneurship Committee of the University, Director of Graduate Studies in Sport Management, Director of the Research Laboratory specialized in Services Management and Quality of Life, former Deputy Rector of Financial Management and Infrastructure, and former Head of the Department. Research interests include TQM and strategic management issues applied to service organizations, including sport organizations. He has written 8 books in Management, 70 papers published in international journals and 200 papers presented at international conferences. Oriana La Monica is a graduate in “Forestry and Agro-Environmental Science and Technology” at the University of Palermo (Italy); she has specialized in protection and enhancement of the rural territory. Her main research interest is the economic impact of climate change on the fisheries industry. Petros Lois is a Professor and holds an MSc degree in Accounting from De Montfort University (UK) and a PhD degree from Liverpool John Moores University (UK). He is a Certified Management Accountant (CMA), he holds the Chair of PwC in Business Research at the

xiv Contributors University of Nicosia and he is Co-Founder of the Euromed Journal of Business. He is currently the Head of the Department of Accounting. He has also served as the Dean of the School of Business, Director of the Academic Affairs Department at the University of Nicosia (Cyprus) and the coordinator of the two professional qualifications: namely CIA (Certified Internal Auditors, USA) and CFA (Chartered Financial Analysts, USA). He is a Member of the Institute of Certified Management Accountants (ICMA) of Australia; the Institute of Marine Engineers, Science and Technology (IMarEST, UK); and the National Book-keepers Association (NBA, USA). He served as a Member of the Board of Directors of the Cyprus Ports Authority (CPA). His research interests include accounting, working capital management, finance and shipping (maritime). His research work has been published in international conference proceedings, books and journals. Anna Makrides is a PhD student at the University of Nicosia, Cyprus. Previously, she served in various senior roles in sales and marketing with large organizations. Her research interests span across the fields of consumer well-being, digital marketing, word-of-mouth and brand awareness. Ms Anna Makrides has a Bachelor’s Degree in Byzantine and Modern Greek Language and Literature, a Master of Business Administration (MBA), a Master of Science in Management and a Professional Diploma in Digital Marketing. Giuseppina Migliore is an Assistant Professor in Agricultural Economics Policy at the Department of Agricultural, Food and Forest Sciences at the University of Palermo. She has achieved two PhDs: one in Sociology and Rural Development, and the other in Agricultural Economics and Policy. Her main research interest deals with consumer behaviour, sustainable consumption, sociology of consumption and marketing of agro-food products. She has been a speaker at several international conferences and has published more than 30 papers in prestigious scientific journals. She is author of several scientific articles in top research journals. Larisa Mihoreanu is Expert in Health Technologies Assessment, trained in the prestigious universities of France, the UK and Romania in bio-medical and economic sciences; she holds a PhD in Business Administration and granted postdoctoral studies in Neuropharmacology. She is a result-driven professional that handles a robust international expertise and global awareness in the field. She was Romania’s Expert Member of Pharmaceutical Products and Medical Devices WG of the EU Council accredited by the EU Permanent Representation of Romania. She founded Guy Researchers’ Society at KCL, chaired Young Researchers’ Group (ECCS) and co-chaired Alternative Sciences Association. Awards received include CRS Jorge Heller Journal of Controlled Release Outstanding Paper Award (2009) and MEDICS

Contributors  xv Conference Award for Targeting Brain (2017). Publications include over 41 scientific papers, including chapters in international books. Most of her articles are cited by outstanding publications. Suja R. Nair holds PhD, MBA and BA(Hons.) degrees, with 25 years of work experience, including corporate, academics and research. She is an independent researcher and handles Strategic Marketing as a Co-entrepreneur at Educe Micro Research, Bengaluru, India. Along with publishing in referred Indian and international publications, her textbooks on consumer behaviour, retail management, marketing research and organizational behaviour are widely read and recommended by leading universities/institutions in India. She is the Editor of Handbook of Research on Ethics, Entrepreneurship and Governance in Higher Education; Associate Editor of International Journal of Big data Management; and Editorial Board Member of IAFOR Journal of Education. Spyridon Repousis  received his BA degree in Economics from Athens University of Economics and Business; MSc degree in Banking and Finance from University of Stirling, Scotland; MBA degree from University of Nicosia, Cyprus; and PhD in Economics from University of Peloponnese. He has taught in Technological Educational Institute of Patras, University of Nicosia and Hellenic Open University, and worked for many years in a private bank. He has written books about banking and finance in Greek, and has participated in books in English. Many scientific articles have been published in English journals, in areas such as banking, finance, fraud and money laundering. Edyta Rudawska, PhD,  is the Head of Marketing Department at the Faculty of Economics and Management at the University of Szczecin, Poland. She is interested in issues regarding marketing, customer relationship management and marketing management. She is an author or co-author of over 200 publications. Her latest book is titled Sustainability Marketing Concept in European SMEs. Insights from the Food & Drink Industry, (Ed)., Emerald Publishing House 2018, Great Britain. She is a Member of the Committee of Organization and Management Sciences of the Polish Academy of Sciences and Polish Scientific Marketing Society. She has participated in scientific internships and research programmes in Cyprus, Great Britain, Sri Lanka and the United States. She has been a Visiting Professor at Guangdong University of Foreign Studies (China) and University of Jaen (Spain). S. M. Riad Shams  is a lecturer in marketing at Northumbria University, UK. He completed his doctoral research at Central Queensland University, Australia. His MBA and BBA (honours in marketing) were awarded by the University of Dhaka, Bangladesh. He is a Research Fellow at the EuroMed Academy of Business, EU, and his key

xvi Contributors research areas are stakeholder relationship management, international marketing, business sustainability, social business and brand management. He has contributed articles to and guest edited for various reputed journals: namely Journal of International Management, Journal of Business Research, International Marketing Review and Management International Review. He is the Lead-Editor of the Annals of Business Research and has been serving as the Track-Chair in the leading international academic conferences. Alkis Thrassou is a Professor at the School of Business at the University of Nicosia (Cyprus, EU). He holds a PhD in Strategic Marketing Management from the University of Leeds (UK) and is also a Chartered Marketer and Fellow (FCIM), a Chartered Construction Manager and Fellow (FCIOB), a Chartered Management Consultancy Surveyor (MRICS), a Senior Research Fellow of the EuroMed Academy of Business (SFEMAB/EMRBI), a Member of the Society of Petroleum Engineers (SPE) and a Member of Cyprus’ Technical Chamber (ETEK). He has extensive academic and professional/industry experience, and has undertaken significant research in the fields of strategic marketing, management and customer behaviour. He has published over 130 works in numerous internationally esteemed, peer-reviewed scientific journals and books, and he retains strong ties with the industry, acting also as a consultant. Eleni Trichina  is a Doctorate Candidate in Business Administration at the University of Nicosia in Cyprus (EU). Her research interests include the marketing of innovation, consumer behaviour, organizational behaviour, business management, anthropomorphism and the use of anthropomorphic technologies. Antonio Tulone is currently a PhD Student in “Agricultural, Food, Forestry and Environmental Sciences” at the Department of Agriculture, Food, and Forest Sciences of the University of Palermo (Italy). In 2016, he acquired the Master’s degree in “Entrepreneurship and Quality for the Agri-Food System” (University of Palermo), and from September 2017 to March 2018 he was Scholarship Fellow at the Geneva School of Economics and Management (University of Geneva, Switzerland). His research interests include economic impacts of climate change, agribusiness and marketing strategies. Kyriakis Vaios has graduated from the Department of Physical Education and Sports Science at the National and Kapodistrian University of Athens. He works as a Physical Education Teacher in primary and secondary public education schools. He is also an alpine ski coach of the Hellenic Mountaineering Club under the name EOS ACHARNON. He has completed postgraduate studies in the field of Sport Management, with a focus on Sports Marketing, at the Department

Contributors  xvii of Sport Management at the University of Peloponnese in Sparta. His research work concerns corporate social responsibility (CSR) in sport organizations and professional sports industry. Part of his postgraduate work has been presented at European conferences and published in international scientific journals. At present, his research interest is focussed on the impact of social responsibility initiatives in the sports sector regarding the brand of a sports entity in terms of market share. He is a PhD Candidate in the Department of Sport Organization and Management at the University of Peloponnese. Demetris Vrontis  is a Professor and Executive Dean at the University of Nicosia in Cyprus. He is the Associate Editor in Chief of the International Marketing Review and the Founding Editor and Editor in Chief of the EuroMed Journal of Business. He is also the President of the EuroMed Research Business Institute (http://emrbi.org). He has widely published in over 200 refereed journal articles and 40 books in the areas of business management, marketing, human resource management, innovation and entrepreneurship. He is a Fellow Member and certified Chartered Marketer of the Chartered Institute of Marketing and a Chartered Business and Chartered Marketing Consultant. He also serves as a Consultant and Member of Board of Directors to a number of international companies. Further details about Professor Vrontis can be found at http://unic.academia.edu/ DemetrisVrontis. Yaakov Weber is Full Professor in the School of Business Administration at the College of Management Academic Studies, Israel. His publications in various journals, such as Strategic Management Journal, Management Science, Human Relations, Journal of Management, California Management Review, Journal of Business Research, Journal of Human Resource Management Review, Human Relations, Human Resource Management and more, received about 6,000 citations. He has received prestige academic awards on his work. His recent book was invited and published by the leading international financial newspaper, Financial Times. He serves in various editorial positions for leading journals. Yaakov is Consultant to international and very large organizations. He is also the Founder and President of the EuroMed Research Business Institute and the EuroMed Academy of Business.

Acknowledgement

We gratefully acknowledge the generous support of colleagues who extended their hands to help us make this book successful. We sincerely thank the contributors for their invaluable contributions. Without their disciplined effort, this book project would not have been accomplished. We would like to express our gratitude to all subject experts for volunteering in the double-blind review process. We would also like to acknowledge the friendly and supportive role of the editorial staff of Routledge. Last, but not least, we appreciate all our family members for their encouragement in making this project a success.

Editorial Note

Stakeholder Engagement and Sustainability This book develops insight for the management of businesses operating in various sectors of economic activity that take, or wish to adopt, a proactive approach to the triple dimensions of sustainability (economic, social and environmental), suggesting itself to support both academics and practitioners in the wide area of business management. The concept of sustainability is today at the heart of international policies and debate, and it plays a key role in the deep changes of the business organizational models operating in a wide range of sectors of economic activity. Companies are more frequently called to answer for the social, ethical and environmental consequences of their business, although they cannot disregard of the impact of their choices on their economic performance. Their behaviour from reactive to proactive, in relation to the issues outlined above, is often a response to pressure from stakeholders, primary or secondary, internal or external, and it is the result of their involvement in the decision-making process, which has become crucial to sustain businesses’ competitive advantage in the international arena. Indeed, compared to the past, stakeholder involvement has moved from a simple, or unidirectional, model, in which companies try to manage stakeholder expectations based on the information they have acquired by the same, to a more complex model, in which companies themselves involve the stakeholder in the decision-making process through a mutual commitment (Manetti, 2011). In recent decades, there has been an increasing interest in stakeholder participation in decision-making, particularly regarding environmental and social issues. With this book, we will try to deepen our understanding of how stakeholder engagement (SE) can contribute to the co-­creation of value for both the company and the external stakeholder as well as along the supply chain. We will also clarify what distinguishes the different involvement of stakeholders, in particular between public involvement and stakeholder participation. In line with this, the aim of this book is to extend our understanding of how SE can be helpful in different business and management areas, such as strategic management,

xxii  Editorial Note marketing, sustainable innovation and eco-innovation, value-creation and corporate social responsibilities, in order to identify the most effective strategies to better consider stakeholders’ expectations when the company includes the concept of sustainability in the business model, proactively exploits business opportunities and/or offsets potential risks. Recognition of the role of stakeholders and the importance of involving them in decision-making processes regarding matters of environmental, social and economic sustainability is drawing increased interest from academics. It has been proven that stakeholder participation in the decision-making process, which can take various forms, can improve the quality of decisions, depending on the nature of the process, contributing to the co-creation of value. Despite the growing importance of stakeholder participation and integration in practices, the academic debate of SE remains underdeveloped and needs further investigation in different economic and geographical contexts. This book presents new and original research in this field, offering features for further research in innovative business models oriented towards sustainability. For the managerial point of view, the different chapters offer an overview of different ways in which stakeholders are involved in order to guarantee sustainable approaches to the economic, environmental and social perspectives. Furthermore, the relevance of the chapters to the different geographical and economic contexts presented in this book offers new insights for firms and managers operating in an international landscape. In order to pursue this aim, apart from the first and the concluding chapters, the rest of the chapters of this book are carefully commissioned, focussing on the role of stakeholder participation in different decision-making processes and their impact on value co-creation in different areas of interest. The first chapter of the book reviews the role of stakeholder participation and engagement in the decision-making processes and the impact of this involvement in value co-creation both for the business and along the supply chain in order to guarantee global sustainability. The last chapter summarizes the main findings of the other chapters to propose effective organizational strategies and models, in relation to the context in which the businesses operates, to gain a sustained competitive advantage. In this context, Chapter 2 explores how corporate social responsibility (CSR) initiatives, adopted by firms to satisfy stakeholders’ expectations and social demands, constitute a strategic factor, affecting their good reputation, and receive stakeholder support. Authors analyse the main benefits for adopting CSR strategies, and especially their link with financial performance and competitiveness, showing that, in several cases, this relationship appears unclear, but in general key determinants of competitiveness are associated with CSR. The chapter highlights that SE, as part of CSR, is crucial for a business that faces conflicting demands from various stakeholders. Through an active collaboration

Editorial Note  xxiii with stakeholders, pursuing common goals contributes to defining an effective strategy oriented towards responsible principles. From this perspective, the authors highlight the importance of planning an effective strategic communication process to inform others about CSR policies and practices. The authors conclude that CSR strategies are valuable in assisting contemporary businesses to develop and retain their reputations, in strengthening their commitment to all stakeholders and in sustaining their future competitiveness. In Chapter 3, a deep and exhaustive review and analysis of the recent academic literature on the SE is carried out in order to reveal the ways in which customer engagement has been researched. The authors identify various customer engagement definitions used in the marketing literature, which demonstrates a multidimensional concept that includes cognitive, emotional, behavioural, psychological and social aspects. The most common theoretical approaches used in the academic literature to explain the concept of customer engagement are analysed, emphasizing that the use of one or another theory depends on the context of analysis. Finally, the chapter shows the antecedents, drivers and outcomes of customer engagement, giving the present state of customer engagement, offering the opportunity to capture the most important variables affecting antecedents and outcomes, and drawing correlations between various concepts analysed. The chapter provides a map of the definitions, theoretical lens, antecedents and consequences of customer engagement and constitutes a basis for scholars and professionals to build further on. In Chapter 4, the authors analyse the role of stakeholders in defining marketing strategies and in particular how understanding the causes and consequences of relations with stakeholders can be useful for developing marketing initiatives aimed at developing and promoting new products and services. The authors follow an inductive constructivist method in order to clarify arguments and to synchronize three different theoretical constructs related to strategic management (resource-based view and dynamic capabilities) and marketing (stakeholder relationship marketing). They empirically test this theoretical synchronization on three case studies of two different industries (education and tourism businesses). The authors conclude that the proposed theoretical synchronization needs to be further supported by empirical studies in order to reinforce its diverse generalization scopes. In Chapter 5, the authors focus on the influence of culture orientation on positive word-of-mouth (WOM) outcomes and the impact of cultural differences on consumer perception of cause-related marketing (CRM) strategies. The most original contribution of the chapter is to bridge the existing gap in economic literature in studying WOM as a CRM outcome from a perspective that considers cultural differences and the collectivist dimension. The authors, through a thorough review, emphasize the failure of the current literature to investigate how consumers, from

xxiv  Editorial Note a specific cultural value dimension, feel and think about a specific subject in the CRM context. In addition, they focus on the collectivist dimension, taking into consideration the association with positive WOM persuasion and psychological outcomes of interest, according to which culture affects both content and process. The analysis contributes to understanding the role of collectivism on consumers’ attitudes towards engaging in information sharing, affecting their decision-making process with regard to CRM. The analysis provides both theoretical and managerial implications, and constitutes a basis for further research. Chapter 6 proposes an empirical analysis to verify whether companies operating in developed countries perceived more stakeholder influence in creating and implementing sustainable marketing strategies than businesses operating in developing markets. The authors identify the three most important determinants of business marketing strategies related to increased competition; the development of information and communication technology (ICT); and the role of intangible resources of companies, such as its image or CRM. In particular, they do not find any statistically significant differences among micro, medium and small enterprises operating in developed and developing countries, although they find that companies in developing countries believe that the above-mentioned determinants are more powerful for Asian companies. The main contribution of this chapter resides in providing new and interesting insight into how stakeholders affect the adoption of sustainable marketing strategies by companies operating under different social, ecological and political contexts, enriching the literature in this research field. In Chapter 7, the authors test the Beneish model (1999) on Greek companies to identify the occurrence of financial statement fraud, or the tendency to engage in earning manipulation, and verify it with the inclusion of social elements in the business strategy that contribute to reducing financial fraud. Findings reveal that careful management can contribute to the prevention of financial fraud if companies include social elements in their business strategies, and especially if they reduce the situational pressures that encourage financial statement fraud. The originality of this chapter is related to the lack of studies that use the proposed mathematical model; it, thus, contributes to enriching the empirical evidence on financial statement fraud and sustainability. The relevant implications that emerge for different stakeholders are aimed to guarantee greater social and ethical sustainability. Chapter 8 of this book focusses on the role of trust among stakeholders in mergers and acquisition success. The author provides a conceptual framework that draws attention to the role of trust in relation to its diverse social manifestations and the condition under which trusting relations emerge and evolve. In particular, the author emphasizes how cultural differences moderate the merger and acquisition (M&A) performance, taking into consideration that, in some cases, cultural

Editorial Note  xxv differences cause communication problems, misunderstandings and conflict between the buying and target management teams, which, in turn, may cause stress and negative attitudes among top managers of the acquired management team. The chapter offers a clear conceptualization of the role of trust among stakeholders in order to guarantee the success of M&A, providing much food for thought for future research and for top executives involved in the planning of international M&As. Chapter 9 develops a review of the relevant empirical studies of stakeholders in Alternative Food Networks (AFNs) by highlighting their effects on the creation and development of new strategies in consumption policies as well as on entrepreneurial activities. In this study, two orders of stakeholders have been identified who are able to have important effects on the diffusion of AFNs and the entrepreneurial activities of small- and medium-sized farms: first-order stakeholders (social movements), whose role is to sensitize consumers into being more responsible in their consumption choices, and second-order stakeholders, identified as consumers aware of the social and environmental consequences of their food purchase behaviour. Indeed, farmers in AFNs try to maximize value creation, by creating social and environmental values, and capture enough profit to ensure the financial viability of the entrepreneurial activities. In Chapter 10, the authors focus on the role of stakeholders in developing a sustainable supply chain in accordance with the three pillars of sustainability. In particular, they explore recent trends in supply chain, emphasizing the growing orientation towards the creation of new supply chain models in which economic, environmental and social aspects, as part of the sustainability concept, become the core business. In this respect, the authors emphasize the role of stakeholders to establish an equilibrium in the supply chain and explain how the interaction among stakeholders allows companies to implement effective actions addressed towards ensuring the sustainability of the supply chain. Based on that, the authors proposed a model summarizing relations between actors across a supply chain and their contribution to the environmental, social and economic sustainability of the chain. Chapter 11 carries out a thorough review and analysis of the existing literature on the main theories used to explain the proactive environmental behaviour of firms operating in the agricultural and food industry. In particular, authors identify and organize the reviewed studies into three groups of theories related to farmers’ beliefs and attitudes towards the social pressures and the diffusion of innovation, and test empirically these theoretical approaches. Through the analysis of a case study of 84 wineries in the Ticino Canton area, the authors outline the influence of external stakeholders (consumers, media and press) and internal drivers (perceived behavioural control and farmer’s attitudes) in orienting farmers’ strategies towards adopting practices with lower environmental impact.

xxvi  Editorial Note In Chapter 12, the author deals with the issue of SE and management in health logistics, with the aim of identifying new opportunities starting from the resources available. The author illustrates several success stories that can form the basis for developing new and effective strategies aimed at improving the well-being of the community. Finally, the last chapter, Chapter 13, summarizes and discusses the different perspectives related to SE and its implications on the sustainability process, emphasizing the main criticism and benefits of the involvement of stakeholders in the decision-making process and their influence on the main business functions. S. M. Riad Shams Northumbria University, UK Demetris Vrontis University of Nicosia, Cyprus Yaakov Weber College of Management, Israel Evangelos Tsoukatos University of Applied Sciences Crete, Greece Antonino Galati University of Palermo, Italy

1 Stakeholder Engagement for a Sustainable Development of Business Models S. M. Riad Shams, Demetris Vrontis, Yaakov Weber, Evangelos Tsoukatos and Antonino Galati Introduction The recent global economic and financial crises and peoples’ growing concerns about the environment have raised fundamental questions about the impacts of existing business models on the sustainability of the global economy and society (Schaltegger et al., 2016). Today, companies are increasingly called upon to respond to society’s expectations that those from all industries take responsibility for their business environment and tackle social and environmental issues (Galati et al., 2019; Salehi et al., 2018; Luhmann & Theuvsen, 2016; Caulfield, 2013). This has inevitably led to a change in the business models whose cardinal principles of economic, environmental and social sustainability are becoming more important for all companies and becoming central in the definition of effective corporate strategies. Companies’ commitment to responding to social and environmental concerns can be summarized with the concept of corporate social responsibility (CSR), which is today an important element of different forms of governance (Galati et al., 2019). Tench et al. (2014) assert that a single definition of CSR does not exist because different scholars seek to claim the concept as their own and define it in their own interests. The most used and widespread definition, proposed by the European Commission in their green paper (European Commission, 2001), states that CSR is “the companies’ voluntary integration of social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. Corporate sustainability can be considered as “a broad approach that includes various characteristics, in particular relating to the contextual integration of economic, environmental and social aspects” (Schaltegger & Burrit, 2005, p. 189). In this respect, the concept of CSR offers some potential contribution to sustainable development because it creates incentives for companies to act socially responsibly (Moon, 2007). Carroll (1999) identified four dimensions of CSR, described as the organization’s economic, legal, ethical and philanthropic responsibilities in relation to the various stakeholders involved in the company activity,

2  S. M. Riad Shams et al. directly or indirectly. It is therefore clear that companies, in defining their sustainable strategies, may not avoid taking stakeholders’ expectations and needs into account. Strategic management theory suggests that a company’s ability to create value depends on its stakeholders’ needs and expectations (Berman et al., 1999; Donaldson & Preston, 1995; Freeman, 1984). Companies are paying more attention to stakeholders’ expectations because the same companies create externalities that affect a broad range of stakeholders, who continually demand that the companies are transparent about their multiple dimensions of sustainability performance (Rasche & Esser, 2006). Stakeholders make their demands to an organization through direct pressure or by conveying information (Galati et al., 2015). The pressures from stakeholders can be political, social or economic, and companies understand the importance of responding to them regarding environmental and social issues as their increased efficiency improves their competitive position and their environmental performance, which gives them external legitimacy (Wu et  al., 2013; Papadopoulos et al., 2010; Sarkis et al., 2010; Hart, 2005; Hart & Milstein, 2003). This means that companies are in an implied social contract with their stakeholders, where the views and opinions of their most important and powerful stakeholders will prevail and affect behaviour (Haddock-Fraser & Tourelle, 2010). However, not all stakeholders exert influence in the same way, and which direction the company moves in depends on which group stakeholders are influencing it and the sector of economic activity in which they operate (Herremans et al., 2016; González-Benito et al., 2011; Sweeney & Coughlan, 2008; Hess, 2007). In addition, the main motivational factors for engaging and developing relationships with stakeholders include accessing conventional capital markets, being accepted in social investment markets, meeting political or social expectations and requiring organizational learning (Herremans et al., 2016; Hitt et al., 2012). This brief analysis suggests that stakeholders play a relevant role in sustainable business models’ definitions, but their influence on a company’s strategic choices varies according to different factors. The heterogeneity of business models and the different approaches used to achieve the goal of sustainability, in which social or environmental purposes can prevail, require more in-depth research to identify new solutions that can help to develop business models able to create positive external effects for the environment and society. The remainder of this chapter defines stakeholders and their contribution to value co-creation and extends the discussion to the relevant areas of business management. It also focusses on how stakeholder relationship management guarantees the design of sustainable strategies and, finally, presents a general conclusion of the discussions. In particular, this chapter provides an overview of the contexts which are considered in the rest of this book’s chapters and which offer insight into

Engagement for Sustainable Development  3 the management of businesses operating in various sectors of economic activity that take or wish to adopt a proactive approach to the triple dimensions of sustainability.

Stakeholder Engagement and Value Co-creation The term “stakeholder”, first defined by Freeman as “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman, 1984, p. 46), has become central in the scientific debate on strategic management and accounting as stakeholders play a key role in shaping firms’ strategies. Stakeholders’ level of importance depends on their power or legitimacy in a specific political or economic context, and how an organization’s operations impact them, which gives them the moral right to be informed and to demand certain standards of performance (Garvare & Johansson, 2010; Mitchell et al., 1997; Freeman, 1984). Nevertheless, the strategy should not be overlooked as it tends to underline the benefits to the organization in terms of its ability to fulfil its objectives (Freeman, 1984). The difficulty of establishing what constitutes a legitimate interest of stakeholders has resulted in several classifications (Reed et al., 2009). Freeman (1984) first identified the most common distinctions, which are primary and secondary stakeholder groups. Primary stakeholders engage in transactions with the organization and then have direct control of its essential means of support (top management, co-workers, employees, customers, suppliers, shareholders and government) (Wheeler  & Sillanpaa, 1997; Freeman, 1984). Secondary stakeholders are actors that, despite not having direct control of the firm’s resources, still have enough influence to merit being considered more than just interested parties (non-government organizations, media, environmental pressure groups and fair trade bodies) (Galati et al., 2018). In response to the pressure from primary or secondary stakeholders, companies address environmental and social issues, and often opt to modify their business models to meet stakeholder expectations. Rogers and Wright (1998) identified four stakeholder groups based on the types of pressure they exert on companies and the distinct information markets. Those four groups are financial stakeholders, product market or consumer stakeholders, labour stakeholders and political and social stakeholders. The same authors suggest that information should be made available to stakeholders, so they can make decisions regarding how the organization’s performance satisfies their interests. More recently, Ferrón Vilchez and colleagues (2017) distinguished between ‘internal stakeholders’, which have a direct economic stake in the organization and operate inside the firms’ physical boundaries, and ‘external stakeholders’, which can be further classified as societal (public interest groups), regulatory (government agents who are tasked to legislate on environmental issues)

4  S. M. Riad Shams et al. and value-chain (suppliers, shareholders and household consumers) stakeholders. Companies’ attention to stakeholders’ expectations has undergone a profound change over the years, which has led parties to be involved differently in the companies’ activities, with the aim of improving sustainable performance. Manetti (2011) identified three phases in the gradual growth of stakeholder involvement. In the first stage, companies identify their primary and secondary stakeholders; in the second phase, they try to respond to stakeholder expectations by balancing positions with respect to social, environmental and economic issues. Finally, companies involve stakeholders in their decision-making processes by sharing ideas and information, through a mutual commitment, with a view to share responsibility for the actions taken. The latter phase, named stakeholder engagement (SE), is a decisive component of a company’s sustainable management, representing the way to involve most parties in a positive and strategic manner, determining the creation of worth in the medium to long term and the organization’s strategic orientation (Greenwood, 2007; Jonker & Foster, 2002). Therefore, as asserted by Andriof et al. (2002, p. 9), SE is a process that “creates a dynamic context of interaction, mutual respect, dialogue and change, not unilateral management of stakeholder”. According to this, stakeholders’ relationship with the company goes beyond the aim to merely satisfy their ambitions and expectations (Manetti, 2011). Taking into consideration the various organizational stakeholders, engagement practices may exist in many areas, including public relations, customer service, supplier relations, management accounting and human resource management (Greenwood, 2007). Extant research on stakeholder theory and SE clearly illustrates the significant importance of engaging with various stakeholders and crafting strong relationships with them for entrepreneurial development (Leonidou et al., 2018). Academics often considered SE and stakeholder co-creation together (Shams & Kaufmann, 2016), and this link has been addressed in several studies, covering a broad range of areas. As Reypens et al. (2016) found, stakeholders’ participation in value-creating and decision-making activities can be crucial for a firm’s performance and long-term survival. The meaning of co-creation basically entails interactions and relationships between firms and external stakeholders in a dynamic and social process to create, exchange and transfer internal ideas and knowledge assets (Ind et al., 2017; Natalicchio et al., 2017; Adderley & Mellor, 2014). Kurucz et al. (2008) identified four types of business case for CSR, which include how value is created (and for whom) as well as the role of business (economic, political or social). It is evident that the creation of value is linked to the company, both acquiring specific knowledge from stakeholders and sharing internal knowledge with stakeholders, thus responding smoothly to company objectives and partners’ expectations. By operating in this way, companies

Engagement for Sustainable Development  5 can minimize production costs and, above all, transaction costs related to knowledge management, reducing the overall level of uncertainty (Galati et al., 2015; Dyer, 1997). The exchange of knowledge is the basis of stakeholder interaction and often underpins the open innovation process, defined by Chesbrough (2006, p. 1) as “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively”. Recently, Leonidou et al. (2018), in a systematic review which synthesizes the current knowledge on how SE affects innovation management, confirmed that SE can enhance innovation process output, improving subsequent entrepreneurship development. Wiesmeth stresses that the careful integration of stakeholders generates additional knowledge for all kinds of innovation activities, providing guidelines for further developing areas, such as CSR and health care management; it is necessary for designing incentive-compatible environmental policies (2018, p. 9). It is therefore clear that knowledge management, and especially the capacity of companies to benefit from the knowledge bases and technologies of external parties, has a positive effect on businesses’ strategies for open innovation (Martinez-Conesa et al., 2017), improving their overall innovative performance (Ferraris et al., 2017). According to the open-innovation paradigm, the use of external knowledge makes innovation easier and faster for firms (Triguero et al., 2018), and, at the same time, calls companies to transform themselves to exploit the outcomes of a successful knowledge management system that they employ (Santoro et al., 2017). A transformation entails the arrangement of well-structured internal practices and a more corporate focus, which also foresee changes and actively involve both tangible and intangible resources (Giacomarra et al., 2019). There is also a need for small- and medium-sized enterprises (SMEs) to acknowledge that internal determinants are important dynamics that are able to act as facilitators of these changes (Santoro et al., 2019). Indeed, as suggested by Ayuso and colleagues (2011), a firm needs to manage external knowledge internally in order to convert it into new ideas for innovation and contribute to a firm’s sustainable innovation orientation. Obviously, the propensity for sustainable innovation is not exclusively dependent on the ability of companies to acquire and manage information from outside, but it also depends on the environment in which it operates and the size of the company. A knowledge management system develops a capacity for the exploitation of internal and external flows of knowledge to facilitate the creation of open and collaborative ecosystems, which, in turn, increases innovation capacity (Santoro et al., 2018). Sustainable corporate transformation, through active SE and knowledge management systems, affects several business actors, such as family firms (FFs) and different supply chain tiers, from business to consumer (B2C) to business to business (B2B) companies. In this regard, as emphasized by Darnall et al. (2010) and Huang et al. (2009), FFs who decide to

6  S. M. Riad Shams et al. adopt sustainable innovation pay more attention to their internal stakeholders and regulatory and value-chain stakeholders than non-FFs do. Indeed, as asserted by Etzion (2007), larger companies have greater societal visibility, which may intensify stakeholders’ requests for them to adopt more proactive sustainable practices. As for the effect of SE on the implementation of CSR, Johnson et al. (2018) reveal that not only are B2C companies under customers’ scrutiny for their sustainability activities, but so are B2B companies, emphasizing how value-oriented aspects of a company widely affect SE, particularly with FFs.

Managing Stakeholder Relationships to Guarantee Sustainable Actions Sustainability has become increasingly important for companies as they face intense scrutiny from diverse stakeholders, and it has been advocated as a key part of the social contract between business and society (Gong et al., 2018; Gold et al., 2015). When a company attempts to not only satisfy the needs of present stakeholder groups but also do so without sacrificing the interests of future generations, we can talk about “sustainable business development”. Companies can operate in different sectors of economic activity, which include the principles of environmental and social sustainability among the factors that guide their decisions. We can define “business sustainability” as a company’s economic, social and environmental efforts to implement and manage both its own and its business network’s impact on Earth’s ecosystems (Svensson & ­Wagner, 2015). Consequently, a company’s sustainability is strictly associated with the sustainability and quality of its stakeholders’ relationships, and it must be the guiding principle for the managerial decision-making process and the pillar of a more comprehensive corporate strategy (Perrini & Tencati, 2006). In this context, Ferrón Vilchez et al. (2017) argued that managers’ perceptions of the pressures from stakeholders vary, and these variations appear to influence the way a company manages its stakeholder relationships and thus implements sustainable strategies (Ferrón Vilchez et al., 2017). As previously emphasized, to meet the diverse needs of stakeholders and to continuously improve, it is important that companies interact with stakeholders and get meaningful feedback on their sustainability performance (Amran & Keat Ooi, 2014). The management of the relationship with stakeholders, therefore, becomes fundamental to achieving the company’s objectives, especially the social and environmental objectives that involve both the company and the stakeholders. It is a priority for the company to define the tools to be used for managing relationships. Onkila (2011, p. 384) suggests that there are different management tools for the various types of relationships, such as if the company has considerable power over stakeholders or vice-versa, if the

Engagement for Sustainable Development  7 stakeholders and the company have a strong collaborative interaction or if there is a conflicting relationship in which the company addresses only stakeholders whose interests are considered to be legitimate. In particular, through active management of stakeholder relationships, it is possible for the company to achieve high sustainability standards for itself and society, and it has the opportunity to develop new ideas that can meet stakeholders’ expectations and contribute to the welfare of the social and natural environments (Ayuso et al., 2011). Strong connections with stakeholders have been widely identified as important factors for modern companies’ success (Sefiani et al., 2018). Companies’ growing tendency to adopt responsible behaviours towards the environment and society, in general, has extended beyond the boundaries of the focal company and has progressed along the supply chain (Wilhelm et al., 2016). Today, managing a sustainable supply chain is a challenging task. Seuring and Müller (2008, p. 1800) define sustainable supply chain management as the management of material, information and capital flows as well as cooperation among companies along the supply chain while taking goals from all three dimensions of sustainable development, i.e. economic, environmental and social, into account which are derived from costumer and stakeholder requirement. This definition highlights how, to ensure sustainability along the supply chain, it is essential to guarantee cooperation between companies and, above all, to interact with stakeholders for the purpose of meeting stakeholder requirements. Gong et al. (2018) found that SE is a moderating factor, which improves a company’s information environment and encourages companies to develop sustainable supply chain management. In this respect, they operate not in an isolation way but as part of a network (Forsman-Hugg et al., 2013). With reference to both the individual company and companies operating along a sustainable supply chain, a central aspect that can condition the process to have a good result is represented by cultural differences between stakeholders and the level of trust among them. The relevant importance of this factor in achieving sustainable results has not been explored much (Del Giudice et al., 2012). Boesso and Kumar (2016) showed that, according to the stakeholder culture, company managers ascribe and weigh the three attributes of power, legitimacy and urgency differently when determining stakeholder salience. We wonder if the current approaches to sustainable development, such as philanthropy, CSR and product innovation, are sufficient to support the radical transformation of organizations and societies towards sustainable development. It is clear that more in-depth research is needed in order to explore new areas of interest and understand the role of

8  S. M. Riad Shams et al. stakeholder and different management tools used to reach sustainable goals at both company and supply chain levels.

Conclusion Sustainability management refers to integrated approaches that a company adopts to face social, environmental and economic issues between itself and stakeholders, thus contributing to the sustainable development of the economy and society. This chapter provides a background to explore how companies involve and engage their internal and external stakeholders, and then manage relationships with them in order to adopt management strategies that respond to the needs of the company itself and society in general but also to the expectations of all stakeholders who are directly or indirectly interested in the company’s sustainable performance. Based on this, Chapters 2–10 of this book explore different SE practices to develop sustainable business models and propose insights on how this engagement can affect different business functions, such as marketing, entrepreneurship and strategizing in various areas of interest. There is a need to identify specific challenges that emerged from these processes, and a willingness to know the capabilities necessary to address such challenges is expected to better guide the designing of new and more sustainable business models. More specifically, the chapters of this book cover the following issues of SE to increase sustainable business performance: - Chapter 02 – CSR and sustainability; - Chapter 03 – Customer engagement and company strategic choices; - Chapter 04 – Stakeholder engagement and sustainable marketing strategies; - Chapter 05 – Cause-related marketing strategies and stakeholder engagement; - Chapter 06 – Stakeholder influence in creating and developing sustainable marketing strategies; - Chapter 07 – Stakeholder management and prevention of financial frauds; - Chapter 08 – Stakeholders’ trust and role in mergers and acquisitions; - Chapter 09 – Stakeholder effects on the creation and development of AFNs; - Chapter 10 – Sustainable supply chain and SE; - Chapter 11 –Stakeholders influence on the proactive environmental behaviour in the wine industry; - Chapter 12 – Stakeholder role in healthy society. - Chapter 13 is an overview of how the various aspects covered in these chapters develop strategic stakeholder management insights and the influence effective management has in achieving a sustainable business model.

Engagement for Sustainable Development  9

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2 The Contribution of Corporate Social Responsibility to Sustainability of Contemporary Businesses Thanos Kriemadis, Vaios Kyriakis, and Alkis Thrassou Introduction Corporate social responsibility (CSR) is an issue that has affected the association between firms and society, and many authors have identified that CSR ideas and methods could support advances in their societal strategies and contribute to their long-term survival and growth. According to McComb (2002), businesses should look beyond earnings, taking into account their starring role in contemporary societies and disseminating humanistic values, transparency, and conformance to legal and statutory demands. The idea of CSR has been extensively used in the global business bibliography, and it is associated with the concept that contemporary businesses should be involved in activities which assist society and do not only pursue their financial goals or legal requirements (McWilliams et al., 2006). According to the United Nations (2009), CSR is: - an approach of investigating the interdependent associations between firms and financial schemes, - an approach of investigating the degree of social responsibilities that a firm has to its community, - an approach of thinking through political rules and guidelines, and how these responsibilities may be fulfilled, and - a method to create benefits for a business that satisfies the identified responsibilities. Moreover, according to the United Nations (2009), there are three fundamental factors of CSR: - Values: Firms’ purpose is not only wealth creation but also environmental protection. - Strategy: Businesses, when formulating their strategic plan, take into consideration societal and environmental issues.

Corporate Social Responsibility  15 - Public pressure: Businesses are reacting to pressure from customers, media, federal governments, local authorities, and other stakeholders, and behave in a more socially responsible manner. Carroll (1991) indicated that firms have economic, legal, ethical, and philanthropic obligations to their stakeholders. a

Economic responsibility: Businesses should create earnings, jobs, and prosperity. b Legal responsibility: Firms are obliged to adhere to the federal and state rules and regulations, which makes the firm eligible to conduct its business legally. c Ethical responsibility: Stakeholders anticipate firms’ exhibiting ethical responsibility that is a consideration for what customers, suppliers, human resources, society, and other shareholders believe is fair and just in accordance with moral standards. Moreover, stakeholders believe that firms should act above the federal and state rules and regulations to achieve societal goals (e.g. improve the working environment for staff and create and implement a code of ethics as well as social reporting in accordance with corporate governance actions). d Philanthropic responsibility: Businesses that are part of good corporate citizenship are expected to get involved in actions that stimulate quality of life and prosperity (e.g. giving donations and philanthropic contributions to local or international communities in order to encourage and assist noble actions). Asongu (2007) stated that CSR is beyond financial and legal responsibilities taking into consideration all stakeholders’ needs and assisting local and international communities to improve their quality of life and the environment. According to Tang and Li (2009), stakeholders of some prestigious corporations in China view CSR strategies as either philanthropy (scholarships to students, financial assistance to nonprofit organizations, poorness decline, environment protection, collaboration with other organizations, etc.) or business practice (quality and safety of the product/ services delivered, human resources health, safety and equal opportunity, CSR strategies to suppliers and other stakeholders, etc.).

Benefits of CSR – Financial Performance – Sustainability According to Visser et al. (2007), planning and implementing CSR strategies may assist firms to: - recruit and keep talent in the firm, - develop powerful collaborations,

16  Thanos Kriemadis et al. - boost revenues and market share, - improve shareholder value, and - cope with crises. Moreover, according to Bhattacharya et al. (2010), there is a relationship between an enterprise’s CSR strategies and its financial performance. The successful planning and implementation of CSR strategies constitutes an essential factor that strengthens the good reputation of a business. According to Klewes and Wreschniok (2009), a business with good reputation, due to the successful implementation of CSR strategies, may attain a bigger market share, improved brand differentiation, and higher revenues and profits. Martin et al. (2009) indicated that CSR strategies are worthy in assisting firms in establishing and retaining their fame, strengthening their commitment to all stakeholders, and sustaining their future competitiveness. According to Macdonald and Marshall (2010), research findings in the international bibliography prove that the following benefits will arise for those organizations that have implemented effectively CSR strategies: - increase market share, revenues, and profits (Salehi et al., 2018); - support the brand strategy of the organization; - promote the image of the organization more effectively with regard to competition; - recruit and retain productive staff, and enhance human resources motivation; - cut back operating costs; and - succeed in fundraising campaigns – raising more funds through a socially responsible investment fund (Barth & Wolff, 2009). Peloza (2009) found that there was a positive relationship between CSR strategies and financial performance in 59% of the studies on CSR reviewed, a mixed or neutral relationship in 27% of the studies on CSR reviewed, and a negative relationship in 14% of the studies on CSR reviewed. Burke and Logsdon (1996) presented how CSR pays off when it is considered as a strategic asset. In this context, the reorientation of a firm’s CSR philosophy can satisfy economic and other stakeholders’ concerns. Burke and Logsdon also maintained that the short-term costs of CSR pay off a firm in the end. Efforts to integrate CSR into corporate strategy have resulted in stakeholders’ strategic management model to respond to social demands. Thus, the concept of strategic CSR was created through the association of the CSR activities with the strategy of the firm. The authors identified five strategy dimensions, which are

Corporate Social Responsibility  17 associated with CSR policies, programs, and processes. Centrality, specificity, proactivity, voluntarism, and visibility are the five dimensions of strategic CSR. The closeness and the fit between CSR strategy and the company’s purpose and goals is the measure of the centrality of CSR strategy. CSR behavior that anticipates upcoming social or political challenges measures the proactivity dimension of CSR strategy, and the extension of CSR behavior beyond mandates or regulatory compliance requirements exhibits a firm’s voluntarism. The immediate measurable stream of benefits has reported as value creation and involves business activities that are integrated with CSR objectives or goals. In conclusion, strategic CSR provides an opportunity for measurable CSR benefits that accrue beyond simplistic associations between philanthropic efforts and earnings. Decision making about strategic CSR should involve CSR activities that produce the highest total payoffs and fall within the five dimensions of strategic CSR (Chatzoglou et al., 2017). In doing so, companies should determine the essential stakeholder groups and define the socially valuable CSR activities to satisfy certain needs. In addition, firms should assess the centrality and specificity of CSR efforts to proactively anticipate future changes and needs, to identify baseline requirements (e.g. voluntarism), to seek opportunities to create CSR positive visibility with key stakeholders, and to evaluate the actual or potential value creation of CSR. Vilanova et al. (2009) explored the relationship between CSR and competitiveness. They argued that a relationship does exist, but its nature remains unclear. First, they determined the issue of CSR and competitiveness in the literature, and identified the competitiveness criteria; in the end, they presented the results using a focus group with practitioners of the European financial sector on the specific issue. They argued that the relationship of CSR and competitiveness is the outcome of a learning cycle where organizational values, policies, and practices are implemented through CSR into business processes, and, in turn, competitiveness is generated. They also found that companies which excel or have claims of superior CSR strategies and policies are top ranked on the competitiveness scale by the markets, and the evaluation criteria used include issues such as capability to create new products and services, brand equity, responsibility, business fame, business relations, and human rights. In this regard, key determinants of competitiveness are associated with CSR. Indeed, the results from the focus group showed that there is an association between CSR and competitiveness. In addition, CSR’s internal acceptance can lead to corporate transformation in terms of organizational values and policies, i.e. altering the business mission, identifying risks, and creating innovative products or services. However, while CSR is viewed as “a license to operate”, it is not measured or evaluated because a common method does not exist. Furthermore, despite its evident importance, it is considered as a reactive rather than a

18  Thanos Kriemadis et al. proactive strategy (e.g. reacting to major scandals or issues regarding business reputation). As a common viewpoint, CSR affects company’s competitiveness mainly in the processes of strategic reflection; stakeholder engagement; and management of reputation, branding, and accountability. Taking into account all of the above results, Vilanova et al. (2009) developed a framework to explain the initial quest. Finally, the authors proposed reputation as the fundamental key driver in the implementation processes of CSR.

Strategies of CSR Mandl and Dorr (2007) indicated that CSR strategies can be: a

employees-oriented strategies regarding the health and safety of the staff, working environment, education, training, and development; diversity and equal opportunities; and balance between work and personal life, which enhance staff loyalty, productivity, internal motivation, and satisfaction, and thus achieve the firm’s mission and objectives, and improve customer service. It is well known that satisfied employees will serve customers better, increasing the ­customer satisfaction index of the company (Bellou & Andronikidis, 2017); b environment-oriented strategies dealing with the protection of the environment and sustainable development, the efficient use of natural resources, and waste and pollution management; c society-oriented strategies regarding community relations; social integration; and working with local community organizations, institutions and the wider society. These strategies could advance business fame, boost assistance from local communities, and captivate and maintain consumers, especially in utilities and energy industries, which include businesses dealing with electricity, gas, water, and energy. These businesses create products and services which contribute highly to the financial and social advancement of a nation (Omer, 2008); d market-oriented strategies dealing primarily with the continuous improvement of the quality and safety of products/services, and product/service innovation, ethical promotion campaigns, and fair pricing.

Lindgreen and Swaen (2010) reviewed the issues that discourage managers from adopting CSR practices. The various conceptualizations of CSR due to the influence of various theories placed a barrier around understanding what CSR consists of and hindered further theoretical development. In their review, the authors found that the agency theory, the institutional theory, the resource-based view theory of the firm,

Corporate Social Responsibility  19 the stakeholder theory, the stewardship theory, and the theory of the firm have contributed to CSR development. They tracked the important topics in the literature concerning CSR aspects, such as the communication, implementation, stakeholder engagement, measurement, and the business case of CSR. Regarding CSR communications, businesses use annual presentations and social media to promote their products in the eyes of customers and other stakeholders, but research showed that CSR communication could create backlash for a firm, provoking stakeholders’ suspicion and cynicism. The stake is how to deal with CSR strategies in order to avoid negative comments. Implementation of CSR is still tricky because existing guidelines and the criteria for success are not verifiable in a dynamic environment. The debate around CSR implementation is whether it is happening through an incremental transformational organizational change process or a radical transformational approach through a managerial reflection on strategies, technologies, and markets. An important part of CSR is the stakeholder engagement process, which should face the conflicting demands of various stakeholders and transform those into CSR goals and policies. Managers are encouraged to embrace all stakeholders through engagement practices in order to pursue common goals and persuade them to aid in the implementation of the organizational strategy. Addressing the moral complexities of diverse stakeholders is a challenge, and only when this happens can stakeholder engagement become CSR in action. Regarding CSR measurement, it is supported that CSR is multidimensional by nature. The questions that placed are about the ways in which CSR activity can be measured and the criteria regarding the level of CSR effectiveness. In addition, the measurement of the impact of CSR based on several dimensions is encouraged. The business case of CSR is established under the notion “doing good is good for business” because organizations create competitive advantage by implementing CSR into their core business. Differentiation, image building, reputation, consumers’ goodwill, and positive attitudes and behavior are some of the CSR outcomes. Jahdi and Acikdilli (2009) examined the role of marketing communications in highlighting, publicizing, and communicating the CSR policies and practices of the organization’s stakeholders. Consumers’ cynicism and mistrust of “sin companies” or “green washing” were pinpointed as obstacles towards acceptance of the message of CSR communication endeavors. Mistrust towards corporate communication efforts about CSR activities can jeopardize the effectiveness of such communications. Their impact on business reputation and brand image is also discussed by authors to maintain the major role that marketing communication tools can play on conveying a more socially responsible image. In addition, authors stressed that CSR-type communications will be significant for the maintenance of image, reputation, and competitive

20  Thanos Kriemadis et al. advantage. Thus, ethics and social responsibility should be included in the strategic marketing communication process. Public relations (PR), advertising, and sponsoring (cause-related marketing) are considered as powerful communication tools for conveying the CSR message. The nature of the business sector and the perceived image and reputation of the firm may have a critical role in transmitting CSR messages. An integrated, coordinated, and holistic approach is required to ensure communication effectiveness. Companies must pay attention to the following three CSR dimensions: (a) what businesses think about business profile, orientation, and legitimacy; (b) what businesses say about justification and transparency; and (c) how businesses behave regarding posture consistency and commitment for a successful CSR communication result. Consistent communications and a commitment from leadership to CSR strategies and implementation processes are also crucial for effective CSR communication. Maignan and Ferrell (2004) introduced a conceptualization of CSR and placed emphasis on the role of the CSR framework in the marketing discipline. They highlighted the managerial need for monitoring, meeting, and even exceeding stakeholders’ norms, and analyzed how CSR initiatives can increase stakeholder support. According to the proposed framework by the authors, marketers should expand their focus to include more stakeholders than just consumers and bundle various CSR activities together. In addition, the authors created a standardized methodology that could be applied across several stakeholders and a classification of strategies that stakeholders use to exercise power over business. They argued that implementation of CSR is not only about initiatives. Businesses should plan and implement a solid set of strategies in order to continually satisfy stakeholder interests and assure their support. Two types of processes suggested that they could support responsible corporate practices, a stakeholder orientation practice, and a practice for the adoption of organizational norms. In order for businesses to benefit from CSR, initiatives should be intelligently communicated to relevant stakeholders. In assessing the prerequisites of successful CSR implementation, Pomering and Dolnicar (2009) examined the awareness level of CSR initiatives in the Australian banking sector, using a qualitative study for managers and a quantitative study for consumers in each respective market. The consumers’ awareness of the social issues that have been examined through CSR initiatives is a critical moderator of CSR effectiveness. Especially in the communication field, this suggests that companies need to provide information to customers in order to better perceive companies’ CSR strategies. A better contextualization might lead to favorable attitudes and purchase intentions among consumers. The emphasis must be placed more on PR and not on advertising when communicating CSR. However, if advertising is used, the execution factors need to be

Corporate Social Responsibility  21 considered in order to avoid and reduce consumer suspicion. In addition, market segmentation is needed in order to improve CSR communications, which, in turn, can increase awareness in certain areas of CSR. Thus, the CSR message should involve information regarding the supported social issues and their significance for the society. The different cognitive abilities and motives of various consumer segments should be considered as a strategic task. The role of CSR communication in maximizing business returns to CSR was explored by Du et al. (2010). They presented a CSR communication conceptual framework by analyzing the content message, communication channels, and specific factors that influence the effectiveness of CSR communication. The authors built on the notion that business returns to CSR are contingent on stakeholder awareness of a company’s CSR activities. The content of the communicated message (commitment, impact, motives, and fit), the channeling process, and company- or stakeholder-specific factors are important and influence the results of CSR communication. The authors pinpointed the fact that low CSR awareness and skepticism towards companies can negatively affect communication efforts to maximize business benefits from CSR investment. In addition, extrinsic motives in companies’ social initiatives can have a backlash effect. In conclusion, the key challenge of CSR communication is to overcome stakeholders’ skepticism and generate favorable CSR attributions. Ellen et al. (2006) examined the influence that consumers’ attributions for CSR motives have on CSR outcomes. Consumers’ attributions regarding the motives of CSR involvement generate corporate associations, which play an important role in the CSR-outcomes relationship, such as reputation, product and brand evaluations, purchase intentions, and customer identification. When corporate motives are attributed as value and strategy driven, consumers respond more positively to CSR efforts. On the contrary, stakeholder-driven motives or motives perceived as egoistic result in negative corporate associations. The combination of value and strategic attributions of CSR motives leads to a more positive appraisal of CSR efforts. Those that incorporate a company’s core business, a well-selected cause, and commitment reduce consumers’ suspicion. Structured CSR initiatives can result in positive attributions and, in turn, affect CSR outcomes. Morsing (2006) described a conceptual model to help managers communicate the company’s ethical and social responsibility profile to a variety of stakeholders. Accordingly, the model companies need to integrate both information and communication strategies for trustworthy CSR communication. Skills and routines must be developed to meet stakeholders’ changing expectations, such as an ongoing dialogue. The model consists of an information strategy and an interaction strategy, with a process to move between these two. The information strategy should

22  Thanos Kriemadis et al. include the following four factors: (a) the promise that CSR constitutes a common-shared concern, (b) the proposition that CSR is associated with the core business, (c) the evidence that proves that CSR has the proper organizational support, and (d) the results that CSR has an objective claim. Regarding the interaction strategy, a proactive engagement between the company and its stakeholders is needed that encompasses a two-way communication process. Babiak and Wolfe (2006), using Carroll’s framework for CSR, outlined the ethical and discretionary CSR initiatives that were implemented in the National Football League (NFL) Super Bowl XL. The authors suggest that sport organizations should use CSR practices to advance their reputation; build brand image and customer loyalty; and, finally, affect society in a positive manner. In addition, altruistic and organizational reasons (that contribute to the bottom line of the team or organization) should be combined as motivation of CSR initiatives. The need to develop criteria to measure the contribution and outcomes of CSR activities, and the study of the nature of motives (pragmatic or principle causes) have also been highlighted by the authors. The prominent role of sport as a vehicle in deploying CSR initiatives has been explored by Smith and Westerbeek (2007). This is because sport possesses the unique ability for mass media distribution and communicative power to appeal to the youth, to associate with positive health impacts, to promote social interaction and sustainability awareness, to foster cultural understanding and integration, and to give immediate gratification benefits to participants. In addition, Smith and Westerbeek highlighted the corporate partnerships as the only form capable of effectively transferring the power of corporate resources to society through CSR because neither sport sponsorship nor donations are a genuine social responsibility. Therefore, sport organizations should channel their CSR efforts into a suggested list of domains of responsibilities. As follows, the rules of fair play (equality, access, and diversity), safety of participants and spectators, independence of playing outcomes, transparency of governance, pathways for playing, community relation policies, health and activity foundation, principles of environmental protection and sustainability, developmental focus of the participants, and qualified and accredited coaches are the domains in which sport organizations should expand their CSR initiatives. Documented policies for addressing the aforementioned social obligations-­responsibilities make sport organizations eligible candidates for corporate partnerships. Exploring the use of sports in disadvantaged communities for social inclusion and the creation of social capital, Skinner et al. (2008) concluded that social inclusion programs should be based on local assets (e.g., infrastructure, people, revenues, and networks) and be available in the target communities. Sport-based social inclusion programs (CSR

Corporate Social Responsibility  23 initiatives) should address and respond to specific community needs by utilizing a social development policy. In addition, monitoring and evaluating such programs from the very start to the very end (from conception to implementation) should be a priority. Partnerships between the traditional sport industry and community-based organizations ensure the viability of these efforts. Breitbarth and Harris (2008) have constructed a model for the role of CSR in the football business. They argued that the implementation of various approaches of CSR can generate humanitarian, financial, cultural, and reassurance values. This value creation process leads the sport to gain institutional relevance, increased game participation and competitiveness, and finally profits. The model was tested in four national professional football contexts. The implementation and management of the proposed CSR model can create resources and strategic advantages to all stakeholders. The authors proposed the application of their model to other industries and suggested that research efforts should continue in order to increase understanding of how CSR can be applied in different contexts. Walter and Chadwick (2009) have illustrated a range of strategic benefits that a firm can reap from CSR programs and corporate citizenship initiatives. They proposed the community trust model of governance as a mode of operation to implement CSR activities in football clubs. Brentford football club and Charlton athletic football club were the case studies of this effort. The avoidance of commercial and community conflicts, reputation management, brand leadership, local authorities’ partnerships, commercial partnerships, and player identification were among the strategic benefits that football clubs could achieve when implementing the proposed model. Babiak and Wolfe (2009) have explored the determinants (internal/ external drivers) of CSR activities in professional sport. Interviews with sport executives (from the National Football League, Major League Baseball, National Hockey League, and National Basketball League) and analysis of organizational documents showed that external drivers (the key constituents, the interconnectedness of the sport field, and pressures from the leagues) are important determinants of a professional sport team’s CSR initiatives in contrast to internal drivers that are less important. The pressures exerted by context, content, constituents, and control or casual forces in the sports industry are referred to as external drives. Internal drivers are all the valuable, rare, and inimitable resources that a sports team or organization owns. Three types of CSR initiatives have emerged regarding the emphasis that teams and organizations placed upon internal or external drives. From this perspective, CSR initiatives can be characterized as corporate-centric, stakeholder-centric, or ­strategic-centric. Other organizations’ practices and perceived societal expectations have been accepted as determinants (external in nature)

24  Thanos Kriemadis et al. that influence the CSR decisions of professional sport executives. In addition, unique internal resources have also played a major role. Bradish and Cronin (2009) stated that CSR is not philanthropy but a systemic business mindset, an organizational culture where the social concerns of an organization should be combined with its financial concerns. Sports as a social and economic institution is aligned with the business principles and practices of CSR. In conclusion, authors support the argument that CSR should be considered as one of the most significant factors of modern sport leadership theory. Godfrey (2009) defined and framed CSR using Carroll’s four responsibilities, Freeman’s stakeholder theory, and Wood’s model of corporate social performance. The author confirmed the institutional character of sport using Scott’s three pillars of the institution and outlined a number of CSR issues that may be unique to sports. As a result, sport can deploy its CSR activities: (a) as a cognitive institution, by shaping how we think and view the world; (b) as a regulative institution, by creating the regulation of social life through rules, norms, and laws; and, finally, (c) as a normative institution, by creating and communicating a sense of what is right, appropriate, or legitimate. The author concludes that as sports globalization is becoming more and more noticeable, the constant question that should be asked is about the kind of social responsibilities that every actor in the sport industry has. The relationship between fans’ assessment (concerning team reputation because of CSR activities) and their patronage intentions was examined by Walker and Kent (2009). In addition, the mediating role of the team identification as a regulator was also considered. The authors suggested that sports managers should promote CSR activities as fans and sport consumers have the ability to evaluate CSR efforts. The promotion of the CSR initiatives can be considered a powerful source of organizational reputation building. Fans’ responses to CSR activities depend on the amount of information given to them and can challenge their favorable support. Consequently, CSR information should provide focused details on how and where CSR practices have influenced the community, and where and how they have helped address specific social issues. CSR information provides the base for an effective marketing communication strategy. However, the provided CSR information should come from reliable sources, such as fan groups and team-related chat rooms, in order to avoid diminishing results on such communications. Team identification is a moderator of the CSR (reputation relationship) so that a high level of team identification can lead to reputational assessments that are less dependent on CSR information. Blumrodt et al. (2010) have researched the CSR actions of the professional teams in the European football league in France and their impact on the clubs’ brand images. Alongside this, consumers’ perception about the clubs’ brand images was evaluated using a four factor-dimension

Corporate Social Responsibility  25 conceptual framework of core services, other attributes, customers’ benefits, and CSR ethical perceptions. Results showed that spectators have expectations regarding teams’ CSR engagement, but managers underestimated its significant role and neglect to consider CSR communication as an essential factor of strategic management. In addition, research revealed the association of CSR engagement to spectators’ perception about teams’ brand image, which is also correlated with the quality of stadiums, financial transparency, international competitiveness, and importance of the duty to face expectations for social engagement. Ratten and Babiak (2010) elaborated on the issues of social responsibility, philanthropy, and entrepreneurship in the sport business sector. CSR issues were approached from three different perspectives of implementation: sport organizations’ CSR (such as sport teams and sport leagues, as CSR efforts initiated by these sport businesses), CSR as partnerships with sport organizations (as a vehicle of corporate CSR through ­donations, cause-related marketing, or sponsorships), and CSR as a focal mission of sport organizations (their main aim is to cause social impact or development). Ratten (2010) has examined the role of the following three factors in the discipline of sport management: (a) social responsibility, (b) philanthropy, and (c) entrepreneurship. Ratten suggested that the integration of the three above-mentioned factors can change the future of sport management. This is because sport businesses have an accessible audience for social responsibility and therefore offer a rationale for promoting social responsibility and philanthropy in the entrepreneurial community. This rationale gives them the opportunity to model socially responsible strategies within the sport sector. Sheth and Babiak (2010) interviewed professional sport executives in order to explore how they define CSR and what their CSR priorities in their respective teams were. Furthermore, organizational variables, such as winning, revenues, and team value, were highlighted as a controlling factor of the reported CSR involvement. Executives placed a different priority on CSR elements, focusing on philanthropic activities and ethical behavior. Sport executives considered CSR as a strategic asset for their organizations. They have also mentioned philanthropy, local community, partnerships, and ethical concerns as factors that influence CSR strategy. In addition, the authors found that for most teams, across sport leagues, the focus on CSR strategies was placed upon youth, education, health, and community issues. Lacey and Kennett-Hansel (2010) explored how customers’ perception of CSR performance, in an NBA team, impacted customer relationship variables, such as trust, commitment, word-of-mouth, purchase ­behavior, and follow up performance over time. Engagement with CSR initiatives rewards a firm by creating and enhancing trust and

26  Thanos Kriemadis et al. commitment. The researchers also mentioned that the level of CSR awareness depends on the length of time for which a sport organization plans and executes CSR activities. The notion of social involvement includes CSR, corporate social responsiveness, corporate citizenship, and financial performance (Vrontis et al., 2011; Singh et al., 2011; Thrassou et al., 2012; Papasolomou et al., 2014; Demetriou et al., 2018; Christofi et al., 2018). Walker and Parent (2010) expanded the idea of social involvement and found out that it differs among sport organizations according to their type, scope of direction, and target audiences. The researchers proposed an integrative model of social involvement that includes the spatial orientation of social involvement in sport. They also realized that most teams, leagues, and sport-related organizations make use of the Internet in the reporting of their social involvement process (due to increased demand for transparency). Operation within an international context requires sport organizations to focus their CSR efforts and reporting on the global workforce, human rights, and environmental issues. On the other hand, teams, leagues, and other sport organizations that operate in a narrow context emphasize their CSR and reporting to more localized CSR efforts, such as philanthropy, community outreach, quality of life, and education. Findings reveal that there is a trend for imitation of social involvement strategies. Sport organizations demonstrate a difference in the kind of reported involvement between production-centered (worker rights, philanthropy, and conduct codes) and service-centered (diversity, philanthropy, and volunteerism initiatives) organizations. Finally, the study differentiates the types of social involvement as follows: CSR is concerned with local community programs, while corporate social responsiveness and corporate citizenship activities are connected with instrumental and socially impactful activities. Regarding the motives of CSR, the authors indicated that a balance of altruistic and instrumental motives for social involvement would lead to greater benefits in acquiring and maintaining a competitive position within the sport industry. Despite the considerable increase of sports, Levermore (2010) indicated that the poor linkage of CSR projects to core business objectives is a main cause of failure. The absence of evaluation of such CSR projects also operates as a failure factor. Levermore (2010) suggested that sport might be a valuable vehicle for the development of CSR initiatives, especially in communities which other CSR schemes have failed to reach, like youth communities. The sport has the advantage in delivering developmental objectives through CSR because of its appeal to youth, other groups of people, and marginalized communities. The capacity of sports to create CSR partnerships among institutions is another considerable profit. However, the use of sports does not apply to all locations and settings. The use of sports to promote not altruistic

Corporate Social Responsibility  27 causes, or causes guided only by donor’s interests, instead of community, leads to failure. Filizöz and Fişne (2011) explored the importance of CSR within the sport industry. They studied several cases of CSR practice in sport management and identified a number of different types of CSR behaviors. Sport entities use a wide variety of CSR practices according to their importance, visibility, and impact on society. Such entities are sport-­ governing bodies, professional sport leagues, professional sport clubs, individual athletes, and sporting good business. The issues these sport bodies chose to address include: (a) help to vulnerable people and disadvantaged or underprivileged children; (b) community support via establishing partnerships with nonprofit and nongovernmental organizations; and (c) fundraising supporting issues, such as peace, anti-­discrimination, social integration, education, arts and culture, housing, poverty, malnutrition, and health-related topics. Fundraising campaigns encourage people to donate to social issues. The researchers concluded that the CSR behavior of sport entities can influence stakeholder attitudes and buying behaviors. Moreover, it contributes to a sport entity’s fame, differentiation strategy, spectator devotion, competitiveness, improved economic efficiency and effectiveness, recognition, improved image, improved community relationships, and greater viability while executing ethical and philanthropic behavior. Carey et al. (2011) have explored the topic of the 2016 Olympic Games city biddings and revealed how the focus of CSR programs on community development is different in “traditional” and “non-­ traditional” bid cities. They examined how the CSR and community development approaches have been presented during the bid processes through the media lenses and articulated by various stakeholders. Results showed that CSR and community development approaches in “non-traditional” bids of underdeveloped cities were at a higher level compared to those of traditional bid cities. The emphasis was placed upon CSR and community development approaches, with respect to the notions of “Sport for development” and “North–South divide”. The researchers conclude that the way in which media frames the issue of CSR during bid campaigns may generate opportunities for community development in “non-traditional” bid cities. The issues of who supervises and leads the bid processes, and how this influences the various social responsibility schemes included in this process, are major topics for future research.

Social and Environmental Auditing and International Management Standards Social auditing is an estimation of the impact of a firm’s social responsibility strategy on society. Social responsibility (ISO 26000) assures that

28  Thanos Kriemadis et al. a firm operates in an ethical and transparent way that contributes to the health and prosperity of society. ISO 14000 deals with the various factors of environmental management. More specifically, it is a management system helping a firm to: - manage the environmental effect of its actions and deliverables; - improve its environmental standards; - deploy a method to formulate environmental goals, accomplish these goals, and provide documented evidence that these predetermined goals have been accomplished (http://www.iso.org/iso/ iso_14000_essentials). SA8000 is a multinational social responsibility standard for working conditions. A firm has the responsibility to deal with the following social issues: - child labor, - forced labor, - workplace safety and health, - the right to organize, - discrimination, - workplace discipline, - working hours, - wages, and - management systems for HRs (Calder, 2008). The Global Reporting Initiative (GRI) is also a system for helping firms to report on CSR issues, placing more emphasis on sustainability issues as well as human rights (Calder, 2008).

Conclusions Businesses produce social results through their operations. Societies need businesses to provide jobs, resources, and infrastructure. Societies also determine the boundaries that will be enforced on the conduct and performance of businesses. The idea of CSR has been extensively used in the global business bibliography, and it is associated with the concept that contemporary businesses should be involved in activities which assist society and not only pursuing their financial goals or legal requirements. A business with a good reputation, due to the successful implementation of CSR strategies, may attain a bigger market share, improved brand differentiation, and higher revenues and profits. CSR strategies are very valuable in assisting contemporary businesses in developing and retaining their fame, strengthening their commitment to all stakeholders, and sustaining their future competitiveness.

Corporate Social Responsibility  29

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Corporate Social Responsibility  31 Ratten, V. (2010). The Future of Sport Management: A Social Responsibility, Philanthropy and Entrepreneurship Perspective. Journal of Management and Organization, 16(4), 488–494. Ratten, V., & Babiak, K. (Eds.). (2010). The Role of Social Responsibility, Philanthropy and Entrepreneurship in the Sport Industry/ Editorial [Special Issue]. Journal of Management and Organization, 16(4), 482–487. Salehi, M., Lari DashtBayaz, M., & Khorashadizadeh, S. (2018). Corporate Social Responsibility and Future Financial Performance. EuroMed Journal of Business, 13(3), 351–371. Sheth, H., & Babiak, K. M. (2010). Beyond the Game: Perceptions and Practices of Corporate Social Responsibility in the Professional Sport Industry. Journal of Business Ethics, 91(3), 433–450. Singh, S., Vrontis, D., & Thrassou, A. (2011). Green Marketing and Consumer Behaviour: The Case of Gasoline Products. Journal of Transnational Management, 16(2), 84–106. Skinner, J., Zakus, D. H., & Cowell, J. (2008). Development through Sport: Building Social Capital in Disadvantaged Communities. Sport Management Review, 11(3), 253–275. Smith, A. C. T., & Westerbeek, H. M. (2007). Sport as a Vehicle for Deploying Corporate Social Responsibility. Journal of Corporate Citizenship, 25(1), 43–55. Tang, L. U., & Li, H. M. (2009). Corporate Social Responsibility Communication of Chinese and Global Corporations in China. Public Relations Review, 35, 199–212. United Nations. (2009). Patterns of Internationalization for Developing Country Enterprises (Alliances and Joint Ventures). New York: United Nations Publications. Thrassou, A., Vrontis, D., Chebbi, H., & Yahiaoui, D. (2012). A Preliminary Strategic Marketing Framework for New Product Development. Journal of Transnational Management, 17(1), 21–44. Vilanova, M., Lozano, J. M., & Arenas, D. (2009). Exploring the Nature of the Relationship between CSR and Competitiveness. Journal of Business Ethics, 87(Suppl. 1), 57–69. Visser, W., Matten, D., Pohl, M., & Tolhurst, N. (2007). The A to Z of Corporate Social Responsibility (2nd ed.). Chichester: Wiley. Vrontis, D., Thrassou, A., & Rossi, M. (2011). Italian Wine Firms: Strategic Branding and Financial Performance. International Journal of Organisational Analysis, 19(4), 288–304. Walter, G., & Chadwick, S. (2009). Corporate Citizenship in Football: Delivering Strategic Benefits through Stakeholder Engagement. Management Decision, 47(1), 51–66. Walker, M., & Kent, A. (2009). Do Fans Care? Assessing the Influence of Corporate Social Responsibility on Consumer Attitudes in the Sport Industry. Journal of Sport Management, 23(6), 743–769. Walker, M., & Parent, M. M. (2010). Toward an Integrated Framework of Corporate Social Responsibility, Responsiveness, and Citizenship in Sport. Sports Management Review, 13(3), 198–213.

3 Customer Engagement A Critical Review of the Literature Eleni Trichina, Demetris Vrontis and Michael Christofi Introduction Over the past decade, customer engagement has become an important component in marketing discipline (Islam and Rahman, 2016). ­Marketers are increasingly interested in the ways in which customers can be better engaged to build favorable consumer experiences ­(Marbach, Lages and Nunan, 2016). These experiences are considered important in developing sustainable differentiation and creating a continuous relationship between businesses and their customers (Rose, Hair and Clark, 2011). Going further than customer satisfaction and loyalty, customer engagement is often considered an advantage for a successful organization (Marbach, Lages and Nunan, 2016). Following these changes, ­customer engagement has been studied extensively in the ­recent academic literature (Munjal, Mishra and Shanker, 2019; Islam and ­Rahman, 2016; Marbach, Lages and Nunan, 2016; Brodie et al., 2013). The purpose of this chapter is to understand the ways in which customer engagement has been researched and analyzed; to identify the relevant and highest quality research in relation to the customer engagement topic in marketing, a literature review was carried out. We derive a set of comprehensive definitions used for customer engagement and theoretical frameworks developed for explaining this concept, and we analyze the various a­ ntecedents and outcomes of customer engagement proposed through the literature. We consequently identify existing research gaps and prescribe effective avenues for future works in this research stream.

Literature Review It has often been noticed that today’s market scenario, technological development and fierce antagonism, in combination with the variety of available products and well-informed consumers, lead organizations to increasingly involve their customers at all possible contact points (Islam and Rahman, 2016). “Customer engagement” or “consumer engagement” is described as a method to create, build and increase customer relations (Islam and Rahman, 2016). It is considered to have the ability

Customer Engagement  33 to influence consumer satisfaction, customer loyalty, firm performance and firm value, and therefore, it is receiving increasing attention from scholars and marketing practitioners (Islam and Rahman, 2016). The concept of customer engagement has arisen in the marketing discipline and service literature only during the past decade (Brodie et al., 2013). Before the beginning of the study of this term in marketing, other academic disciplines, such as social sciences, management, organizational behavior and psychology, have provided a variety of definitions for engagement forms (Alvarez-Milán et al., 2018; Islam and Rahman, 2016; Brodie et al., 2013). However, the managerial interest in customer engagement has started increasing, and it is expected to continue to do so. Specifically, marketing practitioners pay close attention to the correlation between brand equity, sales and earnings from highly engaged consumers (Alvarez-Milán et al., 2018). For example, recent research on this area has indicated that truly engaged customers spend more on their transactions, shop more frequently and are more likely to recommend their brand (Alvarez-Milán et al., 2018). Also, marketing researchers highlight how customer engagement has the potential to achieve competitive benefits and create relationships with customers that are not solely based on monetary motives (Christofi et al., 2019a, 2019b; ­Alvarez-Milán et al., 2018; Christofi et al., 2018; Leonidou et al., 2018). Thus, there is strong evidence to support the ideas that the success of a business depends to a large extent on customer engagement, and understanding consumers’ motivations that drive their participation in various contexts can help organizations to unleash this potential (Zhang et al., 2014).

Definitions Used for “Customer Engagement” In the existing literature, important contributions have been made towards the definition and analysis of customer engagement valence and dimensions. In the academic marketing literature, one of the prominent definitions used for customer engagement is the one of Patterson et al., as it is cited in Hollebeek (2011), explaining the term as the degree of a customer’s physical, cognitive and emotional presence in his/her ­relationship with a service organization. Similarly, Hollebeek (2011) defines customer engagement in a brand environment as “the level of a customer’s motivational, brand-related and context-dependent state of mind characterized by specific levels of cognitive, emotional and behavioral activity in brand interactions”. The level of activation, similarity and absorption in brand interactions is also considered in Hollebeek’s model (2011) ­(Ángeles Oviedo-García et al., 2014). Following Mollen and W ­ ilson’s (2010) theoretical perspective, “instrumental value” and “ ­ experiential value” dimensions are also considered. Specifically, they propose that a consumer’s brand engagement includes an interactive linkage with the object and requires the appearance of a customer’s perceived experiential

34  Eleni Trichina et al. value, along with the instrumental value acquired from certain brand interactions (Brodie et al., 2013; Mollen and Wilson, 2010). On the contrary, Vivek et al.’s analysis, as it is cited in Brodie et al. (2013), defines customer engagement as “the intensity of an individual’s participation and connection with the organization’s offerings and activities initiated by either the customer or the organization”. Bowden (2009) considers customer engagement as a psychological process, including both cognitive and emotional dimensions. More notably, Bowden (2009) focuses on customer engagement as a repeated procedure, starting with customer satisfaction and leading to customer loyalty. The way towards consumer loyalty comprises effective commitment, trust, participation and consumer delight. Concurrently, according to Bowden’s (2009) developed conceptual framework, differences in customer engagement might exist, depending on the extent to which the customer is new or already existing. This is to say that mechanisms should exist through which customer loyalty towards an object is formed and through which customer loyalty towards a brand or a firm is maintained for “repeat purchase customers” (Ángeles Oviedo-García et al., 2014). In turn, Van Doorn et al. (2010) focus on the behavioral dimension of customer engagement, viewing it as the behavior of consumers towards a service brand, driven by motivational factors, including, word-of-mouth activities, recommendations, blogging and written reviews (Ángeles ­Oviedo-García et al., 2014). Gaining insights from the existing conceptualizations of customer ­engagement, a comprehensive definition can see customer engagement as the readiness of an individual to actively be part of and interact with the central object, which can be a brand, organization, service, website or community, and which can have an either negative or positive direction, and an either high or low extent based on the nature of consumers’ interplay with different touch points (Islam and Rahman, 2016). The analysis of the above-mentioned customer engagement definitions in the marketing literature demonstrates that the multi-dimensionality of the term consists of the prominent denominators found across studies (Gavilanes, Flatten and Brettel, 2018). Even though some ­scholars have seen customer engagement as unidimensional, emphasizing the emotional connection between an organization and its customers ­(Ángeles Oviedo-García et al., 2014) or focusing on the psychological state that happens by ­virtue of interactive consumers’ experiences with an object (Jaakkola and A ­ lexander, 2014), most of the definitions have seen customer engagement as a multi-dimensional concept that includes cognitive, emotional, behavioral, psychological and social dimensions (Busalim, Hussin and Iahad, 2019; Gavilanes, Flatten and Brettel, 2018; Islam and Rahman, 2016). Someone might argue that the lack of consensus on the definition of customer engagement could be explained based on the context in which the term is being applied and analyzed, which can be

Customer Engagement  35 different (Gavilanes, Flatten and Brettel, 2018). Except from the context in which customer engagement is taking place, the dimensions, levels and phases also play an important role on the d ­ efinition adapted each time (Gavilanes, Flatten and Brettel, 2018). There is, thus, a number of contradictory definitions of customer engagement, and ­researchers have yet to find a conceptualization that is concordant across different contexts.

Theoretical Frameworks Used to Explain Customer Engagement According to a preliminary search in the extant literature, a range of theoretical lenses have been used to study consumer engagement (Islam and Rahman, 2016). Social exchange theory, relationship marketing (RM) theory and the Service-Dominant (S-D) Logic theory are among the most presented theoretical perspectives in the academic literature (Islam and Rahman, 2016; Alvarez-Milán et al., 2018). To begin with, the relationship marketing (RM) theory and the S-D Logic theory have been adapted by several scholars to create a theoretical framework of the concept of customer engagement (Islam and Rahman, 2016; Hollebeek, 2011). ­Following the RM and S-D Logic theories, scholars consider consumers to have an active rather than a passive role in brand-consumer interactions (Hollebeek, 2011). They may use relevant cognitive, emotional and physical means, depending on the perceived value levels they received from specific brand interactions (Hollebeek, 2011). Therefore, it becomes clear that according to these two theories, consumer engagement is perceived as very interactive in nature (Islam and Rahman, 2016). Another group of theories widely used as the theoretical prisms to ­analyze customer engagement is the one of social exchange or social practice (Verleye, Gemmel and Rangarajan, 2014; Hollebeek, 2011). Drawing from social exchange theory, customers are expected to participate in a social exchange procedure beyond simple economic obligations (Verleye, Gemmel and Rangarajan, 2014). This theory of social exchange holds that it resulted from consumers’ affect. More specifically, consumers are ­presumed to exchange thoughts, feelings and behaviors towards a service, a brand and/or an object in order to gain certain benefits from this relationship (Hollebeek, 2011). Therefore, social exchange involves undefined obligations, according to which someone does a favor for another party with the aim of receiving a future return (Hollebeek, 2011). Balance is the main feature that defines this relationship, and, if for some reason, an ­imbalance arises, attempts will be made to restore equilibrium (­Hollebeek, 2011). Based on social exchange theory, what a customer gives may be seen as a loss, whereas what he/she receives may be perceived as a reward. This cost/reward prospect explains the interactivity of customer ­engagement (Hollebeek, 2011; Islam and Rahman, 2016).

36  Eleni Trichina et al. Personal behavior theories, like the affordance theory, organizational psychology model and theory of planned behavior, consist of another group of theoretical lenses used by scholars to study and develop a framework for customer engagement (Islam and Rahman, 2016). This set of personal behavior theories considers engagement as a trait and attempts to demonstrate customer behavior, emphasizing the individual level (Islam and Rahman, 2016). To understand and predict someone’s behavior in various contexts, Bitter, Grabner-Kräuter and Breitenecker (2014) used the theory of planned behavior. With this theory, we can understand the relationships of attitude, subjective norm and perceived behavioral control to the intent to produce a specific behavior. Attitude is explained as the customers’ general personal view towards a certain behavior and corresponds to an individual’s positive or negative assessment of doing the behavior (Bitter, Grabner-Kräuter and Breitenecker, 2014). It can be predicted that the more positively the customer considers a service, brand and/or object, the more likely it is that she/he will engage with and therefore interact with it (Bitter, Grabner-Kräuter and Breitenecker, 2014). Conceptualizations of consumer engagement in literature are also drawn from the theory of organizational psychology (Dwivedi, 2015). Using the organizational psychology measure of engagement, we can understand an individual’s behavior, in which engagement is considered a trait aspect (Dwivedi, 2015). In this way, the kind of engagement will likely be different between persons. Hence, “a trait and a ­motivational-based measure of individual behavior” is possible to carry out well in different contexts entailing individual behavior (Dwivedi, 2015). Furthermore, the way in which engagement is defined in the domain of organizational psychology is holistic, involving multiple aspects of individual engagement such as cognitive, emotional and behavioral within a single context (Dwivedi, 2015). “Used and gratification theory” (UGT) constitutes another theoretical perspective through which customer engagement has been studied (Verhagen et al., 2015; De Vries and Carlson, 2014). According to UGT theory, as analyzed by Verhagen et al. (2015), De Vries and Carlson (2014), and Jahn and Kunz (2012), people seek to use media channels to their psychological or social benefits, and in order to achieve their goals. If a channel meets these consumers’ needs, it is more likely to be selected from among other alternatives (Verhagen et al., 2015). To have a deeper understanding of the differentiated needs that drive people to use media channels, this theory develops four perceived benefits: ­cognitive, social integrative, personal integrative and hedonic (Verhagen et al., 2015; Jahn and Kunz, 2012). By categorizing the theory into four benefits, UGT can be used to explain why customers might have different ­media-usage contexts and analyze different behavioral patterns in various social usage patterns (Verhagen et al., 2015; Jahn and Kunz, 2012).

Customer Engagement  37 Besides the above-analyzed leading theories of relationship ­marketing, S-D Logic and social theories, some studies have started utilizing other theoretical perspectives, like social and personal behavior theories, while, at the same time, other macro-context theories, such as social media and consumer culture, have begun appearing to explore customer engagement (Islam and Rahman, 2016). Through the analysis of the ­existing theoretical lenses used for studying customer engagement, it has been found that, depending on the context of analysis, various theories have been used.

Antecedents and Drivers of Customer Engagement Several studies are offering relevant information regarding the antecedents and drivers of customer engagement. Indeed, the reasons behind participating and engaging in a community are of vital significance to the success of every community (Munjal, Mishra and Shanker, 2019). These stimulus can be divided into individual, social and technical as well as motivational, and can be conceptualized under customer-based, firm-based and other context-based variables (Islam and Rahman, 2016; Van Doorn et al., 2010). Starting with the individual factors, a person’s motivation to join a community, like social media brand pages, has been explained in terms of social identification theory (Munjal, Mishra and Shanker, 2019). This is to say that customer behavior can be understood by thinking of the communities as social groups in which ­customers are responsible for the progress of a brand or product through their identifying themselves with it and the extent of their participation in the ­community (Munjal, Mishra and Shanker, 2019). Consequently, customers’ identification with the brand or object is considered to be an important driver of community engagement, the relationship with the object and thus its success. Social benefits, self-development and assisting other members of the society can be found as important drivers for customers to engage with and exchange opinions in communities, such as online platforms (­Munjal, Mishra and Shanker, 2019). Customer engagement in such communities has additional value for individuals. In particular, one might consider cognitive and rational incentives as the functional value that resolves each purpose through active involvement in community set-up (Munjal, Mishra and Shanker, 2019). In addition, customer engagement can be explained by consumers’ coalescent need for self-­discovery and knowledge through social affiliations (Munjal, Mishra and Shanker, 2019). Aside from learning by participating in these communities, the desire to entertain is also seen as a motivation for community engagement (­Munjal, Mishra and Shanker, 2019). Various studies have used social factors to study and explain customers’ participation in different communities. Social presence, or

38  Eleni Trichina et al. experiencing the sense of someone’s presence, has been considered one of the antecedents of customer engagement (Busalim, Hussin and I­ ahad, 2019). It has been analyzed as the level of customers’ ability to develop personal, warm and sociable relationships with each other in the environment in which they are engaging (Busalim, Hussin and Iahad, 2019). In other words, a place where customers can find social support and interpersonal interactions, and meet individuals on the same wavelength may enhance their engagement in various communities, like an s-commerce environment (Munjal, Mishra and Shanker, 2019; Busalim, ­Hussin and Iahad, 2019). In a similar manner, a number of studies have focused on relationship quality in order to understand the interactions among customers or the interactions that exist between customers and the community in which they are participating (Lim, 2017; Wang and Zhang, 2012). Trust, relationship commitment and relationship satisfaction have been identified in the literature as the three major components of relationship quality (Lim, 2017; Wang and Zhang, 2012). Taking as an example the environment of s-commerce websites, one might say that a benevolent and honest supplier will develop trust in the customer, who, in turn, will wish to continue this relationship (Lim, 2017; Wang and Zhang, 2012). It becomes clear, therefore, that customer engagement behavior can be positively affected by relationship quality. Social benefits have been analyzed as an antecedent of customer engagement behavior in several studies (Munjal, Mishra and Shanker, 2019; Nambisan and Baron, 2009). In virtual online environments, customers are motivated to engage and share information with other users when they expect to receive some benefits in return (Munjal, Mishra and Shanker, 2019). Following Nambisan and Baron’s (2009) analysis, social benefits are defined as those resulting from the social relationships that customers create over time. Most notably, users’ involvement in activities in virtual customer environments is not solely driven by their “citizenship” but is greatly motivated by their opinions of the benefits derived from their participation in such activities (Nambisan and Baron, 2009). Two common features make the virtual environments appropriate for social interaction to take place in and for customers to interact with others. First, virtual customer environments provide individuals with the opportunity to ­receive a social identity, be part of a group and obtain a feeling of belonging to a “community” with a common shared identity (Algesheimer, Dholakia and Herrmann, 2005). Second, these environments facilitate the development of social ties between customers, enabling joint problem-solving and sense-making, which, in turn, create social bonds that give customers the opportunity to invest in mutual understanding (Verhagen et al., 2015). Taking into consideration the above-mentioned, there is strong support for the idea that customers’ engagement in virtual environments is driven by their perceptions in regard to the benefits they will be receiving from their participation in such activities, and thus, firms need to consider

Customer Engagement  39 and design virtual customer environments in such a way that customers’ ­beliefs about possible benefits are enhanced. In addition, some of the most significant variables influencing customer engagement behavior are the individual goals of the customers. Individuals may have certain consumption purposes, like increasing consumption benefits or relational benefits (Van Doorn et al., 2010). The way in which customers use an object and how they engage with it can be influenced by their goals (Van Doorn et al., 2010). Similarly, individual customer characteristics and predispositions can affect the degree of customer engagement and influence the decision-making process in foreseeable ways (Van Doorn et al., 2010). A customer with a high level of self-enhancement or the desire to be positively recognized by others, who may appear to participate in higher word of mouth behavior, is an example of the above variable (Van Doorn et al., 2010). Consumer resources, like money, time and effort, have also been studied as antecedents to customer engagement behavior in the marketing discipline (Van Doorn et al., 2010). Most notably, customers are often concerned with the costs and benefits of engaging in certain behaviors, and cost can be related to the relative income of the customers (Van Doorn et al., 2010). For example, someone with a part-time job may lack money but have an abundance of time to spend. Such a customer will be more likely to participate in virtual online communities than to engage in charity-related events due to limited monetary resources (Van Doorn et al., 2010). In recent literature, hedonic and utilitarian drivers of customer engagement have also been studied across consumer markets (Busalim, Hussin and Iahad, 2019; Żyminkowska, 2018). The hedonic and utilitarian drivers are determined by the extent of utility offered and/or the degree of enjoyment provided to consumers (Busalim, Hussin and I­ ahad, 2019). On the one hand, utilitarian behavior is characterized as goal-oriented and rational. In this regard, consumers engage for specific purposes, such as getting a better product, receiving material rewards and finding information about the products or services they want before making any decision (Busalim, Hussin and Iahad, 2019; ­Żyminkowska, 2018). On the other hand, hedonic motivations refer to consumers’ ­emotional needs, such as enjoyment and happiness. Several studies have empirically demonstrated that when customers think that a service or a system fulfills their demands for pleasure and fun, this will positively influence their attitudes as well as their repurchase intentions (Busalim, Hussin and Iahad, 2019; ­Żyminkowska, 2018). Although sometimes, the hedonic dimension can have a stronger impact than the utilitarian value, and vice versa, it is evident that hedonic and utilitarian values have a significant impact on customer engagement (Busalim, Hussin and Iahad, 2019; Żyminkowska, 2018). In online environments, the technological factors that allow the creation of an environment in which customers can communicate and ­interact with others have been considered in the academic literature as

40  Eleni Trichina et al. other essential antecedents to customer engagement (Busalim, ­Hussin and Iahad, 2019; Zhang et al., 2014). Interactivity is a key factor of engagement in the new era of e-commerce (Busalim, Hussin and Iahad, 2019). Individuals interact with the s-commerce environment through content design and by sharing and exchanging customers’ experiences (Busalim, Hussin and Iahad, 2019; Zhang et al., 2014). An environment with a high level of interactivity offers a suitable place in which to present oneself, to contribute content and to exchange social support (Busalim, Hussin and Iahad, 2019; Zhang et al., 2014). Aside from the interactivity, information quality can increase a systems’ success in terms of ­customers’ participation. Information quality refers to the extent to which customers are given high quality information that they need (­Busalim, Hussin and Iahad, 2019). This is to say that the customers receiving detailed and accurate information are more likely to remain in an environment and continue to engage with it. Besides that, information quality may positively affect their satisfaction and intention to re-engage in the specific context (Busalim, Hussin and Iahad, 2019). Service quality and system quality are also considered technological factors that have an impact on customer engagement behavior in environments like s-commerce. Service quality is defined as the degree to which a customer accesses the provider’s services and support (Busalim, Hussin and Iahad, 2019; Liang et al., 2011). It is expected that, in environments that encompass commercial activities, the factors created have an important impact on users’ social exchanging and social shopping behavior, and, subsequently, on their continuing to use and engage with this context (Busalim, Hussin and Iahad, 2019). In a similar manner, a good system quality – which is seen in the way in which customers evaluate the extent to which the technical components of a website fulfill the needs and standards set – can make customers trust the company and feel that the environment is safe for social interactions and, hereby, be encouraged to continue using it (Busalim, Hussin and Iahad, 2019; Liang et al., 2011). In addition to the individual, social, technological and motivational factors that play an important role in customer engagement behavior, firm-based constructs, like brands, can also affect customer engagement (Van Doorn et al., 2010). Those brands that have a high reputation rate and an increased level of brand equity are more likely to receive higher levels of customer engagement behavior. However, if a product fails, higher levels of negative customer engagement behavior will be similarly engendered and may lead customers to demotivate others to engage (Van Doorn et al., 2010). Furthermore, businesses can also affect customer engagement by creating and offering processes and services to support specific consumer actions. This is to say that some businesses have ­created technologies to facilitate their customers to express their suggestions, ideas and concerns towards the business and its employees, or they have developed platforms, such as online chat forums, that enable customer-to-customer engagement (Van Doorn et al., 2010). Another

Customer Engagement  41 firm-based variable is the information environment that can strongly influence customer engagement behavior. More specifically, several firms, like Apple, invest money in advertising test products to familiarize customers with them and to gradually engage with these customers (­Gavilanes, Flatten and Brettel, 2018; Van Doorn et al., 2010). Firms can also influence consumer engagement behavior by offering r­ ewards and other motivations (Van Doorn et al., 2010). Lastly, other factors can derive from the political, economic and ­environmental context. In many instances, the political environment of a country may influence customer engagement by either emboldening or preventing information flow (Islam and Rahman, 2016; Van Doorn et al., 2010). For instance, regulations that require products to indicate their energy efficiency rating can increase consumers’ sensitivity to ­environmental issues, and, in turn, they may share this information (Van Doorn et al., 2010). In other cases, events like a natural disaster may affect customer engagement behavior as customers are more likely to engage in charity-­ related events in an effort to help those affected (Van Doorn et al., 2010). Having identified the different constructs that various studies have taken as antecedents of customer engagement, one can understand the classification of these constructs as individual (consumer)-focused (e.g.,  individual, social and motivational factors), business-focused (e.g.,  firm-based and technical factors) and other context-based antecedents (Islam and Rahman, 2016). Customer-related motivations refer to consumers’ attitudinal variables, like customer trust and satisfaction, and/or perceptual elements, such as relationship quality, that are based on customers’ affective beliefs: for example, their goals. ­Organization- or firm-focused variables correspond to the factors that are more under organizations’ control, like service quality, and have a direct impact on organizations’ operations and performance (Islam and Rahman, 2016). Other context-based elements influencing consumer engagement reflect some variables that neither businesses nor customers can have control over as they generally come from competitors, political or economic factors (Islam and Rahman, 2016). These variables can influence customer engagement either directly or indirectly, and they can interact and influence customer engagement together (Van Doorn et al., 2010; Islam and ­R ahman, 2016). From the customers’ perspective, demographic variables, such as gender, age and income, have been used to explain how different customer’s characteristics can affect the antecedents of consumer engagement ­(Busalim, Hussin and Iahad, 2019).

Outcomes of Customer Engagement Through the literature review, several variables were studied as consequences of customer engagement. These consequences reflect the ­customers and the business/firm as well as other components: for instance, consumers of other brands (Busalim, Hussin and Iahad, 2019;

42  Eleni Trichina et al. Van Doorn et al., 2010). For the customers engaged, the outcomes can be classified into cognitive, attitudinal emotional/behavioral and physical (Van Doorn et al., 2010). At the most basic level, customers are successfully engaged in an environment; as a result, they will more likely engage again, more often and more intensively in the actions related to customer engagement behavior (Busalim, Hussin and Iahad, 2019; Brodie et al., 2013; Van Doorn et al., 2010). Nevertheless, if consumers’ engagement behaviors are not successful, they may choose to engage in other strategies (Busalim, Hussin and Iahad, 2019; Brodie et al., 2013; Van Doorn et al., 2010). If firms provide rewards to their customers to further enhance their engagement, they might also provide financial rewards (Van Doorn et al., 2010). By engaging in such rewards-focused activities, customers do not just help the ­business – they receive financial benefits (Busalim, Hussin and Iahad, 2019; Van Doorn et al., 2010). Except for economic rewards, consumers can derive emotional benefits, such as enjoyment, from participating in brand-/firm-related activities (Busalim, Hussin and Iahad, 2019; Ż ­ yminkowska, 2018; Van Doorn et al., 2010). As already mentioned, a firm will achieve outcomes by encouraging consumer engagement behavior. From a firm’s perspective, actions with the purpose of creating and exchanging information, like blogging, may influence customers’ purchase behavior and, in turn, other consumers and customer equity (Kumar et al., 2010; Van Doorn et al., 2010). There may also be consequences for a firm’s reputation. Engaged customers can improve firms’ long-term reputations and brand recognitions (Van Doorn et al., 2010). Similarly, customers who are satisfied with a provider’s services will inform others about the firm, thus developing the firm’s reputation (Van Doorn et al., 2010). Customers who are highly engaged in a firm’s activities can be an advantage as they can be an important source of knowledge and information, providing the firm with ideas for designing new services or products and making constructive suggestions for refining already existing products or services (Van Doorn et al., 2010; Schau, Muñiz and Arnould, 2009). Generally, the implications of customer engagement go beyond the customer and the firm. As explained above, highly engaged customers may suggest how the firms can improve their products, which, in turn, can lead to lower prices and higher customer satisfaction (Van Doorn et al., 2010; Schau, Muñiz and Arnould, 2009). This will have a direct impact on consumer welfare. Similarly, consumers’ complaints are often the reasons for change and improvement in the regulatory framework within which businesses work (Van Doorn et al., 2010). Lastly, considering today’s digital economy and the ways in which a firms’ actions become easily visible to consumers, one might understand how customers can use this information to further enhance competition in the market and unite for the well-being of the community (Van Doorn et al., 2010).

Customer Engagement  43

Discussion and Conclusion This literature review indicates that customer engagement, or consumer engagement, is an important research topic for marketing scholars who are looking to follow a comprehensive and integrative approach to understanding consumers (Islam and Rahman 2016; Van Doorn et  al., 2010). Marketing researchers take customer engagement as a major branding strategy and driver of consumers’ decision-making process, organizational performance, reputation and value (Islam and Rahman, 2016). By analyzing the current status of customer engagement research, we have tried to provide both managerial and academic contributions to the marketing discipline. From a theoretical perspective, this review implies multifold contributions. First, it provides different comprehensive conceptualizations and outlines several dimensions of consumer engagement that are presented in the extant literature. Second, a thorough discussion and summary of the theoretical frameworks used by researchers has been made for easy reference to existing literature results, showing how different scholars have studied the concept of customer engagement up through today. Third, a broad analysis of the antecedents, drivers and outcomes of customer engagement has been presented and tabulated, providing readers with the opportunity to easily understand the present state of customer engagement and capture factors, and to draw ­correlations between various concepts. From a managerial perspective, this literature review highlights the significance of understanding the ways in which consumers are engaged in certain communities, like brands, organization activities, s-commerce, virtual online environments and websites as well as the outcomes of this engagement. It is indicated that consumer engagement can increase, among other things, customer loyalty, satisfaction, welfare, emotional bonds and firms’ reputation (Busalim, Hussin and Iahad, 2019; Brodie et al., 2013; Islam and Rahman, 2016). Emphasizing customer engagement is considered a vital component of a firm’s strategic orientation to markets, and the more a business is aware of how its customers can be engaged, the better its success and receipt of maximum gainful experiences will be (Munjal, Mishra and Shanker, 2019; Islam and Rahman, 2016). Through analysis of the firm-based factors that are considered antecedents of customer engagement, this review has also illustrated how organizations need to be part of this process and to “engage in engaging” customers in their services (Brodie et al., 2013). Such a process requires businesses to take initiatives and develop continuing networks with customers in order to enhance and maintain ongoing relationship bonds (Islam and Rahman, 2016). Consequently, it becomes clear that comprehending customer engagement is important, and this review can help businesses understand this better.

44  Eleni Trichina et al. Although the studies on customer engagement that emerged over the past decade in the marketing discipline are well developed, several ­issues came up during our literature review. First, from the theoretical ­perspective, as previously analyzed, the roots of customer engagement can be found within various theories, such as relationship marketing or S-D Logic. However, as Brodie et al. (2013) argued, further theoretical research is needed which encompasses other theoretical lenses, indicating at the same time the correlations that might exist between them. Examining the relevant links between the service perspective and consumer culture theory offers a significant ­direction for future research (Brodie et al., 2013). Second, as regards the literature themes, although customer engagement has been found to have either positive or negative effects, to our knowledge, the existing literature mainly addresses the positive dimensions of customer engagement. This gap is consistent with previous studies (Islam and Rahman, 2016; Vivek et al., 2014; ­Hollebeek, 2011), which showed that several have analyzed the drivers of customer engagement and demonstrated how customer engagement can be beneficial, but they have left the negative aspects untouched. Therefore, following these insights, it could be useful for the marketing discipline to understand how customer involvement could have negative consequences. Third, future research should focus on providing a comprehensive framework to measure factors of customer engagement. Islam and ­Rahman (2016) stated that efforts to a reliable scale for customer engagement have been already made, using context-focused measures, like social media, tourism, self-concept and online brand communities. However, these measures differ in their dimensions and are specified for limited contexts. Similarly, the findings of Munjal, Mishra and ­Shanker (2019) showed that only a limited number of studies offer insights into measuring customer engagement. Hence, there is a need to create a ­reliable measure of customer engagement that will be empirically studied and generalized across different contexts as well as a scope for developing industry-specific measures (Munjal, Mishra and Shanker, 2019; Islam and Rahman, 2016). Fourth, future research should focus on how firms or organizations arrive at certain conceptualizations for customer engagement and what types of market information they use to explain this (Alvarez-Milán et al., 2018). Although research on the ways in which managers conceptualize customer engagement clearly exists, research paths concerning the firms, industries and organizations have been largely ignored in the extant literature (Alvarez-Milán et al., 2018). Fifth, customer engagement has been analyzed in a number of contexts, such as s-commerce, hospitality, tourism and healthcare (Munjal, Mishra and Shanker, 2019; Serravalle et al., 2019; Islam and Rahman, 2016), leaving some other service contexts untouched. Moreover, there is

Customer Engagement  45 Customer characteristics Gender, Age, Income Individual factors Personality traits Self-identification Self-improvement Concern for others Social factors Social support Social presence Social intercation Relationship quality Social benefits Social identification Social affiliation Technical factiors Interactivity Information quality Service quality System quality Motivational factors Utilitarian Motivation Hedonic motivation Perceived value Monetary Entertainment Networking Information

Firm based factors Brand features Reputation Diversification Information Usage and processes

Antecedents

Other factors Political Economic Environmental

Customer context Cognitive Attitudinal Emotional Physical/time

Outcomes

Organization context Financial Reputational Employees Products Other context Consumer welfare Economic surplus Social surplus Regulation

Figure 3.1  Research framework of the antecedents that affect customer engagement and outcomes.

no adequate number of studies examining if the propensity for customer engagement differs across service contexts (Islam and Rahman, 2016). Consequently, we need more studies to investigate if this exists and, if so, to identify the factors behind this variation (Islam and ­Rahman, 2016; Hollebeek, 2011). This study performs a literature review and a critical analysis of customer engagement behavior. It provides useful insights deriving from the analysis of customer engagement conceptualization, theories, antecedents and the factors of selected articles. It concludes that customer engagement consists of a looming concept in the marketing discipline that requires more emphasis, considering its practical pertinence (­I slam and Rahman, 2016). Overall, by reviewing these articles and developing a mind map for the definitions, theoretical lenses, antecedents and consequences of customer engagement, this review can act as a potential base for scholars to further build upon and as a guide for marketers (Figure 3.1).

46  Eleni Trichina et al.

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4 Stakeholder Engagement for Sustainable Entrepreneurial Marketing Theoretical Synchronization and Empirical Insights S. M. Riad Shams, Zhanna Belyaeva and Suja R. Nair Introduction To sustain a business, it is generally imperative to achieve a competitive advantage of the business or its products/services. However, sustaining competitive advantage is widely researched separately in different knowledge-streams; developing insights on sustained competitive advantage based on the mutual application of different knowledge-streams is scarce. Centred on a theoretical synchronisation between strategic management, entrepreneurship and marketing literature, this study is the first of its kind to accentuate a research gap at the intersection of entrepreneurship and marketing research. The aim here is to understand how entrepreneurial marketing dynamics could strategically analyse the cause and consequence of stakeholder relationships and interactions to explore insights on stakeholders’ needs in a way that could help ­marketeers to develop innovative product/service value to sustain their entrepreneurial marketing initiatives. To pursue this aim, this study follows an inductive constructivist method to clarify arguments in order to coherently explore insights from the reviewed literature and industry information (Yin 1994; Shams 2017). Following the theoretical insights, three case examples are presented in support of the discussed theoretical synchronisation on how marketeers could be more entrepreneurial in the designing, delivering and sustaining of their innovative product/service value in order to sustain their overall (entrepreneurial) marketing initiatives. The remainder of this chapter follows the following order: - First, the key definitions are discussed, and the entrepreneurial ­marketing research gap is accentuated. - Second, a theoretical synthesis is developed in between marketing, entrepreneurship and strategic management to enhance our understanding on how entrepreneurial marketeers could sustain their competitive advantage.

50  S. M. Riad Shams et al. - Third, three case examples are presented in support of this concept of the interlinked arguments between the aforementioned three business knowledge-streams. - Finally, the conclusion and future research areas are discussed.

Key Definitions and Entrepreneurial Marketing Research Gap This study analyses the definition of the relevant terms to accentuate the research gap and develop theoretical and empirical insights associated with it. First, entrepreneurship, which is defined as “the anticipation, identification, or creation of opportunities and innovatively harnessing a combination of resources to exploit the opportunities while motivated by some perceived value and deliberately assuming the risk associated with the newness of the process” (Osiri et al. 2015, p. 28). Second, strategic entrepreneurship can be defined as “leading and managing firms to simultaneously address the dual challenges of exploiting current competitive advantages…while exploring…opportunities…for which future competitive advantages can be developed and used as the path to value and wealth creation” (Hitt et al. 2011, p. 59). In these definitions of entrepreneurship and strategic entrepreneurship, we have found two issues as the ultimate goal or anticipated outcomes of all our entrepreneurial initiatives, which are (1) value creation and (2) competitive advantage of that newly created value, with an aim to sustain the competitive advantage of the value that is created through our entrepreneurial activities. Such value creation activities could be related to product or service innovation or re-innovation of any kind of market offering that would be designed to create and deliver value to the associated stakeholders of that market offering in a way that would be expected and accepted by the stakeholders, including the customers. Now, the questions are (1) what value is, (2) what product or service innovation is and (3) how the competitive advantage of the newly innovated product or service value can be sustained over time. So, in the sequence of discussing the definitions, third, we could define value as an anticipated outcome of any sort of planned and organized activity. The activity could be derived from monetary, psychic, or physical resources; the more the outcome meets initial anticipation, the more the possibility of win-win outcomes or value optimization for all involved stakeholders. Shams 2013, p. 244 For example, our entrepreneurial anticipation could allocate/re-allocate all available monetary, psychic and physical resources, with an aim to

Engagement for Entrepreneurial Marketing  51 explore and exploit business opportunities and to minimise/neutralise business risk through product/service innovation. The anticipated ­outcome is of delivering the actual and latent needs of the associated stakeholders so that could create and deliver value, related to those needs. Fourth, product or service innovation could be defined as a continuous process to develop innovative (or novel) capacities in socio-economic settings through ongoing development and adaptation of (product or service creation and delivery) strategies and processes, (in relation to the customers’ and other stakeholders’ needs) that enable higher advantage in collective and individual levels, compared to (our, as well as our competitors’ existing product/service) strategies. Shams 2016a, p. 671 For example, we could say that entrepreneurial marketeer Mark ­Zuckerberg has innovated Facebook, as a communication service, and proactively communicated and delivered the value related to this service to their target customers, which conveys the message, in general, that “you are now connected in the global village, based on a free, entertaining and engaging communication medium”. As a consequence, irrespective of such innovated services’ initial available resources, the sky has become the only limit for them in terms of their return on investment and social contribution. Fifth, our concern is what competitive advantage is and how the competitive advantage of our newly innovated product or service value can be sustained over time across different markets and perhaps in diverse industries. Competitive advantage can be defined simply as the advantage of the value in product/service innovation and delivery processes and strategies outplaying the value of the competitors’ products/services targeting our customers and other stakeholders, such as business partners, suppliers, employees, intermediaries, shareholders and so forth. In order to sustain a competitive advantage of our product/service over time across different markets and diverse industries, the strategic management literature argues that it is imperative that a ‘valuable, rare, inimitable and non-substitutable’ competence of resources among the competitors is fundamental for the resources that are used to develop the value of a product/service (Barney 1991), which is known as VRIN competency of resources. Now, the question is how innovative marketeers as enterprising entrepreneurs could innovate and deliver the VRIN competent value for their product/service in relation to the current or latent needs of their stakeholders, including their customers. In this context, analysing the entrepreneurial marketing definition would have implications on exploring a possible theoretical synchronisation between the knowledge-streams, such as entrepreneurship, marketing and strategic management.

52  S. M. Riad Shams et al. “Entrepreneurial marketing is a spirit, an orientation as well as a ­ rocess of passionately pursuing opportunities and launching and growp ing ventures that create perceived customer value through relationships by employing innovativeness, creativity, selling, market immersion, ­networking and flexibility” (Hills et al. 2009, p. 7). This definition demonstrates that networking, relationships and interaction between different target stakeholders is instrumental for both entrepreneurship and marketing to explore business opportunities. For example, “neither marketing nor entrepreneurship can be complete without the ultimate customer feedback” (Addison II et al. 2017, p. 4), which requires profound stakeholder engagement (e.g. service staff and customer interaction). However, the existing entrepreneurship literature offers us a very limited scope to broaden our (entrepreneurial) marketing management knowledge. For example, previous seminal papers on entrepreneurship (i.e. Schumpeter 1912; Knight 1921; Kirzner 1973; Cantillon 1755; Shapero 1975; Kets de Vries 1977; Brockhaus 1980) and many other current studies in this knowledge-stream are principally centred on the original endeavours of individual entrepreneurs (Dana et al. 2008). In fact, the “theories of entrepreneurship (that) most typically focus on characteristics specific to the individual (entrepreneur)” (Acs et al. 2013, p. 759) often overlook the potentials of entrepreneurs’ stakeholder networks to identify entrepreneurial (marketing) opportunities (Shams and Kaufmann 2016). However, the process of stakeholder engagement benefits entrepreneurs in identifying opportunities; there is inadequate work in the background that assists entrepreneurial marketeers in influencing their stakeholder networks and scarce research on how they can influence the relations between stakeholder engagement and value co-creating opportunity identification (Burns et al. 2016). Value creation is enriched by inter-organisational relationships, wherein stakeholders cooperate for enhanced strategic efficiency to meet and exceed their reciprocally beneficial multifarious goals through co-created value (Gummesson and Mele 2010; Grönroos 2012; Jaakola and Hakanen 2013; Hsiao et al. 2015). Consequently, the significance of stakeholder relationships and interactions in a network, and exploring opportunities from such stakeholder networks becomes crucial for entrepreneurial marketeers that seek to create sustainable value in order to survive and prosper. The growing importance of modifying marketing strategies for sustainable operations is a consequence of global changes that over the ­decades have triggered drastic changes in consumer behaviour as well as in projections about consumer sensitivity to social issues, environmental issues and ethics for the future (Belyaeva, 2018). Thus, the challenges for stakeholder networks are in the diverse understanding of profit and nonprofit activities. Modern marketing concepts emphasise the need for enterprises to participate in social and environmental activities. In this context, marketing can be perceived as a component of sustainable ­development and activities that support it.

Engagement for Entrepreneurial Marketing  53 Entrepreneurial marketeers’ stakeholder networks can offer a considerable source of capital that may intensify their success (Smith and Lohrke 2008). Consequently, entrepreneurial marketing as a panacea for economic growth is increasingly focussing on the importance of stakeholder networks (Hayter 2013). However, reflecting on a key ­research gap, “despite the growing acknowledgement that entrepreneurship (or entrepreneurial marketing) is an important driver of innovation and growth, the role of the (stakeholder) networks in these processes has been less formally examined” (Huggins and Thompson 2015, p. 103). Therefore, the research question regarding “how entrepreneurial firms (or marketeers) leverage network competence” (Yu et al. 2014, p. 687) is becoming vital to imminent questions in entrepreneurial marketing research. Indeed, drawing from the stakeholder network approach of value creation, new thoughts, competences and skills are required for entrepreneurial marketeers, as are a new set of expectations of what marketeers can and should do relating to aspects of acceptability, legitimacy and reputation (Czinkota et al. 2014), based on their entrepreneurial initiatives to sustain the competitive advantage of their product/ service value.

Sustainable Entrepreneurial Marketing Research Question and a Theoretical Synchronisation Centred on the theoretical arguments thus far and the entrepreneurial marketing research gap, this study pursues the following research question: How could the entrepreneurial marketing dynamics analyse the cause and consequence of stakeholder relationships and interactions to explore insights on stakeholders’ needs in a way that could help marketeers to develop innovative product/service values to sustain the entrepreneurial marketing initiative? To explore this question, understanding organisational dynamic capabilities as a strategic management theory that deals with sustained competitive advantage would be valuable in order to recognise how organisational dynamic capabilities could potentially influence entrepreneurial marketing initiatives’ sustainability. Centred on a firm’s ­coordination, integration, learning, reconfiguration and transformation processes, Teece et al. (1997) devised an organisational creative process to improve an entrepreneurial firm’s organisational capabilities by strategically allocating/re-allocating its resources, based on the ­strategic direction it pursues, in order to prolifically deal with the competitive business environment, which is known as dynamic capabilities. For ­example, how Apple Inc. learns about competitive market factors in ­order to coordinate, integrate, configure and allocate their resources to develop an innovative new version of their iPhone and hereby outplay the competitive advantage of Samsung’s Galaxy series. As a consequence,

54  S. M. Riad Shams et al. the key purpose of organisational dynamic capabilities theory is to achieve/retrieve a product’s/service’s VRIN competency by analysing diverse competitive market forces, such as customers’ needs, market-­ specific regulations, influence of the industry bodies and so forth, with an aim to sustain the product’s/service’s competitive advantage. However, the critics of this theory argue that dynamic capabilities could create a competitive advantage, which would be short-lived because dynamic capabilities are homogeneous across the competitive firms, and have commonalities features (Eisenhardt and Martin 2000). Consequently, such a homogeneous nature and commonalities reduce the non-imitability scope of dynamic capabilities. Also, the competitive advantage that is generated through dynamic capabilities can be wiped out because of its substitutability feature across the firms. For example, Samsung could imitate what Apple Inc. is doing today to achieve a competitive advantage, or substitute that dynamic capabilities tomorrow, launching a new version of their Galaxy series, based on the insights learnt from those capabilities. Consequently, the “resources (and subsequent dynamic capabilities) that have the same functionality (across the firms) can achieve the same end” (Peteraf and Bergen 2003, as cited in Peteraf et. al. 2013, p. 1395), which ultimately downgrades the VRIN competency of a product/service such as iPhone or Samsung Galaxy devaluates each other’s succeeded competitive advantage over time through the new version of their smartphones. In this context, in the intensely competitive business environments that encounter rapid changes in market powers and competitive forces, for example, because of frequent technological advancements, prompt legislation changes, social and political instabilities and so forth, the dynamic capabilities and the consequent competitive advantage would be eroded because of its wide imitability or commonality and substitutability among the competitive marketeers. In this context, the recent development of the dynamic capabilities theory suggests that identifying an exceptional condition would make one able to retrieve a valuable dynamic capability’s rareness, inimitability and non-substitutability to achieve/retrieve its VRIN competency (Peteraf et al. 2013). Such exceptional conditions would include the unique timing, sequence or location of a service delivery, or exclusive reputation; a unique formula of a product; and so forth that would have implications to outplay the commonalities and substitutability features of dynamic capabilities, which could be identified through the details of the overall organisational learning processes and market experience of a firm (Peteraf et al. 2013). In this context, the stakeholder relationship management and marketing concept would have influence to recognise such exceptional conditions to underpin the VRIN competency through the internal and external stakeholders’ mutual learning processes, market relationships and interactions, and overall organisational experience. In support of this view,

Engagement for Entrepreneurial Marketing  55 Little and Marandi (2003) argue that stakeholder relationship marketing (RM) is instrumental to developing a greater knowledge of customer’s needs, wants and expectations. This knowledge, which could be a possible specific exceptional condition, with respect to the target markets’ needs, wants and expectations can then be combined with social rapport built over a number of service encounters to tailor and customise the service to customers’ (or other stakeholders’) stipulations in order to attain and sustain an entrepreneurial marketing initiative’s and subsequent product’s/service’s VRIN competency. For example, analysing the cause and consequence of stakeholders’ or customers’ relationships and interactions as a stakeholder causal scope for entrepreneurial marketeers would have implications to sustainably recognise such exceptional conditions, related to the needs, wants and expectations of the internal and external stakeholders, which is discussed in the rest of this paper.

Stakeholder Engagement for Sustainable Entrepreneurial Marketing: Empirical Insights Case Example 1 In order to discuss the practical application of this concept, a case example is discussed here in the context of the international education business industry. It is widely acknowledged that the major competitive international education industries, such as the UK, the USA, ­Canada and Australia, modify their student visa rules and regulations so ­frequently, which from time to time adversely impacts their competitive advantage (Shams and Gide, 2012). In a recent study an Australian international student states that “one of the reasons influencing his decision to study in Australia is its proximity to Singapore” (Shams 2016a, p. 685). Here, “proximity” that could be a prospective exceptional condition for A ­ ustralia, as a non-academic need of international students, is recognised by previous studies as one of the decision making factors of international students, particularly from Asian countries, which is the largest market of the industry (Phang 2013). Based on the valuable ­Australian international education, an entrepreneurial marketing initiative, such as branding “proximity”, would be able to mark this education as rare, inimitable and non-substitutable for their key competitors from the “proximity” perspective in order to reinforce the Australian universities’ competitive advantage, particularly among Asian students. Asia, especially South-East Asia, as the key market, is naturally located closer to Australia in comparison to other major competitive international ­education industries, such as the UK, the USA, Canada and Germany. Here, on the one hand, the goal of the South-East Asian international students is to gain an international education experience from an international education host country that is closer to their home country.

56  S. M. Riad Shams et al. On the other hand, the goal of the Australian international education industry is to outplay the competitive advantages of their global ­competitors – the UK, the USA, Canada and Germany, for example – to attract international students from the South-East Asian markets. Furthermore, the consequence of these relationships and interactions between an ­Australian University and a South-East Asian international student is the student’s delighting remark about the proximity of ­Australia to his home in Singapore. As a result, analysing these goals and ­consequences of stakeholder relationships and interactions enables us to recognise “proximity” as an exceptional condition to retrieve the VRIN competency of the Australian international education industry and its services in the international markets of the South-East Asian countries from the “proximity” perspective in order to ensure the ­entrepreneurial marketing initiative’s sustainability related to the Australian universities’ ­international education marketing. Case Example 2 Another example is discussed here in the context of the international tourism industry. In general, it is a challenge for international tourism destinations to sustainably promote their competitive advantages to ­international tourists, in comparison to competitive destinations, because the question is why an international tourist will travel to Bali in Indonesia this summer but not Thailand, though both destinations offer similar services in general for international tourists. Usually, international tourists search for information for their next trip, and international tourism destination service providers attempt to reach customers with relevant information to attractively promote their destinations. Following this cause and consequence of prospective relationships and interactions between the providers and the tourists, such promotions are usually centred on an appealing presentation of the destination’s image and reputation. Such promotions usually include how its natural and manmade establishments and services could be relevant to the international tourists’ holiday, corporate, sports or any other needs. How the services could be differentiated from the competitive offerings to customise client-specific needs could be included in such promotions as well. Again, apart from customised differentiation, how typically a destination can be differentiated, in comparison to the competitive destinations, based on a unique value, reputation, cultural heritage, natural and manmade attractions, and so forth, is usually highlighted in such destination promotions (Shams 2016b). For example, if a tourist wants to visit the sea beaches in a certain region of the world, a destination in that region could promote the fact that you can experience both sunrise and sunset from its sea beach if the sun actually rises and sets there because it is commonly known that such an experience is rare in

Engagement for Entrepreneurial Marketing  57 nature, which allows very few sea beaches in the world to differentiate their entrepreneurial marketing promotional initiatives and subsequent offerings from this angle as a VRIN-attributed exceptional condition. ­Ultimately, through such entrepreneurial and innovative promotions, prior to their visit, the international tourist develops a ‘reliability’ sense (an RM construct, as discussed by Parasuraman et al. 1985; Bennett and Barkensjo 2005) as an anticipated experience that s/he will genuinely have such a rare experience from this destination instead of other destinations of that particular region. And during her or his visit, once the tourist actually gains such a rare experience, s/he will have a ‘satisfied’ perceived experience (another RM construct, as discussed by Crosby et al., 1990; Macintosh, 2007) in relation to her or his tourism needs. Case Example 3 Identification and integration of such VRIN characteristics in product/ service design and delivery is a real challenge that all entrepreneurial marketeers encounter to sustain their entrepreneurial initiatives. Therefore, in addition to recognising such unique and primary VRIN-attributed exceptional conditions that could significantly sustain entrepreneurial marketing initiatives in the long-run, we should attempt to recognise some other secondary exceptional conditions that could contribute to developing VRIN competency, at least to some extent, in order to develop some extended competitive advantages to prolong the existing competitive advantages, as a continuous process, unless such exceptional conditions can perpetually sustain the competitive advantage of a particular product or service. From this perspective and based on the context of transnational education business, another case example of an Australian University’s transnational operation in Malaysia is discussed in this sub-section in order to demonstrate how the University has been trying to sustain their international entrepreneurial marketing initiatives in their international market in Malaysia. Curtin Malaysia, the transnational operation of Curtin University, Australia, in Malaysia, contributes to the management of local wildlife, such as crocodile, and other endangered species, i.e. the Borneo sun bear, through their research activities (The Road Ahead 2015). The Curtin Malaysia CEO, Professor Jim Mienczakoniski, says: (Eric, a Borneo sun bear) he is part of our research and our environment that we concern for and looking after. Eric lives here at the crocodile firm and nature park, near Curtin University in Miri, S­ arawak, Borneo. The nature park (offers) a chance to… (work closer to) …the whole range of creatures; most of them are unique to this region. (­ Uneasy Co-existence, 2015, np) In recognition of its contribution to transnational socio-­economic and environmental needs, Curtin Malaysia have been awarded Malaysian

58  S. M. Riad Shams et al. Ringgit 1,000,000,000 (approximately US$231,192,570) in research grants by the Malaysian Ministry of Science, Technology and the ­Environment (Research and Development nd). In addition to the M ­ alaysian Central Government’s research funds, Curtin has also been offered research funds by the State Government and various industrial partners. Curtin has a reputation as the first international University in Malaysia to be entitled to Malaysian Central Government research funds (Research and Development nd). Curtin Malaysia’s contributions to transnational ecological issues also contribute to their profit/revenue generating efforts through their research incomes. Following the understandings of transnational research issues and needs in relation to the cause and consequence of the transnational stakeholders’ relationships and interactions, the following three sustainability indicators appear as contributory to adapting to and integrating the transactional needs in Curtin Malaysia’s research services: - ‘a reinforced reputation’ (Berns et al., 2009) as the first international University to secure the Malaysian Central Government’s research fund; - ‘more potential sources of revenue/additional business opportunities’ (Berns et al., 2009) through research funds, in addition to the revenue gained by transnational student enrolment; and - perhaps ‘proximity to (government) power’ (Choi and Sirakaya, 2006), based on Curtin Malaysia’s contribution to the Malaysian Government’s research and innovation schemes.

Conclusion and Future Research To explore insights centred on the discussed research gap, the ­resourcebased view (VRIN competency) and dynamic capabilities from strategic management literature and the RM concept from marketing principles are interlinked, focussing on the stakeholder engagement approach of entrepreneurial opportunity identification as the entrepreneurial marketing research gap in order to clarify how entrepreneurial marketeers could sustain their marketing initiatives and the competitive advantage of the subsequent products/services. In support of this theoretical synchronisation, empirical insights are presented in this paper, based on two different industries (education and tourism businesses). However, three case examples are presented in support of this initial theoretical synchronisation; the concept needs to be further supported by empirical studies, related to the proposed theoretical aspects of this concept, in order to reinforce its diverse generalisation scopes. Future empirical studies to further correlate these interconnected concepts of entrepreneurial marketing, RM, dynamic capabilities, VRIN competencies, stakeholder relationships, competitive forces and competitive

Engagement for Entrepreneurial Marketing  59 advantage, exceptional condition, RM constructs, cause and consequence of stakeholder relationships and interactions, and other emergent issues in relation to sustaining the product/service value to underpin entrepreneurial marketing progress will be useful to enrich this initial proposition. Also, future research can be conducted in different ­markets across a diverse range of industries (including comparative studies) to further generalise the impact of this initial concept and recognise ­industry-specific implications. In addition to academic interests, further ­research will also satisfy the need for explicit guidance for entrepreneurial marketing practice.

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5 The Role of Collectivism on Positive Word-of-Mouth Persuasion in Cause-Related Marketing Michael Christofi, Demetris Vrontis, and Anna Makrides Introduction Cause-related marketing (CRM) is a persuasive marketing strategy tied to consumers’ purchase behavior pertaining to societal benefits and charitable causes (Christofi et al., 2015a, 2018). CRM is defined as “the process of formulating and implementing marketing activities that are characterised by an offer from the firm to contribute a specified amount to a designated cause when consumers engage in revenue-providing exchanges that satisfy organizational and individual objectives” (Varadarajan and Menon, 1988, p. 60). This prominent dimension of corporate social responsibility (CSR) was first introduced to the mass market in 1983 by American Express, which donated one cent for each purchase a customer made using the company’s credit card and one dollar for every new card application to the Statue of Liberty’s restoration (Christofi, Vrontis and Leonidou, 2014; Welsh, 1999). Over the last 30 years, hundreds of firms have adopted this strategy. As an illustration, every time a pound of East Africa Blend coffee was purchased, Starbucks donated one dollar to the Global Fund in order to support people with AIDS in Africa (Müller, Fries and Gedenk, 2014), and eBay’s campaign, Giving Works, raised more than half a billion US dollars for charities (Andrews et al., 2014). Studies in extant literature have examined CRM by illustrating the interrelationships between three key stakeholders – the consumers, the firm and the nonprofit organization (NPO) – and evaluating various independent and dependent variables in order to understand what makes this strategy effective. Among many independent variables, empirical work has investigated cause/brand fit (Basil and Herr, 2006; Chang et al., 2018; Nan and Heo, 2007; Pracejus and Olsen, 2004), locus of control and moral emotions (Kim and Johnson, 2013; Youn and Kim, 2008), donation magnitude (Chang, 2008; Strahilevitz, 1999) and cause familiarity (Lafferty and Goldsmith, 2005; Lafferty, Goldsmith and Hult, 2004; Nan and Heo, 2007; Singh, Kristensen and Villasenor, 2009). In order to map dependencies between variables, researchers have taken into account several possible outcomes. Examples of dependent

Role of Collectivism  63 variables are purchase intentions (Barone, Norman and Miyazaki, 2007; Chang et al., 2018; Chen and Huang, 2016; Lafferty and Edmondson, 2014; Tangari et al., 2010), attitudes toward CRM (Barone, Norman and Miyazaki, 2007; Chang et al., 2018; La Ferle, Kuber and Edwards (2013); Tangari et al., 2010; Youn and Kim, 2008), brand image (Chen and Huang, 2016; Müller, Fries and Gedenk, 2014), perceived motives of the firm and skepticism toward the firm (Chang and Cheng, 2015; Folse, Niedrich and Grau, 2010; Singh, Kristensen and Villasenor, 2009) and word-of-mouth (WOM) (Christofi et al., 2018; Jeong, Paek and Lee, 2013; Lee Thomas, Mullen and Fraedrich, 2011; Lii and Lee, 2012). Overall, previous research in this domain verified the fact that CRM can provide donor organizations with a sustainable competitive advantage (Christofi et al., 2013, Christofi, Leonidou and Vrontis 2015b; Cone, Feldman and DaSilva, 2003; Larson et al., 2008) by enhancing their reputation (Koschate-Fischer, Stefan and Hoyer, 2012; Vanhamme et al., 2012), eliciting positive feelings or judgments from customers and influencing their purchase behavior (e.g., Arora and Henderson, 2007; Chang, 2008; Krishna and Rajan, 2009; Lafferty, Goldsmith and Hult, 2004; Nan and Heo, 2007; Pracejus and Olsen, 2004; Pracejus, Olsen and Brown, 2003) and generating positive WOM (Lee Thomas, Mullen and Fraedrich, 2011; Lii, Wu and Ding, 2013). Leveraging the gains of WOM to guide consumer behavior has attracted increasing attention from marketing scholars and practitioners. Balter (2008) stated that WOM is the primary factor behind 70% of all purchase decisions, and, according to Dye (2000) and De Angelis et al. (2012), this form of communication has at least partially affected more than two-thirds of all industries. However, despite its tremendous importance and the considerable attention that has been devoted to WOM communications by marketing researchers since 1955 (Ryu and Han, 2009), WOM as a CRM outcome remains a vastly under-researched field by scholars. Adding to this, by critically reviewing existing literature and the contextual rigor of the relevant studies, it appears that little attention has been paid to the contextual dimensions (e.g., cultural variations) that surround positive outcomes of WOM. In the same vein, prior research focuses on positive WOM within the domain of CRM from a universal perspective and thus ignores cultural differences. This is unfortunate because the effectiveness of WOM depends on several parameters, including the consumers’ backgrounds (Sweeney, Soutar and Mazzarol, 2014). Ballings, McCullough and Bharadwaj (2018) argue that consumers’ attitudes adhere to culturally sanctioned norms. When it comes to CRM, research has shown that consumers hold different perceptions of a brand and its CRM initiatives, depending on their culture. For instance, collectivistic consumers act in the interest of their community, whereas individualistic consumers are oriented around the self (Hofstede, 2001), and thus collectivism has a more positive effect than

64  Michael Christofi et al. individualism on decision-making processes and outcomes in situations involving philanthropic issues (Vitell, Paolillo and Thomas, 2003; Waldman et al., 2006). Therefore, this study responds to calls made by, among others, Augusto de Matos, Luiz Henrique and de Rosa (2013), and Blazevic et al. (2013), who highlighted that further research is warranted to investigate the influence of culture orientation on positive WOM outcomes, as well as Chen and Huang (2016) and He, Chao and Zhu (2019) for more research on the impact of cultural differences on consumers’ perceptions of CRM. Following Yadav’s (2010) and MacInnis’s (2011) guidelines for conceptual contributions in marketing, this chapter seeks to assess the manner in which collectivism operates as a contextual dimension for positive WOM persuasion in a CRM context. The remainder of the chapter is organized as follows. First, we conduct a comprehensive overview of prior literature on cultural issues within the CRM domain and critically examine Hofstede’s cultural value orientation of collectivism. Then, we provide rationale on the association between collectivism and positive WOM persuasion in a CRM context. Finally, we conclude with the implications for academics and practitioners, present limitations of the study and identify areas for future research.

Culture: A Contextual Dimension An exact definition of culture is elusive and still remains the subject of intense scholarly debate (Taylor and Wilson, 2012). Fortunately, the purposes of this study require only a useful working definition of culture as a basis upon which to proceed. Having said that, we seek not to argue over competing definitions of culture. Neither do we try to examine the general claim that culture matters. Rather, the aim here is to investigate how consumers belonging to societies are characterized by a specific cultural value dimension, namely collectivism (Hofstede, 1991), and how they feel and think about positive WOM persuasion in a CRM context. Thus, in this form, collectivism operates as a contextual dimension within the CRM domain.

Prior Literature on Cultural Issues within the CRM Domain Our understanding of the association between culture as a contextual dimension and CRM in general, as well as positive WOM persuasion as a CRM outcome in particular, is constrained by empirical weaknesses in previous research. Thus, even though the depth and breadth of CRM research is vast, there is a need to build the contextual foundations in CRM research. Specifically, when reviewing the extant CRM literature, only nine studies focused on cultural issues.

Role of Collectivism  65 The first study, conducted by Lavack and Kropp (2003), examined consumers’ attitudes toward CRM alliances in four countries, Australia, Canada, Korea and Norway, with a special focus on the role of consumer values in shaping these attitudes toward CRM. The results showed that attitudes toward CRM practices are less positive in countries where the CRM concept is not very established (such as Korea) and more positive in countries where it is well established (such as Canada). In addition, differences in attitude toward CRM are directly associated with consumers’ internal (self-fulfillment, self-respect, sense of accomplishment and warm relationships with others) and external (security, sense of belonging and being well respected) values. Second, Chen, Deshpande and Basil (2011) investigated the moderating effects of collectivism and awareness of CRM on the impact of fit on consumer acceptance of, and skepticism toward, CRM. The authors compared responses among individuals of varying levels of CRM exposure and collectivist tendencies: European-Canadians, recent Chinese Canadians, earlier Chinese Canadians and Mainland Chinese. The results showed that as CRM awareness is increased, fit assumes greater significance. Also, fit is more significant among those who rank high on collectivism, and it matters relatively more to Chinese people than Europeans-Canadians. Third, Robinson, Irmak and Jayachandran (2012) investigated how the choice of cause by consumers in a CRM campaign leads to higher consumer support than those cases in which the donor organization determines the cause. The results showed that choice in a CRM context is helpful as long as it enhances consumers’ perception of having a personal role in helping the cause. That is, allowing consumers to choose the cause in a CRM campaign is more likely to enhance perceived personal role and, therefore, purchase intentions for those consumers who are considered collectivists. In other words, the authors illustrate that collectivists, who tend to care more about contributing to society than non-collectivists, value the role they have in CRM campaigns of choosing the cause to a larger extent, and the chances to respond positively increase. In doing so, the moderating impact of collectivism on the effect of choice on purchase intentions is mediated through enhanced perceptions of personal role in helping the cause. Fourth, La Ferle, Kuber and Edwards (2013) investigated the attitudes toward CRM campaigns in India and the United States. In particular, the study assessed three factors that impact on the effectiveness of CRM efforts: (1) novelty as one of the underlying factors distinguishing attitudes toward CRM campaigns, (2) perceptions of a company’s motives and (3) geographical proximity in terms of the type of company sponsoring the campaign (national versus multinational) and the location of the cause supported (national versus international). The study’s results support most of the predictions. Indian consumers found CRM campaigns

66  Michael Christofi et al. more novel and attributed higher levels of altruistic motives to organizations engaging in this tactic than did Americans. In addition, Indian consumers were more positive when such campaigns were conducted by an Indian organization rather than a multinational company. However, the cause of the campaign (a local or worldwide charity) did not affect attitudes toward the CRM campaign for the Indian or the American group. As a concluding remark, findings of the study of La Ferle, Kuber and Edwards (2013) illustrated notable differences in responses to CRM campaigns by students in the United States and in India. Thus, the findings of this study suggest, among other things, that cultural variations contribute to the differences in consumer reactions. The fifth study, conducted by Kim and Johnson (2013), investigated the reasons, other than personal benefit, behind consumers’ support for CRM campaigns. Toward this direction, the study examined how moral emotions operate in a different manner and vary according to culture (United States versus Korea) and an individual difference variable: namely, self-construal. The results of their study showed that purchase intention to buy a product that supports a cause was significantly influenced by moral emotions. The impact of pride, an ego-focused moral emotion, on purchase intention was higher for Americans (individualistic consumers) than their Korean counterparts. In addition, the impact of guilt, an other-focused moral emotion, on intent to purchase was lower for low-interdependent participants (individualists) than it was for those with high-interdependent participants (collectivists). Sixth, Vaidyanathan, Aggarwal and Kozłowski (2013) replicated the study of Vaidyanathan and Aggarwal (2005) in a new cultural context. The original study had illustrated that people in individualist countries, like the United States, are not willing to follow up on their original commitment (to support rainforest protection) if compliance incorporates bearing the cost of such an action (paying a higher price for a product where a portion of the price is donated to rainforest protection). With their study, the authors illustrated that compliance behavior across cultures can be different, depending on the dominant self-­construal paradigm in a given society. Specifically, the results showed that commitment-­consistency operates in collectivist, interdependent self-­ construal societies in a different way: if the cause being supported is of a pro-social nature, individuals in these societies are willing to pay the higher product price in order to support it. The seventh study, conducted by Wang (2014), examined and compared the influence of two consumer traits, namely, individualism and collectivism, and perception of individual charitable giving as a social norm, on attitude toward CRM. The geographical context of the study included China and the United States. The results showed that consumer traits associated with attitude toward CRM were different between these countries. Specifically, this study found that horizontal

Role of Collectivism  67 collectivism, gender and perceptions of individual charitable giving as a social norm were significantly related to attitude toward CRM in the US sample, whereas vertical collectivism, horizontal individualism and horizontal collectivism were significant exogenous variables of attitude toward CRM in the Chinese participants. The eighth study, conducted by Chang and Cheng (2015), examined, among other things, whether and how consumer mindset (individualistic vs. collectivistic) influences consumer skepticism about advertising and intent to purchase in a CRM context. Apart from examining these psychological traits, the authors also examined consumer shopping orientation (hedonic vs. utilitarian) as well as gender differences. The results showed that a collectivistic mindset and hedonistic shopping orientation decrease consumer skepticism about advertising. Also, individualism and utilitarianism might facilitate consumer skepticism about advertising. Moreover, advertising skepticism is negatively associated with consumer purchase intentions. Lastly, gender is found to be a significant moderating factor in the associations between three psychological traits (i.e., individualism, hedonism and collectivism) and consumer skepticism toward advertising. Finally, Choi et al. (2016) explored how consumers from individualistic (the United States and Canada) and collectivistic (South Korea and India) cultures respond to CSR activities of domestic and foreign firms. By conducting three studies, the authors identified the joint effect of cultural orientation and corporate nationality on CSR attributions, which mediate this joint effect on attitudes toward a firm. Specifically, collectivistic (but not individualistic) consumers attribute more altruistic (but not egoistic) motives to domestic than they do to foreign companies, resulting in enhanced positive attitudes toward the former. Apart from cultural orientation, which acts as a moderator between corporate nationality and CSR attributions, the duration of CSR is found to be another significant moderator on the effect of cultural orientation and corporate nationality on consumer attitudes. The findings provide evidence that when a foreign firm’s level of commitment to the cause is high, collectivistic consumers are as likely to make altruistic attributions to and have a positive attitude toward a foreign company as they are toward a domestic company.

Limitations of the Literature As with any literature review, the structure of the existing knowledge limits the generalizations and inferences one can draw. First, even though Hofstede (1980) focused on differences among countries and not individuals, this element of his work has not caught on, and several researchers have investigated individual differences. Some scholars, such as Kim and Johnson (2013), did examine countries; however, several other studies of extant CRM literature focused on comparing individualism

68  Michael Christofi et al. and collectivism at the individual level. Second, most studies conduct country-level comparisons, which require the researcher to have a logically representative sample of society as a whole if they are to make valid generalizations to a society (Oyserman, Coon and Kemmelmeier, 2002). In contrast to this essential characteristic, the reviewed studies compare groups of students. The narrow focus on undergraduates as samples in the studies limits generalizations to the wider population and to real-world settings. A narrow focus on differences between undergraduates from the United States and undergraduates from an East Asian country also limits generalizability to other countries. The last limitation identified in the current wisdom relates to the conceptualization and operationalization of culture. The majority of studies reviewed compare specific variables in different countries, claiming that they conduct a cross-country comparative research in nature. However, they do not focus on specific constructs of culture; in contrast, they vaguely examine the general claim that culture matters. Toward this direction, a central limitation of current wisdom is the failure to investigate how consumers from a specific cultural value dimension feel and think about a specific subject in the CRM context and, thus, create a contextual foundation within the CRM domain.

A Rationale for Choosing Hofstede’s Collectivistic Orientation Several scholars argue about which choice of cultural dimensions is most appropriate for conceptualizing and operationalizing culture (Clark, 1990; Hofstede, 1991; Steenkamp, 2001). In this study, we chose to investigate Hofstede’s collectivistic cultural value dimension for the following reasons. First, Hofstede’s (2001) cultural value dimensions have arguably had a far bigger impact than any other competing cultural dimensions (Smith, Peterson and Schwartz, 2002; Soares, Farhangmehr and Shoham, 2007). Second, according to several scholars (e.g., Kirkman, Lowe and Gibson, 2006; Tang and Koveos, 2008), Hofstede’s framework prevails in cultural research because of its parsimony, clarity and resonance with managers. Third, although Hofstede used a work-related context for his framework, which was initially applied to the human resources discipline, it is still the most widely used national cultural framework in psychology, sociology, marketing or management studies (Kim and Kim, 2010; Soares, Farhangmehr and Shoham, 2007; Steenkamp, 2001). As regards the choice of specifically investigating the collectivistic cultural value orientation, the rationale lies in the following. First, prior literature on culture within the CRM domain is scarce, and very few studies focus on the individualism-collectivism dimension. Second, this study focuses on collectivism because the literature that focused on this construct has produced significant insights into consumers’ processes and because many other identified factors can be conceptually and empirically linked

Role of Collectivism  69 to these constructs (e.g., cause proximity, personal role). Third, the extant cross-national literature demonstrates an association between collectivism and psychological outcomes of interest, and suggests that culture influences both content and process. Fourth, none of the CRM studies that focus on culture investigate how positive WOM persuasion in a CRM context is perceived in a collectivist society. Fifth, collectivism is shown to have an association with positive WOM persuasion in prior WOM literature; thus, it would be interesting to examine this association in a CRM context. Finally, this study responds to calls for further research on consumers’ mindsets at the cultural level (Chang and Cheng, 2015), i.e. something that prior literature failed to focus on due to most studies’ comparative nature between individualism and collectivism, which do not separately examine the consumers’ mindsets in each cultural orientation.

Individualism and Collectivism as Independent Constructs According to Husted and Allen (2008), the cultural orientations of individualism and collectivism have traditionally been conceptualized and researched as opposite ends of a unidimensional continuum. However, more recent studies have started to investigate collectivism and individualism as two independent or discrete facets (Oyserman, Coon and Kemmelmeier, 2002; Robert and Wasti, 2002) because both coexist in all societies (e.g., Schwartz, 1994) as well as in all individuals (e.g., Triandis, 1995). It is argued that individuals and groups activate one of the two cultural value orientations according to the circumstances, and the characterization of a society as collectivistic or individualistic relies on the degree to which collectivistic or individualistic norms, values and assumptions apply to the largest portion of members of that society and in a majority of contexts (Robert and Wasti, 2002). In the same vein, although people differ within a specific society, the characterization of an individual as allocentric or idiocentric illustrates their probability of behaving in such a way that is consistent with the characteristics of a collectivistic society or an individualistic one in most contexts. Therefore, the abstract values, norms, beliefs and assumptions constitute independent, discrete dimensions, but in any specific context, an individual tends to view the values, norms, beliefs and assumptions related to either individualism or collectivism as more relevant to that situation (Robert and Wasti, 2002). In light of the above discussion, we will only focus on collectivism.

Examining Collectivism at the National Level of Analysis Individualism and collectivism constitute special problems as regards their level of analysis (Husted and Allen, 2008) because they have been conceptualized both as an individual-level construct (Earley, 1989) and as a

70  Michael Christofi et al. societal-level dimension. Cultural factors often apply to both levels because culture is a collective phenomenon, while, at the same time, it constitutes values held by individuals (Hofstede, 1991). However, according to the interpretation given by Hofstede, culture incorporates systems of values, which are the elements of culture. Consequently, culture affects the behavior of its members in a predictable and unvarying way, and cultural differences often become clearer at a macro level of analysis (Chiang, 2005). In addition, several authors (e.g., Steenkamp, 2001) argue that there is empirical evidence for differences within a country and between countries, making nationality an acceptable proxy of culture (Soares, Farhangmehr and Shoham, 2007). Based on the above discussion, the present study analyzes collectivism at the national level because it is interesting to identify its role in the consumer’s reasoning processes as part of a collectivist society.

Collectivism: A Comprehensive Overview Individualism-collectivism is one of the five cultural value dimensions that have been put forward by Hofstede (1980), and, according to Sun, Horn and Merritt (2004), it is probably one of the most important ways in which societies differentiate. According to Schwartz (1994), collectivism encompasses the following aspects: (1) Relationships between individuals and groups – Members of collectivist societies are embedded in groups characterized by close-knit harmonious relations; (2) The relationships between humankind and the natural and social world  – ­Collectivism concentrates on harmony with the social and natural world; and (3) Assurance of responsible social behavior – Collectivist cultures motivate people to consider the welfare of other individuals and stress equality instead of hierarchy. Moreover, Triandis (1995) states that collectivism incorporates four universal dimensions: (1) The definition of the self – The term self is interdependent in collectivism. This is evident in a group sharing resources and individuals complying with the group’s norms; (2) The antecedents of social behavior – Norms, duties and obligations are the guiding principles of social behavior in collectivist cultures; (3) The structure of goals – The defining characteristic of collectivism is the compatibility of personal goals with communal goals; and (4) Significance of relationships – In collectivistic cultures, relationships are significant, even if they are disadvantageous. In doing so, an underlying mechanism within a collectivistic culture is cooperation so as to attain group goals and safeguard group welfare (Earley, 1989). The most significant component of collectivism is the assumption that groups bind and mutually obligate individuals (Oyserman, Coon and Kemmelmeier, 2002). From this core, scholars espy a variety of plausible implications or consequences of collectivism (ibid.). According to Schwartz (1994), societies described as collectivist are communal societies characterized by diffuse and collective expectations and obligations on the basis of ascribed statuses. In these societies, social

Role of Collectivism  71 units with common fate, common values and common goals are centralized (Oyserman, Coon and Kemmelmeier, 2002); the personal is just an ingredient of the social, making the in-group the core unit of analysis (e.g., Triandis, 1995). This characterization focuses on collectivism as a social way of being, steered toward in-groups and away from out-groups (Oyserman, 1993; Oyserman, Coon and Kemmelmeier, 2002). Because in-groups can incorporate clan, family, religious, ethnic or other groups, Hui (1988) and Triandis (1995), as well as others, have recommended that collectivism is a diverse construct, incorporating culturally dissimilar foci on various levels and kinds of referent groups. In this view, collectivism might refer to a wider range of attitudes, behaviors and values than individualism (Oyserman, Coon and Kemmelmeier, 2002). Plausible psychological consequences of collectivism, such as self-concept, attribution style, well-being and relationality, are easily observed. First, with regard to emotional expression and well-­ being, collectivism implies that (a) life satisfaction comes from successfully bringing into effect social roles and obligations, and shunning failures in these domains (Markus and Kitayama, 1991; Oyserman, Coon and Kemmelmeier, 2002), and (b) restriction of emotional expression, instead of open and direct expression of personal feelings, is likely to be valued as a means of safeguarding in-group harmony (Oyserman, Coon and Kemmelmeier, 2002). Second, with regard to the self-concept, definitions of collectivism imply that (a) group membership is a major identity aspect (Hofstede, 1980; Markus and Kitayama, 1991; Oyserman, Coon and Kemmelmeier, 2002), and (b) valued personal traits mirror the goals of collectivism, such as retaining harmonious relationships with close others and sacrifice for the common good (Markus and Kitayama, 1991; Oyserman, 1993; Triandis, 1995). Third, regarding relationality, collectivism implies that (a) significant group memberships are ascribed and changeless, and viewed as facts of life to which individuals should adapt; (b) boundaries among in-groups and out-groups are steady, significant and relatively impermeable; and (c) in-group exchanges depend on generosity principles and equality (Oyserman, Coon and Kemmelmeier, 2002; Triandis, 1995). Last, in regard to judgment, attributions and causal reasoning, collectivism suggests that (a) social context, social roles and situational constraints have a prominent position in person perception and causal reasoning (Morris and Peng, 1994), and (b) meaning is positioned in a context, and memory most probably includes richly embedded detail (Oyserman, Coon and Kemmelmeier, 2002).

Collectivism and Positive WOM Persuasion in a CRM Context As noted earlier, the dimensions of individualism and collectivism characterize the relationships that individuals have in each culture (Kim

72  Michael Christofi et al. and Kim, 2010; Soares, Farhangmehr and Shoham, 2007). People from ­collectivistic cultures are characterized by a “we” consciousness, meaning that their identity relies on the social system in which they are embedded (Schumann et al., 2010). In addition, according to Hall (1976), collectivism is characterized by high-context communication because the tight social system incorporates several rules that regulate people’s behavior. In doing so, collectivists live in a tight social framework in which individuals are incorporated from birth into powerful, cohesive in-groups with collectivistic bonds (Kim and Kim, 2010; Kirkman, Lowe and Gibson, 2006; Soares, Farhangmehr and Shoham, 2007). On the contrary, individualistic orientation is described by a strong “I” consciousness and the emotional independence of people from institutions and organizations (Schumann et al., 2010). Moreover, individualist cultures are characterized by low-context communication because, without strong group norms and regulations, the social pattern in which communication is conducted indicates little information (Hall, 1976; Zhang, Beatty and Walsh, 2008). Furthermore, collectivism is represented by a social pattern comprising people who see themselves as part of collectives and are willing to prioritize the collective goals instead of their own personal goals (Patterson, Cowley and Prasongsukarn, 2006). Accordingly, collectivistic-oriented cultures are in favor of group rewards, whereas individualist-oriented cultures prefer individual rewards (Lam, Lee and Mizerski, 2009). Since CRM requires a customer to help a social cause that advances the wider social well-being, customers with a collectivist orientation would be motivated by their underlying social pattern to engage in positive WOM persuasion toward other consumers in their society in favor of the donor organization conducting the CRM campaign. However, customers from countries characterized by individualistic cultures will have a lower motivation to engage in such positive WOM persuasion toward others. This view is supported with empirical evidence as follows. First, there are various studies that empirically showed more pronounced information sharing and acquisition behavior among individuals belonging to collectivist cultures (e.g., Liu, Furrer and Sudharshan, 2001; Money, Gilly and Graham, 1998). The logic behind this is that cultures belonging to the collectivism orientation are more cohesive and have stronger social ties than individualist cultures (Schumann et al., 2010). Thus, customers in collectivist cultures are more likely to engage in information sharing and to allow reference groups to affect their decision-­ making (Doran, 2002; Schumann et al., 2010). Second, several scholars point to the significance of collectivism when attempting to define customer CSR orientation (e.g., Pérez and Rodríguez del Bosque, 2013). For instance, Vitell, Paolillo and Thomas (2003) argue that collectivists have a higher CSR orientation than individuals with lower levels in this cultural orientation. Similarly, CRM is a marketing strategy

Role of Collectivism  73 for advancing CSR activities, and the bulk of campaigns are designed and delivered through collaborative “social” alliances with charitable causes and NPOs (Liu and Ko, 2011; Vanhamme et al., 2012). In addition, CRM accords perfectly with the rationale of enlightened self-­ interest or pragmatic altruism (Varadarajan and Menon, 1988), which views CSR practices as an opportunity to do better while doing good (Bigné-Alcañiz et al., 2012).

General Discussion In their everyday lives, people make numerous consumption decisions. CRM can affect these decisions by evoking their moral emotions. Based on this, the present study stresses the fact that cultural variations contribute to the differences in consumer reactions to CSR programs. More specifically, it advances our understanding of the role of collectivism on consumers’ attitudes toward engaging in information sharing as well as allowing reference groups to affect their decision-making with regard to CRM. Thus, this study is of great importance to both marketing scholarship and practice.

Theoretical Contributions Existing research on culture has focused on vaguely examining its impact on consumers’ attitudes toward CRM campaigns. According to the findings from the review of previous literature done in the CRM domain, this is the first study that rationalizes and conceptualizes the association between collectivism cultural value orientation and positive WOM persuasion behavior in a CRM context, providing the basis for further research. Therefore, this study theoretically contributes to the CRM and WOM literature as well as the cultural studies in consumer behavior.

Managerial Implications Charitable giving as part of a company’s marketing strategy has become a major trend among companies. CRM campaigns have helped companies realize corporate and marketing objectives while at the same time supporting financially deserving causes. However, managers should not only design and implement CRM initiatives that stand out and get attention in a noisy world. The present study suggests that, for the purpose of engaging in positive WOM persuasion toward other consumers, marketing practitioners should take into account that substantial variation in consumers’ responses and attitudes toward CRM campaigns exists across different countries and cultural backgrounds. Moreover, as collectivism has a positive effect on decision-making processes and outcomes

76  Michael Christofi et al. Christofi, M., Leonidou, E., Vrontis, D., Kitchen, P., & Papasolomou, I. (2015a). Innovation and cause-related marketing success: A conceptual framework and propositions. Journal of Services Marketing, 29(5), 354–366. Christofi, M., Leonidou, E., & Vrontis, D. (2015b). Cause-related marketing, product innovation and extraordinary sustainable leadership: The root towards sustainability. Global Business and Economics Review, 17(1), 93–111. Christofi, M., Kaufmann, H. R., Vrontis, D., & Leonidou, E. (2013). Cause-­ related marketing and strategic agility: An integrated framework for gaining the competitive advantage. World Review of Entrepreneurship, Management and Sustainable Development, 9(4), 518–542. Christofi, M., Vrontis, D., & Leonidou, E. (2014). Product innovation and cause-related marketing success: A conceptual framework and a research agenda. Marketing Intelligence & Planning, 32(2), 174–189. Christofi, M., Vrontis, D., Leonidou, E., & Thrassou, A. (2018). Customer engagement through choice in cause-related marketing: A potential for global competitiveness. International Marketing Review. doi:10.1108/ IMR-04-2018-0133. Clark, T. (1990). International marketing and national character: A review and proposal for an integrative theory. Journal of marketing, 54(4), 66–79. Cone, C. L., Feldman, M. A., & DaSilva, A. T. (2003). Causes and effects. Harvard Business Review, 81(7), 95–101. De Angelis, M., Bonezzi, A., Peluso, A. M., Rucker, D. D., & Costabile, M. (2012). On braggarts and gossips: A self-enhancement account of word-ofmouth generation and transmission. Journal of Marketing Research, 49(4), 551–563. Doran, K. (2002). Lessons learned in cross-cultural research of ­Chinese and North American consumers. Journal of Business Research, 55(10), 823–829. Dye, R. (2000). The buzz on buzz. Harvard Business Review, 79(6), 139–146. Earley, P. C. (1989). Social loafing and collectivism: A comparison of the United States and the People’s Republic of China. Administrative science quarterly, 565–581. Folse, J. A. G., Niedrich, R. W., & Grau, S. L. (2010). Cause-relating marketing: The effects of purchase quantity and firm donation amount on consumer inferences and participation intentions. Journal of Retailing, 86(4), 295–309. Hall, E. T. (1976). Beyond culture. New York: Doubleday. He, H., Chao, M. M., & Zhu, W. (2019). Cause-related marketing and employee engagement: The roles of admiration, implicit morality beliefs, and moral identity. Journal of Business Research, 95, 83–92. Hofstede, G. H. (1980). Culture’s consequences: International differences in work-related values. Thousand Oaks, CA: Sage Publications. Hofstede, G. H. (1991). Cultures and organizations: Software of the mind. New York: McGraw-Hill. Hofstede, G. H. (2001). Culture’s consequences. Thousand Oaks, CA: Sage Publications. Hui, C. H. (1988). Measurement of individualism-collectivism. Journal of research in personality, 22(1), 17–36. Husted, B. W., & Allen, D. B. (2008). Toward a model of cross-cultural business ethics: The impact of individualism and collectivism on the ethical ­decision-making process. Journal of Business Ethics, 82(2), 293–305.

Role of Collectivism  75

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6 Stakeholders in the Implementation of a Sustainable Marketing Strategy A Comparative Analysis of Polish and Sri Lankan Markets Edyta Rudawska Introduction Nowadays the world faces unprecedented ecological, social and ethical challenges (Hoornweg & Bhada-Tata, 2012; Lilienfeld, 2015; Tracy, 2017). These challenges give rise to the need to keep the balance between economic progress and environmental and social protection, which is widely discussed in the literature. Apart from implementing profit-­ making activities, improving financial performance and increasing their market value, companies are forced to undertake activities aimed at their long-term sustainable development. Inigo, Albareda and Ritala (2017), as well as Katsikeas, Leonidou and Zeriti (2016), agree that the sources of success for today’s businesses should be sought in long-term, sustainable development, which takes into account economic, environmental and social dimensions. In light of the above-mentioned the aim of the chapter is to assess the role and the place of company stakeholders in the process of implementation of sustainable marketing strategy in two different regions (Poland in Europe as a representative of a developed market and Sri Lanka in Asia, representing a developing region). In this chapter it is hypothesized that in developed markets (e.g. Poland in ­Europe), with a relatively higher level of socio-economic development, the perceived role of stakeholders in creating and implementing sustainable marketing strategies is higher. On the contrary, in developing markets (e.g. Sri Lanka in Asia), with a lower level of economic development, stakeholders’ role in that process is perceived as lower.

Sustainability and the Concept of Marketing: A Changing Perspective Although the term “sustainable development” has gone through various changes in its development, it is most commonly understood ­according to the definition proposed in 1987 by the World Commission on ­Environment and Development (Brundtland Commission, 1987, p. 43):

82  Edyta Rudawska the development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The principles guiding sustainable development relate not only to the macro scale but also to the micro scale. It is widely approved that the idea of sustainable development should be implemented not only on the level of individual economies, countries or regions but on the level of individual businesses as well. Carroll, Brown and Buchholtz (2016, p. 61) stress that corporate sustainability should result in creating long-term shareholder value by taking advantage of opportunities and managing risks related to economic, environmental and social developments (triple bottom-line approach). This approach requires an integration and concentration of all the processes taking place in a company around sustainability issues. In such a company, responsibility for sustainable growth pervades all the departments, and sustainable thinking is present every day and in every action in the minds of all the employees, regardless of their position or function. Accounting, production, transport and logistics, data processing, sales and marketing – all the employees of these departments should focus on one common goal: namely combining economic aspects with those of a social and ecological nature. Referring to the concept of sustainable development on the micro scale, it should be emphasized that it influences the business philosophy of the company, determining its strategies in the area of management and marketing (Inigo, Albreda & Ritala, 2017, ss. 515–542; Papadas, Avlonitis & Carrigan, 2017, ss. 236–246). According to Hejduk and Grudzewski (2014), in addition to innovation and knowledge management, ecological and social management, as well as the inclusion of corporate social responsibility principles in management systems, a modern approach to marketing is indispensable for creating a sustainable company. No matter whether marketing is perceived as one of many functions (organizational units) performed in the company or the company philosophy (the way all the employees operate and think), being mostly involved in relations with the environment marketing should be the main source and focal point of a company’s pursuit of sustainable development. Other researchers argue that marketing may be viewed as the concept that is within, and supportive of, sustainable economic development (Hunt, 2017). Taking the perspective of sustainability concept marketing involves strategic decisions taken at the level of the organization itself, i.e. establishing the value and marketing objectives of a sustainable nature as well as decisions regarding the planning of sustainable marketing strategies. Incorporating sustainable issues into marketing strategies becomes an absolute necessity for survival and building a competitive market advantage in the long term. Kumar, Rahman and Kazmi (2016) asserted that with the introduction of the sustainability concept, marketing discipline, which focussed in the past on traditional economic analysis, has been broadened by environmental and social

Implementation of a Marketing Strategy  83 considerations. Marketing must involve strategic decisions made at the organizational level, i.e. defining sustainable values and marketing objectives as well as making decisions with regard to designing sustainable  marketing activities. As a result, a new conceptualization of the idea of marketing arose in the late 1990s that is often described as sustainable marketing. It is defined as a management process that takes into account the management of marketing programmes which help to achieve the company’s economic goals in addition to social and environmental considerations (Belz & Peattie, 2014; Kumar, Rahman and Kazmi, 2016; Rudawska, 2018). In modern organizations the concept of sustainable marketing should be perceived in a holistic way and viewed as a corporate philosophy (Lim, 2016). It means that sustainability should be embedded within a company’s mission, values, beliefs and norms as well as the marketing goals, the process of developing marketing practices (marketing mix) and the operations it runs.

Relationships with Company Stakeholders in the Field of Sustainable Marketing Undertaking sustainable marketing activities means becoming involved in interactions with society and, consequently, groups of stakeholders interested in the company’s activity as well as groups influenced by the company’s decisions, policies or actions (Frow & Payne, 2011; Mena & Chabowski, 2015; Kull, Mena & Korschun, 2016). According to Hillman and Keim (2001, p. 126) a key to sustainable marketing orientation is building and managing relationships with a wider set of stakeholders, who “bear a kind of a risk as a result of having invested some form of capital, human or financial, something of value, in a firm”. Running successful marketing strategies involves more than a single organization. To achieve objectives in this challenging business environment companies have to approach them collectively, through a collaborative process. An emerging trend is the development of collaborative, often multi-sector partnerships, with different company stakeholders of a strategic nature focussed on particular social issues or problems in the global economy (Lawrence & Weber 2017). A detailed identification and classification of stakeholders related to sustainable marketing was provided by Kumar, Rahman and Kazmi (2016). Basing on the literature review published between 1998 and 2012, including over 150 research papers, the authors proposed to classify them into four categories: economic stakeholders (those who may affect, or be affected during, achieving financial/economic objectives and goals), social stakeholders (those who may affect, or be affected during, the achievement of societal responsibility-related objectives and goals), environmental stakeholders (those who may affect, or be affected during, the achievement of natural

84  Edyta Rudawska environment-related objectives and goals) and regulatory stakeholders (those who may affect, or be affected during, achieving overall sustainability objectives and goals). These four categories of stakeholders can be involved in decision making if they are made participants in business management, sharing information, dialoguing and creating a model of mutual responsibility (Pucci et al., 2018). These provide means for creating and appropriating superior value in the marketplace: namely shared value. Porter and Kramer (2011, p. 66), the so-called fathers of the “shared value” concept, conceptualize it as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions. They claim that learning how to create that value is the best chance to legitimize business again. Other researchers define the “shared value” as creating value of different type for various stakeholders (Dembek, Singh & Bhakoo, 2016). Moon et al. (2011) name companies, which are able to create shared value as “smart corporations”, since they create both corporate and social benefits. There are two main reasons, which make the creation of relations with stakeholders a priority. First of all, the scale of the problems discussed in the first part of the chapter exceeds the possibilities of individual companies operating in the market. No single business is likely to be big enough to cope with complex and diverse customer demands. The complexity and multifaceted nature of many socio-ecological problems means that solving them goes beyond the competences of business employees or beyond the competences of one sector. Companies do not have the required financial, human, organizational or marketing resources at their disposal to cope with these challenges alone. Even those companies that can develop the capabilities may do so faster via partnering. Therefore, as indicated by Hillebrand, Driessen and Koll (2015), system thinking is one of the required capabilities that firms need most. Second, no enterprise is a self-functioning island. Operating in a specific environment, it automatically becomes the object of many relationships with individual people, groups or organizations. According to general system theory, organizations are open to, and interact with, their external environments (Lawrence & Weber 2017). They cannot be considered in isolation. Firms are embedded in a broader social context with which they constantly interact. Initially these relations involved company shareholders and possibly employees and customers. However, a changing business environment, discussed earlier, made different social groups interested in the company, e.g. suppliers, governments, competitors, local communities, social organizations, media and economic organizations. These changes also made companies focus on these groups as well as think about the consequences of their activity on the level of individuals, society and the whole environment. Being a part of the system, the company expects value from its stakeholders but at the same

Implementation of a Marketing Strategy  85 time is aware that it is affected by and that there are some expectations towards the company from its stakeholders. Business and society, taken together, form an interactive social system in which each needs the other, and each influences the other. As a consequence, any action taken by one will surely affect the other. The above-mentioned circumstances change the bargaining power of company stakeholders and create the necessity to direct and manage relations between them. Lawrence and Weber (2017, pp. 38–39) indicate three drivers of stakeholder engagement in the cooperation. These include goals, motivation and organizational capacity. In regard to goals, both the business and the stakeholder must have a problem that they want to be solved. The problem must be both urgent and important. For a business it may be the existence of a gap between actions taken in the market and public expectations, such as its licence to operate in society (e.g. reputational crisis). The goal may also be to enhance the value proposition for the customer or to get access to new markets, unique skills and resources to improve the effectiveness of the company. For stakeholders the goal may refer to issues important to them, like environmental harm. The business and stakeholders need to be motivated to work with one another as well in order to solve the problem by creating successful relationships. A good motivation for the company may be the fact that the stakeholder has technical expertise to help it address an issue or the need to get the stakeholder’s approval because he is in a position to influence, for example, policymakers. On the other side, stakeholders may find that the best way to bring about change is to help a company alter its behaviour. Finally, the third driver of stakeholders’ engagement is the necessity to have the organizational capacity to interact with one another. Lawrence and Weber (2017) indicate that in the business environment the support from the top management and an adequately funded external affairs or comparable department with a reporting relationships to top executives or management process provides an opportunity for leaders to identify and respond quickly to shifts in the external environment. The stakeholders’ organizational capacity refers to leadership that supports dialogue and individuals or organizational units with expertise in working with the business community. Furthermore, Mena and Chabowski (2015) add that for organizations to be engaged and responsive to their stakeholders they need to effectively acquire, distribute, interpret and store stakeholder-related knowledge.

Methodology Research Context Every nation aspires to sustainable development and sustainable marketing strategy, but few know how to pursue it, and even fewer are

86  Edyta Rudawska taking effective action to bring it about. Sustainable development involves change, in the behaviour and attitudes of consumers of the following countries, producers and other market entities as well as in the allocation of resources over time. Both developed and developing countries have caused environmental and social impact in the world. In developing countries that impact is related to excessive population growth, inefficient technology, weak governance, a poor health sector, low level of innovations, low income per capita and poverty (Bascom, 2016). In developed countries, economic growth results in increasing wealth, income, standard of living and improved health care facilities. The drive to economic development was based on the increasing use of fossil fuels, synthetics and chemicals, and increased production at a lower price, to name a few things. In the long term all these came at a price of environmental degradation as well as social injustice. It can be assumed that issues arising in the socio-ecological environment are a result of both the lack of development and the consequences of economic growth. Environmental and social policy and management, as originated in developed countries, has tended to be divorced from economic policy for a long time. Having achieved high levels of economic development with unrestricted access to resources and that are unhindered by environmental concerns, developed countries have sought to protect their environment and ultimately their quality of life from the side-effects of economic activity: primarily air and water pollution; hazardous waste; and, more recently, global climate change. In that context, environmental and social activities were seen as a necessary restriction or regulation of economic activity to contain environmental and social damage within acceptable bounds. For developing countries and transitional economies, the divorce of environmental policy from economic policy and from efforts to achieve sustainable development is meaningless and potentially disastrous, both economically and environmentally. Where standards of living are unacceptably low; where poverty is a major cause and consequence of environmental degradation and social problems; where natural resource exploitation is the engine of growth; and where formerly planned economies struggle to restructure and recover, imposing constraints on economic activity to protect the environment for its own sake rather than as an input in sustainable development has very limited appeal. In this study Asia, as an example of a developing country, had been chosen for the research. The inclusion of the Asian market in the research seems particularly important today. Asia, which is characterized by dynamic but uneven economic growth and widespread environmental degradation, is a region facing many problems related to sustainable development and social and environmental changes. Parnwell and ­Bryant (1996, s. 28) indicate that in Asia, more than in other developing

Implementation of a Marketing Strategy  87 regions of the world, the contradiction between the environment, negative social phenomena and economic development and growth is visible. The approach to economic growth in developing countries is dominated by the view that investments in environmental protection should be implemented at a later stage of development. In practice, this means acceptance for environmental degradation in order to meet the urgent current needs of company stakeholders. In this context, as indicated by Chakraborty and Mandal (2014, ss. 1–18), Asian countries (including Sri Lanka) still have a long way to go to achieve the level of commitment to sustainable development observed in developed countries. Nevertheless, the dynamic development of Asian countries and, as a consequence, growing social and environmental problems will force companies of this region to concentrate more on marketing activities consistent with sustainable development and to include different stakeholders in the process of creating and implementing sustainable marketing strategy. The above-mentioned makes the research in that field necessary and interesting since there is no previous research of a comparative nature. Research sample and the Development of Measurement Scales The results presented in this paper are part of a research project dedicated to the concept of sustainable marketing implementation in micro, small and medium-sized enterprises (MSMEs) operating in Poland and Sri Lanka. The target population constituted CEOs, or eventually CMOs, if that position was in the organizational structure of these organizations. Identification of that group as key research respondents for data collection is justified as, in MSMEs, it’s CEOs who select sustainable marketing tools towards employees. After building a rough draft of the questionnaire, it was reviewed by selected MSMEs in both countries to examine the meaningfulness and the measures. Later, instrument pre-testing was conducted to ensure the measurement quality and the content validity. Pilot research was done by 30 managers of MSMEs. After that stage was completed the research was conducted in 2016 and 2017. The convenience sampling approach was employed for collecting data. Before the final analysis of the results data screening was conducted, 38 questionnaires were eliminated because of missing data. The effective research sample totalled 262 MSMEs operating in Poland (a representative of European market) and Sri Lanka (a representative of the Asian market). The sample included 150 respondents from Poland, comprising 57% of the sample, and 112 respondents from Sri Lanka (43%). As far as the company size was concerned most of the respondents were micro and small firms (equal percentage in both ­countries  −51%). As for medium companies the vast majority (96%) came from Poland (Table 6.1).

88  Edyta Rudawska Table 6.1  T he structure of the sample total with regard to the size of the company Total

Poland Sri Lanka

Number of companies

Percentage

150 112

57% 43% Company size

Micro Small Medium

Number of companies

Percentage

Poland

Sri Lanka

Poland

Sri Lanka

57 49 44

59 51 2

49% 49% 96%

51% 51% 4%

Source: Own research.

The non-parametric U Mann-Whitney test was used to examine the significance of the differences between the two countries. Before the research was run special scales were designed based both on an exhaustive literature review and on a qualitative approach. Consequently, exploratory research was run to develop reliable and valid measures following rigorous scale development stages. During the research secondary sources of information were used. These included a careful review of the available literature on sustainable marketing strategy (Bridges & Wilhelm, 2008; Belz & Peattie, 2014; Martin & Schouten, 2014) as well as qualitative research through interviews undertaken with experts from the relevant population (CEOs or CMOs). The data was supplemented with additional information in the form of sustainable management reports. All scales were anchored along a five-point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree), to determine the degree of acceptance for each statement. The Role and Place of Stakeholders in the Implementation of Sustainable Marketing Strategy – Research Results The starting point in research aimed at identifying the role of relations with stakeholders in the implementation of sustainable marketing strategy in two different regions (developed and developing) was to analyze whether company stakeholders influence the process of creating company marketing strategy and objectives. All the determiners analyzed are shown in Table 6.2.

Increased competition Increased environmental pollution and environmental degradation Growing consumer sensitivity to social injustice Growing consumer, social, globalization, etc., movements Development of information and communications technology Increased importance of companies’ intangible assets, e.g. image or strong customer relationships Changing bargaining power of companies’ stakeholders, e.g. employees, shareholders, local communities, suppliers Changes in legislation relating to environmental protection, employee rights, rules of cooperation, etc., connected with corporate responsibility

1. 2.

1.03 0.95

3.63

0.90

1.01

1.21 1.08

0.98 1.20

S

3.48

3.89

3.69

3.36 3.41

3.93 3.37

X

Poland

Boldface indicates statistically significant differences between countries. Source: Own compilation based on research.

8.

7.

6.

5.

3. 4.

Factors

No.

26.27

29.71

23.08

27.26

35.98 31.80

25.05 35.63

Vs

3.87

3.71

4.28

4.41

3.64 3.99

4.63 3.86

X

1.05

1.02

0.78

0.91

1.32 1.20

0.82 1.28

S

Sri Lanka

Table 6.2  Company stakeholders among determiners of company strategy and objectives (p < .05)

27.11

27.42

18.11

20.67

36.16 29.98

17.65 33.18

Vs

.02

.00

4.05114

2.27106

.00

6.63985

.13

.03 .00

2.16608 4.73634

1.48048

.00 .00

p.

7.36093 3.77511

Z (U MannWhitney test)

90  Edyta Rudawska The data presented in Table 6.2 show that in both markets the changing bargaining power of companies’ stakeholders (employees, shareholders, local communities and suppliers) is not currently a key focus in the process of creating marketing strategy. Although that factor is more important for respondents from Sri Lanka than Polish ones (X = 3.48 and 3.71), it was still one of the lowest assessed determiners in both markets. Asian companies placed it as the seventh determiner out of eight analyzed, with Polish firms placing it as fifth. It is also worth stressing that the perceived role of changing the bargaining power of companies’ stakeholders did not differentiate the two analyzed groups in a statistically significant way. The results show that in both groups of companies, the three most important determiners of marketing strategy are: increased competition; the development of information and communications technology; and increased importance of companies’ intangible assets, such as image or strong customer relationships. In all three elements, the two analyzed groups can be differentiated in a statistically significant way. Companies’ managers from Asian market regard them as much more important in the process of implementing sustainable marketing strategies. According to the assumption made in the research there are different motivations for changing traditional marketing strategy towards sustainable marketing activities. The results show that the most important motivations for companies operating in Sri Lanka are those related to different groups of stakeholders (see Table 6.3). These include stakeholders who are indicated in literature as the most important ones for company success (Carroll, Brown & Buchholtz, 2016). Asian respondents indicated customers who prefer more ecological and socially responsible products, competitors’ involvement in sustainable marketing and pressure from business partners (suppliers) in the supply chain as three key factors influencing the change of company’s marketing strategy towards sustainability. As far as the perception of stakeholders’ influence among Polish respondents is concerned it should be stressed that they mainly appreciate customers preferring more ecological products. On average, only every fourth respondent indicated competitors and business partners as an element encouraging change towards sustainable marketing. In Poland legislation and unpredictability of prices were much more important. Table 6.3 also shows a significant difference between the two markets in regard to another motivation for change: dealing with stakeholders. Over 16% of respondents from Sri Lanka indicated that the necessity of gaining the approval of the stakeholders for activities run by the company makes them focus on sustainable marketing activities. That percentage equals only 3% among respondents from Poland. To sum up, it should be stated that companies operating in a developing market, like Sri Lanka, perceive the role of different groups of stakeholders as much more important in the process of directing the focus of marketing strategy towards sustainability.

Implementation of a Marketing Strategy  91 Table 6.3  Factors which have influenced the company to change marketing strategy towards sustainability (%) Factors

Poland

Sri Lanka

Customers who prefer more ecological products Customers who prefer more socially responsible products Legislation Limited access to resources and raw materials Unpredictability of prices Competitors’ involvement in sustainable marketing Pressure from business partners (suppliers) in the supply chain The financial and economic crisis of 2008–2009 Customers who expect more than the traditional marketing activities The expectations of the owners of your company that you will engage in socio-ecological activities (not just focussing on profits) Customers’ willingness to pay higher prices for organic and/or socially responsible products The expectations of current and new employees Gaining approval for activities run by the company, gaining the favour of the stakeholders

44.67 31.33

34.82 33.93

36.67 29.33 33.33 28.00 23.33

25.89 29.46 25.00 36.61 33.93

8.00 14.67

9.82 24.11

8.00

16.07

11.33

18.75

3.33 2.67

17.86 16.07

Boldface indicates statistically significant differences between countries. Source: Own compilation based on research.

The above research assumptions regarding an important role of competitors as company stakeholders influencing marketing strategy are consistent with other results. Table 6.4 indicates that respondents from Sri Lanka consider the stakeholders’ role to be much more important than those from Poland do. The difference is statistically significant. Literature suggests that creating a mission has proven to be a veritable tool in achieving the goals of contemporary organizations (Taiwo, Lawal & Agwu, 2016). According to Rudawska and Renko (2018), the formulation of sustainable marketing strategy in organizations is determined by the formulation of a mission statement. Papulova (2014) notices that there is no single way of creating an effective mission statement; there is no recommended format, formula or pattern focussing on reaching the target audience. For the purpose of the subject matter of this study the nine core components of mission statements were adapted, including relations with stakeholders (Figure 6.1). As Figure 6.1 shows, the mission statements of companies participating in the research differ in the two analyzed markets. In general respondents operating in the Asian market consider customer satisfaction and meeting customer needs, increasing profits and environmental protection as the primary focuses of the mission/value system. On the other hand, managers of Polish companies put more emphasis on the

We run marketing strategy in a sustainable way because we are required to by law We run marketing strategy in a sustainable way because our competitors are doing it We run marketing strategy in a sustainable way because we feel obliged to get involved in solving socially important problems or ecological considerations

1.

Boldface indicates statistically significant differences between countries. Source: own compilation based on research.

3.

2.

Statements

No.

3.2 3.4 4.3

2.8 3.4

Sri Lanka

3.3

Poland

X

Table 6.4  Drivers for the implementation of sustainable marketing activities

8.00483

3.61146

0.41138

Z (U Mann-Whitney test)

.00

.00

.68

Significance – p < .05

Implementation of a Marketing Strategy  93 74,1

80 70

61,6

60 50 40

30

31,3

27,3

32 29,5

32,1

29,5 26

30

24

18,8

22

20

29,3

25,3 19,35

17

11,6

10

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Poland

Sri Lanka

Figure 6.1  Relations with stakeholders as a part of companies’ mission/value system, in two groups of countries (%). Source: Own research.

high quality of the products offering and innovation, company image and customer satisfaction in the process of setting a company mission statement. Both groups focus their mission on customer satisfaction (a key company stakeholder), which is in line with Devasagayam, Stark and Valestin (2013), who point out that marketers continually assess customers’ changing needs and wants, and make the appropriate adjustments in the design and delivery of products and services to sustain competitive advantage. In the context of the goal of that chapter, it is rather disappointing that companies do not attach a high priority to key aspects of sustainable development, such as involvement in creating good relationships with employees, customers, business partners and other stakeholders. Hardly every third company from Poland and fourth company from Sri Lanka focus their mission statement on these elements. In general, in regard to stakeholders’ inclusion in the mission statement, companies operating in the Asian market focus significantly more on one group of stakeholders, e.g. customers, than those operating in the European market. However, Polish respondents show a little more focus and engagement in creating their mission statement based on relations with a wider group of stakeholders. The above-mentioned inclusion of stakeholders in the mission statement determines the process of creating and implementing marketing ­activities.

94  Edyta Rudawska The research presented above shows that in both developed and developing markets, creating relations with a set of company stakeholders is not perceived as a priority in the process of formulating company mission statements. Nevertheless, creating relations with stakeholders seems to be quite important in the process of implementing marketing activities. Managers were asked to rate how strongly they agree with the statements that marketing should focus (a) on increasing turnover, (b) on promoting the company’s products and services, (c) on boosting profits by satisfying the needs of their customers and (d) on taking long-term interests of broad stakeholder groups into consideration rather than those of customers alone. The survey results clearly show that the understanding of marketing activities in both country groups is very close to the definition of the American Marketing Association, cited earlier in the chapter. The definition identifies marketing as the activity; set of institutions; and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large (AMA, 2013). Although 70% or up to 80% of respondents in both markets perceive marketing as an activity that should be concentrated on sales increase, promoting the company’s offer and increasing profits by satisfying only the needs of existing customers, quite a lot of them associate these activities with the necessity to create relations not only with customers but also with other companies’ stakeholders (e.g. suppliers, environmental groups; Table 6.5). It should be noted that the group of enterprises representing the Asian market is much more engaged in creating relations with a wide group of stakeholders than the European one. In Asia almost 80% of interviewed declared that marketing strategy should take into account the long-term interests of the company’s stakeholders, while in Europe the percentage was 65. According to the research, company stakeholders, namely suppliers, are of special importance in managing sustainable distribution strategy. Table 6.6 draws the conclusion that both groups of analyzed market respondents perceive their role as very important when creating and implementing distribution strategy, especially in choosing suppliers. However, statistical analysis indicates that there exist significant differences between the two analyzed groups of countries. Compared to European market, in Asia much stronger emphasis is put on pro-social and/or environmental involvement in suppliers’ daily activities and the fact that they are aligned to the company ethical and ecological principles in the process of choosing them for cooperation to make that cooperation as sustainable as possible. Company stakeholders are also a focus in the process of sustainable communication. Respondents from both markets are quite strongly engaged in this process; however the commitment to it is stronger among Asian managers (Table 6.6, points 6–9). According to the research there is a statistically significant difference between the two groups in

Marketing activities should be focussed on sales growth in the company Marketing activities should be focussed on promoting the company’s offer Marketing activities should be aimed at increasing profits by satisfying only the needs of existing customers Marketing activities should take into account the long-term interests not only of customers but also of a wide stakeholder group (e.g. suppliers, environmental groups)

1.

65.3

70.0

71.3

72.0

30.0

22.7

22.0

22.0

4.7

7.3

6.7

6.0

78.9

82.8

76.9

81.3

Indications (%)

Strongly agree / agree

Strongly disagree / disagree

Strongly agree / agree Neutral

Sri Lanka

Poland

Boldface indicates statistically significant differences between countries. Source: Own compilation based on research.

4.

3.

2.

Focus of marketing activities

No.

Table 6.5  Relations with stakeholders as a focus of marketing activities (for Poland and Sri Lanka)

15.8

8.2

15.7

13.4

Neutral

5.3

16.4

7.5

5.2

Strongly disagree / disagree

3.8

3.8

3.9

3.9

X Poland

4.1

4.2

4.0

4.3

X Sri Lanka

5.

4.

3.

2.

1.

Our cooperation with suppliers is based on ethical and fair trade principles Choosing suppliers of raw materials/services/half-products we pay special attention to their pro-social and/or environmental involvement in their daily activities Our company has written down the principles of cooperation with business partners (suppliers, intermediaries) We prioritize the sourcing of raw material from local suppliers When we choose suppliers/ contractors we always make sure that they are aligned to our ethical and ecological principles

Distribution

No. Marketing activities

21.3

14.7

76.7 70.0

16.0

22.7

62.7

73.3

15.3

80.0

8.7

10.7

10.7

14.7

4.67

74.2

73.0

76.1

69.6

72.1

Indications (%)

20.3

17.5

15.8

19.2

18.3

Strongly Neutral agree / agree

Strongly disagree / disagree

Strongly agree / agree

Neutral

Sri Lanka

Poland

5.4

9.5

7.9

11.2

8.7

Strongly disagree / disagree

.07 .01

1.79098 2.35257

.20

.00

3.02212a

1.26438

.61

–0.49682

Z Significance (U Mann- – p