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A demographic examination of societal views regarding corporate social responsibility in the US forest products industry
Forest Policy and Economics 12 (2010) 121–128
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Forest Policy and Economics j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / f o r p o l
A demographic examination of societal views regarding corporate social responsibility in the US forest products industry Rajat Panwar a,⁎, Xiaoou Han b,1, Eric Hansen c,2 a b c
Department of Business, Northland College, 1411, Ellis Avenue, Ashland, WI-54806, USA Forest Business Solutions Team, College of Forestry, 244 Richardson Hall, Oregon State University, Corvallis, OR, 97330, USA Forest Products Marketing, Forest Business Solutions Team, College of Forestry, 119 Richardson Hall, Oregon State University, Corvallis, OR, 97330, USA
a r t i c l e
i n f o
Article history: Received 20 January 2009 Received in revised form 28 July 2009 Accepted 3 September 2009 Keywords: Corporate social responsibility Issues management Demographics Forest products industry
a b s t r a c t As corporate social responsibility (CSR) becomes an increasingly mainstream proposition for business organizations, it is becoming increasingly important to develop sector-specific knowledge as well as to explore different aspects of this concept. Adopting an issues management approach, we have discussed that understanding perceptions and expectations of various demographic segments about business performance along relevant social and environmental issues is a research gap in the broader field of CSR. This is particularly true for forest products industry in the US where there is very little research done in the field. For filling this gap, data was collected from the residents within the states of Washington, Oregon, Idaho, and Montana. Results indicate that varying degrees of differences exist in different demographic categories (gender, education level, place of residence, and age). These results have important implications for the US forest products sector, especially as companies formulate their socio-environmental strategy and communication. © 2009 Elsevier B.V. All rights reserved.
1. Introduction During the century following the Industrial Revolution, Adam Smith's (1776) classical economic view suggesting that wealth maximization ushers in the greatest common good, remained the guiding philosophy for many societies and for most businesses that operated within those societies. As a result, businesses largely focused on their financial gains with minimal consideration for any negative impact that they may have had on society. While economic activities were expanding unabated during this period, a general deterioration in the physical environment as well as sporadic instances of social harm accompanied this economic progress. It followed that a societal sentiment emerged relating socio-environmental deterioration to the free-reign nature of business operations. This led to an increased reliance on legal mechanisms in order to shield society and the physical environment from any potential harm that business organizations could inflict upon them. Around the mid-twentieth century, Bowen (1953) proposed the idea of social responsibility and emphasized that businessmen should pursue policies, decisions, and actions that align with broader societal
⁎ Corresponding author. Tel.: +1 715 682 1231. E-mail addresses: [email protected] (R. Panwar), [email protected] (X. Han), [email protected] (E. Hansen). 1 Tel.: +1 541 737 8498. 2 Tel.: +1 541 737 4240. 1389-9341/$ – see front matter © 2009 Elsevier B.V. All rights reserved. doi:10.1016/j.forpol.2009.09.003
objectives and values. This implies that while legal mechanisms still remain in place, business managers must assume voluntary responsibility for their actions. The notion of volunteerism entails businesses transcending mere legal requirements and taking proactive steps for the protection and enhancement of social and environmental wellbeing. This idea, commonly referred to as corporate social responsibility (CSR), has been gaining increased acceptance and has become a separate academic discipline and an important focus area for business practitioners. Marx (1986) maintains that major changes taking place in the traditional relationship between business and society are creating crucial problems that modern business managers face. While CSR has relevance across all industries, some industries have more impact on the environment and/or society than others (Carroll, 1979). For example, it may be argued that the banking sector has a lower environmental impact than, say, automobile manufacturing. On the other hand, the insurance sector may have more social implications for particular societies (such as the US) than, say, tourism. Also, as Gordon (1991) suggests, societal expectations about social responsibility may vary from one industry to another. Thus, from a societal viewpoint, such contextual differences bring certain industry sectors to the center of the CSR debate. Understanding such differences entails a deeper understanding regarding perceptions as well as expectations that society has of particular industry sectors in terms of their environmental and social performances. In the US context, the forest sector holds an important place both from an economic as well as socio-environmental viewpoint. During
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recent decades, social pressures on forestry companies have been intensifying (Nasi et al., 1997) and as a result, CSR practices of the forest industry have gained increased attention (Vidal and Kozak, 2008). Globally the academic research related with CSR in the forest sector has been somewhat sporadic. In the US particularly it is only in a nascent phase. As a result, there is no documentation regarding society's views about the US forest industry's social and environmental performances. Similarly, there is no knowledge available regarding how demographic segments of society differ in terms of these views. These knowledge gaps are important to be filled not only because of the potential insights they may provide industry managers that may help formulate effective CSR strategies and public affairs policies, but also for enriching the academic knowledge about CSR in general and CSR in the US forest sector in particular.
2. Theoretical background 2.1. Stakeholder and issues management approaches Corporate social responsibility has been a topic of interest among academia and business practitioners alike for several decades. However, the field is cluttered with multiple concepts and approaches that have led scholars (e.g., Carroll, 1994) to remark that the overall map of the field is poor. Votaw (1972) maintains that CSR means different things to different people. Some view it is as a fiduciary duty, some view it as a charitable contribution, others as a synonym for legitimacy, and so forth. While there is no unanimity on the definition of CSR, the triple bottom-line approach suggesting that businesses should balance their economic, social, and environmental responsibilities (Elkington, 1997), is at the center of current CSR conceptualizations. Following this, management of CSR may be considered as identification and management of the economic, social, and environmental responsibilities of a company. It may be argued that selection of specific activities within each component (social, economic, and environmental) may be dependent upon the motivations of a company to engage in CSR. Such motivations may be wide ranging and can emanate from the strategic intent of a company (Husted and Allen, 2000; Porter and Krammer, 2002), its preferred routes to wealth creation (Garriga and Mele, 2004), the value system of top management (Buchholtz et al., 1999; Hemingway and Maclagan, 2004), and internal (Jones, 1999) as well as external conditions (Campbell, 2006) surrounding a company. In practice, companies want to put “faces” on economic, social, and environmental components (Carroll, 1991) and therefore identify certain groups representing these components. These groups, called stakeholders (Donaldson and Preston, 1995; Freeman, 1984; Mitchell et al., 1997), have, for the most part, remained the central focus of modern CSR management policies globally. Accordingly, assessing stakeholders' perceptions about CSR has been a much cherished line of research among CSR academicians. While the stakeholder approach has significantly contributed to the development of the CSR field, various scholars have criticized (Blowfield, 2005; Clarkson, 1995) it for normative reasons (Deegan, 2002) as well as for its ethical and environmental limitations (Orts and Strudler, 2002). An alternative approach, called issues management (Ackerman, 1973; Jones, 1980; Wartick and Mahon, 1994), focuses on specific problem areas of broader societal concern rather than areas identified by key stakeholders (Panwar and Hansen, 2008). Ansoff (1979) defines issues as developments that will have an impact on an organization's performance and ability to meet its objectives. In the context of CSR, issues can be the developments in social and environmental arenas that may impact financial performance. Heugens (2005) emphasizes that issues management is the most managerially compelling tool for implementing CSR.
2.2. Assessing CSR perceptions Issues management consists of three stages, namely, issues identification, issues evaluation, and response development (Wartick and Rude, 1986). Academic literature in the field of issues identification is very scant and is dominated by managerial approaches. In the context of the US forest industry, Panwar and Hansen (2008) have identified six social and six environmental issues (Table 2), that the US forest products industry must address. We have used the same set of issues in this research. With regard to issues evaluation, we turn to Post (1978), Husted (2000), and Zyglidopoulos (2003), who suggest that a fundamental tenet of issues management is that changing social expectations lead business organizations to change their performance with regard to a particular issue. This view necessitates that businesses understand and align with societal perceptions and expectations. From a theoretical perspective, issues management can thus be related with social contract theory, suggesting that businesses are bound by a social contract (Donaldson, 1982; Donaldson and Dunfee, 1994)). This contract requires them to perform various socially expected actions in return for approval of their objectives and associated actions and this ultimately ensures their continued existence (Guthrie and Parker, 1989). Associated with social contract is the concept of organizational legitimacy (Donaldson, 1982; Campbell et al., 2003). Dowling and Pfeffer (1975) suggest that a company is legitimate when it is judged as being just and worthy of support. Others (Suchman, 1995; Nasi et al., 1997) have suggested that legitimacy is not an abstract measure of “rightness” and therefore, not necessarily a characteristic of organizations. Instead, it is “a measure of the adequacy of societal perceptions of corporate behavior compared to societal expectations for corporate activity (Nasi et al., 1997).” In the same vein, Sethi (1975, 1979) suggests that legitimacy problems occur when societal expectations for business behavior differ from societal perceptions of business behavior. In conclusion, it is important for companies to understand the societal expectations and perceptions regarding business behavior. Wartick and Mahon (1994) suggest that the nature of social and environmental issues depends on the gaps that exist between societal views of “what is” and “what ought to be” an organizations' performance on such issues. Buchholz and Rosenthal (1997) propose that business and society negotiate with each other with regard to issues resolution the same way as businesses relate to society in determining, for example, what goods or services to produce. Therefore, while it may be established that understanding societal views regarding issues is very important for business organizations, societal perceptions are demonstrably complex (Campbell et al., 2003). What is more, if different groups within societies (for example, older and younger people, males and females, etc.) are heterogeneous in their perceptions as Petty and Cacioppo (1986) demonstrate, this complexity may further increase. Surrounded by a complex societal fabric, companies are faced with a puzzle regarding societal perceptions from an organizational legitimacy perspective. Following Nasi et al. (1997), who emphasize that it is important for businesses to manage both the societal perceptions about their behavior as well as societal expectations of their behavior, it becomes imperative for companies to examine both the societal expectations of performance and the societal perceptions about current performance using demographic categorization based on gender, education levels, place of residence, and age (Fig. 1). 2.3. Gender Smith and Rogers (2000) maintain that gender-based differences in ethical perception have been a topic of interest. Ford and Richardson (1994) also note that business ethics literature is filled with studies examining gender differences. Reviewing 14 studies that examined the relationship between ethical perception and various
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Fig. 1. Demographic factors and CSR views.
individual characteristics, Ford and Richardson (1994) conclude that there are no consistent results in that seven of these fourteen studies suggest that gender has no effect on ethical decision making while the remaining seven studies find females demonstrating more ethical behavior than males. While these studies provide important insights into ethical attitudes of males and females, such an approach is questioned from the premise that ethics is a multi-dimensional construct (Fogarty, 1995) and, therefore, ethical differences between males and females might be of “kind” rather than of “degree.” As Gilligan (1982) suggests, in solving moral dilemmas, males use a justice orientation while females use a care orientation. Therefore, one may argue that instead of using higher order constructs such as ethics, perceptions and expectations of CSR issues may provide rather concrete information regarding gender-based differences. Along this line, Davidson and Freudenburg (1996) find that females have higher concern regarding environmental issues and are likely to participate more frequently in various types of green behavior. Diamantopoulos et al. (2003) also find similar results and suggest that females hold stronger attitudes towards environmental quality than males. In general, males and females are also reported to hold different attitudes towards the norm of social responsibility (Schopler and Bateson, 1965). With respect to CSR perceptions, Paul et al. (1997) and Burton and Hegarty (1999) conclude that females have higher CSR expectations than males. While the past research suggest females having higher CSR expectations but it is not known whether such differences in expectations and perceptions are general in nature or they change from one industry to another. Therefore, in the context of this research, we propose the following hypotheses: H1(a). Males and females have different perceptions about the current performance of the forest industry on social issues; H1(b). Males and females have different perceptions about the current performance of the forest industry on environmental issues and, H2(a). Males and females have different expectations of the forest industry on social issues; H2(b). Males and females have different expectations of the forest industry on environmental issues.
2.4. Education Previous literature suggests that education is an important determinant of individuals' concerns both about the environment in general and about specific environmental issues (Wall, 1995). Overall, most studies find an association between higher levels of education and higher levels of environmental awareness. Maloney et al. (1975)
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conclude a significant positive relationship between one's level of education and environmental consciousness suggesting that more educated people tend to be more concerned about environmental issues. Similarly, in a more recent study, Diamantopoulos et al. (2003) find that more highly educated people understand the issues involved more fully and, therefore, are more concerned about the environment and more motivated to be environmentally responsible. In the CSR realm, Qauzi (2003) maintains that there is a significant relationship between the level of education and CSR perceptions. On the other hand, Samdahl and Robertson (1989) conclude that the level of education was negatively correlated with environmental attitudes, whereas others (Kinnear et al., 1974 and Serwinek, 1992) find no significant relationship. Overall, literature does not provide consistent guidance on how education level might relate with CSR perceptions and expectations of specific industries but we expect that, H3(a). People with different education levels have different perceptions about the forest industry's current performance on social issues; H3(b). People with different education levels have different perceptions about the forest industry's current performance on environmental issues and, H4(a). People with different education levels have different expectations of the forest industry on social issues; H4(b). People with different education levels have different expectations of forest industry on environmental issues. 2.5. Place of residence The relationship between place of residence and attitude has been a subject of inquiry among sociologists and political scientists. It is, however, an under-investigated area in the context of CSR perceptions, and the closest parallels can only be drawn with studies conducted in the field of environmental orientation. These studies have provided mixed results. Van Liere and Dunlap (1980), and Samdahl and Robertson (1989) conclude that urban residents show higher concern for the environment than rural residents, while Arcury and Christianson (1993) find no differences. More recently, Harmon and Adelman (2007) find that there is no difference among rural, urban, and suburban residents. Ereudenburg (1991) argues that any difference between rural and urban residents may appear because of other factors such as one's occupation. He notes that low levels of rural environmental concern may actually reflect lower concerns among farmers in particular. Examining the differences in social and environmental perceptions among urban, suburban and rural residents is especially important for this research in light of the observation of Tremblay and Dunlap (1978). They propose that rural residents, because of their engagement in “nature-exploitative” occupations, such as farming, logging etc., hold utilitarian attitudes towards natural environment and resources. Urban residents, on the other hand, hold appreciative attitudes towards the natural environment. While the previous findings investigating differences in the environmental orientations of urban, suburban and rural residents have been inconclusive, in the context of this research, we have chosen to posit: H5(a). Urban, suburban and rural residents have different perceptions of the forest industry's current performance on social issues; H5(b). Urban, suburban and rural residents have different perceptions of the forest industry's current performance on environmental issues and, H6(a). Urban, suburban and rural residents have different expectations of forest industry on social issues;
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H6(b). Urban, suburban and rural residents have different expectations of forest industry on environmental issues. 2.6. Age Associating social and environmental responsibilities with businesses is a relatively new development and based on its rather recent advent, one may assume that older members of society differ structurally from younger members with respect to their perceptions about business. Parallels can be drawn with studies examining environmental attitudes. Explaining the underpinnings of age-based differences in environmental perceptions and attitudes, Van Liere and Dunlap (1980) maintain that young people are less integrated into the American economic system and the dominant social order. Since solutions to environmental problems are often viewed as threatening the existing social order; older people tend to be less sensitive to such problems as it may possibly require substantial changes in traditional values, habits, behaviors, and existing institutions. Tognacci et al. (1972), Serwinek (1992), and Zimmer et al. (1994) also suggest that younger people are more sensitive about the environment. More recently, Diamantopoulos et al. (2003) conclude that younger people are more knowledgeable about environmental issues. With one notable exception of Harry et al. (1969), who suggest that older people are more concerned for the environment, most findings suggest that younger people are likely to have higher environmental concerns. However, we don't find any literature that examines age-based perceptions regarding CSR. Based on the literature regarding young people and perceptions of the environment we speculate that age groups vary regarding their environmental and social concerns. Accordingly, we suggest that: H7(a). Different age groups have different perceptions about the forest industry's current performance on social issues; H7(b). Different age groups have different perceptions about the forest industry's current performance on environmental issues and, H8(a). Different age groups have different expectations of the forest industry on social issues; H8(b). Different age groups have different expectations of the forest industry on environmental issues. 3. Methods 3.1. Sample frame Data for this study were collected from a randomly chosen sample of 2000 total residents aged 18 and above within the states of Washington, Oregon, Idaho, and Montana. The dataset was purchased from a commercial provider. These states were selected because of having a historically strong forestry sector. Additionally since forestry is an important socio-economic sector in these states, a relatively higher proportion of population is likely to be knowledgeable about the forest products industry. Sample size for each state was proportional to its population. In total 174 addresses were undeliverable and 282 usable responses were received (adjusted response rate = 15.4%). Table 1 provides a state-wise number of respondents. 3.2. Questionnaire development and analysis The questions raised in this research are based on two constructs, namely social issues and environmental issues, each having six items as identified by Panwar and Hansen, 2008 and listed in Table 2.
Table 1 State-wise distribution of respondents. State
Number of respondents
Washington Oregon Idaho Montana Total
118 94 37 33 282
Respondents' perceptions regarding industry's current and expected performance on each of these 12 items were assessed using a 5-point interval scale ranging from 1 (very low) to 5 (very high). Thus, 24 questions (12 items each for current and expected performance) were asked for this assessment. The questionnaire was pre-tested with five persons and minimal changes were made based on their feedback. The Total Design Method (Dillman, 1978) was used to collect data, and therefore non-respondents were followed up by a second wave of questionnaires two weeks after the first wave was sent. An online version of the questionnaire was also prepared and the web-link was provided in the cover letter accompanying the questionnaire. Eight responses were received electronically. Gender, education, place of residence and age are four important demographic factors that we assume to impact people's views of CSR. For gender, t-tests were used to identify significant differences between males and females. Education was categorized as ‘some high school’, ‘high school’, ‘some college’, ‘college’, ‘graduate’ and ‘other’. ANOVA and the LSD and Tamhane's T2 Post Hoc test were used for the multiple comparisons. ‘Some high school’ and ‘other’ were not tested due to their small sample sizes (less than ten). Place of residence was separated as ‘urban’, ‘rural’ and ‘suburban’. No definitions were provided to respondents for the three concepts and they self-identified their place of residence. ANOVA and the Scheffe and Tamhane's Post Hoc were used to test the differences among various residence categories. Age was grouped according to a classification suggested by Schuman and Scott (1989). This classification suggests that there are seven generational cohorts in the US: Depression cohort (born from 1912 to 1921), Pre ‘World War II’ cohort (born from 1922 to 1927), World War II cohort (born from 1928 to 1945), Baby boomer cohort #1 (born from 1946 to 1954), Gen Jones or Boomer cohort #2 (born from 1955 to 1964), Generation X cohort (born from 1965 to 1980) and Generation Y cohort (born from 1982 to 2001). Due to sample size considerations for each category, we merged the first three categories (Depression cohort, Pre ‘World War II’ cohort and World War II cohort) into one group and labeled them as ‘Pre baby boomer cohort’. Similarly, the last two groups (Generation X cohort and Generation Y cohort) were merged together and were labeled as ‘Post baby boomer cohort’. ANOVA and the Scheffe and Tamhane's T2 Post Hoc were used to test the differences among various generational cohorts.
Table 2 Items within the social issues and environmental issues construct. Social issues
Environmental issues
• Encouraging public scrutiny on environmental • Promote and/or practice and land management practices sustainable forestry • Invest in surrounding communities • Increase the use of renewable resources • Promote responsible consumption • Adopt environmentally sound among consumers purchasing policies • Stem declining employment in the sector • Mitigate global warming • Engage with the surrounding communities • Reduce overall energy consumption • Improve industry's public image • Improve waste management
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4. Results A reliability test was conducted to check the internal consistency of the items used in this research. The Cronbach's alpha reliability coefficients were .85 for “industry's current social issues performance”, .88 for “industry's current environmental issues performance”, .84 for “industry's expected social issues performance” and .86 for “industry's expected environmental issues performance” (Table 3). All these coefficients are above the minimum value of .70 suggested by Nunnally (1978). Further, it may also be noted from this table that deleting any variable would not improve the reliability and hence all the items were retained for further analysis. Four composite variables were calculated based on the average of six social and six environmental issues, respectively. Non-response bias was assessed comparing early versus late respondents as suggested by Armstrong and Overton (1977). No significant differences were found between early and late respondents, and therefore non-response bias is assumed to be negligible. 4.1. Gender difference Table 4 illustrates the differences between male and female respondents regarding their views of current and expected performance related to social and environmental issues. There is a convincing evidence that females consider industry's performance significantly lower than males both for social issues (p = .006) and environmental issues (p = .001). In the case of expected performance, however, results are mixed. While there is marginal support (p = .080) for the difference between males and females with regard to their expectations of industry's performance related to social issues, this difference is significant (p < .001) in the case of environmental issues. These results indicate
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Table 4 Difference between male and female perceptions of industry's current and expected performance along social and environmental issues. Mean values
Current social issues performance Current environmental issues performance Expected social issues performance Expected environmental issues performance
p-value
Male
Female
n = 180
n = 101
2.68 3.00 3.89 4.17
2.39 2.60 4.07 4.60
.006 .001 .080 <.001
1 Cell entries are means. 2 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
that hypotheses H1(a), H1(b) and H2(b) are supported while hypothesis H2(a) is only marginally supported. 4.2. Differences among different education categories As Table 5 shows, there are some differences in perceptions among different education levels. For example, those with high school degree perceive industry's current social performance significantly higher than both college and graduate categories. Thus, hypothesis H3(a) is partially supported. With regard to perception about current environmental performance, high school respondents are significantly higher than those with some college, those with college degree, and those with a graduate degree. Other groups are similar to each other and thus again, hypothesis H3(b) is partially supported. Results of expected performance suggest that only those with some college and those with a college degree significantly differ from each other with respect to expected social performance, the remaining groups being similar and thus leading to a partial support for H4(a). Finally, with regard to expected environmental
Table 3 Reliability analysis of current and expected performance along social and environmental issues. Mean
Corrected item total correlation
Cronbach's alpha if item deleted
Current social issues performance Engaging with the communities Investing in communities Improving their public image Stemming the declining employment Encouraging public scrutiny of environment and land mgmt Promoting responsible consumption
2.73 2.74 2.88 2.32 2.39 2.42
.69 .72 .69 .51 .60 .57
.81 .81 .81 .84 .83 .83
Current environmental issues performance Promoting sustainable forestry Reducing their overall energy consumption Increasing the use of renewable resource Adopting environmentally purchasing policies Improving waste management Mitigating global warming
3.11 2.66 3.17 2.76 3.03 2.48
.71 .67 .71 .71 .72 .65
.86 .87 .86 .86 .86 .87
Expected social issues performance Engaging with the communities Investing in communities Improving their public image Stemming the declining employment Encouraging public scrutiny of environment and land mgmt Promoting responsible consumption
4.26 4.20 3.89 3.41 3.96 4.02
.66 .61 .64 .64 .62 .62
.82 .82 .81 .81 .82 .82
Expected environmental issues performance Promoting sustainable forestry Reducing their overall energy consumption Increasing the use of renewable resource Adopting environmentally purchasing policies Improving waste management Mitigating global warming
4.61 4.17 4.41 4.32 4.50 3.90
.61 .66 .65 .75 .73 .60
.84 .83 .83 .81 .82 .86
Cronbach's alpha .85
.88
.84
.86
1 Cell entries are means. 2 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
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Table 5 Difference in perceptions of different education groups regarding current and expected performance along social and environmental issues. Mean values
Current social issues performance Current environmental issues performance Expected social issues performance Expected environmental issues performance
p-value
High school
Some college
College
Graduate
n = 32
n = 74
n = 86
n = 79
2.91a
2.70ab
2.47b
2.45b
.024
3.33a
2.94b
2.78b
2.72b
.008
3.74ab
4.19a
3.81b
3.97ab
.008
b
b
3.96
a
4.41
4.36
4.36
b
.022
1 Means with different letter superscripts differ at p < .05 using LSD Post Hoc tests for equal variances (due to small sample size) and Tamhane's T2 Post Hoc for unequal variances. 2 Cell entries are means. 3 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
performance, those with a high school degree have significantly lower expectations as compared to all other groups. The other groups are similar to each other. Thus, H4(b) is also partially supported.
4.3. Difference among resident groups Table 6 indicates that urban residents consider industry's current performance related to both social and environmental issues, significantly lower than rural residents. Suburban residents fall in between but do not differ significantly from either urban or rural residents. However, none of the resident groups differ from each other in terms of their expectations of industry performance in social and environmental issues. Thus, while H5(a) and H5(b) are partially supported, H6(a) and H6(b) are rejected.
4.4. Difference in age groups As can be noted in Table 7, there are few differences among age groups. The only significant difference exists between the respondents in post baby boomer cohort and the respondents in pre baby boomer cohort with respect to their perceptions of industry's environmental issues related current performance. Therefore H7(a), H8(a) and H8(b) are rejected, while H7(b) is partially supported.
Table 6 Difference among various resident groups about current and expected performance on social and environmental issues. Mean values Urban
Current social issues performance Current environmental issues performance Expected social issues performance Expected environmental issues performance
Table 7 Difference among various age groups about current and expected performance on social and environmental issues.
Rural
p-value Suburban
n = 72
n = 129
n = 78
2.36a 2.55a
2.69b 3.04b
2.59ab 2.88ab
.026 .001
4.06 4.44
3.91 4.26
3.92 4.32
.402 .233
1 Means with different letter superscripts differ at p < .05 using Scheffe Post Hoc tests for equal variances and Tamhane's T2 Post Hoc for unequal variances. 2 Cell entries are means. 3 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
Mean values
Current social issues performance Current environmental issues performance Expected social issues performance Expected environmental issues performance
p-value
Post
#2
#1
Pre
n = 71
n = 55
n = 80
n = 73
2.40 2.62a
2.63 2.94ab
2.57 2.87ab
2.74 3.04b
.120 .031
3.91 4.43
3.96 4.3
3.95 4.38
4.02 4.16
.890 .132
1 Means with different letter superscripts differ at p < .05 using Scheffe Post Hoc tests for equal variances and Tamhane's T2 Post Hoc for unequal variances. 2 Post: Post baby boomer cohort. #2: Boomer cohort#2. #1: Boomer cohort#1. Pre: Pre baby boomer cohort. 3 Cell entries are means. 4 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
5. Discussion Like a majority of past studies, this study establishes that males and females view an industry's social and environmental performances differently. Females are more critical than males in evaluating the US forest products industry's current performance related to both social and environmental issues. In terms of expectations, however, females exceed males only in the area of environmental issues. Previous literature does not provide much insight in explaining this finding. However, we speculate several underlying notions that could be investigated through future research. First, it is possible, that females place environmental issues higher than social issues. This might indicate that females either consider business activities to harm the environment more than they inflict problems in society, or they simply care more for environmental issues than social issues. On the other hand, because the forest industry predominantly employs males, it is also possible that, males associate higher social utility with it (jobs, community investment etc.), than an expectation of environmental stewardship. In any event, it may have important implications for the forest products industry. One, it necessitates that industry develop communication strategies targeting females in order to increase awareness regarding its social and environmental performances. With increasing female participation in media, special interest organizations, and the policy realm this will become more important. It may also have implications for marketing policies for those organizations that are directly or indirectly related to the forest sector and have females as their important buyer segment or buying decision influencers (for example, home furniture). Results pertaining to education level suggest that generally those with lower education level have a more positive perception of industry's social and environmental performances. These results are, by and large, as expected and may also be reflective of the forest products industry being a livelihood support to low-educated segments of society. However, given the imminent need for an educated workforce in the future, the industry must focus on improving perceptions regarding its social and environmental performances among better educated segments. This is all the more important as more people are beginning to consider company social and environmental performances as a part of their employment selection criteria. Therefore, one important strategic implication for the industry may be to develop socio-environmental performance communication strategies that focus upon educated segments. Towards this end, industry associations (or individual companies) may place “goodwill” advertisements in suitable media (magazines,
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newspapers etc.) that are patronized by more educated members of the population. Industry may also consider supporting the forest sector academicians to examine best practices and develop case studies that may be used as teaching cases in a variety of disciplines such as business, environmental philosophy, sociology, and forestry. This may be one important way to send a good message across a wide array of the educated population. In the case of resident groups, urban residents are more critical than rural residents in judging industry's current social and environmental performances. Suburban residents fall in between these two groups and do not significantly differ from either. Past literature suggests that urban residents are more environmentally aware than rural residents and also that environmental attitudes depend upon one's occupation. Both these notions may be used to explain our findings: (i) urban residents judge industry's performance more harshly, and (ii) most forest industry companies provide socioeconomic support to predominantly rural populations and therefore might be seen favorably by rural populations. However, the results regarding expected performance are complex to interpret. None of the groups differ from each other regarding expected performance for both social and environmental issues. It may be attributed to a variety of speculations including rural respondents' bias and urban residents' apathy towards expectations from industry. As far as implications of these findings go, it is likely that the industry may benefit by having an improved image among urban and suburban residents. These groups are important as migration to urban and suburban regions continues to rise. Contrary to most previous findings, we did not find age-based differences being distinct and prominent. It may be argued that social and environmental expectations of business are getting increasingly mainstreamed and age-based differences are disappearing. This may be particularly true for sectors such the forest products that are in the public eye for their socio-environmental impact. As such, the industry should recognize changing societal views and be responsive via improved performance and more effective communication.
6. Limitations and conclusion This research was conducted in four of the US northwest states and therefore the results of this study cannot be generalized to other regions. Further, the issue set used in this research is not claimed to be exhaustive and is used here for examining demographic differences rather than claiming to fully represent all the issues constituting CSR in the US forest products sector. Alike most demographic studies, this research is also limited by the potential effect of confounding variables, such as economic dependence of individuals on forest industry, general economic conditions at the time of study, etc. Such factors may influence the results and their potential effect must be recognized. This research finds some differences among members of the general public with respect to their demographics. Gender differences, for example, are more distinct and significant than, say, age. While this research confirms some of the previously established notions, some of the findings contradict previous literature. The sector-specific focus of this research brings novelty to the body of knowledge in that society's perceptions about the forest industry in the US have not been investigated previously. For the broader field of CSR, this research raises questions such as whether perceptions and expectations are generic in nature or are they associated with particular industry sectors. For future research, it would be interesting to explore whether demographic differences in CSR perceptions and expectations are prevalent across industries or differ from one industry to another. These questions may help CSR academicians in further understanding the social construction of the concept of CSR. This knowledge may be important for business managers as they feel
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the need to focus on “appropriate segments” within a society for their CSR response and communication. Acknowledgements Authors wish to thank Dr. Chris Knowles, Derek Thompson, Valeria Villavicencio, Analu Fonseca, Natalie Macias, and Kate Kamke, all from the Forest Business Solutions Team at Oregon State University for their useful comments on a previous version of this manuscript. Dr. Alix Gitelman from the Statistics Department at Oregon State University and Dr. Rob Kozak from the Sustainable Business Management Lab at the University of British Columbia provided useful insights during the questionnaire development phase. We acknowledge their help. References Ackerman, R.W., 1973. How companies respond to social demands. Harvard Business Review 51 (4), 88–98. Ansoff, H.I., 1979. Strategic issue management. Strategic Management Journal 1, 131–148. Arcury, T.A., Christianson, E.H., 1993. Rural and urban differences in environmental knowledge and action. Journal of Environmental Education 25 (1), 19–25. Armstrong, J.S., Overton, T.S., 1977. Estimating non-response bias in mail surveys. Journal of Marketing Research 14 (3), 396–402. Blowfield, M., 2005. Corporate social responsibility — the failing discipline and why it matters for international relations. International Relations 19 (2), 173–191. Bowen, H.R., 1953. Social Responsibilities of the Businessman. Harper & Row, New York, p. 276. Buchholtz, A.K., Amason, A.C., Rutherford, M.A., 1999. Beyond resources: the mediating effect of top management discretion and values on corporate philanthropy. Business and Society 38 (2), 167–187. Buchholz, R.A., Rosenthal, S.B., 1997. Business and society: what's in a name. The International Journal of Organizational Analysis 5 (2), 180–201. Burton, B.K., Hegarty, W.H., 1999. Some determinants of students corporate social responsibility orientation. Business and Society 38 (2), 188–205. Campbell, J.L., 2006. Institutional analysis and the paradox of corporate social responsibility. American Behavioral Scientist 49 (7), 925–938. Campbell, D., Craven, B., Shrives, P., 2003. Voluntary social reporting in three FTSE sectors: a comment on perception and legitimacy. Accounting, Auditing and Accountability Journal 16 (4), 558–581. Carroll, A.B., 1979. A three-dimensional conceptual model of corporate performance. Academy of Management Review 4 (4), 497–505. Carroll, A.B., 1991. The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Business Horizons 34 (4), 39–48. Carroll, A.B., 1994. Social issues in management research. Business and Society 33 (1), 5–25. Clarkson, M.B.E., 1995. A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review 20 (1), 92–117. Davidson, D.J., Freudenburg, W.R., 1996. Gender and environmental risk concerns. Environment and Behavior 28 (3), 302–303. Deegan, C., 2002. The legitimizing effect of social and environmental disclosures— A theoretical foundation. Accounting, Auditing, and Accountability Journal 15 (3), 282–311. Diamantopoulos, A., Schlegelmilch, B.B., Sinkovics, R.R., Bohlen, G.M., 2003. Can sociodemographics still play a role in profiling green consumers? A review of the evidence and an empirical investigation. Journal of Business Research 56 (6), 465–480. Dillman, D.A., 1978. Mail and Telephone Surveys: The Total Design Method. Wiley Interscience, p. 341. Donaldson, T., 1982. Corporations and Morality. Prentice-Hall Publishers, Englewood Cliff, NJ. Donaldson, T., Dunfee, T.W., 1994. Towards a unified conception of business ethics: integrative social contracts theory. Academy of Management Review 19 (2), 252–284. Donaldson, T., Preston, L.E., 1995. The stakeholder theory of the corporation: concepts, evidence, and implications. Academy of Management Review 20 (1), 65–91. Dowling, J., Pfeffer, J., 1975. Organizational legitimacy: social values and organizational behavior. Pacific Sociological Review 18 (1), 122–136. Elkington, J., 1997. Cannibals with Forks: The Triple Bottom Line of 21st Century Business. Capstone, Oxford, p. 402. Ereudenburg, WilliamR., 1991. Rural–urban differences in environmental concern: a closer look. Sociological Inquiry 61 (2), 167–198. Fogarty, T.J., 1995. Accounting ethics: a brief examination of neglected sociological dimensions. Journal of Business Ethics 14 (2), 103–115. Ford, R.C., Richardson, W.D., 1994. Ethical decision making: a review of the empirical literature. Journal of Business Ethics 13 (3), 205–221. Freeman, R.E., 1984. Strategic Management: a Stakeholder Approach. Pitman, Boston, p. 276. Garriga, E., Mele, D., 2004. Corporate social responsibility theories: mapping the territory. Journal of Business Ethics 53 (1–2), 51–71.
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Forest Policy and Economics j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / f o r p o l
A demographic examination of societal views regarding corporate social responsibility in the US forest products industry Rajat Panwar a,⁎, Xiaoou Han b,1, Eric Hansen c,2 a b c
Department of Business, Northland College, 1411, Ellis Avenue, Ashland, WI-54806, USA Forest Business Solutions Team, College of Forestry, 244 Richardson Hall, Oregon State University, Corvallis, OR, 97330, USA Forest Products Marketing, Forest Business Solutions Team, College of Forestry, 119 Richardson Hall, Oregon State University, Corvallis, OR, 97330, USA
a r t i c l e
i n f o
Article history: Received 20 January 2009 Received in revised form 28 July 2009 Accepted 3 September 2009 Keywords: Corporate social responsibility Issues management Demographics Forest products industry
a b s t r a c t As corporate social responsibility (CSR) becomes an increasingly mainstream proposition for business organizations, it is becoming increasingly important to develop sector-specific knowledge as well as to explore different aspects of this concept. Adopting an issues management approach, we have discussed that understanding perceptions and expectations of various demographic segments about business performance along relevant social and environmental issues is a research gap in the broader field of CSR. This is particularly true for forest products industry in the US where there is very little research done in the field. For filling this gap, data was collected from the residents within the states of Washington, Oregon, Idaho, and Montana. Results indicate that varying degrees of differences exist in different demographic categories (gender, education level, place of residence, and age). These results have important implications for the US forest products sector, especially as companies formulate their socio-environmental strategy and communication. © 2009 Elsevier B.V. All rights reserved.
1. Introduction During the century following the Industrial Revolution, Adam Smith's (1776) classical economic view suggesting that wealth maximization ushers in the greatest common good, remained the guiding philosophy for many societies and for most businesses that operated within those societies. As a result, businesses largely focused on their financial gains with minimal consideration for any negative impact that they may have had on society. While economic activities were expanding unabated during this period, a general deterioration in the physical environment as well as sporadic instances of social harm accompanied this economic progress. It followed that a societal sentiment emerged relating socio-environmental deterioration to the free-reign nature of business operations. This led to an increased reliance on legal mechanisms in order to shield society and the physical environment from any potential harm that business organizations could inflict upon them. Around the mid-twentieth century, Bowen (1953) proposed the idea of social responsibility and emphasized that businessmen should pursue policies, decisions, and actions that align with broader societal
⁎ Corresponding author. Tel.: +1 715 682 1231. E-mail addresses: [email protected] (R. Panwar), [email protected] (X. Han), [email protected] (E. Hansen). 1 Tel.: +1 541 737 8498. 2 Tel.: +1 541 737 4240. 1389-9341/$ – see front matter © 2009 Elsevier B.V. All rights reserved. doi:10.1016/j.forpol.2009.09.003
objectives and values. This implies that while legal mechanisms still remain in place, business managers must assume voluntary responsibility for their actions. The notion of volunteerism entails businesses transcending mere legal requirements and taking proactive steps for the protection and enhancement of social and environmental wellbeing. This idea, commonly referred to as corporate social responsibility (CSR), has been gaining increased acceptance and has become a separate academic discipline and an important focus area for business practitioners. Marx (1986) maintains that major changes taking place in the traditional relationship between business and society are creating crucial problems that modern business managers face. While CSR has relevance across all industries, some industries have more impact on the environment and/or society than others (Carroll, 1979). For example, it may be argued that the banking sector has a lower environmental impact than, say, automobile manufacturing. On the other hand, the insurance sector may have more social implications for particular societies (such as the US) than, say, tourism. Also, as Gordon (1991) suggests, societal expectations about social responsibility may vary from one industry to another. Thus, from a societal viewpoint, such contextual differences bring certain industry sectors to the center of the CSR debate. Understanding such differences entails a deeper understanding regarding perceptions as well as expectations that society has of particular industry sectors in terms of their environmental and social performances. In the US context, the forest sector holds an important place both from an economic as well as socio-environmental viewpoint. During
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recent decades, social pressures on forestry companies have been intensifying (Nasi et al., 1997) and as a result, CSR practices of the forest industry have gained increased attention (Vidal and Kozak, 2008). Globally the academic research related with CSR in the forest sector has been somewhat sporadic. In the US particularly it is only in a nascent phase. As a result, there is no documentation regarding society's views about the US forest industry's social and environmental performances. Similarly, there is no knowledge available regarding how demographic segments of society differ in terms of these views. These knowledge gaps are important to be filled not only because of the potential insights they may provide industry managers that may help formulate effective CSR strategies and public affairs policies, but also for enriching the academic knowledge about CSR in general and CSR in the US forest sector in particular.
2. Theoretical background 2.1. Stakeholder and issues management approaches Corporate social responsibility has been a topic of interest among academia and business practitioners alike for several decades. However, the field is cluttered with multiple concepts and approaches that have led scholars (e.g., Carroll, 1994) to remark that the overall map of the field is poor. Votaw (1972) maintains that CSR means different things to different people. Some view it is as a fiduciary duty, some view it as a charitable contribution, others as a synonym for legitimacy, and so forth. While there is no unanimity on the definition of CSR, the triple bottom-line approach suggesting that businesses should balance their economic, social, and environmental responsibilities (Elkington, 1997), is at the center of current CSR conceptualizations. Following this, management of CSR may be considered as identification and management of the economic, social, and environmental responsibilities of a company. It may be argued that selection of specific activities within each component (social, economic, and environmental) may be dependent upon the motivations of a company to engage in CSR. Such motivations may be wide ranging and can emanate from the strategic intent of a company (Husted and Allen, 2000; Porter and Krammer, 2002), its preferred routes to wealth creation (Garriga and Mele, 2004), the value system of top management (Buchholtz et al., 1999; Hemingway and Maclagan, 2004), and internal (Jones, 1999) as well as external conditions (Campbell, 2006) surrounding a company. In practice, companies want to put “faces” on economic, social, and environmental components (Carroll, 1991) and therefore identify certain groups representing these components. These groups, called stakeholders (Donaldson and Preston, 1995; Freeman, 1984; Mitchell et al., 1997), have, for the most part, remained the central focus of modern CSR management policies globally. Accordingly, assessing stakeholders' perceptions about CSR has been a much cherished line of research among CSR academicians. While the stakeholder approach has significantly contributed to the development of the CSR field, various scholars have criticized (Blowfield, 2005; Clarkson, 1995) it for normative reasons (Deegan, 2002) as well as for its ethical and environmental limitations (Orts and Strudler, 2002). An alternative approach, called issues management (Ackerman, 1973; Jones, 1980; Wartick and Mahon, 1994), focuses on specific problem areas of broader societal concern rather than areas identified by key stakeholders (Panwar and Hansen, 2008). Ansoff (1979) defines issues as developments that will have an impact on an organization's performance and ability to meet its objectives. In the context of CSR, issues can be the developments in social and environmental arenas that may impact financial performance. Heugens (2005) emphasizes that issues management is the most managerially compelling tool for implementing CSR.
2.2. Assessing CSR perceptions Issues management consists of three stages, namely, issues identification, issues evaluation, and response development (Wartick and Rude, 1986). Academic literature in the field of issues identification is very scant and is dominated by managerial approaches. In the context of the US forest industry, Panwar and Hansen (2008) have identified six social and six environmental issues (Table 2), that the US forest products industry must address. We have used the same set of issues in this research. With regard to issues evaluation, we turn to Post (1978), Husted (2000), and Zyglidopoulos (2003), who suggest that a fundamental tenet of issues management is that changing social expectations lead business organizations to change their performance with regard to a particular issue. This view necessitates that businesses understand and align with societal perceptions and expectations. From a theoretical perspective, issues management can thus be related with social contract theory, suggesting that businesses are bound by a social contract (Donaldson, 1982; Donaldson and Dunfee, 1994)). This contract requires them to perform various socially expected actions in return for approval of their objectives and associated actions and this ultimately ensures their continued existence (Guthrie and Parker, 1989). Associated with social contract is the concept of organizational legitimacy (Donaldson, 1982; Campbell et al., 2003). Dowling and Pfeffer (1975) suggest that a company is legitimate when it is judged as being just and worthy of support. Others (Suchman, 1995; Nasi et al., 1997) have suggested that legitimacy is not an abstract measure of “rightness” and therefore, not necessarily a characteristic of organizations. Instead, it is “a measure of the adequacy of societal perceptions of corporate behavior compared to societal expectations for corporate activity (Nasi et al., 1997).” In the same vein, Sethi (1975, 1979) suggests that legitimacy problems occur when societal expectations for business behavior differ from societal perceptions of business behavior. In conclusion, it is important for companies to understand the societal expectations and perceptions regarding business behavior. Wartick and Mahon (1994) suggest that the nature of social and environmental issues depends on the gaps that exist between societal views of “what is” and “what ought to be” an organizations' performance on such issues. Buchholz and Rosenthal (1997) propose that business and society negotiate with each other with regard to issues resolution the same way as businesses relate to society in determining, for example, what goods or services to produce. Therefore, while it may be established that understanding societal views regarding issues is very important for business organizations, societal perceptions are demonstrably complex (Campbell et al., 2003). What is more, if different groups within societies (for example, older and younger people, males and females, etc.) are heterogeneous in their perceptions as Petty and Cacioppo (1986) demonstrate, this complexity may further increase. Surrounded by a complex societal fabric, companies are faced with a puzzle regarding societal perceptions from an organizational legitimacy perspective. Following Nasi et al. (1997), who emphasize that it is important for businesses to manage both the societal perceptions about their behavior as well as societal expectations of their behavior, it becomes imperative for companies to examine both the societal expectations of performance and the societal perceptions about current performance using demographic categorization based on gender, education levels, place of residence, and age (Fig. 1). 2.3. Gender Smith and Rogers (2000) maintain that gender-based differences in ethical perception have been a topic of interest. Ford and Richardson (1994) also note that business ethics literature is filled with studies examining gender differences. Reviewing 14 studies that examined the relationship between ethical perception and various
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Fig. 1. Demographic factors and CSR views.
individual characteristics, Ford and Richardson (1994) conclude that there are no consistent results in that seven of these fourteen studies suggest that gender has no effect on ethical decision making while the remaining seven studies find females demonstrating more ethical behavior than males. While these studies provide important insights into ethical attitudes of males and females, such an approach is questioned from the premise that ethics is a multi-dimensional construct (Fogarty, 1995) and, therefore, ethical differences between males and females might be of “kind” rather than of “degree.” As Gilligan (1982) suggests, in solving moral dilemmas, males use a justice orientation while females use a care orientation. Therefore, one may argue that instead of using higher order constructs such as ethics, perceptions and expectations of CSR issues may provide rather concrete information regarding gender-based differences. Along this line, Davidson and Freudenburg (1996) find that females have higher concern regarding environmental issues and are likely to participate more frequently in various types of green behavior. Diamantopoulos et al. (2003) also find similar results and suggest that females hold stronger attitudes towards environmental quality than males. In general, males and females are also reported to hold different attitudes towards the norm of social responsibility (Schopler and Bateson, 1965). With respect to CSR perceptions, Paul et al. (1997) and Burton and Hegarty (1999) conclude that females have higher CSR expectations than males. While the past research suggest females having higher CSR expectations but it is not known whether such differences in expectations and perceptions are general in nature or they change from one industry to another. Therefore, in the context of this research, we propose the following hypotheses: H1(a). Males and females have different perceptions about the current performance of the forest industry on social issues; H1(b). Males and females have different perceptions about the current performance of the forest industry on environmental issues and, H2(a). Males and females have different expectations of the forest industry on social issues; H2(b). Males and females have different expectations of the forest industry on environmental issues.
2.4. Education Previous literature suggests that education is an important determinant of individuals' concerns both about the environment in general and about specific environmental issues (Wall, 1995). Overall, most studies find an association between higher levels of education and higher levels of environmental awareness. Maloney et al. (1975)
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conclude a significant positive relationship between one's level of education and environmental consciousness suggesting that more educated people tend to be more concerned about environmental issues. Similarly, in a more recent study, Diamantopoulos et al. (2003) find that more highly educated people understand the issues involved more fully and, therefore, are more concerned about the environment and more motivated to be environmentally responsible. In the CSR realm, Qauzi (2003) maintains that there is a significant relationship between the level of education and CSR perceptions. On the other hand, Samdahl and Robertson (1989) conclude that the level of education was negatively correlated with environmental attitudes, whereas others (Kinnear et al., 1974 and Serwinek, 1992) find no significant relationship. Overall, literature does not provide consistent guidance on how education level might relate with CSR perceptions and expectations of specific industries but we expect that, H3(a). People with different education levels have different perceptions about the forest industry's current performance on social issues; H3(b). People with different education levels have different perceptions about the forest industry's current performance on environmental issues and, H4(a). People with different education levels have different expectations of the forest industry on social issues; H4(b). People with different education levels have different expectations of forest industry on environmental issues. 2.5. Place of residence The relationship between place of residence and attitude has been a subject of inquiry among sociologists and political scientists. It is, however, an under-investigated area in the context of CSR perceptions, and the closest parallels can only be drawn with studies conducted in the field of environmental orientation. These studies have provided mixed results. Van Liere and Dunlap (1980), and Samdahl and Robertson (1989) conclude that urban residents show higher concern for the environment than rural residents, while Arcury and Christianson (1993) find no differences. More recently, Harmon and Adelman (2007) find that there is no difference among rural, urban, and suburban residents. Ereudenburg (1991) argues that any difference between rural and urban residents may appear because of other factors such as one's occupation. He notes that low levels of rural environmental concern may actually reflect lower concerns among farmers in particular. Examining the differences in social and environmental perceptions among urban, suburban and rural residents is especially important for this research in light of the observation of Tremblay and Dunlap (1978). They propose that rural residents, because of their engagement in “nature-exploitative” occupations, such as farming, logging etc., hold utilitarian attitudes towards natural environment and resources. Urban residents, on the other hand, hold appreciative attitudes towards the natural environment. While the previous findings investigating differences in the environmental orientations of urban, suburban and rural residents have been inconclusive, in the context of this research, we have chosen to posit: H5(a). Urban, suburban and rural residents have different perceptions of the forest industry's current performance on social issues; H5(b). Urban, suburban and rural residents have different perceptions of the forest industry's current performance on environmental issues and, H6(a). Urban, suburban and rural residents have different expectations of forest industry on social issues;
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H6(b). Urban, suburban and rural residents have different expectations of forest industry on environmental issues. 2.6. Age Associating social and environmental responsibilities with businesses is a relatively new development and based on its rather recent advent, one may assume that older members of society differ structurally from younger members with respect to their perceptions about business. Parallels can be drawn with studies examining environmental attitudes. Explaining the underpinnings of age-based differences in environmental perceptions and attitudes, Van Liere and Dunlap (1980) maintain that young people are less integrated into the American economic system and the dominant social order. Since solutions to environmental problems are often viewed as threatening the existing social order; older people tend to be less sensitive to such problems as it may possibly require substantial changes in traditional values, habits, behaviors, and existing institutions. Tognacci et al. (1972), Serwinek (1992), and Zimmer et al. (1994) also suggest that younger people are more sensitive about the environment. More recently, Diamantopoulos et al. (2003) conclude that younger people are more knowledgeable about environmental issues. With one notable exception of Harry et al. (1969), who suggest that older people are more concerned for the environment, most findings suggest that younger people are likely to have higher environmental concerns. However, we don't find any literature that examines age-based perceptions regarding CSR. Based on the literature regarding young people and perceptions of the environment we speculate that age groups vary regarding their environmental and social concerns. Accordingly, we suggest that: H7(a). Different age groups have different perceptions about the forest industry's current performance on social issues; H7(b). Different age groups have different perceptions about the forest industry's current performance on environmental issues and, H8(a). Different age groups have different expectations of the forest industry on social issues; H8(b). Different age groups have different expectations of the forest industry on environmental issues. 3. Methods 3.1. Sample frame Data for this study were collected from a randomly chosen sample of 2000 total residents aged 18 and above within the states of Washington, Oregon, Idaho, and Montana. The dataset was purchased from a commercial provider. These states were selected because of having a historically strong forestry sector. Additionally since forestry is an important socio-economic sector in these states, a relatively higher proportion of population is likely to be knowledgeable about the forest products industry. Sample size for each state was proportional to its population. In total 174 addresses were undeliverable and 282 usable responses were received (adjusted response rate = 15.4%). Table 1 provides a state-wise number of respondents. 3.2. Questionnaire development and analysis The questions raised in this research are based on two constructs, namely social issues and environmental issues, each having six items as identified by Panwar and Hansen, 2008 and listed in Table 2.
Table 1 State-wise distribution of respondents. State
Number of respondents
Washington Oregon Idaho Montana Total
118 94 37 33 282
Respondents' perceptions regarding industry's current and expected performance on each of these 12 items were assessed using a 5-point interval scale ranging from 1 (very low) to 5 (very high). Thus, 24 questions (12 items each for current and expected performance) were asked for this assessment. The questionnaire was pre-tested with five persons and minimal changes were made based on their feedback. The Total Design Method (Dillman, 1978) was used to collect data, and therefore non-respondents were followed up by a second wave of questionnaires two weeks after the first wave was sent. An online version of the questionnaire was also prepared and the web-link was provided in the cover letter accompanying the questionnaire. Eight responses were received electronically. Gender, education, place of residence and age are four important demographic factors that we assume to impact people's views of CSR. For gender, t-tests were used to identify significant differences between males and females. Education was categorized as ‘some high school’, ‘high school’, ‘some college’, ‘college’, ‘graduate’ and ‘other’. ANOVA and the LSD and Tamhane's T2 Post Hoc test were used for the multiple comparisons. ‘Some high school’ and ‘other’ were not tested due to their small sample sizes (less than ten). Place of residence was separated as ‘urban’, ‘rural’ and ‘suburban’. No definitions were provided to respondents for the three concepts and they self-identified their place of residence. ANOVA and the Scheffe and Tamhane's Post Hoc were used to test the differences among various residence categories. Age was grouped according to a classification suggested by Schuman and Scott (1989). This classification suggests that there are seven generational cohorts in the US: Depression cohort (born from 1912 to 1921), Pre ‘World War II’ cohort (born from 1922 to 1927), World War II cohort (born from 1928 to 1945), Baby boomer cohort #1 (born from 1946 to 1954), Gen Jones or Boomer cohort #2 (born from 1955 to 1964), Generation X cohort (born from 1965 to 1980) and Generation Y cohort (born from 1982 to 2001). Due to sample size considerations for each category, we merged the first three categories (Depression cohort, Pre ‘World War II’ cohort and World War II cohort) into one group and labeled them as ‘Pre baby boomer cohort’. Similarly, the last two groups (Generation X cohort and Generation Y cohort) were merged together and were labeled as ‘Post baby boomer cohort’. ANOVA and the Scheffe and Tamhane's T2 Post Hoc were used to test the differences among various generational cohorts.
Table 2 Items within the social issues and environmental issues construct. Social issues
Environmental issues
• Encouraging public scrutiny on environmental • Promote and/or practice and land management practices sustainable forestry • Invest in surrounding communities • Increase the use of renewable resources • Promote responsible consumption • Adopt environmentally sound among consumers purchasing policies • Stem declining employment in the sector • Mitigate global warming • Engage with the surrounding communities • Reduce overall energy consumption • Improve industry's public image • Improve waste management
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4. Results A reliability test was conducted to check the internal consistency of the items used in this research. The Cronbach's alpha reliability coefficients were .85 for “industry's current social issues performance”, .88 for “industry's current environmental issues performance”, .84 for “industry's expected social issues performance” and .86 for “industry's expected environmental issues performance” (Table 3). All these coefficients are above the minimum value of .70 suggested by Nunnally (1978). Further, it may also be noted from this table that deleting any variable would not improve the reliability and hence all the items were retained for further analysis. Four composite variables were calculated based on the average of six social and six environmental issues, respectively. Non-response bias was assessed comparing early versus late respondents as suggested by Armstrong and Overton (1977). No significant differences were found between early and late respondents, and therefore non-response bias is assumed to be negligible. 4.1. Gender difference Table 4 illustrates the differences between male and female respondents regarding their views of current and expected performance related to social and environmental issues. There is a convincing evidence that females consider industry's performance significantly lower than males both for social issues (p = .006) and environmental issues (p = .001). In the case of expected performance, however, results are mixed. While there is marginal support (p = .080) for the difference between males and females with regard to their expectations of industry's performance related to social issues, this difference is significant (p < .001) in the case of environmental issues. These results indicate
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Table 4 Difference between male and female perceptions of industry's current and expected performance along social and environmental issues. Mean values
Current social issues performance Current environmental issues performance Expected social issues performance Expected environmental issues performance
p-value
Male
Female
n = 180
n = 101
2.68 3.00 3.89 4.17
2.39 2.60 4.07 4.60
.006 .001 .080 <.001
1 Cell entries are means. 2 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
that hypotheses H1(a), H1(b) and H2(b) are supported while hypothesis H2(a) is only marginally supported. 4.2. Differences among different education categories As Table 5 shows, there are some differences in perceptions among different education levels. For example, those with high school degree perceive industry's current social performance significantly higher than both college and graduate categories. Thus, hypothesis H3(a) is partially supported. With regard to perception about current environmental performance, high school respondents are significantly higher than those with some college, those with college degree, and those with a graduate degree. Other groups are similar to each other and thus again, hypothesis H3(b) is partially supported. Results of expected performance suggest that only those with some college and those with a college degree significantly differ from each other with respect to expected social performance, the remaining groups being similar and thus leading to a partial support for H4(a). Finally, with regard to expected environmental
Table 3 Reliability analysis of current and expected performance along social and environmental issues. Mean
Corrected item total correlation
Cronbach's alpha if item deleted
Current social issues performance Engaging with the communities Investing in communities Improving their public image Stemming the declining employment Encouraging public scrutiny of environment and land mgmt Promoting responsible consumption
2.73 2.74 2.88 2.32 2.39 2.42
.69 .72 .69 .51 .60 .57
.81 .81 .81 .84 .83 .83
Current environmental issues performance Promoting sustainable forestry Reducing their overall energy consumption Increasing the use of renewable resource Adopting environmentally purchasing policies Improving waste management Mitigating global warming
3.11 2.66 3.17 2.76 3.03 2.48
.71 .67 .71 .71 .72 .65
.86 .87 .86 .86 .86 .87
Expected social issues performance Engaging with the communities Investing in communities Improving their public image Stemming the declining employment Encouraging public scrutiny of environment and land mgmt Promoting responsible consumption
4.26 4.20 3.89 3.41 3.96 4.02
.66 .61 .64 .64 .62 .62
.82 .82 .81 .81 .82 .82
Expected environmental issues performance Promoting sustainable forestry Reducing their overall energy consumption Increasing the use of renewable resource Adopting environmentally purchasing policies Improving waste management Mitigating global warming
4.61 4.17 4.41 4.32 4.50 3.90
.61 .66 .65 .75 .73 .60
.84 .83 .83 .81 .82 .86
Cronbach's alpha .85
.88
.84
.86
1 Cell entries are means. 2 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
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Table 5 Difference in perceptions of different education groups regarding current and expected performance along social and environmental issues. Mean values
Current social issues performance Current environmental issues performance Expected social issues performance Expected environmental issues performance
p-value
High school
Some college
College
Graduate
n = 32
n = 74
n = 86
n = 79
2.91a
2.70ab
2.47b
2.45b
.024
3.33a
2.94b
2.78b
2.72b
.008
3.74ab
4.19a
3.81b
3.97ab
.008
b
b
3.96
a
4.41
4.36
4.36
b
.022
1 Means with different letter superscripts differ at p < .05 using LSD Post Hoc tests for equal variances (due to small sample size) and Tamhane's T2 Post Hoc for unequal variances. 2 Cell entries are means. 3 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
performance, those with a high school degree have significantly lower expectations as compared to all other groups. The other groups are similar to each other. Thus, H4(b) is also partially supported.
4.3. Difference among resident groups Table 6 indicates that urban residents consider industry's current performance related to both social and environmental issues, significantly lower than rural residents. Suburban residents fall in between but do not differ significantly from either urban or rural residents. However, none of the resident groups differ from each other in terms of their expectations of industry performance in social and environmental issues. Thus, while H5(a) and H5(b) are partially supported, H6(a) and H6(b) are rejected.
4.4. Difference in age groups As can be noted in Table 7, there are few differences among age groups. The only significant difference exists between the respondents in post baby boomer cohort and the respondents in pre baby boomer cohort with respect to their perceptions of industry's environmental issues related current performance. Therefore H7(a), H8(a) and H8(b) are rejected, while H7(b) is partially supported.
Table 6 Difference among various resident groups about current and expected performance on social and environmental issues. Mean values Urban
Current social issues performance Current environmental issues performance Expected social issues performance Expected environmental issues performance
Table 7 Difference among various age groups about current and expected performance on social and environmental issues.
Rural
p-value Suburban
n = 72
n = 129
n = 78
2.36a 2.55a
2.69b 3.04b
2.59ab 2.88ab
.026 .001
4.06 4.44
3.91 4.26
3.92 4.32
.402 .233
1 Means with different letter superscripts differ at p < .05 using Scheffe Post Hoc tests for equal variances and Tamhane's T2 Post Hoc for unequal variances. 2 Cell entries are means. 3 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
Mean values
Current social issues performance Current environmental issues performance Expected social issues performance Expected environmental issues performance
p-value
Post
#2
#1
Pre
n = 71
n = 55
n = 80
n = 73
2.40 2.62a
2.63 2.94ab
2.57 2.87ab
2.74 3.04b
.120 .031
3.91 4.43
3.96 4.3
3.95 4.38
4.02 4.16
.890 .132
1 Means with different letter superscripts differ at p < .05 using Scheffe Post Hoc tests for equal variances and Tamhane's T2 Post Hoc for unequal variances. 2 Post: Post baby boomer cohort. #2: Boomer cohort#2. #1: Boomer cohort#1. Pre: Pre baby boomer cohort. 3 Cell entries are means. 4 Variables coded on a 5-point scale ranging from 1 (very low) to 5 (very high).
5. Discussion Like a majority of past studies, this study establishes that males and females view an industry's social and environmental performances differently. Females are more critical than males in evaluating the US forest products industry's current performance related to both social and environmental issues. In terms of expectations, however, females exceed males only in the area of environmental issues. Previous literature does not provide much insight in explaining this finding. However, we speculate several underlying notions that could be investigated through future research. First, it is possible, that females place environmental issues higher than social issues. This might indicate that females either consider business activities to harm the environment more than they inflict problems in society, or they simply care more for environmental issues than social issues. On the other hand, because the forest industry predominantly employs males, it is also possible that, males associate higher social utility with it (jobs, community investment etc.), than an expectation of environmental stewardship. In any event, it may have important implications for the forest products industry. One, it necessitates that industry develop communication strategies targeting females in order to increase awareness regarding its social and environmental performances. With increasing female participation in media, special interest organizations, and the policy realm this will become more important. It may also have implications for marketing policies for those organizations that are directly or indirectly related to the forest sector and have females as their important buyer segment or buying decision influencers (for example, home furniture). Results pertaining to education level suggest that generally those with lower education level have a more positive perception of industry's social and environmental performances. These results are, by and large, as expected and may also be reflective of the forest products industry being a livelihood support to low-educated segments of society. However, given the imminent need for an educated workforce in the future, the industry must focus on improving perceptions regarding its social and environmental performances among better educated segments. This is all the more important as more people are beginning to consider company social and environmental performances as a part of their employment selection criteria. Therefore, one important strategic implication for the industry may be to develop socio-environmental performance communication strategies that focus upon educated segments. Towards this end, industry associations (or individual companies) may place “goodwill” advertisements in suitable media (magazines,
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newspapers etc.) that are patronized by more educated members of the population. Industry may also consider supporting the forest sector academicians to examine best practices and develop case studies that may be used as teaching cases in a variety of disciplines such as business, environmental philosophy, sociology, and forestry. This may be one important way to send a good message across a wide array of the educated population. In the case of resident groups, urban residents are more critical than rural residents in judging industry's current social and environmental performances. Suburban residents fall in between these two groups and do not significantly differ from either. Past literature suggests that urban residents are more environmentally aware than rural residents and also that environmental attitudes depend upon one's occupation. Both these notions may be used to explain our findings: (i) urban residents judge industry's performance more harshly, and (ii) most forest industry companies provide socioeconomic support to predominantly rural populations and therefore might be seen favorably by rural populations. However, the results regarding expected performance are complex to interpret. None of the groups differ from each other regarding expected performance for both social and environmental issues. It may be attributed to a variety of speculations including rural respondents' bias and urban residents' apathy towards expectations from industry. As far as implications of these findings go, it is likely that the industry may benefit by having an improved image among urban and suburban residents. These groups are important as migration to urban and suburban regions continues to rise. Contrary to most previous findings, we did not find age-based differences being distinct and prominent. It may be argued that social and environmental expectations of business are getting increasingly mainstreamed and age-based differences are disappearing. This may be particularly true for sectors such the forest products that are in the public eye for their socio-environmental impact. As such, the industry should recognize changing societal views and be responsive via improved performance and more effective communication.
6. Limitations and conclusion This research was conducted in four of the US northwest states and therefore the results of this study cannot be generalized to other regions. Further, the issue set used in this research is not claimed to be exhaustive and is used here for examining demographic differences rather than claiming to fully represent all the issues constituting CSR in the US forest products sector. Alike most demographic studies, this research is also limited by the potential effect of confounding variables, such as economic dependence of individuals on forest industry, general economic conditions at the time of study, etc. Such factors may influence the results and their potential effect must be recognized. This research finds some differences among members of the general public with respect to their demographics. Gender differences, for example, are more distinct and significant than, say, age. While this research confirms some of the previously established notions, some of the findings contradict previous literature. The sector-specific focus of this research brings novelty to the body of knowledge in that society's perceptions about the forest industry in the US have not been investigated previously. For the broader field of CSR, this research raises questions such as whether perceptions and expectations are generic in nature or are they associated with particular industry sectors. For future research, it would be interesting to explore whether demographic differences in CSR perceptions and expectations are prevalent across industries or differ from one industry to another. These questions may help CSR academicians in further understanding the social construction of the concept of CSR. This knowledge may be important for business managers as they feel
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