environmental corporate social responsibility, consumer orientation and corporate sustainability of producer firms in kenya

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.