Abstract:
In recent years, the importance of environmental corporate social responsibility in
determining sustainability of firms has increased. However, critical concerns have
been raised about the significant effect on corporate sustainability which has
continued to be faced with inconsistent and at best, inconclusive results. The purpose
of the study was to establish the moderating effect of consumer orientation on the
relationship between environmental corporate social responsibility and corporate
sustainability of producer firms in Kenya. The motivation was to gain understanding
of consumer orientation moderating role on corporate sustainability. The study was
based on stakeholder theory, new collective theory of consumer behavior and
sustaincentrism theory. The study adopted explanatory survey research design guided
by pragmatism philosophical paradigm. The study respondents were 2352 mainly
drawn from a target population of 113 registered producer firms. Cochran’s sample
size formula was used to obtain a sample size of 98 firms, respondents 445 managers
and 515 consumers. Multi stage sampling techniques was applied which involved
proportionate stratified sampling, stratified random sampling and simple random
sampling. Questionnaires were administered to the sampled consumers and managers
while interview schedules were organized to collect data from financial managers.
Data was merged by use of composite index design while reliability and validity of
the data collection instruments were tested statistically using Cronbach’s alpha
coefficient and average variance extracted respectively. The data collected was
analyzed using descriptive statistics, inferential statistics and content analysis.
Multiple and hierarchical regression analysis were used to test the hypotheses. The
study found positive significant relationship between environmental reporting and
corporate sustainability (β = 0.575, p < 0.05), environmental investment and corporate
sustainability (β = 0.264, p < 0.05), social environment initiative and corporate
sustainability (β = 0.221, p < 0.05) and between consumer orientation and corporate
sustainability (β = 0.117, p < 0.05). Subsequently, when moderated with consumer
orientation it was found that environmental reporting had positive significant effect on
corporate sustainability (β = 0.662, P < 0.05) and environmental investment also had
positive significant effect on corporate sustainability (β = 0.251, P < 0.05). On the
other hand, social environment initiative had negative but insignificant effect on
corporate sustainability (β = -0.332, P > 0.05). Similarly, overall test of significance
with F-test values F (11, 87) = 56.166, P < 0.000 confirmed high significant effect of
consumer orientation on the relationship between environmental corporate social
responsibility and corporate sustainability. Based on the findings it was concluded that
the study extended the use of new collective theory of consumer behavior and
sustaincentrism theory but limited the use of stakeholder theory. Subsequently, the
study added new variable consumer orientation to extend the literature on the match
between environmental corporate social responsibility and corporate sustainability.
The findings clarified that policy makers of producer firms should pay close attention
to the formulated policies or strategies of environmental reporting, environmental
investment and social environment initiative which boost superior firm sustainability.
Further research can be done based on sub-constructs of personal orientation, social
orientation and their moderating role on social environment initiative as it was
insignificant in this study.