Dissertation Matiasek Corporate Sustainability Dec 2010

Rainer Matiasek

Corporate Sustainability. Company Strategies and Consumers.

Doctoral Thesis

to be awarded the degree of Doctor of Social and Economic Sciences (Dr. rer.soc.oec.)

at the University of Graz, Austria

Alfred Posch Institute of Systems Sciences, Innovation and Sustainability Research Bernhard Mark-Ungericht Institute of International Management

Graz, December 2010

Rainer Matiasek Corporate Sustainability

Dissertation at the University of Graz, Austria 2

In gratitude to my parents.



Abstract

Rainer Matiasek, "Corporate Sustainability. Company Strategies and Consumers",

Doctoral thesis to be awarded the degree of Doctor of Social and Economic Sciences

(Dr. rer.soc.oec.) at the University of Graz, Austria, 330 pages, December 2010.

This dissertation examines corporate sustainability from a company strategy and

consumer perspective. Thereby, the understanding of the responsibilities of busi-

nesses is deepened and consumers' attitudes towards corporate conduct and their

personal involvement are investigated.

In a mixed methodology approach, qualitative and quantitative techniques are

combined. In the first part of the empirical section, sustainability aspects of interna-

tional companies of the food and beverages industry are compared based on sec-

ondary information and a case study of the Austrian subsidiary of one of these com-

panies is compiled mainly through expert interviews. In the second part, consumer

insights are derived from focus group discussions and a survey in Austria, Germany,

Switzerland and the United States.

It is shown that all companies investigated have formulated sustainability strate-

gies and aim to meet their responsibilities in specific stakeholder activities. The Aus-

trian subsidiary has improved its environmental impact together with its value chain

partners, and it traditionally concentrates its social activities on one charity. Despite

the fact that consumers report that they care about aspects of corporate sustainabili-

ty, they generally show little personal activism and low levels of awareness of corpo-

rate practices.

Improving information provided to consumers about sustainability seems to be an

important area for companies. Seeking cooperation with independent parties such as

NGOs, or providing better product-based communication, could be first steps.

Keywords: Corporate sustainability, corporate social responsibility, strategy,

stakeholder, consumer, food and beverages industry



"We do not inherit the earth from our ancestors, we borrow it from our children."

Native American Proverb

"A business that makes nothing but money is a poor kind of business."

Henry Ford

"Corporations are social institutions. If they do not serve society, they have no business existing."

Henry Mintzberg



Table of Contents

Abstract 3

Executive Summary 10

Preface 14

1 Outlining the Research 15

1.1 Introduction to the topic area 15

1.2 Research questions, purpose and objectives, relevance 16

1.3 Content framework, research process, limitations 19

2 Exploring Concepts of Sustainability 25

2.1 Overview on selected concepts 25 2.1.1 Sustainable development 25 2.1.2 Business ethics 27 2.1.3 Corporate citizenship 28 2.1.4 Corporate social responsibility 29

2.2 Defining corporate sustainability 31

3 Connecting the Firm in Society 34

3.1 Integrating business, government, and civil society 34

3.2 Introduction to stakeholder theory 37

3.3 Consumers as stakeholders and ethical consumption 47 3.3.1 Sustainability and consumerism 47 3.3.2 Sustainable purchasing behavior 56

4 Reviewing Strategic Aspects of the Corporation 61

4.1 A strategic view of the company and sustainability 61 4.1.1 Introduction to strategy and the corporation 61 4.1.2 Strategic purpose of sustainability engagement 65

4.2 Managing corporate sustainability strategy 66 4.2.1 Strategic approach to sustainability 67 4.2.2 Partnership approach through stakeholder management 73

4.3 Disclosure and communication of corporate practices 78

5 Methodology of Empirical Research 82

5.1 Theoretical aspects of the research process 82 5.1.1 Determine methodology (research design) 82 5.1.2 Conduct empirical research 107 5.1.3 Analyzing and interpreting data 109 5.1.4 Compile results 113

5.2 Data collection from companies and consumers 113 5.2.1 Overview of the collection process 113 5.2.2 Process of investigating companies 115 5.2.3 Remarks on company research 119 5.2.4 Process of investigating consumers 121



5.2.5 Remarks on consumer research 127

6 Investigating Sustainability in the Food and Beverages Industry 131

6.1 Overview on sustainability issues in the industry 131

6.2 Comparing the strategies of Unilever Group, The Coca-Cola Company and McDonald's Corporation 133

6.2.1 Background on the companies under review 133 6.2.2 Aspects of corporate sustainability engagement 138 6.2.3 Selected sustainability initiatives and stakeholder involvement 145

6.3 Exploring sustainability at McDonald's Austria 152 6.3.1 Introduction to the country organization 152 6.3.2 Responsibility and environmental highlights in the value chain 164 6.3.3 Social commitment in the Ronald McDonald Kinderhilfe 179

7 Asking the Consumer about Sustainability 197

7.1 Gathering insights with qualitative research 197 7.1.1 Preparation of focus groups based on background research 197 7.1.2 Results obtained from focus group discussions 198

7.2 Preparing quantitative research 202 7.2.1 Drafting the preliminary questionnaire 202 7.2.2 Reviewing the questionnaire 202 7.2.3 Presenting the final questionnaire version 203

7.3 Presenting survey results 205 7.3.1 Drawing a sample and sample characteristics 205 7.3.2 Section I - Corporate sustainability 209 7.3.3 Section II - Purchasing from sustainable companies 219 7.3.4 Section III - Consumer role in sustainability 223 7.3.5 Section IV - Importance of product communication in food and beverages 233 7.3.6 Section V - Company sustainability practices 251

8 Discussing and concluding the research 260

8.1 From research questions to research results 260

8.2 An integrative perspective of corporate sustainability 266

8.3 The author's concluding remarks 268

Appendices 270

Bibliography 309

Curriculum Vitae 329

Author's Declaration 330



List of Exhibits

Exhibit 1 - Content framework of the dissertation (Author's illustration) 19

Exhibit 2 - Phases of the dissertational research process (Kumar 1999: 17 and Churchill 1999: 64) 21

Exhibit 3 - Timeline of the overall research process (Author's illustration) 21

Exhibit 4 - Characteristics of quality in research (Kumar 1999: 7) 22

Exhibit 5 – CSR pyramid (Carrol 1991: 42) 30

Exhibit 6 - Conceptualizations of corporate sustainability (Van Marrewijk 2003: 95, 101-102) 32

Exhibit 7 - Three-sector-framework (Waddell 2000: 112) 35

Exhibit 8 - Characteristics of the three organizational sectors (Waddell 2000: 113) 36

Exhibit 9 - Stakeholder groups (Lawrence, Weber, and Post 2005: 8-10) 43

Exhibit 10 - Theory of Planned Behavior (Ajzen 1991: 182) 57

Exhibit 11 - (Extended) Model of Goal-Directed Behavior (Perugini and Bagozzi 2001: 80; Perugini and Conner 2000: 709) 58

Exhibit 12 - Dominant themes in strategic management (Grant 2008: 18) 64

Exhibit 13 - Complexity of sustainability indicators (Keeble, Topio, and Berkeley 2002: 150) 69

Exhibit 14 - Corporate sustainability development stages (Dunphy 2003: 4) 71

Exhibit 15 - Stakeholder oriented integrative strategic management reference model (Katsoulakos and Katsoulacos 2007: 363)

72

Exhibit 16 - Clarkson Principles (Clarkson Centre for Ethics & Board Effectiveness 2010a) 74

Exhibit 17 - Ladder of Stakeholder Management and Engagement (Friedman and Miles 2006: 162) 76

Exhibit 18 - Advantages and disadvantages of secondary data (Churchill 1999: 214-218 and Kumar 1999: 125) 84

Exhibit 19 - Characteristics of qualitative and quantitative methods (Hair, Bush and Ortinau 2006: 172, 174) 86

Exhibit 20 - Selected mixed research methodologies (Foscht, Angerer, and Swoboda 2009: 249-254) 87

Exhibit 21 - Advantages and disadvantages of interviews (Hair, Bush and Ortinau 2006: 178; Craig and Douglas 2005: 226;

Kumar 1999: 115;) 90

Exhibit 22 - Advantages and disadvantages of surveys (Hair, Bush and Ortinau 2006: 222; Kumar 1999: 114-115) 92

Exhibit 23 - Characteristics of probability and non-probability sampling (Hair, Bush and Ortinau 2006: 331) 97

Exhibit 24 - Advantages and disadvantages of convenience sampling (Kumar 1999: 161-162; Hair, Bush and Ortinau 2006: 340)

98

Exhibit 25 - Distinctive properties of scale types (Diamantopoulos and Schlegelmilch 1997: 25). 100

Exhibit 26 - Sampling and nonsampling error (Author's illustration) 104

Exhibit 27 - Researcher and respondent errors (Hair, Bush and Ortinau 2006: 225-231; Craig and Douglas 2005: 259-271) 106

Exhibit 28 - Timeline of the empirical research process (Author's illustration) 114

Exhibit 29 - Primary goal and result of company research phases (Author's illustration) 116

Exhibit 30 - Primary goal and result of consumer research phases (Author's illustration) 122

Exhibit 31 - Sustainability issues in the food and beverages value chain (Ionescu-Somers and Steger 2008: 39) 132

Exhibit 32 - Financial data of the selected companies (Author's illustration) 135

Exhibit 33 - Personnel data of the selected companies (Author's illustration) 136

Exhibit 34 - Exemplary sustainability initiatives with stakeholders (Author's illustration) 145

Exhibit 35 - Main suppliers of McDonald's Austria (McDonald's Austria 2010d: 13-18; HAVI Logistics 2010c) 154

Exhibit 36 - Types of waste at McDonald's Austria (McDonald's Austria 2010c: 4) 173

Exhibit 37 - Advantages and disadvantages of biodiesel (SDL 2008: 8) 175

Exhibit 38 - Economic impact of biodiesel (SDL 2008: 24-26; HAVI Logistics Austria 2010: 10) 176

Exhibit 39 - Organizational structure of the Kinderhilfe (Author's illustration) 185

Exhibit 40 - House indicators of the Kinderhilfe (Ronald McDonald Kinderhilfe 2008: 3; Idem 2009a: 4; Idem 2010a: 3) 187

Exhibit 41 - Comparison of the individual houses of the Kinderhilfe (Ronald McDonald Kinderhilfe 2008: 3; Idem 2010b: 5-8,

Idem 2010g; Grill-Haderer 2010) 188

Exhibit 42 - Financial figures of the Kinderhilfe (Ronald McDonald Kinderhilfe 2008: 3; Idem 2009a: 4; Idem 2010a: 3) 193

Exhibit 43 - Revenues from principal charity events of the Kinderhilfe (Author's illustration) 194

Exhibit 44 - Core content areas of focus group discussions (Author's illustration) 198

Exhibit 45 - Top three findings from focus group discussions per topic section (Author's illustration) 199



Exhibit 46 - Sampling funnel (Author's illustration) 206

Exhibit 47 - Total eligible sample and specified analysis sample (Author's illustration) 206

Exhibit 48 - Sample characteristics: country of origin 207

Exhibit 49 - Sample characteristics: year of birth (age) 208

Exhibit 50 - Sample characteristics: location of home university 208

Exhibit 51 - Sample characteristics: home university institution 208

Exhibit 52 - Sample characteristics: stage of education 209

Exhibit 53 - Sample characteristics: main field of studies 209

Exhibit 54 - Phrasing of survey question one 210

Exhibit 55 - Test of normality for question one 212

Exhibit 56 - Test of homogeneity of variances for question one 213

Exhibit 57 - Descriptives for question one 213

Exhibit 58 - ANOVA for question one 214

Exhibit 59 - Robust tests of equality of means for question one 215

Exhibit 60 - Post hoc tests for question one 216

Exhibit 61 - Illustration of means for question one 217

Exhibit 62 - Responses for survey question two 219

Exhibit 63 - Phrasing of survey questions three to eleven 220

Exhibit 64 - (E)MGB for purchasing from sustainable companies in AMOS 221

Exhibit 65 - Indicators of model fit for (E)MGB 223

Exhibit 66 - Phrasing of survey question twelve 223

Exhibit 67 - Test of homogeneity of variances for question twelve 224

Exhibit 68 - Descriptives for question twelve 224

Exhibit 69 - ANOVA for question twelve 225

Exhibit 70 - Robust tests of equality of means for question twelve 225

Exhibit 71 - Post hoc tests for question twelve 226

Exhibit 72 - Illustration of means for question twelve 226

Exhibit 73 - Phrasing of survey question thirteen 227

Exhibit 74 - Test of homogeneity of variances for question thirteen 228

Exhibit 75 - Descriptives for question thirteen 228

Exhibit 76 - ANOVA for question thirteen 229

Exhibit 77 - Robust tests of equality of means for question thirteen 229

Exhibit 78 - Post hoc tests for question thirteen 230

Exhibit 79 - Illustration of means for question thirteen 231

Exhibit 80 - Test of homogeneity of variances for question fourteen 232

Exhibit 81 - Descriptives for question fourteen 232

Exhibit 82 - ANOVA for question fourteen 232

Exhibit 83 - Test of homogeneity of variances for question fifteen 234

Exhibit 84 - Descriptives for question fifteen 234

Exhibit 85 - ANOVA for question fifteen 235

Exhibit 86 - Robust tests of equality of means for question fifteen 235

Exhibit 87 - Post hoc tests for question fifteen 236

Exhibit 88 - Illustration of means for question fifteen 237

Exhibit 89 - Phrasing of survey question sixteen 239

Exhibit 90 - Test of homogeneity of variances for question sixteen 239

Exhibit 91 - Descriptives for question sixteen 240

Exhibit 92 - ANOVA for question sixteen 240

Exhibit 93 - Post hoc tests for question sixteen 241

Exhibit 94 - Illustration of means for question sixteen 242

Exhibit 95 - Responses for survey question seventeen 243

Exhibit 96 - Responses for survey question eighteen 244



Exhibit 97 - Phrasing of survey question nineteen 245

Exhibit 98 - Correlation matrix for question nineteen 246

Exhibit 99 - KMO and Bartlett's test for question nineteen 246

Exhibit 100 - Total variance explained and commonalities for question nineteen 247

Exhibit 101 - Scree plot for question nineteen 248

Exhibit 102 - Component matrix for question nineteen 248

Exhibit 103 - Rotated component matrix for question nineteen 249

Exhibit 104 - Categories of on-product information 250

Exhibit 105 - Ranking of factors for survey question nineteen 250

Exhibit 106 - Characteristics of survey question twenty 251

Exhibit 107 - Responses for survey question twenty 252

Exhibit 108 - Test of homogeneity of variances for question twenty-one 253

Exhibit 109 - Descriptives for question twenty-one 253

Exhibit 110 - ANOVA for question twenty-one 254

Exhibit 111 - Robust tests of equality of means for question twenty-one 254

Exhibit 112 - Post hoc tests for question twenty-one 256

Exhibit 113 - Illustration of means for question twenty-one 257

Exhibit 114 - Connectedness of research (Author's illustration) 260

List of Appendices

Appendix 1 - Details on the selection process of companies 270

Appendix 2 - Exemplary guiding questions for expert interviews 270

Appendix 3 - Email template for contacting experts 271

Appendix 4 - Details on experts and interview realization 271

Appendix 5 - List of focus group participants 272

Appendix 6 - List of survey pretest participants 273

Appendix 7 - Examples of invitation formats for survey participation 273

Appendix 8 - Distribution channels of survey invitation 274

Appendix 9 - General company background information 275

Appendix 10 - Background on the companies' corporate strategies 278

Appendix 11 - Details on reported sustainability performance metrics 279

Appendix 12 - Summary of content contributions by experts and main sustainability aspects 282

Appendix 13 - Questions for focus group discussions 284

Appendix 14 - Detailed findings from focus group discussions 285

Appendix 15 - Questions for pretest interviews 293

Appendix 16 - Main critical findings of pretest and consequent action 293

Appendix 17 - Structure of the final questionnaire version 294

Appendix 18 - Final version of the questionnaire 296

Appendix 19 - Background analysis output of survey results 306



Executive Summary

This doctoral thesis investigates the concept of "corporate sustainability". On the

one hand, the research focuses on company strategies and on the other, on

consumers' attitudes towards responsibility in corporate conduct and their personal

involvement. In this research, a mixed methodology is applied, using both qualitative

and quantitative techniques, including interviews, focus group discussions and a

survey (Chapter 5). Based on background from the literature (Chapters 3 to 5), data

were obtained from three international food and beverages companies on a broad

level (Chapter 6), in-depth data from one of their Austrian subsidiary organizations

(Chapter 6) and from 518 usable consumer responses from Austria, Germany,

Switzerland and the United States (Chapter 7).

Several concepts relate to sustainability and corporate responsibility, among which

sustainable development (United Nations 1987), business ethics (Wetherly and Otter

2008), corporate citizenship (Waddell 2000) and corporate social responsibility

(Carrol 1991) are introduced. "Corporate sustainability" is presented as having the

broadest and most holistic meaning as it integrates economic, ecological and social

dimensions in a long term business approach (Van Marrewijk 2003). However, there

is no universally accepted definition for this term, which leads to varying meaning in

its usages (Sharma and Ruud 2003) and the use of synonyms among academics

and business professionals (The Economist Intelligence Unit 2008). The companies

under investigation also refer differently to the matter (Chapter 6). Results of

consumer research reveal that awareness of the term "corporate sustainability" is

considerably lower than, for example, of "corporate social responsibility" (Chapter 7).

The business world is connected with the two other sectors: government and civil

society (Waddell 2000), which have distinct characteristics but strongly influence

each other. The stakeholder approach can support firms in managing their

connectedness in a network of other parties on a microeconomic level (Borghesi and

Vercelli 2008). It may also be regarded as a means of operationalizing their

responsibilities in the relationships (Crane and Matten 2007). Among various

stakeholders, such as, suppliers, activist groups and government, consumers play a

particularly influential role (Lawrence, Weber, and Post 2005). They may become

active for environmental or social reasons for themselves or on behalf of civil society.

This is referred to as ethical consumption, consumer activism or consumerism



(Barnett, Cafaro, and Newholm 2005). One form of influencing companies is

economic voting through positive buying or boycotting (Clouder and Harrison 2005).

Human behavior can be modelled in the theory of planned behavior (Ajzen 1991),

the model of goal-directed behavior (Perugini and Bagozzi 2001) and the extended

version of the latter (Perugini and Conner 2000). These were used, for instance, to

investigate socially responsible buying (Shaw 2005) and personal activism for

environmental issues (Carrus, Passafaro and Bonnes 2008). In consumer research,

direct adaption of an existing model to investigate purchasing from sustainable

companies resulted, however, in poor model fit (Chapter 7).

Strategy sets the long-term orientation of the firm towards its environment (Grant

2008). In this respect, a clear formulation of mission and vision contribute to the

overall success of the strategy (Hitt, Hoskisson, and Ireland 2007). Over the past

years, corporate sustainability has moved from the periphery to the strategic

management level (Lowitt et al. 2009). Despite some critical remarks, for example

with regard to limiting stockholder sovereignty (Porter 2002) or uncertainty on

measuring effects (Steger 2004), engaging strategically in sustainability is generally

considered beneficial. In fact, it may improve brand positioning (Kotler and Lee

2005), improve bottom line results (McKinsey & Company 2009) and increase the

market value of companies among investors (Lo and Sheu 2007). There can be

important differences in the strategies of the underlying organization towards

sustainability (Dunphy 2003), for example in the formulation of coherent corporate

sustainability strategies (Becerra 2009), the measurement of the results of the

strategy (Keeble, Topiol, and Berkeley 2002) and in the integration of sustainability

strategy with other corporate strategies (Katsoulakos and Katsoulacos 2007). In

addition, proficiency of stakeholder management (Friedman and Miles 2006) and the

approach to disclosing and communicating corporate practices (Zadek et al. 1997)

may also vary significantly. Concerning the latter, a considerable lack of knowledge

about consumer preferences seems to remain (Bezencon and Blili 2010).

The investigated companies were selected based on their advanced level of

development in terms of sustainability (Chapter 5). All firms have sustainability

strategies based on vision and mission. Activities are concentrated in economic,

environmental and social areas, which are defined heterogeneously at the

operational level. Despite specific target values, the indicators applied are sometimes

difficult to understand. All companies officially disclose performance, but reporting



formats vary and this makes comparison across several dimensions difficult.

Nevertheless, there seems to be a tendency towards standardization in this respect.

Throughout the chapter, examples are provided of concrete sustainability initiatives

and stakeholder involvement on an international level (Chapter 6).

The second section of the company investigation is dedicated to a case study of

the Austrian subsidiary of an international food and beverage services provider.

Although defined internationally, the sustainability approach is adapted to the

country's characteristics and implemented nationally. Particular emphasis is given to

illustrating stakeholder cooperation with suppliers, the general distribution, franchise

partners and an environmental consultancy. Concrete examples highlight corporate

responsibility and environmental improvements in the value chain such as

sustainable sourcing and food security, packaging and waste management, and

energy efficiency in operations. With regard to the social commitment of the firm, all

philanthropic involvement is concentrated on a single charity. Details are given of its

purpose and aims, its historical development and international integration, its

financial aspects and its organizational structure within Austria (Chapter 6).

Consumer research reveals that respondents from Austria, Germany and

Switzerland consider monitoring environmental and social impacts of businesses, the

pursuit of stakeholder orientation, and responsible corporate conduct, more important

than respondents from in the United States. In addition, they Austrian, German and

Swiss respondents are more skeptical towards companies in general and require

more information to make responsible purchases. These trends apply equally to men

and women in each geographical region. In general, respondents believe they can

influence corporate conduct through their actions in the marketplace. They regularly

apply economic voting or use word-of-mouth to inform others, but rarely contact

NGOs, companies or governmental agencies directly. When it comes to evaluating

the amount of available information about the company's or product's environmental

and social impact, consumers are generally dissatisfied. In addition, they rank

external sources about sustainability such as non-governmental organizations

(NGOs), government agencies and the media more favorably than retailers and

producers. If such information is nevertheless provided by the producer, the preferred

format is product communication rather than online communication, point-of-sale

communication or corporate reporting. Sustainability-related facts that consumers

would like to receive with the products they purchase, i.e. on the packaging or an



attached leaflet, include primarily product-centered information such as ingredients,

genetic modifications, geographic origin, nutritional value, product impact and

sustainability labels. Overall, respondents show low levels of awareness of specific

companies' sustainability policies and appear to have difficulty differentiating

corporate performance in this respect (Chapter 7).

It is concluded that corporate responsibility is an increasingly important part of

overall company strategy. For various reasons, firms aim to balance economic,

environmental and social aspects in a lasting manner. In this, close cooperation with

stakeholders is of the essence. Examples from leading corporations in the food and

beverages industry and one Austrian subsidiary show concrete activities that go

beyond marketing rhetoric. Consumers seem to increasingly care about

sustainability, but often they lack knowledge or have misconception that hinder their

ability to make responsible decisions in the marketplace. As they have apparently

more trust in external parties, companies should consider seeking increased

cooperation in both directions. With regard to consumer interaction, on-product

communication needs improvement to provide the information consumers desire

(Chapter 8).

Overall, the concept of corporate sustainability supports companies in bridging

business goals and obligations to society in the long term.



Preface

This dissertation presents research that was conducted during doctoral studies at

the University of Graz. It covers the area of "Corporate Sustainability" with particular

consideration of company and consumer aspects. As content will be covered inten-

sively in later sections, the reader is briefly introduced here to the topic selection. Fol-

lowing Kumar (1999: 39), two factors need to be considered when choosing a re-

search problem, as, for example, for a dissertation. First, personal interest has to be

very strong in the subject area. Second, completion of the study must be managea-

ble within the researcher's constraints.

Concerning the former, the author was already interested in how environmental

and social issues might be brought into balance with business concerns in the final

stages of high school. During studies at university, several courses in the respective

fields provided further insights. In addition, interest in topics of strategic and interna-

tional relevance to corporations was stimulated by the curriculum of the master's pro-

gram and internships. Corporate sustainability then presented itself as an important

research theme because it is an especially vibrant and future-oriented topic.

With regard to manageability, the broad area of sustainability certainly posed a

challenge. The researcher thus needed to specifically focus on content. It was also

crucial to define a methodology that both led to the desired results and was feasible

in terms of limited resources. Within theses boundaries, research was successfully

carried out.

However even if these two conditions were met, this dissertation could certainly

not have been completed alone. First, the author wishes to sincerely express his ap-

preciation and gratitude for the countless forms of support received from his parents,

Christa and Heinrich Matiasek. In the academic domain, gratitude is especially due to

Professor Alfred Posch from the University of Graz and Professor Abdolreza Eshghi

from Bentley University, who provided guidance throughout the work on the disserta-

tion. Several other people with different backgrounds and connections to the re-

searcher are not explicitly mentioned by name here but should be nevertheless

gratefully acknowledged. They have made crucial contributions, knowingly or not, by

inspirational comments, critical remarks, statistical insights, language skills, organiza-

tional planning, personal assistance and much more. Thank you all!

The author wishes you an interesting read.



1 Outlining the Research

At the beginning of this document, aspects of the research are outlined. First, the

reader is provided with a short introduction to the topic area. Then the research prob-

lem is defined, objectives of the study clarified and potential new contributions men-

tioned. Finally, the procedures are covered in more detail by examining the connec-

tions between content and methodology, illustrating the research steps and describ-

ing some of the limitations encountered.

1.1 Introduction to the topic area

Within the topic of this dissertation, "corporate sustainability", several terms or

concepts are of importance, especially as they also build upon each other. As further

details are revealed in later sections, selected citations from the literature reviewed

aim to introduce the reader to the research area in advance.

“Corporate sustainability can be viewed as a new and evolving management

paradigm, … [which] is an alternative to the traditional growth and profit-

maximization model. … It requires companies to consider the protection of the

natural environment and responsibilities towards society in addition to its

profitability goals” (Wilson 2003: 1).

“What a difference a decade makes. Ten years ago the term “stakeholder” was

slang for any neglected group affected by a corporation. … Today the term has

arrived. … stakeholder theory [is identified] as one of a tiny handful of

recognized models for interpreting corporate responsibility” (Donaldson 2002:

107).

“Consumption is the reason why anything gets produced… In a market

economy, the main responsibility … thus lies with the consumer. Realistically,

however, ordinary consumers have little knowledge of the links between

consumption patterns and their consequences…” (Heiskanen and Pantzar

1997: 409).

“Strategic decisions … are important, involve a significant commitment of

resources and are not easily reversible. … strategy implies consistency,

integration, and cohesiveness” (Grant 2008: 14, 17).

“[Since] sustainability strategies are constituents of corporate strategy ... [they

contribute] to create competitive advantage and new market spaces” (Orsato

2009: 23).



“The food and beverages industry is a front-line industry, given that people …

have to eat [and drink] every day. … it is ‘front of mind’ for consumers and

industry stakeholders” (Ionescu-Somers and Steger 2008: xvii).

Having these content areas in mind, the author defined the research field.

Emphasis was given to clearly outlining the problem and the procedures.

1.2 Research questions, purpose and objectives, relevance

First, the research problem was approached in terms of "what" and "why". In the

following, the research questions are presented, the purpose of the research and

objectives clarified, and the scientific and practical relevance of the research intro-

duced.

(1) Research questions

In the broad and often vaguely defined area of sustainability, the following guiding

question (GQ)1 sets the overall direction of the research:

How does the concept of ‘corporate sustainability’ contribute to bridging

companies’ longtime business goals and their obligations to society? (GQ)

As this question shows, research focuses on aspects of sustainability with regard

to business firms2. In particular, the company and the consumer are of interest. The

research questions (RQ) tackle these two specific areas:

How are companies in the food and beverages industry involved in applying

corporate sustainability? (RQ1)

How do consumers in Western Europe and the United States perceive

companies’ conduct based on their own attitude towards and behavior in

sustainability? (RQ2)

Within the scope of either question, several specific issues will be investigated.

These are identified by the research sub-questions (RSQ):

What strategic stage of development in corporate sustainability are the

selected companies currently in? (RSQ 1.1)

How is sustainability strategy aligned with overall corporate strategy and

business partners in the value creation process? (RSQ 1.2)

1 The guiding question and research questions were developed based on an initial screening of re-

levant literature, the researcher's own thoughts and interaction with the dissertation advisor. With re-gard to brevity, further details on the process are omitted.

2 Although the investigation aims at integrating the company and consumer perspective, aspects and implications of sustainability for the firm represent the overall dominant research interest.



How is corporate sustainability transformed into concrete activities with

stakeholders? (RSQ 1.3)

What do consumers expect from companies with regard to sustainable

business conduct? (RSQ 2.1)

How can consumer attitudes, intention and behavior towards purchasing from

sustainable companies be modeled? (RSQ 2.2)

What involvement do consumers themselves show in contributing to

sustainability in business? (RSQ 2.3)

What sustainability issues do consumers favor in product choice and

communications? (RSQ 2.4)

How do consumers assess specific companies as regards corporate

sustainability? (RSQ 2.5)

These questions describe the research problem. They serve as a reference for the

entire study. Part of the concluding chapter, chapter eight, is then structured to

specifically provide answers to the questions from research results.

(2) Purpose of the research and objectives

Based on the description of the research problem, the purpose of the dissertation

is twofold. On the one hand, it should contribute to deepening the understanding of

the concept of corporate sustainability in business and expanding the knowledge of

practices in specific companies in a certain industry by examples. On the other hand,

it should also investigate consumers' connection to sustainability in several

dimensions and generate quantifiable insights. To fulfill this purpose, specific

objectives have been formulated. They aim at defining the concrete outcomes that

are expected at the end of the research process. The objectives are as follows:

1 To explore corporate sustainability in specific companies.

1.1. To gain a broad understanding of aspects such as general strategy,

sustainability strategy, stakeholder activities and disclosure of environmental

and social performance of international companies.

1.2. To compile in-depth information on corporate sustainability in one country

organization with particular consideration of value chain partners and an

affiliated charitable association.

2 To explore sustainability and corporate sustainability among consumers.

2.1. To gather qualitative and quantitative insights about consumers in Austria,



Germany, Switzerland and the United States.

2.2. To better understand attitudes on the general responsibilities of firms,

individuals' purchasing behavior, consumerism and awareness of corporate

sustainability practices.

These objectives are pursued throughout the research process.

(3) Relevance of the research

A review of the literature has revealed that there are still many research

opportunities to generate new scientific and practical contributions. One author, for

example, states that “sustainability is a complex issue and much theoretical and

empirical work remains to be done” … Especially some areas “need further attention”

such as “analyzing sustainability practices in a variety of industry contexts” … and

“investigating the role of stakeholders in the path toward sustainability” (Banerjee

2002: 113-114).

There seems to be particular relevance in combining aspects of corporate strategy

and consumers with regard to sustainability. PricewaterhouseCoopers (2009: 26-27)

found in its latest "Annual CEO Survey" that most collaboration of firms exists with

the stakeholder group "customers and clients" and that their influence on strategic

business decisions has grown stronger over the past three years. It is also revealed

that meeting customers' and clients' preferences and needs is considered crucial for

business success, but business leaders widely lack such information.

Therefore, this dissertation is intended to provide particular value in combining two

interlinked but contrasted viewpoints on corporate sustainability: the company and

the consumer. As such, a better understanding should be generated of corporate

activities in environmental and social domains and market place perception thereof.

For instance, relevance arises from the following:

Comparing the strategies of three leading international companies and building

a case study of activities of one national subsidiary leads to a better practical

understanding of the characteristics of corporate sustainability.

Exploring consumers' viewpoints qualitatively and quantitatively contributes to

better comprehension of their attitudes, involvement and needs concerning

corporate sustainability.

Applying the theoretical backgrounds of stakeholder theory, consumerism and

strategic management, the connections between practice and theory may be



further investigated and new conclusions be drawn in both fields.

Connecting two perspectives, those of the company and the consumer, should

allow a different understanding of the relevance of sustainability efforts and

their reception.

Thus the dissertation seek to stimulate the ongoing sustainability debate in the

academic world and among business professionals.

1.3 Content framework, research process, limitations

Second, the research was approached with regard to "how". A content framework

illustrates the specific subject areas and respective investigation methods, the

depiction of the research process shows the various steps and some remarks are

then given on limitations encountered.

(1) Content framework

To provide guidance throughout the research, a framework was designed to

illustrate the various content areas. Two sections can be distinguished: the literature

section, which includes an exploration of the concepts of corporate responsibilities,

strategic management and stakeholder theory, and the empirical section, which deals

with company studies of a particular industry and a consumer investigation.

Exhibit 1 - Content framework of the dissertation (Author's illustration)

Content FrameworkLiterature section

Desk research Mixed field research methodology

Selected case examples and expert

interviews

Focus groupsSurvey

Literature review of academic and practical sources (Secondary data)

Empirical section

The firm and societalstakeholders

Strategic perspectives and the

corporation

Exploring concepts of corporateresponsibility

Investigating sustainability in the food and beverages

industry

Consumer attitudes towards and behavior in

sustainability

Conclusions on issues in and the state of corporate

sustainability



In the theoretical section, the discussion of relevant content is based on academic

literature primarily in books and journals, contributions from practical experts such as

consultancies, publicly disclosed corporate information, and other general sources

such as the Internet. Most data in this first section is secondary data, whereas mainly

primary data is processed in the subsequent field research.

In the empirical section, two approaches are used. On the one hand, some

aspects of selected public listed corporations of the food and beverages industry are

compared. In addition to processing written information, individual expert interviews

were conducted to provide further details on one country organization. The results

provide exploratory insights into sustainability strategies in practice. On the other

hand, a quantitative survey aims at testing aspects derived from the company

investigation and focus group discussions. Among other aspects, consumer attitudes

on the role of the firm in society and perception of corporate sustainability

approaches are examined.

In total, research has an exploratory and descriptive focus. Further details on the

methodological proceedings are discussed in chapter five.

(2) Research process

The research process includes all necessary steps for successfully completing a

research project. Literature provides several detailed recommendations to the re-

searcher on how to proceed. Two contributions proved especially valuable in defining

the approach employed in this doctoral research:

Churchill (1999: 64) divides a research process into six phases. First, the

problem to be solved has to be clearly defined. In a second step, the research

design is determined based on how much knowledge in the specified area

already exists. If primary data is necessary, the appropriate data collection

method and form are then chosen. Fourth, the sample needs to be defined

according to size and selection process. In the two last steps, data is analyzed

and interpreted, and the results presented in a formal report.

Kumar (1999: 17) differentiates eight phases in his illustration of a research

process. At the beginning, a research problem is formulated primarily as a

result of reviewing literature. Second, an appropriate research design is

selected. In a third step, an instrument for data collection is constructed

including the collection method, scales and quality assurance in terms of



validity and reliability. Then, a sample is chosen. The results of these

processes are then developed as a research proposal in phase five. In the

three remaining steps, data is collected, processed and finally documented in

the research report.

Based on these insights, research for this dissertation was structured in a six step

approach. It takes into account all necessary elements described above, but slightly

adapts the proceedings to meet the requirements of the dissertational research. The

figure below (Exhibit 2) provides an overview.

Exhibit 2 - Phases of the dissertational research process (Kumar 1999: 17 and Churchill 1999: 64)

Each of these phases lasted over several months with several overlaps3 as illu-

strated in the figure below (Exhibit 3). It can be observed that gathering data, both in

the literature review and the empirical study, was most time-intensive. Greater atten-

tion was paid to determining the research methodology after development of the re-

search proposal ("exposé") as it needed to be aligned with findings of the extended

literature review. Because of their immediate relevance to the investigation in the

field, phases three to six are further discussed, both theoretically and practicaly, in

chapter five.

Exhibit 3 - Timeline of the overall research process (Author's illustration)

3 The timeline illustrates only the approximate timeframes for each phase. It should be noted that

research intensity may have varied within a period and the representation of content in the final dissertation is not proportionate to the respective duration within the research process.

(2)Reviewliterature

(1)Formulateresearchproblem

(4)Conductempiricalresearch

(3)Determine

methodology

(5)Analyze

and interpretdata

Completedissertation

(6)Compileresults

2008 2009 2010

O N D J F M A M J J A S O N D J F M A M J J A S O N D

x x x x x x x X

x x x x x x x x x x x x x x x x x x

x x x x

x x x x x x x x x x x x x x x

x x x x x x x x x

x x x x x

x x x x x

x x x x x x x x x

Exposé (research proposal)

Dissertation

(1) Formulate research problem

(2) Review literature

(3) Determine methodology

(4) Conduct empirical research

(5) Analyze and interpret data

(6) Compile results

Dissertational research process



(3) Restrictions and limitations

This dissertation was compiled with the author's best intention to meet and exceed

academic standards in terms of overall approach, formal requirements and content.

Basically, the research process needs to be controlled, critical, empirically-oriented,

rigorous, systematic, and valid and verifiable. Brief descriptions of these key words

are given in the table below (Exhibit 4).

Characteristic Description

Controlled The influence of factors that are not subject to research has to be minimized or even eliminated.

Critical Critical assessment has to be made of the research process and methods applied.

Empirical Data has to originate from various real-world sources to count as "hard evidence".

Rigorous Procedures have to be "relevant, appropriate, and justified" to meet research goals.

Systematic The research approach needs to be logically understandable and reasonable.

Valid Conclusions based on the data must be independently verifiable.

Exhibit 4 - Characteristics of quality in research (Kumar 1999: 7)

In practice however, several issues challenged realization, which need to be briefly

mentioned because of their potential impacts on the quality of the results:

The doctoral candidate was not affiliated with any institute at the University of

Graz. Therefore, research was conducted from a perspective external to the

academic world. Regular personal exchange took place only with the primary

advisor over the entire research period.

Financial resources constrained the process in terms of scale and scope. De-

pendence on scholarships granted by the University of Graz, parental contri-

butions and income from marginal employment had to be weighed against re-

search aspirations. In addition, the official curriculum schedules completion of

doctoral studies within four semesters or 24 months. This time frame was

slightly exceeded.

Information was predominantly accessed from English sources, with input for

the case study of the Austrian subsidiary being the only exception. Although

this language is practically standard in all international publications, some kind

of Anglophone influence probably still remains. In addition, the researcher

himself did not compose this dissertation in his mother tongue. Therefore,

issues regarding vocabulary, grammar or the like can still persist despite

external proof-reading.

With a combination of exploratory and descriptive methods, an integration of

company and consumer perspectives, and a discussion of results from



qualitative and quantitative data, the researcher aims at applying an integrated

research approach. This should not be interpreted as a lack of focus, but to

specifically ensure broad coverage of the research problem.

In chapters two, three and four, the overview on theoretical backgrounds such

as stakeholder theory, consumerism or company strategy is focused on the

requirements for the preparation of empirical field work. If compared to purely

literature-focused research, some lack in breadth and depth can be expected.

Chapter five aims at outlining proper scientific methodology, which serves as

the guideline for conducting practical research and the reference for

discussing the major challenges faced. It should be noted in advance that this

dissertation represents an unprecedented piece of scientific work for the

researcher. Therefore, some issues would have probably been tackled

differently by more experienced academics.

Empirical material presented in chapters six and seven includes limitations

resulting from the selection of a specific industry, companies, countries and

survey population. Also restricted access to internal company data, issues of

data sensitivity from interviews and heterogeneous sustainability perception by

interviewees are likely to have influenced qualitative results. Similarly,

quantitative findings may not be representative for the entire population.

These aspects are discussed in the respective sections later.

Chapter eight has potentially the highest degree of subjectivity as research is

interlinked and summarized. Nevertheless, all conclusions are backed by

results from the literature review or the empirical investigation.

These limitations have certainly influenced research but it is up to the reader to

judge their actual impact on results.

Concluding remarks of chapter one

The author concludes that research for the dissertation "Corporate Sustainability.

Company Strategies and Consumers" is based on a specific research problem as

defined by research questions and objectives, provides a relevant contribution to

academics and professionals, applies a mixed methodology approach, follows a

structured research process and suffers from some limitations.

Specifically, the dissertation can be characterized as

...exploring corporate sustainability from company and consumer viewpoints.



...applying the concepts corporate sustainability, stakeholder theory, consumerism

and strategic management as theoretical guidelines.

...combining qualitative and quantitative methods in the research process.

...investigating companies of the food and beverages industry and consumers from

Austria, Germany, Switzerland and the United States.

The following chapters provide the reader with the literature review (chapters two,

three and four), research methodology (chapter five), empirical findings (chapters six

and seven) and the conclusion (chapter eight). Reference to the sources accessed is

given in the bibliography and additional relevant background to the research in the

appendix. For details on the author, a CV is attached at the end.



2 Exploring Concepts of Sustainability

In the following section4, selected concepts regarding long-term orientation, ethical

business conduct, the public role of corporations and a firm’s social commitments are

discussed. Although these concepts may involve different aspects of business

activity, important linkages exist between them. Finally, corporate sustainability is

presented as the most integrative perspective for managing contemporary

companies’ main areas of responsibility.

2.1 Overview on selected concepts

2.1.1 Sustainable development

One of the earliest descriptions of sustainability comes from forestry: The

"sustainable yield" by Carlowitz (1713) proposes to "harvest a forest resources such

that the harvest rate can be maintained indefinitely" (Brander 2007: 8). For the 20th

century, three stages in the process of knowledge formation on sustainable

development can be differentiated: conceptualization (1964-1972), policy promotion

(1970-1987), and institutionalization (1972-1992). In the 1960s, the relationship

between the environment and human development of central interest.

Environmentalists developed a vision of the interdependence of our quality of life and

the sustainability of ecosystems on our planet. They suggested the goal should be to

"safeguard the planet's ecosystem by regulating the commercial use of natural

resources from an inter-generational ethic". Considerable interaction among leading

thinkers in the field then lead to the formulation of working principles and practical

knowledge on sustainable development. In the 1970s, discussion of the new

paradigm became more widespread. Activism promoted debates in the media,

lobbying of governments and further social mobilization. Finally, international

institutions also began to play a more active role in supporting the idea of

sustainability from the mid-1970s. A number of conferences were held and working

groups initiated. One of the most often quoted definitions of sustainability originates

from this period of institutionalization (Pumar 2005: 64-74). In the 1987-report, “Our

common future”, by the World Commission on Environment and Development,

4 Discussion of these concepts supports the understanding of the empirical chapter six, which in-

cludes the comparison of the corporate sustainability strategies of three international companies and the environmental and social activities of an Austrian subsidiary. In addition, in the assessment of consumer awareness of corporate responsibilities (chapter seven), and the overview on these con-cepts is also relevant.



sustainable development is defined as "development that meets the needs of the

present without compromising the ability of future generations to meet their own

needs“ (United Nations 1987: 1). The definition implies that economic sustainability

alone is not enough; environmental and social sustainability must be considered as

well (Banerjee 2002: 106).

After the publication of the report, numerous alternative definitions of sustainable

development were formulated5. They were characterized by a diversity of focus,

interdependencies and objectives. Nevertheless, five common components could be

identified in the definition of sustainable development: inclusiveness, connectivity,

equity, prudence and security. 'Inclusiveness' refers to incorporating many factors in

long-term human development such as population change, economic growth or

technological innovation. 'Connectivity' addresses the interdependencies of

ecological, social and economic challenges. The next aspect, 'equity', addresses fair

distribution of resources both within and between generations. 'Prudence' can be

described as "keeping the scale and impact of human activities within regenerative

and carrying capacities". Finally, 'security' requires the inclusion of some safety

margins to ensure quality of life now and in the future. On this basis, the authors

define sustainable development as "a process of achieving human development in an

inclusive, connected, equitable, prudent, and secure manner" (Gladwin, Kennelly,

and Krause 1995: 876-880).

Three approaches to sustainability will be briefly mentioned: the overpopulation

school of thought, environmental degradation and resource depletion, and the "limits

to growth" debate. First, the focus on overpopulation goes back to Malthus in the late

18th century, who expressed concern that an (at best arithmetically increasing) food

supply could not cope with a (geometrically) growing population. The topic appears to

have been particularly popular in academic and public debate in the 1960s but has

lost momentum since. Second, environmental degradation has been noted

particularly in the form of air and water pollution, and in depletion, for example, of

forests and oil reserves. Both aspects are now covered in the economic fields

'environmental economics' and 'resource economics'. Third, discussion of the "limits

to growth model" was stimulated by Meadows in the 1970s. This predicts that "if the

present growth trends [...] continue unchanged [...] the most probable result will be a 5 The author provides an overview on "representative conceptions of sustainable development",

which are omitted here for reasons of brevity.



sudden and uncontrollable decline in both population and industrial capacity".

Despite considerable controversy, ecological modeling evolved as a "serious field of

study" (Brander 2007: 5-8).

In the last decades, government leaders around the world have been especially

challenged in ensuring economic development that does not harm the natural

environment. Most pressure is put on the earth’s resource base by three factors:

growing populations in emerging economies, an increasing number of very poor

people, and the rapid industrialization of many developing nations (Lawrence, Weber,

and Post 2005: 213-215).

Sustainable development originally started as an environmental approach. Long-

term growth was primarily viewed from a macroeconomic perspective. Later, it was

extended to encompass economic and social considerations, and the search for

development models balancing intra-generational and inter-generational needs

(Crane and Matten 2007: 22).

2.1.2 Business ethics

Ethics is referred to as "the systematic study of how to behave in the right way and

how to judge what is right" (Wetherly and Otter 2008: 192). Business ethics can be

described as “the application of general ethical ideas to business behavior”. This im-

plies addressing issues of right or wrong in moral rather than commercial, strategic or

financial terms (Lawrence, Weber, and Post 2005: 82).

Ethics in general or business ethics in particular are difficult to define as they de-

pend on an underlying set of values. These are framed by individual, historical, cul-

tural, social or other factors. In an international setting, it may thus often be difficult to

reach a common understanding. Ultimately, a business organization needs to define

some "formal business code". As dilemmas arise, if moral imperatives are incompati-

ble in certain situations, some kind of hierarchy of principles must be established

(Welford 1995: 29-31). The values a business may be expected to espouse reflect

the surrounding society's norms and expectations. However some core values likely

to arise in most contexts include honesty, trust, respect and fairness (Lasserre 2007:

403).

An important aspect is the relationship between ethics and the law. The latter is

defined as “an institutionalization or codification of ethics into specific social rules,

regulations and proscriptions”. In most cases, these domains overlap, but sometimes



they do not. For example, it cannot be assumed that plant managers would take full

economic advantage of apparently weak environmental legislation if they were con-

fronted with actual degradation of local ecosystems. In contrast, there are provisions

in law which have no ethical basis such as driving on a certain side of the road. Thus

business ethics may be important in morally challenging areas that are not explicitly

covered by the law (Crane and Matten 2007: 7).

Ethical problems may arise in business for several identifiable reasons. First,

managers may aim only for personal gain and put their own interests above those of

others. Second, exclusive concentration on profit growth may lead to neglect of as-

pects important to other stakeholders. Third, business goals may conflict with individ-

ual personal values. Fourth, company interests create cross-cultural conflicts if they

contradict local tradition within a certain country (Lawrence, Weber, and Post 2005:

92-94).

2.1.3 Corporate citizenship

Historically, the corporation was originally intended to serve a public purpose. In

the 18th century, business firms were created by the government, which oversaw

their operations and held them directly accountable if society was not served proper-

ly. However, in the late 19th century, corporations were granted the same privileges

as other (natural) individuals and became legally independent entities. Since then,

there has been lively discussion on the rights and responsibilities of businesses to-

wards society because of their citizenship status (Waddell 2000: 108-109). Corporate

citizenship is thus not a new term. Nevertheless, its popularity and reference to it in

discussion increased considerably in the late 1990s. It can be seen as "not a new

concept, but one whose time has come" (Altman and Vidaver-Cohen 2000: 1).

Currently, three perspectives on corporate citizenship can be differentiated: the

"limited view", the "equivalent view", and the "extended view". First, the limited view

has a rather narrow scope and is rooted in voluntary philanthropy. It focuses on se-

lected projects with restrictions in time contributed, partners and the corporation’s

own involvement. Main stakeholders include local communities and employees. It is

grounded morally in the concept of reciprocity, or giving something back. Second, the

equivalent view resembles the corporate social responsibility approach, which is dis-

cussed later in this chapter. Corporate activities target a broad range of stakeholders

out of economic, legal, ethical and philanthropic motives. Recognizing a duty to be



responsible, the company aims at avoiding harms to society. Third, in the extended

view, corporate citizenship describes a firm's social, political and civil rights. In addi-

tion, the emerging role of corporations in administering these rights for individuals is

considered. As such, stakeholders now involve a broad range of (natural) citizens

and even society in general. The basic drive is rooted in political participation as a

result of shifts in power towards businesses (Matten, Crane and Chapple 2003: 109-

115).

There is criticism that the limited and equivalent views do not really add any con-

ceptual aspects6. They appear to be just a new expression for existing ideas on rela-

tions between business and society. However, the extended view stresses the

emerging political role of a firm. Being rather new, it is not yet very prevalent in aca-

demic or managerial discussions (Crane and Matten 2007: 78-79).

In common usage, the term is applied to the shift in perspective from business-to-

business to business-to-society relations, especially with regard to addressing social

issues (Crane and Matten 2007: 70). The approach further includes the aspect of

“collaborative partnerships” with various stakeholder groups aiming at “better manag-

ing both social and financial performance” (Lawrence, Weber, and Post 2005: 64).

Another important characteristic is the notion of "management as public work".

Post (2002: 143-148) refuses the separation of the private (i.e. a single firm's busi-

ness) and public (i.e. citizenship for the common good) spheres. These two are too

much interlinked and affect each other considerably. In this respect, the author refers

to stakeholder management as a means of operationalizing responsibilities towards

the public. On a global level, acceptance of an active citizenship role is likely to be-

come even more crucial in the near future. Considering the increase in the number,

size, influence and impact of large international corporations, public concern is also

on the rise. "Social legitimacy" becomes key to long term business viability. To be

issued such a "social license to operate" by the public, corporations need to assume

active responsibilities in communities.

2.1.4 Corporate social responsibility

Corporate social responsibility (CSR) describes a firm's social obligations to the

general public at large. In fact, it can be defined as a business approach that “en-

6 For example, Carroll (1998: 1-2) stresses that corporate citizenship is only an alternative term for

his corporate social responsibility concept proposed earlier.



compasses the economic, legal, ethical, and philanthropic expectations placed on

organizations by society at a given point in time” (Carrol and Buchholtz 2000: 35).

The four levels of involvement are illu-

strated in the widely accepted model of

corporate social responsibility by Carrol

(1991: 42), which is given in the adjacent

figure (Exhibit 5). First, a company needs

to fulfill its economic responsibility to gen-

erate continual profit for its owners.

Second, all activities must be in accor-

dance with the law. The next level of

progress requires that ethical issues be adequately considered by the business lead-

ers responsible. Finally, a company should make charitable contributions to society.

The whole concept is dominated by the social dimension.

The concept of corporate social responsibility is rooted in two principles: the chari-

ty principle and the stewardship principle. First, charity implies that the more affluent

members of society are morally obliged to donate to people in need. Such conduct

actually has a long tradition in all forms of religious belief. Originally, contributions

were usually made by wealthy individuals and influential families. However, in the

early 20th century, business firms became more and more involved in providing vo-

luntary aid to society's needy persons or groups. Charity from corporations is also

referred to as "corporate giving" or "corporate philanthropy". Second, stewardship

requires corporate managers to act as stewards or trustees of the public. This means

that there is an obligation in doing business to consider the interests of all who are

affected by business decisions and policies. Acknowledging interdependence of

business and society is crucial in this respect. As executives regularly have influence

over the use of significant resources, they need to consider carefully the conse-

quences of their decisions for the social good (Lawrence, Weber, and Post 2005: 48-

49).

With regard to the historical evolution of the concept of corporate social responsi-

bility, Carroll (1999: 268-292) identifies several foci in the various phases. Although

some literature on the topic can be found from the 1930s and 1940s, the modern era

of CSR starts around the 1950s. At this time, the term social responsibility became

more common. Bowen provides an important initial definition in 1953: "social respon-

Exhibit 5 – CSR pyramid (Carrol 1991: 42)

Economic

Legal

Ethical

Philan-thropic



sibilities of businessmen refer to the obligations [...] to make those decisions [...]

which are desirable in terms of the objectives and values of our society". The 1960s

and 1970s are marked by a number of academic and practical contributions to defini-

tions of CSR and a considerable proliferation of the respective literature. In the

1980s, the focus shifts from defining to researching the initial concept, which leads to

alternative conceptualizations and also uncovers further themes. Examples include

corporate social responsiveness, corporate social performance, and public policy.

Several authors also establish linkages with or get involved in ethical and moral dis-

cussions and the interests of parties affected by firms' operations. The trend to ex-

tend and merge the basic ideas continues in the 1990s. In fact, Carrol points out that

"more than anything else, the CSR concept served as the base point, building block,

or point-of-departure for other related concepts and themes, many of which em-

braced CSR-thinking and were quite compatible with it". Apparently, themes of social

and corporate responsibility contributed to the evolution of business ethics theory,

corporate citizenship and stakeholder theory.

2.2 Defining corporate sustainability

The discussion now focuses on “corporate sustainability”. As will be demonstrated,

this approach presently constitutes the most integrated way of managing a

company’s responsibilities.

In corporate sustainability, companies do not only pursue growth and profitability

goals but also consider protection of the natural environment and responsibilities

towards society. One may refer to it as “a new and evolving corporate management

paradigm” (Wilson 2003: 2-5). In addition, value creation is not meant to satisfy

exclusively short-term interests of business owners but to generate benefits for all

stakeholders in a lasting manner (Borghesi and Vercelli 2008: 153).

Viewed from a historical perspective, for a considerable period before the 1990s

sustainability research in corporations focused on the environment (Sharma and

Ruud 2003: 207). The emphasis changed and developed from “pollution denial”

(1945-60s), to compliance with “end-of-pipe regulation” (1970s-80s), to “greening

proactively” in the organization (mid-1980s-90s). Since the mid-1990s, the focus has

been on “beyond greening”, in effect developing broader interpretations of corporate

sustainability and incorporating social dimensions (Mirchandani and Ikerd 2008: 44).

Against this background, businesses may still attach different associations to



either part of the term "corporate sustainability". For example, people who focus on

‘sustainable development’ still tend to emphasize ecological aspects and those

investigating ‘corporate social responsibility’ rather on social and ethical issues. Both

dimensions are nevertheless within the responsibilities of corporations (Sharma and

Ruud 2003: 205-206). Also, the geographical location of businesses may play a role.

In general, the use of the term corporate sustainability is more common in Europe7,

as environmental concerns took on greater importance earlier in many densely

populated areas. On the other hand, CSR is more commonly referred to in the United

States. This might be rooted in earlier development of philanthropy, where the most

successful businesses traditionally donated some of their profit to the common good

(The Economist Intelligence Unit 2008: 8).

Given the fact that literature does not provide a single definition for corporate

sustainability, two conceptualizations8 are presented in the figure below (Exhibit 6).

They both encompass the same principal ideas but differ slightly (Van Marrewijk

2003: 95, 101-102): The first framework suggests a hierarchical relationship with

“corporate sustainability as the ultimate goal and CSR put at an intermediate stage

where companies try to balance the triple bottom line”. In the second model, the

three aspects of sustainability are seen similarly as direct “corporate responsibilities”,

but are now embedded in the broader vision of a sustainable corporation.

Exhibit 6 - Conceptualizations of corporate sustainability (Van Marrewijk 2003: 95, 101-102)

As such, the concept of corporate sustainability aims at providing a new,

consolidated approach. It integrates several specific viewpoints and tries to establish

business principles that enjoy widespread approval in society and are beneficial to

7 However, the European Commission surprisingly uses "corporate social responsibility (CSR)" as

its official term to describe corporate approaches to responsible business conduct within its overall sustainable development initiative (http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-social-responsibility/index_en.htm. Accessed on 10 September 2010).

8 The two conceptualizations are proposals presented at the Corporate Sustainability Conference 2002 and match the researcher's own understanding derived from other literature sources.

CorporateSustainability

Prof it People Planet

Corporate Social ResponsibilitySocial

Economic

Environment



the planet (Hitchcock 2007: 125). Similarly, there seems to be some recent initiatives

to also integrate other concepts such as corporate social responsibility into existing

sustainability paradigms (Panapanaan 2003: 134). However, scholars and

practitioners often use ‘corporate sustainability’ incoherently and also incorrectly.

Sometimes it is applied in conjunction with and in some cases as a synonym for

describing related ideas (Wilson 2003: 1).

Concluding remarks of chapter two

The author concludes that each of the four concepts presented earlier in this

chapter has a specific connection to, and influence on the broader and more holistic

meaning of 'corporate sustainability':

‘Sustainable development’ emphasizes long-term perspectives and seeks a

balance between the three dimensions (economy, ecology, society), but

environmental and macroeconomic considerations are given marginally greater

emphasis.

‘Business ethics’ highlights moral questions and reveals tensions between

business and government over regulatory issues.

‘Corporate citizenship’ focuses on the rights and responsibilities of companies

compared to “natural citizens” by stressing the public role of corporations in the world

and influential impacts on stakeholders.

Often used synonymously, the term ‘corporate social responsibility’ has a strong

social focus as a result of its origin in philanthropy and stewardship.

The author defines 'corporate sustainability" as a business approach that aims to

balance economic, ecological and social aspects for long-term success of the

corporation in the marketplace and favorable effects for stakeholders.

In this dissertation, ‘corporate sustainability’ is chosen as the overarching

framework applied. Therefore, this term is used predominantly. Occasionally,

‘corporate responsibility’ is applied synonymously, though to a lesser extent because

of its rather general nature and lack of long-term perspectives. The use of ‘corporate

social responsibility’ is intentionally limited only to those contexts in which all three

sustainability dimensions are clearly referred to.



3 Connecting the Firm in Society

The following chapter9 looks first at the connection of the business sphere to other

sectors in general. Then, stakeholder theory as an important concept for describing

the relationship of the firm to other parties is discussed. Finally, some consideration

is given to consumers' influence on companies through sustainable consumption.

3.1 Integrating business, government, and civil society

In the literature, there are widely differing conceptualizations of the firm. In fact,

every theory looks at the business entity from a specific angle. Generally, economists

are most interested in explaining the existence of firms. Those interested in business

strategy, in contrast, shift their focus rather to analyzing determinants of overall

corporate performance (Becerra 2009: 11-22, 56-75). As such, there exist economic,

managerial, behavioral, resource-based, social, institutional and several other

theoretical models (Cashian 2007: 19-27, 40-56; Maxwell 2006: 94-125).

The changing mindset of citizens and corporate representatives favors the discus-

sion of more integrated concepts of the role of the firm in society. In a systems

theory-based approach, business and society are regarded as an interactive social

system. Corporations are integrated in a broader structure (society), within which

constant exchanges take place. There exist no clear boundaries between the two

entities and so they cannot be treated separately from one another. In fact, both in-

fluence each other and are dependent on the other’s existence (Lawrence, Weber,

and Post 2005: 4-5).

However, this two-entity-perspective has been replaced by the contemporary no-

tion of a three-sector-world. It also includes the state as an influential sector (Crane

and Matten 2007: 404). The so-called "three-sector-framework" provides some con-

ceptual guidance (Exhibit 7) by integrating the market, the state and the civil sector. It

should be noted that these sectors are to be interpreted not in an industrial but an

organizational sense. Each of them has very different primary concerns and charac-

9 Discussion of the integration of the business world with other sectors and principals of stakehold-

er theory support empirical analyses of the connectedness of the firm in chapter six. In addition, the case study on the Austrian subsidiary describes in detail activities that originally do not belong to the business sector, but in which the firm engages together with stakeholder partners because of corpo-rate responsibility. Understanding of the stakeholder group "consumers" in general, their expectations towards companies, activism in the form of consumerism, and some background about purchasing behavior constitute part of the theoretical basis for the empirical consumer investigation in chapter seven.



teristics (Waddell 2000: 111-114):

Businesses form the economic sector,

in which generating profits for owners

is the goal. Globalization has in-

creased the power of large multina-

tionals in recent decades.

The government expresses the sove-

reignty of the nation state by setting

and enforcing laws. Driven by political

interests, its practitioners are finally re-

sponsible to their voters.

Civil society generally consists of civil society organizations (CSOs), which are

interested in promoting social goals through mobilization. Operating predomi-

nantly as non-profit organizations, they aim at providing a counterbalance to

businesses and the state.

An overview on further distinctive characteristics of the sectors is provided in the

table below (Exhibit 8). Because of the differences, each sector would strive for its

own predominance were it to act in isolation. Businesses, for example, aim at in-

creasing efficiency and returns for their owners, which, under “optimal” circums-

tances, leads to a monopoly that generates wealth only for a few. The government is

able to set and enforce compulsory rules, which, if unchecked, may be repressive.

Community-based organizations may react quickly because of good mobilization ca-

pabilities, but often have rather different viewpoints as a result of fragmentation.

Consequently, there is a need to share competences between the sectors in order to

achieve best outcomes (Crane and Matten 2007: 404-405).

Market sector State sector Civil sector

Party Businesses Government Community-based organiza-tions

Primary interest Economic Political Social

Primary control agents Owners Voters Communities

Goods produced Private Public Group

Core competences include Production of goods and services

Enforcement of State-wide standards

Mobilization of communities

Primary resources include Financial capital Law / police Voluntary energy

Primary weaknesses in-clude

Monopoly Rigidity Fragmentation

Exhibit 7 - Three-sector-framework (Waddell2000: 112)

Government“The state”

Civil Society“CSOs”

Business“The market”



Dominant organizational form

For-profit Governmental Non-profit

Exhibit 8 - Characteristics of the three organizational sectors (Waddell 2000: 113)

Reece (2001: 651-657) provides some background on the evolution of these three

strongly interlinked sectors:

The economic society has its origins in ancient traders. They generated taxes,

which supported government in building infrastructure and providing public so-

cial services. Over time, merchants aligned with producers of goods to consti-

tute the commercial sector. Economic development generally contributed to

improving the quality of life, but also led to negative social developments such

as considerable income disparities and poverty. On an international level, at

the present time, economic parties such as corporations, banks and other fi-

nancial institutions are closely connected property holders. The sector has se-

parated itself from its origins in civil society and, viewed globally, is less under

the control of the nation state than, for instance, during the period of mercantil-

ism. The nation state still exerts comparatively weak influence in the form of

fiscal, monetary, trade or industrial policies. In contrast, civil actors exert an

ever increasing pressure on businesses to counteract commercial lack of re-

straint.

The political society is considered the oldest form of society. It was originally

limited to a governing elite that ruled a mass of subordinates. Absolute power

declined with the emergence of the modern nation state. Since then, political

leaders govern only with the formal consent of the governed. Currently, there

are about 200 nations in the world. Based on the sovereignty concept, each

country has to be officially recognized by others to be able to legitimately exert

absolute power in its territory. Two functions are to be fulfilled by the political

leadership: internal order and external safety. In today's interconnected world,

numerous bonds with other nation states exist at the international and supra-

national level to tackle common challenges. However, globalization has con-

tributed to a power shift from political representatives to actors of economic

and civil society.

The civil sector is constituted by all citizens and their organizations. Originally,

it aimed at limiting the political power of the state by striving, for example, for

institutional pluralism. The Universal Declaration of Human Rights, which was



adopted by the United Nations in 1948, marks a milestone in the sector's evo-

lution. Since then, activism in the interests of all mankind has increased inter-

nationally, disseminating the concept of "world citizenship". Normally, a specif-

ic cause such as environmental or human rights' concerns unites otherwise ra-

ther disparate individuals from different origins or backgrounds. Today, global

civil society is considered sufficiently strong to effectively confront businesses

and states around the world.

A survey has revealed that people trust the three sectors to "do the right thing" to

differing degrees on either side of the Atlantic. In the United States, business domi-

nates with 44 percent, leaving NGOs (36 percent) and government (27 percent)

clearly behind. In contrast, Europeans consider the civil sector (48 percent) the most

trustworthy as compared to government with 36 percent and business with 32 per-

cent (Wootliff and Deri 2001: 161).

The three-sector-perspective (market-state-civil society) gave an overview of the

connections between business and other sectors on the macroeconomic level. In the

following section, stakeholder theory is used to focus on the connections between

business and other actors from a more microeconomic point of view.

3.2 Introduction to stakeholder theory

Stakeholder theory10 is connected to some concepts discussed earlier. In fact, the

approaches of corporate social responsibility and corporate sustainability focus on

reviewing and interpreting the responsibilities of the corporation itself. Stakeholder

theory acknowledges these responsibilities, but rather investigates the connections to

the several groups to which the firm is accountable (Crane and Matten 2007: 57).

The theory can thus be regarded as a means of "operationalization of CSR". It

contributes to indentifying the relevant parties and prioritizing their individual

influence on corporate decisions. Basically, the stakeholder approach is a "necessary

but not sufficient condition for social responsibility" (Matten, Crane, and Chapple

10 In this section, the stakeholder approach is presented as a theory that describes the connected-

ness of the firm in a network of other parties on a microeconomic level. Afterwards, one particularly important party, consumers, is discussed in detail. Based on these insights, subchapter 4.2.2 focuses on the corporate strategy perspective of strategic stakeholder management, i.e. how to effectively build, maintain and influence the company's relationships in the long-term.



2003: 110-111). The importance of the concept has evolved considerably since the

1990s, when it described "any neglected group affected by a corporation". Today,

stakeholder theory can be identified as "one of a tiny handful of recognized models

for interpreting corporate responsibility" (Donaldson 2002: 107). What is more, the

stakeholder approach actually provides an instrument to describe sustainable

business models based on microeconomic principles within "the macroeconomic

theory of sustainable development" (Borghesi and Vercelli 2008: 164).

In contrast to ownership theory (also property, finance or shareholder theory), the

purpose of the firm in stakeholder theory is not only rooted in maximizing returns for

its owners, but in also generating value for society as a whole. Despite the fact that

profits are a necessity for business survival, corporations exist to strive for much

broader goals and obligations, such as satisfying the economic interests of multiple

parties (Lawrence, Weber, and Post 2005: 5-6).

A very frequently used stakeholder definition comes from Freeman (1984: 46),

who states as follows: "A stakeholder in an organization is (by definition) any group

or individual who can affect or is affected by the achievement of the organization’s

objectives". In the literature, a number of authors define stakeholders slightly diffe-

rently (Crane and Matten 2007: 58) as some examples11 demonstrate: "those groups

without whose support the organization would cease to exist" (Stanford memo 1963),

"benefit from or are harmed by, and whose rights are violated or respected by, corpo-

rate actions" (Evan and Freeman 1993), or "have, or claim, ownership, rights, or in-

terests in a corporation and its activities" (Hill and Jones 1992).

An overview of the literature reveals that generally a broad range of aspects is

covered when referring to stakeholders. Stoney and Winstanley (2001: 618-622)

provide a classification of various interpretations, conceptualizations and

perspectives. In fact, contributions are categorized along five continuums, with two

distinct poles. The first continuum depicts authors in a left-right political spectrum

ranging from a Marxist/Radical view (i.e. proponents of a dualistic model of society

that rejects stakeholding) over Pluralist (i.e. supporters of accommodating multiple

interests) to a Unitarist/Neo-liberal approach (i.e. advocating the primacy of

shareholders instead). Freeman (1984), who, as mentioned earlier, provided one of

11 More extensive lists can be found in the literature such as the chronological overview by Mitchell,

Agle, and Wood (1997: 858), who provide nearly thirty different definitions from 1963 to 1995.



the most popular stakeholder definitions, is, for example12, positioned in the middle,

as he perceives organizations and society as having competing interests but as

capable of working together in wealth creation. The second continuum investigates

the purpose of the stakeholder model ranging from analysis (i.e. being a useful

research tool) on the left to reform (i.e. as a means for corporate reform or societal

change) on the right. Using Freeman (1984) again for illustration, this writer's

contribution occupies a position to the center of the continuum with a tendency to

proposing reforms. The third continuum clusters the literature according to the motive

of stakeholder engagement, which can vary from intrinsic (i.e. being "good in itself")

to instrumental (i.e. "means to an end"). Freeman (1984) can be found in the middle

of the scale with a slight rightwards orientation as the author favors the idea of

improved corporate performance over pure philosophical concerns. The fourth

continuum lists various levels at which stakeholder principles need to be established

to be effective. These include "individual rights", "corporate governance of an

organization", "government policy", and "international regulation". As Freeman (1984)

strongly advocates the grounding of stakeholder rights at the individual level, he has

a position on the far left. The fifth continuum distinguishes various degrees of

enforcement of the stakeholder principle, which range from voluntarism (i.e. in the

form of philosophy or ethos) to coercion (i.e. the legal entrenchment of stakeholder

rights). Freeman (1984) is a proponent of the latter. Overall, the authors suggest that

their framework contributed to comparing and differentiating other writers' individual

contributions. In this respect, ongoing debate on the concept may be simplified.

The very core of stakeholder theory, however, has three characteristic traits which

are distinct but interrelated. There exist normative, instrumental, and descriptive

theoretical groundings (Donaldson and Preston 1995: 69-71):

Normative: the theory provides an interpretation of the overall function of the

firm with regard to the external parties affected. Among others, it raises moral

or philosophical claims to guide corporate operations and management.

Instrumental: the theory is used as an instrument to align the handling of vari-

ous stakeholder groups with the achievement of corporate goals such as prof-

itability or growth. Adherence to stakeholder principles and practices is consi-

dered to provide better results than alternative management approaches. 12 With regard to brevity, only one writer out of many is given as illustration. For a more indepth lite-

rature overview, the reader is referred to the original source.



Descriptive: the theory is applied to describe and explain characteristics of

companies. It is used, for instance, to describe the nature of the firm, mana-

gerial views in general on how to manage a business and the interests of vari-

ous parties in commercial interaction.

In a number of sources, the perspectives of stakeholder theory are interlinked with

or without explicit consideration. The theory can thus be considered as a framework

that provides a "three-in-one" approach. Donaldson and Preston (1995: 72,74)

suggest that the three aspects are nested within each other, which can be illustrated

in the form of concentric circles: the external shell is descriptive, the middle-layer is

instrumental and the core is normative. On the outside, the theory describes

relationships with other parties. At the center, corporate conduct is defined by

intrinsic values and norms. Operational practices are the intermediate instrument, i.e.

if stakeholders are engaged in a certain way, effects will be feasible in the external

world. As such the theory can be justified because it provides a combination of

"descriptive accuracy, instrumental power, and normative validity" (Donaldson and

Preston 1995: 65).

Based on these three traits, Lawrence, Weber, and Post (2005: 6-7) further

elaborate advantages in the application of stakeholder theory: following the

normative argument first, companies are simply obliged to consider their impacts on

other parties. This is especially relevant given the great risk resulting from the power

large enterprises wield and their consumption of resources. Given the complexity of

the processes involved, the theory provides some useful guidance. A practical

instrument is required to actively managing a firm's connections in the long-term.

Several sources consider the stakeholder approach very appropriate in this respect.

According to the descriptive argument, a company represents an entity that is

interlinked with many different parties. By the use of stakeholder management

techniques, the various viewpoints and interests can be comprehensively structured.

In contrast, stakeholder theory has also encountered criticism. A very direct

attack13 was made by Sternberg (1997: 9), who proposes that "stakeholder theory is

both misguided and mistaken" and that, as a result, "stakeholder theory should ... be

firmly resisted". The author grounds her position in arguments which are mostly

rooted in the traditional shareholder orientation (Sternberg 1997: 3-9): first, the focus 13 The formulation in the original source is rather fierce, whereas the main issues in the content are

presented in a more neutral form here.



of the theory has changed from referring originally to parties without whom the firm

cannot prevail (i.e. those who affect the organization). Presently, stakeholders are

considered to be all groups that are affected by business operations. As a result,

there has been a considerable increase in their number and range of expectation.

Second, stakeholder theory is incompatible with the traditional business idea of

maximizing long-term owner value. It requires the balancing of multiple interests, but

does not specify how. In any case, the primary company objective of generating profit

cannot be pursued consistently. Third, in the notion of stakeholder theory, the

company should be accountable to all parties affected. It is argued that such a

doctrine is practically unworkable: "an organization that is accountable to everyone,

is actually accountable to no one". Apparently, there exist shortcomings in standards

or criteria to which the entity or representatives thereof are expected to adhere.

Fourth, the basic reasoning for accountability is seen as contradicting traditional

corporate accountability. This supposes that it is exclusively the right of owners to

demand accountability. Arguments such as improved performance by responding to

many parties or social contract responsibility because common goods are used, for

example, should not count. "Claims for accountability require demonstrations of

entitlement, not displays of raw power". Fifth, stakeholder theory undermines private

property as owners cannot make sure that their property is used in their personal

interest. In fact, property can be employed for the sake of multiple constituents. In

this respect, Doh and Guay (2006: 56) refer to Williamson (1993) who argues that

"the direct principal-agent relationship between owners and managers is distorted

with the addition of other stakeholders to the equation". Thus agency problems may

arise if the interests of non-shareholder stakeholders are considered in business

operations.

Additional criticism, partially overlapping with the above, is provided by Stoney and

Winstanley (2001: 605-618). The authors focus on three main areas; namely

"conceptual confusion", "pluralist assumptions" and "confusion in practice".

"Conceptual confusion" points out, for example, that interpretations and definitions of

the theory vary greatly, are often vague or carry ambiguous meanings. What is more,

authors address issues from a number of different perspectives and based on

different motives, which often renders debates difficult to follow. "Pluralist

assumptions" contain critical arguments from both a "left-wing" (i.e. Marxist ideology)

and "right-wing" (i.e. neo-liberal ideology) perspective. Although for different reasons,



both sides raise concerns about the multidimensionality of the approach. As such,

some parties' agendas can easily be hidden and are difficult to control. Particular

criticism is expressed, for example, by Milton Friedman who claims that the sole

responsibility of a business is to increase profits of its owners. In "confusion in

practice", the author notes that it is unclear, for instance, if the stakeholder concept

should be implemented voluntarily or rather by legal pressure. Moreover, there is

widespread disagreement on whether stakeholderism is more of a burden or a

competitive advantage.

In stakeholder theory, stakeholder issues need to be differentiated from social is-

sues. Corporations are only able to deal with the former as these are within their im-

mediate influence. In contrast, they cannot assume responsibility for matters that

concern society as a whole but might not be of importance to their stakeholders. The

two areas of concern differ in so far as social issues evolve over a longer time and

generally involve the public. Also, social issues are ultimately dealt with in legislation

or through regulation, whereas stakeholder issues are not. It is thus important for a

firm to select those issues that are important for those groups directly affected

(Clarkson 1995: 100-105).

The stakeholder concept distinguishes primary and secondary stakeholders (Exhibit

9). The former, which may also be called market stakeholders, are essential for the

firms’ ‘primary purpose of effectively providing goods and services’, such as

stockholders, customers, employees or suppliers. The latter, sometimes referred to

as nonmarket stakeholders, comprises, for example, local communities, the

government or media, which are all affected in one way or the other by the

corporation’s existence and operations. Firms interact with stakeholders through

market and/or non-market institutions in several constellations. It becomes evident

that businesses need to consider responsibly demands arising from their social and

natural environments (Frederick 1992: 11-15; Lawrence, Weber, and Post 2005: 8-

10).



Some brief information is now given on selected stakeholder groups. Examples for

primary stakeholders are suppliers and customers, whereas activist groups and

government represent secondary stakeholders:

Suppliers are basically interested in receiving regular orders and being remu-

nerated on time for deliveries. They may exert influence on the company by

refusing to provide the supplies requested. In addition, they can also seek col-

laboration with a firm's competitors should the business relationship be unsa-

tisfactory (Lawrence, Weber, and Post 2005: 12).

In the stakeholder relationship, ethical issues can arise in various forms such

as in the misuse of power. Either the supplier or more often the producer is

likely to acquire a dominant position, and with it the potential to misuse. How-

ever, fair interaction in mutual relations is crucial to building loyalty. Especially

in purchasing departments, preferential treatment of some suppliers can occur

if objective criteria are neglected. Additional ethical challenges may arise

through conflicts of interest of individuals inside the firm, personal monetary or

financial inducements offered by suppliers, and misconduct such as decep-

tion, nondisclosure or exploitation of information in negotiations (Crane and

Matten 2007: 361-372).

Between suppliers and producers, the relationship has changed from an "ad-

versarial" to an "obligational" one. In the former, a short-term, profit-

maximization vision prevailed in which upstream parties could be easily re-

placed because of their number, and interaction focused on contractual terms

such as price, quality, and quantity. In contrast today, more demands ("obliga-

Customers Retailers

Shareholders

Employees Suppliers

Creditors

Business groups

Media

Civil society organizations

Government Communities

General public

Firm

Exhibit 9 - Stakeholder groups (Lawrence, Weber, and Post 2005: 8-10)



tions") are made on the supplier-producer interaction. In a long-term partner-

ship approach, both parties consider themselves collaborators that share in-

formation, jointly engage in issues, and align business goals. Mutual trust is of

the essence (Duran and Sanchez 1999: 273-275)

Customers expect a fair exchange in the business transaction: the money

spent has to correspond with the value and quality of the goods or services

consumed. In the marketplace, their power can be most directly expressed in

economic terms. Companies which do not satisfy product / service or quality

expectations can be boycotted and punished monetarily by switching to com-

petitors (Lawrence, Weber, and Post 2005: 12).

Ethical issues between consumers and the company are diverse. One aspect

concerns, for example, product policy, where product safety, efficiency and

adequacy for the end-user need to be guaranteed. Another area is marketing

which involves consumer rights regarding honesty, fairness, and privacy. In

particular, misleading claims, creating artificial wants and needs, manipulating

consumption patterns, stimulating buyers' insecurity or reinforcing social ste-

reotypes are examples of ethical misconduct. Additionally, excessive, decep-

tive, or predatory pricing practices should not be used to deny consumers a

fair deal. Distribution should ensure access to products and services and ac-

cept the right to free choice without point-of-purchase manipulation. Further-

more, marketing strategy should avoid targeting vulnerable consumer seg-

ments and market research needs to respect individuals' privacy (Crane and

Matten 2007: 316-335).

The stakeholder relationship between consumers and companies has

changed over time. Originally, the notion of “caveat emptor” (i.e. "may the

buyer beware") often prevailed, which meant that the consumer’s sole right

was to refuse to purchase a product. In such a situation, producers are in a

more favorable position as they can focus purely on profit maximization and

are liable only within the law. However, societal expectations led to a shift of

power towards consumers. Leading corporations established more buyer-

friendly industry practices and complied with specific ethics codes. In addition,

competitive markets increased the power of consumers, through their own

purchasing behavior, to demand responsible business practices. The other ex-

treme in the relationship is "caveat venditor" (i.e. "may the seller beware"),



which advocates extensive consumer protection. The actual position of an in-

dividual consumer may vary on this continuum between caveat emptor and

caveat venditor. Generally though, there is a tendency in Western markets to

favor consumers in current times (Smith 1995: 88-91).

Activist groups can also be referred to as civil society organizations (CSOs) or

nongovernmental organizations (NGOs). They represent the interests of civil

society by, for example, monitoring company actions and policies. Compliance

with legal and ethical standards may be of particular interest in this respect.

They may exert influence on companies by making issues public and stimulat-

ing broad societal support. In addition, they may lobby governments on regula-

tion (Lawrence, Weber, and Post 2005: 13).

Ethical issues that may arise in dealing with CSOs include, for example, decid-

ing which groups are worthy of attention from the company and for what rea-

sons. In fact, subjective interpretations by managers determine the legitimacy

of a claim and thus the stakeholder's position. From an NGO's perspective,

ethics may play a role when deciding what tactics to use. For example, provi-

sion of misleading or exaggerated information, acceptance of violent action,

and unfounded demonstrations, boycotts or occupations cause problems. A

third aspect concerns the accountability of activist groups to their stakehold-

ers. For example, questions may be raised as to who the beneficiaries are,

what purposes are served and where responsibilities are based. Therefore,

there is considerable room for activities that might not serve the general inter-

est of society (Crane and Matten 2007: 413-428)

As discussed earlier, the civil sector has expanded in importance. CSOs basi-

cally operate in two areas and can thus be divided into "advocacy" and "ser-

vice" sector activist groups. The first type engages in promoting social, politi-

cal, economic or other interests by a variety of techniques. Service-oriented

groups on the other hand are involved in rendering services that are needed

by society but not provided for by public authorities. Whatever the specific fo-

cus of interest, mutually beneficial collaboration between NGOs and corpora-

tions has grown considerably in recent years. It seems that this trend contin-

ues and is likely to lead to greater frequency, intensity, and innovativeness in

collaborations in the future (Yaziji and Doh 2009: 7-9, 182).

Governments aim to stimulate economic development and contribute to im-



provements in the social situation of the people. Their primary source of reve-

nue is taxes, which businesses have to pay. Power is rooted in the regulatory

and legal authority. Licenses and permits are a means of allowing corporate

operations (Lawrence, Weber, and Post 2005: 13).

Ethical issues arise in the relationship between businesses and governments

mostly because of too close and friendly interaction. As a result, the govern-

ment's role of protecting the public interest may be put at risk. Companies ac-

tively seek to influence government decision-makers by lobbying and through

party financing. Whereas in the former, provision of information and advocacy

are the focus, the latter involves direct payments to support politicians' posi-

tions on certain issues. The financial involvement of businesses is morally

questionable if individual public officials are targeted directly in the form of cor-

ruption. With increasing privatization and deregulation, the influence of the pri-

vate sector also grows (Crane and Matten 2007: 463-477).

Businesses operate under a mix of statutory regulation (i.e. regulation by laws)

and self regulation (i.e. voluntary regulation by firms). In the latter, they nor-

mally work together at an industry level to initiate certain standards. This is the

more cost-effective and desirable form, but has potential disadvantages un-

less it is properly checked. Collusive practices can occur and any claims made

by the company remain unsubstantiated. Certain characteristics of industry

are the main reasons for self regulation. These are, for example, strong com-

petition, well-defined products, a high degree of publicly available information

and straightforward hierarchical company structures. Often, there is some ba-

sic statutory regulation and further self regulation built on it (Doyle 1999: 35-

36).

Having described aspects of the connectedness of the firm in a network of other

parties on microeconomic level, the stakeholder group "consumers" will now be dealt

with in more detail.



3.3 Consumers as stakeholders and ethical consumption

In the following subchapter, ethical consumption is presented as a form of support

for sustainable corporate conduct by the important stakeholder group: consumers14.

Also, a behavioral model is introduced to exemplify responsible purchasing.

3.3.1 Sustainability and consumerism

Stakeholder activism plays an influential role in supporting corporate sustainability.

Consumers, for example, can confront the firm on sensitive environmental or social

issues themselves or via third parties. They are considered especially important be-

cause the most direct influence they exert is through shifting demand (Borghesi and

Vercelli 2008: 168-169). This basic idea is reflected in the definition of ethical con-

sumption, which is "the conscious and deliberate choice to make certain consumption

choices due to personal moral beliefs and values” (Crane and Matten 2007: 341).

With regard to businesses, it translates as "supporting the 'good' companies and

products [...] and withdrawing support from the 'bad' ones" (Ethicalconsumer 2010).

Other expressions can be used fairly synonymously, such as ethical consumerism, or

in a broader context, consumer activism (Auger and Devinney 2007: 362). If single

consumers organize and take collective action, the term "consumer movement" is

used (Lawrence, Weber, and Post 2005: 313).

Ethical consumption is effected by "concerned consumers". In recent literature,

there has been no universally accepted term for this type. Some examples illustrate

the breadth of the range, including "responsible consumer", "socially conscious con-

sumer", "ecologically/environmentally concerned consumer", "humane consumer",

and "conserving consumer". The most prominent are "green consumer" and "ethical

consumer". Although these originally had different emphases, namely ecological and

social issues, there is more and more overlap. In fact, many sources refer to the "in-

extricable link [...] between environmental degeneration and fairness in world trade".

This interconnectivity of diverse concerns is expressed in parallel demand for organ-

ic, fair trade, energy efficient, renewably-sourced, recyclable and similar products

(Connolly and Shaw 2006: 355-357).

14 So far, the macroeconomic perspective of business interaction with other sectors and the micro-

economic perspective of company connectedness with other stakeholders were discussed. It is now illustrated how one particular group, consumers, can exert considerable influence on the firm. The following chapter, chapter four, will then discuss how such pressure is approached strategically by companies through corporate sustainability strategy and aspects of strategic management such as stakeholder management.



When observing current debates on ethics and consumption, two concerns can be

differentiated: "ethics of consumption" and "ethical consumption". The former refers

primarily to the overall level of available goods and services in today's market econ-

omy. With regard to worldwide resource constraints, the general idea is to reduce

consumption altogether15. An ethical challenge in this respect is how to deal with po-

verty especially in developing countries, where people suffer because of a lack of

goods. The latter, in contrast, does not require consumers to necessarily consume

less but to do so in different ways. The focus is more on the practices and patterns in

consumption that result from purchasing decisions. Consumer activism and corporate

responses deal regularly rather with this aspect (Barnett, Cafaro, and Newholm 2005:

21-23). When integrating the long-term perspective into purchasing behavior, ethical

consumption can also be referred to as "sustainable consumption". It is not only

about certain immediate values but requires the consumer to consider the conse-

quences for future generations (Heiskanen and Pantzar 1997: 410).

Historically, consumer activism is not a new phenomenon. In fact, there are four

waves that can be differentiated: "co-operative consumers", "value-for-money con-

sumers", "Naderism", and "alternative consumers". To foster understanding of the

characteristics of the present form of consumerism, a higher degree of detail is pro-

vided in the following (Lang and Gabriel 2005: 41-50):

"Co-operative consumers": The first wave started in about the middle of the

19th century in England. Monopolistic industry structures brought about exces-

sive prices and poor quality goods. As a result, members of the working-class

founded co-operatives, especially for food products. Based on mutuality, it put

consumers themselves in charge of improving their quality of life. The move-

ment proved to be a success as such societies spread quickly in other coun-

tries also and across industries. At the end of the 20th century, the importance

of co-ops was acknowledged as "one of the largest organized segments of civ-

il society" and as playing "a crucial role across a wide spectrum of human as-

piration and needs" by the United Nations. In numbers, there are currently

about 700 million people enrolled in co-ops in 100 countries. The latest gener-

15 The topic of the amount of consumption (i.e. "ethics of consumption") is addressed, for example,

in Buchholz (1998: 871-882). The author compares issues of overconsumption today with moral limits of consumption in the Protestant Ethic. Borgmann (2000: 418-422) discusses the moral complexion of materialism and raises objections to vigorous consumption. Both perspectives are not considered in more detail as the research focuses rather on ethical consumption.



ation of co-operatives was established in developed countries in recent years.

Consumers, dissatisfied with conventional market interactions and unsettled

by scandals involving international corporations, formed partnerships to jointly

ensure aspects beyond simply the price of goods, such as quality, safety, in-

formation, environmental impact and the like. In foods, for example, this lead

to increased community-related initiatives such as local farmers' markets or

organized direct farmer-consumer interaction. The movements may often

serve niche markets, but have an important impact on mainstream business. If

managed professionally, there is further potential in the social and ecological

domains for collective consumer action in the future.

"Value-for-money consumers": the second wave of consumerism emerged in

the light of the increasingly powerful corporations of the early 20th century. In

contrast to the first wave, which sought to establish alternatives to the market,

the value-for-money movement aimed at taking best advantage of the existing

market. With independent product testing on a large scale and research into

background facts, consumers structured efforts to make best possible choices

for themselves. The aim was that society should not be improved as a whole,

but that individual consumers should be empowered by information. For this

purpose, a number of consumer organizations were founded, especially from

the 1930s to the early 1970s. They regularly published magazines with prod-

uct evaluations on criteria such as safety, ease of use, price, durability and

task effectiveness. However, support for this type of consumer activism began

to decrease in the early 1990s. One possible reason is the speed of technolo-

gical change in the market, which made it harder to provide up-to-date com-

parisons of a number of slightly varied products and niche offers. Another ex-

planation can be found in large, transnational retail firms that enticed consum-

ers with considerable price reductions away from organizations offering advice

by comparing value. Third, an important drawback of the second wave of con-

sumerism is rooted in its individualist and middle-class orientation. There is lit-

tle common value orientation in the movement and a failure to deal with long-

term ecological or social issues.

"Naderism": The third wave is named after the prominent U.S. American law-

yer, Ralph Nader. Together with a number of colleagues and organizations, he

started advocating consumers' rights against corporations on a large scale, of-



ten in court, in the 1960s. The basic assumptions of this American-based

movement are that "the consumer is relatively powerless in a world dominated

by corporate giants" and "the nature of commerce is stacked against the cus-

tomer, unless regulations or standards of conduct are fought for". In contrast

to the second wave, this form of consumerism did not aim at supporting the

consumer to find the best deal in the market but to confront the market itself.

Consumer pressure is especially important to keep the state from following

businesses' interests. Therefore, the activist's role is "to confront, to expose, to

stand up for public rights, to be a citizen". On an international level, the devel-

opment of similar organizations only started slowly in the 1980s and 1990s,

mostly because of different political and legal systems. Presently, numerous

allies of the movement can be found in environmental groups, animal welfare

groups, trades unions and other consumer groups.

"Alternative consumers": the latest wave of activism began in Europe in the

mid-1970s. It was first dominated by ecological concerns. This "green consu-

merism" basically consisted of two camps: a minority of radicals and the ma-

jority of reformists. The former suggested limiting consumption per se. In con-

trast, the latter encouraged consumers to use their consumption choices to

support 'good producers'. "Consume carefully" was a popular slogan for build-

ing a better form of capitalism. For this purpose, the movement incorporated

aspects from the first and second waves as co-ops also aimed at influencing

production directly and value-for-money activists similarly monitored compa-

nies and products in specific dimension. Although considered only a tempo-

rary niche movement at first, companies responded by providing more envi-

ronmentally-friendly products and introduced environmental audits to gain

competitive advantage. In the early 1990s, green consumerism became main-

stream but environmental issues are still highly present on activists' agendas.

In the following years, alternative consumers became more and more involved

in ethical consumption as well. This means that moral dimensions such as fair

labor practices, workplace security and community impact of businesses are

also included in product choices. The fair trade movement, for example, has

had considerable success.

As shown above, consumerism is not a new movement, but has had different

priorities over time. The present form incorporates aspects from the first and second



waves, but pursues its own issues of ecology and social affairs. For the future, activ-

ists are likely to face challenges themselves in defining human progress, determining

quality of life and reevaluating wants and needs. However, "ethical consumption

maps one clear path for consumers, a route for translating consumerism into citizen-

ship" (Lang and Gabriel 2005: 51-52).

In the last twenty years, ethical consumption has evolved considerably. Several

trends have particularly influenced growth of the movement, among which a selection

is given in the following (Harrison 2005: 55-59):

Globalization of markets has reduced the ability of national governments to ef-

fectively influence corporate conduct. Citizens themselves often take the initia-

tive to fill this gap and exercise some kind of "civil regulation" of company be-

havior.

The number, size and financial power of international companies have in-

creased considerably. With high-profile brands being an important asset in

consumer markets, direct campaigning targetting these can have a strong im-

pact on corporate activities.

Single-issue pressure groups16 have proliferated to represent individuals' in-

terests, for example, in environmental and social issues. They have turned out

to be fairly successful in mobilizing others to join the cause and in achieving

concessions from corporations.

Increased choice and competition have lead to a shift of market power from

the producer towards consumers. The development of information technology

further enhanced the individual's ability to quickly gain knowledge about prod-

ucts, companies and relevant background facts.

Consumerism is operationalized by consumer buying behavior, which plays an im-

portant economic role in society. Driven by self-interest, people always aim at max-

imizing their personal utility. In purchasing decisions, they are able to express their

values and beliefs. Despite the influence of firms and governments, every individual

ultimately has the power to cast his or her economic vote. In contrast to politics,

monetary value distinguishes the importance of votes. With regard to the overall

good of society, rich consumers especially should reflect on factors beyond maximiz-

ing their individual personal utility. As such, the approach to purchasing as a form of 16 Single-issue pressure groups may also be referred to as cause groups, public interest groups,

promotional pressure groups, NGOs or expressive interest groups (Harrison 2005: 57).



voting can be seen as representing the economic aspect of consumer citizenship. A

responsible citizen considers the long term and aligns consumption with greater so-

cietal goals. However, it remains unclear how much time consumers actually take to

consider the consequences of their many buying decisions. Normative claims only

create impact if translated into actual practice (Dickinson and Carsky 2005: 25-28,

36)

Some literature even suggests the demise of political voting. Hertz (2001: 190-

192) provides evidence quoting low turnout in elections, decreasing party member-

ship and expressions of a loss of faith in politics at an international level. This trend,

observed at the turn of the millennium, seems somewhat bitter given the long strug-

gle for universal suffrage and women's right to vote. However, people appear to be

turning to economic voting instead. Companies are considered able to respond to

consumer demands much faster than politicians to their constituents. And the public

increasingly calls for broad responsibility in society to be taken over by businesses.

The author puts the recent shift as follows: "Consumer politics is the new politics, and

politicians are stepping aside to make space so that consumers can become to an

ever-greater extent agents of political change".

Among others, four benefits could emerge from educating and encouraging more

consumers to see purchasing as their economic vote: first, people would co-operate

in the marketplace and orient themselves more to higher order goals. Second, a non-

legislative alternative may arise to correct imbalances in the perceived distribution of

wealth. Third, private and public discussion could be stimulated regarding utilities of

society. Fourth, qualitative economic development is likely to be fostered since it con-

tributes to the success of those economic players that represent individuals' values

best (Dickinson and Carsky 2005: 31-32).

"Economic voting" can be pursued basically in two forms: boycotting and positive

buying. Both methods are regularly used by consumers to achieve certain social or

political goals. They can also be applied together. First, in boycotting, consumers re-

frain from purchasing a particular product or products from a certain company as a

whole. The underlying idea is that significant reductions in sales or bad publicity

created by the initiative stimulate change in corporate conduct. Second, positive buy-

ing pursues similar goals but requires consumers to consistently prefer certain prod-

ucts or products from a certain company. This form of activism is generally more fre-

quently practiced by higher income groups (Clouder and Harrison 2005: 89-90, 96-



97).

Boycotting can be motivated, for example, by the will to make a difference, seek-

ing moral self-expression, complying with social pressure, simply the ease of partici-

pation, expecting the success of the action, self-enhancement and / or specific issue-

related characteristics. It needs to be weighed against potential costs such as pro-

voking personal or social harm like job losses, doubts about the effectiveness of the

individual's contribution on the collective or the need to renounce a previously pre-

ferred good (Klein, Smith and John 2004: 92-99). Involvement in positive buying can

be rooted in similar motivations and vice-versa. Additional factors may be operative,

such as consumers' perception of being a co-creator of a certain product with the

respective responsibility for it, aspirational thoughts on the value and quality of life,

trust in the power of society or the drive of citizenship involvement (Shaw, Newholm

and Dickinson 2006: 1049-1050).

In either case, the more there is at stake for the company, in terms of direct finan-

cial losses/gains, damage/improvements to/in brand reputation, or difficul-

ties/advantages in recruitment, the faster and more complete the response usually is.

It is difficult, however, to evaluate exactly primary and secondary effects of the two

forms of economic voting. A number of successful boycotts have occurred historical-

ly, affecting various companies and industries around the world. Examples range

from improving labor practices in companies from the fashion industry in developing

countries to limiting animal testing by consumer goods producers in developed na-

tions. In positive buying, primary effects are more directly measurable as rising sales

in organic and fair trade products illustrate. The secondary impact of ethical purchas-

ing can be observed, for example, in changing practices in entire business sectors as

a result of intense consumer attention and media coverage, responses by govern-

ment regulators to legally eliminate general grievances and voluntary disclosure of

environmental and social performance by companies (Clouder and Harrison 2005:

91, 94-96, 99-100).

Whatever the form of consumer activism, it is argued that all manifestations share

some characteristics: first, consumption choices are made in an orderly and planned

manner based on information derived from consumer organizations; second, con-

sumption can be seen as a vehicle to fulfil a desire for change or a sense of mission;

third, activism requires an active struggle for certain rights; fourth, in addition to indi-

vidual actions, consumers can align themselves with others to reinforce their possible



impact; fifth, consumers need to be aware of the moral message and values ex-

pressed through consumption; sixth, consumption implies choices about the envi-

ronment or society that go beyond the good itself (Lang and Gabriel 2005: 40-41)

In contrast, the underlying reasons for getting involved can differ significantly. This

is because ethical decision-making draws on subjective norms, values and beliefs.

Whereas some moral judgments, such as protection of human life are considered

universal and enduring, ethical consumption is not. Three main reasons for such he-

terogeneity can be pointed out: first, contextual factors such as time and place de-

termine an individual's assessment of right or wrong. Half a century ago, for example,

Americans saw it as their duty to increase consumption levels at any cost to boost

economic growth after the recession. In contrast, present-day European consumers

value qualitative and sustainability issues in their purchasing behavior. Second, indi-

viduals differ considerably in their subjective views on ethics. They orient their per-

sonal judgment in the marketplace according to numerous humane, religious, envi-

ronmental or other concerns. In addition, some consumers are more reflective or

emancipated than their peers. Finally, ethical consumption can take very different

forms. It may involve explicit activism or implicit conscious purchasing. Thus in deal-

ing with ethical consumption, one needs to keep in mind contextual factors, multiplici-

ty of concerns and inconsistent actual behavior. However, there are areas of the sus-

tainability debate which concern larger parts of society or the entire public where

consistent moral judgments are arrived at (Cherrier 2005: 125-126).

Ethical consumption depends on consumer sovereignty. From an economic pers-

pective, the individual's right to free choice as a consumer is the rationale for capital-

ism. In practice, however, consumers are often limited to some degree in acting in-

dependently in the marketplace. Intervention by the state on behalf of the consumer

may sometimes be justified in the case of serious market failures (Smith 1990: 13-14,

33-34). With regard to influencing corporate conduct, the degree of autarchy is critical

to the breadth of impact of possible effects. Put simply, the greater it is, the more eth-

ical or sustainable a transaction is likely to be. Three dimensions define consumer

sovereignty: consumer capability, choice and information. Capability describes free-

dom from limitations in decision-making and can be defined by factors such as age,

education or health. Choice refers to opportunities for switching, which is defined, for

example, by the number of competitors and switching costs. Availability, quality,

comparability and complexity of information influence the degree of awareness



(Smith 1995: 91-93)

To access social or environmental information, consumers may draw on three pri-

mary sources: the government, civil society organizations and the private sector (Ber-

ry and McEachern 2005: 69-80).

First, as governments generally avoid directly intervening in the market, they

instead improve consumers ability to make their own choices, for example, via

product labeling. In this respect, the state can take several actions such as in-

troducing mandatory or voluntary schemes, harmonizing and enhancing

awareness of existing schemes or promoting private labeling initiatives inter-

nationally. In addition, labeling partnerships between corporations, consumers

and pressure groups could be fostered and public procurement policies used

to signalize support for labeling as such. However labeling may be viewed with

skepticism by the public because of issues of transparency, comprehensive-

ness and comparability.

Second, in addition to mobilizing and campaigning, civil society organizations

are involved in providing consumers with product, company and background

information. Popular formats are specific shopping and buyers' guides. Made

available both in print and online, they regularly include product tests, envi-

ronmental and social rankings, or company details and the like required for

making responsible choices. Consumers report that they generally trust these

sources, although many are often reluctant to access specific information.

Third, in the private sector, companies claiming to have adopted alternative

models actively push ecological and social facts as part of their business ap-

proach with, for example, leaflets, in-store displays or private logos. Main-

stream companies, in contrast, have long been reluctant to disclose informa-

tion. As a result of growing public interest, many now provide sustainability re-

porting, use logos or run special issue-marketing campaigns. However, con-

sumers often react with mistrust: criticism includes vague or misleading state-

ments, confusing claims or logos, or general skepticism towards the corpora-

tion.

Various studies have shown that the rise of modern technologies has greatly en-

hanced consumer awareness. In fact, enough information is often available but diffi-

culties exist in terms of quality and complexity (Berry and McEachern 2005: 83). As a

result, confusion and lack of trust are regularly reported as being considerable factors



in preventing more consumers from engaging in sustainable purchasing. Other bar-

riers remain in excessively high pricing of environmentally and socially advanced

products or in the lack of such a product offer in the marketplace at all (Pricewaterh-

ouseCoopers 2008a: 6-7).

In consumer research, sustainable consumption needs to be addressed from dif-

ferent perspectives. It would be important to consider a transdisciplinary approach to

tackle issues in an integrated manner. Instead, a considerable amount of research on

ethical consumerism investigates only individual aspects (Heiskanen and Pantzar

1997: 410-411). However, most academic and commercial sources suggest that

more and more consumers include environmental, social and other ethical issues in

their consumption choices. Nevertheless, there is some contradiction as to the impor-

tance of ethical issues in actual purchasing decisions, which seems to be consistent-

ly overstated in quantitative data. In addition, several researchers explore the willing-

ness to pay for sustainable products and assume slightly higher prices are not an

obstacle. Nevertheless, doubts on the reliability of the results is often expressed. The

sensitivity of the topic is likely to provoke socially desirable responses. Apparently,

there is also an important "attitude-behavior gap", which describes the fact that res-

ponses appear to be much more ethically favorable than actual behavior (Auger and

Devinney 2007: 362-363).

However, there have been many positive business responses to consumer activ-

ism. These include improved quality management, voluntary industry codes of con-

duct, consumer affairs departments, product recalls and others (Lawrence, Weber,

and Post 2005: 326). More details on the corporate side of sustainability will be given

in chapter four.

3.3.2 Sustainable purchasing behavior

As previously discussed, ethical consumption strongly depends on certain values

and beliefs. These form attitudes that affect purchasing decisions. In the following, a

brief overview is given on the evolution of modeling decision-making processes to

predict behavior. Finally, one model is demonstrated to be the most appropriate for

investigating consumers' buying preferences in relation to sustainable companies.



irst of all, it should be noted that "explaining human behavior in all its complexity is

a difficult task". A number of theoretical frameworks aim at modeling the respective

processes involved. One such theory

is the Theory of Planned Behavior

(TPB). It constitutes basically an ex-

tension of the Theory of Reasoned

Action (TRA), which was proposed by

Fishbein and Ajzen in 1975. The con-

struct of perceived behavioral control

was added as the resources and op-

portunities of an individual have an

impact especially on intention and be-

havior. In the figure below (Exhibit 10), the elements of the model are depicted. Atti-

tude, subjective norms and perceived behavioral control describe intention, which is

considered the predictor of behavior (Ajzen 1991: 179, 181-184).

The literature shows that TRA and TPB do not adequateley reflect all relevant fac-

tors nevertheless. Those neglected include self-identity, personal or moral norms,

personality traits, anticipated regret, past behavior and others. If these shortfalls are

appropriately addressed, the predictive power of the models can be improved. As a

result, several theoretical expansions of the model are proposed (Richetin et al.

2008: 1132).

Perugini and Bagozzi (2001: 79-85) introduced the Model of Goal-Directed Beha-

vior (MGB) to broaden and deepen the TPB. Constructs such as anticipated positive

and negative emotions, frequency and recency of past behavior, and desire were

added. Goal desire was then added to form the Extended Model of Goal-Directed

Behavior (EMGB) (Perugini and Conner 2000: 709-710). An illustration is given in the

figure below (Exhibit 11).

Exhibit 10 - Theory of Planned Behavior (Ajzen 1991:182)

Attitude toward the behavior

BehaviorIntention

Perceived behavioral

control

Subjective norms



One major difference between the TPB and MGB are the direct predictors of inten-

tion. In the latter model, these are frequency of past behavior and desire. Desires can

be described as "less feasible and less linked to a final goal or outcome" as com-

pared to intentions17. Apparently, if an action is both desired and intended, it is more

likely to be realized. Another difference is the inclusion of past behavior in the form of

frequency and recency to predict behavior. Thus repeatedly occurring aspects of

human conduct can be considered. A third distinction concerns anticipated emotions,

which are used as a parallel predictor to attitudes. They differ, for example, as the

former focus on feelings in achieving personal goals, whereas the latter focus on the

general mindset associated with the behavior itself (Carrus, Passafaro and Bonnes

2008: 53-54).

Concerning the MGB/EMGB, some details are given on the meaning of the mea-

surement elements (Richetin et al. 2008: 1136-1139)

Attitude as the general mindset towards a certain subject is expressed by ad-

jectives such as good-bad, pleasant-unpleasant or enjoyable-unenjoyable, for

example.

Anticipated emotions describe how respondents believe they will feel as a re-

sult of a certain conduct, including positive and negative associations such as

happy, pleased, disappointed or embarrassed.

17 The difference between desires and intentions is explained in detail and empirically investigated,

for example, by Bagozzi (2004: 69-84).

Anticipated emotions

(+/-)

Intention Behavior

Perceived behavioral

control

Desire

Subjective Norms

Attitude

Goal desire(EMGB)

Frequency of past

behavior

Recency of past

behavior

Exhibit 11 - (Extended) Model of Goal-Directed Behavior (Perugini and Bagozzi 2001: 80; Peruginiand Conner 2000: 709)



Goal desire requires the respondent to state a certain aim that he or she

wants to achieve by a particular conduct and to define the intensity of this de-

sire.

Subjective norms refer to the influence on the individual of close family, friends

or other "people that are important".

Perceived behavioral control investigates a person's ability to pursue a certain

behavior based on external influence.

Desire expresses the wish to do something, whereas intention is the actual

plan to follow such desire in practice.

Behavior tracks self-reported actions in the past, currently and the future.

Further details on the formation of scales, which is based closely on Perugini and

Bagozzi (2001: 85-87), are given in chapter seven.

In many domains, the TPB is "a well-known and extensively applied behavioral

model" to describe purchasing intention. However, it seems that it was little used in

the context of ethical concerns in consumer decision-making. A study by Shaw

(2005: 137-151), for example, aimed at filling this gap. However, practical application

of the model proved that it was deficient in some predictors. The author then reformu-

lated the model, adding constructs such as self-identity and ethical obligations, and

then later developed alternative conceptual models. These proved to be more appro-

priate than the traditional theory of planned behavior.

The MGB has already been used to investigate behavior in several fields. A recent

study, for example, suggests the model is well suited to explore activism in support of

environmental issues. In contrast to the TPB, the wider use of constructs allows bet-

ter understanding of individual influences. Conservation-oriented behavior seems to

be especially influenced by past involvement and emotions. The former addresses

habitual processes, whereas the latter focuses on affective processes. Neither had

been included in earlier theoretical models applied to this area, but are considered

important aspects of personal responsibility (Carrus, Passafaro and Bonnes 2008:

52-53).

Several studies have evaluated the predictive power of the various theoretical

models. The MGB/EMGB consistently accounted for higher percentages of variance

in intention and behavior than the TPB or TRA (Richetin et al. 2008: 1133). It can be

concluded that the latter approaches are "not sufficient in modeling [...] processes

that ultimately lead to behavior". In general, the EMGB provided best results (Riche-



tin et al. 2008: 1147).

From the above, it can be concluded that the TPB has significant deficiencies in

explaining ethical decision-making and should include further constructs. In the sus-

tainability-related sphere of environmental activism, the MGB seems to deliver good

results. In a direct comparison of the TPB, MGB and EMGB, the broader range of

variables in the latter model improved results further. Therefore, the EMGB has been

selected to investigate environmentally and socially conscious purchasing in this re-

search.

Concluding remarks of chapter three

The author concludes that the world can be differentiated into the three sectors

business, state and civil society, that the company as an individual business entity is

interconnected with many other stakeholders, and that consumerism can directly

influence business operations.

Specifically, chapter three...

...introduces the reader to the macroeconomic three-sector perspective on the

world, consisting of the business, political and civil sectors. In today's globalized

world, there is a powerful dynamic between business and civil society.

...presents stakeholder theory as a theoretical approach for illustrating company

relations with a number of groups and understanding some of their interests. The

concept allows the firm to balance differing agendas and operationalize corporate

responsibilities in the relationships.

...identifies consumers as a particular stakeholder group that has become active

on behalf of civil society in various forms already in the past. Within consumerism,

positive buying and boycotting can serve as economic voting to influence business

conduct. Several factors may determine attitude, intention and ultimate purchasing

behavior of sustainable products.



4 Reviewing Strategic Aspects of the Corporation

The following chapter18 investigates corporate sustainability from a company

strategy perspective. Within this subject area, elements of strategy, the rationale for

strategic engagement, management of strategy and stakeholders, and

communication and disclosure of performance are considered.

4.1 A strategic view of the company and sustainability

In the first section, some principles of strategy are introduced and the strategic

purpose of engagement in corporate sustainability is presented.

4.1.1 Introduction to strategy and the corporation

Strategy refers to the "plans, policies, and principles that guide and unify a number

of specific actions" to reach the company's objectives. Basic characteristics include,

for instance, a significant commitment of resources, long-term planning, a broad

range of activities, and decision-making authority generally at the highest corporate

levels. In addition, strategic actions need to be consistent, integrated, cohesive and

aligned with company principles. In fact, strategy can be interpreted as the link be-

tween the firm (i.e. goals and values, resources and capabilities, structure and sys-

tems) and its environment, which is primarily shaped by competitors, customers and

suppliers (Grant 2008: 12,14,17). Strategy requires managers to make decisions

that have lasting impact on the firm. It involves not only doing things better, but diffe-

rently. The former refers to operational effectiveness, whereas the latter describes

striving for a specific position in the market environment. The challenge lies in outper-

forming competitors over the long term, which is only feasible if differentiation can be

achieved and defended. Uniqueness may be based on satisfying specific consumer

needs, achieving particular distribution access, or other characteristics of the firm, its

brand and products (Porter 1996: 61-62,66).

Strategies are based on the definition of corporate vision and mission. The vision

provides the long-term, aspirational view for the firm. By stimulating passion and im-

agination, employees are supposed to feel a purpose in their work. Also other stake-

18 The presentation of theoretical aspects of company strategy, strategic corporate sustainability

and strategic management provide the relevant foundations for the company comparison in chapter six. Also, the case study in the same chapter is illustrated based on strategy considerations discussed here. With regard to the consumer investigation, this chapter is of slightly less relevance, although some aspects of sustainability strategy in product attributes, communication and disclosure, as well as principles of the firm's overall approach, are referred to in the survey.



holders are given some sort of 'big picture' as to the intended course of development

for the business, what it aims to ultimately achieve and what it would look like if it ful-

filled its potential. However, as the vision is formulated in a highly idealized manner,

further clarification is necessary to provide guidance. This requires that the company

formulate a mission or statement of purpose that builds on the vision. It is more con-

crete and normally specifies the overall business approach. Mission statements cov-

er, for example, who the firm wants to serve, how it desires to serve customers and

what principles and ethical standards are important for success. Like the vision, the

mission also needs to be inspiring and relevant to stakeholders. However, the mis-

sion is likely to be less enduring as adaptations may become necessary in light of

changing conditions in the market environment. Research has shown that a well-

formulated vision and mission contribute positively to successful company strategies

and thus corporate performance (Hitt, Hoskisson, and Ireland 2007: 19-21). For ac-

tual realization of both vision and mission, a strategic plan needs to be created. It

specifies details of strategy such as performance goals, approaches to achieve these

goals and respective resource allocations (Grant 2008: 21).

Strategies can be classified according to their "level of aggregation", which takes

into account the types of entities that are involved in strategic actions. Network

strategies are at the top of the hierarchy as they deal with alliances and partnerships

between companies or stakeholder groups. Right below are corporate strategies with

a focus on issues that affect the whole company. Operating units such as sourcing,

logistics or sales are managed by business strategies. Within each department,

functional strategies determine the orientation and organization of the smallest

business units (De Wit 2004: 8-10).

To be more precise, the main issue of corporate strategy concerns the boundaries

of the organization. This includes determining options for horizontal diversification

into new business fields and vertical integration along the value chain. Furthermore,

questions of internationalization and corporate responsibility are dealt with at this

level. It should be noted, though, that corporate strategies are closely linked with

network and business strategies. Lasting value can only be created if strategies are

properly aligned at all levels (Becerra 2009: 174-175). Marketing strategy is a form of

business strategy as it is concerned with building competitive advantage in a certain

market. It basically includes two elements: the target market definition and the mar-

keting mix. The former is a result of segmentation during which the total market is



divided into smaller, more homogenous groups with similar wants, needs and charac-

teristics. To determine the marketing mix, decisions are made on the so-called "four

Ps": product, price, place and promotion. All of these elements have to be aligned at

the particular business level to allow consistent and successful performance in the

market place (Ferrell and Hartline 2008: 17-21). On the functional level, product

strategy can, for example, deal with the design of ethical products. Environmental

and social benefits are considered to belong to the augmented product. In this seg-

mentation, the core product represents the fundamental benefit and the actual prod-

uct delivers it in a particular form. But only in the third layer, augmentation, ethical

attributes such as fair trade origin or recyclability provide additional value. In product

strategy, decisions are made on what values are sought by consumers and thus

need to be represented (Crane 2001: 363-364).

According to Hitt, Hoskisson and Ireland (2007: 5-6), the strategic management

process consists of three phases, namely ‘strategic inputs’, ‘strategic actions’ and

‘strategic outcomes’. Firstly, a vision and mission need to be defined taking into

account the external and internal environment. Secondly, strategies are formulated

and implemented. Both imply several focus areas and sub steps: formulation deals,

for example, with various strategic levels (e.g. corporate, business, cooperative) and

competitive dynamics, whereas implementation considers the corporate governance

structure, aspects of leadership and promotion of entrepreneurship. Thirdly, ‘strategic

competitiveness’ aims at providing ‘above-average returns’, which can be used as a

direct feedback on the result of the process. De Wit (2004: 74) provides a similar

approach but differentiates only two major dimensions: 'formulation’ (deciding what to

do) and ‘implementation’ (achieving results). Johnson and Scholes (1997: 23-25), in

contrast, present strategic management not as a sequence of strictly defined steps

but as a model structuring three interconnected areas: strategic analysis, strategic

choice and strategy implementation. In their view, managers think about the strategic

position of their firm based on their "experience, sensitivity to changes and market

knowledge". It takes place in a less formalized and more "vibrant" way.

An important role in strategic management is played by strategy analysis. To facili-

tate the analytical approach, a number of tools have been developed that cover a

broad range of issues and aspects. Well-known examples are the SWOT Frame-

work, the BCG Growth-Share Matrix, the Five Forces Industry Analysis, the McKin-

sey Seven-S Framework, the Economic Value Added (EVA) Concept and Value



Chain Analysis (Bowman, Singh, and Thomas 2002: 37-39). The model of the value

chain depicts business operations from a vertical perspective. It is based on the aim

of the firm to add value, which means that the cost of all resources and competencies

has to be less than the output produced. Company activities are split into primary and

secondary or support activities. In the original generic model, the former comprise

inbound logistics, operations, outbound logistics, marketing and sales, and service.

Support activities include firm infrastructure, human resource management, technol-

ogy development and procurement. The value chain model can be used not only to

analyze where value is created or lost, but also to determine the role of internal de-

partments or external business partners if services are outsourced (Cashian 2007:

165-167).

In the last fifty years, the importance of various themes in strategic management

has shifted considerably. As can be seen in the table below (Exhibit 12), issues of

corporate planning dominated, for instance, in the 1960s. In the following decades,

companies focused on positioning and achieving competitive advantage. At the turn

of the millennium, new business models and coping with disruptive technologies filled

corporate agendas. Today, strategy is most concerned with aspects of sustainability

and ethics, global strategies and establishing worldwide industry standards (Grant

2008: 18).

1960/70

Corporate Planning

1970/80

Positioning

1990

Competitive Advan-tage

2000

New Economy

2006

New Millennium

Formal corpo-rate planning

Creation of planning de-partments

Diversification and quest for synergy

Industry analysis and market segmentation

Experience curve

Planning busi-ness portfolios

Analysis of re-sources and ca-pabilities

Shareholder value maximiza-tion

Restructuring and alliances

Strategic innova-tion

New business models

Disruptive tech-nologies

CSR and busi-ness ethics

Global strategies and winner-takes-all mar-kets

Competing for standards

Exhibit 12 - Dominant themes in strategic management (Grant 2008: 18)

As this discussion of corporate responsibility has arrived at the executive agenda,

the advantages and disadvantages of strategic engagement in sustainability are eva-

luated in the next section.



4.1.2 Strategic purpose of sustainability engagement

The Millennium Poll survey of 25,000 individuals in over twenty countries revealed

that companies are expected to play a larger role in society than just generating

profits. In fact, people demanded that businesses “set higher standards and help

build a better society”, which goes far beyond compliance with laws and regulations

(International Business Leaders Forum 1999: 3). Community needs, environmental

protection and employee needs were expecially high on the list of priorities

(Hitchcock 2007: 12). In the wake of large scale corporate scandals, consumers have

lost some trust in the ability of governments to regulate effectively the most powerful

international companies. However, increasing awareness of the significance of

purchasing power has raised confidence levels among consumers. They now turn

directly to companies to demand more ethical and responsible conduct (Werther and

Chandler 2006: 20). Societal expectations have thus changed considerably since

Milton Friedman's description of the role of the firm in the 1970s: “the social

responsibility of business is to increase its profits” and “the corporation is an

instrument of the stockholders who own it" (Gallagher 2005: 55).

In the literature, a broad range of arguments can be found both for and against

companies' strategic engagement in sustainability that can all affect business results.

Kotler and Lee (2005: 10-11), for example, mentions strengthened brand positioning

in the market place, enhanced corporate image in societal stakeholder relations,

improved internal operation processes, higher attractiveness to current and potential

employees and better appeal to investors. Lawrence, Weber and Post (2005: 50-55)

also acknowledge a possible obligation to balance corporate power with

responsibility, while such strategies may also discourage government regulation and

correct of social or environmental problems caused by business. In contrast,

corporate sustainability can lower economic efficiency and profit, impose unequal

costs among competitors, pass hidden costs on to stakeholders without their consent

and require skills that businesses might lack. Especially with regard to charitable

contributions to society, Porter (2002: 58) sees a considerable drawback with regard

to individuals' sovereignty. By getting involved, the corporation would "prevent the

individual stockholder from himself deciding how he should dispose of his funds".

Furthermore, it cannot be assured that firms, which might do business in totally

different areas, are aware of what people actually need.

In any case, recent research shows that sustainability creates quantifiable value



for corporations in four main areas: first, it enables growth by entering new markets,

launching new products, reaching additional customer segments, strengthening

market share and promoting innovation. Second, returns on capital are likely to be

improved through better operational and workforce efficiency. Third, overall risk can

be reduced by anticipating regulation, gaining public support and improving supply

chain interaction. Finally, improved management quality as expressed in leadership

development, adaptability and long-term orientation contributes to more sustainable

bottom line results (McKinsey & Company 2009: 66-71). However, in any investment

decision, the case for a business to engage with sustainability issues needs to be

calculated by applying traditional financial instruments. Any involvement in

environmental and social dimensions above legal requirements has to trigger returns

with a net present value greater than zero. In this respect, it should nevertheless be

noted that a number cannot immediately be put on all gains in competitive position

and so some uncertainty remains (Steger 2004: 8-9).

Generally, there seems to be at least a positive relation between corporate

sustainability and companies’ market value. In a value-based analysis of American

firms between 1999 and 2002, Lo and Sheu (2007: 355) conclude that responsible

behavior is "appreciated price-wise among investors". Others agree on some kind of

positive link, but note that the correlation is difficult to establish (The Economist

Business Intelligence Unit 2008a: 5). In its annual review of the Dow Jones

Sustainability Indexes, SAM (2008: 17) shows for example the better performance of

the DJSI World in comparison to the MSCI World in a 9-year observation period.

Having noted the primarily positive impacts on businesses of pursuing corporate

sustainability, the following section deals with the strategic management of business

and stakeholder partnerships.

4.2 Managing corporate sustainability strategy

Given the fact that the literature does not provide a universal definition of

"sustainability strategy", the author understands it simply as the company's long-term

commitment to integrating economic, ecological and social dimensions in a

stakeholder-based approach. Basically, it can be considered as the application of the

concept of corporate sustainability, which is presented in chapter two, on a corporate



strategy level. Aspects relevant to the management of this part of strategic

orientation are given in the following.

4.2.1 Strategic approach to sustainability

In managerial perception of the role of the firm, Mirchandani (2005: 42-43) outlines

different trends in recent history. For example, regulatory pressures in the 1970s

provoked a mindset focused on compliance and reaction rather than action. In the

early 1990s, many managers sought proactive strategies especially in environmental

matters. In the new millennium, the inclusion of social factors has gained momentum.

Over the past years, sustainability has thus constantly moved from ‘the periphery

to the heart of business’. More and more executives have become aware of its

principles. It is put on corporate agendas as an issue to which the organization

should adjust. As such, corporate sustainability has arrived at the strategic

management level (Lowitt et al. 2009: 4)

Within the three sustainability areas, business aspects are still particularly impor-

tant to managers. A study of 184 Austrian companies, for example, demonstrated

that the economic aspect is considered by far the most important. Aspects of the en-

vironment and society are much less significant, in direct comparison being consi-

dered only half as important. The various aspects of sustainability were thus ac-

corded priority in the following order: economic, ecological and then social (Tschandl

2005: 23-27).

However, this imbalance seems to have shifted in recent years as the scope of

environmental and social concerns has become wider. In its annual CEO survey,

PricewaterhouseCoopers (2009: 18) found, for instance, that current company

strategists are willing to contribute to tackling even several large-scale challenges

such as demographic changes or threats from overpopulation. Thus corporations are

defining broader and more far-reaching strategies, which also generate payoffs for

the firm. In a survey of over 1,200 executives worldwide, among which about 340

were in Europe and nearly as many in North America, the Economist Business

Intelligence Unit (2008a,b: 1-4) found evidence for increasing emphasis on

integrating social and environmental issues in both regions. Currently, one of the

most pressing concerns is climate change with all its consequences for doing global

business, fragile ecosystems and risks for vulnerable communities. Corporations in

Europe are considered slightly in the lead in utilizing the opportunities inherent in this



situation and those in North America marginally behind.

Given these developments, it is evident that only coherent corporate sustainability

approaches are likely to meet the goals of society and the companies themselves.

Becerra (2009: 231) provides five conditions, which define if a CSR approach can be

considered "strategic" in this respect: centrality, specificity, proactivity, voluntarism

and visibility. Centrality decrees that sustainability programs and policies be central

to the organization's mission, so that these are not mistakenly considered isolated

acts of philanthropy. Specificity means that environmental and social activities need

to be formulated specifically enough to allow companies to capture some of the

benefits created for themselves, instead of funding a vague public good. Proactivity

stands for taking early action, so that the corporation can position itself better with

regard to opportunities and problems related to sustainability. Voluntarism implies

that the company has to take actions of its own choice that exceed legal compliance

requirements. Finally, visibility refers to making sustainability strategy observable for

internal and external stakeholders. If all conditions are met, the strategic approach is

likely to generate value for the parties involved.

Corporate sustainability strategies can be defined on the basis of these

characteristics. However, Aragón-Correa and Rubio-Lopez (2007: 357-361) highlight

some "myths and misunderstandings". Specifically, companies should not be misled

by overly positive reports on stakeholder reception of sustainability efforts. Social

bias, lack of action at the point-of-purchase, or trust issues can hinder the expected

improvement in business performance. Furthermore, increased eco-efficiency and

inclusion of more sustainable resources in the production process may lead to higher

overall expenses, at least in the short term. One reason lies in the fact that true social

cost is not yet reflected in prices in many regulatory environments. The authors point

out further caveats, especially in environmental areas. One may conclude that any

efforts, even if they appear strategically favorable, need careful consideration in order

to generate clear sustainability payoffs for both the company and society.

Once a strategy is defined and implemented, performance needs to be tracked.

The challenge with sustainability is that a number of aspects can be considered from

within the organization and externally and these include numerous value-based

judgments rather than quantitatively measurable data. The table below (Exhibit 13)

illustrates key performance indicator (KPI) categories in the dimensions of collection

complexity and external focus. Energy, water, and waste, for example, can be easily



measured in-house, whereas fair trade, workload, and equal opportunities are harder

to assess. It should be noted, however, that both collection difficulty and outside

orientation can vary from one firm to another based on the business model and es-

tablished measurement practices. Furthermore, there is no set of indicators that re-

mains "ideal" over the long-term without regular reviews and adaptations to organiza-

tional developments (Keeble, Topiol, and Berkeley 2002: 149-151).

In-house indicators Management

indicators Stakeholder, business partner

& product indicators

Mo

re c

om

ple

x t

o c

olle

ct

Bribery and corruption

Fair trade Workload Auditing Reputation Corporate citizenship

Transportation Code of con-duct

Diversity and equal opportun-ities

Management systems

Product repre-sentation

Ethical prod-ucts

Air Working envi-ronment

Sickness Business per-formance

Family friendli-ness

Suppliers / contractors

Environmental training

Quality Training and personal de-velopment

Compliance Local commu-nity

Shareholders

Water Environmental costs

Employee benefits

Safety and occupational health

Social perfor-mance report-ing

Business part-ners

Energy Waste Job creation Health and safety

Reporting Customers

Increasingly external focus

Exhibit 13 - Complexity of sustainability indicators (Keeble, Topio, and Berkeley 2002: 150)

The value of KPIs can be improved by applying standardized, integrated man-

agement systems within the whole company instead of relying on various separate

systems for tracking environmental or social issues in the business units. On an in-

ternational level, several standards exist already for performance measurement. ISO

9001, for example, deals with quality management, ISO 14001 with environmental

management, and the related OHSAS 18001 with occupational health and safety.

Regarding social and ethical responsibility, Social Accountability SA 8000 and Ac-

countAbility AA 1000 should be mentioned (Oskarsson and Malmborg 2005: 122-

123). Very recently, the new ISO 26000 was released to provide assistance to com-

panies in managing social responsibility (International Organization for Standardiza-

tion 2010a). However, in contrast to ISO 9001 and ISO 14001, it is not a manage-

ment system standard that can be certified but a voluntary guide in seven core social

areas relevant to organizations (International Organization for Standardization

2010b).

In addition to the quality of the sustainability strategy itself and its representation in



an underlying management system, the development of the company overall can

also be described. Several authors aim at classifying a company’s strategic

sustainability development in specific phases. Carlisle and Faulkner (2004: 145-147),

for example, distinguish four stages in their framework. Companies first become

aware of legal requirements and potential risks. They then move on to adopt

environmental policies, which comprise environmental audits, recycling standards

and cooperation with environmental agencies. In the third stage, social issues are

also actively dealt with as CSR responsibilities are internally defined, suppliers and

external parties included, and an annual report published. Ultimately, corporate

responsibility becomes the mainstream in the whole firm. Sustainability is then

integrated in corporate culture and considered in all policy decisions.

In a more extended classification, Dunphy (2003: 3-5) differentiates six phases,

which are depicted in the figure below (Exhibit 14). These are rejection, non-

responsiveness, compliance, efficiency, strategic proactivity and the sustaining cor-

poration. In the rejection stage, corporations behave in an exploitative manner to-

wards their ecological and social environment. In addition to denying corporate re-

sponsibilities, they actively engage in compromising respective efforts of other parties

such as climate change initiatives. In the second stage, non-responsiveness, sustai-

nability is simply considered irrelevant for the firm. In a rather limited business ap-

proach, short-term profit maximization dominates all executive decisions. Manage-

ment may even be reluctant, for example, to institute employee safety regulations or

anti-pollution requirements. Starting at the next phase, compliance, the company fully

recognizes all legal requirements and also the basic expectations of various stake-

holder groups. Sustainability efforts aim at reducing risk from possible lawsuits and at

building a positive reputation in the market place. In the efficiency phase, the compa-

ny sees sustainability as an opportunity and actively strives for internal improve-

ments. This can be in the environmental domain, such as streamlining production

processes, or in the social field, such as boosting employees' morale by training initi-

atives. In stage five, the firm becomes proactive on sustainability issues which then

are treated as integral to business strategy. In a more external oriented approach, a

redefinition of the business concept, product redesign, or innovative offers, for in-

stance, are systematically aligned with environmental and social benefits to build

competitive advantage. In the ultimate stage, the corporation wedded to sustainability

sees its business approach as an ideological commitment, which concerns not only



aspects within the firm but reaches out to make its surroundings more sustainable as

well. Some characteristics include, for instance, strong stakeholder orientation (in-

stead of shareholder focus), a "social and ecological contract" that has to be res-

pected in doing business, corporate accountability, shared value creation and a cor-

porate culture of stewardship. It should be noted that the model is not intended to be

linear. Companies may develop between phases, can move back and forth, and also

skip some phases. A change in leadership, for example, can result in a shift in the

position.

Exhibit 14 - Corporate sustainability development stages (Dunphy 2003: 4)

In the advanced stages of sustainability development, strategic management deals

with how to combine and interlink different strategic approaches within the company.

A comprehensive illustration is, for example, provided by the "Stakeholder Oriented

Integrative Strategic Management Reference Model" (Exhibit 15). Katsoulakos and

Katsoulacos (2007: 362-364) put an emphasis on modeling the position and

interaction of various kinds of strategy towards core competences and dynamic

capabilities. For example, environment-based strategies take into account the

external position of the company with regard to, for instance, other market

participants or regulatory characteristics. Based on that, the specific boundaries of

the corporation are defined by organizational and networking strategies, which also

take into account responsible values in resource allocation. Resource-based

strategies strongly influence a company's ability to position itself vis-a-vis customers

in terms of the values it represents, which define the necessary competences.

Knowledge management strategies are primarily responsible for creating the

knowledge advantage vis-a-vis competitors. Corporate sustainability strategies define

Rejection

Compliance

Non-responsiveness

Eff iciency

Strategic proactivity

Sustaining corporation



the company's stand as regards its responsibilities towards its social and ecological

environment, which is closely linked with organizational and stakeholder strategies.

The latter are then ultimately responsible for building advantage in the relationship

with other parties. The model illustrates how strategic sustainability and stakeholder

approaches are embedded in the management of overall company strategy. The key

to sound financial performance and fulfillment of responsibilities inherent in

sustainability lies thus in integration.

Despite the evident advantages, the majority of companies still lack any form of

coherent strategy for corporate sustainability. In Western Europe, the percentage is

just 50 percent and in North America marginally above, at 51 percent. It occurs

regularly that firms try to catch-up under short term pressures. What is more, there is

a significant lack of targets, measures and controls. Obviously, many sustainability-

related efforts are made in an isolated manner and are neither integrated nor labeled

as such (The Economist Intelligence Unit 2008a,b: 2-6).

Even if the content side of sustainability strategy may not yet be integrated in a

sophisticated manner in the whole company, companies already work closely with

many of their stakeholders. Research suggests that customers and clients are given

the highest priority, closely followed by employees and supply chain partners.

Industry competitors and their peers as well as non-governmental organizations

generally enjoy a lower degree of interaction (PricewaterhouseCoopers 2009: 22).

In the following section, management of partnerships is given closer consideration

Exhibit 15 - Stakeholder oriented integrative strategic management reference model (Katsoulakos andKatsoulacos 2007: 363)



as it represents an important element in integrating the firm in society in a

sustainable fashion.

4.2.2 Partnership approach through stakeholder management

In chapter three, the connectedness of the firm was first briefly described from a

macroeconomic perspective in the three-sector-framework and then discussed in

more detail from a microeconomic viewpoint in stakeholder theory. Despite some

shortcomings19, this theory is frequently operationalized in strategic management

through "stakeholder management"20. In contrast to what the term might suggest, the

concept is not concerned with managing a particular stakeholder group itself. It rather

refers to "relationship management" in the sense of building, maintaining and

influencing the connections with other parties (Friedman and Miles 2006: 149). From

a corporate strategy perspective, the focus is on bonds with individual groups and not

on the overall integration into society as a whole (Clarkson 1995: 3).

Stakeholder management needs to be based on certain principles to be effective.

Among the most important are the so-called "Clarkson Principles", which were devel-

oped in a multiple-year project involving leading scholars21. They were defined to

cover a wide range of issues in order to be of universal help to managers in practice

(Donaldson 2002: 108-109). However, each of the seven principals is formulated in a

rather wordy manner. Without written reference, memorizing can thus become com-

plicated (Szwajkowski 2000: 388) The principles are given in the figure below (Exhibit

16). Principles one to three address the concerns of stakeholders and how to best

handle them. Principle four deals with positive and negative effects of corporate con-

duct on other parties and distributing these fairly. The next two principles stress the

need for non-harmful cooperation and avoidance of human rights violations in com-

pany activities. The seventh and last principle addresses the role of managers as

19 Details on advantages and shortcomings of stakeholder theory are provided in chapter 3.2. 20 This subchapter builds on insights from stakeholder theory discussed in chapter 3.2. but focuses

now on management aspects relevant to corporate strategy. Particular consideration is given to the way firms identify relevant stakeholders, engage them effectively and ensure the quality of the rela-tionship in the long term.

21 The "Principles of Stakeholder Management" were developed in a six-year project (1996-2002) dealing with the definition of the corporation with special emphasis on stakeholder theory and its im-plementation in stakeholder management. The project was funded by the Alfred P. Sloan Foundation and involved numerous well-known scholars in the topic area such as Archie B. Carrol, Max Clarkson, William C. Frederick, James E. Post, Lee E. Preston, and Deborah Vidaver-Cohen (Donaldson 2002: 107-108; Clarkson Centre for Ethics & Board Effectiveness 2010b).



being stakeholders themselves, including possible conflicts between their function as

representative of the firm and personal interest (Clarkson Centre for Ethics & Board

Effectiveness 2010a).

Clarkson Principles of Stakeholder Management

Principle 1: Managers should acknowledge and actively monitor the concerns of all legitimate stakeholders, and should

take their interests appropriately into account in decision-making and operations.

Principle 2: Managers should listen to and openly communicate with stakeholders about their respective concerns and

contributions, and about the risks that they assume because of their involvement with the corporation.

Principle 3: Managers should adopt processes and modes of behavior that are sensitive to the concerns and capabilities

of each stakeholder constituency.

Principle 4: Managers should recognize the interdependence of efforts and rewards among stakeholders, and should

at tempt to achieve a fair distribution of the benefits and burdens of corporate activity among them, taking in

to account their respective risks and vulnerabilities.

Principle 5: Managers should work cooperatively with other entities, both public and private, to insure that risks and

harms arising from corporate activities are minimized and, where they cannot be avoided, appropriately com-

pensated.

Principle 6: Managers should avoid altogether activities that might jeopardize inalienable human rights (e.g., the right to

life) or give rise to risks which, if clearly understood, would be patently unacceptable to relevant stakeholders.

Principle 7: Managers should acknowledge the potential conflicts between (a) their own role as corporate stakeholders,

and (b) their legal and moral responsibilities for the interests of stakeholders, and should address such con-

flicts through open communication, appropriate reporting and incentive systems and, where necessary, third

party review.

Exhibit 16 - Clarkson Principles (Clarkson Centre for Ethics & Board Effectiveness 2010a)

An important aspect of stakeholder management is stakeholder analysis. It aims to

define all relevant stakeholders, evaluating their individual interests and estimating

their potential influence (Lawrence, Weber, and Post 2005: 10). In this process, the

Theory of Stakeholder Identification and Salience by Mitchell, Agle, and Wood (1997:

865-869) can be applied. The approach aims at identifying the most relevant stake-

holders among the very many which may be associated with a company. To do so,

three attributes are important for classification: power, legitimacy and urgency. "Pow-

er" is expressed in a relationship if one party can exert influence or even impose its

will over the other party. "Legitimacy" describes whether an action complies with cer-

tain commonly shared norms, values or beliefs so that it can be generally accepted.

"Urgency" calls for immediate attention, which can result from a claim that is time-

sensitive or critical to one of the parties. These three attributes are variable (i.e. they

can change in a stakeholder) and socially constructed (i.e. not objective reality). Ad-

ditionally, subjects may or may not consciously fulfill the characteristics. As a result,

application of the theory requires constant evaluation of the stakeholders according

to these criteria.

Based on the three attributes, eight types of stakeholder can be differentiated with



regard to their degree of salience22. They range from "nonstakeholder" (i.e. no

attribute possessed) to "definitive stakeholder" (i.e. all attributes possessed). In

between, there are the groupings23 of "latent stakeholders" (i.e. one attribute

possessed) and "expectant stakeholders" (i.e. two attributes possessed). For each

stakeholder type, managers are provided with a description and some proposal on

how to deal with them. For instance, the strongest type, "definitive stakeholder",

needs to be considered immediately and provided an adequate response to its claim

(Mitchell, Agle, and Wood 1997: 869-879).

As soon as stakeholders are identified and characterized, special consideration

should be given in the management process to understanding interactive aspects.

Managers are advised to investigate relationships and coalitions. An illustrative ap-

proach, such as a stakeholder map, can provide a better overview. However, depict-

ing ties even among the most important groups can easily become challenging.

Complexity is rooted especially in monitoring changes in the stakes of groups in the

firm over time and the existence of multiple stakeholder affiliations. In addition, hete-

rogeneity can be present even within stakeholder groups, which implies conflicting

agendas. Furthermore, interconnectivity and coordination of groups is difficult to track

as it can be done in direct coalitions or involve independent intermediaries. Neverthe-

less, managers should finally be able to construct some sort of stakeholder matrix to

prioritize efforts and resource allocation. This allows best coverage of risks and iden-

tification of potential opportunities in the stakeholder management process (Friedman

and Miles 2006: 179-182).

Another part of stakeholder management is stakeholder engagement. This refers

to the way a company approaches its stakeholders. Consideration is also given to the

level of involvement in dealing with the issues brought up by the parties (Lawrence,

Weber, and Post 2005: 15). In a compact categorization, four phases can be differen-

tiated: reactive, defensive, accommodative, and proactive engagement. Following a

reactive approach, the firm denies any responsibility towards stakeholders and does

less than is required by them. "Defensive" describes a strategy according to which a

company admits its responsibility but fights it, resulting in doing the least that is re-

22 Salience is defined as "the degree to which managers give priority to competing stakeholder

claims" (Mitchell, Agle, and Wood 1997: 869). 23 Latent stakeholders include dormant (power), discretionary (legitimacy), and demanding (urgen-

cy) stakeholders. Expectant stakeholders comprise dominant (power & legitimacy), dangerous (power & urgency), and dependent (legitimacy & urgency) stakeholders (Mitchell, Agle, and Wood 1997: 874).



quired. In the third phase, responsibility is accepted and performance involves doing

all that is required. When engaging stakeholders proactively, the company antic-

ipates its responsibility and does more than is required (Clarkson 1995: 108-109). A

more extensive model is provided in the "Ladder of Stakeholder Management and

Engagement" by Friedman and Miles (2006: 160-164). As depicted in the table below

(Exhibit 17), the construct differentiates twelve phases. The organization can ap-

proach different stakeholder groups with different forms of engagement or one group

may also be treated differently over time. The lower levels (one to three) reflect non-

participation between a company and its surroundings. At the bottom, there is even

some cynical behavior, which then evolves to indifference. In the middle phases,

management starts to actively considering the concerns of others. Stakeholders are

able to contribute their viewpoints, but do not have a direct say in determining end

results. As of phase nine, the organization is willing to share power in decision-

making. Cooperation can be realized first in specific projects or be extended to regu-

lar business efforts such as joint-ventures or partnerships. The latest level of stake-

holder control is unusual in practice as managers normally do not relinquish control

over their firm.

Form of engagement Intention and purpose

1. Manipulation Manipulate stakeholders and attempt to change stakeholders' expectations

2. Therapy 'Cure' stakeholders of their ignorance and preconceived beliefs

3. Informing Educate stakeholders

4. Explaining Educate and convince stakeholders

5. Placation Appease stakeholders and allow them to be heard

6. Consultation Seek advice by stakeholders, but maintain the organization's right to decide

7. Negotiation Negotiate support by stakeholders

8. Involvement Involve stakeholder further by accepting conditions in the support

9. Collaboration Afford some decision-making power to stakeholders over specific projects

10. Partnership Agree on joint decision-making power over specific projects

11. Delegated power Grant minority representation to stakeholders in decision-making process

12. Stakeholder control Grant majority representation to stakeholders in decision-making process

Exhibit 17 - Ladder of Stakeholder Management and Engagement (Friedman and Miles 2006: 162)

An important aspect is ensuring the quality of the stakeholder relationship. Neligan

(2003: 8-9) suggests assessing four dimensions: first, information quality depends on

reliable sources, provision in an appropriate form, timely availability and proper ac-

cessibility. Second, the terms of engagement need to be understandable for all par-

ties involved, allow initiatives in all directions, and have an appropriate degree of



standardization. The third aspect deals with legitimacy, which includes the selection

parameters for the partners, completeness of party representation, and inclusion of

all respective interests. Finally, the possibility to review the stakeholder process is

essential, preferably including formal mechanisms and independent third parties.

Other authors identified satisfaction as a crucial quality in the stakeholder relation-

ship. Three factors are of the essence: empathy and concern for equitable treatment,

honesty and integrity of information, and time sensitiveness in communication. Posi-

tive and negative perception can be close and change fast, so stakeholder manage-

ment requires constant effort to ensure standards in the long term (Strong, Ringer,

and Taylor 2001: 225).

Despite a company's positive commitment to stakeholder engagement, problems

can arise in stakeholder collaboration for a number of reasons. For example, re-

sources are not readily available or cannot be distributed as required by either party.

In addition, different cultural backgrounds can lead to misunderstandings or lack of

comprehension of the other party's concerns. Furthermore, the perceived uncontrol-

lability of the other party or a lack of accountability for actions taken may prevent co-

operation between them. Also, institutional inertia or intra-organizational resistance

can negatively influence stakeholder relationships (Crane and Matten 2007: 191).

The keys to successful strategic stakeholder management are truthful disclosure

and comprehensive communication of corporate practices. Szwajkowski (2000: 389)

puts it as follows: "Information is the currency in the stakeholder environment. Honest

disclosure breeds control of information, control of behavior, empowerment on stake-

holder issues, and, perhaps most important, trust". The author further points out vari-

ous specific aspects such as the need for real reciprocity in the information flow be-

tween the parties involved. It is also important to deliver content in both an unders-

tandable format and truly based on facts. Stakeholders are likely to closely inspect

information, but also to pursue information where it has been left out. Based on re-

spect and in the interests of building reputation, stakeholder management should

encourage collaborative rather than confrontational treatment of issues. In total,

proper disclosure supports managers in making responsible decisions and managing

relationships with other parties (Szwajkowski 2000: 387-393).

Following this conclusion, disclosure and communication of corporate sustainabili-

ty practices are discussed in more detail in the next section.



4.3 Disclosure and communication of corporate practices

In a worldwide survey of over 1,200 executives in 2008, “only 22 percent of res-

pondents say their firms have formal triple bottom line reporting”. However, “a further

40 percent state that they will adopt it within the next five years” (The Economist In-

telligence Unit 2008: 58). "Triple bottom line"’ reporting means that companies do not

only disclose their financial performance regularly, but also publish social and envi-

ronmental data. By measuring defined indicators in these new dimensions too, they

become more transparent and thus responsible for their impact. This fact is often re-

ferred to as ‘corporate accountability’(Elkington 1999: 70-94).

Companies engage in environmental and social reporting for several reasons.

These can be categorized according to four incentives: market, social, political and

accountability. First, pressure from the market place often originates from institutional

investors that seek sustainable investment opportunities. Also, consumers may de-

mand more background information on the companies from which they purchase

goods. The social incentive is closely connected with the rationale for stakeholder

engagement, that is building trust and cooperation with external parties. Voluntary

reporting supports the balance of interests and alignment of strategic objectives.

Third, environmental and social corporate information is often highly appreciated by

government agencies. Firms can also prepare for future legislation in proactively

managing and disclosing sustainability performance. The accountability incentive re-

fers to the company's role in society. The firm needs to assume responsibility and

can also make its efforts public to build, for example, brand reputation or legitimize its

operations. In contrast, there may also exist disincentives for disclosure such as ab-

sence of demand for information, no legal requirements, unfavorable cost/benefit ra-

tio or simply organizational reluctance (Solomon and Lewis 2002: 156-159)

Information for corporate disclosure is sourced from social accounting. Some prin-

ciples determine its quality. Inclusivity requires that the perspectives of and influence

on all major stakeholders need to be considered in a holistic approach. Comparability

of key indicators should be possible within the organization for different time periods

as well as with the performance of external parties. Completeness requires that all

data, whether it is positive or negative, is represented in the assessment. Proper

management policies and systems are the backbone for tracking and evaluating in-



formation properly. As stakeholder expectations change, social accounting should

respond and allow evolution. Similarly, continuous improvement needs to be feasible

also within the organization. External verification assures credibility of the data. Final-

ly, insights regarding the environmental and social performance need to be disclosed

in a comprehensive format suitable to the various stakeholders (Zadek et al. 1997:

41-44).

Guidance on achieving these quality standards can be found at an international

level. There are several guidelines, principles, and standards for corporations with

regard to sustainability practices and disclosure. In this domain, Kirchmayr (2008: 58-

80), for example, provides a chronological overview and comparison24 of the OECD

Guidelines for Multinational Enterprises, the Caux Round Table Principles for Busi-

ness, Social Accountability 8000, the UN Global Compact and the Global Reporting

Initiative's (GRI) Sustainability Reporting Guidelines. In addition, a preview is given

on ISO 26000. They all share a global perspective, are widely discussed in the litera-

ture, and strongly address business aspects of sustainability-related behavior. How-

ever, differences exist for instance in the background and purpose of the initiatives.

For example, some were developed by business organizations, while others originate

from nonprofit entities. Also the degree of compulsory and voluntary elements varies.

What is more, some initiatives provide guidance on doing business sustainably, but

others focus on measuring and communicating performance. In the analysis, the au-

thor concludes that the "GRI Guidelines are the most comprehensive international

initiative". The "wide array of indicators" and the "high degree of technical, quantita-

tive indicators" are particularly noted. In a comparison of three global social audit

standards, Lawrence, Weber, and Post (2005: 74-76) found that the GRI Reporting

Guidelines are the most holistic. ISO 14001 and ISEA AA 1000 specialize on envi-

ronmental or social and ethical issues, but only the GRI Guidelines link all three as-

pects of sustainability. Laufer (2003: 258) provides a number of shortcomings of

available reporting initiatives. Criticism concerns, for example, variable content and

scope, limited engagement of stakeholders, lack of transparency in the development

of standards, inability to measure and ensure compliance, general quality issues, dif-

fering reporting requirements and other aspects. Again, the Global reporting Initiative

stands out positively. It seems to be the only approach that is a positive "exception" 24 Due to limitations in space, more detailed information on each of the various initiatives had to be

omitted.



in the critical reviews.

The Global Reporting Initiative characterizes itself as a "network-based organiza-

tion" that developed the "world's most widely used sustainability reporting framework"

(Global Reporting Initiative 2010a). Adams and Zutshi (2005: 210) see it as "the best

known multi-stakeholder initiative" in the field. Historically, the idea to develop an in-

ternational sustainability disclosure framework arose in the non-profit organization

CERES (Coalition for Environmentally Responsible Economies) in 1997. Three years

later, the first "Sustainability Reporting Guidelines" of the "Global Reporting Initiative

Project" were released. In 2001, the GRI became an independent institution. The lat-

est edition of the GRI Reporting Framework, the G3 Guidelines, were launched in

2006 (Global Reporting Initiative 2010b). It should be noted that the reporting frame-

work in general and the latest version in particular was created in close collaboration

by a number of parties. In fact, the guidelines were developed "by stakeholders for

stakeholders" in a consensus-oriented approach. The broad engagement of people

from different sectors with a range of levels of reporting expertise resulted in "univer-

sally applicable, credible and technically superior results" (Richards and Dickson

2007: 19-20). The reporting framework consists of three parts: the Sustainability Re-

porting Guidelines ("the Guidelines"), the Protocols, and the Sector Supplements.

The Guidelines are the core and represent the principal guidance for triple bottom

line reporting in organizations of any size, sector, or location. The Protocols describe

indicators in the Guidelines in more detail by providing some methodological and

technical references. Sector Supplements tackle particularities in sustainability in var-

ious sectors (Global Reporting Initiative 2010c). The Guidelines are divided into two

parts: part one covers reporting principles and provides guidance with clear expecta-

tions for content, quality and boundary definition. Part two includes detailed require-

ments for disclosure of the company profile, the management approach and the per-

formance indicators, which are grouped into economic, environmental and social in-

dicators with various subheadings (Global Reporting Initiative 2010d). Being a volun-

tary initiative, companies can decide themselves what degree of sophistication in dis-

closure they want to achieve. The three levels from C, B, and A describe the scope of

indicators and profile components in the report with an additional possibility of

achieving plus status (C+ to A+) where external verification is done (Global Reporting

Initiative 2010e). Overall, it can be stated that the framework successfully contributed

to "making the critical first steps" towards harmonizing reporting of sustainability is-



sues and improving social accounting (Crane and Matten 2007: 201).

Official company reporting is one way of disclosing corporate sustainability per-

formance. Other formats include, for instance, Internet sites, leaflets, magazine con-

tributions, newsletters and on-product information (Friedman and Miles 2006: 164-

165). In addition, informal channels rather than those controlled by companies in-

crease in importance among consumers. Word-of-mouth is the most widely used

source of ethical advocacy, for example (Worcester and Dawkins 2005: 203). Anoth-

er aspect to consider in communication strategy is what information contributes to the

preferred choice of ethical products. There is additional need for identifying the re-

spective preferences and profiles of the buyers involved (Bezencon and Blili 2010:

1318).

Concluding remarks of chapter four

The author concludes that the strategic pursuit of corporate sustainability primarily

benefits the firm, the strategic development of companies is reflected in sustainability

strategy, its degree and level of integration, as well as in the management of

stakeholder relations, and that formal and comprehensive disclosure of

environmental and social practices is essential.

Specifically, chapter four...

...introduces the reader to selected elements of strategy and strategic

management. In a comparison of possible advantages and disadvantages, it appears

to be generally favorable for companies to adopt corporate sustainability strategies.

...illustrates how the firm tackles sustainability from a strategic management

perspective with particular consideration given to defining strategy, measuring

results, and integrating strategies. To successfully achieve environmental and social

goals, the management of stakeholder relations is of the essence.

...provides information on disclosure of sustainability practices with particular

consideration of formal reporting.



5 Methodology of Empirical Research

In chapter five, the methodology of research is approached from a process-

oriented perspective, first theoretically and then practically as far as relevant for the

study at hand25. The aspects discussed in the following specifically relate to the em-

pirical part.

5.1 Theoretical aspects of the research process

Referring to the overall process presented in chapter one, the phases "Formulate

research problem" and "Review literature" are not further considered here26. There-

fore, this subsection starts with phase three, "Determine methodology"27.

5.1.1 Determine methodology (research design)

In the third phase of the research process, the methodology28 and corresponding

research design are determined. The design can be defined as the "master plan of

the methods used" (Hair, Bush and Ortinau 2006: 63). Churchill (1999: 98) refers to it

as "the blueprint that is followed in completing a study" and Kumar (1999: 74) as "the

procedural plan that is adopted by the researcher". All authors point out that the de-

sign needs to address the research problem effectively, but also highlight the eco-

nomic dimension. Financial and time constraints may be important factors.

In international research, data equivalence is a major issue. The researcher has

thus to take care to "generate data that is comparable from one country to another

[...] at all stages of the research design". This implies data should have the same

meaning and allow valid comparisons (Craig and Douglas 2005: 179). According to

Usunier (1996: 142-159) equivalence can be differentiated in various dimensions:

conceptual, functional, data collection, sample, measure and translation equivalence.

Thus underlying theories should allow meaningful comparison between countries,

data needs to be collected in similar ways and content formulated in a cross- 25 Certainly, "relevance" can be interpreted either in a broad or narrow meaning. Even if expe-

rienced researchers may consider some theoretical backgrounds provided in this chapter fundamen-tal, the author is of the opinion that the detailed discussion of relevant methodological aspects is im-portant for the quality of his work.

26 These two phases were integral parts of developing the research proposal ("exposé") in May 2009. This chapter focuses on those parts that were immediately relevant for conducting field research and completing the research.

27 A brief outlook on methodology was already included in the research proposal ("exposé"), but the details of the actual approach were defined in the early stages of work on the dissertation.

28 A method or methodology refers to "the big picture" of the research approach, whereas research design or procedures outline what techniques and steps are concretely applied to find answers to the research problem (Biklen and Casella 2007: 72).



culturally sensitive fashion.

Considerations in methodology and research design include choosing the appro-

priate type of data, selecting adequate collection methods, applying a suitable sam-

pling approach, performing proper measurement and avoiding a variety of errors.

These aspects are now further investigated.

(1) Different types of data

To be precise, data has to be distinguished from information. As a matter of fact,

raw data itself carries only little informational value. It needs to be edited, structured,

summarized and analyzed. This resulting "product of data" or "knowledge obtained"

from data analysis can then be referred to as 'information' (Diamantopoulos and

Schlegelmilch 1997: 8).

Concerning data, three categories can be differentiated according to (1) their

meaning, (2) their time dimension, and (3) their source. First, the category 'meaning'

comprises factual data such as age, sex or income, awareness data such as know-

ledge of a certain topic, intentions data such as purchasing behavior, attitudes data

such as product evaluations, and motives data such as reasons for doing something.

Second, the category 'time dimension' includes cross-sectional data, which relates to

a single point in time, and longitudinal data, which relates to a number of time pe-

riods. Third, the category 'source' refers to one of the most commonly-used distinc-

tions between secondary and primary data (Diamantopoulos and Schlegelmilch

1997: 4-6).

'Primary data' is specifically collected for the researcher's current study. In con-

trast, 'secondary data' was originally gathered for a different purpose (Churchill 1999:

214). It may originate from sources such as government publications, company re-

ports, other research studies, investors' analyses, the mass media, or the like (Kumar

1999: 124).

Secondary data has some advantages and disadvantages. For example, it is fa-

vorable that the data is already available and can thus be accessed promptly. Cost

savings are also possible because only a certain share of total research costs for the

data needs to be contributed. In contrast, the data may not exactly fit the research at

hand. Problems with accuracy can stem from errors for instance in collection, analy-



sis or presentation of the data. Some additional aspects are listed in the table below

(Exhibit 18).

Advantages Disadvantages

Availability and time economies Cost savings in data usage Broader understanding of the problem Suggestion of alternative methods Means of comparison for interpretation of addition-

ally gathered primary data

Lack of fit to the current problem Multiple problems with accuracy Differences in validity and reliability from one

source to another Completeness of available data Improper format of the available data

Exhibit 18 - Advantages and disadvantages of secondary data (Churchill 1999: 214-218 and Kumar 1999: 125)

Because of considerable potential savings in time and money, any researcher may

be inclined to make maximum use of secondary data. Given that, Hair, Bush and Or-

tinau (2006: 84) stress the importance of a careful assessment of its respective quali-

ty. For that reason, they propose six areas to be evaluated: (1) purpose, (2) accura-

cy, (3) consistency, (4) credibility, (5) methodology, and (6) bias. First, data may be

most appropriate if the purposes of the secondary source and the current research

study match. Second, the researcher needs to verify 'what was actually measured'

and 'when it was measured'. Third, information from various secondary sources

should be compared to avoid inconsistencies29. Fourth, the reputation of the source

indicates how credible it probably is. Fifth, some elements of the methodology such

as sample size, response rate or questionnaire design should be checked. Sixth, any

personal or institutional bias apparent on the part of the researcher must be investi-

gated.

Churchill (1999: 214) suggests researchers should "not [...] bypass secondary da-

ta". It appears reasonable to start first with data from such existing sources, and ad-

vance only to primary data if results prove unsatisfactory.

Research designs may include both secondary and primary sources30. It is up to

the researcher to choose the appropriate kind of data depending on the characteris-

tics of the specific problem at hand and the defined objectives (Hair, Bush and Orti-

nau 2006: 64).

29 By ensuring consistency across various sources, the researcher can achieve higher levels of

reliability. It is also crucial to document the origin of all data and information properly. Any detected discrepancy may thus be checked directly in the respective secondary source (Hair, Bush and Ortinau 2006: 87-88).

30 Data from an interview, for example, can be gathered for the study at hand (primary data) or for another research project (secondary data). In both situations, the researcher needs to be aware of the method, its characteristics, and advantages and drawbacks.



In this dissertation, both secondary and primary sources are used31.

Irrespective of the source of the data, the following section deals with the different

methods of data collection.

(2) Different data collection methods

Data collection methods should be designed to answer as well as possible the

specific research questions. However, there is no single, universally applicable ap-

proach that will always deliver correct results. There are often several appropriate

approaches. Based on the objectives of the research, three basic designs can be

differentiated: (1) exploratory, (2) descriptive, and (3) causal research32 (Churchill

1999: 99).

As the name suggests, exploratory research aims at discovering ideas. It is of use

when the researcher wants to become familiar with a phenomenon, classify problems

or discover areas for further research. Likewise, concepts may be clarified, research

priorities established, impractical ideas eliminated or hypotheses developed. As a

result of its rather unstructured format and often informal interpretation procedures,

this approach offers great flexibility. Techniques include literature searches, expe-

rience interviews, focus groups, selected case studies or the like. Exploratory re-

search generally deals with qualitative data and is thus considered a qualitative me-

thod (Hair, Bush and Ortinau 2006: 63-64; Churchill 1999: 99, 132-133).

Descriptive research in contrast is more formalized and rigid. As is implied by its

name, it is concerned with describing characteristics of a group of people. Variables

are also investigated to find the frequency with which something happens, estimate

proportions within larger populations, make predictions about outcomes, or explore

relationships. Hypotheses defined in exploratory research may also be empirically

tested in descriptive research. This approach is based on scientific methods and pro-

cedures which require precise specifications. Techniques are often longitudinal stu-

dies or sample surveys. As descriptive research usually draws on quantitative data, 31 As illustrated in the content framework in chapter one, the literature section (chapters two to four)

is based on secondary information and the empirical section (chapters six and seven) mostly on pri-mary data.

32 Causal research tries to create data structures and use information derived from raw data to construct cause-and-effect relationships between variables. Techniques include laboratory or field experiments (Hair, Bush and Ortinau 2006: 63-64, 132). As this design is not applied within this research, it is not further discussed in detail.



it can be referred to as a quantitative method (Hair, Bush and Ortinau 2006: 63-64;

Churchill 1999: 99, 132-133).

These two research designs can be assigned to either qualitative or quantitative

methods. In addition to the characteristics described above, some further aspects are

compared in the table below (Exhibit 19). Qualitative methods require, for example,

shorter time frames because of smaller samples. They are very useful in generating

new insights, but lower representativeness and subjectivity in analyses limit the ge-

neralizability of results. The opposite holds true for quantitative methods, which are

based on statistical procedures. As a result, they require larger numbers of partici-

pants and take more time to complete.

Characteristics Qualitative methods Quantitative methods

Type of research design Normally exploratory designs Descriptive and causal designs

Research goal / objectives Discovery and identification of new ideas, thoughts, feelings; preliminary insights on and understanding of ideas and objects

Validation of facts, estimates, rela-tionships, predictions

Time and cost of execution Relatively short time frames More economical data collection, but

high cost per individual response

Usually longer time frames Generally higher total costs, but

more economical per response

Type of questions Open-ended, semi-structured, un-structured, deep probing

Mostly structured

Researcher skills Interpersonal communications, ob-servation techniques

Broad interpretive skills

Scientific, statistical procedure, and translation skills;

Some subjective interpretive skills

Representativeness Small samples, limited to the sam-pled respondents

Large samples, normally good re-presentation of target populations

Type of analyses Debriefing, subjective, content, in-terpretive, semiotic analyses

Statistical, descriptive, causal predic-tions and relationships

Generalizability of results Very limited; only preliminary in-sights and understanding

Usually very good; inferences about facts, estimates of relationships

Quality of results High richness of data, but small differences in data cannot be distin-guished

Little accuracy, validity and reliability

Focused and very specific data Generally higher accuracy, validity

and reliability

Exhibit 19 - Characteristics of qualitative and quantitative methods (Hair, Bush and Ortinau 2006: 172, 174)

Calder (1996: 68-70) is critical of the fact that qualitative methods are often pre-

sented negatively. He remarks that mainstream argumentation regularly concentrates

on statistical limitations such as small sample size or lack of numerical data in com-

parison to, for example, a sample survey. It is often concluded that results of explora-

tory designs may be of lower value than quantitative ones. However in reality, all re-

search approaches have advantages and disadvantages. None can provide all the

answers in a universal way to a specific problem. The author stresses that it is mis-

leading to compare only the weaknesses of one method with the strengths of anoth-



er.

In fact, no research approach can guarantee completely accurate and reliable find-

ings. Quality always depends on a number of factors, for instance the researcher's

ability to select the most appropriate design and then ensure proper execution, given

the characteristics of different methodologies (Kumar 1999: 104-105).

Furthermore, it is worth mentioning that qualitative and quantitative methods can-

not always be clearly separated from each other. Despite the considerable differenc-

es in various dimensions presented above, Hair, Bush and Ortinau (2006: 171) point

out that there is "no single agreed-on set of factors that distinguishes them as being

mutually exclusive". As a matter of fact, in some cases more than one approach

might be practical. Given their diverse particularities, each should be applied where it

fits best or even a combination could make perfect sense (Calder 1996: 70).

Given that, Foscht, Angerer, and Swoboda (2009: 249-254, 258) discuss mixed

research methodologies. The basic idea is to abandon the perception that qualitative

and quantitative research are alternative approaches. By focusing on integration, re-

sults should become more "objective, reliable and accurate". Out of the considerable

number of possible combinations, the goal is to formalize methodological configura-

tions that fit best to a certain problem with regard to effectiveness and efficiency. A

simplified illustration is given in the table below (Exhibit 20).

Monostrand designs Multistrand mixed designs

Apply only one method for data collection and anal-ysis for the research question ("either or")

(1) Monostrand monomethod designs

Qualitative methods are used for exploratory re-search and quantitative methods for descriptive re-search

(2) Monostrand mixed designs

In contrast to (1), e.g. quantitative problems are tackled by qualitative methods

Apply several methods in parallel for responding to the research question

(1) Single approach multistrand mixed designs

The study is defined as either qualitative or quantit-ative, but within the respective category several me-thods can be applied in parallel (e.g. focus groups and interviews)

(2) Multiple approach multistrand mixed designs

Qualitative and quantitative methods can be used together and may be connected to each other ("as well as")

Exhibit 20 - Selected mixed research methodologies (Foscht, Angerer, and Swoboda 2009: 249-254)

When selecting a specific research method or combination of methods, some fac-

tors can be decisive. In general, these reflect either situational, task or respondent

characteristics. First, the financial resources, the available time frame, overall quality

requirements, the degree of generalizability and precision aimed at, and complete-

ness of data requirements play a role. Second, some factors relate to the research

task itself such as the difficulty of the task, the amount of information needed, re-



search topic sensitivity and potential stimuli required to trigger results. Third, respon-

dent characteristics need to be considered for a specific design, including the diversi-

ty of subjects and degree of participation sought. Based on these factors, it is up to

the researcher to not only select the most appropriate research method to address

the problem but also determine its scope and focus (Hair, Bush and Ortinau 2006:

248).

Empirical research in this dissertation is oriented on the multiple approach multi-

strand mixed designs methodology with both exploratory and descriptive goals33.

The following section presents a selection of techniques corresponding to the re-

search methods illustrated above.

(3) Selected techniques of collection methods

Aspects of five selected34 techniques are now further discussed. According to

Churchill (1999: 132) literature search, interviews, focus groups and case analysis

are examples of exploratory research in qualitative methodology. A survey

represents a descriptive approach using quantitative procedures.

(a) Literature search

Literature search involves consulting numerous secondary sources such as aca-

demic literature, trade publications, government reports, company data and the like.

As an exploratory technique, the focus is on generating broad knowledge and new

insights. This approach is highly recommended at an early stage of research (Chur-

chill 1999: 104-105).

Literature search was used to prepare both company and consumer research.

(b) Interviews

In its basic form, an interview can be described as a formal process, in which one

person, the interviewer, formally asks the other, the interviewee, a number of ques-

tions on a specific topic, and is normally conducted in a face-to-face setting. It can

also be called "in-depth interview" or "one-on-one interview" (Hair, Bush and Ortinau

33 The company investigation has an exploratory focus and the consumer investigation has both

exploratory and descriptive aims. 34 Among a considerable number of research techniques, only those are presented in greater detail

that are most relevant for the study at hand. In fact, most consideration is given to interviews, focus groups and the survey.



2006: 176).

Interviewing is a very common method for collecting detailed qualitative data, for

example, on people's attitudes, knowledge, intention, motivation or behavior. Normal-

ly, most questions in the interview are formulated spontaneously, while based on a

pre-determined framework called the interview guide. Such a technique is especially

valuable if very detailed information is sought or very little is known about a certain

topic (Kumar 1999: 109-110).

In-depth interviews (usually also called unstructured interviews) need to be distin-

guished from structured interviews. In the latter, the interviewer personally follows a

list of pre-determined questions, many of which also include pre-defined answers.

Instead of an interview guide, an interview schedule is used. Results are thus more

similar to survey responses, i.e. quantitative in nature (Craig and Douglas 2005: 224-

225).

Under optimal conditions, the interviewer should be a trained individual with good

rhetorical and listening skills. It is essential that questions are formulated in a clear

and precise manner with no room for ambiguity. Also, the interviewee's responses

need to be accurately collected and interpreted. An intuitive ability to pose structured,

semi-structured and probing questions35 as the situation demands is also valuable

(Hair, Bush and Ortinau 2006: 65).

The process of conducting successful in-depth interviews starts already with a de-

tailed understanding of the research problem itself. Only then, is the researcher able

to define areas of discussion and formulate a set of suitable questions. The results of

this step are compiled in formal guidelines for later use during the interviews. Partici-

pants then need to be selected, contacted and invited, and a convenient environment

for the investigation arranged. Proper preparation and a skilled interviewer are prere-

quisites for achieving accurate results. After the interviews, the subject's narrative

responses need to be analyzed and findings compiled in a summary report (Hair,

Bush and Ortinau 2006: 179).

Interviews share the respective advantages and disadvantages typical of qualita-

tive research. For example, they may generate in-depth knowledge of a certain area,

which is advantageous, while suffering from a lack of generalizability, validity and

reliability. However, some positive and negative aspects are specific to this tech- 35 A probing question is formulated based on the interviewee's response to the initial question and

asked directly afterwards to gain more detailed knowledge (Hair, Bush and Ortinau 2006: 65).



nique. For instance, the interviewer may explain or even reformulate unclear ques-

tions and adapt them spontaneously to the interviewee. In contrast, poor interviewer

performance or inadequate rapport between interviewer and interviewee can have a

particularly strong influence on data quality. Some selected further details are given

in the table below (Exhibit 21).


Interviewing is appropriate for complex situations as questions can be explained or reformulated

Interviewer can move flexibly within variety of topics Allows very direct access to attitudes, motivations,

and opinions that underlie reported behaviors Skilled interviewers may reveal very personal in-

sights of the interviewee

Involves considerable cost and time for completion Requires skilled and trained interviewers Data depends strongly upon the quality of the inte-

raction on a personal level Inaccurate findings may be caused by the introduc-

tion of interviewer-respondent artifacts, respondent bias or interviewer errors

Exhibit 21 - Advantages and disadvantages of interviews (Hair, Bush and Ortinau 2006: 178; Craig and Douglas 2005: 226; Kumar 1999: 115;)

Interviews were applied during the company investigation.

(c) Focus groups

Focus groups can be characterized as "a formalized process of bringing a small

group of people together for an interactive, spontaneous discussion on one particular

topic or concept" (Hair, Bush and Ortinau 2006: 180). An interviewer or moderator is

in charge of moderating the group and stimulating contributions by participants. Dis-

cussions are often centered on feelings, attitudes and perceptions. As is characteris-

tic of qualitative methods, the main aim is to generate broad knowledge as well as

better in-depth understanding (Craig and Douglas 2005: 227).

Despite the above description, there is apparently no universally applicable variant

of this research approach. Calder (1996: 53), for example, states that "there is no

such thing as 'a' focus group". Depending on the researcher's particular ideas, the

technique may vary considerably and can be applied in numerous ways.

Given that, the number of participants and approximate duration of interaction re-

quired is open to question. In professional marketing research, for instance, there is a

preference for discussions involving eight to twelve people and lasting one-and-a-half

to two hours. Such settings are said to facilitate evolution of group dynamics such

that optimal results are obtained. However, in practice, the scope of a focus group is

strongly influenced by financial constraints (Hair, Bush and Ortinau 2006: 187).

As with interviews, the moderator uses a pre-set focus group guide. It determines

the general topics and lists questions with which to lead the group session (Hair,

Bush and Ortinau 2006: 192). Additionally, the moderator needs to ensure that com-

ments made are exposed to the discussion within the group. This is essential so that



each individual's ideas are explored further by other participants (Churchill 1999:

106).

Furthermore, comparable to the skills required for conducting in-depth interviews,

the person who moderates focus groups needs to have good "communication, ob-

servation, interpersonal and interpretive skills". Additionally, he or she should have

some familiarity with group dynamics and processes in order to quickly deal with new

ideas as they arise. While displaying professionalism, it is also helpful to have a

"friendly, enthusiastic and adaptive personality" (Hair, Bush and Ortinau 2006: 189-

190).

Focus group research includes planning, conducting discussions and analyzing

results (Hair, Bush and Ortinau 2006: 183-185), a process comparable to that in-

volved in interviews.

Thus it is clear that focus groups and in-depth interviews share many characteris-

tics. However, one important distinction is the difference in participants involved.

Some argue that group dynamics are a positive stimulus in discussions, whereas

others point out that some individuals may be intimidated by the other participants

(Churchill 1999: 111). Calder (1996: 63-64) sees strong advantages in the more pri-

vate setting of the one-to-one interview: first, the interviewer has more control over

how much time is allocated to each issue. Second, the interviewer can better interact

with the interviewee and thus connect on a more personal level. Third, the intervie-

wee is likely to be much more spontaneous in direct interaction and open up more

easily than in a large group. Fourth, interviewed individually participants are more

likely to relate to their own life, opinion and viewpoints rather than responding to what

others have contributed. Concerning costs, both authors agree that in-depth inter-

views are overall much more expensive per individual participant than focus group

discussions. Therefore, the latter are often used as the preferred technique either

preliminary to a survey or in some occasions even as a replacement for one.

Focus groups supported the development of the questionnaire in consumer re-

search.

(d) Case analysis

In case analysis, selected examples in the area of interest are investigated in de-

tail. The focus can be either on single entities such as persons or institutions or on

groups of these entities (Churchill 1999: 113).



When applying this exploratory technique, the examination is normally intense and

may combine a variety of approaches. The ultimate goal is to be able to comprehen-

sively describe the key aspects of and major issues leading to the problem. Also the

illustration of interactions between elements within the defined area contributes to a

better overall understanding (Hair, Bush and Ortinau 2006: 201).

Churchill (1999: 114) points out three situations that qualify particularly well for

case analysis: first, cases illustrating changes, second, cases demonstrating the oc-

currence of events over time, third, cases reflecting extremes such as very good or

really bad examples.

This technique was used in the company investigation. The case study on

McDonald's Austria actually deals with examples of good corporate conduct.

(e) Survey and questionnaire

A survey is a quantitative research technique that applies a questionnaire format

to gather data from a certain sample population. Participants are provided with a set

of questions in one or several content areas. Then, they have to select the most ap-

propriate answer among several pre-defined choices or write down their own if re-

quired (Kumar 1999: 110).

Generally, surveys offer a high degree of anonymity for respondents. In addition to

easy distribution among larger sample sizes, they can also be well administered in

standardized procedures. Another advantage is the possibility of using statistical me-

thods. However, researchers have to cope with generally low response rates. Addi-

tionally, one needs to consider the fact that those who return the questionnaire, com-

pared to those who do not, may not be respresentative of the entire group (self-

selecting bias). Despite the use of scientific analysis, there is still much room for mi-

sinterpretation of complex data. Some further aspects are listed below (Exhibit 22).


Offers great anonymity for respondents which may also influence response quality

Can accommodate large sample sizes Practicability and ease of administering and

recording questions and answers Ability to use advanced statistical analysis Discovery of small differences in data

Involves generally low response rates May have considerable self-selecting bias Is limited to in-depth details of data Offers little control over timeliness of providing answers or

evaluating truthful responses Possible misinterpretation of data and inappropriate use of

analysis procedures

Exhibit 22 - Advantages and disadvantages of surveys (Hair, Bush and Ortinau 2006: 222; Kumar 1999: 114-115)

Two types of surveys can be distinguished: (1) person-administered and (2) self-

administered surveys. The former involves a human interviewer who asks questions

and records the answers given. Examples of this method of data collection include



executive interviews, purchase-intercept interviews or telephone interviews. In con-

trast, participants may also read and respond to survey questions themselves without

any personal assistance. This kind of self-administered collection occurs, for in-

stance, in the form of drop-off, mail/email or internet surveys (Hair, Bush and Ortinau

2006: 232-247).

In direct comparison, self-administered surveys generally incur lower costs than do

person-administered surveys. This is mainly due to the fact that there is no need for

an interviewer, which eliminates, incidentally, any form of interviewer-respondent bi-

as. In addition, respondents may feel more comfortable as they can exercise full con-

trol over how fast, when or where they complete the questionnaire. Greater anonymi-

ty can likewise lead to better results. In contrast, disadvantages include high non-

response rates and potential response errors as a result of frustration with or misun-

derstanding of items. What is more, there is no interviewer present to monitor the

answering process and ensure the desired standard. Also, overall data acquisition is

generally very slow (Hair, Bush and Ortinau 2006: 241).

The electronic survey, email- or web-based, is a prominent example of a self-

administered survey. Normally, the questionnaire is placed on a specifically designed

website using some sort of survey software. Once set-up procedures are complete,

this approach allows fairly easy handling of large sample sizes. As the whole process

is automated, any recording error is practically eliminated. Furthermore, results can

be monitored and checked while being received. Electronic surveys are also very

flexible. There exist barely no limits as to structure, design, layout, length, question

formats, languages or the like. Nevertheless, technical accessibility and response

rates36 could become areas of concern. First, respondents need to have computer

and internet access, and be familiar with their use. This may not be the case for

some targeted populations. Second, as a matter of fact, many people consider invita-

tions to participate in a web survey as spam, and simply ignore them (Craig and

Douglas 2005: 302-303).

It may be possible to increase participation in surveys by providing better informa-

tion on the overall research study, emphasizing the importance of every individual's

contribution, guaranteeing absolute confidence of responses, providing some sort of

technical assistance in electronic formats and offering incentives as tokens of ap- 36 Response rates in electronic surveys are generally rather low, often only between 0.5 and two

percent (Craig and Douglas 2005: 302).



preciation (Churchill 1999: 588-589).

Against a background of this general overview of surveys, it is pertinent to consid-

er in detail the core collection instrument in surveys: the questionnaire. This tool can

be defined as "a formalized framework consisting of a set of questions and scales

designed to generate primary raw data" (Hair, Bush and Ortinau 2006: 429). It is

usually used in surveys as a tool of quantitative research.

Churchill (1999: 328-329) distinguishes nine steps for successfully designing a

questionnaire. First, the researcher needs to specify the required information.

Second, the type of questionnaire and method of administration are determined. The

next three steps concern individual questions; namely defining content, determining

form of response and choosing the wording. Afterwards, questions need to be put in

an appropriate sequence. Then the overall characteristics of the questionnaire are

determined based on the questions included. In step eight, Churchill suggests it may

be necessary to review the process thus far. Finally, conducting a pretest is advisa-

ble. Despite the above clearly defined step-by-step approach, the author acknowl-

edges that this sequence need not be taken too seriously in practice. Often, the de-

velopment of a questionnaire involves several iterations and looping. Thus, it is con-

cluded that this 'process' should be considered rather as a "guide or checklist".

Providing respondents with a well-designed questionnaire improves response rate

and data quality. The overall structure should follow a logical and hierarchical order

with data being collected from general to specific. At the beginning, a brief introduc-

tion ought to provide some background information on the research. The following

sections need to be dedicated to specific content areas, which can be clearly distin-

guished from one another. Finally, there are usually some identification questions

and a closing statement expressing gratitude for participation (Hair, Bush and Ortinau

2006: 435-437).

When designing a questionnaire, researchers should keep in mind that the total

amount of time respondents agree to spend is rather limited. In general, 15 to 20 mi-

nutes is the usual time frame for surveys. Although incentives may increase individu-

als' willingness to provide answers, completion rates quickly decrease with response

duration. Half an hour is generally considered the maximum for questionnaires (Ba-

gozzi 1996a: 40).

The application of questionnaires in international studies sometimes makes trans-



lation necessary. Basically, there exist two methods37: (1) forward translation, and (2)

back translation. In the former, a translator or group of translators simply translates

the questionnaire from the source into the target language. In the latter, two transla-

tors are used, of whom one is a native speaker in the target language and the other

in the source language. After a first translation from source to target language, the

process is run in the other direction, i.e is done by the other individual. Then, the

back translated version is compared to the original. As both approaches have pros

and cons, some suggest using a committee approach, which includes multiple indi-

viduals in the translation process, irrespective of the method used (Craig and Doug-

las 2005: 254-257).

Having set up a draft of the questionnaire, three test stages are then conducted:

(1) the review, (2) the pilot test38, and (3) the representative pretest. After each stage

revisions allow for improvements of the framework. First, the researcher can them-

selves conduct a review, or consult an expert for advice. From a broad perspective,

the questionnaire is assessed with regard to topic relevance, connection to theories

or literature, and methodology of the study. Second, a pilot test involves a small

number of respondents, generally between five and ten. On completion of the ques-

tionnaire, they can provide valuable feedback on problems in wording, response al-

ternatives, overall structure, length or the like. In a third stage, a representative pret-

est may be conducted if sufficient time and resources are available. To be able to run

accurate analyses, an appropriate sample size is required, typically involving up to a

100 sample elements. Having familiarised themselves with these stages, the re-

searcher is in a position to decide what tests may be necessary and their scope (Ba-

gozzi 1996a: 41-44).

Within consumer research, this technique was applied in the form of a self-

administered websurvey.

(4) Details on sampling

In the presentation of qualitative techniques, some aspects of the selection of par-

ticipants for interviews or focus groups have been briefly mentioned already. When

using secondary sources, issues of sampling are also of lesser concern. However, in

quantitative studies and primary research, sampling issues need to be closely ex-

37 In this research, the approach of forward translation was used because of limited resources. 38 As no 'representative pretest' was conducted in this research, the term 'pretest' is used as a

synonym for 'pilot test', which is in line with Hair, Bush and Ortinau (2006: 66).



amined to ensure all steps of the process are appropriate to the research problem

(Hair, Bush and Ortinau 2006: 65). Furthermore, the quality of the sample is highly

correlated with the quality of possible conclusions from the collected data. As a mat-

ter of fact, poor samples may sabotage even good statistical techniques in the search

for "meaningful, credible and generalizable results" (Diamantopoulos and Schlegel-

milch 1997: 18).

'Sampling' itself is defined as "the process of selecting a few from a bigger group"

in order to estimate characteristics or facts of this bigger group (Kumar 1999: 148).

There are several terms in this process such as "population", "target population",

"sample" and "sampling element" that need to be distinguished (Hair, Bush and Orti-

nau 2006: 309-310)39.

(a) Sampling process

The sampling process can be split into five phases: first, the researcher needs to

determine the population as regards, for instance, sampling units, extent and time.

Second, the listing or directory from which the sample is chosen has to be specified.

Third, a decision is taken on whether a probability or nonprobability sampling tech-

nique is used and how sample members are chosen in practice. Fourth, the number

of sampling units is specified in the targeted sample size. Finally, the researcher

draws the sample and gathers data (Diamantopoulos and Schlegelmilch 1997: 18-

19).

(b) Sampling techniques

There are two categories of sampling techniques: (1) probability sampling, and (2)

non-probability sampling40. In probability samples, each sampling element has a

"known, non-zero probability of being included in the sample". It is not important that

the probabilities of selection are equal, but they have to be specified. In contrast, in

non-probability samples "the probability of selecting each sampling unit is unknown".

As a result, for example, it is not possible to ensure that the sample is representative 39 'Population' refers to the "identifiable set of elements of interest to the researcher" based on the

defined research problem; 'Target population' is "the complete group of people specified for investiga-tion"; 'Sample' describes the "selected subgroup of the target population", which is actually used for the research; 'Sampling element or unit' stands for any single "person or object from the target popula-tion or sample" (Hair, Bush and Ortinau 2006: 309-310). The whole approach is called 'sampling de-sign', which involves the concrete strategy and techniques for arriving at the defined subgroup of people (Kumar 1999: 149).

40 Probability sampling can also be called probabilistic or random sampling, whereas non-probability sampling may be alternatively referred to as non-probabilistic or non-random sampling (Diamantopoulos and Schlegelmilch 1997: 13; Kumar 1999: 153).



of the population (Churchill 1999: 501).

The two sampling types differ in a number of characteristics (Exhibit 23). In gener-

al, probability sampling has stronger requirements concerning listing population ele-

ments, time needed for completion or overall skills. As a result, representativeness,

accuracy and reliability are higher. In contrast, non-probability sampling is much eas-

ier to conduct and offers important cost economies.

Characteristics Probability sampling Non-probability sampling

List of population elements Complete list necessary None necessary

Sampling skill required Skill required Little skill required

Time requirement Time-consuming Low time consumption

Cost per unit sampled Moderate to high Low

Estimates of population parameters Unbiased Biased

Sample representativeness Good, assured Suspect, undeterminable

Accuracy and reliability Computed with confidence intervals Unknown

Measurement of sampling error Statistical measures No true measure available

Exhibit 23 - Characteristics of probability and non-probability sampling (Hair, Bush and Ortinau 2006: 331)

Probability samples can be conducted as simple random sampling, stratified ran-

dom sampling, and cluster sampling. Some well-known non-probability types include

judgmental, quota and convenience sampling41 (Diamantopoulos and Schlegelmilch

1997: 14-16).

In this research, non-probability sampling was applied in the form of convenience

sampling.

(c) Convenience sampling

In convenience sampling42, sample units are chosen "on the basis of their being

readily available or accessible" or, in other words, "on the basis of convenience" (Di-

amantopoulos and Schlegelmilch 1997: 14). One underlying assumption of this ap-

proach is that the elements surveyed are similar to the target population regarding

the characteristic under research (Hair, Bush and Ortinau 2006: 340).

This sampling technique allows the selection of a large number of people within a

short time. In addition, there is no need to establish the total number of elements in

the sampling population. Despite the fact that sampling error cannot be determined,

41 Details on judgmental and quota sampling are omitted as they are of no further relevance for this

research. 42 Convenience sampling is also named accidential or chunk sampling in some sources

(Diamantopoulos and Schlegelmilch 1997: 14; Kumar 1999: 153).



the sample may still be relatively free of systematic bias if variables are measured

properly43 (Craig and Douglas 2005: 285). Some difficulties include representative-

ness and generalizability. Advantages and disadvantages are compared in the table

below (Exhibit 24).


any respondent who is readily available may be included in the sample

large number of respondents can be surveyed in a relatively short time

no information needed about the sampling population such as total number of elements

the least expensive way of selecting a sample

as the resulting sample is not a probability one, sampling error cannot be calculated

data is not generalizable to the defined target population the most accessible individuals might have particular

characteristics that are unique to them some people contacted by convenience may not have

the required information for certain research problems

Exhibit 24 - Advantages and disadvantages of convenience sampling (Kumar 1999: 161-162; Hair, Bush and Ortinau 2006: 340)

Churchill (1999: 503) outlines a common practice in international marketing re-

search. Often, researchers approach people originating from a country under investi-

gation but who currently reside in the country where the study is based. For example,

a convenience sample of a study based in the European Union may include Ameri-

cans currently living in the European Union rather than in their home country. It

should be considered that these people may have some characteristics, such as be-

longing to a particular social class, that make them less representative of the total

population.

(d) Sample size and response rate

In general, the size of the sample has consequences for data quality and generali-

zability of the findings (Hair, Bush and Ortinau 2006: 65). Applying statistics, the de-

sired degrees of, for example, variability, precision and confidence play a role. How-

ever, such considerations are significant only for probability samples (Churchill 1999:

549-550).

For non-probability samples, such as convenience sampling, there exist no objec-

tive formulas for determining the appropriate sample size. It is rather the researcher

who makes an intuitive judgment on how many units he or she deems necessary

(Hair, Bush and Ortinau 2006: 320-321). Instead of aiming for the optimal size, one

may just look at historic evidence. Especially inexperienced researchers often wel-

come such guidance from the work of others who conducted similar studies (Chur-

chill 1999: 565).

In practice, sample size is apparently mainly determined by the available re-

43 Sampling error and systematic error are discussed in more detail in a later section.



sources. Factors such as time, personnel and money define the targeted number of

respondents (Craig and Douglas 2005: 290-291).

In spite of differences between projects and varying degrees of homogeneity in

target populations, Diamantopoulos and Schlegelmilch (1997: 17) provide a rule of

thumb for an appropriate sample size: "the sample should be large enough so that

there are 100 or more units in each category of the major breakdowns and a mini-

mum of 20 to 50 in the minor breakdowns".

In a nutshell, Kumar (1999: 164-165) concludes "budget determines the sample

size" and "the larger the sample size, the more accurate are the estimates".

(5) Details on measurement

As in the previous section on sampling, measurement issues also concern mostly

quantitative research, for example, when using a questionnaire. In the process, re-

searchers need to first define relevant research dimensions and then apply appropri-

ate forms of measurement to investigate those variables that are considered signifi-

cant for the problem (Hair, Bush and Ortinau 2006: 65-66).

(a) Types of questions and remarks

Basically, questions can fall into two categories: (1) open-ended or (2) closed-

ended questions44. In open-ended questions, the respondent provides answers in his

or her own words. On the other hand, in closed-ended questions responses are con-

strained by a specific format and pre-defined alternatives (Craig and Douglas 2005:

248).

Open-ended questions are advantageous if the researcher aims at gathering

broader or deeper information. However, some individuals may be unable to express

themselves precisely and understandably in a free format. In addition, analysis poses

challenges in summarizing, classifying and interpreting the data (Kumar 1999: 118-

119).

As reply categories need to be specified in advance, closed-ended questions help

researchers to ensure that all relevant information is actually gathered. For respon-

dents, it is a fairly convenient process to provide answers. In addition, later analysis

is also easier for standardized responses. Nevertheless, some respondents can be

negatively influenced by the given set of responses. They may, for example, pick an

44 Open-ended questions may also be called 'unstructured questions' and closed-ended questions

referred to as 'structured questions' (Hair, Bush and Ortinau 2006: 430).



option that does not exactly represent their opinion or make the selection without tho-

rough consideration (Kumar 1999: 119).

Regarding quality in the formulation of questions, Bagozzi (1996a: 39-41) provides

a broad overview45 on dimensions to consider. For example, he suggests that ques-

tions have to be simple, clear, direct, and short. They also need to be uniformly com-

prehensible, technically accurate, and understandable when taken out of order or

context. Additional positive criteria include the possibility for mutually exclusive an-

swers and comparison to existing information.

In contrast, questions should not contain abbreviations or unconventional phrases,

be too vague or too precise, biased, too demanding, double-barreled46, loaded or

leading47, assume too much knowledge, be irrelevant to the object under research or

include double negatives (Bagozzi 1996a: 39-41).

In this research, both open-ended and closed-ended questions were used48.

(b) Types of measurement scales

Measurement scales can be divided into four categories, which have different cha-

racteristics: (1) nominal, (2) ordinal, (3) interval, and (4) ratio. The latter two are also

referred to as metric scales. The table below provides a compact overview on the

distinctive characteristics (Exhibit 25).

Properties / Scale type Nominal Ordinal Interval Ratio

Identity Yes Yes Yes Yes

Order No Yes Yes Yes

Equal intervals No No Yes Yes

Absolute zero No No No Yes

Exhibit 25 - Distinctive properties of scale types (Diamantopoulos and Schlegelmilch 1997: 25).

A nominal scale can be considered the simplest form of a scale. The respondent

must specify only whether a characteristic applies or not. By attaching a label to the

criterion being measured, the scale is used for identification and/or categorization. It

basically only allows counting the number of cases in each category or splitting the

sample into groups. Common applications involve classification by gender, origin,

45 The author here combines remarks from several sources. In the interest of brevity, only a

selection and combined summary of criteria is given here. 46 In double-barreled questions, the respondent is "asked to provide more than one issue at a time

(Hair, Bush and Ortinau 2006: 429). 47 In loaded or leading questions, questions contain "several complete thoughts" instead of one

specific thought and the respondent is "directed into a response" (Hair, Bush and Ortinau 2006: 429). 48 Open-ended questions provided most useful in expert interviews and focus group discussions,

whereas closed-ended questions allowed standardization in the consumer survey.



education or the like49 (Craig and Douglas 2005: 313; Bagozzi 1996a: 10-11).

An ordinal scale establishes an order between objects. The respondent usually

needs to set up a ranking of elements according to a specific characteristic. The re-

sulting values indicate whether an object is, for example, liked more or less com-

pared to another object. It is however not possible to state anything about the

strength of preferences. Typically, this scale is used for rankings of preference of any

kind (Craig and Douglas 2005: 313-314; Bagozzi 1996a: 12-13).

In addition to the features of the previous two scales, the widely-used interval

scale is characterized by having equal intervals across the range of the scale and an

arbitrary zero point. It is thus possible to determine how strong certain differences

between variables actually are. In analysis, scale values derived from the respon-

dents' answers can be directly compared to each other. A typical application of this

type is in measuring attitudes via all forms of attitudinal scales, which will be more

closely presented in a later section (Craig and Douglas 2005: 314; Bagozzi 1996a:

14-15).

Ratio scales are rarely applied in collecting data from individuals. The scale has all

the previous characteristics and also an absolute or true zero point. As a result, com-

parisons can be made in the absolute magnitude of a given feature. Examples in-

clude age, incomes, sales, units produced or the like (Craig and Douglas 2005: 315;

Bagozzi 1996a: 16).

As a general rule, Diamantopoulos and Schlegelmilch (1997: 27) point out that

"the higher the level of measurement, the greater the resulting flexibility [...] in

analysis". Interval data, for example, allows more advanced techniques50 than ordinal

data. Thus, the researcher is advised to favor metric measures (i.e. interval and ratio)

over non-metric (i.e. nominal and ordinal).

In the questionnaire, mostly interval scales were used.

(c) Details on attitudinal scales

Attitudes play an important role in consumer investigations. They are considered

an important influence on purchasing decisions (Churchill 1999: 378). Therefore, re-

49 If a nominal scale contains only two values such as male/female or user/nonuser, for example,

the resulting variable is called "dichotomous or binary variable". Despite its categorizing character, it also establishes an order and provides equal-sized intervals. As a result, it can be handled as nominal, ordinal or also interval (Diamantopoulos and Schlegelmilch 1997: 30).

50 Analytical techniques that can be used at the different levels of measurement are discussed in step five of the research process, which deals with 'analyzing and interpreting data'.



searchers aim to apply accurate measurement formats. In this respect, attitudinal

scales provide a central function: They "measure the intensity of respondents' atti-

tudes towards the various aspects of a situation or issue" and also "provide tech-

niques to combine the attitudes towards different aspects into one overall indicator"

(Kumar 1999: 128).

Among several scales51, two interval scales are considered most "popular and ef-

fective" to measure attitudes, intention or behavior (Bagozzi 1996: 12): (1) The se-

mantic differential scale, and (2) the summated rating scale or Likert scale.

The semantic differential scale uses bipolar adjectives as endpoints. It is easy to

understand and has generally strong consistency also across cultures. Respondents'

attitude is measured by adjectives that should be the exact opposite of each other.

Examples include good/bad, attractive/unattractive, pleasant/unpleasant, or use-

ful/useless (Churchill 1999: 395-407; Bagozzi 1996a: 12-14).

The summated rating scale, better known as Likert scale, provides a number of

statements on any issue under research. The respondent needs to indicate his or her

level of agreement, for example, on a 5-point scale by choosing among 'strongly

agree', 'agree', 'neither agree nor disagree', 'disagree', and 'strongly disagree'. While

being fairly easy to construct, the researcher has to keep in mind that the scale ac-

tually does not measure attitude as such. The score attained only reflects the res-

pondents' positions on an issue in a relative sense (Churchill 1999: 395-407; Bagozzi

1996a: 12-14; Kumar 1999: 129-135).

When constructing attitudinal scales, it is very common to employ an odd rather

than even number of scale points. In such a scale, there is a neutral response in the

center, which provides a symmetrical division of positive and negative poles. Despite

interpretative problems that occur if the middle option is chosen too frequently, a va-

lid value is however created. If designed properly, an even-point or forced-choice

format needs to provide some kind of "no opinion", "don't know" or "not applicable"

option. As an outside option, this response provides a less valuable contribution

(Hair, Bush and Ortinau 2006: 395). In addition, the number of scale steps should be

at least between five and seven, so that the extremes and the center are less likely to

51 There is a considerable number of other scales available, for example, the equal-appearing-

interval (Thurston), cumulative (Guttman), behavior intention, rank-order, comparative and non-comparative rating, paired-comparison and constant sums scale. As a result of their less frequent use, further details are omitted here (Kumar 1999: 128-135; Churchill 1999: 295-407; Bagozzi 1996a: 12-14).



be selected, since these quickly limit feasible choices. As a result, the resultant dis-

tribution of responses can be expected to be more satisfactory with more steps than

with fewer (Bagozzi 1996a: 40-41). Furthermore, it makes sense to randomly mix the

positions of positive and negative pole descriptors on both ends of the scale. Other-

wise, respondents may be inclined to generally favor positive responses, which

would lead to an overly favorable evaluation in the whole construct, also known as

halo effect bias (Hair, Bush and Ortinau 2006: 395). Depending on the level of so-

phistication of the research, attitudinal scales can be designed in a single-item or

multi-item format. In the former, data is collected on only one attribute per question.

In contrast, the latter simultaneously collects data on several attributes, an approach

which is more common in advanced scales on attitudes, intention or behavior (Hair,

Bush and Ortinau 2006: 407).

Besides issues of scale construction, the researcher should also be aware of the

fact that results of attitudinal scales in multicountry studies may not be interpreted as

being truly interval data. This is due to potentially different meaning ascribed to the

distance between scale points in different countries. Thus it remains questionable if a

specific mean response in two countries can be regarded as equivalent. However, as

such a situation is not tackled by analytical procedures, it requires some interpreta-

tive experience (Craig and Douglas 2005: 314).

Finally, one more remark must be made on drawing conclusions from the results

of attitudinal scales. Data should not be considered as providing facts about any ob-

ject, attitude, intention or behavior. It represents only "insights into what might be re-

ality". Moreover, neither attitudes nor intentions can be interpreted as capable of

clearly predicting behavior. Although behavioral intent is already more accurately un-

derstood, the strongest predictor of actual behavior is past behavior52 (Hair, Bush

and Ortinau 2006: 401).

Both the semantic differential scale and the summated rating scale were used with

an odd number of scale points.

(d) Validity and reliability in measurement

To ensure proper measurement, the concepts of validity and reliability need some

closer consideration. 'Validity' refers to whether a measure "measures what it is in-

52 Theories using structural equation modeling (SEM) can be fairly sophisticated in describing, for

example, consumer behavior based on combinations of attitudinal scales.



tended to measure". 'Reliability' on the other hand describes "the amount of agree-

ment between independent attempts to measure the same" (Bagozzi 1996a: 16). For

a research tool this means that "repeat measurements made by it under constant

conditions will give the same result". Thus the accuracy of results can be measured

by it (Kumar 1999: 140).

For assessment, the researcher may raise the following questions: (1) "Am I in fact

measuring what I think I am measuring?" concerning validity, and (2) "Am I getting

consistent results from my measurements?" concerning reliability. In practice, as-

sessment of both aspects can be quite complex. Although procedures exist, these

are not further elaborated on here (Diamantopoulos and Schlegelmilch 1997: 34).

(6) Sampling and nonsampling error

There is considerable potential for error53 in all stages of the research process.

However, awareness and understanding of the most prominent sources are likely to

be of assistance to the researcher, especially in the phase of methodological design

(Churchill 1999: 575). Although the literature covers a great number of potential er-

rors, classified in ways54, the following section focuses on providing a general sum-

mary as illustrated in the figure below (Exhibit 26).

(I) Sampling error

(II) Nonsampling error (1) Nonobservation error In the form of...

Random error

or

systematic error

(2) Observation error (a) Researcher error

(b) Respondent error

Exhibit 26 - Sampling and nonsampling error (Author's illustration)

(a) Difference of sampling and nonsampling error

All errors in research can be broadly assigned to either (1) sampling55 or (2) non-

sampling error, which together create total error (Bagozzi 1996a: 26). The former is

affected by sampling techniques, whereas the latter by measurement design. When

referring to a data matrix, "sampling issues affect the rows and measurement issues

53 Errors can also be referred to as bias (Hair, Bush and Ortinau 2006: 224-225) 54 As the various authors list errors in different ways and do not provide a universal classification,

the simplified overview aims at introducing the seemingly most frequent types according to some common differentiation dimensions.

55 In some literature, a number of errors are listed as "sampling errors" such as population specification error, sampling frame error, selection error, small numbers error and also sampling error (Diamantopoulos and Schlegelmilch 1997: 18-19; Bagozzi 1996a: 26). In this section however, "sampling error" is to be regarded solely as the error resulting from sampling in probability sampling that can be calculated with statistical means, as opposed to "nonsampling error".



the columns" (Diamatopolous and Schlegelmilch 1997: 39).

Sampling error is defined as "the statistically measured difference between the ac-

tual sample results and the true population results" (Hair, Bush and Ortinau 2006:

224). Only the application of probability sampling techniques56 enables the research-

er to calculate the extent of this type of error. It is thus possible to estimate how likely

it is that the sample is unrepresentative and by how much (Diamantopoulos and

Schlegelmilch 1997: 13). By increasing sample size, sampling error can generally be

reduced (Churchill 1999: 572).

Put simply, nonsampling error "reflects the many other kinds of error that arise in

research". It can neither be assessed using statistical measures nor can its direction,

i.e. underestimation or overestimation of the parameter, be determined. In sharp con-

trast to sampling error, nonsampling error is likely to even increase the larger the

sample size, but can be improved by better measurement (Churchill 1999: 573).

In direct comparison, nonsampling error exerts much stronger influence on total

error than sampling error. The former may be "up to ten times the magnitude" of the

latter (Churchill 1999: 574). As a result, nonsampling error is more closely dealt with

in the following.

(b) Nonobservation and measurement error

Within nonsampling errors, two types of errors are dominant: (1) nonobservation

error and (2) observation error (Bagozzi 1996a: 27).

Nonobservation error follows from "a failure to obtain data from parts of the survey

population". Basically, it can be split into noncoverage error, which is defined as a

"failure to include some units [...] of the defined survey population in the sampling

frame", and nonresponse error, which is the "failure to obtain information from some

elements of the population that were selected for the sample"(Churchill 1999: 574-

575). Regarding the latter, this may be because the respondent is not available, he or

she refuses to cooperate, or respondent's data is lost or damaged after collection

(Bagozzi 1996a: 27).

Observation or measurement error can be the result of either inaccurate data from

the sampling units, or error in collecting, processing and analyzing data. Churchill

(1999: 575) points out that this error type is "more troublesome" because "with non-

56 As nonprobability sampling does not allow the calculation of sampling error, generalizability of

any information with regard to the total population is limited (Hair, Bush and Ortinau 2006: 65).



observation errors, we at least know we have a problem [...], with observation errors,

we may not even be aware that a problem exists".

(c) Researcher and respondent error

Observation error can be differentiated according to its origin: (1) Researcher error

and (2) respondent error (Hair, Bush and Ortinau 2006: 225).

Researcher error Respondent error

Construct development error Scale measurement errors Instrument design error Data processing and analysis error Misinterpretation error

Social desirability error Social acquiescence error Extreme response error Item non-response error Unconscious misrepresentation error

Exhibit 27 - Researcher and respondent errors (Hair, Bush and Ortinau 2006: 225-231; Craig and Douglas 2005: 259-271)

Researcher error may result from several causes including, for example, incom-

plete constructs, low reliability and/or validity of constructs, lack of precision in

scales, misuse of scale descriptors, improper sequence of questions, length of ques-

tionnaire, inappropriate analysis techniques, predictive bias, selective perception,

data editing error and several more (Hair, Bush and Ortinau 2006: 225-231).

Within respondent errors, one popular error is social desirability bias. It is defined

as "the desire to provide the socially acceptable response". Although this tendency is

stronger in face-to-face settings than in self-completion formats, respondents are

generally inclined to this bias. Another common type is social acquiescence or yea-

saying bias, which refers to the "tendency to respond in the affirmative". It describes

the fact that respondents often tend to favor positive responses over negative ones

and refrain from being too critical over an issue. Additional bias results from respon-

dents choosing extreme points of a scale and intentionally skipping questions or pro-

viding incorrect answers (Craig and Douglas 2005: 265-269).

In international research, there is, additionally, potential for cultural bias. Errors

may occur in all phases of the research process and be ascribable to either the re-

searcher or the respondent. Regarding communication or interpretation, for example,

different meanings may be transported in the formulation of questions and responses

(Craig and Douglas 2005: 170-174).

(d) Random and systematic error

Measurement errors, whether they originate from the researcher or the respon-

dent, occur either in the form of (1) random error or (2) systematic error (Bagozzi

1996a: 27).



Random error, which is also called variable or nonconstant error, "does not manif-

est itself consistently every time a measurement is taken" (Diamantopoulos and

Schlegelmilch 1997: 33). In fact, estimates may vary on a random basis, creating es-

timates either above or below the true value. The source of this error lies in momen-

tary conditions of the respondent or measurement situation (Churchill 1999: 452).

Systematic error is also known as nonrandom error or constant error. It "occurs in

a consistent manner every time a measurement is taken" (Diamantopoulos and

Schlegelmilch 1997: 33). The problem with this type of error is that all mistakes occur

in one direction, thus biasing sample results consistently away from the true popula-

tion parameter (Churchill 1999: 572-573). However, nonrandom error is to a certain

degree "controllable". It falls on the researcher to ensure that, for example, mea-

surement design does not lead respondents to reply in a certain way and errors are

avoided in processing data (Hair, Bush and Ortinau 2006: 225).

The concepts of validity and reliability introduced earlier can also be described by

applying these forms of error. Validity of a measure is "the extent to which a particu-

lar measure is free from both systematic and random error", whereas reliability is "the

extent to which a particular measure is free from random error". Thus reliability is a

precondition of validity, but the reverse does not hold true (Diamantopoulos and

Schlegelmilch 1997: 36).

In interpreting results, the effect of these errors needs to be considered.

After presenting a number of aspects of determining methodology, the following

section focuses on what to consider when conducting empirical research in practice.

5.1.2 Conduct empirical research

In the fourth phase of the research process, empirical data is actually gathered.

Depending on the design, the researcher may have to deal with conducting inter-

views or focus groups, constructing a case study or running a survey. Thus the chal-

lenge now lies in doing the field work in an effective, efficient and ethical manner.

This last aspect is given further consideration.

Among the various parties affected by research activity, three stakeholders are

most deeply involved: (1) the participants, (2) the researcher, and (3) the funding or-

ganization. First, participants supply their attitudes, knowledge or other information



relevant to investigating the research problem. They can be individuals, groups of

people, organizations or any other entity. Second, the researcher is responsible for

planning, setting up and ultimately completing the research process. Normally

representing a specific academic discipline, he or she has to adhere to a certain code

of behavior. Third, there is usually some further party that contributes significant fi-

nancial or other resources to the endeavor. This might be a private company, gov-

ernment organization or academic institution (Kumar 1999: 191).

One should be aware of the fact that every stakeholder pursues a personal agen-

da. Research is thus normally exposed to differing perspectives, aims or motivations.

The researcher's obligation is to always give scientific integrity the utmost priority.

The self-interest of any party must not affect activities in the process or results. One

important contribution on the part of the researcher is to set a standard of correct

conduct. With regard to research participants, it is imperative that consent is sought

for their inclusion in a study. Likewise, before collecting sensitive information, sub-

jects should be provided with enough time to freely decide whether to contribute or

not. Confidentiality has to be strictly kept. Furthermore, information needs to be col-

lected in an effective way to make best use of participants' time. Some token of ap-

preciation for the respondents' efforts may also be appropriate. As regards the spon-

soring or supporting body, proper conduct implies prevention of any influence on re-

search activities or data. The researcher must also avoid personal bias of any kind.

The correct use of methodology and accurate handling of data are crucial. During the

entire process, truthful communication of both objectives and findings is imperative

(Kumar 1999: 192-196).

The researcher also bears a number of ethical responsibilities towards the scientif-

ic community and the general public. Already at the beginning of the research

process, problems may arise, for example, in deciding what issues should be ad-

dressed and what is to be intentionally left out. Here it is important to list transparent-

ly list the reasons behind each decision. The whole set of activities has to be based

on a sound methodology. Procedures need to be described and progress docu-

mented. Concerning results, the researcher must refrain from fabricating, manipulat-

ing, withholding or influencing in any other way empirical findings (Bagozzi 1996a:

43).



Assuming57 ethical standards in empirical research have been complied with and

enough data successfully gathered, the next phase deals with analysis and interpre-

tation.

5.1.3 Analyzing and interpreting data

The fifth phase of the research process is concerned with transforming collected

raw data into interpretable information. There are three stages that can be differen-

tiated: first, raw data collected from various sources such as existing literature, inter-

views, focus groups or surveys is compiled; second, all raw data needs some editing

and coding before it can be used in computer programmes; third, an analysis frame-

work needs to be set up. Once the data is prepared it can be broken down using con-

tent, descriptive, univariate or multivariate analyses (Kumar 1999: 201; Hair, Bush

and Ortinau 2006: 478). In the following, the two later stages are presented in more

detail.

(1) Editing and coding

Editing involves checking raw data for inconsistencies and incompleteness. Mis-

takes made by either the interviewer or respondent are eliminated. If necessary, the

researcher inspects each questionnaire and makes appropriate corrections (Churchill

1999: 630).

Three major problems with data may occur in editing: (1) ambiguity, (2) inconsis-

tency, (3) nonexistence. First, ambiguous data involves unspecific or unclear mean-

ing, which is especially likely in open-ended questions. The researcher may decide

whether to ignore only the individual response concerned or exclude the complete

set of responses given by the subject. Second, data can turn out to be inconsistent,

meaning that it is apparently logically unreasonable. This is the case, for example, if

contradictory answers are provided in a sequence of questions. Such data must be

eliminated. Third, in the case of item non-response, answers to some questions have

been omitted. This problem may be tackled by leaving a blank data point or ignoring

the complete data set. Exceptionally, it may be permissible to add a neutral value

instead of the missing response, as, for example, choosing the center value in an

unevenly numbered measurement scale (Diamantopoulos and Schlegelmilch 1997:

57 The author wants to point out that empirical research was conducted in line with ethical stan-

dards.



42).

In coding, values are assigned to the given responses. As a result, data can be

counted, tabulated and read by computer programs. The process usually involves the

use of a codebook that contains requisite instructions on how to code each item. In

electronic surveys, the user interface is normally already connected with such a cod-

ing scheme58. Answers are automatically converted into a numeric format during en-

try and saved in a database. Errors in data-entry can be thereby nearly eliminated59

(Hair, Bush and Ortinau 2006: 67, 485; Churchill 1999: 633-635).

After initial editing of raw data, coding and possible further editing, data is ready

for further processing. At this stage, all improper data has been excluded from the

sample. The resulting total set of responses that is available for analysis is called the

'effective sample size' (Diamantopoulos and Schlegelmilch 1997: 69).

(2) Analysis and interpretation

In the analytical process, the researcher tries to give initially random data some

meaningful structure. By doing so, the aim is to discover particular characteristics as

well as commonalities or differences in the variables. The applicable procedures

have a wide variety of complexity and sophistication, ranging, for example, in quan-

titative data from simple frequency distributions to multivariate methods (Hair, Bush


Before proceeding directly to performing the analyses, it is important to clearly

specify what goals are to be reached. In addition to providing some overall guidance,

such objectives of analysis have a threefold purpose: first, it helps the researcher to

select only those analyses that actually contribute to investigating the research prob-

lem; second, it assists the researcher in obtaining as much information as possible

from the available data; third, it helps to avoid overlap in applying the analyses.

When defining the objectives in the first place, the researcher needs to specify both

the content of the analyses, i.e. which variables to use, and their respective focus,

i.e. for example description vs. examination of relationships (Diamantopoulos and

Schlegelmilch 1997: 62-63).

In multicountry research, the level at which analyses are performed is also an is-

sue. Basically, three levels can be differentiated. At the intracountry level, data from

58 This holds true for example for 'Limesurvey', which is the survey software used in this research. 59 As a result, coding as a seperated step done by the researcher becomes practically irrelevant.

Thus, editing actually deals directly with numeric, computerized raw data.



each country involved is analyzed separately for its own characteristics. At the inter-

country level, analyses are concerned with comparing data from one country with

data from another. From a pan-country perspective, all data is grouped together

without considering geographical origin and analyzed as a whole. Whatever level or

levels are chosen depends not only on the defined focus of the research, but also on

what is feasible with regard to effective sample sizes and their representativeness for

individual countries (Craig and Douglas 2005: 348-349).

(a) Analysis of qualitative data

Content analysis is a method for analyzing qualitative data such as interviews or

focus groups. It can be defined as "the systematic procedure of taking individual res-

ponses and grouping them into larger theme categories or patterns". Based on the

written raw data in transcripts or notes, for instance, the researcher reviews, organiz-

es, groups together and summarizes the participants' inputs. Then he or she inter-

prets and comments on the findings (Hair, Bush and Ortinau 2006: 194).

The process of content analysis is likely to be subjective because the researcher's

individual perception and intuition may exert considerable influence. However, it in-

cludes specifically defined interpretive factors that may provide some analytical guid-

ance: (1) assessing the vocabulary, classification should be based on the degree of

similarity determined and underlying commonalities; (2) in considering the context,

the researcher's understanding may be derived from both verbal expressions such as

preceeding and subsequent statements and nonverbal factors such as tone, intensity

and nonverbal communication; (3) the frequency of comments should not be consi-

dered a direct indicator of importance, but gives some indication of the most pressing

topics nevertheless; (4) the intensity of comments as expressed, for instance, in

voice tone, talking speed, or emphasis on specific words or phrases may provide

some additional insight into the participants' perception of the importance of particular

topics; (5) considering the specificity of responses, respondents' detailed firsthand

experiences are more valuable than vague statements; (6) despite the detailed na-

ture of qualitative data, the researcher needs to concentrate on the main aim, i.e.

extracting information most relevant to the research problem. In general, the more

nonverbal and verbal indicators can be considered in content analysis, the richer are

the overall findings. However, data complexity may also increase risk of potential mi-

sinterpretation (Hair, Bush and Ortinau 2006: 195).



(b) Analysis of quantitative data

In the analysis of quantitative data, two dimensions can be differentiated: (1) con-

tent of the analysis and (2) focus of the analysis. The former results from the number

of variables included in the analysis and their level of measurement (i.e. nominal, or-

dinal or metric). For the latter, the researcher may choose a descriptive, estimation or

hypothesis-testing focus (Diamantopoulos and Schlegelmilch 1997: 64). Any analysis

is then a combination of content and focus60.

The variants in terms of content of the analysis are differentiated according to the

number of variables included. First, univariate analysis deals with only one single va-

riable at a time. Thus there is little complexity in analysis as only one level of mea-

surement is involved as well. Second, when dealing with two variables, bivariate

analysis allows six distinct combinations in terms of measurement scale, such as

nominal/nominal to metric/metric. Each of these calls for a different statistical tech-

nique. Third, multivariate analysis is applied if three or more variables are used at a

time (Diamantopoulos and Schlegelmilch 1997: 67).

Regarding the focus of the analysis, there are three options. With a descriptive fo-

cus, analytical techniques are applied to provide an understanding of the information

supplied by the variables of the sample. With an estimation focus, inferences are

drawn on the characteristics of the whole population based on information derived

from the sample and statistical methods. With a hypothesis-testing focus, previously

defined propositions on some variables are accepted or rejected based on the evi-

dence provided in the sample (Diamantopoulos and Schlegelmilch 1997: 64-65).

(c) Interpretation

After having performed several analyses, results need to be interpreted. This

means that several aspects from the data are logically integrated. With regard to the

initial questions, statements have to clearly specify what conclusions can be drawn

out of the data (Hair, Bush and Ortinau 2006: 67).

In this dissertation, both qualitative and quantitative data is analyzed. If applicable,

further remarks on analysis are made in chapters six and seven.

Having processed, analyzed and interpreted data, all information needs to be

60 In terms of content, this research involves primarily univariate and selectively multivariate

analysis with nominal, ordinal and metric data. Regarding focus, descriptive analysis is applied.



compiled in a written report as discussed in the following part.

5.1.4 Compile results

The final phase in the research process is compiling the research report. After

considerable effort, ranging from determining the problem and objectives to analyzing

and interpreting all the data collected, results and their implications need to be finally

presented in a well-structured, comprehensible manner. The researcher is advised

not to neglect this concluding part of the study (Kumar 1999: 267-268).

Although its format may be specifically tailored to either an academic or profes-

sional audience, the content of the report should nevertheless be generally unders-

tandable for any person not totally familiar with the topic and procedures (Hair, Bush


A dissertation is the relevant form of research report when pursuing doctoral stu-

dies at university. It is normally structured in five overall sections, each of which can

include one or several chapters: (1) introduction, (2) literature review, (3) methodolo-

gy, (4) data section, and (5) conclusion (Biklen and Casella 2007: 69-88).

This dissertation follows this structure.

Based on this theoretical background to the research process, the following sub-

chapter now provides insights into actual empirical data collection in the field.

5.2 Data collection from companies and consumers

The second section of this chapter discusses the process of collecting empirical

data from companies and consumers. First, an overview is offered of the relevant

phases of investigation regarding duration and timing. Second, discussion focuses on

the selection of companies and relevant aspects of company research. Third, some

background is also given on the aspect of the consumer.

5.2.1 Overview of the collection process

In summer term 2010, empirical research was conducted, corresponding to phase

four of the research process illustrated in chapter one of this dissertation. The data

collection process started in early March and covered a period of nearly 30 weeks. It

can be split into "company investigation" and "consumer investigation", both compris-



ing several phases with particular goals and results. In terms of timing, both parts

were run in parallel during the process. However, it needs to be stated that differenc-

es in research intensity and shifts in focus from one aspect to the other occurred. On

the company side, preparatory research for the investigation lasted until mid-May and

was succeeded by preparing and scheduling interviews. With some overlap, inter-

viewing experts and transcribing the interview content were completed by the end of

July. Another seven weeks were then required to analyze the content and effect

some additional interview-related research. On the consumer side, initial research

preparations were followed by focus group discussions. After drafting a preliminary

version of the questionnaire, pretests were carried out to investigate its applicability.

The final survey was conducted during a period of six weeks. Then all data was pre-

pared for and subject to analysis. In late September, both company and consumer

investigations were complete. A graphical illustration is provided in the figure below

(Exhibit 28)61.

Exhibit 28 - Timeline of the empirical research process (Author's illustration)

61 Some activities may have occurred after the "completion" of the respective phase, but were not

represented separately in the illustration. The aim is to visualize the main steps of the research process.

Mar 2010 Apr May Jun Jul Aug Sep

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

X X X X X X X X X X X X X X X X X X X X X X X X

x x x x x x x x x x x

x x x x x x x x

x x x x x x

x x x x x x

X X X X X X X X X X X X X X X X X X X X X X x x

x x x x x x

x x x x

x x x x

x

x x x x x x

x x x x x x

Calendar week

Company investigation

Preparing company research

Preparing and scheduling interviews

Conducting interviews

Post-interview research and analyses

Consumer investigation

Preparing consumer research

Effecting focus group discussions

Draf ting preliminary questionnaire

Pretesting the questionnaire

Conducting the survey

Preparing data and running analyses

Activities



5.2.2 Process of investigating companies

The following section provides details on the systematic selection of companies for

investigation and illustrates the data collection process.

(1) Company selection process

From within the food and beverages industry62 selected, suitable companies for an

analysis of sustainability practices had to be chosen. The process was run systemat-

ically by applying specific criteria and consisted of the following five steps:

(1) In the first step, the largest publicly listed companies in the food and beverages

industry with headquarters in Europe or Northern America were selected. Priority

was given to those companies deemed leaders in terms of sustainability as

defined, e.g. by the Dow Jones Sustainability Index. In addition, tobacco

companies were banned per se because of ethical concerns regarding their

business.

(2) In the next step, producers of durable household goods were excluded from

the sample and the applicable geographic region was further narrowed down to

Western Europe and the United States.

(3) The third step eliminated all alcohol producers, food and beverages retailers

and the smallest food producers.

(4) The last step resulted in the selection of three of the leading companies in

sustainability in the food and beverages industry.

Details on the evolution of the sample during the five-step process are given in the

appendix (Appendix 1).

By applying this approach, the number of companies was reduced from initially

over 100 in step one, to seven in step four. This group63 already provided an attrac-

tive base, but considering the scope of the research, some additional selection was

necessary. As a result, one example for each of the categories 'food producer' (FOP),

'beverages producer' (BEP) and 'food and beverages services' (FBS) was selected in

step four. Where several companies matched a category, the researcher made the

final decision intuitively. Finally, the sample can be described as follows:

Selection of three of the largest publicly listed companies in the production and

62 The food and beverages industry is described as "a frontline industry" in terms of advancement

in the application of sustainability practices (Ionescu-Somers and Steger 2008: xvii). 63 The enlarged sample of seven companies included Coca-Cola, Kraft Foods, McDonald's, Nestlé,

PepsiCo, Starbucks and Unilever.



service sector of the food and beverages industry in Western Europe and the United

States that are leader in sustainability practices.

Within the sample, the following three companies were selected:

Unilever Group as food producer (FOP)

The Coca-Cola Company as beverages producer (BEP)

McDonald's Corporation as food and beverages service provider (FBS)

These three companies are thus the final sample for a horizontal examination

based on secondary information. One had to be chosen for an additional exploratory

in-depth case study in Austria. McDonald's Austria proved to be the most appropriate

choice. It operates a multi-dimensional supply chain including several partners and

runs its own charitable initiative. In contrast, Unilever Austria is solely a sales organi-

zation and Coca-Cola Austria functions as the marketing entity with production ef-

fected by the bottling partner Coca-Cola Hellenic, which is in practice also the only

supplier.

(2) Details of the company research process

The company investigation process can be divided into four phases64 (Exhibit 29).

Based on prior research and the literature review (see chapters two to four), the first

phase started in early March 2010 and focused on collecting more detailed informa-

tion on the selected companies. Whereas phase two resulted in scheduling inter-

views, completion of phase three provided the relevant expert content. Conducted in

late July and early August, the last phase aimed at generating some additional, more

neutral knowledge.

Phases Primary goal Primary result

(1) Preparing company research Collect secondary information on the total sample and the case-study relevant country organization

Specific secondary background knowledge on companies

(2) Preparing and scheduling inter-views

Arrange interviews with previously selected interview partners,

Interview schedule for practical realization

(3) Conducting interviews Put expert contributions formally on record for academic use

Primary insight knowledge on the company selected for case study

(4) Post-interview research and analyses

Back expert opinion by additional publicly available information

Additional neutral knowledge for case study

Exhibit 29 - Primary goal and result of company research phases (Author's illustration)

Some further details on these phases are given in the following.

64 Phase one actually included research on all three companies in the sample, whereas phases two

to four focused on creating the exploratory case-study on McDonald's Austria.



(a) Preparing company research

In the first phase, background research, which had already started on a broader

level, was intensified for the sample of three food and beverages companies (Unilev-

er Group, The Coca-Cola Company, McDonald's Corporation). Secondary data such

as official company reports, homepage information and analyses by external parties

were drawn from publicly available sources. In minor cases involving lack of clarity or

missing information, company representatives from public relations, consumer ser-

vices or investor relations were contacted directly. A considerable amount of informa-

tion was thus gathered that served as the basis for the comparative company analy-

sis based on the dimensions "corporate strategy", "strategy in the value chain",

"stakeholder engagement", "product strategy" and "communication". In addition, in-

depth data was collected for the case study on McDonald's Austria. Special attention

was given to social and ecological initiatives and potential expert insights on these

issues. It became apparent that suppliers in the value chain and representatives of

the closely-related child charity might serve as valuable interview partners.

(b) Preparing and scheduling interviews

Based on these findings, preparation of the interviews began in mid-May. In a first

step, individual experts were identified who could be assigned to the following cate-

gories:

(1) McDonald's Austria: general management, corporate communications,

sustainability specialists

(2) Franchise owner: operator of McDonald's restaurants

(3) Suppliers and logistic partners: upstream representatives of the value-chain

and logistics company

(4) House charity: general management, operations, house management

(5) Business advisor: consultancy in environmental affairs

(6) Government representatives: ministries responsible for the economy and

the environment

In a second step, questions were drafted for the potential interviewees. Depending

on the respective party, different aspects needed to be covered. Except for investi-

gating suppliers, there was little room for standardization. For instance, an essential

part in the investigation of suppliers consisted of details on their own sustainability

standards as independent companies and their interconnection with their main cus-



tomer, McDonald's Austria. In contrast, questions regarding the child charity focused

on better understanding its contribution to society in practice and the philanthropic

commitment by a large international company. To provide a third example, concern-

ing the responsible consultancy for environmental affairs, the focus fell on the inte-

grated ecological concept and the early challenges in greening the organization. For

further details, three lists illustrating guiding questions are provided in the appendix

(Appendix 2).

In a third step, experts were contacted directly. Normally, telephone calls were

made first to personally introduce the doctoral research project in advance. Then a

formal email request containing all relevant information was sent. In most cases, a

preview of the core interview questions was already provided in advance. An

example can be found in the appendix (Appendix 3). Either future interviewees

responded directly or further effort was necessary to secure an interview partner.

As some experts turned out to be more challenging to reach, this phase

overlapped considerably with the actual realization of the interviews. Final dates were

scheduled in mid-July.

(c) Conducting interviews

Interviews were then conducted in the third phase of the company investigation.

This started in mid-June and lasted until the end of July. Finally, 13 contributions

were gathered including ten personal interviews, one telephone interview and two

responses in writing. Most experts were from senior management or a comparable

executive function, which allowed insights from fairly strategic perspectives. Referring

to the categorization in the previous subchapter, two responses came from

McDonald's Austria, one from a franchisee, five from suppliers and logistic partners,

three from the house charities, one from a business advisor and another from a

government representative.

An overview on the experts, their involvement and some details can be accessed

in the appendix (Appendix 4). Highlights include about 900 minutes of talks (15

hours), travel of over 880 kilometers for conducting personal interviews and nearly 70

pages of interview notes.

Interviews were conducted in a semi-structured manner, with the open questions

prepared earlier supporting the discussions. Nevertheless, because of the superior

insights of the experts, they were given some independence in highlighting aspects



they considered to be of particular importance. Upon request, experts had received

all or a selection of the questions in advance for preparation. Notes were taken in all

personal and phone interviews, but recordings could not always be taken either at

the personal request of the interviewee or because of other circumstances.

Information on all interviews was compiled in an electronic word processing

document. Afterwards all transcripts were sent to the interviewees with a request to

formally reviewing their content. Once released, they could be used for the purpose

of this research.

(d) Conducting post-interview research and preparing analysis

Based on the findings in the expert interviews, some additional background re-

search was necessary. It was dedicated in particular to areas uncovered in the inter-

views where it became apparent that specific issues required more in-depth know-

ledge. In addition, guaranteeing a neutral perspective in preparing the case study

was also of importance.

5.2.3 Remarks on company research

Concerning the selection of the three companies for the broadly-oriented explora-

tory investigation, and one of these for the in-depth case study, one might question

the objectivity of the approach. Therefore, the process is transparently explained and

all criteria applied disclosed. However, some bias from the researcher may neverthe-

less remain. This also holds true for the sustainability aspects presented in more de-

tail in the company comparison and case examples. Having defined an illustrative

and idea-generating purpose of this part, qualitative research simply embodies such

drawbacks.

Contacting company representatives was challenging, but generally fairly success-

ful. None of the suppliers and business partners of McDonald's actually declined the

request. Nonetheless in some cases an interview could be arranged only after sever-

al attempts at contact making by email or phone, which occasionally lasted over a

period of several weeks because of vacation and other reasons.

In reaching experts, one personal contact proved very helpful. McDonald's franchi-

see Mr. Czasch not only agreed to be interviewed himself but also initiated contact

with two partner companies, namely Mr. Hoeller (HAVI Logistics Austria, formerly

SDL) and Mr. Galle (GUT). In addition, during the Ronald McDonald Car Wash Day

at one of his restaurants Mrs. Schelander (House Charity) could be interviewed and



Mrs. Marek (State Secretary) asked personally for her input.

It should be noted that McDonald's Austria apparently has a rather strict policy on

how to respond to academic research requests. Mrs. Riegler, who is responsible for

communications, insisted that responses were possible only to five short questions in

writing. In email and phone communication, she repeatedly stated that McDonald's

Austria is nearly overrun by student requests. She also declined permission for a

short personal interview with herself or a colleague of any other department. Efforts

in directly contacting Mr. Schwerla, Managing Director of McDonald's Austria, and

Mrs. Tottzer, responsible for quality management, were forwarded to Mrs. Riegler,

who instantly blocked these again. It remains questionable why such a very success-

ful country organization of this international corporation on the one hand claims to

give top priority to the customer and transparency, but on the other is not willing to

cooperate with students. Simply providing brief statements apparently formulated for

press purposes is unfortunately not a very satisfactory approach. Furthermore such

contributions hardly meet the expectations of doctoral research. In contrast, suppliers

and business partners of McDonald's as well as representatives of the Ronald

McDonald House Charity Austria responded completely differently. They willingly

gave some of their time to personally answer my questions.

Expert contributions were generally rich in terms of content. However critical ex-

amination of potential bias in the answers is necessary. Interviewees of course aimed

to present themselves and their company in a positive light. In the presentation of

results in the following chapters, information is therefore put into perspective by in-

corporating additional sources.

For analyses in the company investigation, only qualitative data was gathered.

Secondary sources were consulted for details on the three companies on an interna-

tional level, whereas experts provided additional primary sources for the case study.

Following an exploratory approach, analysis of information focused on illustrating

sustainability practices. Neutrality in presenting the results was ensured by including

different viewpoints, providing background data and documenting all steps of the

process. Notes from expert interviews were thoroughly transcribed and systematical-

ly summarized. Despite all efforts, bias from the researcher himself cannot be totally

excluded nonetheless.



5.2.4 Process of investigating consumers

The following illustration of the process of investigating consumers first briefly

touches on the selection of students as a survey population and then provides details

on how consumer research was actually carried out.

(1) Selection of students as consumers

Peterson (2001: 450-458) provides an overview on using students in social

science research. In a comparison of existing literature, a variety of viewpoints can

be identified on whether or not they constitute an appropriate sample population. In a

nutshell, the author says "there seem to be few insights into the college-student-as-

research-subject issue that have not been previously presented, replied to, subjected

to rejoinder, and subsequently forgotten". Amongst other aspects, selecting students

is advantageous as they can be easily accessed, represent a fairly homogenous

group and are regularly used in a number of research disciplines. However, one

should be aware that they are "unfinished personalities in a relatively early adult life

stage" and that, as is common with any sample, "generalizability to other subject

groups" or people in general is questionable. However the percentage of student

samples has increased considerably in consumer research since the 1980s. In the

first volume of the Journal of Consumer Research, for example, 23 percent of publi-

cations drew on students, whereas the corresponding figure for the latest volume65 is

89 percent. Other journals such as the Journal of Personality and Social Psychology

or the Journal of Consumer Psychology report similar percentages. The author con-

cludes that the best approach with any sample population is to "incorporate sample

characteristics routinely in consumer behavior studies". Thus any researcher can as-

sess potential effects or bias independently.

Given the above, students in Austria, Germany, Switzerland and the United States

were selected as a consumer group mostly because of their accessibility and homo-

geneity.

(2) Details of the consumer research process

The consumer research process consisted of six phases. They were preceded by

literature research (see chapters two to four) and succeeded by the presentation and

discussion of the results (see chapters seven and eight). Similar to company re-

65 The article does not specify the year of "the most recent volume", but as the article was pub-

lished in volume 28 in December 2001, it probably referred to volume 27 in 2000.



search and summarized in the table below (Exhibit 30), a specific primary goal was

pursued in each phase that aimed to achieve a concrete research outcome. For ex-

ample, the preparation of the consumer research resulted in the completion of guide-

lines for the subsequent focus group discussion.

Phases Primary goal Primary result

(1) Preparing consumer research Define focus areas of consumer research based on reviewed litera-ture

Guidelines for focus group discus-sions

(2) Effecting focus group discus-sions

Gather qualitative insights to eva-luate research assumptions

Insights for structuring question-naire

(3) Drafting preliminary question-naire

Design a questionnaire based on literature and focus group findings

Preliminary version of question-naire

(4) Pretesting the questionnaire Test the preliminary version of the questionnaire on its applicability

Final version of questionnaire

(5) Conducting the survey Ensure satisfactory response rate from the sample population

Sufficient usable data sets

(6) Preparing data and running analyses

Test research hypotheses by apply-ing statistical analyses

Processed data and results

Exhibit 30 - Primary goal and result of consumer research phases (Author's illustration)

The following sections take a closer look at each of these phases.

(a) Preparing consumer research

In the first phase, additional literature research was conducted based on the re-

search questions. Access to international journal databases and printed literature in

the library proved the most practical secondary sources in this six week period. Final-

ly, a focus group discussion guide was designed that provided valuable practical

support in successfully effecting the discussions. It was divided into three parts:

(1) "Preparation and organization" contained a checklist for all necessary

preparations such as selecting participants, finding a suitable place, providing

food and drinks, offering financial compensation and preparing a recording

device.

(2) "Conducting the discussion" included remarks on what to consider during

the discussion, such as informing participants at the beginning about the

research project and the discussion itself, discussing some key questions in

more detail than others and finishing the event punctually.

(3) "Summary and analysis" briefly stated how to proceed with the discussion

notes and recordings.



(b) Effecting focus group discussions

In early April, invitations to participate were provided electronically about two

weeks in advance of the first focus group discussions. Students were primarily in-

formed via posting on the Internet site "Sowi Info-Lounge"66, which is an information

and exchange portal on many student-related issues. In addition, the same content

was sent to doctoral students at the Faculty of Social and Economic Sciences at the

University of Graz, who participated in the doctoral research colloquia in winter term

2009 and summer term 2010. To specifically attract American students, all incoming

US-exchange students at the University of Graz and at the Vienna University of Eco-

nomics and Business Administration received an email invitation via their contact

persons at the respective international offices67. The invitation, in either format or

language, included a short introduction to the research project, some facts on the

discussion format, an offer of financial compensation of 15 euros and several times

and dates to chose from.

Discussions of about 60 minutes each were held on four different dates

(15.04.2010, 26.04.2010, 28.04.2010, 05.05.2010) with a total of twelve students.

The mix of participants was fairly balanced in terms of origin (six Austrians / six

American) and gender (seven female / five male). Most students were enrolled in a

business program at either graduate or postgraduate level. A detailed list of all focus

group participants is attached in the appendix (Appendix 5).

In the whole process, the focus group discussion guide proved very helpful. Dis-

cussions were recorded, but notes also taken on paper. Afterwards, all information

was compiled in a bullet-point format divided according to origin.

(c) Drafting preliminary questionnaire

After the focus group discussions and the analysis of the participants' responses, a

preliminary questionnaire was drafted by the end of May. At this point, it existed only

in a word document and in an English language version.

66 For more information, please refer to http://sowi.infonetz.org/index.php (in German). 67 Originally, it was planned to conduct focus group discussions with American students at Bentley

University, MA, in late April 2010. Due to the volcanic eruptions of Eyjafjallajökull in Iceland and the major disruptions in air travel, research could not be effected in the United States directly. Consequently, American students currently on exchange in Austria were recruited instead.



(d) Pretesting the questionnaire

The preliminary version of the questionnaire was tested with regard to content,

understandability and other criteria among students. In fact, the pretest resembled

one-to-one qualitative interviews of about 40 minutes per person including the time

necessary for survey completion. Most interviews were conducted in person, the re-

maining ones by phone in early June between 01.06.2010 and 04.06.2010. A pretest

interview guide, which was of similar format to the one used for the focus groups,

supported the organization and practical realization. Among other elements, it con-

tained all relevant questions that were asked (for further details refer to chapter

7.2.2). Participants needed to fit approximately the target group of the following sur-

vey. They were recruited mainly from former focus group participants, who already

knew the subject and research project. Some additional students were also asked to

participate as not everybody from the original group was available. In the pretest, no

financial compensation was distributed. In total, ten students provided their opinion,

and these were fairly evenly distributed in terms of origin (six Austrians and four

Americans) and gender (four female and six male). Eight students completed the pre-

liminary English version, whereas the remaining two were given a German translation

that was created in the process. Further details on the pretest participants are listed

in the appendix (Appendix 6).

(e) Conducting the final survey

After adjustments based on the findings from the pretest, the final version of the

questionnaire was transformed into an online version. For this purpose, the Universi-

ty of Graz provides students with the software Limesurvey68. Once access was

granted to the server, programming could be done directly on the webpage. The de-

partment for computer services (ZID) makes available a very detailed manual for the

technical realization. It includes clear guidelines on how to create a survey, add sec-

tions and questions, choose the relevant scales, set specific properties and other

practical information. In addition, it describes clearly how to finally publish the survey,

administer responses and export data. All content from the word document was then

manually converted. Before its release, the survey was repeatedly checked and the

68 Limesurvey is the leading open source software for creating statistical surveys. Further

information can be accessed at http://www.limesurvey.org/en.



answering process simulated. Finally, the questionnaire was made available online69

on 08 June 2010 in two languages in the official University of Graz style format. Al-

though there were slightly different links for accessing either language version,

switching was always possible during the questionnaire by using a small dropdown

box at the top of each page.

For collecting responses from Bentley University, it was not possible to invite stu-

dents to access the survey directly at the servers of the University of Graz. This is

because of proprietary issues related to the data gathered. As a result, the question-

naire needed to be programmed again in the United States. Although I did not do the

programming myself, I stayed in close contact with Professor Eshghi, who managed

the process at Bentley. After some revisions, the survey was available online70 on 24

June 2010. After completion of the investigation period, all responses were provided

in an SPSS data file that had no restrictions on its use in this research.

For contacting students, formal invitations were set up to be sent out via email or

other channels. The short version contained a short introduction, a request to partici-

pate by following the link to the survey website, information on a lottery of gift certifi-

cates as a token of appreciation and contact details for any inquiries. The long ver-

sion also asked for distribution of the link among peers by forwarding a message

template, which was attached at the bottom of the email. Several adaptations such

as including a brief personal note or providing more background information were

made, depending on the actual group of recipients. For forum postings, an even

shorter message was used. Examples for the English version (short), the German

version (long) and an English posting version are given in the appendix (Appendix 7).

Students were addressed in a multi-channel approach. In fact, six main categories

can be distinguished (details in Appendix 8): (1) Access to official university distribu-

tions lists required a formal request, but gave direct access to a very large number of

recipients. (2) Membership in certain student networks allowed the use of email ad-

dresses of other members that could in some cases even be selected according to

origin. (3) The link to the survey was further posted on the social network fan pages

of numerous U.S. universities as well as in student-oriented internet fora. (4) As sup-

69 At the University of Graz, the English version of the survey was accessible at

https://survey.edu.uni-graz.at/index.php?sid=68497&lang=en and the German version at https://survey.edu.uni-graz.at/index.php?sid=68497&lang=de during the investigation period.

70 The English version at Bentley University was accessible at https://bentley.qualtrics.com/SE?SID=SV_1QX40ijoOmG3Ofi during the investigation period.



port by Bentley University involved the total data gathering process, finding respon-

dents was also taken care of. (5) Cooperation with the University of New Orleans re-

sulted in personal access to American students participating in a summer exchange

program at the University of Innsbruck. (6) Last but not least, personal contacts to

friends and colleagues were used in addition, if the respective person had not al-

ready received an invitation. The challenges in effecting distribution and the effec-

tiveness of the channels used are discussed in the following subchapter.

To increase the response rate, concrete material incentives were offered in the in-

vitation to participate. As suggested by students in the pretest interviews and also

American professors, such incentives are common practice, especially in the United

States. In fact, gift vouchers for a well-known international online store of a total val-

ue of 250 euros were distributed.

In total, the survey at the University of Graz was available online during a period of

more than seven weeks between 08 June and 28 July 2010 and the one at Bentley

University for nearly four weeks between 24 June and 20 July 2010.

(f) Preparing data and running analyses

After the end of the survey, all responses needed to be prepared for the upcoming

analyses. While Limesurvey allowed data and variable export into SPSS, the file re-

ceived from Bentley University was already in the appropriate format. Nevertheless,

the following steps had to be taken: (1) Combining both files into one by aligning data

set structures; (2) Manually reviewing data for apparent inconsistencies and obvious-

ly faked responses; (3) Renaming and partially reorganizing variables, ensuring data

consistency in columns with no compulsory format and effecting some further minor

adjustments. Despite this editing of the original data, no changes in its informational

content were made.

Finally, a total number of 660 responses could potentially be used for statistical

analysis. However, the application of two further selection criteria reduced the sam-

ple to 518. More details on this process are given in the subchapter on survey results

in chapter seven.

As of early August, data was ready for analysis and interpretation.



5.2.5 Remarks on consumer research

Focus group discussions were initially planned to be done in Austria and the Unit-

ed States in mid-April. However because of the flight cancellations mentioned earlier

as a result of the volcanic ash, they had to be canceled at Bentley University (MA).

As a result, U.S. students currently on exchange in Graz or Vienna had to serve as

replacement. As these American students already have some kind of affiliation with

Europe, it is questionable if they truly represent the "typical American student".

Therefore, some kind of bias can be expected in this respect.

Collecting a sufficient number of responses in the survey turned out to be a main

challenge in consumer research. To address a fairly broad base, a multi-channel ap-

proach was chosen, as presented earlier, and backed by details in the appendix

(Appendix 8). Each of the channels had particular characteristics:

(1) Among several universities that were contacted, only the Vienna University of

Economics and Business allowed the use of a general distribution list. Although

access had to be granted after a formal request, the process was then simple. In ad-

dition, the international offices of this university and the University of Graz agreed to

forward an email to all U.S. students. In contrast, access to a distribution list to all

students was technically not possible at, or was formally refused by, the following

institutions: University of Graz, Johannes Kepler University Linz, University of

Innsbruck, Ludwig Maximilian University Munich, University of Cologne, University of

St. Gallen, Webster University Vienna, Miami University and the University of New

Orleans. Not only official university representatives , but also people in charge in stu-

dent organizations proved, unfortunately, to be unsupportive. Consequently, an es-

pecially large number of business students was reached at Vienna University of Eco-

nomics and Business.

(2) Membership in the CEMS71 and S4E72 networks provided access to student

contacts that could be selected according to origin. Access to either requires that cer-

tain criteria are fulfilled: For the former, one has to be enrolled in the master's pro-

gram of the same name, whereas the latter needs a formal application based on the

71 CEMS stands for "Community of European Management Schools", which is a cooperation of

leading business schools and corporations, and offers an international master's in international management with a two semester CEMS-specific curriculum. Students have to be accepted into the program after a formal application process. For further information refer to http://www.cems.org.

72 Students4excellence is an initiative to support high potential students and provide a network for exchange. For further information refer to http://www.students4excellence.at.



resumé in general, grades and different other qualifications. As a result, potential re-

cipients may not represent the "typical ordinary student" but rather high performers.

(3) Postings in social networks and university fora allowed access to a very large

number of people, although responses lagged vastly behind expectations. The sur-

vey link was published twice on the "walls" of the Facebook pages of nearly 30 Amer-

ican universities73, among which can be found large institutions like the University of

Florida (>299,000 "liking members"), the University of Kentucky (>155,000) and the

University of Texas at Austin (>133,000). In Austria, a similar approach was taken in

the university-related or student fora of Johannes Kepler University Linz ("JKU

KUSS") and the University of Graz ("Sowi-Info-Lounge"). It appears, unfortunately,

that this elicited almost no responses.

(4) Cooperation with American universities was already established in early 2009

and personally intensified during two research stays at Bentley University (MA), Mi-

ami University (OH) and the University of New Orleans (LA) in summer and fall of

2009. In contrast to very good information in direct contact with several faculty mem-

bers and background library research onsite, support for actually getting responses

from students of their institutions was rather low one year later. However, Professor

Eshghi from Bentley University greatly contributed to the research by personally ad-

ministering the survey directly in classes. As all responses were delivered compiled

in a final file, details of the process and possible limitations cannot be discussed.

(5) Cooperation with the University of New Orleans brought the opportunity to

access participants in UNO's yearly summer exchange program at the University of

Innsbruck. American students were contacted directly in Austria: they were handed a

printed version of the questionnaire and asked to fill it out as promptly as possible.

Eventually, a fairly high response rate was achieved. This approach was different

from all other channels because of the personal contact, but anonymity for partici-

pants was nevertheless guaranteed. There is no indication that results may have

been different if they had filled it out online. So, any potential bias remains highly

doubtful.

(6) Finally, personal contacts of the researcher were asked to participate in the

survey. Other than their generally higher willingness to respond, no difference to stu-

dents reached through other channels is actually expected in the results. 73 The American universities on Facebook were selected following the list of partner universities of

the University of Graz and Vienna University of Economics and Business.



The use of a variety of channels aimed at increasing the response rate and also

the breadth of the sample. This approach should thus contribute to strengthening the

validity of the results.

The channel responsible for generating a specific response cannot be definitely

determined in each case. By taking into consideration potential recipients, the origin

of the respondent, his or her home university and the date of the response (as invita-

tions in the channels were sent one after the other), the channels' effectiveness can

be estimated to a certain degree. There was additionally some overlap between the

channels, as, for example, a student of Vienna University of Economics and Busi-

ness may also be enrolled in CEMS and belong to the S4E network. However, this

was probably only occasionally the case.

In any case, results are likely to be dominated by students from Vienna University

of Economics and Business in the German-speaking section and students from Bent-

ley University in the American section. In addition, the use of networks with special

selection criteria for admission may have also influenced the sample. Personal con-

tacts were important but turned out to be only a supportive source of responses. A

clearer picture of the origin of the responses will be given in chapter seven.

In order to increase the response rate, material incentives were offered to partici-

pants who completed the survey. In the United State this is apparently regular prac-

tice, whereas in Austria it does not seem to be that common. It is hard to evaluate

how strong the effect actually was and if it might have had some influence on the

responses themselves.

Programming of the online version with Limesurvey provided by the University of

Graz was sufficiently explained in the available guide. One major drawback though

was the limited choice of templates and the lack of customization of the visual ele-

ments. Another more challenging technical issue came from the bilingual question-

naire: Normally, some predefined scales were available in which e.g. "1" was labeled

"totally agree" and "5" accordingly "totally disagree". However, when programming in

two languages, the system only accepted the scale choice if identical versions ex-

isted in either. As students are not allowed to add such scale changes in the pro-

gram, only the basic scale options without labels could be picked. Therefore, it was

necessary to include the labeling in the question field itself, resulting in constructs like

'Question [...] ? [...] (a) "1" = "Totally agree", [...], "5" = "Totally disagree"; and (b) "1"

= "Definitely", [...], "5" = "Not at all"' if scales were different for the sub-answers. Es-



pecially in section two, this kind of compromise had to be frequently used. Feedback

from respondents showed some critical remarks on the overall layout and conveni-

ence of answering questions. Consequently, these shortcomings of the software may

have increased the dropout rate of the questionnaire.

In the consumer investigation, analyses had to deal with both qualitative and quan-

titative data. Focus group discussions provided a considerable amount of informa-

tion. This was transcribed and summarized without any particular technique or specif-

ic computer program. The survey produced quantitative results that could be formally

analyzed using the software SPSS, including statistical tests.

Concluding remarks of chapter five

The author concludes that the entire research process is divided into six phases.

In each of these phases, some theoretical background on methodology is required.

Data collection itself is split into a company and consumer section. Proceedings in

both are outlined in detail and remarks are made on some challenges incured.

Specifically, chapter five...

...provides details on formulating a research problem, reviewing literature,

determining methodology, conducting empirical research, analyzing and interpreting

data and compiling results.

...introduces in these research phases, for example, different types of data,

various collection methods, specific techniques of the collection methods, sampling

procedures and aspects related to drawing samples, details on measurement such

as question types and scales, considerations of validity, reliability and potential

errors, ethical considerations in empirical research, principles of data editing, coding,

analyzing and interpreting, and result presentation.

...illustrates the empirical data collection process including the selection of

companies and consumers, the sub-phases of the investigation and the researcher's

personal field experiences.

After the discussion of methodological aspects, the subsequent chapter deals with

the results from researching companies in the food and beverages industry.



6 Investigating Sustainability in the Food and Beverages Industry

Chapter six74 presents the findings of the company investigation. First, an

overview is given on some sustainability issues in the industry. Second, the

strategies of three leading companies are compared in an exploratory and descriptive

approach. Third, a case study on the country organization of one of these companies

provides details on some specific initiatives.

Guidance for this investigation was provided by the respective research questions

discussed in more detail in chapter one and backed theoretically by chapter two to

four. Whereas this section aims at presenting the results of the investigation, the dis-

cussion and conclusion follow in chapter.

6.1 Overview on sustainability issues in the industry

Ionescu-Somers and Steger (2008: 36-41) differentiate six stages in the value

chain of the food and beverages industry. Sustainability issues may dominate in one

of the stages or overlap throughout the chain. Farmers, for example, deal especially

with the environmental impacts on agriculture (e.g. soil degradation, raw material

supply, water security, responsible agriculture practices) and in developing countries

with workers' rights (e.g. human rights, slavery, child labor). In processing, transpor-

tation and sales (i.e. stages four and five), particular consideration is given to energy

efficiency, pollution and quality. Among other issues, consumers focus on nutritional

content and responsible business practices (e.g. marketing, advertising). Overall,

issues of food safety, traceability, packaging waste, recycling and energy efficiency

are of concern to several parties. An overview is given in the table below (Exhibit 31).

74 The presentation of empirical results in this chapter is based on theoretical insights from chap-

ters two, three and four. Specifically, subchapter 6.1 draws strongly on strategic aspects of the firm and strategic aspects of sustainability from subchapter 4.1. Subchapter 6.2 provides content related to the concepts of sustainability introduced in chapter 2, the position of the firm towards other parties (subchapter 3.2), consumer interaction (subchapter 3.3), management of corporate sustainability and stakeholder relations (subchapter 4.2) and communication and disclosure (subchapter 4.3). The case study in subchapter 6.3 has similar theoretical foundations, but provides more detailed descriptive examples for the environmental and social outcomes of stakeholder connectedness (subchapter 3.2) through strategic stakeholder management (subchapter 4.2) and the facets of corporate responsibility considerations in practice (chapter 2).



Value chain stages

(1) Input industry

(2) Farmer (3) Trade processor

(4) Food industry

(5) Restau-rants, retail-er, catering

(6) Consum-er

Sustainability issues

Pesticides

Pollution

Labor issues

Traceability

Sustainable agriculture

Price stability

Animal welfare

Water security

Fair trade

Traceability

Pollution

Soil degrada-tion

Long term raw material supply

Human rights

Child labor

Worker safety

Human rights

Work condi-tions

Corrup-tion/bribery

Fair trade

Animal welfare

Eco-efficiency

Energy

Water security

Food safety

Traceability

Emissions

Packaging waste

Recycling

Health and safety of em-ployees

Diversity

Work condi-tions

Quality

Food safety

Traceability

Packaging waste

Recycling

Transport

Corrup-tion/bribery

Traceability

Obesity

Nutritional content

Allergies

Responsible marketing

Alcohol abuse

Advertising to children

Packaging waste

Recycling

Exhibit 31 - Sustainability issues in the food and beverages value chain (Ionescu-Somers and Steger 2008: 39)

In addition to the detailed value chain stages depicted above, large international

food and beverage companies are advised to cope with environmental and social

challenges especially for brand, reputation and product positioning purposes. Particu-

lar pressure may arise from sourcing and production impacts (e.g. eco-system de-

gradation, resource depletion, water scarcity, supplier standards, workplace safety)

as well as final product concerns (e.g. food/beverage safety, obesity, nutritional con-

tent, product labeling, packaging) (PricewaterhouseCoopers 2006: 62-63)

With regard to business opportunities resulting from exercising corporate respon-

sibility, the food and beverages industry seems to be in the upper average. Value

creation can originate from "bottom line savings" (e.g. from efficiency increases) or

"top line growth" (e.g. innovations as direct response to sustainability challenges). In

an international survey, 34 percent of food and beverage companies reported bene-

fiting financially from social and environmental challenges. Most potential can appar-

ently be realized by companies clustered in utilities, oil and gas, and chemicals

(about 40-50 percent), whereas least opportunities are feasible in pharmaceuticals,

trade, and retail (around 15 percent) (KPMG 2008: 25).

Companies in the food and beverages industry have long played a responsible

role in corporate citizenship. In addition to meeting consumers' direct necessities,

corporate visions regularly aimed at tackling issues of lifestyle and quality of life. The

most advanced companies also included long-term value creation in their corporate



purpose. Therefore, general corporate strategies are often aligned with sustainability

strategies and vice-versa. In fact, environmental and ethical considerations are regu-

larly an integral part of business operations (Steger 2004: 188-189).

Regarding stakeholders in the food and beverage industry, companies are con-

fronted with several pressures. For example, consumers generally demand more

sustainability as part of better products, but are reluctant to pay a premium. This

leads retailers to strive for increasing quality despite price strains. This is also a chal-

lenge for food and beverage companies. The best approach for the latter is to work

out joint positions to tackle sustainability issues. Industry wide standards can on the

one hand satisfy involved stakeholders and on the other provide security and cost

economies for producers (Ionescu-Somers and Steger 2008: 82-87, 108-111).

Consumers increasingly seek products that meet their LOHAS (lifestyle of health

and sustainability) expectations. Health, safety, ethical and environmental standards

are of growing importance. There is also more demand for transparency and tracea-

bility in all aspects of value chain operations (PricewaterhouseCoopers 2008b: 10).

Given that, the following section aims to introduce three of the leading food and

beverages companies and illustrating some aspects of their concrete involvement in

sustainability.

6.2 Comparing the strategies of Unilever Group, The Coca-Cola Company and McDonald's Corporation

In this subchapter, some short background description first introduces the reader

to the companies under review. Then general corporate strategies and the specific

sustainability approaches are illustrated. Third, selected sustainability initiatives and

corresponding stakeholder cooperation are given as examples. Finally, a closer look

is taken at reporting and external assessments of the food and beverages compa-

nies.

6.2.1 Background on the companies under review

The selected companies can formally be categorized as part of the food and beve-

rages industry, but nevertheless have very distinct characteristics. In the following,



Unilever Group (UNI)75, the Coca-Cola Company (CCC) and McDonald's Corporation

(MCD) are briefly compared from several view points to illustrate commonalities as

well as differences. Some further background information is provided in the appendix

(Appendix 9).

Unilever Group is a leading multi-brand producer of fast-moving consumer goods

worldwide. It acts as the single economic and reporting entity of the two companies

Unilever N.V., which is registered in the Netherlands, and the England and Wales-

based Unilever PLC. Both are public limited companies listed on stock exchanges in

Amsterdam (N.V.), London (PLC) and New York (both). Within the three areas of op-

erations 'food', 'hygiene' and 'personal care', food products represent more than half

of total revenues (Unilever Group 2010a: 2). Therefore Unilever Group is considered

as a food producer (FOP) for the purpose of this research.

The Coca-Cola Company is one of the world's largest beverages companies. In

addition to owning and marketing a global leader in nonalcoholic beverage brands, it

also manufactures, distributes and markets concentrates and syrups to produce

these brands. It is publicly listed on the New York Stock Exchange and headquar-

tered in Atlanta (GA) in the United States. (The Coca-Cola Company 2010c: 29). For

this research, it represents a beverage producer (BEV).

McDonald's Corporation is a leading food and beverage service retailer. The com-

pany franchises and operates fast-food restaurants around the world. Listed also on

the New York Exchange, its headquarters are based in Oak Brook (IL) in the United

States (McDonald's Corporation 2010a: 9). It is referred to as a food and beverage

services company (FBS) within this research.

Comparing financial data (Exhibit 32), Unilever Group leads in turnover, ahead of

both the Coca-Cola Company and McDonald's Corporation. It has exceeded the oth-

er companies' revenues by nearly a third to three quarters since 2007. The difference

would be even higher if the exchange rate between euro and dollar was consi-

dered76. Nevertheless, McDonald's Corporation achieved the highest income margin

with over 30 percent, closely followed by the Coca-Cola Company with nearly 27

percent. Unilever Group lags far behind at about one third of these margins.

75 The companies are assigned three-letter abbreviation as given in brackets. They are unofficial

and only used if limitations in space do not allow otherwise. 76 According to the European Central Bank, the rate between EUR and USD on 31 December 2009

was 1:1.44. http://www.ecb.int/stats/exchange/eurofxref/html/eurofxref-graph-usd.en.html. Accessed on 12 September 2010.



Financial overview Unilever Group The Coca-Cola Compa-ny

McDonald's Corporation

In € millions In $ millions In $ millions

Year 2009 2008 2007 2009 2008 2007 2009 2008 2007

Turnover 39,823 40,523 40,187 30,990 31,944 28,857 22,745 23,522 22,787

Operating income77 5,020 7,167 5,245 8,231 8,446 7,252 6,841 6,443 3,879

Operating income margin78 12.6% 17.7% 13.1% 26.6% 26.4% 25.1% 30.1% 27.4% 17.0%

Source (Unilever Group 2010c: 2-3)

(The Coca-Cola Compa-ny 2010c: 45)

(McDonald's Corporation 2010a: 7)

Exhibit 32 - Financial data of the selected companies (Author's illustration)

All three companies operate around the world. The Coca-Cola Company has the

broadest global reach with beverage sales in more than 200 countries. Unilever

Group reports doing business in more than 170 countries and McDonald's Corpora-

tion in 117 (Unilever Group 2010a: 25; The Coca-Cola Company 2010c: 29; McDo-

nald's Corporation 2010a: 9). As to the share in geographic regions, Europe and

North America clearly dominate sales at year-end 2009 despite slower growth rates.

Because of consolidated numbers and different regional clustering, precise percen-

tages cannot be provided. It can be estimated that European and American revenues

account for about 50 to nearly 80 percent79 (Unilever Group 2010c: 2-3; The Coca-

Cola Company 2010c: 120; McDonald's Corporation 2010a: 42).

As a result of its service-oriented business model, McDonald's Corporation em-

ploys by far the largest number of people (385,000 in 2009). Unilever Group provides

about 163,000 jobs and the Coca-Cola Company 93,000. From 2007 to 2009, the

two larger corporations streamlined their workforces (Exhibit 33). In all three corpora-

tions, male executives dominate the board of directors and serve as CEOs, namely

Paul Polman (Unilever Group), Muthar Kent (The Coca-Cola Company) and James

Skinner (McDonald's Corporation) (Unilever Group 2010a: 51; The Coca-Cola Com-

pany 2010a: 37; McDonald's Corporation 2010a: 49).

77 "Operating income" equates to "earnings before interest and taxes" (EBIT). 78 "Operating income margin" expresses "operating income" as percentage of "turnover". 79 The shares of the revenues of the Coca-Cola Company were 17 percent (Europe) and 27

percent (North America) in beverages, and another 21 percent in bottling investments in Europe and North America. McDonald's Corporation reported 41 percent of sales originating in Europe and 35 percent in the United States.



Personnel overview Unilever Group The Coca-Cola Compa-ny

McDonald's Corporation

At year-end 2009 2008 2007 2009 2008 2007 2009 2008 2007

Employees (rounded in thousands)

163 174 174 93 92 91 385 400 390

Source (Unilever Group 2010a: 28)

(The Coca-Cola Compa-ny 2008a: 8; Idem 2009a: 43; Idem 2010a: 35)

(CNNMoney 2010)

Exhibit 33 - Personnel data of the selected companies (Author's illustration)

Unilever Group and the Coca-Cola Company own several very strong product

brands that generate global sales of or above one billion euros or dollars. Within Un-

ilever's portfolio, six out of eleven of these belong to the food and beverages sector,

including among others Knorr, Lipton, Becel/Flora (Healthy Heart) and Wall's/Algida

(Heartbrand) (Unilever Group 2010a: 27). With "Coca-Cola" itself being considered

as the "most valuable brand"80, the corporation's brand portfolio comprises another

twelve one-billion-dollar brands among which can be found Coca-Cola Zero, Diet

Coke / Coca-Cola light, Sprite and Fanta (The Coca-Cola Company 2010a: 18). As a

food and beverage service provider, products sold in McDonald's restaurants are

closely linked with the corporate brand. Examples include Big Mac, Chicken McNug-

gets, McDonald's Fries and McCafé (McDonald's Corporation 2010a: 9-10). Consi-

dering the value of the corporate brands81, results vary according to source and me-

thodology applied. Using a form of discounted cash flow approach82, Brandirectory

(2010a), for example, approximates the value of the Coca-Cola Company at 34 bil-

lion USD and McDonald's Corporation at 20 billion USD. Businessweek / Bloomberg

report higher estimates, of 65 billion USD for the former and 29 billion USD for the

latter (Businessweek 2010a).

The three companies occupy different positions in the value chain. Unilever Group

sources from over 10,000 suppliers and runs more than 260 production facilities in

80 The description refers to the value as "global product brand". Based on Euromonitor and the

Coca-Cola Company estimates, "Coca-Cola" was worth about 56 billion dollars in 2009 (The Coca-Cola Company 2010a: 19).

81 As a result of the fact that Unilever Group stresses its individual product brands, no data on the value of the corporate brand could be found. Actually, the corporate logo was only introduced on all product packs in 2002. As a result, the company acknowledges that "most consumers still do not connect our individual brand with our corporate brand" (Unilever Group 2009: 9).

82 Brandirectory calculates the brand value by using a discounted cash flow approach "to discount estimated future royalties at an appropriate discount rate" in order to "arrive at a net present value of the trademark and associated intellectual property" (Brandirectory 2010b). Businessweek / Bloomberg and Interbrand calculate "how much of the earnings result from the power of a brand itself" and how the respective share translates to "future earnings, which are discounted to arrive at a net present value (Businessweek 2010b).



over 100 countries. Globally, it focuses on production, research and development,

and marketing of its products and brands. In areas like raw material production, dis-

tribution to wholesalers and retail sales, close cooperation is sought with outside

business partners (Unilever Group 2009: 6-7; Idem 2010b: 2,4-5; Idem 2010k: 14).

The so-called "Coca-Cola System" comprises the Coca-Cola Company and bottling

partners. The former is in charge of producing beverage concentrates and all market-

ing activities, whereas the latter operates the facilities for manufacturing, packaging

and distributing products. Worldwide, there exist about 300 bottling partners, which

can be independent or owned by the Coca-Cola Company, operating more than 900

plants. Consumers finally purchase through a number of different external channels

ranging from supermarkets to restaurants to entertainment facilities (The Coca-Cola

Company 2009b: 4-5; Idem 2010h). McDonald's Corporation refers to the coopera-

tion with its primary stakeholders as "the three-legged stool". The parties are franchi-

sees, suppliers and company employees. Regarding suppliers, indirect suppliers are

producers of primary products and direct suppliers are the final food processors and

distributors. As to restaurants, about 80 percent are owned and operated by local

business people (franchisees) and the remainder by the company directly (McDo-

nald's Corporation 2009: 10-11,16). As a result of their business models, the three

companies can exercise direct control only in some parts of the value chain and have

to rely on indirect measures to influence partners in others. This may pose structural

challenges to effectively implement corporate sustainability.

All food and beverages companies under review have already been in business for

a considerable time. Some date back even to the 19th century. Six years after the

original recipe was invented, the Coca-Cola Company was incorporated in 1892.

Thus it has the longest history as a single company (The Coca-Cola Company

2010d). Unilever Group was established in 1930 as a result of the merger of a Dutch

margarine producer, founded in 1872, and a British soap manufacturer, which had

been in production since 1884 (Unilever Group 2010e). Selling hamburgers since

1940, the McDonald's franchising business was only established in 1955. In 1965,

the corporation went public (McDonald's Corporation 2010b).

After considering the strong financial performance, size of the businesses, scope

of global operations and historical embededness, sustainability strategies formulated

to meet companies' responsibilities will now be investigated.



6.2.2 Aspects of corporate sustainability engagement

To illustrate strategic involvement in corporate sustainability, the following section

first gives an overview of the companies' overall long-term orientation, then presents

specific elements of sustainability strategy and finally discusses some aspects of

measuring results in performance.

(1) Strategic orientation of companies

Sustainability strategies are embedded in the overall strategic orientation of the

company. In the following, mission and vision as well as the focus areas of corporate

strategy provide some illustration in this regard. Further details are given in the ap-

pendix (Appendix 10).

(a) Mission/Purpose and vision

Unilever Group defines its mission as "adding vitality to life" and stresses the im-

portance of meeting customers' needs (Unilever Group 2009: 9; Idem 2010f). As a

beverages producer, the Coca-Cola Company aims at "refreshing the world" and

"making a difference" in value creation (The Coca-Cola Company 2010e). Most simp-

ly, McDonald's Corporation just wants to be the "favorite place and way to eat" of its

customers (McDonald's Corporation 2010c).

Generally, the companies' visions are formulated in a fairly aspirational manner.

Within the four-pillar vision of Unilever, it is, for example, stated that the group works

"to create a better future every day" and inspires consumers "to take small, everyday

actions that can add up to a big difference in the world". In addition, it also states that

it aims to balance ecological and economic issues by seeking to "double the size of

[the] company while reducing [the] environmental impact" (Unilever Group 2010a: 1).

The Coca-Cola Company defines its vision in six terms, all starting with the letter "p":

people, portfolio, partners, planet, profit, productivity. The three dimensions of sustai-

nability are thus also covered by the beverages firm. Regarding 'profit', it states expli-

citly that it aims to maximize returns in the long run "while being mindful of [the com-

pany's] overall responsibilities" (The Coca-Cola Company 2010e). In contrast to the

other companies, McDonald's Corporation does not provide a corporate vision expli-

citly. It briefly defines the long-term goal in doing global business as "being better, not

just bigger" (McDonald's Corporation 2010a: 10).



(b) Corporate strategy focus areas

The companies also disclose some information on how they actually plan to run

their businesses successfully in the future. Unilever Group defines "profitable share

and volume growth across all categories and countries" as the strategic maxim. To

achieve that, four dimensions are considered important: brands and innovation, the

market place, continuous internal improvement and employees (Unilever Group

2010a: 7-15). For the upcoming decade, the Coca-Cola Company set out a strategic

"2020 Vision and Roadmap". By then, five goals are to be tackled by specific meas-

ures. These include, for example, "more than doubling system revenue while increas-

ing system margins" and "ensuring [it is] the most preferred and trusted beverage

partner". Furthermore, the company explicitly states it strives toward "attaining global

leadership in corporate sustainability" (The Coca-Cola Company 2010a 2-3). In its

strategic "Plan to Win", McDonald's Corporation emphasizes the combination of qua-

litative improvements with quantitatively expanding the business. To stimulate

growth, three focus areas are identified: "enhancing restaurant experience", "increas-

ing sales and customer visits", and "maintaining financial discipline in the system".

Implementation draws on a number of initiatives around the defined core business

driver: people, products, place, price, and promotion (McDonald's Corporation 2010a:

10-11).

(2) Definition and elements of sustainability strategy

Generally, in accordance with overall corporate strategy, the companies under re-

view specifically define their long-term approach to balancing economic, environmen-

tal and social affairs.

(a) Unilever Group

Unilever Group builds its sustainability strategy on its corporate mission, "adding

vitality to life", which is also the commonly used slogan for various campaigns (Un-

ilever Group 2009: 8). Brand managers can draw on two frameworks to integrate

sustainability systematically into the brands (Unilever Group 2009: 9):

The "Brand Imprint Process", which is basically an overall assessment of both

the "impacts by brands/products" in "environmental, economic and social di-

mensions" as well as the "influences on brands/products" by "consumers, mar-

ket forces and key opinion formers".

The "Vitality Framework", which is additional to the aim of driving "innovation



and improvement" of brands in three fields: "more personal vitality", "more so-

cial value", and "less environmental impact").

Sustainability strategy focuses on three core areas: (1) "health and well-being", (2)

"sustainable living", and (3) "economic impact and development" (Unilever Group

2010b: 8). Further details are now given on some elements therein (Unilever Group

2010b: 2,10-33):

In "health and well-being", the company is involved in nutrition, hygiene and

well-being.

In "sustainable living", measures concentrate on less environmental impact in

business growth, sustainable agriculture and sourcing, refrigerants, climate

change, water, manufacturing waste and packaging.

In "economic impact and development", the strategy focuses on supporting

economic development, business performance in developing and emerging

markets and smallholder farmers.

(b) The Coca-Cola Company

The Coca-Cola Company subsumes its sustainability strategy under the slogan

"Live Positively". The approach is described as being a "holistic and global" effort to

tackle all kinds of challenges throughout the Coca-Cola System. Some reference is

also made to elements of the company's mission statement, namely "making a posi-

tive difference in the world" (The Coca-Cola Company 2010a: 29)

Within the strategy, there are seven core areas: (1) "beverage benefits", (2) "active

healthy living", (3) "energy management and climate protection", (4) "community", (5)

"sustainable packaging", (6) "water stewardship", and (7) "workplace" (The Coca-

Cola Company 2009b: 6-7). All these areas contain further specific topics (The Coca-

Cola Company 2009b: 9-37):

"Beverage benefits" includes issues of beverage innovation, product safety and

quality.

In "active healthy living", consideration is given to promote active healthy living,

educate consumers, and effect responsible marketing.

"Energy management and climate protection" deals with energy efficiency, the

carbon footprint and climate innovation.

Initiatives regarding "community" deal with economic development, economic

opportunity, charitable contributions, and sustainable agriculture.



"Sustainable packaging" focuses on packaging innovation, recovery and reuse

efforts.

"Water stewardship" comprises water efficiency, recycling water, and also mat-

ters concerning water beyond the company's own operations.

In the area of "workplace", safety issues and maintaining good supplier relation-

ships are of concern.

(c) McDonald's Corporation

McDonald's Corporation does not refer to its corporate sustainability approach with

a specific slogan and generally prefers the term "corporate responsibility". It sees

itself as "a values-based company" as general corporate values83 "underlie every-

thing we do" (McDonald's Corporation 2009: 2,4). Therefore, sustainability can be

considered as the way the firm "brings values to the table" (McDonald's Corporation

2009: 10). McDonald's Corporation pursues a "holistic" strategy, as a company's re-

sponsibility is simply an essential part of "good business". The strategic goals are set

in six major areas: (1) "governance & ethics", (2) "sustainable supply chain", (3) "nu-

trition & well-being", (4) "environmental responsibility", (5) "employment experience",

and (6) "community" (McDonald's Corporation 2009: 5-7). Again, more detailed as-

pects are subsumed within these focus areas (McDonald's Corporation 2009: 14-65):

"Governance and ethics" deals with ethics and governance principles, business

conduct and accountability.

To promote a "sustainable supply chain", the company seeks to educate the

whole supply system about sustainability, ensure product safety, increase em-

ployee and animal welfare, and conserve resources, for instance, in packaging,

forestry/land use, and fishing.

"Nutrition and well-being" is concerned with high-quality product choices, con-

sumer-friendly nutrition information, and responsible communications.

In "environmental responsibility", measures tackle energy efficiency, sustainable

packaging, waste management and green restaurant design.

The goal of sustainable "employment experience" is approached by measures

to build respect, enhance commitment, and manage talent.

Towards the "community", the company engages in the Ronald McDonald

83 The corporation's values, for example, place customer experience "at the core of all we do", ensure ethical business operations, advocate "giving back to our communities", emphasize profitable busi-ness growth, and express the aim of continual improvement (McDonald's Corporation 2009: 3).



House Charities and other children's programs, runs a variety of partnerships

and sponsorships, encourages restaurant owners/operators to participate and

provides support in disaster relief.

(3) Measuring and disclosing results of strategy

Companies publish information on their sustainability performance in different for-

mats and depth84. Qualitative descriptions of accomplishments and quantitative indi-

cators are both presented. In the following, particular consideration is given to the

companies' self-declared "key performance indicators". Corresponding background

information is provided in the appendix (Appendix 11).

Before dealing with each company separately, it can be stated that comparing per-

formance in environmental and social issues is generally somewhat challenging.

Several examples85 illustrate some underlying issues:

The use of absolute numbers like "number of existing low- and no-calorie beve-

rages in portfolio" (The Coca-Cola Company) or "number of audited supplier

meat processing plants" (McDonald's Corporation) does not allow instant com-

parison in performance.

One-year percentages prevent tracking performance like "44 percent of food

portfolio are in line with international guidelines for saturated and trans fat, sug-

ar and salt" (Unilever Group) or "the equivalent of 35 percent of bottles and

cans sold are recovered" (The Coca-Cola Company).

Internal indices are only useful when details on their construction and database

are included, e.g. "global company product quality index rating out of 100" or

"global company packaging quality index rating out of 100" (The Coca-Cola

Company).

Sometimes the direct relation to sustainability performance is questionable, like

"number of manual distribution centers in Africa" (The Coca-Cola Company),

"percentage of company-owned restaurants with a certified manager" or "total

income taxes paid" (McDonald's Corporation).

In certain cases, the reported numbers themselves simply appear doubtful at

first sight as, for example, "gender of employees male/female in percent (U.S.

84 Some comparability results from the companies' orientation on the GRI guidelines and other

standardization initiatives, but internally developed reporting formats appear to still dominate. 85 These examples give only an introductory snapshot and are selected randomly from the three

companies under review.



only)" with 50/50 in 2007 and 50/50 in 2008 (The Coca-Cola Company) or "total

number of fatal accidents" with 4 in 2007, 4 in 2008 and 4 again in 2009 (Un-

ilever Group).

Complexity of an indicator can limit informational value such as "ethnicity of

employees: African American / Asian / Caucasian / Hispanic / Other in percent

(U.S. only)" (The Coca-Cola Company) or "items per menu with at least 1/2 fruit

or vegetable serving" (McDonald's Corporation).

Further issues include different time frames or time lag in indicators, use of metrics

in development or change of metrics calculation within the observation period, mixing

international with regional and country-specific achievements, and alternation of

regular (long-term) company indicators and (temporary) project-centered indicators.

(a) Unilever Group

Unilever Group provides performance results in its "Sustainability Development

Overview" in a variety of formats. Data is available at least for the last three years

and mostly on an internationally compiled level (Unilever Group 2009; Idem 2010b).

Ten specific key performance indicators are not included in the overview, but re-

ported in an additional figures-based publication and online on the homepage. Eight

of these cover environmental and the remaining two occupational safety issues in

manufacturing operations from 1995 to 2009. Given per ton of production, the former

include water use, energy use, carbon dioxide, total waste, hazardous waste, non-

hazardous waste, chemical oxygen demand and SOx emissions. The final two are

accident rate and total number of fatal accidents. Data originates from 264 company-

owned manufacturing sites in 69 countries and a further nine corporate sites, which

represent about 85 percent of production. The KPIs are verified by an external audit-

ing firm (Deloitte) (Unilever Group 2010i; Idem 2010j).

All other achievements in sustainability are not reported in such an easily compa-

rable format. In one section, an overview is given on some "highlights" like for exam-

ple "15 percent of tea is sourced from Rainforest Alliance Certified farms" or

"Achievement of Food Industry Sector Leader in the Dow Jones Sustainability Index

in 2009 for the 11th time". Another section comprises a comparison of "commit-

ments" with "progress" in the last year. For example, it was planned to "deliver school

meals to 100,000 children via the partnership with the UN World Food Program",

whereas the company achieved "delivering nearly 17 million school meals to 80,000



children" (Unilever Group 2010b: II, 9).

(b) The Coca-Cola Company

The Coca-Cola Company reports a considerable number of sustainability-related

"performance highlights" in its "Sustainability Review". In the last available report,

four years are covered from 2004 to 2008. In fall 2010, no data for the preceding year

was yet accessible. In total, 27 indicators could be identified, which are categorized

according to the core areas in its overall strategic approach. In "energy management

and climate protection" for example, "energy use" and "carbon dioxide emissions" are

disclosed. "Recovered bottles and cans" and "packaging quality" are part of "sustain-

able packaging". There is a considerable number of absolute figures and several in-

ternal company indicators (The Coca-Cola Company 2009b: III-IV).

Another indication of sustainability performance is given in a rather narrative for-

mat with selected figures added for illustration. Examples are "39,000 HFC-free CO2-

refrigerated coolers and vending machines were placed in the market through 2008"

or "200+ community water partnerships [existed] in more than 60 countries as of Au-

gust 2009". Also the fact that "200+ juices and juice drinks were launched in 2008"

may give some interesting information but makes comparison to any reference chal-

lenging (The Coca-Cola Company 2009b: I-II).

(c) McDonald's Corporation

McDonald's Corporation provides 18 performance indicators in its "Corporate Re-

sponsibility Report". They are also clustered according to the strategic core areas of

sustainability strategy. However, only four out of six areas are covered as no KPIs

are available for "governance & ethics" and "environmental responsibility". Examples

for "sustainable supply chain" include "supplier social accountability", "animal wel-

fare" and "recycled packaging". "Employment experience" is represented for instance

by "training satisfaction" and "career chances". Indicators are reported for a period of

four years (2005-2008), but several exceptions or missing data complicates compari-

son. Numerous footnotes include geographic constraints, e.g. "figures only for the

nine largest markets", or exclusions (McDonald's Corporation 2009: 8-9).

The company gives some further results mostly in an example-based format con-

centrated on country or regional initiatives. This highlights differences in executing

the strategy rather than common achievements. For instance, restaurants run a "one

meal, one napkin" policy which lead to savings of 1,088 tons of napkin materials in



Brazil and 170 million napkins in the United States in 2009. For this or a comparable

initiative, no data exists for Europe (McDonald's Corporation 2009: 26).

6.2.3 Selected sustainability initiatives and stakeholder involvement

Selected sustainability initiatives provide an illustration of the companies' direct

cooperation with stakeholders and indirect influence on other parties86. From an in-

ternational perspective, examples are given in four categories: sourcing, packaging,

healthiness, and community. Whereas the former focus more on the environment,

the latter concern the social side. A short overview is given for orientation in the table

below (Exhibit 34):

Category (focus) Unilever Group The Coca-Cola Company McDonald's Corporation

(1) Sourcing (env.) "Palmoil" "Sugarcane" "Soya"

(2) Packaging (env.) "Unilever approach" "Coca-Cola approach" "McDonald's approach"

(3) Healthiness (soc.) "Heartage" "Active living" "Children moving"

(4) Community (soc.) "Against malnutrition" "Manual distribution" "House charities"

Exhibit 34 - Exemplary sustainability initiatives with stakeholders (Author's illustration)

(1) Sourcing

The three companies all source considerable amounts from primary producers in

developing countries. To avoid exploitation and degradation of fragile natural habi-

tats, cooperation is sought with NGOs and local governments, often also leading to

industry-wide codes of conduct.

(a) "Palmoil"

In South-East Asia (especially Malaysia and Indonesia), deforestation in the pro-

duction of palm oil leads to significant harm to the environment. To tackle this chal-

lenge, Unilever Group cooperated with WWF and several other companies and as-

sociations to launch the "Roundtable on Sustainable Palmoil" (RSPO), which aims at

"promoting the growth and use of sustainable palm oil" (Unilever Group 2010b: 18-

19). The NGO was formally established in 2004 and now comprises 380 ordinary

members, 81 affiliate members and 18 supply chain associates, and is currently

based in Zurich, Switzerland (Roundtable on Sustainable Palmoil 2010). In 2009,

Unilever Group purchased 15 percent of its total palm oil from certified RSPO

sources (GreenPalm certificate) (Unilever Group 2010b: 19). In an assessment of

nearly 60 major European companies ("Palm Oil Buyers Scorecard 2009"), WWF

86 The following examples are intentionally kept short to provide broad rather than in-depth cover-

age of the companies efforts.



rated Unilever Group as number five, meaning that the company responsibly sources

palm oil and proactively cooperates with other stakeholders in this matter (WWF

2010a).

Major stakeholders in this initiative include Unilever Group, the Roundtable on

Sustainable Palm Oil (RSPO), World Wildlife Fund (WWF), oil palm growers, oil palm

oil processors and traders, environmental and social NGOs, consumer goods manu-

facturers, retailers and banks and investors.

(b) "Sugarcane"

According to WWF, sugarcane is grown in over 120 countries and greatly influ-

ences the environment, especially wildlife, soil, water and air (WWF 2010b).

Being one of the largest purchasers of sugar, the Coca-Cola Company started to

work with WWF in 2007 to eliminate negative impacts in its supply chain, including

the crop's substantial water consumption (The Coca-Cola Company 2010f).

Efforts are concentrated in the Better Sugarcane Initiative (BSI), which aims at en-

suring sustainable sourcing of sugarcane in a multi-stakeholder approach (The Coca-

Cola Company 2010: 24-25).

The BSI uses a metric and certification system with globally set standards to en-

sure "credible, transparent and measurable criteria" in production and processing of

sugarcane. Standards are based on five principles, among which are "respecting

human rights and labor standards", "managing input, production and processing effi-

ciencies to enhance sustainability", and "actively managing biodiversity" (Better Su-

garcane Initiative 2010: 2; The Coca-Cola Company 2010: 25).

Major stakeholders in this initiative include the Coca-Cola Company, the Better

Sugarcane Initiative (BSI), the World Wildlife Fund (WWF), national and local pro-

ducers, commodity traders, consumer product companies, NGOs, investors, retailers

and oil companies.

(c) " Soya"

In early 2006, Greenpeace discovered that large areas of the Amazon rainforest in

Brazil had been illegally destroyed and used for planting soya. It addressed several

large multinationals to inquire about their direct or indirect involvement, among them

suppliers to McDonald's Corporation. McDonald's Corporation only had a relatively

small purchasing volume of less than one percent in the region, but was nevertheless

involved in the matter through its supply chain operations and assumed its responsi-



bility (Greenpeace 2006: 5); McDonald Corporation 2009: 27). By mid-2006, an in-

dustry-wide two-year moratorium on purchasing soya from deforested areas in the

Amazon region could be reached among multiple stakeholders. It was extended in

2008 and 2009 (Greenpeace 2009).Greenpeace acknowledged the "swift support of

the campaign" by and the resulting "amazing alliance" with McDonald's Corporation

(McDonald's Corporation 2009: 27).

Major stakeholders in this initiative include McDonald's Corporation, Greenpeace,

the Brazilian government, European politicians, local and international soya produc-

ers, soya traders and exporters, NGOs and European food retailers.

(2) Packaging

All three companies engage in increasing sustainability in packaging, particularly

with regard to recycling, packaging design and life cycle improvement.

(a) "Unilever approach"

At Unilever, about 2.4 million tones of packaging was used in 2009, including pa-

per (42 percent), plastic (27), glass (15), metal (7), mixed (5) and other (4). Within the

network "Consumer Goods Forum" (CIES), the company funded the "Global Packag-

ing Project" to promote industry-wide sustainable packaging, together with a large

retailer, by 2010 (Unilever Group 2010b: 27-28). A number of principles and meas-

ures cover environmental, economic and social aspects. They can be combined in

different variations according to the business needs at hand (Consumer Goods Fo-

rum 2010: 5-7). In creating sustainable packaging, the company applies a lifecycle

approach and investigates the "whole product" for improvements. Five principles are

defined: remove, reduce, reuse, renew, and recycle. Consumers are educated on

their own responsibility and integrated in sustainability efforts by being provided, for

example, with refilling packages (Unilever Group 2010b: 28-29).

Major stakeholders in this initiative include Unilever Group, consumers, the Con-

sumer Goods Forum, large food retailers, the Rainforest Alliance and other NGOs.

(b) "Coca-Cola approach"

Of its 23.7 billion unit cases, the Coca-Cola Company's packaging consisted of the

following formats and materials in 2008: PET-nonrefillable (52 percent), aluminum

(13), glass-refillable (12), fountain (12), PET-refillable (7), and other (4). The compa-

ny uses lifecycle assessment to tackle its four priority areas: "optimizing packaging

efficiency, increasing renewable resource use, recovering packages for reuse, and



increasing recycled material use". Stakeholders in the Coca-Cola system and the

entire value chain are included in the integrated corporate strategy to reduce raw ma-

terial, energy and water use in the packaging process (The Coca-Cola Company

2009b: 26-27). In 2009, the company ran a large-scale marketing campaign called

"Give It Back" to also remind consumers about recycling the packaging after con-

sumption (The Coca-Cola Company 2009d).

Major stakeholders in this initiative include the Coca-Cola Company, the Coca-

Cola System partners and value chain stakeholders, and consumers.

(c) "McDonald's approach"

On an international level, McDonald's Corporation does not provide information

either on the total volume or composition of packaging. It only reports that slightly

above 80 percent of "consumer packaging used in the nine largest markets is made

from renewable (paper or wood fibers) materials", among which about 31 percent is

recycled fiber (McDonald's Corporation 2010f). Considering a product's entire

lifecycle, the company considers five criteria in designing packaging: functionality,

cost, availability of materials, impact on operations and environmental impact. When

managing packaging materials, the first priority is given to avoidance (i.e. reduce

materials through efficient design), the second to recycling (i.e. collecting and

reutilizing materials), and the third to proper disposal (i.e. in case recycling is not

feasible). Recycling in restaurants considerably affects packaging's overall

environmental impact, but progress varies strongly from one country to another. In

any market, consumers are also actively encouraged to contribute to facilitating

recycling and avoid littering of public spaces around restaurants (McDonald's

Corporation 2009: 42,44-45).

Major stakeholders in this initiative include McDonald's Corporation, franchisees,

suppliers and consumers.

(3) Healthiness

To promote the health of consumers and the general public, all companies have

introduced numerous programs and increased the sustainability of their products,

especially concerning ingredients and nutrition.

(a) "Heartage"

Unilever Group launched the "Heartage" campaign to address the considerable

number of people who suffer heart disease, which could be "largely prevented by a



healthy diet and active lifestyle". Prepared in close cooperation between Unilever

Group, the World Heart Federation (WHF) and scientific experts, the campaign has

been effected via the "Becel/Flora" brand and product communication since mid-2009

(Unilever Group 2010b: 12; World Heart Federation 2009). In order to become aware

of and prevent risk factors for cardiovascular disease (CVD), people can access a

website with an online tool to calculate one's personal "Heartage", i.e. how much it

differs from one's chronological age (Heartagecalculator 2010). While the company's

goal is to reach 100 million people by 2020, about two million participated in the ear-

lier version of the test and 1.5 million took it via the new online-tool by year-end 2009

(Unilever Group 2010b: 9).

Major stakeholders in this initiative include Unilever Group, the World Heart Fed-

eration (WHF) and consumers.

(b) "Active living"

The Coca-Cola Company runs a worldwide initiative to support consumers in

"leading active, healthy lives", which is communicated through all marketing chan-

nels. The commitment is based on three dimensions: offering a wide variety of beve-

rages including different calorie options, portion sizes and nutrition fortification, edu-

cating consumers about nutrition, health and wellness programs, and promoting

physical activity (The Coca-Cola Company 2009b: 12-13). In 2008, the company

sponsored activity programs in 100 countries and set the target to run one such pro-

gram in every country where it does business by 2015. Considerable contributions

are made to sports, either in sponsoring professional sport events or supporting, for

example, government-run sport programs in schools, hiking in national parks or other

public sporting competitions (The Coca-Cola Company 2010g).

Major stakeholders in this initiative include the Coca-Cola Company, consumers,

the general public, government and public service agencies and private sport organi-

zations.

(c) "Children moving"

McDonald's Corporation defines, in its "Children Global Marketing Guidelines",

among other aspects, its goal as to "encourage activity and make healthy food choic-

es fun to eat". In cooperation with experts in the food industry, nongovernmental or-

ganizations and public services menu offerings and activity programs are better

aligned to meet children's nutritional and behavioral needs (McDonald's Corporation



2009: 36). It regularly runs special promotion campaigns that "deliver fun with pur-

pose", which are supported by major sport events or popular (animated) movies that

are particularly attractive to its young consumers. One such example was the Mada-

gascar 2 promotion, in which children were encouraged to take "One Minute to Move"

for "joyful self-expression" in "dancing, jumping, swinging, grooving, rocking or the

like" (McDonald's Corporation 2010g).

Major stakeholders in this initiative include the McDonald's Corporation, consum-

ers, including especially children, experts in matters of child education, sports and

nutrition, promotional partners in entertainment and the sports industry, and celebri-

ties.

(4) Community

All companies under review are involved in supporting poor people with nutritional,

economic, health or other challenges in both developing and developed countries.

(a) "Against malnutrition"

Unilever Group works closely with international governmental and non-

governmental organizations to tackle mal- and under-nutrition especially in develop-

ing countries (Unilever Group 2010b: 7). One recently launched, large-scale program

is the "Amsterdam Initiative against Malnutrition" (AIM) in cooperation with the Swiss-

based foundation Global Alliance for Improved Nutrition (GAIN) as well as govern-

ment and corporate partners from the Netherlands. The initiative aims at "eliminating

malnutrition for 100 million people in Africa through improving food fortification by

2015" (Unilever Group 2010b: 13; Global Alliance for Improved Nutrition 2009). "Food

fortification" means that vitamins and minerals such as Vitamins A, B (several) and D,

and iron and zinc are artificially added to the food. Results from earlier projects by

GAIN show that deaths or severe illnesses because of deficiencies can be reduced

by about 30 percent (Global Alliance for Improved Nutrition 2010).

Major stakeholders in this initiative include Unilever Group, the Global Alliance for

Improved Nutrition (GAIN), the Dutch government, universities, several Dutch com-

panies and malnourished people in developing countries.

(b) "Manual distribution"

The Coca-Cola Company supports "wealth creation at the community level" by es-

tablishing "Manual Distribution Centers" (MDCs) in developing countries in East Afri-

ca (especially Kenya, Tanzania, Ethiopia), which are run by local entrepreneurs.



MDCs typically cover about 150 small scale retail businesses, supply mostly manual-

ly and deliver at high frequency to keep customers' stocks low. The initiative is rea-

lized in close cooperation with the United Nations Development Program (UNDP)

and local partners (Nelson, Ishikawa, and Geaneotes 2009: 12; The Coca-Cola

Company 2009b: 22). According to an analysis by Harvard University, MDCs bring

both business (e.g. easier delivery in 'road-poor' settings, more inventory flexibility in

small outlets, improved customers service) and development (e.g. entrepreneurship

and employment opportunities, women's economic empowerment, human capital

development) benefits to the community (Nelson, Ishikawa, and Geaneotes 2009:

15-18). Since 2000, more than 2,600 MDCs have been created, creating jobs for

about 12,000 people (The Coca-Cola Company 2009b: 22).

Major stakeholders include the Coca-Cola Company, Coca-Cola bottling partners

and suppliers, the United Nations Development Program (UNDP) and local entrepre-

neurs in Africa.

(c) "House charities"

McDonald's Corporation concentrates its charitable commitment in the Ronald

McDonald House Charities (RMHC)87, which are supported by monetary donations

and a number of in-kind contributions (McDonald's Corporation 2009: 59). The com-

pany's "Charity of Choice" was founded in 1974 and provides families a "home-away-

from-home" in proximity to where their severely ill children are treated (Ronald

McDonald House Charities 2010a). In addition, the NGO runs Ronald McDonald

Care Mobile (RMCM), which sends specifically designed health care vehicles directly

to communities with children in need, and Ronald McDonald Family Room (RMFR),

which gives families some room for privacy and leisure time with their kids directly in

the hospital. In 2010, RMHC has more than 300 Charity Houses worldwide, RMCM

more than 40 Care Mobiles and RMFR more than 152 Family Rooms (Ronald

McDonald House Charities 2010b).

Major stakeholders include the McDonald's Corporation, the Ronald McDonald

House Charities (RMHC) with Ronald McDonald Care Mobile (RMCM) and Ronald

McDonald Family Room (RMFR), children and their families, local communities and

the general public, hospitals and donors.

87 A detailed illustration of the charities' operations in Austria, the Ronald McDonald Kinderhilfe, is

given in a later section of this chapter.



Following this broad comparison of strategic sustainability approaches of three

leading food and beverages companies on an international level, an in-depth illustra-

tion is provided on the practices within one country organization.

6.3 Exploring sustainability at McDonald's Austria

The case study88 on McDonald's Austria aims at illustrating examples of sustaina-

bility practices in the country organization of the international food and beverage ser-

vices company. It is based on publicly available information and primary data ga-

thered in expert interviews. The latter resulted in a significant amount of qualitative

data. As reported in detail in chapter five, field notes were screened, interpreted and

summarized manually. An overview on all contributions and topics with particular

sustainability relevance is given in the appendix (Appendix 12).

In the following subchapter, an introduction to McDonald's Austria is given. Then

sustainability-related highlights in the value chain of the country organization are pre-

sented. Finally, the company's particular social commitment in the Ronald McDo-

nald's House Charity is illustrated separately.

6.3.1 Introduction to the country organization

(1) Introduction to McDonald's Austria

McDonald's Austria is the national country organization within the McDonald's

Corporation that has been responsible for the Austrian market since the opening of

the first restaurant in Vienna in 1977. In 2009, the company realized sales of 443 mil-

lion Euros in its 168 outlets. 134 million people purchased food and beverage prod-

ucts during the year, which equals more than 367,000 customers per day. By year-

end 2009, the fast service restaurant chain had about 7,500 employees (McDonald's

Austria 2010a: 3-4; McDonald's Austria 2010d: 2).

(2) Sustainability and corporate social responsibility at McDonald's Austria

McDonald's Corporation is a company which operates globally, but is also deeply

rooted in regional and national environments. This is reflected in corporate responsi-

88 The illustration of this case study follows a strongly descriptive approach (within qualitative data)

as presented in the methodology (subchapter 5.1). It aims to provide detailed examples of good corpo-rate conduct in practice based on the theoretical concepts relating to corporate sustainability (chapter 2). In addition, the characteristics and favorable outcomes of stakeholder connectedness (chapter 3.2) through strategic stakeholder management (chapter 4.2) are illustrated.



bility measures. Clearly defined international sustainability approaches are adapted

to country characteristics and then implemented nationally (Riegler 2010).

McDonald's Austria considers corporate social responsibility as an "integrated part

of its corporate culture". Regularly, reference to the founder Ray Kroc is made, for

example, when stressing that people are at the center of business activities: "We are

not a hamburger company serving people, we are a people company serving ham-

burgers". The company follows a self-declared "integrated" approach in ensuring re-

sponsibility by focusing on six core areas. First, emphasis is given to being recog-

nized as a caring and trustworthy employer, which provides special initiatives for ap-

prentices, runs continuing internal education programs and supports employees in

combining job and family. Second, McDonald's Austria pledges to take a leading role

in preserving the environment. Its specifically tailored environmental concept McRe-

cycle® for instance allows for a recycling quota of 95 percent of all waste incurred in

the restaurants and all newly designed, highly energy efficient outlets reduce water

and energy consumption by up to 50 percent. Third, the balance between an active

lifestyle and a healthy diet is promoted among its customers. The product portfolio

comprises several low-calorie options and nutritional values are reported for all prod-

ucts, which is a result of a voluntary corporate initiative taken in 2006. In addition,

background brochures, a special website and the display of GDA (guideline daily

amounts) allow for informed consumption choices. Fourth, the company emphasizes

high product quality standards that are regularly assessed in internal and external

audits. Fifth, a high degree of involvement is shown in sports. In addition to its pres-

ence at large international events, the restaurant chain also aims at motivating child-

ren to become physically active and supports the national soccer team. Last but not

least, McDonald's Austria has backed the charitable organization "Ronald McDonald

House Charities" in organizational and financial matters since 1987 (McDonald's Aus-

tria 2010b: 1-10).

For the company, corporate sustainability in general is a very broad topic, which is

approached from different angles internally. Therefore, initiatives by McDonald's

usually cover specific areas such as the carbon footprint or social accountability. In

addition, it is a fairly dynamic topic, in which considerable corporate investment is

made. Together with external experts, programs are in constant development, review

and adaptation. This explains also the degree of sensitivity to disclosure. McDonald's

discloses information normally only when concrete achievements or measurable re-



sults are available. With many details on internal initiatives kept confidential, one is

advised to consult primarily any information released via public relations and market-

ing (Dobes 2010).

(3) The value chain and suppliers of McDonald's Austria

Basically, the supply chain consists of small, mostly Austria-based sub-suppliers

that deliver to larger producers. Goods are collected from these producers, stored in

one of two warehouses and distributed to the individual McDonald's restaurants by

one distributor, which is exclusively in charge. In the restaurants, meals are com-

pleted from the semi-finished ingredients. Post consumption, waste is collected by

several subcontractors of a firm that also offers environmental consultancy services.

The chain is centrally managed from McDonald's Austria headquarters. The pur-

chase department negotiates prices and executes quality control (Czasch 2010).

In the value chain of McDonald's Austria, six key suppliers can be identified that

are characterized by their main delivery volumes. Esca Austria provides beef and

chicken, Frisch & Frost produces French fries, and the Austrian Hamburger Bakery

(AHB) is responsible for buns and donuts. Milk, free range eggs and coffee originate

from Schaerdinger, EZG Frischei and Kraft Foods. Some additional details are given

in the table below (Exhibit 35). The logistics provider HAVI Logistics Austria, formerly

known as SDL - Service Distribution Logistik, also has an important role (McDonald's

Austria 2010d: 13-18).

Supplier Esca Aus-tria

Frisch & Frost

Austrian Hamburger Bakery (AHB)

Schaerdinger EZG Fris-chei

Kraft Foods HAVI Lo-gistics Austria

Location Enns (Up-per Aus-tria)

Hollabrunn (Lower Austria)

Korneuburg (Lower Austria)

Klagenfurt (Carinthia)

Vienna (Vienna)

Vienna (Vienna)

Korneuburg (Lower Austria)

Products Beef (pat-ties) and chicken

French fries

Buns and donuts

Milk for shakes, ice cream and coffee

Free range eggs

Coffee "JA-COBS Nachhaltige Entwicklung"

Delivery of all products (frozen, chilled, ambient)

Volume p.a. 2009

5,540 tons (beef), 940 tons (chicken)

8,450 tons

109 million buns, 1.05 million donuts

3.3 million liters

6.0 million eggs

144 tons 74,000 tons

Exhibit 35 - Main suppliers of McDonald's Austria (McDonald's Austria 2010d: 13-18; HAVI Logistics 2010c)

(a) Meat from Esca Austria

Meat products for McDonald's Austria are supplied by Esca Food Solutions GmbH

& Co. KG (Esca Austria). The company produces roughly 20,000 tons of beef (pat-



ties) and chicken, which have more or less equal shares in volume. Regarding ham-

burger patties, 60 percent are for the Austrian market and the remaining for several

other European countries. In 2009, sales amounted to about 65 million Euros and 90

people were employed (Poechlinger 2010).

Esca Austria is part of the American group Otto & Son International (OSI). This is

one of the largest privately owned food corporations in the world, producing for

McDonald's Corporation and other customers. The business division of OSI that ex-

clusively works for McDonald's is called "Esca Food Solutions". Among its 50 world-

wide production sites, the company is located in Austria in Enns, in Germany in

Guenzburg and Duisburg, and in Poland, Ukraine, Hungary, Spain, Serbia and the

United Kingdom. The latter country is also where the European headquarters are si-

tuated (Poechlinger 2010).

Traditionally, there has been a close connection between the growth of McDo-

nald's Corporation and Otto & Son (OSI) / Esca Food Solutions on an international

level. In Germany, Fa. Lutz served as a partner company in the "Lutz und Otto

Fleischwaren" (L&O). At the beginning of McDonald's operations in Austria in 1977,

meat was supplied by Fa. Vieh & Fleisch, first with production in Linz. In 1990, L&O

started production at the current location in Enns. In 2004, the company was re-

named Esca Food Solutions (Poechlinger 2010).

(b) French fries from Frisch & Frost

Frisch & Frost Nahrungsmittel-Gesellschaft m.b.H. (Frisch & Frost) is the supplier

of French fries for McDonald's Austria. It is located in Hollabrunn in Lower Austria. In

2009, revenues exceeded 68 million Euros with roughly a third attributable to the res-

taurant chain. The total portfolio includes frozen and chilled potato, dough, dumpling

and strudel products. With more than 103,000 tons of potatoes per year, the compa-

ny is the largest potato processor in Austria. It plays an important economic role for

the region by directly employing 275 people and purchasing potatoes from about 350

farmers, among which is Gutsverwaltung Hardegg that delivers the specific potato

types needed for the particular French fries ("McFries") for McDonald's. Products are

exported to more than ten European countries (Pichler 2010; Frisch & Frost 2010a).

In 1966, the Kartoffelverwertung Hollabrunn was originally founded for the purpose

of trading regionally grown potatoes. But only one year later, production of French

fries and potato chips was added. In 1982, McDonald's Austria became a customer.



Kartoffelverwertung Hollabrunn was integrated into Frisch & Frost Warenhandels-

GesmbH in 1992. Shortly after, production facilities were modernized considerably

making them one of the most modern in Europe. The company name was changed

to Frisch & Frost Nahrungsmittel-Ges.m.b.H. in 1999. Four years later, it took an im-

portant step for the environment with the opening of a biogas power plant89 (Frisch &

Frost 2010b, Pichler 2010).

(c) Buns from Austrian Hamburger Bakery

Buns for all kinds of burgers and donuts are produced by the Austrian Hamburger

Bakery (AHB), which was established by the Viennese bakery "Der Mann" in 1996.

The production facility is located in Korneuburg next door to the logistics provider

HAVI Logistics Austria. In 2009, about half of the approximately 250 million buns

produced was delivered to McDonald's Austria and the other half exported to Eastern

European markets. The company employs roughly 50 people, a number that is how-

ever fluctuating. As McDonald's is AHB's only customer, revenue figures cannot be

disclosed90 (Wieninger 2010; McDonald's Austria 2010d: 15-16).

(d) Distribution by HAVI Logistics Austria (formerly SDL)

HAVI Logistics Austria is exclusively responsible for effecting distribution to all

McDonald's restaurants in Austria. In 2009, 140 million Euros of revenue were gen-

erated by about 140 employees. The major customer is McDonald's Austria (about

90 to 95 percent of sales), but some business is nevertheless also done with other

firms in the food services industry. The company currently operates two distribution

centers, the original one located in Korneuburg (Lower Austria) together with the

headquarters and the second one in Vomp (Tyrol). It was opened in June 2010 to

service 34 restaurants in the western provinces of Austria. Delivery is done by 26

company-owned trucks on the road and by rail in cooperation with other logistics pro-

viders (Hoeller 2010; McDonald's Austria 2010d: 17-18).

The distribution company was established as SDL Service Distribution Logistik in

Austria in 1988. In the 1990s, it became part of Alpha Group, integrated in the area

Central Europe. Currently, it is the Austrian subsidiary of HAVI Global Logistics

Group. This international network of distribution, logistics and service providers com-

89 The biogas facility at Frisch & Frost is considered in more detail in a later part of this chapter as

an example of environmental sustainability. 90 The general manager of AHB does not reveal revenues as the price per bun that is charged to

the single customer McDonald's Austria could be calculated (Wieninger 2010).



prises more than 40 companies with nearly 4,800 employees. In over 30 countries, it

operates 47 delivery centers with 620 trucks. In mid-2010, the company name SDL

was changed to HAVI Logistics Austria (HAVI Logistics 2010b; Hoeller 2010)

(4) International programs for a sustainable supply chain in Austria

Already on a national level, McDonald's Austria cooperates with a number of sup-

pliers. Considering global operations, the supply chain is rather "extensive and com-

plex". Nevertheless, McDonald's Corporation aims at applying uniform standards in

quality, safety and availability as well as promoting sustainable practices among its

partners91. It acknowledges that it does not have direct control over these issues, but

can use its "size and recognized brand to be a positive influence" (McDonald's Cor-

poration 2009: 16). As a result, the company defines certain assurance programs. As

these are generally designed from an international or regional perspective, local mar-

ket characteristics may yet need some adaptation. In every country, there is some

degree of compliance (Dobes 2010). Often these internal regulations of McDonald's

exceed legal requirements. Thus business partners and suppliers are constantly

challenged (McDonald's Austria 2010e: 3).

In the following, an introduction92 is given on some systems, programs, audits and

certifications that are relevant to Austrian suppliers:

(a) SQMS and MAAP

The McDonald's Supplier Quality Management System (SQMS) aims at "promot-

ing food safety and quality expectations for all suppliers globally" (McDonald's Corpo-

ration 2009: 19). It covers areas such as good manufacturing practices, risk man-

agement, conduct of management, product quality, environmental aspects and the

like (Poechlinger 2010). Practically, the supplier has to respond to a number of ques-

tions based on the information available from the supplier's own management sys-

tem. Such an audit is performed once a year (Pichler 2010).

The McDonald's Agricultural Assurance Program (MAAP) aims at "increasing the

91 The internationally-determined vision for a sustainable supply chain is the foundation for all na-

tional programs, systems and audits. It is defined as "We envision a supply chain that profitably yields high-quality, safe products without supply interruption while leveraging our leadership position to create a net benefit by improving ethical, environmental and economic outcomes" (McDonald's Corpo-ration 2009: 16-17).

92 As the McDonald's approach to sustainability is "holistic" (e.g. McDonald's Corporation 2009: 17), the reader may perceive some overlap between initiatives. What is more, as a result of limited direct information from the company, the researcher was advised to primarily draw on publicly availa-ble information and insights from supplier interviews. Information is thus likely to be incomplete.



company's influence through the supply chain to the primary producer level" and "de-

veloping sustainable agriculture across Europe" (McDonald's Corporation 2009: 17).

In fact, it is a reference tool to specifically evaluate the production standards of agri-

cultural producers. By using an extensive database, McDonald's own standards are

matched against over 300 European assurance schemes in the database (McDo-

nald's Europe 2010e). Being an agricultural program, MAAP covers suppliers that are

involved in producing main products like beef, chicken, potatoes, wheat, dairy prod-

ucts and vegetables (McDonald's Europe 2010d). In practice, MAAP assessment

takes place as part of SQMS (Pichler 2010).

The program comprises six policies, which are environmental management, good

agricultural practices, animal welfare, animal health, transparency and genetics. In

each of these areas more detailed targets are defined. In environmental manage-

ment, for example, farmers are guided to prevent the pollution of air, soil or water, cut

greenhouse gas emissions, preserve natural habitats, prefer renewable energy

sources, employ organic fertilizers and preserve rural landscapes (McDonald's Eu-

rope 2010f). By applying the program, every agricultural holding is evaluated as an

integrated entity. The various policies cover the main criteria that are important to

remain a McDonald's supplier in the long term (McDonald's Austria 2010d: 6).

The MAAP was developed in 2001 and has experienced several adaptations

since. The standards are actually still in constant evolution (McDonald's Corporation

2009: 17). As a matter of fact, the standards can never be fully fulfilled. The aim is to

constantly improve practices, product quality, and environmental and social impacts

(McDonald's Europe 2010g). Suppliers are very involved in developing further the

MAAP checklist. In the yearly workshops, via the online platform or through the ex-

ternal audits, they contribute knowledge as experts from the field. Frisch & Frost, for

example, shared some practical insights concerning issues in potato production

(Pichler 2010).

To promote the standards set and evaluated in SQMS/MAAP in practice, McDo-

nald's discloses best practice examples of supplier sustainability. The best environ-

mental performers in several categories are presented in the Best of Green report.

Concerning agriculture, the McDonald's Flagship Farms project has a similar ap-

proach: within the European supply chain, the most sustainable agricultural holding



serves as a case study93 (McDonald's Corporation 2009: 18-19). Furthermore, the

suppliers selected for these leadership examples are sought especially for the ongo-

ing improvement of MAAP standards described above. In close interaction with other

partners, an evaluation is carried out as to how their best practices can be incorpo-

rated into working methods (McDonald's Europe 2010h).

A challenge to promoting sustainability throughout the supply chain is posed by

the considerable number of indirect suppliers. It is not possible for McDonald's to stay

in close interaction with each business (McDonald's Europe 2010e). Thus the com-

pany puts their direct suppliers in charge. They communicate and assess standards

down to the individual farmer level (McDonald's Europe 2010g). As an illustration of

reporting, for instance, Gutsverwaltung Hardegg has to fill out the MAAP checklist

received from Frisch & Frost. Results are then used to evaluate the sub-supplier's

general practices (Hardegg 2010). In addition to reporting, cooperation between di-

rect and indirect suppliers in practice usually goes further. Different approaches may

be used to achieve MAAP compliance as the following examples demonstrate:

(1) Esca Austria uses incentives to promote sustainable conduct among its

farmers. If two criteria are met, the supplier pays a premium of ten cents per

kilo on top of the current market price (Poechlinger 2010): First, a commitment

must be made to the cross-compliance requirements of the European Union.

This ensures good overall practices of the agricultural holding and most

favorable impact on the environment of the agricultural processes applied

(European Commission 2010). Second, the farmer needs to be a member of

the Austria Tiergesundheitsdienst. Membership involves regular support and

supervision with regard to, for example, animal health, appropriateness of

facilities for animals and animal feed (Tiergesundheitsdienst 2010). Among the

approximately 30,000 farmers that supply meat for McDonald's Austria, about a

third is committed to these additional requirements. On average, an additional

20 percent join each year (Poechlinger 2010).

(2) Frisch & Frost uses its long-term cooperation to increase sustainability

among its suppliers. It developed its own set of guidelines that are based on

but exceed the requirements of the Austrian Agri-Environmental Program

93 The Austrian direct supplier Frisch & Frost is included in the Best of Green report and the indirect

supplier Gutsverwaltung Hardegg ("Seefeld farm") is considered a Flagship Farm. Further details on both are presented later in this chapter.



ÖPUL of the Austrian Federal Ministry of Agriculture, Forestry, Environment

and Water Management94. For example, Frisch & Frost does not only limit the

amount certain fertilizers are used but requires farmers to completely refrain

from applying them. This is possible via contracts that guarantee that 100

percent of the potato crop from a specified field is purchased. With such

volume contracts, both parties may or may not benefit: if the farmer does not

achieve the expected productivity in a sustainable manner, it is also bad for

Frisch & Frost. In practice, so-called "field advisors" provide on-site assistance.

They also allow Frisch & Frost to directly influence agricultural practices. As a

result of close cooperation, farmers achieve high scores in the MAAP (Pichler

2010).

(b) SPMP with SPI

The Supplier Performance Measurement Process (SPMP) is a formalized process

during which suppliers' performance in a number of dimensions is regularly as-

sessed. Such dimensions include, for example, supplier management vision and val-

ues, supply chain optimization, quality systems and innovation. It is a means for de-

termining the fit between McDonald's expectations and its business partners' overall

business approach and results. Supplier selection and affirmation is part of the

process (Pichler 2010). The primary evaluation tool is the McDonald's Supplier Per-

formance Index (SPI). It comprises a review of adherence to programs such as the

Environmental Scorecard and the Social Accountability Program as well as others

related to sustainable supply (McDonald's Corporation 2009: 16). These two initia-

tives are now elaborated on in a bit more detail:

(1) The Environmental Scorecard is a standardized format by which the

supplier reports selected environmental performance figures to McDonald's.

Being employed in manufacturing and logistics, it comprises the four core

areas water, energy, air, and solid waste. In yearly meetings, this data is

reviewed. McDonald's does not specific reduction targets to its independent

suppliers; measures for improvement should nevertheless be identified for the

upcoming year. In fact, the tool serves primarily for raising awareness and

94 ÖPUL is an Austrian program that was introduced in 1995 and currently runs in a version which

has been further developed. It aims at promoting agriculture that is "extensive, appropriate to the envi-ronment, and protective of nature", with incentives via financial subsidies (Lebensministerium 2010; Pichler 2010).



addressing environmental issues on a quantitative basis in operations. The

cost of subsequent investments for increasing efficiency needs to carefully

weighed against the associated cost (Wieninger 2010).

(2) The Social Accountability Program aims at investigating whether social

standards are respected by the supplier. It requires compliance naturally with

applicable laws and regulations as well as some policies specific to McDonald's

(Wieninger 2010). Within the program, the McDonald's Code of Conduct for

Suppliers plays a major role (Pichler 2010). Concerning employment practices,

this code, for example, covers aspects of absence of prison/forced and child

labor, appropriate working hours, fair compensation, non-discrimination, safe

and healthy workplace environment and the like (McDonald's Corporation

2010e: 2-4). An external Social Compliance Audit is conducted approximately

at two-year intervals (Poechlinger 2010). In contrast to developing countries,

social standards are advanced in Austria. Thus the requirements of this

program can be fairly easily met (Poechlinger 2010; Pichler 2010; Wieninger

2010).

(c) Supplier-specific programs and certifications

The independent direct and indirect suppliers of McDonald's Austria also have

some national and international certifications that serve a particular purpose. Broadly

differentiated, they can be useful in either establishing integrated systems (ISO 9001,

ISO 14001, OHSAS 18001, EMAS)95 or gaining market access (AMA quality sign,

BIO seal, IFS Food)96 (Hardegg 2010; Hoeller 2010; Pichler 2010; Poechlinger 2010;

Wieninger 2010)

McDonald's Corporation supports existing, externally recognized assurance

95 ISO 9001 is "a set of standardized requirements for a quality management system"

(http://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/iso_9000_essentials.htm); ISO 14001 "specifies the requirements for an environmental management system (http://www.iso.org/iso/iso_14000_essentials); OHSAS 18001 is "an international occupational health and safety management system specification (http://www.ohsas-18001-occupational-health-and-safety.com/what.htm); The EU Eco-Management and Audit Scheme (EMAS) is "a management tool for companies and other organisations to evaluate, report and improve their environmental per-formance (http://ec.europa.eu/environment/emas/index_en.htm). All websites were accessed on 10 October 2010.

96 The AMA quality sign ensures independent quality controls (http://www.ama-marketing.at/qualitaet-und-sicherheit/ama-guetesiegel/); The BIO seal certifies organic production (http://www.ama-marketing.at/amabiozeichen/grundprinzipien); The International Food Standard (IFS) is a standard required for delivering to food wholesalers and retailers (http://www.ifs-certification.com/index.php?page=home&content=public_content&desc=ifs_standards_food_5&lang uage=english). All websites were accessed on 10 October 2010.



schemes as they contribute to transparency and standards in supplier operations

(McDonald's Europe 2010e). Basically, all additional certifications can thus be consi-

dered "appreciated" by McDonald's Austria, but are not explicitly required. However,

they greatly support the fulfillment of general and sustainability-related McDonald's

standards (Hoeller 2010; Pichler 2010). However, any associated cost for compliance

and external audits should not be underestimated. It is important to select those that

are of immediate practical use or contribute to developing the business (Pichler

2010).

(5) Stakeholder interaction in the value chain and sustainability

Stakeholder interaction in the value chain is based on the idea of partnership.

Represented in the "three-legged-stool" principle of McDonald's, the company, fran-

chisees and suppliers can achieve most lasting success when working closely to-

gether. There is practically no incentive to achieve higher standards in quality, opera-

tional processes or environmental and social performance other than fulfilling mutual

expectations (Wieninger 2010).

Traditionally, no written contracts exist within the McDonald's system. The compa-

ny does not hold any financial stake in suppliers either, which thus remain indepen-

dent organizations. In the partnership, "mutual trust and respect" are considered the

cornerstones (Czasch 2010; McDonald's Austria 2010a: 4).

When it comes to corporate sustainability initiatives, suppliers are very much in-

volved. They may thus provide valuable insights into some characteristics and their

impact in practice (Dobes 2010). In the following, views on the cooperation with

McDonald's Austria are given by the main suppliers:

(a) Esca Austria

According to Esca Austria, the interaction with McDonald's Austria is a "functioning

partnership based on handshakes". The responsibility of the supplier is to actively

support the brand of its customer. Therefore, it does not only need to deliver best

quality at competitive prices, but also adapt to new initiatives. In this respect, corpo-

rate sustainability plays a major role. For some time already, McDonald's Austria has

pushed responsibility in the value chain. An important platform for exchange is called

"McDonald's Meat Council", which is held twice a year. At a European level, repre-

sentatives from McDonald's and specialists from Esca discuss strategic issues con-

cerning, for instance, purchasing, quality and also sustainability. This partnership ap-



proach is also reflected in relations between Esca and its suppliers (Poechlinger

2010).

(b) Frisch & Frost

Traditionally, McDonald's Austria has been very involved in monitoring and sup-

porting supplier conduct. Already in the 1990s, the company had proactively tried to

bring its business partners to a higher level in quality standards. Although Frisch &

Frost also had advanced practices, some further improvements were made together.

Similarly, McDonald's has also been fairly active when it comes to sustainability.

There is close cooperation with suppliers and even sub-suppliers, thus covering the

whole logistics chain. An example of mutual involvement is the Sustainable Agricul-

ture Initiative (SAI), in which a number of international companies aim at implement-

ing more sustainable practices in agriculture. Frisch & Frost provided input for devel-

oping certain rules and also backed the McDonald's brand (Pichler 2010). Gutsver-

waltung Hardegg, a large scale agricultural holding that grows potatoes for French

Fries, reports positive experience in stakeholder interaction. McDonald's Austria does

not only require fulfillment of certain standards but is additionally very much inclined

to receive practical feedback for improvement. There is constant exchange in the

chain also with the sub-supplier (Hardegg 2010).

(c) Austrian Hamburger Bakery

In principle, the Austrian Hamburger Bakery needs to meet certain quality stan-

dards for buns and donuts, pass the required audits and charge competitive prices in

its interaction with McDonald's Austria. Practically, however, the long-term partner-

ship of the "McFamily" brings parties closer together. In aspects of sustainability, for

example, McDonald's appears eager to show strong leadership, which also puts

pressure on suppliers. In addition to sharing ideas and discussing best practices, the

so-called "Bakery Council" is a means for presenting corresponding new targets of

the company. AHB and bakeries in other countries can then independently run pro-

grams, for example, for improving energy efficiency (Wieninger 2010).

(d) HAVI Logistics Austria (formerly SDL)

From the viewpoint of HAVI Logistics Austria, McDonald's Austria can be de-

scribed as a "very demanding customer". The distributor describes the partnership in

a favorable manner but acknowledges that it is continuously challenged to meet ex-

pectations. Regarding sustainability, McDonald's demands significant effort and as-



sesses progress, for example, by the use of an environmental scorecard. A major

project was, for instance, the introduction of trucks that are able to run on Biodiesel97

during the warmer time of the year. Stakeholder cooperation proved to be very strong

in this venture despite considerable risk and money involved. Support by all parties

including McDonald's Austria, the individual restaurants, the environmental consul-

tancy GUT and HAVI Logistics Austria finally led to success (Hoeller 2010).

After this overview of McDonald's Austria and its main suppliers, the following sec-

tion investigates some concrete environmental highlights.

6.3.2 Responsibility and environmental highlights in the value chain

In the following section, the focus lies on sustainability initiatives in the value chain

that are realized either by McDonald's Austria directly or in close stakeholder cooper-

ation. First, the sustainability of local sourcing and aspects of food security are more

closely looked at. Second, the company's concept on waste management and recy-

cling is presented. Third, initiatives to increase energy efficiency are discussed.

(1) Sustainable sourcing and food security

Responsibility towards customers is closely linked with reliable local origin of in-

gredients, regional farmers that proactively aim at pushing sustainability further and

quality assurance of transparent food quality up to final consumption. For McDonald's

Austria, sustainability thus covers aspects of regional sourcing and quality assurance

in the product cycle (McDonald's Austria 2010b: 5; Dobes 2010).

(a) Sustainable local sourcing

In sourcing, McDonald's Austria aims at pursuing a local approach if resources are

available in terms of volume and quality standards (McDonald's Austria 2010d: 2).

Austrian suppliers are known for providing high quality ingredients. Therefore, beef

patties for burgers, potatoes for French fries, eggs, milks, bread for breakfast and

most ingredients for buns can be sourced entirely from Austria. For the first two in-

gredients, the origin was publicly communicated in advertising: "100% Rindfleisch in

AMA Qualität aus Österreich" and "100% Kartoffeln aus Österreich" (Riegler 2010).

The two largest producers in terms of volume, Esca Austria and Frisch & Frost, al-

97 Biodiesel at HAVI Logistics is dealt with in further detail in a later section.



so highlight environmental aspects of local sourcing. In long-term cooperation with

farmers, advanced practices can be developed for improving animal welfare and soil

quality (Poechlinger 2010; Pichler 2010). In addition, shorter transportation routes

reduce carbon dioxide emissions in logistics (Hoeller 2010). Unfortunately, certain

ingredients are not grown in Austria like American wheat. Because of particular cha-

racteristics, bun quality could not be achieved with domestic substitutes (Wieninger

2010).

In 2009, McDonald's Austria purchased goods worth more than 129 million Euros

from domestic suppliers, among whom were about 30,000 agricultural holdings

(McDonald's Austria 2010a: 4). The quick service restaurant chain is thus the largest

partner in the gastronomy sector of Austrian agriculture. In addition to quality and

environmental aspects, this sourcing policy supports economic sustainability (McDo-

nald's Austria 2010b: 6).

(b) Example for a sustainability-advanced, local farm

In general, Austrian agriculture already has a high level of sophistication. Farmers

know that consumers expect best quality and appreciate regional origin (Poechlinger

2010). Many agricultural holdings, both small and larger ones, already apply ad-

vanced processes that create more output with less impact on the soil (Pichler 2010).

In the following, Gutsverwaltung Hardegg is presented as an example for an indirect

supplier of McDonald's Austria that is a leader in sustainable agriculture. It was even

chosen to serve as a role model in the Europe-wide initiative "Flagship Farms".

Gutsverwaltung Hardegg is located in Seefeld-Kadolz, Lower Austria. Having a

long history in the region, it now combines an "age-long history of experience" and

"modern agricultural management". The business is one of the largest privately-

owned agricultural holdings in Austria (Gutsverwaltung Hardegg 2010). In 2009, the

farm generated revenues of roughly seven million Euros and employed about 40

people, including seasonal workers. There are three lines of business: farming with

2,300 ha of arable land, viniculture with 40 ha of area under cultivation, and pig

breeding with 1,000 sows to produce about 25,000 pigs per year. Gutsverwaltung

Hardegg is the largest producer of potatoes in Austria. In terms of volume, total out-

put equals nearly half of the amount of potatoes consumed annually in the country.

As an indirect supplier of McDonald's Austria, the farm grows potatoes on about 80

ha and then supplies them to Frisch & Frost for processing (Hardegg 2010).



The owner of Gutsverwaltung Hardegg, Maximilian Hardegg, describes his com-

mitment to sustainability as being "deeply rooted in the long historical bonds" with the

region. For nearly 400 years, the farm has been handed on within his family. Doing

sustainable business thus means "building, growing, and strengthening" for the fol-

lowing generation (Hardegg 2010).

Mr Hardegg has a strong personal drive to further improve sustainable practices

on the farm. He is in constant exchange with other farmers, politicians, company rep-

resentatives and experts on a European level. His position as a member of the board

of the German Agricultural Society (DLG)98 is especially important. In this function, he

was involved in the development of the DLG Sustainability Certificate 'Sustainable

Agriculture - Fit for the Future' (Hardegg 2010). A sustainable agricultural holding is

characterized by "environmental compatibility, social acceptance and cost effective-

ness"99 (DLG 2010b). Most synergy is simply reached if a business optimizes opera-

tions to the joint benefit of the environment, society and the bottom line (DLG 2010a:

4). In each of these three dimensions, management depends on specific indicators to

measure performance. Agro-biodiversity, soil erosion and greenhouse gases fall, for

example, in the environmental dimension, level of compensation, training on the job

and workers' participation in the social sphere, and net investments, change in equity

and profit rate in the economic category. These were all defined in close stakeholder

dialogue and scientifically assessed (DLG 2010a: 3). In total, about 90 indicators aim

at covering the agricultural entity as a whole (Hardegg 2010). The DLG Sustainability

Certificate eventually requires that certain target values of these sustainability indica-

tors are met, legal agricultural regulations are complied with, and quality and hygiene

assurance measures are implemented (DLG 2010c). In late 2009, the certificate was

officially awarded to Gutsverwaltung Hardegg for a three-year period (Gutsverwal-

tung Hardegg 2009: 6).

Promotion of sustainability in the supply chain of McDonald's also benefits from

the advanced stage of development of Gutsverwaltung Hardegg. Mr Hardegg is in

98 The Deutsche Landwirtschafts-Gesellschaft (DLG) is an agricultural expert organisation that

aims at promoting technical and scientific progress. Internationally, it engages in knowledge transfer, trade exhibitions, machinery and farm input tests, and food tests as a competence center. Founded in 1885, the organization has currently over 22,000 members (http://www.dlg.org/about.html; Accessed on 09 September 2010).

99 In detail, sustainability in agriculture and the food chain covers aspects such as "protection of soil, water, air and biodiversity; improvement of climate impacts and energy efficiency; optimising of fertilising and plant protection; strengthening of cost effectiveness and competitiveness; advanced training for farm managers and farm staff; and food safety and hygiene" (DLG 2010b).



regular exchange with representatives of McDonald's Austria and McDonald's Europe

to provide practical insights. In 2008, he was approached to participate in the McDo-

nald's Flagship Farms Project (Hardegg 2010). The project aims at driving improve-

ments in sustainable agriculture, establishing direct dialogue among progressive far-

mers, and increasing proliferation of advanced techniques and technology within the

McDonald's system. Leading agricultural holdings are presented as case study ex-

amples, called 'Flagship Farms' (McDonald's Europe 2010a). In order to be invited to

participate, farms need to operate good practices in general and strive for continuous

improvement, demonstrate leading practices in the ethical, environmental or econom-

ic area, and run modern scientifically-grounded practices that are endorsed by ex-

perts from NGOs, academia or other fields (McDonald's Europe 2010b). The "Good

Practice Matrix" provides a framework for linking specific actions in categories such

as management, inputs, resources, outputs and community benefits in the three sus-

tainability areas "ethical" (i.e. "acceptable practices"), "environmental" (i.e. "protecting

the planet"), and "economic" (i.e. "long-term economic viability") (McDonald's Europe

2010c). Examples of advanced practices at Gutsverwaltung Hardegg include (McDo-

nald's Europe 2009: 3):

The farm and the processor set up supply contracts in advance to ensure fair

prices, effective production and a lasting business relationship.

Biodiversity on the farmland is maintained as areas are set aside long term as

wildlife habitats, a practice that is not required under EU law.

The farm's carbon footprint is reduced by using pig slurry as a natural fertilizer

instead of artificial products.

Quality of the soil is improved by planting so-called cover crops in fall on areas

used in the upcoming season so that, for example, any excess soluble

nutrients are absorbed.

Water usage on the fields is reduced by employing a more efficient center pivot

irrigation technique rather than a rain gun system.

Good management practices, including all sustainability initiatives, have lead to

a yield of about 50 t/ha, which is more than 50 percent more than the Austrian

average at 33 t/ha.

To conclude, Mr Hardegg states that he "highly appreciates the efforts of a global

firm like McDonald's. Apparently, the company is not only interested in sustainability

with regard to reports, but also in its realization in practice at the level of the farmer".



Furthermore, he is determined to continue his approach as "sustainability of the

product is closely linked with the sustainability of the producer" (Hardegg 2010).

(c) Product quality and food security

In addition to superior ingredients from sustainable local sources, corporate re-

sponsibility involves guaranteeing hygiene and food security in the whole value

process. Quality assurance of McDonald's Austria is thus intensive, comprising more

than one million single checks per year (McDonald's Austria 2010d: 5).

In 1996, the company proactively introduced the Hazard Analysis Critical Control

Point system (HACCP) for safer food products in the McDonald's System. It should

be pointed out that this was three years before legislation, under the Lebensmittelhy-

gieneverordnung100, required such a system. The HACCP principles involve analyz-

ing potential risks for food safety, identifying where these risks could occur in the

processes, determining what risks are 'critical', establishing effective control and as-

sessment procedures for these critical points, and finally reevaluating the system at

regular intervals. In comparison to earlier food protection approaches, the focus of

this program is on prevention rather than only detection. The origin of HACCP dates

back to the 1960s as food for astronauts needed to be checked for physical, chemi-

cal and microbiological contaminants. Since its application at McDonald's, the system

has been proven to be very effective (McDonald's Austria 2010d: 3-4; (International

HACCP Alliance 2010).

At the suppliers, product sites are annually inspected by the American Institute of

Baking (AIB). The unheralded "Food Safety Audit" covers aspects such as overall

food safety management, personnel hygiene, standards in operations and mainten-

ance and cleaning practices of the facility. All suppliers of McDonald's Austria passed

the audit successfully in 2009 (McDonald's Austria 2010d: 7-8). In meat sourcing,

additional controls are conducted by the European Food Safety Institute (EFSIS).

The food processor Esca Austria is furthermore subject to routine checks by the

Agrarmarkt Austria (AMA) (McDonald's Austria 2010b: 6).

At the distribution center, employees of HAVI Logistics Austria run a "Quality In-

spection Program" to check all incoming and outgoing products according to a num-

100 §3 of the Lebensmittelhygieneverordnung states that any company that serves food products

needs to make sure that hygiene standards are met in all processes in accordance with HACCP (http://www.ris.bka.gv.at/Dokumente/BgblPdf/1998_31_2/1998_31_2.pdf. Accessed on 15 September 2010).



ber of criteria. Also during transport, HACCP standards are met: delivery trucks are

equipped with three separated temperature zones for frozen goods (-20°C), chilled

goods (+2°C), and ambient goods (+20°C). All goods can thus be transported at the

same time. At unloading, supplies are once more subject to controls (HAVI Logistics

2010a: 6-7).

In the restaurants, the fast-food concept means that fresh products have to be

made available within very short time frames. The customer should receive his or her

order within less than three minutes. Main products like ham-, cheese or chicken-

burgers need to be always available in certain amounts and can be kept warm for a

maximum of ten minutes. Salads are also made in advance but may be kept for eight

hours in the fridge. Specialty products and more elaborate burgers are usually made

to order. Concerning products prepared ahead, either computer displays or labels

directly on the packaging ensure product quality and hygiene (Czasch 2010).

A specially trained employee is in charge of fulfillment of HACCP standards in the

restaurant. For guaranteeing "McSafety", temperature checks are continuously con-

ducted at specified intervals, for example, when products arrive, are stored and

processed for final consumption. Additionally, products prepared in advance are mo-

nitored for the sell-by time (McDonald's Austria 2010b: 7).

In addition to these ongoing control procedures, representatives from McDonald's

Austria or external parties also conduct regular checks outside of daily operations.

Some examples are given for illustration (McDonald's Austria 2010d: 9-11):

Field consultants are in charge of ensuring that all quality standards including

product specifications, restaurant hygiene and the like are met. On average,

every consultant services between 10 and 20 restaurants owned by the

company itself or franchisees. Once a year, he or she supervises the "Global

Restaurant Operations Improvement Process" (GROIP). In an extensive audit,

the restaurant in general, all equipment in operation and skills of the

employees are assessed.

Anonymous inspectors from an external institute or the company itself regularly

evaluate customer experience, product quality and compliance with hygiene

standards. By acting like regular customers, they aim at conducting an overall

assessment based on objective criteria. In addition to these shoppers,

corporate management also inspects restaurants several times a year.

Independent external controls are also conducted by the



Lebensmittelversuchsanstalt Wien and the Salzburg-based Institut Analytec,

which take product samples to be tested in the laboratory.

The researcher had the opportunity personally to get insight into quality standards

and operational processes in the course of the interviews101.

(2) Packaging and waste management

Further aspects of sustainability concern packaging and the waste management

concept of McDonald's Austria. First, a brief introduction is given on some legal re-

quirements and the role of the environmental consultancy Galle Umwelttechnik

(GUT). Then practical insights are provided on packaging design and the company's

recycling concept. Finally, the example of the transformation of waste frying oil from

restaurants into biodiesel for use in delivery trucks of HAVI Logistics Austria is given.

(a) Legal requirements and Galle Umwelttechnik (GUT)

Concerning packaging and waste management, basically two legal regulations are

relevant: (1) the "Verpackungsverordnung" (VerpackVO) and (2) the "Abfallwirt-

schaftsgesetz" (AWG)102. Some aspects of the laws are highlighted in the following:

The "Verpackungsverordnung" applies to all companies that produce, import,

utilize, distribute or finally consume packaging material (§ 1). The companies

are generally obliged to take back used transportation and sales packaging

free of charge. Furthermore, they have to make sure that such packaging is

returned to where it originates from, reused or properly disposed of. Such

obligation may be transferred to an eligible third party (§ 3). Any party that

hands packaging over to end consumers needs to participate in a collection

and recycling system ("Sammel- und Verwertungssystem") if an upstream

party does not already do so (§ 4). Such a collecting and recycling system has

to fulfill several requirements such as keeping track of all quantities and types

of packaging and adherence to environmental and economic standards (§ 11)

(VerpackVO).

The "Abfallwirtschaftsgesetz" aims at establishing waste management that

101 In fact, the researcher was given a tour through a McDonald's restaurant, the production facility

at Frisch & Frost and the distribution center at HAVI Logistics Austria. 102 Both regulations are considered in the current version, which can be accessed on the "Rechtsin-

formationssystem" of the Republic of Austria at http://www.ris.bka.gv.at.



above all reduces any harmful impact on humans or other living beings to the

minimum, preserves resources and also avoids negative consequences for

future generations (§ 1). Sustainable waste management already draws on

waste avoidance, for example, in designing products with the lowest possible

environmental imprint as well as by establishing appropriate production,

processing and distribution processes (§ 9). An appropriate waste

management concept is required for facilities with more than 20 employees (§

10). Businesses with 100 employees and more have to appoint an authorized

person in waste management ("Abfallbeauftragter") who, for example,

supervises compliance with legal obligations and supports the organization in

handling waste (§ 11). In The Federal Ministry of Agriculture, Forestry,

Environment and Water Management is in charge of licensing a collection and

recycling system. The license for such a system can be issued for a period of

ten years and prolonged afterwards (§ 29) (AWG).

To meet and exceed these requirements, McDonald's Austria works closely with

Galle Umwelttechnik (GUT). The latter was founded in mid-1996 by Dr. Klaus

Galle, a former senior executive responsible for environmental matters in the

restaurant chain103 (Galle 2010). GUT provides services in three business areas:

first, as a consultancy focusing on environmental and waste management; second,

as an officially authorized collection and recycling system; third, as a practical

partner of restaurants in collecting and disposing biogenic waste (Galle

Umwelttechnik 2010c: 1). The company relies on external partners for all activities

that can be outsourced. Apart from basic administrative activities such as

accounting, cooperation is also sought in operations with waste collectors in all

Austrian provinces, for example. As a result, there are only three employees in the

firm. Consultancy and environmental services are provided for a number of

customers. About a quarter to a third of revenues originate from McDonald's

Austria. In the partnership with the latter, Galle Umwelttechnik practically operates

as an outsourced environmental department (Galle 2010). Therefore, it does not

103 Dr. Klaus Galle holds a doctoral degree from Vienna University of Technology and worked in the

McDonald's Development Company Central Europe as Department Head Environment, Director, and Member of the Board. In June 1996, he founded GUT-Galle Umwelttechnik GmbH (CV Dr. Galle).



only provide the collection and recycling system104 required by the VerpackVO and

AWG (Galle Umwelttechnik 2010a), but is basically involved in all environmental

matters (Galle 2010).

(b) Packaging and the recycling concept

In 1992, McDonald's Austria introduced the recycling concept105 "McRecycle®". At

that point in time, the company had only 35 outlets but expansion perspectives ap-

peared very favorable. Therefore, it was decided to implement an integrative ap-

proach to tackle all upcoming challenges in packaging and waste management com-

prehensively and proactively. By September 1993, the concept was already imple-

mented in all restaurants (McDonald's Austria 2010c: 2).

The concept is based on the three cornerstones "vermeiden - vermindern - verwer-

ten" (avoid - reduce - recycle). It actually installs a total recycling management sys-

tem ("Kreislaufwirtschaft"). That means that already before some sort of packaging is

introduced, its environmental impact and recyclability are assessed. If needed,

changes can be effected in a timely fashion. Once in use, waste and packaging are

constantly separated in the restaurants by specially trained employees so that mate-

rials can then be effectively recycled (McDonald's Austria 2010c: 2, 4-5).

Concerning 'avoiding and reducing', Galle Umwelttechnik assesses the quantita-

tive and qualitative aspect of packaging. The former involves reducing the amount of

packaging wherever possible, whereas the latter involves utilizing the most environ-

mentally friendly materials (Galle 2010). Improvements may be achieved in reducing

weight, volume and size of a packaging unit, introducing reusable transport systems,

substituting plastics by paper or introducing biologically degradable resources (Galle

Umwelttechnik 2010b). In addition to optimizing existing products, the consultancy

also offers advice before new ones are launched. Certainly, quality and marketing

requirements have to be considered, but there is usually some leeway for greening in

packaging design (Galle 2010). The approach of Galle Umwelttechnik provided mea-

surable progress, as the following results demonstrate (McDonald's Austria 2010c: 3-

4):

Changing packaging for burgers from plastic to paperboard lead to an 104 Other authorized collection and recycling systems are for example Altstoff Recycling Austria

(ARA), Öko Box Sammel-GmbH, EVA-Holsystem and Bonus Sammel- und Verwertungssystem (Wirt-schaftskammer Oesterreich 2010).

105 McDonald's Austria introduced "McRecycle" ahead of respective legislation ("Verpackungsve-rordnung"), which came into effect in October 1993.



immediate reduction of about 100 tons of plastic waste in the respective year.

Spoons for beverages are now made of wood, bringing about an additional

reduction of approximately one ton of plastic in the year in which the measure

was taken.

Paper is used as much as possible in packaging, which decreased the share of

plastic to only seven percent in all packaging.

Paperboard packaging was specially designed to consist of three layers106, so

that 72 percent can be made of recycled paper.

In daily restaurant practice, specially trained employees107 make sure that the re-

cycling concept is carried out. Waste needs to be properly separated in several cate-

gories such as paper, composites, plastic, glass, biogenous waste and mixed waste

(Czasch 2010). Customers are also involved in waste management as posters pro-

vide information and raise awareness on good disposal practices. Several times a

day, an employee of the restaurant also checks the vicinity for carelessly discarded

packaging (McDonald's Austria 2010c: 8). Once or twice a week, each waste type is

collected in compressed form to be disposed of at an appropriate waste utilization

facility. Management is effected by GUT (McDonald's Austria 2010c: 5).

In 2009, waste categories at McDonald's Austria were dominated by paper and

paperboard (44 percent) and biogenous waste (24 percent). The share of other mate-

rials is given in the table below (Exhibit 36):

Type of waste

Paper, paperboard

Biogenous waste

Old frying oil

Composites Plastic Glass Mixed waste

Share in 2009

44% 24%

11% 8% 7% 1% 5%

Exhibit 36 - Types of waste at McDonald's Austria (McDonald's Austria 2010c: 4)

With regard to 'recycling', separated waste collection greatly contributes to effec-

tiveness in waste management. In fact, most of the main residuals can be further

processed or reused: paper and paperboard are, for example, transformed into re-

cycled paper and paperboard, biogenous waste is composted or converted into elec- 106 The "triplex clamshell" consists in the middle layer of recycled fiber and on both external sides of

fresh fiber. This packaging innovation was developed in cooperation with the Austrian company Mayr-Melnhof and spread internationally with McDonald's (Galle 2010).

107 In franchise businesses with more than 100 employees, an authorized person in waste man-agement ("Abfallbeauftragter") needs to be appointed by law. As Mr Czasch, for example, runs three restaurants under one company and employs a total of 90 people, he is not legally required to staff such a position (Czasch 2010; AWG). It appears thus slightly questionable that McDonald's Austria claims that in "every restaurant, there is at least one 'Abfallbeauftragter'" (McDonald's Austria 2010c: 7). An explanation may be that in every restaurant, some employees receive some special training but may not be officially certified according to the law.



tricity and heat and plastic is shreddered and washed to be sold as granulate for fur-

ther industrial use (McDonald's Austria 2010c: 5).

To sum up, the figures and initiatives presented above indicate a very positive im-

pact from the integrated packaging and waste management approach of McDonald's

Austria on the environment. Referring to a recycling quota of 95 percent (McDonald's

Austria 2010c: 3), Dr. Galle believes that McDonald's Austria employs "the most ad-

vanced environmental concept" within the McDonald's family (Galle 2010).

(c) Transforming waste frying oil into biodiesel

An important contribution to environmental sustainability concerns frying oil.

McDonald's Austria, Galle Umwelttechnik and HAVI Logistics Austria effectively in-

troduced a closed loop recycling system (Galle 2010). After its use in the restaurants,

frying oil is gathered, transformed into biodiesel and used in logistics.

Already in the mid-1990s, McDonald's Austria made use of used frying oil. Howev-

er, it was processed to soap at that time (Czasch 2010). In late 1997, the company

started collecting waste oil from restaurants for the purpose of producing biodiesel

(McDonald's Austria 2010c: 6). The effort was initiated in cooperation with Galle Um-

welttechnik and the Federal Ministry of Agriculture, Forestry, Environment and Water

Management. After the concept was approved, a system of collection partners

needed to be implemented and further processing arranged (Galle 2010). HAVI Lo-

gistics Austria began experimenting with biodiesel in 1999. At first, there was consi-

derable skepticism towards this venture as little experience existed inside the com-

pany. In cooperation with the truck producer MAN, a number of short-term and long-

term tests were conducted, which lead to favorable results. For the 2002 budget, the

company arranged "early replacements" of trucks, i.e. trucks are replaced ahead of

their defined service life, in close alignment with McDonald's Austria. As a result, the

whole fleet could be fueled 100 percent with biodiesel as of early 2002. For their ef-

forts, the distributor was granted the Environmental Award of Lower Austria in the

same year. In 2006, the company served as a reference example at the global

McDonald's Convention (Hoeller 2010).

To provide some background on biodiesel, its biggest advantage lies in the favor-

able environmental impact as emissions of all kinds are considerably lower. In addi-

tion, it is renewable, biologically degradable and nontoxic. Though it can be mixed

with fossil fuels at every ratio, practical inconveniences include higher maintenance



costs and non-usability at low temperatures (Exhibit 37).


renewable, biologically degradable and nontoxic fuel reduces CO2 emissions, contains practically no SO2,

emits less black carbon usable in every diesel engine without modification employable in every mixing ration with fossil fuel

lower engine power and higher fuel consumption flocculates at low temperatures more frequent change of filter necessary and

shorter oil change intervals because of oil thinning degrades plastic parts

Exhibit 37 - Advantages and disadvantages of biodiesel (SDL 2008: 8)

The whole cycle starts with the delivery of frying oil to the McDonald's restaurant.

There, it is utilized for a maximum of two days. After replacement, waste oil is ga-

thered in special tanks. Depending on turnover, these are discharged every three to

five weeks. The oil is collected, cleaned and transesterified into biodiesel by GUT

partner companies. HAVI Logistics Austria can then purchase this renewable fuel to

power its vehicles supplying restaurants with required goods, including new frying oil

(Galle 2010). Some numbers illustrate the cycle in 2007: HAVI Logistics Austria deli-

vered nearly 2.2 million liters of frying oil to some 160 McDonald's restaurants, which

produced e.g. 40 million portions of French fries. Almost 1.2 million liters of waste

frying oil were collected, which resulted in approximately 900,000 liters of biodiesel. A

bit more than half this amount was finally used to fuel the distributor's delivery trucks

(SDL 2008: 30).

Considering HAVI Logistics Austria, biodiesel from McDonald's restaurants can

only be used between April and October. Any temperature below +5°C does not al-

low operation of trucks because of flocculation of the fuel. Vehicles are equipped with

only one tank, so they run on fossil diesel during the colder months. The distributor

has its own filling station on its premises, which also has only one 50 thousand liter

reservoir with no heating device. The fleet manager has thus to decide when to re-

duce and finally stop the use of biodiesel. Both fuel types may be used together, but

temperature is the decisive factor for any mixing ratio nevertheless. Currently, HAVI

Logistics Austria uses about one million liters of diesel annually, among which about

650,000 liters are biodiesel (Hoeller 2010).

A review of the use of biodiesel at HAVI Logistics Austria between 2003 and 2008

shows a positive ecological impact: CO2 emissions were reduced by more than 2.9

million kilos and SO2 emissions by more than 5,100 kilos, black carbon was cut by

26.5 percent and 1.7 million liters of fossil diesel substituted (SDL 2008: 3, 24, 28).

Economically, the review reveals overall savings of nearly 90,000 euros over the five-

year period (Exhibit 38). Cost savings are a result of an average price advantage of



ten to even 25 percent108 for biodiesel compared to fossil diesel. Tax benefits more

than compensate for the higher production costs of the ecological fuel. In two years

(2004 and 2007), increases in the price gap between the fuel types were particularly

visible in cost savings. In contrast, shorter maintenance intervals and about seven

percent higher consumption contribute to additional costs with biodiesel. It should be

noted that nearly 70 percent of total savings of the period were realized in only one

year: in 2007, an exceptionally favorable spread in prices (biodiesel dropped by sev-

en percent and fossil fuel rose by eight percent compared to the previous year) was

boosted by a 26 percent increase in road kilometers109 because of delivery expan-

sion to Slovenian restaurants (SDL 2008: 24-26; HAVI Logistics Austria 2010: 10;

Hoeller 2010).

In TSD Euro (rounded) 2003 2004 2005 2006 2007 Total

Cost savings 5.7 15.2 12.8 14.4 66.9 115.0

Additional cost 4.8 4.8 4.9 5.5 6.1 26.1

Total savings 0.9 10.4 7.9 8.9 60.8 88.9

Exhibit 38 - Economic impact of biodiesel (SDL 2008: 24-26; HAVI Logistics Austria 2010: 10)

The general manager of HAVI Logistics Austria, Gerald Hoeller, remembers the

beginnings of the project, numerous challenges over the years and the steps in the

cooperation with business partners. The project of "closing the loop with biodiesel"

finally achieved an exemplary environmental as well as favorable economic impact

(Hoeller 2010).

(3) Initiatives for energy efficiency improvements in operations

Another aspect of sustainability in the value chain concerns energy issues. First, a

brief look is taken at the recent remodeling of restaurants. Then some improvements

in energy usage related to cooling systems are presented. Finally, energy production

in a biogas facility at Frisch & Frost is discussed.

(a) Remodeling and energy efficiency of McDonald's restaurants

In 2009, remodeling of the Austrian McDonald's restaurants continued as planned

(McDonald's Austria 2010a: 3). General management announced that it expected

completion of the initiative by the end of 2010 so that all outlets comply with the latest

108 Average prices of biodiesel are compared to fossil diesel, with difference given in percent in

brackets: 2003: 0.482/0.536 (10%); 2004: 0.527/0.619 (15%); 2005: 0.617/0.701 (12%); 2006: 0.658/0.753 (13%); 2007: 0.610/0.814 (25%) (SDL 2008: 25).

109 Total road kilometers in thousands in 2006 were 1,870 and 2,350 in 2007, which equals an in-crease of 25.7 percent (HAVI Logistics Austria 2010: 10).



standards (McDonald's Austria 2010a: 7-8). The new restaurant types achieve sav-

ings in energy and water consumption of up to 50 percent. They are equipped with

intelligent boiler technology and heat recovery systems. Experts work on additional

concepts for increasing efficiency in operations and include renewable energy

sources (McDonald's Austria 2010c: 8-9). On a European level, "Green Building

Guidelines" provide assistance in improving the environmental performance of res-

taurant buildings. They were developed by McDonald's Europe and share good prac-

tices. Proposals for concrete measures are differentiated in three ascending levels:

"minimum (Silver), recommended (Gold) and aspirational (Platinum)" (McDonald's

Europe 2010i). Within the guidelines, an analysis of the carbon footprint of restaurant

operations reveals that a total of 85 percent of CO2 equivalents stem from energy use

(about 73 percent from electricity use and another twelve percent from gas and oil

use). The three categories of measures require different investment volumes, but

may generate expected annual savings of up to 15,000 Euros. Whereas the Silver

standard includes very practical improvements in lightning, water, heating, ventilation

and air-conditioning, the Platinum standard draws on innovative approaches such as

solar panels or wind turbines with long payback periods. The former is common prac-

tice in current remodeling initiatives in all European countries (McDonald's Europe

2010j: 3,4 6-8,14-15). An Austrian franchisee describes aspects of the remodeling of

one of his restaurants: "The restaurant was built in 2001 and remodeled completely

in 2009. [...] The franchisee can choose from ten different designs, which all comply

with the latest environmental standards. Within such a 'green building', there are

energy-savings lamps everywhere, thermal insulation materials, waste separation

facilities and much more [...] The remodeling required an investment of several hun-

dred thousand Euros. However, McDonald's Austria reimburses about two third of

total cost in the form of reduced royalties over the subsequent years" (Czasch 2010).

(b) Improving energy usage related to cooling systems

When asked about energy efficiency measures, several McDonald's value chain

partners reported improvements related to cooling of products or cooling systems:

At the Austrian Hamburger Bakery (AHB), energy usage was optimized in the

fermentation process. The dough proofer needs to provide a certain degree of

humidity and a constant temperature of 38°C. Earlier, baking trays were chilled

after baking and then reheated for proving. Some time ago, this approach was



altered: trays are now allowed to cool off naturally only to 40°C and then put

directly into the dough proofer. If the temperature gauge, installed additionally,

indicates that it is still too hot inside, the ventilation system is switched on. As a

result of this slight change in process, the proofer no longer needs to be

heated. Considering the number of bakery items at AHB, important energy

savings could be realized. In the yearly alignment meeting with McDonald's

Austria, the measure was well-received as a means to reduce the CO2 imprint

of the facility (Wieninger 2010).

Esca Austria uses the "individual quick frozen technique" (IQF) to optimize

energy efficiency in freezing. In the process, a conveyor belt routes the freshly

formed meat patties through a 20 meter "shock tunnel". Liquid nitrogen, which

has a temperature of -185°C, is applied at the end of the tunnel and vaporizes

towards the front. Ventilators blow the gaseous nitrogen against the moving

direction of the belt based on the counterflow principle. "Warm" patties (about

0°C) thus come first into contact with the warmest gas. As the temperature

difference between the individual product item and its surroundings is always a

maximum in the tunnel, the technique allows very fast freezing. After about two

to three minutes, patties are at -18°C. It can be said that this process allows

best energy usage (Poechlinger 2010).

The distribution center of HAVI Logistics Austria optimizes energy usage and

supply, and exploits waste heat. In the building, there are two cold stores (-

20°C) with each about 1,000m² of size, one chilled store (+2°C) with 500m²

and a cooldock (+10°C) with about 1,000m². As maintaining the respective

temperatures at all these areas requires significant energy, efficiency increases

are of the essence. For example, improvement potential was identified in the

cooling and defrosting processes in cooling aggregates. In cooperation with

device suppliers, different controlling systems were tested. Finally, not only

better alignment of usage cycles, but also more economic timing of electricity

consumption could be achieved. Furthermore, a system of heat recovery was

installed to utilize waste heat from cooling devices. It serves, for instance, in

floor heating of the offices, which are located directly above the chilled storage

areas. So far, additional gas heating is required only in winter. In total, a

number of individual measures considerably improved sustainability in

operations (Hoeller 2010).



(c) Energy production in biogas facility at Frisch & Frost

Frisch & Frost also optimizes plants and processes to reduce long-term energy

consumption. In addition, it operates a biogas power plant to produce some of its

electricity and heat requirements independently (McDonald's Corporation 2010d).

After considerable work on the concept, the gas facility was opened in 2003. So far,

total investments have grown to more than four million Euros (Pichler 2010). Energy

generation starts with biogenic waste from all stages of the French fries production

process. Solid materials are sieved, finely grated and converted to gas in an organic

gas reactor. The gas is connected to a generator via block heating to create electrici-

ty (McDonald's Corporation 2010d). Concerning solid materials, Frisch & Frost

processes a bit more than 100,000 tons of potatoes per year. Out of that, up to 20

percent are left over as organic waste. Subsequent energy production in the gas

plant creates roughly 2,500 tons of fermentation residues. Being a sort of natural fer-

tilizer, these can be directly deployed on the fields (Pichler 2010). With regard to

energy output, the facility produces around six GWh of electricity per year. This

equals annual consumption of more than 2,000 households. An additional 4.2 GWh

come in the form of excess heat, which is recovered in the process and allows cor-

responding reduction of fossil gas use in plant operations. In total, Frisch & Frost

saves above 1,900 tons of carbon dioxide emissions and realizes roughly 40 percent

of total electricity and gas consumption needs (McDonald's Corporation 2010d).

The general manager of Frisch & Frost, Gerfried Pichler, is proud to have actually

implemented with the facility "a very particular example for environmental sustainabil-

ity". Energy content of biogenic waste that was simply lost in earlier times can now be

saved to contribute to the production facility's energy efficiency (Pichler 2010).

Following the presentation of environmental efforts, a closer look is now taken at

the social commitment of McDonald's Austria.

6.3.3 Social commitment in the Ronald McDonald Kinderhilfe

Both the company and the individual franchisees concentrate their philanthropic

involvement on a single non-profit association: the Ronald McDonald House Chari-

ties. Because of the scope of the overall contributions, other initiatives are supported

to a much lesser extent (Czasch 2010).



(1) Purpose and aims of the association

The bylaws in their latest version clearly state the official characteristics of the Ro-

nald McDonald House Charities in Austria. It is registered as a non-profit association

with the name "Ronald McDonald Kinderhilfe". With headquarters in Brunn am Ge-

birge, its operations cover all parts of Austria. The purpose of the association is given

in German110 as 'providing support during treatment and recovery of severely ill child-

ren in need' (Ronald McDonald Kinderhilfe 2010d: 1).

Some aspects of the concept of the charity are expressed in the slogan "Nähe hilft

heilen". It can be translated as "proximity supports healing" and refers to enabling

families to be close to their severely ill children (Ronald McDonald Kinderhilfe 2009b:

3). Another commonly used phrase111, "Zuhause auf Zeit", highlights some further

ideas of the approach, namely providing a temporary home for families in need (Ro-

nald McDonald Kinderhilfe 2008: 2). In the following, the four dimensions 'severe ill-

ness', 'proximity', 'temporary home' and 'in need' are described in more detail:

(a) "Severe illness"

The association is primarily concerned with the recovery of severely ill children.

Therefore, houses are constructed and operated only in the vicinity of specialist child-

ren's hospitals or general hospitals with specialized children's wards (Ronald McDo-

nald Kinderhilfe 2008: 4). Such institutions usually have a wide catchment area,

which leads to a higher proportion of "patient tourism". The charity is not involved in

cases of routine medical care, but in those that require extraordinary treatment. As a

result of the severity of the children's conditions, procedures normally last for long

periods of time (Grill-Haderer 2010). The specific type of illness is not important for

the association. There are no constraints or preferred treatment of any kind in this

respect. In practice, it is the specialization of the nearby children's hospitals that de-

fine the dominant clinical pictures of the children who reside in the houses (Kellner

2010).

(b) "Proximity"

The house charities aim at providing proximity for the young patients, their parents

110 It is officially expressed in §2 of the bylaws "Unterstützung der Behandlung und Genesung

schwer kranker, hilfsbedürftiger Kinder (Ronald McDonald Kinderhilfe 2010d: 1). 111 The American association uses "home-away-from-home" instead (http://rmhc.org/what-we-

do/ronald-mcdonald-house. Accessed on 9 September 2010).



and siblings. Such a familiar family atmosphere is disrupted by the transfer112 to a

remote hospital, but is very important for the recovery process (Ronald McDonald

Kinderhilfe 2010b: 3). In 1996, a study conducted by the University of Groningen re-

vealed the positive impact of the Ronald McDonald House examined. The overall

time that children needed to overcome their illness was reduced by up to a third if

parents were constantly in close reach (Ronald McDonald Kinderhilfe 2007: 3). In

practice, the association supports the "system family" by providing lodging for up to

four people and other infrastructure during the period of treatment. On holidays and

over the weekends, the rooms are often completely occupied by various members of

the families. Proximity can then assume very different forms, including first-degree

relatives, second-degree relatives or also close friends. Thus the charity usually

needs to find fairly individual ways of responding to family needs (Grill-Haderer

2010).

(c) "Temporary home"

The houses of the Ronald McDonald House Charities allow families to find a tem-

porary home close to the specialized children's hospitals (McDonald's Austria 2010b:

9). Every house provides an organized environment, in which parents may continue

to follow their daily routines and sustain family life. There is no additional pressure

from long commutes or high costs for accommodation. Instead the family may find

some calm, security and solace amongst themselves or in the interaction with fami-

lies who undergo similar circumstances (Ronald McDonald Kinderhilfe 2009b: 3).

Despite being temporary, there is no formal maximum duration of stay. The associa-

tion ensures every family in need can occupy a room as long as is necessary for the

young patient's treatment (Kellner 2010).

(d) "In need"

After the first diagnosis, families are subject to many different pressures. Not only

concern for the well-being of their children, but also monetary considerations can ra-

pidly put parents 'in need' of external support (Ronald McDonald Kinderhilfe 2010b:

3). The charity can provide assistance in offering a convenient place to stay, which

also offers some initial stability. During their most difficult time, families have some-

112 In addition to severe illness and ongoing treatment, a certain geographical distance between the

treatment institution and the ordinary place of residence is a necessary condition for staying in one of the houses. For example, the house Vienna is not available for families living in Vienna (Kellner 2010).



one to talk to, either in addressing the house manager or in exchanges with other

families in the house (Schelander 2010). 'Need' occurs thus in many forms, such as

personal, social, psychological or monetary. But especially the latter can quickly be-

come a major concern even for families that are financially viable. They may find

themselves in very different circumstances as a result of radically higher expenses

and lower income. While cost for therapies and medication require higher contribu-

tions, one parent may decide or be forced to take a break from work. However, self-

selection certainly operates in this regard: if families do not need the services of the

house charities, they also do not ask for them (Grill-Haderer 2010).

In a nutshell, the social contribution of the Ronald McDonald House Kinderhilfe is

twofold: first, it supports the "system family" and second, it disburdens the public

health system. Concerning the former, the charity's offer can be considered unique in

Austria. Families are provided with a broad package of services, including accommo-

dation, psychosocial assistance, a setting for self-help and the opportunity for ex-

change among one another (Grill-Haderer 2010). Regarding the public health sys-

tem, the medical institutions and their sponsors are relieved of considerable expense.

This is achieved directly in the form of accommodation and increased opportunity for

in-patient treatment as well as indirectly because of faster recovery as a result of the

family's proximity (Kellner 2010). In view of the above, the Ronald McDonald Kinder-

hilfe provides some "indispensible support for families in need" (Marek 2010).

(2) History and integration of the Kinderhilfe

Despite being formally an independent association, the history of the Ronald

McDonald Kinderhilfe is closely linked with the development of McDonald's Corpora-

tion and the Ronald McDonald House Charities on an international as well as McDo-

nald's Austria on a national level.

(a) Historical overview

In 1974, the Ronald McDonald House Charities (RMHC) were founded by Ray

Kroc in Philadelphia in the United States (Ronald McDonald Kinderhilfe 2010b: 2).

Ten years after market entry of McDonald's Corporation in Austria, Ronald McDonald

Kinderhilfe started operations as well. The first house was inaugurated opposite St.

Anna Children's Hospital in Vienna in 1987. In the following years, expansion lead to

the opening of additional houses in Graz (1994), Innsbruck (1998) and Salzburg

(2003). In 2007, the Ronald McDonald Kinderhilfe celebrated its 20th anniversary



(Ronald McDonald Kinderhilfe 2008: 2, 4). In the most recent past, three highlights

can be identified: first, the association was formally detached from the marketing de-

partment of McDonald's Austria at the beginning of this year. Responsibility was

moved to the newly established position of general manager for the Kinderhilfe.

Second, in all areas, increasing professionalism could be achieved. Especially in

marketing and communications, a higher and more consistent public profile for the

association, new channels of interaction such as using new social networks, and bet-

ter focus in program planning and operations lead to higher levels of awareness in

the general public. Third, the large scale renovation of the Vienna house from 2008

to 2009 brought about improved quality in services, such as modern rooms, attractive

facilities, barrier-free access and increased capacity (Schelander 2010).

(b) International and national integration

The bonds between McDonald's Corporation and the Ronald McDonald House

Charities are rooted in the beliefs of Ray Kroc. In his view, companies have an impor-

tant social responsibility and need to give something back to the community in which

they do business (Ronald McDonald Kinderhilfe 2010b: 2).

The Ronald McDonald House Charities Global113 serve as the worldwide umbrella

organization for the national associations or foundations. In a number of areas, it de-

fines sets of international standards and guidelines that the various local bodies have

to comply with. If a new house is planned, the "American mother" needs to issue a

license based on the business plans submitted. Likewise, changes to existing houses

also require central approval. Concerning exchange of knowledge and ideas, there

are regular meetings which take place every second year on an international level

and on a regional level in the interval (Grill-Haderer 2010). Despite these formal re-

strictions, the Ronald McDonald Kinderhilfe is totally independent from its interna-

tional umbrella organization in all day-to-day matters. It can set the priorities and

conduct operations at its own discretion (Schelander 2010).

There has been a close connection between McDonald's Austria and the Ronald

McDonald Kinderhilfe Austria since the beginning. The fast-service restaurant com-

pany officially states that it is "committed to support severely ill children and their

families" and is thus highly dedicated to the activities of the association (McDonald's

113 In other countries, the social commitment of the Ronald McDonald House Charities includes

three services: the Ronald McDonald House, the Ronald McDonald Family Room, and the Ronald McDonald Care Mobile (Ronald McDonald Kinderhilfe 2010h).



Austria 2010b: 9). From an outside perspective, it appears that McDonald's Austria

considers its charitable engagement as an integral part of its corporate philosophy.

Such profound CSR cooperation between companies and non-profit associations

perform an important role for society (Marek 2010). Considering formal bonds,

McDonald's Austria only exerts oversight via the organizational structure and all op-

erations are the responsibility of the charity. Practically, the company's role is very

strong given the scope of monetary donations, which are discussed in a later part.

Also considerable in-kind contributions like the provision of office space in its head-

quarters, the joint use of the marketing agency or free of charge product deliveries by

the suppliers should be noted. The ties between McDonald's Austria and the Kinder-

hilfe can be described as "a unique kind of relationship", which is characterized by

being "permanent, reliable and sustainable". The stability in the partnership allows

services to be rendered in the "best possible interest of the children and families in

need" (Schelander 2010).

(c) Success in supporting families

As there is no formal documentation of the personal stories of families because of

privacy issues114 (Kellner 2010), success can only be judged by considering official

figures. On an international level, there are currently 298 houses of the Ronald

McDonald House Charities in 30 different countries (Ronald McDonald Kinderhilfe

2010h). In the four Austrian houses, more than 9,800 families have been provided a

temporary home since 1987, which equals over 100,000 overnight stays (Ronald

McDonald Kinderhilfe 2010a: 4).

(3) Organization of the association and houses

Based on the organizational structure of the Ronald McDonald Kinderhilfe, further

consideration is given to an overview of house operations in general and insights into

the Vienna house in particular.

(a) Organizational structure of the Kinderhilfe

All formal positions, also referred to as organs of the association, are determined

in the bylaws. There are the general assembly, the board of management, the super-

visory board, the treasurer, the auditor and the arbitrating body (Ronald McDonald

114 The Ronald McDonald Kinderhilfe does not track any individual story. Kellner (2010) explains

that privacy is the top priority in dealing with the many different personal fates and courses of illness. However, some families decide for themselves to write down their experiences. These are then either published for the general public or directly provided to other families in need for private use.



Kinderhilfe 2010d: 3).

The board of management consists of two people, the president (or general man-

ager) and the vice-president (or deputy general manager). Decisions are made by

simple majority with the president's vote being decisive in the event of a tie (Ronald

McDonald Kinderhilfe 2010d: 4). As a result of the development of the association

and detachment from McDonald's Austria, Ulrike Schelander was appointed as the

first general manager in January 2010 (Ronald McDonald Kinderhilfe 2010a: 2). In

early September of the same year, the charity appointed Sonja Klima as her succes-

sor (Ronald McDonald Kinderhilfe 2010e: 1)

The supervisory board oversees the activities of the board of management. It has

to be composed of at least three and at most 15 members, among whom a chairman

is selected (Ronald McDonald Kinderhilfe 2010d: 6). This position is taken by the

managing director of McDonald's Austria, Andreas Schwerla (Ronald McDonald's

Kinderhilfe 2010f).

In mid-2010, twelve employees worked permanently for the charity. Referring to

the organizational chart depicted below (Exhibit 39), four people work in headquar-

ters (management, marketing, house operations, controlling). The remaining eight

are employed as house managers and deputy house managers (Schelander 2010).

Exhibit 39 - Organizational structure of the Kinderhilfe (Author's illustration)

(b) House operations in Austria

As already mentioned, the charity currently operates four houses in Austria. Before

going into further detail, a generalized overview is given.

General overview

All houses provide comparable accommodation standards to the families. Rooms

or apartments are all equipped with a bathroom, and TV and radio. Usually, there is

space for four people. Shared facilities include a kitchen, dining room, and a living or

children's play room. Internet access, leisure materials (games, books et cetera),

Supervisory Board Board of Management

(General Manager and Deputy*)

Marketing and Public Relations Management House Operations

House Managers and Deputies

Controlling

*Taken in addition to other position.



some soft drinks as well as fresh bed-linen and towels are also made available for

free (Ronald McDonald Kinderhilfe 2010b: 4).

A central function in every house is fulfilled by the house manager. He or she is

responsible for all organizational matters and represents the direct contact person for

families in case of problems. Furthermore, the position requires a psychosocial back-

ground to ensure professional communication in sensitive situations and moments of

emotional distress (Grill-Haderer 2010). Statistically, five to ten children per year do

not respond to treatment and cannot be healed. It is especially important that the

house manager is available in the family's most depressing time. Many families seize

the opportunity of simply expressing their feelings and talking about ways to move

forward before seeking professional assistance (Kellner 2010).

Characteristic for all houses is the close cooperation with the nearby hospitals. On

the one hand, this involves long-term cooperation in services offered and operational

processes and on the other, constant coordination concerning the immediate needs

of individual patients. Preferably in advance, the hospital or families themselves con-

tacts the house manager for upcoming arrivals of new young patients. Expected

medical procedures can then already be considered in capacity planning. In practice,

this is mostly the case for illnesses with prolonged treatments. However, in many

other cases, accommodation needs to be arranged at short notice. There is also

some exchange with regard to setbacks in therapy, which may lead to prolonged

stays of the concerned families. Above all, having a house of the Ronald McDonald

Kinderhilfe in the vicinity is considered an important location advantage for the hos-

pital (Grill-Haderer 2010).

The table below (Exhibit 40) provides an overview on some house indicators for

the past three years115. Overall, growth was achieved in all dimensions from 2007 to

2009. First, utilization is constantly at about two third of the houses' capacity. Howev-

er, the consolidated percentage does not take into account the significant differences

between the individual houses, which is discussed later. Second, both overnight

stays and the number of families increased from 2007 to 2009. As a result of

changes in medical treatments, the duration per stay was reduced on average and

considerably more families could thus be provided accommodation. Third, the share

115 It should be noted that figures from the year 2008 are slightly distorted. Extensive renovation of

the largest house considerably limited operations. Therefore, the comparison focuses on the general trends as expressed in the differences between 2007 and 2009.



of convalescent children sharply increased (Ronald McDonald Kinderhilfe 2008: 3;

Idem 2009a: 4; Idem 2010a: 3). Generally, hospitals reduce in-patient procedures so

that patients can go home earlier. However, there is still need for on-going ambulant

treatment afterwards and children themselves have to find a temporary home in one

of the charity's houses (Grill-Haderer 2010).

Indicator 2007 2008 2009 Growth 07/09

Utilization 67% 62% 68% +1.5%

Overnight stays 6,724 5,980 6,790 +1.0%

Number of families 580 660 698 +20.0%

Share of convalescent children

17% 30% 21% +23.5%

Source Ronald McDonald Kinderhilfe 2008: 3

Ronald McDonald Kinderhilfe 2009a: 4

Ronald McDonald Kinderhilfe 2010a: 3

Exhibit 40 - House indicators of the Kinderhilfe (Ronald McDonald Kinderhilfe 2008: 3; Idem 2009a: 4; Idem 2010a: 3)

Particularities of the houses

All four houses have some distinct characteristics, which are compiled in the table

below (Exhibit 41). The Vienna house is the oldest and with 13 rooms also the larg-

est. It is the only house that actually provides services to two hospitals. In 2007, it

operated at nearly full capacity with a utilization of 93 percent (relative to the nine

available rooms at that time). The nearby St. Anna hospital is a competence center

for blood cancer treatment. Because of the large number of long term procedures

such as stem cell transplantations, average duration of stay is much longer than in

the other houses. The hospital's good reputation also leads to a large catchment

area, which is illustrated in the high proportion of 36 percent international guests

(Ronald McDonald Kinderhilfe 2008: 3; Idem 2010b: 5-8; Idem 2010g; Grill-Haderer

2010).

In the provinces, capacity is generally smaller. The Graz house, for instance, pro-

vides nine apartments. Looking at utilization, it is surprising that more than half of the

rooms are usually vacant116. A ten day duration stay is average. Concerning opera-

tions, all houses comply with the same standards except Graz. This house was tradi-

tionally considered an exception because of the involvement of the Styrian Childhood

Cancer Association (Steirische Kinderkrebshilfe). However, Ronald McDonald Kin-

derhilfe takes over managerial control in 2011 (Ronald McDonald Kinderhilfe 2008: 3;

Idem 2010b: 5-8; Idem 2010g; Grill-Haderer 2010). 116 So far only families of children receiving cancer treatment are accommodated. After taking over

operations, the Kinderhilfe will support all severely ill young patients (Grill-Haderer 2010).



The two youngest houses in Tyrol and Salzburg have the smallest capacities with

four rooms each. Utilization rate is about average, but the durations of stay are the

shortest, being even less than a week in Salzburg. Concerning origin of families, both

houses are between figures for Graz and Vienna with 80 percent and 69 percent

Austrian patients (Ronald McDonald Kinderhilfe 2008: 3; Idem 2010b: 5-8; Idem

2010g; Grill-Haderer 2010).

Data for 2010 House Vienna House Graz House Innsbruck House Salzburg

Founded 1987 1994 1998 2003

House manager Ursula Kellner Sylvia Walcher Robert Krug Barbara Engländer

Nearby hospitals St. Anna Kinderspital

Allgemeines Kranken-haus (AKH)

LKH-Univ. Klinikum Graz

Universitätsklinik Innsbruck

Universitätsklinik für Kinder- und Jugend-heilkunde Salzburg

Room capacity 13 (15) 9 4 4

Sources: Ronald McDonald Kinderhilfe 2010b: 5-8; Ronald McDonald Kinderhilfe 2010g; Grill-Haderer 2010

Comparative data for the year 2007117

Utilization 93% (9 rooms in 2007) 44% 64% 66%

Duration of stay 20 days 10 days 8 days 6 days

Origin of families Austria: 64% Abroad: 36 %

Austria: 81% Abroad: 19%



Source: Ronald McDonald Kinderhilfe 2008: 3

Exhibit 41 - Comparison of the individual houses of the Kinderhilfe (Ronald McDonald Kinderhilfe 2008: 3; Idem 2010b: 5-8, Idem 2010g; Grill-Haderer 2010)

Referring to these particular characteristics, some general remarks need to be

made. First, the consolidated figure on utilization distorts the individual situations.

One representative from the Kinderhilfe clearly states that "there are no overcapaci-

ties". However, it seems that Vienna operates rather at its limits with generally be-

tween 87 and 95 percent occupation rates and Graz is underutilized. Therefore, in-

crease in capacity in the capital is likely to be a pressing issue for the near future. In

any case, providing accommodation in the house cannot be compared to "offering

hotel rooms". Arrivals and departures depend on the health status of severely ill

children and may thus change quickly. As room planning needs to remain highly flex-

ible, utilization can only depend on actual demand. There is no way of providing in-

centives as accommodation is not for cases of choice but need. Planning is done in

close coordination with the hospital, but unforeseeable events can strongly influence

the course of disease (Grill-Haderer 2010). Second, the average duration of stay is

also a rather ambivalent indicator. It is officially reported as ranging between ten days

117 The latest information disclosed on differences between individual houses is from 2007.



and several months (Ronald McDonald Kinderhilfe 2010b: 8). As the actual stay of a

family depends on its child's illness and the required treatment, there is a close con-

nection with the hospital's specialization. Especially in Vienna, there is, for instance,

a large number of long-term cancer treatments. Also, the necessary amount of after-

care can hardly be generalized. As one house manager explains, in some worst cas-

es "a stay that is scheduled for thirty days eventually takes several months". As a

principle, any family in a house can remain there as long as necessary (Kellner

2010). Third, the Ronald McDonald House Charities are open for families from Aus-

tria and other countries (Ronald McDonald Kinderhilfe 2010b: 6). Some people may

consider the availability of facilities to international residents inappropriate because in

their view, financial constraints require a focus on domestic patients in need. Howev-

er, in the houses themselves, this aspect is not a big issue. Families of all origins are

actually brought together by their common fate. Frequently, friendships develop

across cultures and repeatedly families visited each other in their home countries

after the end of treatment. Similar to the duration of stay, the mix of nationalities is

also closely linked to the hospitals' areas of core competence. Since the opening of

the borders, more patients from Bulgaria and Rumania arrive, for example, at St. An-

na (Kellner 2010).

(c) Details of the Vienna house

Some further details on the Vienna house are given to provide insight into the daily

social contribution of the Kinderhilfe. 23 years ago, the institution opened with only

five rooms. The initiative was personally driven by the medical director of the St. An-

na hospital Prof. Dr. Helmut Gadner. Since the beginning, it has been very conve-

niently situated right opposite the hospital (Ronald McDonald Kinderhilfe 2010b: 5)

Cooperation with St. Anna

Historically, it can be said that cooperation with St. Anna started out of personal

connection and local proximity. Currently, it is of vital practical assistance in best

serving families in need. Examples of cooperation include larger issues such as es-

tablishing hygiene standards in the house and facilitating capacity planning, or small-

er areas such as pick-up service for room keys on weekends and operation of a di-

rect phone line from the house to the children's ward. Concerning hygiene standards,

all rooms in the Vienna house have, for instance, disinfection material for hands and

surfaces available, cleaning follows defined procedures, bed-linen and towels are



specially washed, and the dishwasher always runs at 90 centigrade. These stan-

dards were designed and are monitored together with a hospital hygiene representa-

tive. With regard to capacity planning, there are regular group meetings as well as

informal personal coordination about twice a week to learn about upcoming family

arrivals in good time. Especially with long-term treatments such as bone marrow and

stem cell transplantations, St. Anna and the Vienna house can achieve good plan-

ning in advance (Kellner 2010).

Renovation from 2008 to 2009

In 1987, the focus of the house was simply to provide a place to stay for the par-

ents of hospitalized children. Meanwhile, however, children hospitals have introduced

new forms of treatment, especially more ambulant procedures. Also, increasing de-

mand posed a challenge to the original, and since then only slightly adapted, service

concept (Kellner 2010). To respond to the new situation, the Vienna house was ex-

tensively renovated and enlarged from fall 2008 to mid-2009 in close cooperation

between the Ronald McDonald Kinderhilfe and the Vienna Red Cross, which is the

house owner and sponsoring organization of the St. Anna Children's Hospital (Ro-

nald McDonald Kinderhilfe 2010b: 5). The project had two main targets: capacity en-

largement and quality improvement. As to the former, the number of rooms needed

to be augmented from nine to 13 as well as more common space in the form of play-

ing and recreation rooms had to be provided. Regarding quality, better accessibility

of all floors through a newly installed elevator and improved hygiene standards for

immunocompromised children through the installation of individual bathrooms and

sanitation material in every room were the priorities (Ronald McDonald Kinderhilfe

2009a: 3). Families could finally move in to the new house in late June 2009. The

Kinderhilfe summarizes the main benefits as follows: more room and light for fami-

lies, improved interaction opportunities between residents, higher quality in areas of

privacy, better mobility and enhanced safety especially for ambulant young patients

(Ronald McDonald Kinderhilfe 2010a: 2).

Current situation

One year after the re-opening118, the house manager says, with satisfaction: "Be-

fore the project started, I wrote down all my wishes for the new house in a book of

118 After the interview, Ms Kellner gave the researcher a tour through the house to demonstrate the

broad range of services and high quality accommodation.



dreams". Shortly after, she adds: "So far, I haven't noticed a thing that was not consi-

dered" (Kellner 2010).

Currently, three employees share a 50-hour-workload in the Vienna house: a

house manager, a colleague and a vacation replacement. Also some support is pro-

vided by the St. Anna Hospital, such as the key-pickup service for families. In addi-

tion, there is a new project involving volunteers in the afternoons and on the weekend

(Kellner 2010).

The house provides 13 rooms in total, which are all equipped with two beds, a

sleeper sofa, a bathroom with bath and toilet, and TV and radio. In addition, families

have three kitchens, one living and playing room, one recreation room on the top

floor, a terrace, an elevator, a laundry in the basement, and a storage room for baby

carriages or wheelchairs commonly at their disposal. Furthermore, several other ser-

vices are rendered for free, like Internet access, a free phone line to St. Anna ("St.

Anna Telefon"), fresh bed-linen and towels and a selection of drinks (Ronald McDo-

nald Kinderhilfe 2009b: 2). Besides, some additional services for the parents relaxa-

tion like Shiatsu or traditional massage are offered for a small sum (Kellner 2010).

Families have responded very well to the new facilities. What is often surprising for

outside visitors, though, is the emptiness of the house during the day. One common

statement is "there is nobody here". However, following typical daily routines, parents

have breakfast and then spend time with their children at the hospital. They usually

return in the afternoon or evening (Kellner 2010).

(4) Financial aspects of the house charities

In the next subsection, some insights aim at introducing the reader to how the as-

sociation manages its social activities financially.

(a) Financial basis of the charity

Financing of the activities of Ronald McDonald Kinderhilfe comes from different

sources119 as illustrated in detail in the table below (Exhibit 42). Donations in dona-

tion boxes in the restaurants, fundraising activities, charity events, and the contrac-

tually agreed contributions by McDonald's Austria and the franchisees provide the

financial foundations (Ronald McDonald Kinderhilfe Austria 2008: 3).

119 Nonpaid services like the collection of coins in the donation boxes from all McDonald's restau-

rants, which is effected by HAVI Logistics Austria (formerly SDL), are not considered here (Hoeller 2010).



When first looking at the three year figures120, it is apparent that overall financial

volume peaked extraordinarily in 2008. The reason lies in the renovation of the Vien-

na house, which was primarily funded by the large scale liquidation of financial re-

serves. Apart from that, the development of revenues and expenses generally shows

a fairly constant development. However, some figures stand out. On the revenue

side, the strongest increases were in donations (on average 30 percent p.a.) as well

as in fundraising and charity activities, where results nearly tripled from 2007 to 2009.

In contrast, overnight fees seem to be usually weak and earnings from capital ob-

viously were significantly reduced because of considerable reduction in financial re-

serves. Regarding expenses, operational costs increased dramatically in the first two

years (+19.2 percent) but could be controlled with a slight decrease in 2009. For pub-

lic relations / fundraising, administration and other expenditures, the picture is slightly

unclear as a different categorization was apparently applied in 2007 compared to the

following years. It seems that costs rose modestly in these areas.

As to the composition of financial donations, the highest share of revenues is still

contributed by McDonald's Austria and the franchisees. However, this dropped con-

siderably in importance from nearly 50 percent in 2007 to about 39 percent in 2009.

In contrast, donations in donation boxes realized slight gains and fundraising & chari-

ty activities increased dramatically from formerly 13 percent to nearly 26 percent.

Overnight fees from families traditionally provide only minimal funds. Concerning ex-

penses, costs for housing operations accounted for a little more than a third in 2009,

investments in houses as well as public relations / fundraising both represented

roughly a quarter. The share of the latter seems to increase overall.

120 As the Kinderhilfe is a non-profit association, total revenues match total expenses. Any profits

are apparently allocated to financial reserves.



2007 2007 (%) 2008 2008 (%) 2009 2009 (%)

Total revenues 757,685 100.0% 1,761,639 100.0% 1,136,378 100.0%

Donation boxes in restaurants 197,539 26.0% 265,224 15.1% 330,000 29.0%

Fundraising & charity activities 101,328 13.4% 223,635 12.7% 294,878 25.9%

Contribution McD & Franchisees 364,968 48.2% 405,286 23.0% 438,340 38.6%

Donations in kind n.a. n.a. 15,294 0.9% 20,379 1.8%

Overnight fees 33,014 4.4% 24,351 1.3% 28,361 2.6%

Other earnings / Earnings from capital

60,836 8.0% 88,696 5.0% 24,421 2.1%

Liquidation of financial reserves n.a. n.a. 739,154 42.0% n.a. n.a.

Total expenses 757,685 100.0% 1,761,639 100.0% 1,136,378 100.0%

Operation of houses 375,231 49.5% 447,558 25.4% 438,265 38.6%

Investments in houses n.a. n.a. 1,000,869 56.8% 274,911 24.2%

Public relations / Fundraising 83,128 11.0% 256,732 14.6% 258,943 22.7%

Administration 93,946 12.4% 56,481 3.2% 61,992 5.5%

Allocation to reserves 178,500 23.6% 0 0.0% 102,267 9.0%

Other expenditures 26,880 3.5% n.a. n.a. n.a. n.a.

Source Ronald McDo-nald Kinderhilfe 2008: 3

Ronald McDo-nald Kinderhilfe 2009a: 4

Ronald McDo-nald Kinderhilfe 2010a: 3

Exhibit 42 - Financial figures of the Kinderhilfe (Ronald McDonald Kinderhilfe 2008: 3; Idem 2009a: 4; Idem 2010a: 3)

(b) Donation quality seal ("Spendenguetesiegel") and tax deductibility

Ronald McDonald Kinderhilfe was assigned the Austrian Donation Quality Seal

(Oesterreichisches Spendenguetesiegel) with the registration number 05688 in Sep-

tember 2009. The seal guarantees "careful, economic and transparent handling" of

donations received (Ronald McDonald Kinderhilfe 2010b: 9). Introduced in late 2001,

213 non-profit organizations are currently bearers of the seal. New applications are

constantly received by the Chamber of Public Accountants (Kammer der Wirt-

schaftstreuhaender), which is the official assigning body (Oesterreichisches Spen-

dengütesiegel 2010). Organizations have to voluntarily consult a certified tax accoun-

tant or financial auditor for assessment. In the process, seven specific areas are re-

viewed. These include, for instance, proper accounting and reporting, existence of an

internal control system, use of donations as specified and communicated by the as-

sociation, and economical conduct of operations. If all criteria are satisfactorily ful-

filled and the seal is assigned by the chamber, the same assessment needs to be

performed annually (Kammer der Wirtschaftstreuhänder 2009: 16). For Ronald

McDonald Kinderhilfe, the professional services firm Ernst & Young conducted the



audit. After successful completion, it was stated that donors can now be assured that

donations are in fact utilized as promised by the association (Ronald McDonald Kin-

derhilfe Austria 2009c: 3).

In addition to the quality seal, the association was added to the list of tax deducti-

ble charities of the Federal Ministry of Finance with retrospective effect as of January

2009. Donations are consequently tax deductible (Ronald McDonald Kinderhilfe

2010a: 3).

(c) Charity events

As illustrated earlier, an increasingly important part of revenues originates from

fundraising121 and charity events. Whereas the individual houses are not directly in-

volved (Kellner 2010), the association pursues two goals by these centrally planned

initiatives: raising awareness in the public and generating considerable additional

income (Schelander 2010).

The table below (Exhibit 43) shows some recent results from the two major charity

events. Development looks very favorable as the share of total revenues increased

from 3.5 percent122 in 2008 to 8.6 percent in 2009. Over three years, combined reve-

nues more than doubled, reaching a record high of 125,000 euros in 2010.

2008 2009 2010

Car Wash Day (June) 32,000 38,000 45,000

Source Ronald McDonald Kinderhilfe 2009a: 4

Ronald McDonald Kinderhilfe 2010c: 1-2

Ronald McDonald Kinderhilfe 2010b: 10)

McMaster's Golfing Event (September) 30,000 60,000 80,000

Source Ronald McDonald Kinderhilfe 2009a: 4

Ronald McDonald Kinderhilfe 2010b: 10

Ronald McDonald Kinderhilfe 2010i)

Combined revenues 62,000 98,000 125,000

Share of total revenues 3.5% 8.6% n.a.

Exhibit 43 - Revenues from principal charity events of the Kinderhilfe (Author's illustration)

The Car Wash Day can basically be described as "cleaning car windows, distribut-

ing folders and asking for a donation" (Czasch 2010). Annually, McDonald's em-

ployees and a number of celebrities from politics, business, sports and media partici-

pate in the event. This year, it took place in about 110 restaurants with McDrives on

June 18 (Ronald McDonald Kinderhilfe 2010c: 1-2). The researcher had the opportu-

121 Fundraising activities include, for example, selling Christmas cards, Christmas gift tags and Ad-

vent calenders in the winter season (Ronald McDonald Kinderhilfe 2009a: 4; Idem 2010b: 10). 122 It should be remarked, however, that the percentage of 3.5 percent in 2008 may be negatively

distorted as the extraordinary liquidation of financial reserves meant total revenues peaked at nearly 1.8 million Euros. The adjusted percentage would be 6.1 percent.



nity to personally witness the Car Wash Day at a McDonald's restaurant in Vienna.

The celebrities active at this venue included Ulrike Schelander, general manager of

Ronald McDonald Kinderhilfe, and Christine Marek, State Secretary in the Federal

Ministry of Economy, Family and Youth. The politician emphasized the social impor-

tance of the activities of the Kinderhilfe and stated her "enthusiasm for participating in

the Car Wash Day for years" (Marek 2010).

McMaster's is the annual charity golfing tournament of the Ronald McDonald Kin-

derhilfe, which also involves participation by numerous celebrities. In addition to the

sports challenge, the one-day event comprises other program elements such as a

tombola, charity auction and gala dinner. In 2010, it took place for the thirteenth time

with a new record of 124 participants (Ronald McDonald Kinderhilfe 2010i).

(7) Outlook and perspectives of the association

To finalize the case illustration of an association that represents the most impor-

tant pillar in the social commitment of McDonald's Austria, contributions from inter-

view partners may provide some perspectives on the Ronald McDonald Kinderhilfe:

From the viewpoint of a McDonald's franchisee, the Kinderhilfe is now more

present than in earlier times. It is important to raise awareness. However, some cau-

tion in the presentation of activities should be maintained. If put too much in the fore-

ground, people may cast even good practices into doubt. In general, it appears that

customers appreciate McDonald's social engagement (Czasch 2010).

Based on practical insights, the house manager of the Vienna house points out

that a challenge still lies in the eastern European expansion, especially with Romania

and Bulgaria. This involves finding effective ways to better support families who may

not be able to express themselves comprehensably in German. For example, con-

versations are already regularly conducted with an interpreter present. However bet-

ter understanding of and respondse to cultural traits such as a very restrained way of

dealing with death are issues for the future in daily operations (Kellner 2010).

The manager of house operations shifts the focus to expanding existing facilities.

After a period of remodeling and adaptation, consideration is now being given to

opening a new house. Necessity seems strongest in Vienna as capacity is constantly

at the limit. Currently, an assessment of possible new locations, such as in the vicini-

ty of the AKH or the SMZ Sued / Kaiser Franz Joseph Spital, is under way. A deci-

sion will probably be taken in late 2010 (Grill-Haderer 2010).



The vision of the general manager of the association is succinct. It is to streng-

then, even more, social engagement as a "natural matter of course" in the future. And

the Ronald McDonald Kinderhilfe is very well positioned to fulfill this task (Schelander

2010).

Concluding remarks of chapter six

The author concludes that some sustainability issues are specific to the food and

beverages industry, that the three companies under review all pursue a strategic

approach to corporate sustainability with different characteristics and that concrete

environmental and social activities are pursued by the one country organization

investigated in more detail.

Specifically, chapter six...

...briefly presents sustainability issues in the value chain and stakeholder pressure

in the food and beverages industry.

...provides some background facts on a leading food producer, beverages

producer and food and beverage service provider, further details their strategic

approach including mission and vision, corporate strategy focus areas, definition and

elements of sustainability strategy and measuring and disclosing results of strategy,

and presents selected sustainability initiatives in cooperation with stakeholders in

environmental (sourcing, packaging) and social (healthiness, community) areas.

...explores sustainability in-depth at one of these companies' national subsidiaries

with details on the country organization including value chain partners, application of

international sustainability programs and stakeholder interaction, then gives insights

on responsibility and environmental highlights along the value chain considering

sustainable sourcing and food security, packaging and waste management and

initiatives for energy efficiency improvements in operations, and finally introduces the

social commitment of the firm in a non-profit association with facts on the purpose

and aim, social contribution, history and integration, organizational structure, financial

aspects and perspectives.

As this chapter was dedicated to company aspects of sustainability strategy, the

focus shifts to consumers in the following section.



7 Asking the Consumer about Sustainability

In chapter seven123, empirical results of the consumer investigation are presented.

The first section covers qualitative insights primarily from focus group discussions

and illustrates content-related aspects that lead to the development of the

questionnaire. Afterwards, data from the survey is analyzed and quantitative findings

are given. Discussion and concluding remarks follow in chapter eight.

7.1 Gathering insights with qualitative research

As described in the methodology section, the first part of the empirical consumer

research was done using a qualitative approach. The relevant literature was specified

based on insights from focus group participants.

7.1.1 Preparation of focus groups based on background research

Based on the research questions, five core areas from the literature review were

selected for further investigation. The table below124 (Exhibit 44) provides the corres-

ponding overview with a reference to the relevant grounding from theoretical sources:

Core area Focus Key aspects in area Source reference

Sustainability and the corporation

General Role of the firm, stakeholder theory, consumer influence, consumer activism, terms related to sustainability, consumer self-evaluation

Stakeholder theory, consumer-ism, sustainability and related concepts

Purchasing sustain-able food and beve-rages

F&B Purchase behavior towards sustainable food and beverages (products)

(Extended) Model of Goal-directed Behavior (MGB, EMGB)

Evaluating company perception

F&B

Evaluating some F&B companies in detail: sustai-nability approach, products & attributes, product range & availability, information policy; information sources

Real companies selected for case evaluation

Personal involve-ment

General Positive buying, boycotting, support of NGOs, contact of companies, contact of government organizations

Consumerism, selected stake-holder groups

123 The empirical consumer investigation in this chapter is based on theoretical knowledge from

chapters two to four and empirical insights from the food and beverages industry and specific compa-nies (subchapters 6.1. and 6.2). Consumer attitudes and sustainability awareness relate to concepts of corporate responsibility (chapter 2), the three-sector-world of business, government and civil society (subchapter 3.1) and stakeholder theory (subchapter 3.2). The second section of subchapter 3.3 pro-vides background for researching purchasing behavior. The role of consumers refers to the detailed presentation of the stakeholder group consumers in the first section of subchapter 3.3. Regarding the importance of product attributes and communication in the food and beverages industry, the empirical investigation is closely connected with corporate sustainability strategy (4.1), disclosure and commu-nication of corporate practices (subchapter 4.3) and industry-specific sustainability issues (subchapter 6.1). The evaluation of company sustainability practices draws on industry and company background research for subchapter 6.1 and 6.2.

124 Information in the table presents the initial status of empirical research, which changed both in content and structure during the process.



Ways to improve F&B Main barrier for purchasing sustainable food and beverages, advice for improvement

Other survey results on ethical consumption, open question style

Exhibit 44 - Core content areas of focus group discussions (Author's illustration)

Within these areas, 23 questions were developed and put in the focus group dis-

cussion guide. These were intended to provide the maximum freedom to respond,

and were formulated in an open manner as can be seen in the examples below:

"What does 'corporate sustainability' mean to you?" (question two, part one)

"Would you desire to purchase sustainable products? Why / Why not?" (ques-

tion eleven, part two)

"How do you inform yourself about companies' and products' sustainability

performance?" (question 17, part three)

"Have you ever been personally involved in promoting sustainable products? If

yes, how?" (question 19, part four)

"What barriers keep you from purchasing more sustainable products?" (ques-

tion 22, part five)

A complete list of all questions developed as a result of background research is

attached in the appendix (Appendix 13).

7.1.2 Results obtained from focus group discussions

Statements of focus group participants were compiled and summarized. The table

below (Exhibit 45) provides an overview of the results by highlighting briefly the top

three aspects per section:

(I) Responsibilities of companies, sustainability, corporate sustainability, sustainable products

Americans and Europeans seem to have differing views on a corporation’s responsibilities There are varied associations for “sustainability” and “corporate sustainability” “Sustainable products” may be associated with basic groceries, environmentally and socially friendly manufac-

tured goods or products from sustainable companies

(II) Attitude, emotions, influencers, goals, desire and intention of sustainable buying

It appears that sustainability is confronted with both a positive and negative attitude and similar ambivalent emotions

Influence towards sustainable purchasing comes mostly from family and friends, who have different personal goals

There seems to be great variance in desire and actual intention of purchasing sustainably from one person to another

(III) Consumers’ influence on corporations and personal activism

Consumers generally seem to believe they have some influence even on large firms through their purchasing behavior

There is apparently only little interest among consumers for assuming concrete responsibility Overall, only few consumers report being active in promoting sustainability themselves

(IV) Evaluating and purchasing from real-world companies

Generally, there is very poor knowledge of sustainability strategies of real F&B companies



It seems difficult for consumers to assess corporate environmental and social performance Purchasing is stimulated by different attributes, only some of which have a sustainability aspect

(V) Information behavior on corporate sustainability, purchasing barriers and ways to improve

Consumers report reluctance in actively seeking sustainability information Nevertheless, there might be some potential interest in receiving some additional facts Most prominent barriers exist in price premiums, lack of transparency and confusion, which need to be over-

come

Exhibit 45 - Top three findings from focus group discussions per topic section (Author's illustration)

Based on the detailed focus group discussion notes (Appendix 14) and prioritiza-

tion of aspects given above, the following findings were finally considered most rele-

vant for further steps in the research process:

A broad variance of associations with “sustainability” exists among individuals,

but altogether they cover the main aspects of the idea. However, attitudes

may slightly differ according to gender and nationality.

“Corporate sustainability” is generally perceived as describing the company’s

economic, social, environmental and long-term responsibilities, but with vary-

ing focus from one person to another. In addition, there is considerable skep-

ticism as to the true motivation of firms to strive for the concept and the integri-

ty of its application in reality.

Americans traditionally see the corporation’s responsibilities as limited mainly

to focusing on customers, shareholders and making profits; Europeans expect

firms to consider their impact on more parties and to cooperate closely with

governments and civil society organizations.

Consumers feel potentially able to influence even large companies by their

purchasing behavior, which some of them actually do. Nevertheless, inade-

quate information on sustainability issues, limited awareness of one’s own

consumption impact or low trust in corporate advertising leave many others

indecisive of what actions to take.

However, there is growing interest in assuming concrete responsibility. De-

spite budget restraints, even younger consumers report sometimes intention-

ally paying a little more to support environmentally balanced, socially friendly

or domestically produced goods and services.

Sustainable products are first taken to refer to basic groceries such as fruits or

vegetables from the farmers’ market directly, or organic and/or fairly traded

sources. Despite some controversy, it turned out that issues such as quality of

ingredients, regional origin, resource intensity in production, recyclable pack-



aging and transportation routes very well represent the sustainability even of

manufactured food and beverages. In addition, products from sustainable

firms, i.e. ones that excel in applying advanced environmental and social prin-

ciples in their business practices, may also be considered "sustainable prod-

ucts" in a wider sense.

Several adjectives such as responsible, sophisticated, future-oriented or envi-

ronmentally-conscious are appropriate to describe a purchaser's attitude to-

wards sustainable products or products from sustainable corporations. In addi-

tion, consumers expect specific emotions to be stimulated by their consump-

tion such as satisfaction, happiness, balance or confidence.

Family and friends are important influencers on consumers’ buying behavior.

Generally, information on food, nutrition and sustainability issues spread most

among women and outdoor-oriented, health-conscious and sporty men.

There are different reasons why people support sustainability. In fact, goals

range from the very idealistic, such as saving the world for my grandchildren,

to the rather pragmatic, such as supporting quality orientation, strengthening

responsible business conduct or promoting innovation and competition.

Desire and actual intention to purchase responsibly varies considerably for dif-

ferent reasons. While there is a general consensus on sustainability being

worth striving for, some people have issues of trust and complain about ex-

cessive price premiums. Choice and availability of sustainable goods seem

sufficient only if one is intentionally seeking, which indicates there is still po-

tential for improvement in both dimensions. Actually, willingness to consume

more sustainably is reported to lag behind people's actual consumption.

Corporate sustainability strategies of the leading multinationals in food and

beverages production and services are rather poorly known among consum-

ers. Surprisingly, some slightly negative perceptions as to the level of respon-

sibility of their business conduct prevails. In fact, consumers believe that any

public commitment exceeding legal requirements is doubtful and rooted pri-

marily in marketing rhetoric. However, some interviewees report having read

articles on specific company initiatives in environmental and social fields,

which changed their viewpoint for the better.

Consumers have already purchased at least once some of the products of the

selected companies, which are well-known on both sides of the Atlantic ocean.



Generally though, brand experience derives from many different attributes,

with ecological and social aspects being currently of relatively low initial impor-

tance. However, it is agreed that consideration of sustainability-related as-

pects is important and might positively contribute to satisfaction with the prod-

uct or company choice.

As to actively seeking information on the sustainability performance of compa-

nies or their products, consumers admit a certain degree of reluctance. Al-

though groceries are consumed on a daily basis, which adds up to large quan-

tities over the year, incentives to do background research are perceived as

much weaker than, for example, for durable goods. Nonetheless, easily ac-

cessible, clearly understandable and appealingly presented facts that do not

require much additional time and effort are considered a viable option. When

comparing different formats, consumers would most favor content directly on

the packaging.

When it comes to promoting sustainability themselves or getting involved with

government agencies or civil society organizations, consumers show very little

interest in activism. Only positive buying or occasional boycotting appear to be

applied sometimes.

Consumers complain most about a lack of transparency, being confused by

differing labeling, skepticism about real company intentions and high price

premiums or admit general reluctance to engage with the topic. To overcome

these barriers, they require in particular clear and transparent communication

policies, corporate accountability that is confirmed by independent sources,

application of internationally universal logos on environmental and social en-

gagement, and more convenient and direct information on additional product

attributes and company conduct.

These consumer insights allowed the author to get a more detailed understanding

of other people's viewpoints and the perceived importance of various issues.

Qualitative research provided the basis for the preparation of quantitative re-

search, which is discussed in the next section.



7.2 Preparing quantitative research

Quantitative research involved first the drafting of a preliminary questionnaire,

which was then externally reviewed and adapted. As a result, a final and improved

version was ready to use in the actual survey.

7.2.1 Drafting the preliminary questionnaire

Based on the findings from the literature review and focus group discussions, a

preliminary questionnaire was drafted. Due to limitations in space, only a short struc-

tural overview on this version is given here. The survey draft consisted of five sec-

tions, which were preceded by an introduction and concluded by demographic ques-

tions. The first section was titled "Role of companies and corporate sustainability"

and comprised three questions with nine items. Second, in "Purchasing from respon-

sible companies", the eight questions had 35 items. In the subsequent sections,

"Role of the consumer and personal activism" and "Importance of product and com-

munication features", three questions in both included eleven items in the former and

28 items in the latter. The final "Evaluating real companies" consisted of two ques-

tions with 24 items. In total, there were 19 questions with 107 items in the main sec-

tions of the questionnaire.

7.2.2 Reviewing the questionnaire

The preliminary version was tested among students, who were asked to complete

the questionnaire and then respond to five general questions. Particular importance

was given to attractiveness, comprehensiveness, duration, language and specific

suggestions for improvement. The questions used are listed in the appendix

(Appendix 15).

Respondents generally provided very positive feedback. They considered most

questions sufficiently understandable and straightforward. Variation from one section

to another was perceived as favorable to ensure continued attention. Most students

appreciated the content of the survey, which was regarded as important in our times

and stimulated their own personal reflection. Despite its nature as a questionnaire, it

was described sometimes even as likeable.

Nevertheless, respondents also expressed criticism that illustrated some short-

comings of the preliminary version. Based on the detailed notes of the responses of

review participants, a summary was compiled. It includes the main critical findings

and also lists the consequent changes to the final questionnaire. The material in full



can be found in the appendix (Appendix 16). Some highlights are given here:

The survey was considered a bit too long and wordy.

Some questions appeared rather complex and others repetitive.

The use of different scales provoked confusion.

Section two was perceived as being the most challenging to answer.

A German translation would be highly appreciated.

As a result changes were made so that, for example, some parts were shortened,

questions rephrased and simplified, only five item scales applied, section two stream-

lined as well as a German translation created and also tested.

7.2.3 Presenting the final questionnaire version

The final questionnaire consisted of an introduction, five content sections with dif-

ferent focus and a last part including questions on personal details of the respon-

dents. An overview on their respective headings is given below:

Introduction

Section I - Corporate Sustainability

Section II - Purchasing from Sustainable Companies

Section III - Consumer Role in Sustainability

Section IV - Importance of Product and Communication in the F&B industries

Section V - Company Sustainability Practices

Personal Information

Whereas sections I to III had a more general approach to sustainability-related

content, the remaining two (IV and V) specifically investigated the food and beverag-

es industry.

All parts of the questionnaire are linked with relevant literature and designed with

consideration to all empirical input from the previous steps in the consumer investiga-

tion. Furthermore, close interconnection with corporate strategy-related aspects and

research in the company investigation was sought. Section I combines elements of

the three-sector world concept (chapter three), stakeholder theory (chapter three)

and sustainability-related terms (chapter two). Section II is entirely dedicated to em-

pirical assessment of the (Extended) Model of Goal-oriented Behavior (EMGB) in its

application to purchasing from sustainable companies125 (chapter three). In section

125 In contrast to earlier versions, purchasing "sustainable products" was changed to "from

sustainable companies" as especially focus group research showed some important relevance in



III, the consumer per se is investigated on the perceived power to influence compa-

nies (chapter three), the application of elements of consumerism (chapter three) and

a self-evaluation (chapter three). Considering more strategic aspects in the selected

industry, section IV assesses sustainability elements in business strategy (chapter

four) and the communication approach (chapter four). Awareness of the sustainability

strategies (chapters four and six) and perception of sustainability performance (chap-

ters four and six) of the extended sample of seven real food and beverages compa-

nies (chapter five) are explored in section V. Within these content sections, the final

questionnaire comprises a total of 21 questions with 92 items. Compared to the pre-

liminary version, this is a slight increase in questions (plus two) because of format

changes, but a considerable reduction in items to be answered (minus 15). The time

for completion is estimated at around 15 to 18 minutes. Further details can be found

in the appendix (Appendix 17).

As described in the methodology chapter, the formulation and scale format of the

questions are important because they define what analyses and statistical tests are

possible. In most cases the application of interval scales appeared appropriate. Nev-

ertheless, sometimes nominal or ordinal scales were also used.

The complete final English version of the questionnaire can be accessed in the

appendix (Appendix 18).

Once the final questionnaire was ready, the survey was conducted. Results of the

quantitative consumer investigation are given in the next section.

testing the latter. In addition, this is also more in line with research on corporate strategies in previous sections.



7.3 Presenting survey results

Results of the proceedings and activities described in chapter five (methodology)

are now illustrated in numbers. First, an overview is given on generating the sample

and sample characteristics. Then, detailed results from all sections of the question-

naire are presented.

7.3.1 Drawing a sample and sample characteristics

Two aspects are of interest regarding the final sample: first, the process from con-

tacting subjects to arriving at the final sample size and, second, the characteristics of

the set of respondents analyzed.

(1) Arriving at the final sample

As presented in detail in the table below (Exhibit 46), it is estimated that roughly

18,000 people received an invitation to participate in the survey through various

channels. During the investigation period, a total of 966 responses was received,

representing an overall response rate of 5.4 percent. However, only a bit more than

seven out of ten questionnaires were completed, which was a requirement for inclu-

sion. From this group, another three percent were removed in data editing because

of marked inconsistencies and from that, another two percent because of misfit to the

target group characteristics defined prior to the research. The resulting "total eligible

sample" (TES)126 comprises 660 responses (3.7 percent of the estimated recipients

of an invitation for survey participation). It includes students enrolled in universities

located in Austria, Germany, or Switzerland (AGS) or the United States of America

(USA). However, two further aspects needed to be considered: first, not all students

enrolled in a university from one of these countries also originated from one of these

countries. Second, some respondents who declared themselves students were of a

higher age than the "average student", which was defined as being between 18 and

30 years. Application of these criteria lead to a further reduction of the sample to a

final number of 518 subjects in the "specified analysis sample" (SAS). It represents

nearly three percent of people contacted for survey participation.

126 The terms "total eligible sample" (TES) and "specified analysis sample" (SAS) were introduced

by the author without basis in any external source. Referring to Diamantopoulos and Schlegelmilch (1997: 69), the term "effective sample" may be used to describe primarily the TES but also the SAS.



Estimated survey invita-tion recipients

All responses Completed responses

Valid res-ponses

Total eligible sample (TES)

Specified analysis sam-ple (SAS)

Description Number of directly con-tacted subjects for survey participation through various channels

Number of total responses received

Number of completely filled out ques-tionnaires

Number of responses after elimination of those with obvious incon-sistencies

All students enrolled in a university located in Austria, Ger-many or Swit-zerland (AGS), or the US

In addition to enrollment, further speci-fied to origin of the student in AGS or the US and age be-tween 18-30 [i.e. 1980-1992]

Total >18,000127 966 696 674 660 518

Recipients/ Response ratio

100% 5.4% 3.9% 3.7% 3.7% 2.9%

Reduction in percent per stage

- -94.6% -28.0% -3.2% -2.1% -21.5%

Exhibit 46 - Sampling funnel (Author's illustration)

In a direct comparison of the last two stages in the sample funnel, it turns out that

the main grouping according to geographies only changed marginally. In fact, the

share of people from Austria, Germany, and Switzerland just increased a little. Within

the regional groups, AGS is dominant, with 72.2 percent of all responses, but 144

usable datasets from the USA are still sufficient to allow comparison between the

subgroups introduced later. The table below (Exhibit 47) provides the detailed fig-

ures.

Total eligible sample (TES) Specified analysis sample (SAS)

The "total eligible sample" (TES) comprises all valid responses from students enrolled at a university located in Austria, Germany or Switzerland (AGS), or in the U.S.

The "specified analysis sample" (SAS) further speci-fies the TES by including only students originating from AGS or the U.S. and being between 18-30 years of age [i.e. year of birth between 1980-1992].

Total 660 (100%) 518 (100%)

AGS128 466 (70.6%) 374 (72.2%)

USA 194 (29.4%) 144 (27.8%)

Exhibit 47 - Total eligible sample and specified analysis sample (Author's illustration)

The following description of survey respondents refers only to the "specified analy-

sis sample" (SAS).

127 This number reflects the approximate number of recipients of the email invitation to participate

in the survey. As can be seen in detail in the appendix (Appendix 8), about 89% of email invitations were distributed automatically via one institution, whereas the rest was sent manually through a variety of channels. Estimated response rates also varied greatly.

128 Whereas in the TES, "location of home university" is sufficient, inclusion is more rigid for the SAS. "Country of origin" is added as a second and now decisive parameter for determining membership in the geographic groups AGS (i.e. origin in Austria, Germany or Switzerland) or USA (i.e. origin in the United States of America).



(2) Description of survey respondents

The characteristics of the sample used for all further analyses are now presented

in six dimensions129: "country of origin", "year of birth", "location of home university",

"home university institution", "stage of education", and "main field of studies". Data is

given for four groups: "Women from Austria, Germany or Switzerland" (AGS F), "Men

from Austria, Germany or Switzerland" (AGS M), "Women from the United States"

(USA F) and "Men from the United States" (USA M). In the group AGS F, 227 res-

ponses are included, representing 43.8 percent of the sample. For AGS M, there are

147 responses representing 28.4 percent, for USA F 74 responses representing 14.3

percent and for USA M 70 responses representing 13.5 percent. The differences in

size of the subgroups can be generally ignored in further analyses130. If not otherwise

indicated, all percentages in brackets in the following tables refer to the total sample

size of 518.

(a) Country of origin

As to country of origin (Exhibit 48), Austria clearly dominates the sample, account-

ing for 61.6 percent. It is interesting that an especially high number of answers were

given by Austrian females, who alone account for nearly two fifths of all responses. In

all other countries the gender distribution is more evenly balanced.

Country of origin Austria Germany Switzerland USA TOTAL

AGS F 199 (38.4%) 19 (3.7%) 9 (1.7%) 0 227 (43.8%)

AGS M 120 (23.2%) 20 (3.9%) 7 (1.4%) 0 147 (28.4%)

USA F 0 0 0 74 (14.3%) 74 (14.3%)

USA M 0 0 0 70 (13.5%) 70 (13.5%)

TOTAL 319 (61.6%) 39 (7.5%) 16 (3.1%) 144 (27.8%) 518 (100%)

Exhibit 48 - Sample characteristics: country of origin

(b) Year of birth (age)

With regard to age (Exhibit 49), there is a fairly even distribution with most stu-

dents being between 23 and 26 years old. However, it can be observed that Ameri-

cans in the sample are generally younger. Relatively, females and males are equally

represented in all age categories, given the higher proportion of women overall. 129 Most dimensions are self-explanatory except "country of origin", which refers to where the stu-

dent originally comes from, and "home university", which means the university the student enrolled at first.

130 As presented in the following section, most questions are analyzed using ANOVA to test for dif-ferences between the subgroups. If only data for the whole group are reported, for example, in ques-tion two, it needs to be considered that there are overall slightly more responses from women, as well as slightly more responses from Austria, Germany and Switzerland. Regarding mean values for the total population, SPSS provides the weighted values from the subgroups.



Year of birth (age) 1991-88

(19-22)

1987-84

(23-26)

1983-80

(27-30)

TOTAL

AGS F 56 (10.8%) 128 (24.7%) 43 (8.3%) 227 (43.8%)

AGS M 31 (6.0%) 76 (14.7%) 40 (7.7%) 147 (28.4%)

USA F 59 (11.4%) 7 (1.4%) 8 (1.5%) 74 (14.3%)

USA M 51 (9.8%) 14 (2.7%) 5 (1.0%) 70 (13.5%)

TOTAL 197 (38.0%) 225 (43.5%) 96 (18.5%) 518 (100%)

Exhibit 49 - Sample characteristics: year of birth (age)

(c) Location of home university

Concerning the location of home university (Exhibit 50), the picture is similar to

that for the country of origin: the highest proportion of people study at their home uni-

versity in Austria and considerably fewer in Germany or Switzerland. The United

States are represented slightly less. It should be noted that one American respondent

is enrolled for studies in Austria and four students from AGS in the United States, but

this does not distort the overall proportions.

Location of home university

Austria Germany Switzerland USA TOTAL

AGS F 207 (40.0%) 9 (1.7%) 9 (1.7%) 2 (0.4%) 227 (43.8%)

AGS M 127 (24.5%) 11 (2.1%) 7 (1.4%) 2 (0.4%) 147 (28.4%)

USA F 1 (0.2%) 0 0 73 (14.1%) 74 (14.3%)

USA M 0 0 0 70 (13.5%) 70 (13.5%)

TOTAL 335 (64.7%) 20 (3.9%) 16 (3.1%) 147 (28.4%) 518 (100%)

Exhibit 50 - Sample characteristics: location of home university

(d) Home university institution

Regarding the home university institution attended (Exhibit 51), more than half of

all responses come from the Vienna University of Economics and Business in Austria

and Bentley University in the United States. All other students are evenly divided

among several European and American institutions.

Home university institution*

WUW BEU UVI JKU UGE KFU HSG VUT Other TOTAL

AGS F 134 (25.8%)

1 (0.2%) 28 (5.4%)

16 (3.1%)

0 4 (0.8%)

9 (1.7%)

5 (1.0%) 30 (5.9%)

227 (43.8%)

AGS M 64 (12.4%)

2 (0.4%) 11 (2.1%)

12 (2.3%)

0 14 (2.7%)

7 (1.4%)

11 (2.1%)

26 (5.0%)

147 (28.4%)

USA F 0 41 (7.9%)

1 (0.2%)

0 9 (1.7%)

0 0 0 23 (4.4%)

74 (14.3%)

USA M 0 34 (6.6%)

0 0 14 (2.7%)

0 0 0 22 (4.2%)

70 (13.5%)

TOTAL 198 (38.2%)

78 (15.1%)

40 (7.7%)

28 (5.4%)

23 (4.4%)

18 (3.5%)

16 (3.1%)

16 (3.1%)

101 (19.5%)

518 (100%)

*: WUW (Vienna University of Economics and Business), BEU (Bentley University), UVI (University of Vienna), JKU (Johannes Kepler University Linz), University of Georgia (UGE), KFU (University of Graz), HSG (University of St. Gallen), VUT (Vienna University of Technology)

Exhibit 51 - Sample characteristics: home university institution



(e) Stage of education

Considering stage of education (Exhibit 52), bachelor and undergraduate students

dominate the sample with a fairly balanced split between the groupings. In contrast,

masters, diploma or graduate-level students and doctoral, Ph.D. or postgraduate-

level students are overrepresented in the German-speaking region. Therefore,

whether analysis of the subgroup of bachelor students alone would provide different

results131 is open to discussion.

Stage of education Bachelor / Undergra-duate

Masters or diploma / Graduate

Doctoral, Ph.D. / Postgraduate

TOTAL

AGS F 91 (17.6%) 111 (21.4%) 25 (4.8%) 227 (43.8%)

AGS M 57 (11.0%) 70 (13.5%) 20 (3.9%) 147 (28.4%)

USA F 60 (11.6%) 13 (2.5%) 1 (0.2%) 74 (14.3%)

USA M 60 (11.6%) 9 (1.7%) 1 (0.2%) 70 (13.5%)

TOTAL 268 (51.7%) 203 (39.2%) 47 (9.1%) 518 (100%)

Exhibit 52 - Sample characteristics: stage of education

(f) Main field of studies

The main field of studies (Exhibit 53) is related to the specialization of the home

universities of the students described above. Therefore, more than two thirds have a

background in economics or business. The proportion is even higher for American

respondents.

Main field of studies

Economics or business

Legal studies

Technology or engineer-ing

Natural sciences

Humanities Any other field

TOTAL

AGS F 158 (30.5%) 21 (4.1%) 8 (1.5%) 13 (2.5%) 10 (1.9%) 17 (3.3%) 227 (43.8%)

AGS M 94 (18.1%) 11 (2.1%) 18 (3.5%) 10 (1.9%) 7 (1.4%) 7 (1.4%) 147 (28.4%)

USA F 49 (9.5%) 0 2 (0.4%) 2 (0.4%) 7 (1.4%) 14 (2.7%) 74 (14.3%)

USA M 55 (10.6%) 1 (0.2%) 2 (0.4%) 1 (0.2%) 2 (0.4%) 9 (1.7%) 70 (13.5%)

TOTAL 356 (68.7%) 33 (6.4%) 30 (5.8%) 26 (5.0%) 26 (5.0%) 47 (9.1%) 518 (100%)

Exhibit 53 - Sample characteristics: main field of studies

After describing the characteristics of the sample population, responses are now

presented based on the structure of the questionnaire.

7.3.2 Section I - Corporate sustainability

The first section of the questionnaire investigates respondents' general attitude

towards the role and responsibilities of companies and the awareness of specific

131 Because convenience sampling was applied, criteria for groups were defined prior to gathering

responses, and as space is limited, no such subgroup analysis is included.



terms in this respect.

(1) Question 1 - Attitude to the role and responsibilities of companies

In this part, respondents had to indicate their level of agreement/disagreement

with statements on the role and responsibilities of companies on a five point scale

ranging from "strongly agree" (1) to "strongly disagree" (5). The statements are given

in the table below (Exhibit 54):

Code Label Statement

S1-Q01-O01 Three sectors The government, private and civil sectors, should work together to meet today's global chal-lenges.

S1-Q01-O02 Role of busi-nesses

Businesses should play a more active role in tackling the ecological and societal problems of the world, well beyond complying with legal standards.

S1-Q01-O03 Shareholder A corporation’s first and foremost mission is to promote the interests of its stockholders.

S1-Q01-O04 Stakeholder All stakeholders, including owners, employees, suppliers, and customers should all receive a fair share of the value-added created by the business.

S1-Q01-O05 Business sustainability

Businesses should aim at balancing economic, ecological and social obligations in a respon-sible manner for all stakeholders.

Exhibit 54 - Phrasing of survey question one

The researcher is interested in finding out whether there are differences between

the responses of the four groups AGS F, AGS M, USA F and USA M. For that pur-

pose, the one-way analysis of variance (ANOVA)132 was chosen, which can be re-

garded as a generalization of the t-Test. It is broadly applied to test whether the

mean values of two or more independent samples can be regarded as homogenous

(Eckstein 2006: 126). Thus the null hypothesis (H0) assumes that all samples have

the same mean. It can be rejected if two or more means are not equal to each other

(Weinberg and Abramowitz 2008: 315). Several assumptions need to be made for

the ANOVA. First, the dependent variable must be at least interval scale and the in-

dependent variable, also known as factor, allows separation into groups, though no-

minal scale is sufficient. Second, the samples are drawn independently. Third, the

scores are normally distributed in all groups studied. Fourth, the groups have equal

variances, which is also referred to as "homogeneity of variance" (Janssen and Laatz

2010: 347). With regard to conducting an ANOVA, Kremelberg (2011: 155-161) and

Brosius (2006: 495-511), for example, provide guidance. Based on this literature, the

researcher distinguishes three phases. At the beginning, a descriptive overview of

the data is needed, which includes testing whether the assumptions are met. If they

can, the results of the ANOVA can be interpreted and the null hypothesis accepted or

132 In the following, the steps in the application of the ANOVA are covered in detail as the proce-

dure will also be used to analyze several other questions in the survey later.



rejected. Finally, so-called post hoc tests allow groups showing significant differences

in mean values to be identified. Further details on the proceedures are illustrated

while analyzing the data for question one as follows.

(a) Phase one: "Testing the assumptions"

It can be stated that the first assumption is fulfilled: The dependent variable is

based on a five point Likert scale, which is considered an interval scale, and the fac-

tor is computed from the categorizations country of origin and gender, which are no-

minal. Also the second assumption is fulfilled as the samples were drawn indepen-

dently.

With regard to normal distribution, two tests of normality, the Kolmogorov-Smirnov

and the Shapiro-Wilk, are conducted. In both, the null hypothesis that the scores of

the variables are normally distributed, is tested. A probability value regarding the er-

ror in rejecting this hypothesis is calculated, which is higher the more likely it is that

the values are normally distributed. Results are given in the figure below for all

groups (Exhibit 55). Most important are the significance values. As they are 0.000 for

all, the assumption of normal distribution is rejected. However, it needs to be noted

that the tests investigate perfect normal distribution, which may be problematic for

results that are near normal distribution. Therefore, graphical illustrations such as

histograms, normal Q-Q plots and detrended normal Q-Q plots can be used to de-

termine how much the distribution of the sample differs from a normal distribution133.

Particular consideration should be given to observing systematic patterns in the dis-

crepancies (Brosius 2006: 399-401). The next question is whether such discrepan-

cies prevent the application of variance analysis. From the literature it is revealed that

violations of the assumption of normality "do not affect, or only minimally affect, the

validity of the ANOVA" or, in other words, that "the ANOVA is robust to violations of

the assumption of normality". Correct results are also produced in the absence of

normal distribution if each group contains at least 30 subjects (Weinberg and Abra-

mowitz 2008: 322). This is the case for the sample at hand.

133 The researcher considered using graphical illustrations but there is no depiction here because

of limitations in space.



Exhibit 55 - Test of normality for question one

The fourth assumption concerns homogeneity of variance in the groups. In this re-

spect, the Levene test was applied with the results provided below (Exhibit 56). Two

probability levels (Sig.) are above .05, which indicates that variances can be as-

sumed homogenous, and the remaining three are below .05, meaning that the va-

riances are significantly different between the groups. Again, violation of the homo-

geneity assumption "does not affect, or only minimally affect, the validity of the ANO-

VA". It is only important that sample sizes are large enough and equal134 (Weinberg

and Abramowitz 2008: 322). Depending on the homogeneity or heterogeneity of va-

riances, the researcher needed to select the appropriate post hoc test, which will be

discussed later (Kremelberg 2011: 160).

134 Literature provides neither clear reference as to what sample sizes can be considered "large

enough" and what differences between the sample sizes can still be counted as "equal". Therefore, ANOVA is applied and the results of the Levene test serve primarily for chosing the appropriate post hoc test.



Exhibit 56 - Test of homogeneity of variances for question one

Given that, the data that will be analyzed by the ANOVA is given below (Exhibit

57). In the second column, the mean for all groups is displayed, which will be ana-

lyzed and interpreted in the following section.

Exhibit 57 - Descriptives for question one

(b) Phase two: "Interpreting ANOVA results"

In phase two, the results of the ANOVA (Exhibit 58) are interpreted. For the first

set "Three Sectors", the F statistic is 7,029 with 3 degrees of freedom between

groups and 514 degrees of freedoms within groups. The significance is ,000, which

means that the hypothesis that means in all groups are equal holds only true with a

probability of 0.0 percent135. Therefore the null hypothesis is rejected (Brosius 2006:

135 To avoid a higher global α error, because of the number of tests conducted, it is reasonable to

make more conservative decisions regarding H1, i.e. considering p-values that are only slightly above 0.05 as a weak indicator for H1.



501). The same interpretation can also be made for "Role of Businesses", "Share-

holder", "Stakeholder" and "Business Sustainability". One further aspect is addressed

by Janssen and Laatz (2010: 355) who suggest the calculation of the eta² value. By

dividing the sum of squares between groups with the total sum of squares, the per-

centage value of how much of the total variance is explained by the factor, i.e. by the

grouping in AGS F, AGS M, USA F and USA M, is calculated. The eta² values are

3.9 percent (Three Sectors), 6.3 percent (Role of Businesses), 11.9 percent (Share-

holder), 19.4 percent (Stakeholder) and 6.3 percent (Business Sustainability). Most

variance is thus explained by the factors in the stakeholder orientation.

Exhibit 58 - ANOVA for question one

Eckstein (2006: 131-133) argues that for samples without homogenous variances,

as was reported by the Levene test, the model of a one-way analysis of variance

needs to be modified. The Welch test and the Brown-Forsythe test, for example, can

be used to tackle the so-called Behrens-Fischer problem, i.e. testing two or more

means with heterogeneous variances. The results for the Welch test for the three

affected variables in question one are provided in the table below (Exhibit 59). Differ-

ences to the ANOVA include an asymptotical F distribution of the value of the testing

variable and the significance and a lower number of degrees of freedoms. As p < α,

i.e. ,000 < ,05, the null hypothesis that the means are equal can be rejected.



Exhibit 59 - Robust tests of equality of means for question one

As can be seen from the results, the ANOVA and the Welch test provided the

same results for question one.

(c) Phase three: "Interpreting post hoc test results"

In the next phase, it is now to use a post hoc test to ascertain whether significant

differences between the groups of national origin and gender can be observed. There

a several possible tests with slightly different characteristics (Kremelberg 2011: 160).

The LSD post hoc test, for example, reports the "least significant difference" (LSD)

and is based on T-tests between the means of the groups, which makes the test less

conservative136 than other tests applicable for an equal variances assumption (Bro-

sius 2006: 506). Within the category of tests with equal variances not assumed, the

Games-Howell test can be considered robust and is thus broadly applied in practice

(Eckstein 2006: 134). In the table below (Exhibit 60), either the LSD or the Games-

Howell test is applied based on the results of the earlier conducted Levene test.

Multiple Comparisons

Dependent Variable (I) Groups

(J) Groups

Mean Differ-ence (I-J) Std. Error Sig.

95% Confidence Interval

Lower Bound Upper Bound

Three sectors LSD AGS F AGS M ,024 ,081 ,766 -,13 ,18

USA F -,311* ,102 ,002 -,51 -,11

USA M -,353* ,104 ,001 -,56 -,15

AGS M AGS F -,024 ,081 ,766 -,18 ,13

USA F -,335* ,108 ,002 -,55 -,12

USA M -,377* ,110 ,001 -,59 -,16

USA F AGS F ,311* ,102 ,002 ,11 ,51

AGS M ,335* ,108 ,002 ,12 ,55

USA M -,042 ,127 ,742 -,29 ,21

USA M AGS F ,353* ,104 ,001 ,15 ,56

AGS M ,377* ,110 ,001 ,16 ,59

USA F ,042 ,127 ,742 -,21 ,29

Role of businesses Games-Howell AGS F AGS M -,272* ,100 ,035 -,53 -,01

USA F -,517* ,117 ,000 -,82 -,21

136 Janssen and Laatz (2010: 358) point to the fact that the LSD does not consider the number of

group comparisons. That results in an increasing probability of error depending on the number of groups.



USA M -,591* ,122 ,000 -,91 -,27

AGS M AGS F ,272* ,100 ,035 ,01 ,53

USA F -,245 ,136 ,279 -,60 ,11

USA M -,319 ,141 ,111 -,69 ,05

USA F AGS F ,517* ,117 ,000 ,21 ,82

AGS M ,245 ,136 ,279 -,11 ,60

USA M -,075 ,153 ,962 -,47 ,32

USA M AGS F ,591* ,122 ,000 ,27 ,91

AGS M ,319 ,141 ,111 -,05 ,69

USA F ,075 ,153 ,962 -,32 ,47

Shareholder LSD AGS F AGS M ,499* ,110 ,000 ,28 ,71

USA F ,741* ,139 ,000 ,47 1,01

USA M 1,037* ,142 ,000 ,76 1,32

AGS M AGS F -,499* ,110 ,000 -,71 -,28

USA F ,242 ,148 ,103 -,05 ,53

USA M ,538* ,151 ,000 ,24 ,83

USA F AGS F -,741* ,139 ,000 -1,01 -,47

AGS M -,242 ,148 ,103 -,53 ,05

USA M ,296 ,173 ,088 -,04 ,64

USA M AGS F -1,037* ,142 ,000 -1,32 -,76

AGS M -,538* ,151 ,000 -,83 -,24

USA F -,296 ,173 ,088 -,64 ,04

Stakeholder Games-Howell AGS F AGS M -,098 ,084 ,652 -,32 ,12

USA F -1,039* ,131 ,000 -1,38 -,70

USA M -,844* ,121 ,000 -1,16 -,53

AGS M AGS F ,098 ,084 ,652 -,12 ,32

USA F -,942* ,140 ,000 -1,31 -,58

USA M -,746* ,130 ,000 -1,08 -,41

USA F AGS F 1,039* ,131 ,000 ,70 1,38

AGS M ,942* ,140 ,000 ,58 1,31

USA M ,195 ,164 ,634 -,23 ,62

USA M AGS F ,844* ,121 ,000 ,53 1,16

AGS M ,746* ,130 ,000 ,41 1,08

USA F -,195 ,164 ,634 -,62 ,23

Business sustainability Games-Howell AGS F AGS M -,298* ,088 ,004 -,52 -,07

USA F -,442* ,100 ,000 -,70 -,18

USA M -,476* ,099 ,000 -,73 -,22

AGS M AGS F ,298* ,088 ,004 ,07 ,52

USA F -,144 ,120 ,628 -,46 ,17

USA M -,178 ,119 ,438 -,49 ,13

USA F AGS F ,442* ,100 ,000 ,18 ,70

AGS M ,144 ,120 ,628 -,17 ,46

USA M -,034 ,128 ,993 -,37 ,30

USA M AGS F ,476* ,099 ,000 ,22 ,73

AGS M ,178 ,119 ,438 -,13 ,49

USA F ,034 ,128 ,993 -,30 ,37

*. The mean difference is significant at the 0.05 level.

Exhibit 60 - Post hoc tests for question one

Finally, the results for each aspect are discussed. For easier comparison, the fig-

ure below (Exhibit 61) illustrates the means for the four groups relative to each other

in the order AGS F, AGS M, USA F and USA M.



(1) "Three sectors" (2) "Role of businesses"

(3) "Shareholder" (4) "Stakeholder"

(5) "Business sustainability"

Exhibit 61 - Illustration of means for question one

(1) Concerning the statement "The government, private and civil sectors,

should work together to meet today's global challenges" significant differences

in the level of agreement exist between AGS F and USA F, AGS F and USA M,

AGS M and USA F, AGS M and USA M. Although all means range between



"strongly agree" ("1") and "agree" ("2), Europeans express even a slightly more

positive attitude towards the cooperation of the three sectors.

(2) "Businesses should play a more active role in tackling the ecological and

societal problems of the world, well beyond complying with legal standards" is

generally confirmed with means ranging between 1.54 (AGS F) and 2.13 (USA

M). Thus women from AGS expect more involvement of businesses than men

from the USA. Significant differences on the role of businesses are identified

between AGS F and AGS M, AGS F and USA F, and AGS F and USA M.

(3) With regard to shareholder orientation, i.e. "The corporation's first and

foremost mission is to promote the interests of its stockholders", the levels of

agreement are marginally positive, with AGS F being the exception. Significant

differences were discovered between the groups AGS F and AGS M, AGS F

and USA F, AGS F and USA M, and AGS M and USA M. The strongest

contrast in opinion exists between AGS F (mean of 3.31), who are rather

against, and USA M (mean of 2.27), who are in favor.

(4) The opinion on stakeholders in AGS and USA is generally the reverse to

that expressed on shareholders in the previous statement. There are significant

differences regarding "All stakeholders, including owners, employees,

suppliers, and customers should receive a fair share of the value-added

created by the business" between AGS F and USA F, AGS F and USA M, AGS

M and USA F, and AGS M and USA M. It seems that Europeans (mean of

AGS F is 1.54 and of AGS M is 1.64) have a more positive attitude towards

stakeholders than Americans (means of 2.58, AGS F, and 2.39, AGS M).

(5) "Businesses should aim at balancing economic, ecological and social

obligations in a responsible manner for all stakeholders" yielded mean levels of

agreement between 1.41 (AGS F) and USA M (1.89). Differences with regard

to business sustainability were only significant between AGS F and all three

other groups.

Overall, the data suggest that the attitude to sustainability is more favorable

among Europeans than Americans and, within the geographic origin groups, more

favorable among women than men.

(2) Question 2 - Awareness of terms related to corporate responsibilities

In the second question, survey participants were asked to tick all terms related to



responsible business conduct that they knew the meaning of. The choices available

included "sustainable development", "business ethics", "corporate social responsibili-

ty", "corporate citizenship", "environmental sustainability", "corporate responsibility",

and "corporate sustainability".

Responses are given in the table below (Exhibit 62). In the column "Responses

N", the total number of people who indicated knowing the term "Sustainable devel-

opment" is given. It is followed by the respective percentage ("Percent of cases") re-

ferring to all responses per question, which is 518, and indicates the degree of

awareness of the term. In the last column, a ranking was added based on this per-

centage.

Code Label Responses N ("Yes")

Percent of cases

Rank

S1-Q02-O01 Sustainable development 341 65.8% 5

S1-Q02-O02 Business ethics 439 84.7% 2

S1-Q02-O03 Corporate social responsibility 456 88.0% 1

S1-Q02-O04 Corporate citizenship 193 37.3% 7

S1-Q02-O05 Environmental sustainability 387 74.7% 4

S1-Q02-O06 Corporate responsibility 411 79.3% 3

S1-Q02-O07 Corporate sustainability 267 51.5% 6

Exhibit 62 - Responses for survey question two

The responses show that the term "corporate social responsibility" is best known

with an awareness of 88.0 percent. Right behind are "business ethics" with 84.7 per-

cent and "corporate responsibility" with 79.3 percent. Nearly three quarters of res-

pondents know the terms "environmental sustainability" (74.7 percent) and almost

two thirds know "sustainable development" (65.8 percent). It is surprising that just

one in two students has heard of "corporate sustainability" (51.5 percent). "Corporate

citizenship" is at the very bottom of all the terms with only 37.7 percent.

Overall, it needs to be highlighted that the term that specifically refers to responsi-

bility in the social field is the best known ("corporate social responsibility") and the

most general term ("corporate responsibility") is only average. Although "corporate

sustainability" is the umbrella expression, it is comparatively low in peoples' aware-

ness.

7.3.3 Section II - Purchasing from sustainable companies

The second section of the questionnaire is dedicated to investigating purchasing

behavior from sustainable companies. For this purpose, it is tested whether an exist-

ing model can be applied directly from literature.



Questions 3 to 11 - Questions determined by the (E)MGB

In questions three to eleven, respondents reported on various aspects of sustai-

nability and purchasing behavior. Further information can be found in the table below

(Exhibit 62). Phrasing and format of the questions were adapted directly from the re-

levant literature in Richetin et al. 2008 and Perugini and Bagozzi 2001. Answer op-

tions included five item scales in all cases, with differences only in labeling. Details

can be found in the questionnaire in the appendix (Appendix 18).

Code Label Questions and statements (without answer options)

S2-Q03-O01 to 06 Attitude Purchasing from sustainable companies is... beneficial, wise, pleasing, useless, unattractive, exploitation [independent items].

S2-Q04-O01 to 05 Positive anticipated emotions

When I purchase from sustainable companies, I feel... good, responsible, self-assured, relieved, satisfied [independent items].

S2-Q05-O01 to 05 Negative anticipated emotions

When I purchase from unsustainable companies, I feel... uncomfortable, regret-ful, guilty, frustrated, worried [independent items].

S2-Q06-O01 to 02 Goal desire Think about your personal reasons for purchasing from sustainable companies [...], then insert your personal reason in the blank space when you answer the following questions: I desire to ...? and How strong is your desire to...? [inde-pendent items].

S2-Q07-O01 to 02 Subjective norms Think about the influence of people who are important to you, then respond to the following questions: -) People who are important to me think I should pur-chase from sustainable companies. -) People who are important to me would approve of my purchasing from sustainable companies. [independent items].

S2-Q08-O01 to 02 Behavioral control Think about the ease/difficulty of purchasing sustainable products, then respond to the following questions: -) How much control do you have over purchasing from sustainable companies? -) For me, purchasing from sustainable compa-nies is... [independent items].

S2-Q09-O01 to 02 Behavioral desire Think about your overall desire to purchase sustainable products, then respond to the following statements. -) Overall, I desire to purchase from sustainable companies. -) How strong is your desire to purchase from sustainable compa-nies? [independent items].

S2-Q10-O01 to 02 Intention Think about your intention to purchase from sustainable companies, then an-swer the following questions: -) I intend to purchase from sustainable compa-nies. -) How strong is your intention to purchase from sustainable companies? [independent items]

S2-Q11-O01 to 04 Self-reported beha-vior

Please report on your past behavior and future intention in purchasing from sustainable companies: -) How often have you purchased from sustainable companies in the past year? -) How often have you purchased from sustainable companies in the past four weeks? -) Currently, I purchase from sustainable companies. -) How likely are you to purchase from sustainable companies in the next four weeks? [independent items].

Exhibit 63 - Phrasing of survey questions three to eleven

The researcher is primarily interested in whether a model that was successfully

used for investigating ecological behavior by Carrus, Passafaro and Bonnes (2008)

can be adapted to sustainable purchasing behavior. Consequently the full range of

structural equation modeling (SEM) will not be capitalized in the form described, for

instance, by Bagozzi (1996b: 317). He sees SEM as a "methodology in its broadest

sense in that its successful execution requires forming concepts and hypotheses,

making observations and measurements, performing experiments, building models

and theories, providing explanations, and making predictions". Furthermore, the



common procedure of developing, analyzing and modifying a model in SEM is inten-

tionally not followed. Backhaus et al. (2006: 357), for example, differentiate six phas-

es in such causal analysis: (1) Building hypotheses, (2) Path diagram and model

specification, (3) Identification of model structure, (4) Estimation of parameters, (5)

Assessment of estimation results, and (6) Modification of model structure.

In the following, the researcher first briefly describes the applied model and then

assesses model fit.

(a) Model description

The model analyzed is depicted in the figure below (Exhibit 64). The total number

of variables is 70, which can be split into 30 observed and 40 unobserved variables

or 39 exogenous and 31 endogenous variables. The sample size is 518 subjects.

With 495 distinct sample moments and 101 distinct parameters to be estimated, the

number of degrees of freedom is 394. Regression weights and variances are omitted

here, but were provided in the AMOS output.

Exhibit 64 - (E)MGB for purchasing from sustainable companies in AMOS



(b) Model fit

According to Shook et al. (2004: 400-401), the assessment of model fit, i.e. how

well the model appears to represent reality, is "one of SEM's most controversial as-

pects". Because of limitations in the comparability of models, it is common to use fit

indices. These evaluate the model to be tested against baseline models. Acceptable

fit levels are determined based on rules of thumb rather than significance tests. As

for the latter, the underlying sampling distributions of the indices are unknown.

Among the several measures of model fit, Kremelberg (2011: 395-397) uses six

indicators, which are provided in the table below (Exhibit 65). First and second, the

significance level of the chi-square values (P) and the ratio of chi-square divided by

its degrees of freedom (chi-square/df ratio or CMIN/DF) are considered. The former

is .000, which is good as is preferred for the chi-square value not to be significant in

SEM, although it is generally significant with larger samples. The latter, the CMIN/DF,

is 7.16. Depending on the degree of conservatism, a value of 2, 3 or 5 is the upper

limit for good model fit, which is exceeded by the model at hand. The next two indica-

tors, the NFI (i.e. normed fit index) Delta1 and CFI (i.e. comparative fit index) in the

category "Baseline comparisons", have values of .712 and .741. While ranging be-

tween 0 and 1, only models with scores of .9 or higher are declared to have accepta-

ble model fit. One of the "most popular" indices is the RMSEA (i.e. root mean square

error of approximation), which indicates good model fit with a value of .05 or less,

acceptable fit between .05 and .08, and marginal fit between .08 and .10. The model

at hand scores .109 and thus has only poor fit. Finally, the Hoelter's critical N states

"the sample size at which the significance level of the chi-square value crosses the

.05 or .01 level. Aiming for acceptable model fit, the value should be 200 or greater.

This is not the case for the model tested with a value of 81 and 85 respectively. Giv-

en that, indicators have consistently shown poor fit of the model.

CMIN NPAR CMIN DF P CMIN/DF

Default model 101 2821.465 394 .000 7.161

Saturated model 495 .000 0

Independence model 60 9803.043 435 .000 22.536

Baseline Comparisons NFI Delta1 RFI rho1 IFI Delta2 TLI rho2 CFI

Default model .712 .682 .742 .714 .741

Saturated model 1.000 1.000 1.000

Independence model .000 .000 .000 .000 .000

RMSEA RMSEA LO 90 HI 90 PCLOSE



CMIN NPAR CMIN DF P CMIN/DF

Default model .109 .105 .113 .000

Independence model .204 .201 .208 .000

HOELTER HOELTER .05 HOELTER .01

Default model 81 85

Independence model 26 27

Exhibit 65 - Indicators of model fit for (E)MGB

Overall, it is concluded that the model cannot be directly applied to investigate

sustainable purchasing behavior. Adaptations are necessary to improve model fit and

provide better results137.

7.3.4 Section III - Consumer role in sustainability

The third section takes a closer look at the consumers' role in sustainability. After

inquiring about consumers' attitude about the overall impact of their behavior, the

degree of activism to promote sustainable aspects in daily life is investigated. Finally,

consumers are asked to evaluate their behavior themselves.

(1) Question 12 - Attitude on consumers' impact

In this question, respondents needed to indicate their level of agree-

ment/disagreement with several statements on a five-item scale ranging from

"strongly agree" (1) to "strongly disagree"(5). The statements are given in the follow-

ing table:


S3-Q12-O01 Consumption choice Companies are dependent on individual consumer's consumption choices.

S3-Q12-O02 Economic vote As a consumer, my purchasing decision is my personal economic vote.

S3-Q12-O03 Purchasing behavior With my purchasing behavior, I can directly support those corporations that do business in an environmentally and socially responsible manner.

S3-Q12-O04 Consumer power Consumers have the power to change business conduct.

Exhibit 66 - Phrasing of survey question twelve

Similar to question one, the researcher is interested in differences in the res-

ponses between women from AGS, men from AGS, women from the USA, and men

from the USA. Therefore, the one-way analysis of variance is applied following the

same procedure presented in detail earlier138.

(a) Testing ANOVA assumptions and descriptives

Again, the assumptions of the ANOVA need to be met. First, both the dependent

137 One approach is to use modification indices, which are available in AMOS. They allow evalua-

tion of several modifications in a single analysis (Arbuckle 2009: 101-128). 138 The following analysis is kept short to avoid repetition with regard to question one.



and independent variables are of the appropriate scale level, which is the same as in

question one. Second, scores in the sample have been achieved independently.

Third, the significance value of ,000 for the Kolmogorov-Smirnov and the Shapiro-

Wilk tests, which are given in the appendix (Appendix 19), in all groups lead to the

rejection of the null hypothesis of normal distribution. However, as noted earlier, the

ANOVA is robust to violations of this assumption. Fourth, homogeneity of variances

is tested by the Levene test (Exhibit 67). Significance levels suggest that equal va-

riances can be assumed only for "Economic Purchasing Vote", whereas variances

are assumed to be different among the groups in "Consumption Choice Depen-

dence", "Responsibility Supporting Purchasing" and "Change Business Conduct".

Exhibit 67 - Test of homogeneity of variances for question twelve

The data that is analyzed by the ANOVA or the Welch test is presented in the fig-

ure below (Exhibit 68). The means for the all groups per statement are given in the

second column.

Exhibit 68 - Descriptives for question twelve



(b) Interpreting results of variance analysis

Based on the Levene test, the ANOVA results and, in addition, the results of the

Welch test for statements with inhomogeneous variances are provided (Exhibit 69

and Exhibit 70). With p < α of 0.05, the null hypothesis of equal means can be re-

jected for "Economic vote" and "Purchasing behavior". This is reported by both tests.

Exhibit 69 - ANOVA for question twelve

Exhibit 70 - Robust tests of equality of means for question twelve

(c) Interpreting post hoc test results

To determine where there are significant differences between the means of the

groups, post hoc tests were conducted. As equal variances can be assumed for

"Economic vote", the LSD test was applied. By contrast, the Games-Howell test was

used for "Purchasing behavior".



(J) Groups




Economic vote LSD AGS F AGS M -,084 ,093 ,367 -,27 ,10

USA F -,498* ,117 ,000 -,73 -,27

USA M -,280* ,120 ,020 -,52 -,04

AGS M AGS F ,084 ,093 ,367 -,10 ,27

USA F -,414* ,125 ,001 -,66 -,17

USA M -,196 ,127 ,125 -,45 ,05

USA F AGS F ,498* ,117 ,000 ,27 ,73

AGS M ,414* ,125 ,001 ,17 ,66



USA M ,218 ,146 ,137 -,07 ,51

USA M AGS F ,280* ,120 ,020 ,04 ,52

AGS M ,196 ,127 ,125 -,05 ,45

USA F -,218 ,146 ,137 -,51 ,07

Purchasing behavior Games-Howell AGS F AGS M ,011 ,094 ,999 -,23 ,25

USA F -,262 ,103 ,056 -,53 ,00

USA M -,343* ,097 ,003 -,60 -,09

AGS M AGS F -,011 ,094 ,999 -,25 ,23

USA F -,273 ,115 ,087 -,57 ,03

USA M -,353* ,110 ,009 -,64 -,07

USA F AGS F ,262 ,103 ,056 ,00 ,53

AGS M ,273 ,115 ,087 -,03 ,57

USA M -,080 ,118 ,904 -,39 ,23

USA M AGS F ,343* ,097 ,003 ,09 ,60

AGS M ,353* ,110 ,009 ,07 ,64

USA F ,080 ,118 ,904 -,23 ,39


Exhibit 71 - Post hoc tests for question twelve

The results of the above tests (Exhibit 71) are now discussed. Again, an illustration

(Exhibit 72) of the mean values for the four groups AGS F, AGS M, USA F and USA

M is provided. Where the differences were not significant, the respective field is in-

tentionally left "n.a.".

(2) "Economic vote" (3) "Purchasing behavior"

Exhibit 72 - Illustration of means for question twelve

(1) Regarding "Companies are dependent on individual consumer's

consumption choices", the different means are not significant between the

groups. They range between 2.05 (USA F) and 2.16 (AGS M), with an average

of 2.13. In general, it can be noted that respondents slightly agree with the

statement.

(2) Perceptions on one's economic vote are significantly different between AGS

F and USA F, AGS F and USA M, and AGS M and USA F. Most agreement

with the statement "As a consumer, my purchasing decision is my personal



economic vote" comes from AGS F with a mean of 1.69. Women from the

USA, by contrast, are more sceptical towards their influence as expressed in a

mean of 2.19.

(3) The statement "With my purchasing behavior, I can directly support those

corporations that do business in an environmentally and socially responsible

manner" provoked significantly different levels of agreement between AGS F

and USA M, and AGS M and USA M. With means of 1.64 and 1.63 as

compared to 1.91 and 1.99, people from AGS are slightly more optimistic

regarding the impact of their purchasing.

(4) Differences in the responses to "Consumers have the power to change

business conduct" are not significant. Means range between 2.00 (USA F) and

2.31 (AGS F) with an average of 2.23. Thus there is a certain agreement of

consumer empowerment in the market place irrespective of origin or gender.

In general, respondents agree that they influence companies through their pur-

chasing behavior. If any, there are only slight differences between the groups.

(3) Question 13 - Personal involvement in promoting sustainability

This question investigated the degree of activism that consumers show in promot-

ing sustainability in their personal lives. Respondents had to indicate the frequency of

past behavior by choosing the appropriate frequencies item from "always" (1), "often"

(2), "regularly" (3), "sometimes" (4) and "never" (5). Statements covered six different

forms of involvement and were formulated as follows (Exhibit 73):


S3-Q13-O01 Positive buying I have favored sustainable products over other products of comparable quality.

S3-Q13-O02 Boycotting I have boycotted unsustainable products.

S3-Q13-O03 Word of mouth I have influenced my family and friends purchasing decisions for environ-mental and/or social reasons.

S3-Q13-O04 Supporting NGOs I have supported non-governmental organizations (NGO) that pressure companies to pursue environmental and/or social goals.

S3-Q13-O05 Contacting companies I have contacted a company directly because of environmental and/or social reasons.

S3-Q13-O06 Contacting government I have contacted governmental or public service agencies to report environ-mental and/or social issues with companies and/or companies’ products.

Exhibit 73 - Phrasing of survey question thirteen

With regard to analysis, the researcher is again interested in differences between

the groups. ANOVA or the modification in the form of the Welch test were applied.




First, the variables are of the appropriate level, i.e. the independent variable is at

least interval scale and the factor allows classification because of nominal scale.

Second, independence in the sample can also be assumed. Third, the test of test of

normality (Appendix 19) leads to the rejection of the hypothesis of normal distribution,

which is again ignored. Fourth, the Levene test (Exhibit 74) provides the following

results: With significance levels above 0.05, homogeneity of variances can be as-

sumed for "Positive buying" (0.113), "Word of mouth" (0.483) and "Supporting NGOs"

(0.441). For "Boycotting" (0.000), "Contacting companies" (0.039) and "Contacting

government" (0.000) equal variances are not assumed.

Exhibit 74 - Test of homogeneity of variances for question thirteen

An overview on the data to be analyzed is given in the figure below (Exhibit 75).

The mean values can be found in the second column.

Exhibit 75 - Descriptives for question thirteen




Based on the Levene test, the Welch test was done in addition to the ANOVA for

those items where equal variances cannot be assumed. Results are however similar

as can be seen in the figures below (Exhibit 76 and Exhibit 77).

Exhibit 76 - ANOVA for question thirteen

Exhibit 77 - Robust tests of equality of means for question thirteen

With p < α, "Positive buying", "Boycotting" and "Word of mouth" are further ana-

lyzed with post hoc tests. For all other items, differences between the groups are not

significant.


The LSD test is used for "Positive buying" and "Word of mouth", but the Games-

Howell test for "Boycotting". Results are given below (Exhibit 78).



(J) Groups




Positive Buying LSD AGS F AGS M -,264* ,108 ,015 -,48 -,05

USA F -,115 ,137 ,401 -,38 ,15

USA M -,405* ,140 ,004 -,68 -,13

AGS M AGS F ,264* ,108 ,015 ,05 ,48

USA F ,148 ,146 ,309 -,14 ,44



USA M -,141 ,149 ,342 -,43 ,15

USA F AGS F ,115 ,137 ,401 -,15 ,38

AGS M -,148 ,146 ,309 -,44 ,14

USA M -,290 ,171 ,090 -,63 ,05

USA M AGS F ,405* ,140 ,004 ,13 ,68

AGS M ,141 ,149 ,342 -,15 ,43

USA F ,290 ,171 ,090 -,05 ,63

Boycotting Games-Howell AGS F AGS M ,011 ,129 1,000 -,32 ,34

USA F -,831* ,130 ,000 -1,17 -,49

USA M -,926* ,130 ,000 -1,26 -,59

AGS M AGS F -,011 ,129 1,000 -,34 ,32

USA F -,843* ,149 ,000 -1,23 -,46

USA M -,937* ,149 ,000 -1,32 -,55

USA F AGS F ,831* ,130 ,000 ,49 1,17

AGS M ,843* ,149 ,000 ,46 1,23

USA M -,094 ,151 ,924 -,49 ,30

USA M AGS F ,926* ,130 ,000 ,59 1,26

AGS M ,937* ,149 ,000 ,55 1,32

USA F ,094 ,151 ,924 -,30 ,49

Word of mouth LSD AGS F AGS M -,174 ,118 ,138 -,41 ,06

USA F -,281 ,149 ,059 -,57 ,01

USA M -,630* ,152 ,000 -,93 -,33

AGS M AGS F ,174 ,118 ,138 -,06 ,41

USA F -,106 ,158 ,501 -,42 ,20

USA M -,455* ,161 ,005 -,77 -,14

USA F AGS F ,281 ,149 ,059 -,01 ,57

AGS M ,106 ,158 ,501 -,20 ,42

USA M -,349 ,185 ,060 -,71 ,02

USA M AGS F ,630* ,152 ,000 ,33 ,93

AGS M ,455* ,161 ,005 ,14 ,77

USA F ,349 ,185 ,060 -,02 ,71


Exhibit 78 - Post hoc tests for question thirteen

Differences in the means in the groups AGS F, AGS M, USA F and USA M are

again illustrated (Exhibit 79) if they were significant.

(1) "Positive buying" (2) "Boycotting"



(3) "Word of mouth"

Exhibit 79 - Illustration of means for question thirteen

(1) Regarding "I have favored sustainable products over other products of

comparable quality", respondents generally indicate to "regularly" show such

behavior. Significant differences exist between AGS F and AGS M, and AGS F

and USA M. Generally, women are more inclined towards positive buying.

(2) Boycotting unsustainable products seems to be more slightly more popular

in AGS than in the USA as the mean values indicate AGS F (3.32), AGS M

(3.31), USA F (4.15) and USA M (4.24). The former tend to "regularly" get

involved in this way, whereas the latter only "sometimes". Significant

differences exist between AGS F and both USA F and USA M, and AGS M

also between USA F and USA M.

(3) Concerning "I have influenced my family's and friends' purchasing decisions

for environmental and/or social reasons", significant differences exist between

AGS F and USA M, and AGS M and USA M. With a mean of 3.07, women from

AGS say they "regularly" stimulate by word of mouth, whereas men from the

USA only "sometimes" (mean of 3.70).

(4-6) No differences in the groups were significant for consumer activism with

regard to supporting non-governmental organizations, contacting companies or

contacting government for environmental and/or social reasons. As the

average mean values indicate, involvement in these forms occurs "sometimes"

the most but frequently "never".

Overall, positive buying, boycotting and word of mouth seem to be the most popu-

lar forms of consumer activism, ranging between "regularly" (2) and "sometimes" (3).

Broadly speaking, women and people from AGS report higher involvement. Direct



contact with NGOs, companies or governmental bodies is apparently less attractive.

(3) Question 14 - Self-assessment as responsible consumer

In the last question of this section, respondents had to indicate the extent to which

they see themselves as responsible consumers. The scale ranged from "very re-

sponsible consumer" (1) to "very irresponsible consumer" (5).

As the researcher is interested in differences between groups, ANOVA is applied if

the assumptions are met.


The first and second assumption of the ANOVA are fulfilled, as scale levels and

sampling were the same as, for example, in question one. Third, normality cannot be

assumed (Appendix 19), which is nevertheless ignored. Fourth, the Levene test

(Exhibit 80) reveals that variances are not significantly different.

Exhibit 80 - Test of homogeneity of variances for question fourteen

The means for all groups are displayed below in the column "mean" (Exhibit 81).

Exhibit 81 - Descriptives for question fourteen


As all assumptions have been fulfilled, the ANOVA is applied (Exhibit 82). As

0.364 > 0.05 (p > α), the null hypothesis of equal means cannot be rejected.

Exhibit 82 - ANOVA for question fourteen




As a result, it can be concluded that no significant differences exist between the

groups and post hoc tests need not be conducted. An average mean of 2.77, which

is rather close to the center of the scale, indicates that people only marginally perce-

ive themselves as being more responsible than average.

7.3.5 Section IV - Importance of product communication in food and beverages

Section four deals with sustainability issues in product and corporate communica-

tion. First, consumers are asked to express the relevance of several sustainability

attributes in their purchasing decisions. Then, the perception of company disclosure

is evaluated. Furthermore, preferred sources and formats for information about envi-

ronmental and social performance are identified. Finally, preference of concrete in-

formation elements in on-product communication are determined and clustered ac-

cording to importance.

(1) Question 15 - Attributes in product purchasing decision

In this question, respondents indicated the importance of several attributes in their

decision to purchase food and beverage products or brands on a scale from "highly

important" (1) to "not at all important" (5). The objects included sustainable "Ingre-

dients", sustainability of "Product benefits", resource intensiveness of "Production",

distance from production source or "Transportation", sustainable "Packaging", and

sustainability of the "Producer".

Again the question is whether there are differences between the responses of the

four groups AGS F, AGS M, USA F and USA M. Therefore the assumptions of the

ANOVA are tested.


First, variables have the required scale levels, interval for the independent variable

and nominal for the factor. Second, sampling was done independently. Third, there is

no normal distribution (Appendix 19), but this is ignored because of the robustness of

the analysis. Fourth, equal variances can only be assumed for "Product benefits",

whereas variances are significantly different in all others (Exhibit 83).



Exhibit 83 - Test of homogeneity of variances for question fifteen

Descriptive statistics are presented in the figure below (Exhibit 84). The values in

the column "mean" are used in the following analysis.

Exhibit 84 - Descriptives for question fifteen


The one-way analysis of variance (ANOVA) and the Welch test as a modification

for items without equal variances were applied (Exhibit 85 and Exhibit 86). Despite

different values, both indicate that differences between groups are significant for "In-

gredients", "Production", "Transportation", "Packaging" and "Producer" at the α =

0.05 level. Therefore post hoc tests were applied to identify which groups differ signif-

icantly from each other.



Exhibit 85 - ANOVA for question fifteen

Exhibit 86 - Robust tests of equality of means for question fifteen


As the Levene test indicated that equal variances cannot be assumed, the Games-

Howell post hoc test was chosen for all items with significant differences (Exhibit 87).



(J) Groups




Ingredients Games-Howell AGS F AGS M -,428* ,106 ,000 -,70 -,15

USA F -,719* ,123 ,000 -1,04 -,40

USA M -1,190* ,129 ,000 -1,53 -,85

AGS M AGS F ,428* ,106 ,000 ,15 ,70

USA F -,291 ,146 ,193 -,67 ,09

USA M -,762* ,151 ,000 -1,15 -,37

USA F AGS F ,719* ,123 ,000 ,40 1,04

AGS M ,291 ,146 ,193 -,09 ,67

USA M -,471* ,163 ,023 -,90 -,05

USA M AGS F 1,190* ,129 ,000 ,85 1,53



AGS M ,762* ,151 ,000 ,37 1,15

USA F ,471* ,163 ,023 ,05 ,90

Production Games-Howell AGS F AGS M -,120 ,122 ,756 -,43 ,19

USA F -,070 ,132 ,952 -,41 ,27

USA M -,463* ,134 ,004 -,81 -,11

AGS M AGS F ,120 ,122 ,756 -,19 ,43

USA F ,050 ,149 ,987 -,34 ,44

USA M -,343 ,150 ,107 -,73 ,05

USA F AGS F ,070 ,132 ,952 -,27 ,41

AGS M -,050 ,149 ,987 -,44 ,34

USA M -,393 ,159 ,070 -,81 ,02

USA M AGS F ,463* ,134 ,004 ,11 ,81

AGS M ,343 ,150 ,107 -,05 ,73

USA F ,393 ,159 ,070 -,02 ,81

Transportation Games-Howell AGS F AGS M -,494* ,117 ,000 -,80 -,19

USA F -,870* ,142 ,000 -1,24 -,50

USA M -1,282* ,151 ,000 -1,68 -,89

AGS M AGS F ,494* ,117 ,000 ,19 ,80

USA F -,376 ,159 ,089 -,79 ,04

USA M -,788* ,167 ,000 -1,22 -,35

USA F AGS F ,870* ,142 ,000 ,50 1,24

AGS M ,376 ,159 ,089 -,04 ,79

USA M -,412 ,185 ,122 -,89 ,07

USA M AGS F 1,282* ,151 ,000 ,89 1,68

AGS M ,788* ,167 ,000 ,35 1,22

USA F ,412 ,185 ,122 -,07 ,89

Packaging Games-Howell AGS F AGS M -,279 ,118 ,088 -,59 ,03

USA F -,425* ,151 ,029 -,82 -,03

USA M -,712* ,142 ,000 -1,08 -,34

AGS M AGS F ,279 ,118 ,088 -,03 ,59

USA F -,146 ,167 ,816 -,58 ,29

USA M -,433* ,158 ,035 -,84 -,02

USA F AGS F ,425* ,151 ,029 ,03 ,82

AGS M ,146 ,167 ,816 -,29 ,58

USA M -,286 ,184 ,406 -,76 ,19

USA M AGS F ,712* ,142 ,000 ,34 1,08

AGS M ,433* ,158 ,035 ,02 ,84

USA F ,286 ,184 ,406 -,19 ,76

Producer Games-Howell AGS F AGS M -,252 ,109 ,100 -,53 ,03

USA F -,160 ,145 ,688 -,54 ,22

USA M -,473* ,126 ,002 -,80 -,14

AGS M AGS F ,252 ,109 ,100 -,03 ,53

USA F ,092 ,159 ,938 -,32 ,50

USA M -,221 ,141 ,402 -,59 ,15

USA F AGS F ,160 ,145 ,688 -,22 ,54

AGS M -,092 ,159 ,938 -,50 ,32

USA M -,313 ,171 ,262 -,76 ,13

USA M AGS F ,473* ,126 ,002 ,14 ,80

AGS M ,221 ,141 ,402 -,15 ,59

USA F ,313 ,171 ,262 -,13 ,76


Exhibit 87 - Post hoc tests for question fifteen



The results are discussed with mean values illustrated for each applicable item

(Exhibit 88) in the group order AGS F, AGS M, USA F and USA M.

(1) "Ingredients" (3) "Production"

(4) "Transportation" (5) "Packaging"

(6) "Producer"

Exhibit 88 - Illustration of means for question fifteen

(1) With regard to sustainability of ingredients, for example environmental and

social sourcing, differences are significant between AGS F and AGS M, AGS F



and USA F, AGS F and USA M, and AGS M and USA M. Respondents from

AGS consider this aspect between "highly important" and "important" (mean of

1.52 for AGS F and mean of 1.95 for AGS M), whereas those from the USA

see it of slightly lower importance (USA F: 2.24, USA M: 2.71). The strongest

contrast is between AGS F and USA M.

(2) There are no significant differences between groups with regard to

sustainability of product benefits, for example, provision of nutritional value or

inclusion of dietary supplements. With an average mean of 2.19, respondents

consider this aspect rather important.

(3) Considering sustainability of production, i.e. resource intensiveness of the

production process, the difference of the mean values is only significant

between the two extreme groups, AGS F and USA M. Despite USA M, the

means of all groups are close within 2.31 (AGS F) and 2.43 (AGS M).

(4) In sustainability of transportation or distance from the production source,

the mean values are significantly different between AGS F and AGS M, AGS F

and USA F, AGS F and USA M, and AGS M and USA M. The strongest

differences is between AGS F (1.83), which equals "important", and USA M

(3.11), meaning "neither important nor not important".

(5) Respondents from AGS F and AGS M, AGS F and USA F, AGS F and USA

M, and AGS M and USA M attribute significantly different importance to

sustainability of packaging. With a mean of 2.09, AGS F consider it rather

important and USA M are fairly indifferent (mean of 2.80).

(6) Environmental and social performance of the producer is rated significantly

differently between AGS F and AGS M, and AGS F and USA M. Women from

both regions are slightly more interested than men in the firm's sustainability

when choosing a product.

In total, respondents from AGS consider sustainability in the various dimensions

more important than their counterparts from the USA. This holds equally true if wom-

en are compared to men in both geographies. If the average mean values were

ranked, sustainability of product ingredients would be considered most important

and, surprisingly, sustainability of the producer of least importance.



(2) Question 16 - Companies' information disclosure

In question 16, respondents were asked to indicate their level of agree-

ment/disagreement with statements relating to the provision of sustainability informa-

tion by publicly listed companies in the food and beverages industry. The scale

ranged from "strongly agree" (1) to "strongly disagree" (5). The response objects

were put as indicated in the table below (Exhibit 89).


I think that publicly listed companies of the food & beverages industries...

S4-Q16-O01 Company information ...provide sufficient information on their company’s environmental and social im-pact.

S4-Q16-O02 Product information ...provide sufficient information on their products’ environmental and social impact.

S4-Q16-O03 Truth ...report the truth on their economic, ecological and social performance.

S4-Q16-O04 Positive focus ...focus entirely on reporting the positive aspects of their sustainability perfor-mance.

Exhibit 89 - Phrasing of survey question sixteen

Also in the analysis of this question, the researcher is interested in investigating

differences between the groups. If possible, ANOVA is applied.


The first and second assumptions are fulfilled as the scale format and sampling

method are the same as in the previous questions. The test of normality does not

indicate normal distribution and is provided in the appendix (Appendix 19). As re-

peatedly mentioned, the one way analysis of variance is nevertheless robust enough.

The fourth assumption, homogeneity of variances, is fulfilled for all items. Signific-

ance levels are greater than 0.05 (Exhibit 90).

Exhibit 90 - Test of homogeneity of variances for question sixteen

As a result, ANOVA can be applied. The means of the various groups are dis-

played in the figure below (Exhibit 91).



Exhibit 91 - Descriptives for question sixteen


Results of the ANOVA indicate significant differences in all groups (Exhibit 92).

Therefore, post hoc tests were conducted to determine where.

Exhibit 92 - ANOVA for question sixteen


The Levene test revealed that equal variances can be assumed. Thus the LSD

test is used for all variables (Exhibit 93).



(J) Groups




Company information LSD AGS F AGS M -,017 ,112 ,882 -,24 ,20

USA F ,636* ,142 ,000 ,36 ,92

USA M ,797* ,145 ,000 ,51 1,08

AGS M AGS F ,017 ,112 ,882 -,20 ,24



USA F ,653* ,151 ,000 ,36 ,95

USA M ,814* ,154 ,000 ,51 1,12

USA F AGS F -,636* ,142 ,000 -,92 -,36

AGS M -,653* ,151 ,000 -,95 -,36

USA M ,161 ,177 ,364 -,19 ,51

USA M AGS F -,797* ,145 ,000 -1,08 -,51

AGS M -,814* ,154 ,000 -1,12 -,51

USA F -,161 ,177 ,364 -,51 ,19

Product information LSD AGS F AGS M -,109 ,112 ,331 -,33 ,11

USA F ,558* ,141 ,000 ,28 ,84

USA M ,769* ,144 ,000 ,49 1,05

AGS M AGS F ,109 ,112 ,331 -,11 ,33

USA F ,667* ,150 ,000 ,37 ,96

USA M ,878* ,153 ,000 ,58 1,18

USA F AGS F -,558* ,141 ,000 -,84 -,28

AGS M -,667* ,150 ,000 -,96 -,37

USA M ,211 ,176 ,231 -,13 ,56

USA M AGS F -,769* ,144 ,000 -1,05 -,49

AGS M -,878* ,153 ,000 -1,18 -,58

USA F -,211 ,176 ,231 -,56 ,13

Truth LSD AGS F AGS M -,062 ,117 ,596 -,29 ,17

USA F ,484* ,148 ,001 ,19 ,77

USA M ,770* ,151 ,000 ,47 1,07

AGS M AGS F ,062 ,117 ,596 -,17 ,29

USA F ,546* ,158 ,001 ,24 ,86

USA M ,832* ,161 ,000 ,52 1,15

USA F AGS F -,484* ,148 ,001 -,77 -,19

AGS M -,546* ,158 ,001 -,86 -,24

USA M ,286 ,185 ,122 -,08 ,65

USA M AGS F -,770* ,151 ,000 -1,07 -,47

AGS M -,832* ,161 ,000 -1,15 -,52

USA F -,286 ,185 ,122 -,65 ,08

Positive focus LSD AGS F AGS M -,039 ,102 ,702 -,24 ,16

USA F -,553* ,128 ,000 -,80 -,30

USA M -,680* ,131 ,000 -,94 -,42

AGS M AGS F ,039 ,102 ,702 -,16 ,24

USA F -,514* ,137 ,000 -,78 -,25

USA M -,641* ,139 ,000 -,92 -,37

USA F AGS F ,553* ,128 ,000 ,30 ,80

AGS M ,514* ,137 ,000 ,25 ,78

USA M -,128 ,160 ,425 -,44 ,19

USA M AGS F ,680* ,131 ,000 ,42 ,94

AGS M ,641* ,139 ,000 ,37 ,92

USA F ,128 ,160 ,425 -,19 ,44


Exhibit 93 - Post hoc tests for question sixteen

In the illustration below (Exhibit 94), the mean values of the aspects "Company in-

formation", "Product information", "Truth" and "Positive focus" are given for the four

groups under investigation.



(1) "Company information" (2) "Product information"

(3) "Truth" (4) "Positive focus"

Exhibit 94 - Illustration of means for question sixteen

(1) Regarding the statement "Publicly listed companies in the food & beverages

industry provide sufficient information on their company's environmental and

social impact", significantly different levels of approval exist between AGS F

and USA F, AGS F and USA M, AGS M and USA F, and AGS M and USA M.

Respondents from AGS seem to slightly disagree (mean of 3.57 for AGS F and

3.59 for AGS M), whereas Americans are fairly indifferent (means of 2.93 for

USA F and 2.77 for USA M).

(2) Considering how much information is provided on the products'

environmental and social impacts, the results show a similar picture.

Europeans are dissatisfied, as expressed in disagreement with the statement,

and Americans are neutral on the topic. Differences are significant between

AGS F and USA F, AGS F and USA M, AGS M and USA F, and AGS M and

USA M.

(3) Companies "report the truth on their economic, ecological and social



performance" is most disagreed with by men from AGS (mean of 3.79) and

least by their counterparts from the USA (mean of 2.96). Groups differ

significantly as follows: AGS F and USA F, AGS F and USA M, AGS M and

USA F, and AGS M and USA M.

(4) AGS F (mean of 1.93) and AGS M (mean of 1.97) agree that companies

"focus entirely on reporting the positive aspects of their sustainability

performance". Both groups are significantly different from USA F and USA M,

who are rather indifferent in their opinion.

In total, respondents from AGS are more dissatisfied with the amount of informa-

tion received about companies and their products than those from the USA. In addi-

tion, they seem to be more suspicious towards corporate conduct, as expressed in

their higher level of disagreement on "Truth" and agreement on "Positive focus".

(3) Question 17 - Ranking of information sources

In this question, respondents had to rank entities from "best" (1) to "worst" (5) as

sources of information on sustainable companies or products. Available objects in-

cluded "Non-governmental organizations", "Government / Public agency", "Retailer",

"Producer" and "Media".

Results are given in the table below (Exhibit 95). The columns "1" to "5" provide

the percentage of respondents who positioned the item on a certain rank. Then a

score is calculated by multiplying the ranking value in the ranking order given, i.e.

between one and five, by this percentage. The lower the score, the better the item

was ranked overall. Finally the total ranking is provided.

Code Label "1" "2" "3" "4" "5" Score Rank

S4-Q17-O01 Non-governmental organizations 56.2% 18.0% 7.7% 7.9% 10.2% 2.0 1

S4-Q17-O02 Government / Public agency 14.7% 32.4% 25.7% 14.1% 13.1% 2.8 2

S4-Q17-O03 Retailer 6.8% 15.3% 17.4% 37.3% 23.4% 3.6 4

S4-Q17-O04 Producer 8.5% 10.0% 19.5% 25.9% 36.1% 3.7 5

S4-Q17-O05 Media 13.9% 24.3% 29.7% 14.9% 17.2% 3.0 3

Exhibit 95 - Responses for survey question seventeen

Overall, non-governmental organizations are trusted most as sources of sustaina-

bility information, ahead of government or public agencies and then the media. Enti-

ties of the business sector are less favored: retailers occupy the second to last rank

and producers themselves are placed at the very bottom.

(4) Question 18 - Ranking of companies' information formats

Similar to the previous question, respondents were asked to rank their preferred



format for receiving information on environmental and social impacts of the company

and/or products. Choices included "Corporate reporting" (e.g. annual report, sustai-

nability report), "Online communication" (e.g. homepage, email newsletter, social

network interaction), "Traditional advertising" (e.g. traditional mass media: TV, radio,

print, outdoor), "Product communication" (e.g. on-packaging information, leaflets

packed in products) and "Point-of-sale communication" (e.g. brochures, flyers, au-

dio/video information in store). Again, the ranking was from "best" (1) to "worst" (5).

Results are provided in the same format as for the previous question (Exhibit 96).

Code Label "1" "2" "3" "4" "5" Score Rank

S4-Q18-O01 Corporate reporting 20.1% 15.8% 14.3% 14.7% 35.1% 3.3 4

S4-Q18-O02 Online communication 24.5% 23.4% 22.6% 21.6% 7.9% 2.7 2

S4-Q18-O03 Traditional advertising 13.7% 18.1% 18.7% 20.5% 2.9% 3.4 5

S4-Q18-O04 Product communication 29.3% 25.5% 22.0% 15.6% 7.5% 2.5 1

S4-Q18-O05 Point-of-sale communication 12.4% 17.2% 22.4% 27.6% 20.5% 3.2 3

Exhibit 96 - Responses for survey question eighteen

Overall, product communication is the preferred format for receiving information on

environmental or social corporate impact. Next are online and point-of-sale commu-

nications. Formal corporate reporting is ranked second to last, which leaves tradi-

tional advertising as the least preferred way for being updated on sustainability.

(5) Question 19 - On-product sustainability information

This question aimed at investigating what sustainability-related information con-

sumers would like to receive with the products they purchase, i.e. on the packaging

or on an attached leaflet. A total of eighteen objects needed to be evaluated on a

scale ranging from "definitely yes" (1) to "definitely no" (5). They are provided in the

table below (Exhibit 97).

Code Label "Receive details on..."

S4-Q19-O01 Ingredients all ingredients

S4-Q19-O02 Genetic modifications genetic modifications of ingredients

S4-Q19-O03 Geographic origin geographic origin of the product

S4-Q19-O04 Nutritional value nutritional value in a comprehensive format

S4-Q19-O05 Product impact ecological and/or social impact of the product

S4-Q19-O06 Own consumption how to make my own consumption more sustainable

S4-Q19-O07 Lifestyle ways to pursue a healthier lifestyle

S4-Q19-O08 Sustainability labels independent sustainability labels (e.g. fair-trade)

S4-Q19-O09 Experts' view experts' viewpoint (e.g. commentary, testimonials)

S4-Q19-O10 Sustainability website sources to get additional information (e.g. sustainability website)

S4-Q19-O11 Transportation transportation routes

S4-Q19-O12 Supply chain supply chain (source/producer, intermediaries)



S4-Q19-O13 Recyclability recyclability of the packaging

S4-Q19-O14 Producer producer (company background information)

S4-Q19-O15 Company initiatives company sustainability initiatives (background)

S4-Q19-O16 Company awards company awards in sustainability

S4-Q19-O17 Partnerships NGOs company partnerships with civil society organizations

S4-Q19-O18 Partnerships government company partnerships with government organizations

Exhibit 97 - Phrasing of survey question nineteen

In this question, the researcher is interested in defining categories of sustainability

information that should be provided directly with the product purchased. Important for

classification is the consumers' attitude towards the items. In this respect, factor

analysis seems appropriate. Its basic idea is to determine from of a larger number of

empirically observed variables, which have metric scale level, a reduced number of

new variable constructs, called factors, based on correlations (Eckstein 2006: 307).

Brosius (2006: 767) differentiates four common steps in factor analysis. First, a

correlation matrix is calculated for the variables to get an overview of the data.

Second, factor extraction identifies possibilities for data reduction. Third, rotation

simplifies interpretation of the factors. Finally, values for the factors can be calculated

and the factors saved as new variables. Other sources, such as Janssen and Laatz

(2010: 555), suggest basically the same proceedings in the analysis. They only point

out that step four, calculation of factor values, does not necessarily need to be done

if factors are not used as new variables later on. Further practical advice is given by

Backhaus et al. (2006: 269-324) and Kremelberg (2010: 287-314). Based on these

inputs, factor analysis is conducted for the eighteen variables of question nineteen.

(a) Correlation matrix

At the beginning, descriptive statistics contribute to a first understanding of the data.

The figure below (Exhibit 98) provides a correlation matrix. Several items correlate

strongly with each other such "Own consumption" with "Lifestyle" (0.607), "Transpor-

tation" with "Supply chain" (0.780) and "Partnership NGOs" with "Partnership gov-

ernment" (0.811). These are an early indication of possible connection with the same

background variable (Brosius 2006: 768). Numerous weaker correlations range be-

tween 0.2 and 0.5.



Correlation Matrix

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Correlation 1 1,000 ,436 ,383 ,243 ,240 -,024 -,035 ,283 -,078 ,081 ,124 ,161 ,151 ,051 ,051 ,066 ,066 ,014

2 ,436 1,000 ,421 ,200 ,326 ,061 -,062 ,330 -,062 ,157 ,175 ,207 ,116 ,083 ,125 ,086 ,122 ,114

3 ,383 ,421 1,000 ,241 ,396 ,117 -,036 ,428 -,043 ,120 ,424 ,361 ,252 ,196 ,109 ,108 ,089 ,034

4 ,243 ,200 ,241 1,000 ,255 ,186 ,212 ,155 ,065 ,111 ,014 ,041 ,197 ,090 ,134 ,140 ,100 ,031

5 ,240 ,326 ,396 ,255 1,000 ,389 ,170 ,427 ,204 ,248 ,369 ,412 ,326 ,297 ,411 ,232 ,283 ,259

6 -,024 ,061 ,117 ,186 ,389 1,000 ,607 ,187 ,443 ,269 ,205 ,240 ,225 ,265 ,454 ,279 ,359 ,319

7 -,035 -,062 -,036 ,212 ,170 ,607 1,000 ,132 ,493 ,187 ,008 ,043 ,115 ,157 ,385 ,326 ,306 ,284

8 ,283 ,330 ,428 ,155 ,427 ,187 ,132 1,000 ,168 ,343 ,357 ,371 ,341 ,268 ,255 ,317 ,333 ,250

9 -,078 -,062 -,043 ,065 ,204 ,443 ,493 ,168 1,000 ,361 ,121 ,158 ,159 ,267 ,429 ,367 ,415 ,423

10 ,081 ,157 ,120 ,111 ,248 ,269 ,187 ,343 ,361 1,000 ,254 ,285 ,286 ,184 ,354 ,304 ,329 ,287

11 ,124 ,175 ,424 ,014 ,369 ,205 ,008 ,357 ,121 ,254 1,000 ,780 ,299 ,315 ,260 ,208 ,270 ,211

12 ,161 ,207 ,361 ,041 ,412 ,240 ,043 ,371 ,158 ,285 ,780 1,000 ,343 ,420 ,350 ,277 ,331 ,283

13 ,151 ,116 ,252 ,197 ,326 ,225 ,115 ,341 ,159 ,286 ,299 ,343 1,000 ,331 ,311 ,222 ,226 ,157

14 ,051 ,083 ,196 ,090 ,297 ,265 ,157 ,268 ,267 ,184 ,315 ,420 ,331 1,000 ,516 ,330 ,337 ,363

15 ,051 ,125 ,109 ,134 ,411 ,454 ,385 ,255 ,429 ,354 ,260 ,350 ,311 ,516 1,000 ,600 ,589 ,567

16 ,066 ,086 ,108 ,140 ,232 ,279 ,326 ,317 ,367 ,304 ,208 ,277 ,222 ,330 ,600 1,000 ,640 ,558

17 ,066 ,122 ,089 ,100 ,283 ,359 ,306 ,333 ,415 ,329 ,270 ,331 ,226 ,337 ,589 ,640 1,000 ,811

18 ,014 ,114 ,034 ,031 ,259 ,319 ,284 ,250 ,423 ,287 ,211 ,283 ,157 ,363 ,567 ,558 ,811 1,000

*1=Ingredients, 2=Genetic modifications, 3=Geographic origin, 4=Nutritional value, 5=Product impact, 6=Own consumption,

7=Lifestyle, 8=Sustainability labels, 9=Experts' view, 10=Sustainability website, 11=Transportation, 12=Supply chain,

13=Recyclability, 14=Producer, 15=Company initiatives, 16=Company awards, 17=Partnership NGOs, 18=Partnership govern-

ment

Exhibit 98 - Correlation matrix for question nineteen

It is possible that these correlations occurred by chance in the sample, and do not

exist in the underlying population. The Bartlett's Test of Sphericity (Exhibit 99) tests

the null hypothesis that all correlation coefficients between the variables in the popu-

lation have the value zero. A significance of 0.000 allows rejection of this hypothesis

with a probability of error of 0.000 percent. Thus it means that at least between two

variables a correlation also exists in the population (Brosius 2006: 769). The Kaiser-

Meyer-Olkin Measure of Sampling adequacy (KMO) is a consolidated indicator of

how well the variables fit for a factorial model. Kaiser differentiates certain quality le-

vels, such as a value between 0.9 and 1.0 is considered "marvelous", a value be-

tween 0.8 and 0.9 means "meritorious" and below 0.5 is "unacceptable". In this re-

spect, 0.837 is fairly good (Brosius 2006: 771-772).

Exhibit 99 - KMO and Bartlett's test for question nineteen



(b) Factor extraction

For the next step, factor extraction, several methods exist. They apply different al-

gorithms and thus lead to different results. Being most commonly used, Principal

Component Analysis was chosen (Janssen and Laatz 2010: 561).

The figure below (Exhibit 100) provides the outcome of the extraction in the left

section. In the first column, all possible factors are listed, which equal the number of

initial variables. The second and third columns provide the factor's eigenvalues and

the percentage of variance explained by the factor. The first four factors have eigen-

values of more than one and explain nearly 60 percent of total variance (Kremelberg

2011: 297). Also of interest are the communalities in the right part of the figure.

Based on their initial value of one, the third column indicates how much variance of

the variable is explained by the newly extracted factor. If the value is close to zero,

the variable itself is of better explanatory power (Brosius 2006: 774-775).

Exhibit 100 - Total variance explained and commonalities for question nineteen

The Scree Plot (Exhibit 101) depicts the eigenvalues and number of components.

It helps the researcher to select the appropriate number of factors.



Exhibit 101 - Scree plot for question nineteen

Based on the Kaiser criterion, i.e. eigenvalues need to be at least one, it appears

reasonable to select four components. However, other selection criteria could also be

applied such as assuming a certain number of factors in advance, defining a certain

percentage of variance that should be explained, or extracting any factor that loads a

certain number of variables (Janssen and Laatz 2010: 564).

The Component Matrix below (Exhibit 102) provides the factor loadings. The abso-

lute value indicates the importance of the component for the variable. For example,

the variable "Ingredients" is explained most by factor two and "Nutritional value" by

factor three (Brosius 2006: 777).

Exhibit 102 - Component matrix for question nineteen



(c) Factor rotation and interpretation

Considering the values in the component matrix, interpretation becomes difficult if

several heterogeneous variables load similarly to a factor. For example, thirteen out

of eighteen variables have a factor loading of at least 0.5 towards component one.

Literature reveals that such a situation commonly occurs in the first matrix. Therefore,

results need to be transformed without changing their informational content. One

popular method is Varimax rotation, which rotates the axes so as to minimize the

number of variables with high factor loadings (Brosius 2006: 779-781).

Results of the Varimax rotation are provided in the figure below (Exhibit 103). For

easier interpretation, values lower than 0.3 are eliminated from the matrix.

Exhibit 103 - Rotated component matrix for question nineteen

For almost all variables, clustering into factors also makes sense from an interpre-

tive viewpoint. In fact, only the variable "Product impact" is considered to fit better to

component three than two. Thus, the following four categories of sustainability infor-

mation are formed: "Sustainability background information", "Company-centered sus-

tainability facts", "Product-centered sustainability facts" and "Consumption and life-

style information". The corresponding variables are provided in the table below

(Exhibit 104). Factor analysis is thus completed.



Factor Factor name ("category") Variables

1 "Sustainability background information" Sustainability website, company initiatives, company awards, partner-ship NGOs, partnership government

2 "Company-centered sustainability facts" Transportation, supply chain, recyclability, producer

3 "Product-centered sustainability facts" Ingredients, genetic modifications, geographic origin, nutritional value, product impact, sustainability labels

4 "Consumption and lifestyle information" Own consumption, lifestyle, experts' view

Exhibit 104 - Categories of on-product information

In addition to defining categories of sustainability information, the researcher is in-

terested in how consumers prioritize them. Therefore a combined score is calculated

for these factors based on the rankings of the single sustainability-related information

items139. The results are given below (Exhibit 105).

Factor Factor name Variable Overall mean

Ranking mean

Factor score*

Factor rank

(1) "Sustainability background information"

Sustainability website 2.71 11 14.2 3

Company initiatives 2.92 15

Company awards 2.80 12

Partnership NGOs 2.98 16

Partnership government 3.18 17

(2) "Company-centered sustai-nability facts"

Transportation 2.69 10 8.25 2

Supply chain 2.63 8/9

Recyclability 2.15 6

Producer 2.63 8/9

(3) "Product-centered sustaina-bility facts"

Ingredients 1.45 1 3.7 1

Genetic modifications 1.64 3

Geographic origin 1.62 2

Nutritional value 1.79 4

Product impact 2.26 7

Sustainability labels 1.97 5

(4) "Consumption and lifestyle information"

Own consumption 2.87 13/14 15.0 4

Lifestyle 2.87 13/14

Experts' view 3.29 18

*The factor score is calculated by dividing the sum of the ranks of the variables, which is based on the overall mean, by the number of variables included.

Exhibit 105 - Ranking of factors for survey question nineteen

It appears that consumers especially favor being provided with "product-centered

sustainability facts" on the packaging, which includes information on ingredients, ge-

netic modification, product origin, nutritional value, ecological and social product im-

pact and sustainability labels. "Company-centered sustainability facts" like transporta-

tion routes, supply chain partners, corporate recycling procedures, and characteris-

tics of the producer itself are of secondary importance. Thereafter, further information 139 This procedure does not follow statistical methods, but makes practical sense.



on online support to deepen ecological and social awareness, corporate initiatives in

the field, sustainability awards received, and cooperation with civil society or gov-

ernment organizations are clustered in "sustainability background information". Least

appreciated is apparently "consumption and lifestyle information", such as guidelines

to improve one's own consumption pattern, lifestyle tips, and experts' opinions.

Overall, analysis of question nineteen reveals that consumers appreciate most re-

ceiving sustainability-related information about the product and the company in the

form of direct product communication. However, mean scores also indicate that they

have a generally positive position on the other subject areas. This puts the ranks of

sustainability background, and consumption and lifestyle information in a more favor-

able light.

7.3.6 Section V - Company sustainability practices

The final section examines consumer perception of sustainability in real food and

beverages companies. First, knowledge about the specific corporate approaches is

looked at. Second, subjective performance of the firms is evaluated.

(1) Question 20 - Sustainability approaches of food and beverages companies

Question 20 investigates consumers' awareness of the sustainability approaches

of specific companies in the food and beverages industry. Respondents had to indi-

cate whether or not they could match a particular slogan with the corresponding

company. For example, the Coca-Cola Company pursues all its sustainability efforts

under "Live positively", which was presented in more detail in the previous chapter.

The correct choices for the extended sample of seven firms are given below (Exhibit

106).

Code Label Correct slogan

S5-Q20-O01 SL Coca-Cola "Live positively"

S5-Q20-O02 SL McDonald's "(Company name) corporate responsibility"

S5-Q20-O03 SL Unilever "Adding vitality to life"

S5-Q20-O04 SL Starbucks "(Company name) shared planet"

S5-Q20-O05 SL Nestlé "Creating shared value"

S5-Q20-O06 SL PepsiCo "Performance with purpose"

S5-Q20-O07 SL Kraft Foods "Working to build a better world"

Exhibit 106 - Characteristics of survey question twenty

Results are displayed in the table below (Exhibit 107). The column "Responses N"

indicates the number of correct responses for each company-slogan combination.

The percentages refer to the total number of responses, which shows how many



people possess knowledge of the firm's activities. Finally, companies are ranked in

the last column.

Code Label Responses N ("Correct")

Percent of cases

Rank

S5-Q20-O01 SL Coca-Cola 47 9.1% 1

S5-Q20-O02 SL McDonald's 15 2.9% 5/6

S5-Q20-O03 SL Unilever 21 4.1% 4

S5-Q20-O04 SL Starbucks 30 5.8% 2

S5-Q20-O05 SL Nestlé 26 5.0% 3

S5-Q20-O06 SL PepsiCo 15 2.9% 5/6

S5-Q20-O07 SL Kraft Foods 8 1.5% 7

Exhibit 107 - Responses for survey question twenty

The Coca-Cola Company's approach is best known as 9.1 percent or 47 of all 518

respondents could assign it properly, whereas Kraft Foods' commitment "working to

build a better world" is relatively unknown in the market place. Starbucks' "shared

planet" and Nestlé's "shared value" are known fairly equally with rates of five and

nearly six percent. Slightly above four percent of respondents are aware of Unilever's

"adding vitality to life" vision and just below three percent of McDonald's involvement

generically named "corporate responsibility".

(2) Question 21 - Evaluation of sustainability performance

In this question, respondents had to evaluate the sustainability performance of

seven real food and beverages companies, namely "Coca-Cola", "Kraft Foods",

"McDonald's", "Nestlé", "PepsiCo", Starbucks" and "Unilever", on a scale from "very

sustainable" (1) to "very unsustainable" (5).

In the responses, it is interesting whether differences between the groups exist.

Therefore, the one-way analysis of variance is applied if possible.


Regarding scale level and score independence, both assumptions are met. Ac-

cording to the tests of normality (Appendix 19), normal distribution cannot be as-

sumed, which is ignored again. The test of homogeneity of variances (Exhibit 108)

indicates that variances are not significantly different from each other for "Coca-

Cola", "Kraft Foods" and "McDonald's". By contrast, equal variances cannot be as-

sumed for the remaining items.



Exhibit 108 - Test of homogeneity of variances for question twenty-one

The results of question twenty-one are displayed in the figure below (Exhibit 109)

with the means in the column labeled respectively.

Exhibit 109 - Descriptives for question twenty-one


Based on the homogeneity of variances, ANOVA was conducted and, additionally,



the Welch test for "Nestlé", "Starbucks" and Unilever". Both analyses provide compa-

rable results (Exhibit 110 and Exhibit 111). The significance levels indicate significant

differences between groups in the evaluation of all firms except "McDonald's".

Exhibit 110 - ANOVA for question twenty-one

Exhibit 111 - Robust tests of equality of means for question twenty-one


As a post hoc test, the LSD was selected for "Coca-Cola", "Kraft Foods" and

"PepsiCo" because of the assumption of equal variance in the subgroups (Levene

test) and the Games-Howell test for all others. Results are provided below (Exhibit

112).



(J) Groups




Coca-Cola LSD AGS F AGS M -,122 ,106 ,249 -,33 ,09

USA F ,828* ,134 ,000 ,56 1,09

USA M ,778* ,137 ,000 ,51 1,05

AGS M AGS F ,122 ,106 ,249 -,09 ,33



USA F ,950* ,142 ,000 ,67 1,23

USA M ,900* ,145 ,000 ,61 1,19

USA F AGS F -,828* ,134 ,000 -1,09 -,56

AGS M -,950* ,142 ,000 -1,23 -,67

USA M -,050 ,167 ,765 -,38 ,28

USA M AGS F -,778* ,137 ,000 -1,05 -,51

AGS M -,900* ,145 ,000 -1,19 -,61

USA F ,050 ,167 ,765 -,28 ,38

Kraft Foods LSD AGS F AGS M -,175 ,098 ,073 -,37 ,02

USA F ,369* ,124 ,003 ,13 ,61

USA M ,653* ,126 ,000 ,40 ,90

AGS M AGS F ,175 ,098 ,073 -,02 ,37

USA F ,544* ,132 ,000 ,29 ,80

USA M ,828* ,134 ,000 ,56 1,09

USA F AGS F -,369* ,124 ,003 -,61 -,13

AGS M -,544* ,132 ,000 -,80 -,29

USA M ,283 ,154 ,066 -,02 ,59

USA M AGS F -,653* ,126 ,000 -,90 -,40

AGS M -,828* ,134 ,000 -1,09 -,56

USA F -,283 ,154 ,066 -,59 ,02

Nestlé Games-Howell AGS F AGS M ,047 ,120 ,980 -,26 ,36

USA F ,415* ,131 ,010 ,07 ,76

USA M ,692* ,126 ,000 ,37 1,02

AGS M AGS F -,047 ,120 ,980 -,36 ,26

USA F ,368 ,144 ,054 ,00 ,74

USA M ,646* ,139 ,000 ,29 1,01

USA F AGS F -,415* ,131 ,010 -,76 -,07

AGS M -,368 ,144 ,054 -,74 ,00

USA M ,277 ,148 ,247 -,11 ,66

USA M AGS F -,692* ,126 ,000 -1,02 -,37

AGS M -,646* ,139 ,000 -1,01 -,29

USA F -,277 ,148 ,247 -,66 ,11

PepsiCo LSD AGS F AGS M -,012 ,095 ,897 -,20 ,18

USA F ,708* ,121 ,000 ,47 ,94

USA M ,744* ,123 ,000 ,50 ,99

AGS M AGS F ,012 ,095 ,897 -,18 ,20

USA F ,720* ,129 ,000 ,47 ,97

USA M ,756* ,131 ,000 ,50 1,01

USA F AGS F -,708* ,121 ,000 -,94 -,47

AGS M -,720* ,129 ,000 -,97 -,47

USA M ,036 ,150 ,809 -,26 ,33

USA M AGS F -,744* ,123 ,000 -,99 -,50

AGS M -,756* ,131 ,000 -1,01 -,50

USA F -,036 ,150 ,809 -,33 ,26

Starbucks Games-Howell AGS F AGS M -,330* ,125 ,044 -,65 -,01

USA F ,834* ,134 ,000 ,49 1,18

USA M ,399* ,142 ,029 ,03 ,77

AGS M AGS F ,330* ,125 ,044 ,01 ,65

USA F 1,164* ,146 ,000 ,79 1,54

USA M ,729* ,153 ,000 ,33 1,13

USA F AGS F -,834* ,134 ,000 -1,18 -,49

AGS M -1,164* ,146 ,000 -1,54 -,79

USA M -,436* ,160 ,037 -,85 -,02



USA M AGS F -,399* ,142 ,029 -,77 -,03

AGS M -,729* ,153 ,000 -1,13 -,33

USA F ,436* ,160 ,037 ,02 ,85

Unilever Games-Howell AGS F AGS M -,060 ,103 ,938 -,33 ,21

USA F ,327* ,116 ,027 ,03 ,63

USA M ,288 ,125 ,102 -,04 ,61

AGS M AGS F ,060 ,103 ,938 -,21 ,33

USA F ,387* ,126 ,013 ,06 ,71

USA M ,348 ,135 ,051 ,00 ,70

USA F AGS F -,327* ,116 ,027 -,63 -,03

AGS M -,387* ,126 ,013 -,71 -,06

USA M -,039 ,145 ,993 -,42 ,34

USA M AGS F -,288 ,125 ,102 -,61 ,04

AGS M -,348 ,135 ,051 -,70 ,00

USA F ,039 ,145 ,993 -,34 ,42


Exhibit 112 - Post hoc tests for question twenty-one

Again, the mean values for the four groups relative to each other are illustrated

(Exhibit 113) if significant differences were discovered.

(1) "Coca-Cola" (2) "Kraft Foods"

(4) "Nestlé" (5) "PepsiCo"



(6) "Starbucks" (7) "Unilever"

Exhibit 113 - Illustration of means for question twenty-one

In all the company evaluations, there are fairly similar significant differences

between the mean values of the various groups. Almost always, they exist

between AGS F and USA F, AGS F and USA M, AGS M and USA F, and AGS

M and USA M.

Generally, respondents from AGS rate the companies' performance worse, i.e.

between "3" and "4" than their American counterparts, i.e. between "2" and "3".

Overall, it can be stated that responses of the groups for each company differ, but

comparison between companies seems not to provide any meaningful insights. Thus

results may reflect a slightly better attitude towards businesses in the USA than in

AGS, which can be observed from the other questions as well.

Concluding remarks of chapter seven

The author concludes that qualitative research provided valuable first insights into

the consumer and sustainability, and that quantitative research empirically assessed

these insights in the areas of attitudes to corporate sustainability, purchasing from

sustainable companies, the consumer's role in sustainability, the importance of

product and communication in the food & beverages industries and the perceptions

of company sustainability practices among students from Austria, Germany,

Switzerland and the United States.

Specifically, chapter seven...

...presents the qualitative results of background research and focus group

discussions that lead to the development of the questionnaire.



...discusses the steps taken in adapting content and form from the first

questionnaire draft to the final, externally reviewed version.

...describes in detail how the final sample has been arrived at and what its

characteristics are in terms of size, country of origin, age distribution, location of

home university, home university institution, stage of education and main field of

studies of the respondents.

...shows that attitudes differ on each side of the Atlantic as consumers from

Austria, Germany and Switzerland in general and women in particular expect, for

example, companies to be oriented more towards stakeholders, to play a more active

role in tackling ecological and social problems and to cooperate more strongly with

the government and civil sector than their American counterparts. In addition, only

one in two respondents knows the term "corporate sustainability", whereas a large

majority is familiar with "corporate social responsibility".

...evaluates the application of the (extended) Model of Goal-Directed Behavior to

purchasing from sustainable companies and finds poor results in model fit.

...investigates the consumers' role in sustainability, for example, with regard to

purchasing as economic voting, which is generally perceived more optimistically by

respondents from Austria, Germany and Switzerland. Regarding personal

involvement, positive buying, boycotting and word-of-mouth are practiced more often

than supporting NGOs, contacting companies or contacting the government on

corporate environmental and/or social issues.

...explores the importance of aspects of corporate sustainability communication

with regard to, for instance, which attributes are most relevant in supporting brand or

product choice and how satisfied consumers are with companies' information

disclosure. Concerning the latter, respondents from Austria, Germany and

Switzerland turn out to be more demanding and sceptical compared with Americans.

Overall, the producer ranks very low in terms of information source. Among corporate

information formats on environmental and social performance, direct product

communication turns out to be preferred over, for example, online or point-of-sale

communication. Consumers would like to be informed first and foremost about

product-centered sustainability facts, including ingredients, genetic modifications,

geographic origin, nutritional value, product impact and labels directly on the

packaging or in an attached leaflet.

...assesses consumers' awareness of the corporate sustainability strategies of



specific food & beverages companies. As only a minority of respondents seem to

follow corporate initiatives, it remains questionable how to interpret the differences in

performance perception by respondents from Austria, Germany, Switzerland and the

United States.

As this chapter finalized the presentation of empirical results by providing

consumer insights, the following section discusses and concludes the research.



8 Discussing and concluding the research

In the final chapter140, the research is concluded. First, reference is given to the

research questions which formed the starting point of this dissertation. Second, the

integration of the overall research is discussed. Third, the author gives concluding

remarks.

8.1 From research questions to research results

The whole research process is based on the questions introduced in chapter one.

They also connect the theoretical and empirical sections in both the company and the

consumer investigation. This is illustrated in the table below (Exhibit 114).

Research question Theoretical section Empirical section

RQ1: How are companies in the food & beverages industry involved in applying corporate sustainability?

Chapters 2, 3, 4

Chapter 5* Chapter 6

RSQ 1.1: What strategic stage of development in corporate sustai-nability are the selected companies currently in?

Subchapters 2.1, 2.2, 4.2.1, 5.2.2, 4.3

Subchapter 6.2.1, 6.2.2, 6.3.1

RSQ 1.2: How is sustainability strategy aligned with overall corpo-rate strategy and business partners in the value creation process?

Subchapters 4.1.1, 4.2.1 Subchapters 6.1, 6.2.2, 6.2.3, 6.3.1

RSQ 1.3: How is corporate sustainability transformed into concrete activities with stakeholders?

Subchapters 3.2, 4.1.2, 4.2.2

Subchapters 6.2.3, 6.3.2, 6.3.3

RQ2: How do consumers in Western Europe and the United States perceive companies’ conduct based on their own attitude towards and behavior in sustainability?

Chapters 2, 3, 4

Chapter 6* Chapter 7

RSQ 2.1: What do consumers expect from companies with regard to sustainable business conduct?

Subchapters 2.1, 2.2, 3.1, 3.2

Subchapter 7.3.2

RSQ 2.2: How can consumer attitudes, intention and behavior towards purchasing from sustainable companies be modeled?

Subchapter 3.3.2 Subchapter 7.3.3

RSQ 2.3: What involvement do consumers themselves show in contributing to sustainability in business?

Subchapter 3.3.1 Subchapter 7.3.4

RSQ 2.4: What sustainability issues do consumers favor in product choice and communications?

Subchapters 3.3.1, 4.3

Subchapter 6.1* Subchapter 7.3.5

RSQ 2.5: How do consumers assess specific companies as regards corporate sustainability?

Subchapters 6.1* and 6.2* Subchapter 7.3.6

*Relevant background does not originate from the theoretical section but from the methodology or the empirical section.

Exhibit 114 - Connectedness of research (Author's illustration)

For example141, research subquestion 1.1 requires theoretical understanding of

the concepts related to corporate responsibility, which are given in subchapters 2.1

and 2.2. Furthermore, an idea of classifications of companies' sustainability

140 This chapter aims to conclude the research by providing summarized answers to the research

questions of the company and consumer investigation, as introduced in chapter one. In addition, the overall integration of these two research areas and the connection between theoretical and empirical contributions are highlighted based on the overall guiding question. Some aspects thereof were al-ready addressed in footnotes in previous chapters.

141 For reasons of brevity, the author describes in detail only one example of the integration of the research question with the theoretical background and empirical data.



development from subchapter 4.2.1 is necessary. The criteria for including

companies in the investigation need to be considered because of their selection

effect (subchapter 5.2.2). Empirical insights into the company backgrounds and

corporate sustainability strategies presented in subchapters 6.2.1, 6.2.2 and 6.3.1

finally enable the researcher to provide a solution to this.

Selected results from the company and consumer investigation are now given

separately, following the research questions and subquestions.

(1) Sustainability from the companies' perspective

The company investigation provided empirical insights into the sustainability

practices of three international corporations of the food and beverages industry on a

broad level, and in detail for one Austrian subsidiary. The research subquestions can

thus be briefly answered as follows:

With regard to RSQ 1.1, "What strategic stage of development in corporate

sustainability are the selected companies currently in?", the concept of

corporate sustainability requires companies to balance economic, ecological

and social aspects in the long-term (subchapters 2.1 and 2.2). Strategically,

several stages of development in corporate sustainability are given in

subchapter 4.2.1. It is observed that all companies are fairly well developed in

their corporate sustainability practices. Given the external orientation and

systematic integration of environmental and social issues, it is assumed that

the firms under investigation are at least strategically proactive (subchapters

6.2.1 and 6.2.2). The case study on the Austrian subsidiary provides a detailed

description of good corporate conduct for its development stage (subchapter

6.3.1). One aspect that needs to be critically remarked, however, is disclosure

(subchapter 4.3). Despite efforts for standardization, companies still adhere

mostly to their own format, which makes comparisons difficult.

Concerning RSQ 1.2, "How is sustainability strategy aligned with overall

corporate strategy and business partners in the value creation process?",

aspects of strategy formulation based on mission and vision (subchapter

4.1.1), strategic management orientation (4.1.1), performance indicators

(subchapter 4.2.1), and strategy integration (subchapter 4.2.1) are theoretically



relevant. Empirical evidence shows that all three companies investigated have

explicitly formulated some sort of sustainability strategy based on mission and

vision and with defined focus areas (subchapters 6.2.1 and 6.2.2). This

strategic approach appears to be closely aligned with overall corporate

strategy, especially market strategy and stakeholder strategy, and includes

specific initiatives to tackle ecological and social issues in the value creation

process (subchapter 6.2.2). The constitution of the value chain influences

sustainability management and monitoring. The metrics used in the companies'

management systems to keep track of performance vary considerably.

Quantitative comparison of achievements of the corporation or its business

partners is thus difficult in many respects. In the case study on the Austrian

subsidiary, adaption of the international sustainability strategy to country

characteristics and the resulting cooperation in the value chain are described in

detail (subchapter 6.3.1).

As to RSQ 1.3, "How is corporate sustainability transformed into concrete

activities with stakeholders?", knowledge about the connectedness of the firm

in stakeholder theory and characteristics of stakeholders (subchapter 3.2),

strategic goals of activities (subchapter 4.1.2) and stakeholder management

(subchapter 4.2.2) is useful. The international companies seem to actively seek

partnerships with stakeholders for the realization of their sustainability strategy.

Involved parties include civil society organizations, government institutions,

consumers, suppliers and others. Several concrete activities illustrate

cooperation, for example, in the environmental domains of sourcing and

packaging or with the primarily social goal of promoting healthiness and

community initiatives (subchapter 6.2.3). The case study of the Austrian

subsidiary highlights further specific examples such as achievements in

sustainable sourcing and food security, packaging and waste management,

and energy efficiency in operations (subchapter 6.3.2). In addition, particular

emphasis is given to describing the subsidiary's social commitment to a charity

(subchapter 6.3.3). Apparently, the activities with stakeholders provide

favorable impacts for society. However, it remains unclear what the motives of

the companies actually are (subchapters 6.2.3, 6.3.2 and 6.3.3).

Given the above, the first research question (RQ1), "How are companies in the

food and beverages industry involved in applying corporate sustainability?", was



already answered in many facets. The following main findings should be pointed out:

(1) The companies researched occupy an advanced stage of development in

applying the concept of corporate sustainability.

(2) Concrete environmental and social activities are realized in cooperation

with value chain partners or other stakeholders.

(3) Corporate initiatives may provide good practice examples of responsible

business conduct as illustrated in the detailed case study description.

(4) Information about the companies' sustainability performance is disclosed

mostly in the form of corporate reporting.

(2) Consumers' position towards sustainability

In the consumer investigation, empirical insights were gained on attitude and

awareness about various aspects related to sustainability from respondents from

Austria, Germany, Switzerland and the United States. The research subquestions

can be briefly answered as follows:

First, RSQ 2.1. reads as "What do consumers expect from companies with

regard to sustainable business conduct?". It draws on the concepts of

corporate responsibility (subchapters 2.1 and 2.2), the relation of the business

sector to other sectors (subchapter 3.1) and stakeholder theory (subchapter

3.2). Results from the survey indicate that consumers generally appreciate

companies' assuming responsibility. Respondents from Austria, Germany and

Switzerland have generally higher expectations towards businesses to engage

in sustainable conduct than people from the United States. Specifically, they

would appreciate firms playing a more active role in tackling the ecological and

social problems of the world, they strongly appreciate cooperation of the

private sector with the government and the civil sector to meet global

challenges, and they prefer stakeholder orientation of corporations over

shareholder orientation. If women are compared to men in both geographies,

ideas relating to corporate sustainability are more popular among women.

When it comes to the awareness of terms, the term "corporate social

responsibility" is known by a large majority, but "corporate sustainability" only

by one in two respondents.

RSQ 2.2, "How can consumer attitudes, intention and behavior towards

purchasing from sustainable companies be modeled?", and RSQ 2.3, "What



involvement do consumers themselves show in contributing to sustainability in

business?" focus on consumers' personal actions. These areas are presented

theoretically in subchapters 3.3.1 and 3.3.2 about consumerism and

purchasing behavior. It is concluded that the behavioral model applied shows

only poor model fit and thus cannot be used to predict behavior. However,

customers report that they believe they can influence corporate conduct in the

marketplace. The use of economic voting and the power for influencing

corporate conduct are considered slightly more feasible in Austria, Germany

and Switzerland than in the United States. In both geographies, respondents

regularly apply economic voting or use word-of-mouth to inform others, but

usually refrain from contacting NGOs, companies or governmental agencies

directly. This indicates that people believe most in the relevance of direct,

market-based action.

RSQ 2.4, "What sustainability issues do consumers favor in product choice and

communications?", addresses a direct link between companies and

consumers. Theoretical backgrounds can be found in consumerism

(subchapter 3.3.1), disclosure and communication of corporate practices

(subchapter 4.3) and aspects of sustainability in the food and beverages

industry (subchapter 6.1). With regard to sustainability attributes in their

purchasing decisions, respondents from both geographies assigned most

relevance to product ingredients and least to the environmental and social

performance of the producer. There is general dissatisfaction with the amount

of company and product sustainability information provided. Regarding

trustworthiness, producers do not score well, either. External sources for

sustainability such as non-governmental organizations, government agencies

and the media are perceived more positively than retailers and the producer

itself. If such information is nevertheless provided by the producer, product

communication is the preferred format. Consumers rated several information

items they would like to receive directly with the products purchased: Product-

centered sustainability facts, including details on ingredients, geographic origin

and nutritional value are considered most relevant before company-centered

ones, sustainability background information and consumption and lifestyle

information. Apparently, consumers show interest in the environmental and

social aspects of the food and beverages they purchase, but producers do not



fulfill their information expectations.

Perception of strategic company conduct is referred to in RSQ 2.5, "How do

consumers assess specific companies as regards corporate sustainability?".

Background information relates to the food and beverages industry (subchapter

6.1) and the food and beverages companies researched (subchapter 6.2). It is

found that respondents do not have much knowledge about the companies'

sustainability practices. The approach of the Coca-Cola Company is best

known with almost ten percent awareness, which is considerably more than the

other companies achieved. Evaluation of corporate environmental and social

performance does not provide meaningful insights. In particular, it seems that

consumers from Austria, Germany and Switzerland and from the United States

have difficulties differentiating companies in this respect.

Based on the above discussion of subquestions, the second research question

(RQ2), "How do consumers in Western Europe and the United States perceive

companies’ conduct based on their own attitude towards and behavior in

sustainability?", is sufficiently answered. The following main findings should be

highlighted in the consumer investigation:

(1) Consumers seem to have a generally favorable attitude towards corporate

sustainability and expect firms to engage in responsible conduct in both

geographies observed.

(2) Consumers realize economic voting is a form of influencing companies, are

only slightly active in other forms of consumerism and show little awareness of

real company corporate practices.

(3) Consumers care about some aspects of sustainability and attributes in

product choice in food and beverages.

(4) Consumers are generally dissatisfied with corporate communication and

with the producer as information sources. They would appreciate receiving

information about specific issues directly with the product in a convenient form.

In the following, findings of the two domains of research are combined.



8.2 An integrative perspective of corporate sustainability

Based on the results from the company and consumer investigation presented

separately so far, a conclusion can be drawn from an integrative perspective.

Empirical evidence suggests that...

(1) ...companies of the food and beverages industry strategically engage

proactively in sustainability in various specific activities with stakeholders on an

international and country level, but have difficulties in communicating

information about it in a reliable and attractive manner to consumers.

(2) ...consumers generally appreciate it when corporations assume

responsibility in applying sustainable practices and show some activism that

has an effect in the marketplace, but they encounter difficulties in differentiating

the performance of specific companies of the food and beverages industry in

this domain.

(3)...there is a misfit between corporate achievements in ecological and social

domains and consumers' perceptions and reactions.

The consequences of these findings are approached based on the overall guiding

question of this dissertation, which provides the formal integration142 of company and

consumer aspects in research and also refers to the slightly dominant corporate

focus143. As introduced in chapter one, it is formulated as "How does the concept of

‘corporate sustainability’ contribute to bridging companies’ longtime business goals

and their obligations to society?". The author concludes that the key terms in this

question are interlinked in the following way in practice: The concept of corporate

sustainability supports a firm in transforming its business perception and position

towards its environment at the corporate strategy level. By balancing economic,

ecological and social considerations in close stakeholder interaction, the company's

earlier isolated longtime business goal of "the company needs to earn money to do

well " expands to "the company needs to earn money to do well by doing good for the

planet and its people". This is the corporation's obligation to society, which is more

and more challenged in the marketplace. Regarding the "how" in the guiding

142 The connection of two viewpoints is a particular element of this dissertation. In most parts of the

work, though, company and consumer aspects are treated separately on purpose to focus on investi-gating specific characteristics of each. The reader needs thus to keep actively in mind aspects of the other side when accessing the material.

143 The company and consumer perspective are integrated with regard to how to ultimately best re-flect company interest in the marketplace through responsible conduct.



question, companies need to see consumers as economic voters and compete

actively for their sustainability vote. In research, three core areas seem to be relevant

in this respect:

(1) "Integrity of the firm": Companies needs to consistently apply the concept of

corporate sustainability throughout their organization and respect the

corresponding principles in all activities. The three multinationals in food and

beverages, for example, follow concrete sustainability strategies and set

themselves further goals towards improving their impact on the environment

and society.

(2) "Partnership approach": Companies should interact closely with trusted

stakeholders to achieve their sustainability goals. The companies investigated,

for instance, apply a number of concrete strategic initiatives together with

partners within and outside the value chain.

(3) "Two-way communication with consumers": Companies are advised to

communicate with consumers in both directions, i.e. disclosing information to

them and being receptive to information received from them. Regarding

companies included in this research, it appears that in this area there is

considerable potential for improvement as consumers are not satisfied with the

amount of information received, the producer as source of information, or

information formats.

So, the integrative perspective of corporate sustainability that was approached

from two sides, the company and the consumer, is a crucial element for long-term

corporate success. Simply, it is not only important for firms to perform responsibly but

they must also be perceived as responsible in the marketplace.

Appearing to be a straightforward idea in general, understanding of further

theoretical details and its practical realization are challenging. Therefore, the author

is of the opinion that this dissertation has an implication for academics in providing a

starting point for further research and for business professionals in constituting the

basis for specific action. Academics could, for example, engage in investigating in

further detail the discovered gap between actual corporate performance in

sustainability and consumer perception for companies of an individual industry and

across industries. Another possibility would be to research a broader sample of

consumers in terms of socio-demographics and geographic origin about their

expectations of corporate conduct and its disclosure. Business professionals may, for



instance, use the detailed descriptions of good corporate conduct provided in the

company comparison and case study to assess their own business or improve

consumer interaction in communicating sustainability more reliably and conveniently

as the advanced business approach of the new millennium also provides concrete

benefits for consumers. In addition to the ideas provided, every reader is encouraged

to draw his or her own conclusions and implications of the data provided.

Having conclusively discussed the research, the author wishes to close his

dissertation by delivering some final remarks.

8.3 The author's concluding remarks

Referring to the quote by Henry Mintzberg at the beginning, companies need to be

social institutions, that is, they need to provide lasting value for the environments in

which they operate to justify and secure their existence in the marketplace. It seems,

many business leaders have not yet fully considered the real impact of their

decisions on others. In addition, the misperception that economic, ecological and

social goals are contradictory often still prevails. Some time ago, the industrialist

Henry Ford, for instance, recognized that making money alone is not a sufficient

business proposition. A company has a greater purpose than just economically

transforming inputs into outputs. Business professionals can prove their capacity for

true and visionary leadership if they manage to balance the dimensions of corporate

sustainability despite the challenges potentially inherent to existing business models.

Regarding insecurity and volatility in today's world economy, it is more crucial than

ever that companies follow long-term perspectives in defining the foundations of their

business. A core value in this respect comes down to responsibility towards

stakeholders, society and the planet. As native Americans once put it, earth is not

inherited from our ancestors, but borrowed from our children. This hold also true for

businesses: even outstanding past performance does not relieve companies from

pressure to constantly renew themselves and perceive their existence as a venture of

the future. In this respect, it is not abstract institutions that shape sustainability of the

business world but the inspirational and value-based actions of individuals.

Therefore, the author wants to provide a final quote by Hazel Henderson, who is very

involved in promoting ecologically and socially responsible business, as a reminder



that everyone, be it business professionals or consumers, has the power to make a

difference:

"Don't wait for anyone to deputize you or authorize you or empower you.

You have to just start out with yourself... and put one foot in front of the other."

Hazel Henderson



Appendices

Appendix 1 - Details on the selection process of companies

Step 1 Step 2 Step 3 Step 4

Original sampling base

Forbes Global 2000; Fortune Global 500; Fortune 500; Dow Jones Composite Average (DJCA); Dow Jones Industrial Average (DJIA); Dow Jones Sustainability Index (DJSI) World 09/10; DJSI U.S. 09/10; DJ Stoxx Sustainability Index

Sample size >40 companies ~20 companies 7 companies 3 companies

Geography Europe, Northern America

Western Europe, U.S.

Evolution of sample de-scription

Largest publicly listed companies in the food and beve-rages industry in the Western world, excluding tobacco companies and focusing on ad-vanced sustainability practices.

Largest publicly listed and sustaina-bly advanced com-panies in the food and beverages industry in Western Europe and the United States with-out tobacco and durable household producers.

Largest publicly listed and sustaina-bly advanced com-panies in the food and beverages industry in Western Europe and the United States with-out tobacco, durable household and alco-hol producers and retailers.

Selection of three of the largest publicly listed companies in the production and service businesses of the food and beverag-es industry in Western Europe and the United States that are leading in sustainability prac-tices.

Categories DJ Indices: Con-sumer Goods; Con-sumer Services; FOA Food Produc-ers; BVG Beverag-es; FDR Food and Drug Retailers; HOU Non-Durable Household Products

Food Producers (FOP) Beverages Produc-ers (BEP) Food and Beverag-es Retailers (FBR) Food and Beverag-es Services (FBS)

Food Producers (FOP) Beverages Produc-ers (BEP) Food and Beverag-es Services (FBS)

Food Producers (FOP)Beverages Producers (BEP) Food and Beverages Services (FBS)

Appendix 2 - Exemplary guiding questions for expert interviews

(1) Supplier (Esca) (2) House charity (operations) (3) Business advisor (GUT)

The following selection only covers some main aspects of the interviews and questions were regularly extended.

(1) Could you tell me a bit about yourself and your responsibili-ties at Esca?

(2) Would you mind providing some facts and figures on Esca Austria?

(3) What does corporate sustaina-bility, i.e. balancing economic, environmental and social as-pects, mean for Esca?

(4) Could you describe the inter-connection with McDonald's Austria? What policies do you have to comply with?

(5) Concerning you own suppliers, what policies have they to comply with?

(6) What quality checks do you effect? How can meat be tracked back to its origin?

(7) What independent certifications do you have? What does the

(1) Could you first describe your-self and elaborate on your re-sponsibility at the Ronald McDonald's House Charities?

(2) What is important about the structure and background of the charity in Austria?

(3) What social contribution does the charity make in your opi-nion?

(4) How can the relationship be-tween the houses and the nearby children hospitals be described?

(5) What is the role of McDo-nald's? How do you interact and does the company support your daily activities?

(6) Regarding the international network, how do you learn from experiences in other countries?

(7) What about the current capaci-ty of the houses? Is there any

(1) Could you briefly introduce yourself and your role at GUT?

(2) May I learn some more details about the company GUT?

(3) I would be particularly interest-ed in the environmental con-cept of McDonald's Austria. Could you tell me a bit more about its pillars and practical impacts?

(4) What were the milestones in implementing the concept in the company? How did you achieve success?

(5) What does "licensing" mean and how would you differen-tiate your company from com-petitors?

(6) Where do you acquire the knowledge on which you base advice to clients?

(7) Do you also work with suppli-ers of McDonald's Austria?



AMA quality label mean for doing business?

(8) What specific measures are taken to minimize business im-pacts currently and in the fu-ture?

need for expansion? (8) What challenges do you see

for today and the years to come?

(8) How would you describe the current role of GUT in the co-operation with McDonald's Austria? What are the chal-lenges ahead?

Appendix 3 - Email template for contacting experts

German email version for interview request (example F&F, email sent on 28 June 2010)

Betreff: Dissertation: Anfrage um Interview

Sehr geehrter Herr DI Pichler,

Nach einem Telefonat mit Frau Mattes würde ich gerne um die Möglichkeit eines zirka 30min Experteninterviews mit Ihnen als Geschäftsführer von Frisch & Frost für meine Dissertation "Unternehmerische Nachhaltigkeit" ansu-chen.

Konkret arbeite ich an einer Fallstudie über ökologische und soziale Aspekte innerhalb der Wertschöpfungskette von McDonald's Österreich. Dafür würden mich über die veröffentlichen Informationen hinausgehende Einblicke in die Zuliefererperspektive bei "Frisch & Frost" interessieren. Wenn möglich, würde ich auch gerne einen kurzen Eindruck von der Produktion erlangen.

Ich würde mich freuen, wenn Sie mir eine positive Rückmeldung auf meine Anfrage geben könnten. Zeitlich und räumlich wäre ich für das Interview auf jeden Fall sehr flexibel.

Mit besten Grüßen

Rainer Matiasek

---

Für Ihre Hintergrundinformation sende ich noch die folgenden Details:

1. Persönliche Vorstellung

Mein Name ist Rainer Matiasek und ich bin seit Wintersemester 2008 Doktoratsstudent an der wirtschaftswissen-schaftlichen Fakultät der Universität Graz.

In meinem bisherigen akademischen Werdegang absolvierte ich das Diplomstudium "Internationale Betriebswirt-schaft" an der Wirtschaftsuniversität Wien sowie das europäische Masterprogramm "CEMS Master's in Interna-tional Management" mit Auslandsaufenthalten in Europa und den USA. Praktische Erfahrung konnte ich bereits in der strategischen Unternehmensberatung und Industrie gewinnen.

2. Kurzvorstellung des Dissertationsprojekts

Meine Dissertation trägt den Titel "Embedding Corporate Sustainability - Company Strategies and Consumer Involvement" (Betreuer: Ao.Univ.-Prof. Dr. Alfred Posch). Dabei wird das Konzept der unternehmerischen Nach-haltigkeit behandelt, wobei die zwei Schwerpunkte auf die Analyse von Aspekten der Unternehmensstrategie (in der Food & Beverages Industry) und Konsumentenwahrnehmung (in ausgewählten Ländern Westeuropas und den USA) gesetzt sind. Für die Unternehmensseite wird bei McDonald's Österreich eine exemplarische Fallstudie durchgeführt. Methodisch gehe ich in einer Kombination aus qualitativer (Analyse von Hintergrunddaten, Experte-ninterviews, Fokusgruppendiskussionen) und quantitativer (Konsumentenfragebogen) Erhebung vor. Meine Arbeit befindet sich bereits in einem fortgeschrittenen Stadium und sollte spätestens Anfang Herbst 2010 abgeschlos-sen sein.

Appendix 4 - Details on experts and interview realization

# Inter-view partner

Organization Role Form of contribu-tion

Date Venue* Dura-tion

Notes re-viewed

1 Mag. Edmund Czasch

McDonald‘s Österreich

Franchisee and owner of two restaurants

Personal interview

14.06.2010

Vienna;

4km

1500-1645;

105min

18.07.2010

2 Mag. Ulrike Schelander

Ronald McDonald Kinderhilfe Österreich

General Manager

Personal interview

18.06.2010

Vienna;

4km

1530-1615;

45min

30.06.2010

3 Mag. Ursula

McDonald‘s Österreich

Senior Manager Communicati

Email response

29.06.2010

- - -



Riegler ons

4 Mag. Karola Grill-Haderer


Manager House Operations

Personal interview

01.07.2010

Brunn/ Gebirge;

11km

1000-1100;

60min

21.07.2010

5 Dr. Leopold Wieninger

AHB Backwaren GesmbH & Co KG

General Manager

Personal interview

02.07.2010

Korneuburg;

31km

0930-1100;

90min

27.07.2010

6 Ursula Kellner, MSc.


House Manager RMDK House Vienna

Personal interview

02.07.2010

Vienna;

9km

1200-1330;

90min

21.07.2010

7 DI Maximilian Hardegg

Gutsverwaltung Hardegg (McD Flagship Farm)

Owner Personal interview

12.07.2010

Seefeld-Kadolz;

87km

0900-1000;

60min

29.07.2010

8 DI Michaela Dobes

McDonald‘s Europe

Commercial Lead Bakery Products

Telephone interview

12.07.2010

- 1600-1630;

30min

13.07.2010

9 Christine Marek

Federal Ministry of Economy, Family and Youth

State Secretary

Email response

15.07.2010

- - -

10

DI Gerald Hoeller

SDL HandelsgesmbH

General Manager

Personal interview

16.07.2010

Korneuburg;

31km

1330-1500;

90min

11.08.2010

11

DI Gerfried Pichler

Frisch & Frost Nahrungsmittel GesmbH

General Manager

Personal interview

19.07.2010

Hollabrunn;

65km

1030-1245;

135min

16.08.2010

12

Dr. Klaus Galle

GUT Umwelttechnik GmbH

Founder and General Manager

Personal interview

20.07.2010

Klosterneuburg;

26km

1300-1345;

45min

26.07.2010

13

DI Andreas Pöchlinger

Esca Food Solutions GmbH & Co. KG

Plant Manager

Personal interview

22.07.2010

Enns;

173km

0930-1200;

150min

Not responded

*Distance to home in 1100 Vienna

Appendix 5 - List of focus group participants

Name Gender Nationality Home university Study program

Bedard, Stephanie Female United States

University of South Carolina Master studies in business

Galiher, Laura Female United States

University of Vermont Master studies in business

Garritano, Peter Male United States

University of Vermont Master studies in business

Hightower, Zoraya Female United States

University of Tulsa Master studies in economics

Klampf-Pernold, Male Austria University of Graz Doctoral studies in business



Hannes

Nikic, Marija Female Austria University of Graz Master studies in business

Osmon, Timothy Male United States

Indiana University Master studies in political science

Rackel, Ingrid Female Austria University of Graz Doctoral studies in business

Schabhüttl, Michael Male Austria University of Graz Master studies in business

Shively, Sabrina Female United States

Truman State University Master studies in business

Wieser, Oliver Male Austria University of Graz Doctoral studies in business

Zluga, Iris Female Austria University of Graz Medical studies

Appendix 6 - List of survey pretest participants

Name Gender Nationality Home university Study program Survey lang.

Galiher, Laura Female United States

University of Vermont Master studies in busi-ness

English

Garritano, Peter Male United States

University of Vermont Master studies in busi-ness

English

Hightower, Zoraya

Female United States

University of Tulsa Master studies in busi-ness

English

Klampf-Pernold, Hannes

Male Austria University of Graz Doctoral studies in busi-ness

German

Kuprian, Cle-mens

Male Austria Vienna University of Economics and Busi-ness

Master studies in busi-ness

English

Miska, Christof Male Austria Vienna University of Economics and Busi-ness

Doctoral studies in busi-ness

English

Osmon, Timo-thy

Male United States

Indiana University Master studies in busi-ness

English

Rackel, Ingrid Female Austria University of Graz Doctoral studies in busi-ness

English

Wieser, Oliver Male Austria University of Graz Doctoral studies in busi-ness

English

Zluga, Iris Female Austria University of Graz Medical studies German

Appendix 7 - Examples of invitation formats for survey participation

English email version (short)

Subject: Doctoral research: Survey on "Consumers and Sustainability"

Dear fellow student,

I am a doctoral student from Austria, currently investigating "Consumers and corporate sustainability" in a comparison of German-speaking (Austria, Germany, Switzerland) and US-American students.

Therefore, I would be very thankful if you supported me by providing about 15min of your time for completing a questionnaire: https://survey.edu.uni-graz.at/index.php?sid=68497&lang=en

Thank you a lot in advance for your time and effort! As a token of appreciation, you may register for a lottery of gift certificates after completion of the questionnaire.

In case of any questions, please do not hesitate to contact me directly at [email protected]

Kind regards,

Rainer Matiasek



German email version (long)

Liebe Kollegin, lieber Kollege,

Ich wäre dir sehr dankbar, wenn du mich bei meiner Dissertation unterstützen könntest, indem du dir zirka 15min für die Beantwortung meines Fragebogens zum Thema "Konsumenten und unternehmerische Nachhaltigkeit" Zeit nimmst:

https://survey.edu.uni-graz.at/index.php?sid=68497&lang=de (auf Deutsch) oder

https://survey.edu.uni-graz.at/index.php?sid=68497&lang=en (in English)

Es wäre weiters toll, wenn du den Link auch an andere Studienkollegeninnen und -kollegen aus ÖSTER-REICH, DEUTSCHLAND und der SCHWEIZ weiterleiten könntest, da mir hier noch einige Antworten fehlen. Einen Textvorschlag für ein entsprechendes Email (für copy&paste) findest du weiter unten.

Wenn du Studienkolleginnen und -kollegen aus den USA kennst, würde ich dich auch noch ersuchen, den Link zur englischen Version derselben Befragung ("Consumers and corporate sustainability") weiterzuleiten und die Teilnahme zu bewerben. Hierzu gibt es ebenfalls einen Textvorschlag (für copy&paste) unten angefügt.

Für deine Mühe möchte ich mich nicht nur im Voraus herzlichst bedanken, sondern dich ebenso auf die Möglichkeit hinweisen, dich nach dem Ausfüllen des Fragebogens für die Verlosung von Gutscheinen zu regi-strieren.

Für etwaige Fragen, melde dich einfach unter [email protected]

Mit kollegialen Grüßen,

Rainer Matiasek

---

TEXTVORSCHLAG 1 (für Studienkolleginnen und -kollegen aus Österreich, Deutschland und der Schweiz)

Betreff: Teilnahme an Umfrage über "Konsumenten und Nachhaltigkeit"

Liebe/r ...

Einem Studienkollegen wäre sehr geholfen, wenn du seine Dissertation durch Beantwortung eines Fragebogens (ca. 15min) zum Thema "Konsumenten und unternehmerische Nachhaltigkeit" unterstützen könntest:

https://survey.edu.uni-graz.at/index.php?sid=68497&lang=de

Sehr wichtig wären für ihn zusätzliche Antworten von Studenten aus Österreich, Deutschland und der Schweiz.

Nach erfolgter Beantwortung kannst du dich für eine Teilnahme an der Verlosung von Gutscheinen registrieren.

Besten Dank in seinem Namen und liebe Grüße

...

TEXTVORSCHLAG 2 (für amerikanische StudienkollegenInnen)

Subject: Participate in survey on "Consumers and Sustainability"

Dear...

It would be great if you could support a student colleague from Austria in his dissertational research by answering his questionnaire (about 15min) on "Consumers and corporate sustainability":

https://survey.edu.uni-graz.at/index.php?sid=68497&lang=en

He still urgently needs additional replies from American students.

After completion of the survey, you may register for a lottery of vouchers.

Thanks a lot on his behalf and greetings,

...

English posting version

STUDENT SURVEY: https://survey.edu.uni-graz.at/index.php?sid=68497&lang=en

Dear fellow students, it would be great if you supported my doctoral research on "Consumers and Sustainabili-ty". Completion of the survey takes about 15min and you may register for a drawing of gift vouchers. Thanks a lot and kind regards, Rainer

Appendix 8 - Distribution channels of survey invitation

Category Description Channels Potential reci-pients

Estimated response rate

(1) University email distribu-tion lists

After formal request, email invitations were sent to all members of the official university distribution list.

WU Surveys

International offices at WU and KFU

16.000

150

Low (1%)

Medium (10%)



(2) Network mem-bership con-tacts

Personal membership in network allowed access to the email ad-dresses of the other members.

CEMS

S4E

600

800

Medium (15%)

(3) Social network and forum postings

Information was posted on the social network fan pages of nearly 30 American universities as well as in student or university internet fora.

Facebook

Efellows.net

JKU KUSS

Sowi-Info-Lounge

n.a. n.a.

(4) Bentley admi-nistered sup-port

Cooperation with this U.S. university involved contacting students in class through their professors.

Data collection at Bentley University

n.a. n.a.

(5) Organized direct address-ing

Cooperation with another U.S. uni-versity helped addressing partici-pants of the university's summer exchange program in Austria.

University of New Orleans Summer Program at the Uni-versity of Innsbruck

300 Medium (15%)

(6) Personal con-tacts

If not already addressed via other channels, personal contacts were directly asked to participate.

Friends and col-leagues

150 High (30%)

Appendix 9 - General company background information

Aspect Unilever Group The Coca-Cola Company McDonald's Corporation

Company descrip-tion

"Is one of the world's lead-ing suppliers of fast moving consumer goods", selling its products in more than 170 countries (Unilever Group 2010a: 25)

"Is the world's leading own-er and marketer of nonalco-holic beverages brands reaching consumers in more than 200 countries" (The Coca-Cola Company 2010c: 29)

"Is the leading global food-service firm that franchises and operates 32,478 McDonald's restaurants in 117 countries at year-end 2009" (McDonald's Corpora-tion 2010a: 9)

Consumer cover-age

"Two billion people use a Unilever product on any given day" (Unilever Group 2010b: 2)

"Provides nearly 1.6 billion servings per day" (The Coca-Cola Company 2009b: 4)

"Serves about 58 million customers daily" (McDo-nald's Corporation 2009: 10)

Defined business category

Food producer (FOP) Beverages producer (BEP) Food and beverages ser-vices (FBS)

Chief Executive Officer (CEO)

Paul Polman (Chief Execu-tive Officer)

(Unilever Group 2010a: 51)

Muhtar Kent (Chairman of the Board of Directors and Chief Executive Officer)

(The Coca-Cola Company 2010a: 37)

James Skinner (Vice Chairman and CEO)


Headquarters Is headquartered in Rotter-dam in the Netherlands (Unilever N.V.) and in Lon-don in the United Kingdom (Unilever PLC)


Is headquartered in Atlanta (GA) in the United States


Is headquartered in Oak Brook (IL) in the United States


Stock listings Is listed on the Amsterdam (Unilever N.V.), London (Unilever PLC) and New York (both) Stock Exchange under the tickers UNA, ULVR, UN and UL

(Unilever Group 2010d)

Is listed on the New York Stock Exchange under the ticker symbol KO


Is listed on the New York Stock Exchange under the ticker symbol MCD


Geographies and business areas

Divides its operations in the areas Asia, Africa and Cen-tral & Eastern Europe

Operates in the geographies Eurasia & Africa, Europe, Latin America, North Ameri-

Operates in the United States, Europe, Asia/Pacific, Middle East



(AAC), The Americas and Western Europe (Unilever Group 2010a: 16-17)

Operates in the segments foods, personal care and home care (Unilever Group 2010c: 2)

ca and Pacific

Is divided into operating group and bottling invest-ments group (The Coca-Cola Company 2010b: 1-6)

and Africa (APMEA) and other countries, including Canada, Latin America

Does business in franchised and company-owned res-taurants (McDonald's Cor-poration 2010a: 9)

Revenues 2009 per geography

€* % $* % $* %

Western Europe

11,947 30 Europe 5,203 17 Europe 9,274 41

The Ameri-cas

12,743 32 North America

8,271 27 U.S. 7,944 35

Asia Africa CEE

15,133 38 Eurasia & Africa

2,197 7 APMEA 4,337 19

- - - Latin America

3,882 13 Others 1,190 5

- - - Pacific 4,875 16 - - -

- - - Other*** 6,562 21 - - -

Total** 39,823 100% Total** 30,990 100% Total** 22,745 100%

*In millions; **Numbers may not add up because of rounding;***Including bottling investments, corporate and elimina-tions;

(Unilever Group 2010c: 2-3) (The Coca-Cola Company 2010c: 120)


Operating income 2009 per geogra-phy

€* % $* % $* %

Western Europe

1,255 25 Europe 2,946 36 Europe 2,588 38

The Ameri-cas

1,857 37 North America

1,699 21 U.S. 3,232 47

Asia Africa CEE

1,908 38 Eurasia & Africa

810 10 APMEA 990 14

- - - Latin America

2,042 25 Others 32 0

- - - Pacific 1,887 23 - - -

- - - Other*** (1,153) (14) - - -

Total** 5,020 100% Total** 8,231 100% Total** 6,841 100%

*In millions; **Numbers may not add up because of rounding;***Including bottling investments, corporate and elimina-tions;

(Unilever Group 2010c: 2-3) (The Coca-Cola Company 2010c: 120)


Employees (in thousands at year-end)

Employed in total 163 tsd. people in 2009 compared to 174 in both of the previous years


Employed in total 92.8 tsd. people in 2009, 92.4 in 2008 and 90.5 in 2007

(The Coca-Cola Company 2008a: 8; Idem 2009a: 43; Idem 2010a: 35)

Employed in total about 385 tsd. people in 2009, 400 in 2008 and 390 in 2007 (CNNMoney 2010)

Major products and brands

Offers a differentiated port-folio of global and local brand to meet consumers' needs

Manages its more than 400 brands in the four catego-ries "savory, dressings and spreads", "ice cream and beverages", "personal care" and "home care", with the former two also including

Licenses or markets more than 500 nonalcoholic beve-rages brands and more than 3,300 beverage products

Provides a highly varied portfolio including "full-, reduced-, low- and no-calorie sparkling beverages, waters, sports and energy drinks, teas, coffees and dairy- and soy-based beve-

Provides variety in its menu and beverage choices in its fast-service restaurants

Offers a tiered menu ap-proach in products accord-ing to price: "premium core, classic core and everyday affordable menu offerings"

Sells well-known products in its restaurants around the world such as "McDonald's



"Foodsolutions"

Subsumes its brands in the three segments foods, per-sonal care, and home care and other

Out of the eleven brands with global sales of €1 bil-lion or more in 2009, six are food and beverages: Knorr, Hellmann's, Lipton, Be-cel/Flora (Healthy Heart), Rama/Blue Band (Family Goodness), Wall's/Algida (Heartbrand)

(Unilever Group 2010a: 27-28; Idem 2010c: 2)

rages"

Coca-Cola is considered the "world's most valuable brand" with an estimated value of $56 billion and is the only product that is sold in every market engaged by the company

Thirteen brands had annual sales of more than $1 billion in 2009: Coca-Cola, CC Zero, Diet Coke/CC light, Sprite, Fanta, Minute Maid, Dasani, Aquarius, Powe-rade, Sokenbicha, Georgia Coffee, glacéau vitaminwa-ter, Simply

(The Coca-Cola Company 2010a: 18-19; Idem 2010c: 29)

Fries, Big Mac, Quarter Pounder, Chicken McNug-gets and Egg McMuffin"

Also sells different kinds of other burgers, chicken, sides, salads, beverages, breakfast and desserts

Recently enlarged its prod-uct offering by McCafé premium coffees

(McDonald's Corporation 2010a: 9-10)

Business model and value chain

Describes itself as a "multi-local multinational" that operates in around 100 countries while selling prod-ucts in considerably more

Differentiates four parts of its value chain: (1) sourcing raw materials, (2) opera-tions, (3) distribution, and (4) consumers.

Focuses on operations like research & development, production and marketing of its brands and products itself, but closely cooperates with business partners in all other areas

Over 10,000 suppliers de-liver raw materials and packaging to Unilever Group

Operates six major R&D centers and 264 manufac-turing sites around the world

Distribution is effected via a network of logistics partners to wholesalers, major retail chains and others

Direct control can be exer-cised only in operations and indirect control in all other parts of the value chain

(Unilever Group 2009: 6-7, Unilever Group 2010b: 2, 4-5; Unilever Group 2010k: 14)

Operates "the Coca-Cola System" as the core of its business, which comprises (1) "The Coca-Cola Compa-ny" as the producer of beve-rage concentrates and in charge of marketing and advertising, and (2) "Bottling Partners", which operate the facilities to "manufacture, package and distribute the finished products"

The approximately 300 bottling partners worldwide can be independent or company-owned

Deliveries by suppliers to the Coca-Cola System fall into three categories: (1) ingredients, (2) water, and (3) packaging

Customers like supermar-kets, restaurants, enter-tainment facilities and many others finally sell beverages to consumers

Has direct control only of production and marketing activities and indirect influ-ence on the operations of its suppliers and distributors

(The Coca-Cola Company 2009b: 4-5)

Builds its business on the cooperation of the company with three main parties: (1) "franchisees" who own and operate most restaurants, (2) "suppliers" who deliver food and beverages for sale in the restaurants, and (3) "company employees" who serve customers directly in restaurants or indirectly in the administration

The business model is often referred to as "the three-legged stool"

About 80 percent of restau-rants are operated by local business people (mostly franchisees) and the re-maining by the company itself

Differentiates in its supply chain (1) indirect suppliers like farms & ranches and primary production & processing plants, and (2) direct suppliers like final processing facilities and distribution centers

Does not actually produce the food and beverages that are sold in the restaurants, thus lacking direct control in the supply chain

(McDonald's Corporation 2009: 10-11, 16)

Historical high-lights

In 1930, Unilever Group is established out of the Neth-erlands-based margarine producer Margarine Unie (founded as a family busi-ness in 1872) and the Brit-ish soap producer Lever

In 1886, the pharmacist Dr. John Stith Pemberton creates the syrup for Coca-Cola in Atlanta (GA)

In 1892, the Coca-Cola Company is registered as

In 1940, Dick and Mac McDonald open a McDo-nald's Bar-B-Que restaurant in San Bernardino, Califor-nia, which is reopened as a self-service drive-in restau-rant in 1948.



Brothers (starting production in 1884)

After World War II, Unilever significantly grows interna-tional operations, which is supported by the post-war consumer boom

In the 1960s and 1970s, acquisitions contribute to the diversification of the business

The 1990s are marked by restructuring and consolida-tion to focus on selected core business areas

In 2010, Unilever has its 80th anniversary

(Unilever Group 2010e)

listed corporation

In 1899, large scale bottling of the soft drink begins with outside partners, founding the Coca-Cola bottling sys-tem

Starting in 1919, the com-pany considerably grows first nationally and then internationally especially during World War II and in its aftermath

The 1960s and 1970s are marked by new product launches, packaging and advertising innovations

In 2002, the Coca-Cola Company has its 120th anniversary

(The Coca-Cola Company 2010d)

In 1954, Ray Kroc meets the McDonald's brothers and starts building the fran-chising business in 1955.

In 1965, McDonald's Corpo-ration goes public.

In 1967, the first restaurants open outside the United States.

In 1974, the first Ronald McDonald House opens.

In 2005, the company cele-brates its 50th anniversary.

(McDonald's Corporation 2010b)

Appendix 10 - Background on the companies' corporate strategies

Aspect Unilever Group The Coca-Cola Company McDonald's Corporation

Mission / Purpose Sees its mission in "adding vitality to life144" (Unilever Group 2009: 9)

Further defines a "heart of its corporate purpose": "Serving consumers in a unique and effective way"

(Unilever Group 2010f)

Defines its mission as fol-lows:

"To refresh the world..." "To inspire moments of

optimism and happi-ness..."

"To create value and make a difference."

(The Coca-Cola Company 2010e)

Formulates its brand mis-sion as such:

"Be our customers' favorite place and way to eat"

(McDonald's Corporation 2010c)

Vision Has a vision that builds on four pillars:

(1) "We work to create a better future every day."

(2) "We help people feel good, look good and get more out of life with brands and services that are good for them and good for oth-ers."

(3) "We will inspire people to take small, everyday actions that can add up to a big difference for the world."

(4) "We will develop new ways of doing business with the aim of doubling the size of our company while reduc-ing our environmental im-pact."

Has a vision covering six aspects:

(1) "People: Be a great place to work where people are inspired to be the best they can be."

(2) "Portfolio: Bring to the world a portfolio of quality beverage brands that antic-ipate and satisfy people's desires and needs."

(3) "Partners: Nurture a winning network of custom-ers and suppliers, together we create mutual, enduring value."

(4) "Planet: Be a responsi-ble citizen that makes a difference by helping build and support sustainable

Does not explicitly provide a corporate vision.

Focuses on the long-term goal of "being better, not just bigger" in doing global business (McDonald's Cor-poration 2010a: 10)

Describes its business and offering that is provided "day in and day out" as follows:

"Safe, quality food. Afforda-bility and convenience. A simple and enjoyable expe-rience. Service you can count on."

(McDonald's Corporation

144 In the "2008 Sustainable Development Overview" (Unilever Group 2009), Unilever refers to a

"Vitality Mission" that is important for both the direction of the general business and sustainability initiatives.



(Unilever Group 2010a: 1) communities."

(5) "Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities."

(6) "Productivity: Be a highly effective, lean and fast-moving organization."

(The Coca-Cola Company 2010e)

2009: 2)

Areas of corpo-rate strategy

The priority of the strategy is to achieve "profitable share and volume growth across all categories and countries" (Unilever Group 2010a: 7)

The strategy is founded on four dimensions:

(1) "Winning with brands and innovation" based on superior products, wide-spread appeal and success-ful R&D (Unilever Group 2010a: 7-9)

(2) "Winning in the market place" based on developing lead markets and closely cooperating with leading retailers (Unilever Group 2010a: 7, 10-11)

(3) "Winning through conti-nuous improvement" based on increasing cost-based competitiveness in sourcing and supply chain operations (Unilever Group 2010a: 7, 12-13)

(4) "Winning with people" based on developing the company's workforce (Un-ilever Group 2010a: 7, 14-15)

The strategic approach ("2020 Vision" and "Road-map") aims at "creating long-term sustainable growth and shareholder value" (The Coca-Cola Company 2010a: 2)

The strategy defines five specific goals to be achieved by 2020:

(1) "More than doubling system revenue while in-creasing system margins"

(2) "Ensuring to be the most preferred and trusted beve-rage partner"

(3) "Attaining global leader-ship in corporate sustaina-bility"

(4) "Managing people, time and money for the greatest effectiveness"

(5) "Becoming one of the world's premier employers"

(The Coca-Cola Company 2010a: 2-3)

The strategy "Plan to Win" defines five "core drivers of the business", which aim at "delivering exceptional cus-tomer experiences": (1) People, (2) Products, (3) Place, (4) Price, and (5) Promotion (McDonald's Corporation 2010a: 10)

Within the strategy, particu-lar emphasis is given to "enhancing restaurant expe-rience for customers world-wide", increasing "sales and customer visits" and main-taining financial discipline in "the system" (McDonald's Corporation 2010a: 10)

For the near future, initia-tives are centered in three core areas: (1) "service enhancement", (2) "restau-rant reimaging", and (3) "menu innovation" (McDo-nald's Corporation 2010a: 11)

Appendix 11 - Details on reported sustainability performance metrics

(1) Unilever Group

(a) Officially reported key performance indicators for sustainability strategy

# KPI - Description* Cat.** 2007 2008 2009

1 Water use - Use of water in production in m³ / ton of production n.a. 3.05 2.97 2.81

2 Energy use - Use of energy in production in GJ / ton of production n.a. 1.80 1.76 1.72

3 Carbon dioxide - CO2 from energy use in kg / ton of production n.a. 149.2 145.9 142.2

4 Total waste - Total waste in kg / ton of production n.a. 7.56 7.91 6.52

5 Hazardous waste - H. waste in kg / ton of production n.a. 0.40 0.49 0.67

6 Non-hazardous waste - N-h. waste in kg / ton of production n.a. 7.16 7.43 5.85

7 Chemical oxygen demand - COD in kg / ton of production n.a. 1.61 1.67 1.40

8 SOx emissions - SOx from boilers / utilities in kg / ton of production n.a. 0.17 0.17 0.15

9 Accident rate - Total recordable accident frequency rate (TRFR) per n.a. 2.6 2.1 1.9



1 million hours

10 Fatal accidents - Total number of fatal accidents n.a. 4 4 4

*Source: #1-8 Unilever Group 2010i, #9-10 Unilever Group 2010j

**(Cat.) Category according to sustainability strategy core area: Not officially allocated by Unilever Group; #1-8 seem to belong to "Sustainable living", but #9-10 refer to internal workforce which is not represented in sustaina-bility strategy core areas.

(2) Overview on other selected performance highlights

44% of our food portfolio now in line with internationally accepted guidelines for saturated and trans fat, sugar and salt

Purchased 185,000 tons of certified sustainable palm oil via GreenPalm certificates, accounting for 15% of our total purchases

Food industry sector leader in the Dow Jones Sustainability World Indexes for the 11th year running – the only company ever to have achieved this

15% of the tea we use globally now sourced from Rainforest Alliance Certified™ farms Reduced environmental impacts of our manufacturing operations by 41% for CO2 from energy, 65% for water

use and 73% for total waste, measured per ton of production over 1995-2009 Achieved display of percentage of Guideline Daily Amounts (GDA) for five key nutrients on pack for products

sold in Europe as part of CIAA voluntary initiative for over 90% of eligible products Increased the penetration and consumption of our categories by consumers at all income levels in developing

and emerging markets, now about 49% of sales reached from these markets Increased sourcing from smallholder farmers to ensure security of supply: 10,500 farmers now involved in

projects in Africa and 38,000 smallholder farmers have achieved Rainforest Alliance certification in Kenya over 2007-2009

Nearly 17 million school meals delivered to 80,000 children in 2009 through our partnership with the World Food Program

45,000 women entrepreneurs reach 3 million consumers in 100,000 Indian villages with Unilever products

Source: "Sustainable Development Overview 2009" (Unilever Group 2010b: II, 9), "Annual Report and Accounts 2009" (Unilever Group 2010a: 2-3)

(2) The Coca-Cola Company



1 Product quality - Global company index rating out of 100 (a) 94.5 94.5 n.a.

2 Existing low- and no-calorie beverages - Number in portfolio (a) 700+ 750+ n.a.

3 New low- and no-calorie beverages - Number of newly launched (a) 150+ 160+ n.a.

4 Active healthy living charitable contributions - In USD million (b) 6 9 n.a.

5 New beverages - Number of newly introduced (b) 700+ 700+ n.a.

6 Direct CO2 - Greenhouse gas emissions in million tons (c) 1.95 1.96 n.a.

7 Indirect CO2 - From electricity purchased and consumed in million tons (c) 2.97 3.21 n.a.

8 Energy use - Total megajoules used in billion (c) 55.8 58.6 n.a.

9 Energy use ratio - Megajoules per liter of product (c) 0.46 0.46 n.a.

10 Economic impact - Total global salaries, shareowner dividends, local capital expenditures, goods purchased and income taxes in USD billion

(d) 21.2 22.8 n.a.

11 Charitable community contributions - In USD million (percent of op-erating income)

(d) 99 (1.3)

82 (1.1)

n.a.

12 Manual distribution centers - Total number of centers in Africa (d) 1,800+ 2,600+ n.a.

13 Packaging use ratio - Grams of material per liter of product (e) 50.0 51.9 n.a.

14 Recovered bottles and cans - Percent of equivalent sales (e) 36 n.a. n.a.

15 Packaging quality - Global company index rating out of 100 (e) 90.4 91.2 n.a.

16 Water use ratio - Liters of water used per liter of product (f) 2.47 2.43 n.a.



17 Total water use - Total liters of water used in billion (f) 300 313 n.a.

18 Community water partnerships - Number of partnerships (f) 116 203 n.a.

19 Countries with water projects - Number of countries with projects (f) 48 56 n.a.

20 Wastewater treatment standards - In percent of all plants (f) 85 88 n.a.

21 Workplace rights policy assessments - Number of assessments (g) 106 93 n.a.

22 Supplier audits - Number of audits performed (g) 1,313 1,898 n.a.

23 Gender of employees - Male / Female in percent (U.S. only) (g) 50 / 50 50 / 50 n.a.

24 Ethnicity of employees - African American / Asian / Caucasian / His-panic / Other in percent (U.S. only)

(g) 23 / 5 / 65 / 6 / 1

23 / 5 / 64 / 7 / 1

n.a.

25 Lost time incident rate (LTIR) - Per 200,000 work hours (g) 2.3 2.2 n.a.

26 Total lost days - Including days lost, restricted and transferred (g) 29,407 24,621 n.a.

27 Spend with minority- and women-owned enterprises - In million USD (g) 366 413 n.a.

*Source: The Coca-Cola Company 2009b: I-IV

**(Cat.) Category according to sustainability strategy core area: (a) Beverage benefits, (b) Active healthy living, (c) Energy management and climate protection, (d) Community, (e) Sustainable packaging, (f) Water stewardship, (g) Workplace.

(b) Overview on other selected performance highlights

$413 million spent with diverse suppliers in 2008 No. 9 ranking in the annual DiversityInc Top 50 Companies for Diversity, making us the only company to be in

the top 10 for six consecutive years 200+ juices and juice drinks launched in 2008 Our portfolio has nearly 500 brands inclusive of 3,000+ beverage products 39,000 HFC-free CO2-refrigerated coolers and vending machines placed in the market trough 2008 Recovered the equivalent of more than 35% of the bottles and cans sold by our system Opened the world’s largest PET4 bottle-to-bottle recycling plant in February 2009, which will produce PET

plastic for reuse each year equivalent to 2 billion 20-ounce PET bottles In 2008, Company associates volunteered 273,000 hours of community service In 2008, our Company discharged a total of 184 liters of wastewater, a 3 percent increase over 2007 while unit

case volume grew 5 percent

Source: "2008/2009 Sustainability Review" (The Coca-Cola Company 2009b: I-IV)

(3) McDonald's Corporation



1 Supplier social accountability - Percent having affirmed code of conduct (b) 92 95 n.a.

2 Animal welfare - Number of audited supplier meat processing plants (b) 513 484 n.a.

3 Packaging ratio - Amount of packaging used per transaction count (b) 0.14 0.13 n.a.

4 Recycled packaging - Percent of packaging made from recycled paper (b) 29.8 30.8 n.a.

5 Menu choice (1) - Items per menu with at least 1 fruit / vegetable serving (c) 6.1 6.4 n.a.

6 Menu choice (2) - Items per menu with at least 1/2 fruit / vegetable serving (c) 10.9 11.4 n.a.

7 Nutrition info (1) - Percent of nine largest markets with in-restaurant info (c) 100 100 n.a.

8 Nutrition info (2) - Percent of largest markets with out-of-restaurant info (c) 100 100 n.a.

9 Training satisfaction - Percent of crew members satisfied with training (e) 84 85 n.a.

10 Support by superior - Percent of managers satisfied w. top-down support (e) 83 82 n.a.

11 Trained manager - Percent of comp.-owned rest. with certified manager (e) n.a. 93.3 n.a.

12 Career chance - Percent of top management who started in restaurant (e) 42 42 n.a.



13 Female managers - Percent of women as comp.-owned rest. managers (e) 49 47 n.a.

14 Female top leadership - Percent of women in top executive team (VP+) (e) 26.7 27 n.a.

15 Philanthropic activities - Total global contributions in USD millions (f) 10.6 15.2 n.a.

16 Local economic impact - Total capital expenditures in top nine markets (including investments in new and existing restaurants) in USD billions

(f) 1.8 1.8 n.a.

17 Social taxes - Total social taxes paid in top nine markets in USD millions (f) 621 616 n.a.

18 Income taxes - Total income taxes paid in top nine markets in USD billions (f) 1.2 1.1 n.a.

*Source: McDonald's Corporation 2009: 8-9

**(Cat.) Category according to sustainability strategy core area: (a) Governance & ethics, (b) Sustainable supply chain, (c) Nutrition & well-being, (d) Environmental responsibility, (e) Employment experience, (f) Community

(b) Overview on other selected performance highlights

In 2008, more than 98% of our fish was sourced from fisheries with favorable sustainability ratings. 97% of the 500 approved abattoirs (animal handling facilities) in our supply chain were audited for animal

welfare in 2008, and 99% of those passed their audits. Today, approximately 80.8% of the consumer packaging used in our nine largest markets is made from re-

newable (paper or wood-fiber) materials, and nearly 31% of the material comes from recycled fiber. 2008: Our percentage of sources from green fisheries (i.e. sustainable fishing practices according to Marine

Stewardship Council) went up and in total, and more than 98% of all McDonald’s fish originated from fisheries with zero unsatisfactory (red) ratings.

[Quotations of country/region-specific achievements were omitted in the above examples.]

Source: "Worldwide Corporate Responsibility Report" (McDonald's Corporation 2009: 17, 26, 28)

Appendix 12 - Summary of content contributions by experts and main sustainability aspects

General overview on interview topics Major sustainability-related contributions

This summary is based on field notes that were taken of the interviews and reviewed by the experts.

(1) Mag. Edi Czasch (Franchisee and Owner of two McDonald's restaurants)

Personal details and role of franchisee Details on operations in the restaurant Organization and sustainability in the value chain Ronald McDonald House Charity Austria and the

upcoming event "Car Wash Day 2010" Background on marketing, communications and

products Internal sources and potential contacts

McDonald's Austria has local sourcing as one of its principles (100% Austrian origin for beef, potatoes and eggs)

GUT Galle Umwelttechnik is the environmental consultancy that is for example responsible for all recycling efforts in the restaurants

All social involvement in bundled in the Ronald McDonald House Charities

(2) Mag. Ulrike Schelander (General Manager of Ronald McDonald's Kinderhilfe Österreich)

Personal role and responsibilities Particularities and importance of the Ronald McDo-

nald House Charity Milestone in recent history Organization and staff of the charity Connection to McDonald's Austria Relationships with stakeholder groups Marketing activities and public perception Visions for the future

The house charity is an important social contribu-tion by supporting families with severely ill children with a "temporary home" close to children hospitals

There is a strong partnership with McDonald's Aus-tria and good international interconnection

Recent changes and achievements have contri-buted to the further development of the charity (e.g. own management, renovation of house Vienna, Spendengütesiegel)

(3) Mag. Ursula Riegler (Senior Manager Communications of McDonald's Österreich)

Adaptation of international sustainability approach-es to McDonald's Austria

Advertising related to sustainability initiatives Corporate communications Interaction with and response to stakeholders Sustainability in product policy

International sustainability policies are adapted to meet the requirements of the country

Ecological and social topics play an important role in corporate communications

Quality and regional origin of the products play important roles (e.g. beef 100% AMA, potatoes 100% from Austria, 100% AMA free range eggs)

(4) Mag. Karola Grill-Haderer (Manager House Operations of Ronald McDonald's Kinderhilfe Österreich)

Role description and responsibilities of position The house charities not only help families directly



Organization of the house charity in Austria Social contribution and offer in the houses Particularities of houses and connection to hospitals International connection of Austrian charity Ecological aspects in house management Quality and safety standards in the houses Utilization rate and plans for expansion Vision and further targets

but also support the public health system High utilization and often unpredictable course of

disease of the children pose challenges to operative planning

The offer provided by houses is very well received and plans for expansion are currently under investi-gation

(5) Dr. Leopold Wieninger (General Manager of AHB Backwaren GesmbH & Co KG)

Personal details and role description Background information on the Austrian Hamburger

Bakery (AHB) Regional and ecological aspects in sourcing Sustainability in production Cooperation with McDonald's Austria and exchange

in the Bakery Council Internal and external audits Certifications

Value creation of buns occurs in Austria, but not all ingredients can are locally available

McDonald's provides support in measuring and reducing CO2 emissions in the supplier's operation practices

McDonald's shows leadership in sustainability-related topics by e.g. setting advanced standards and organizing experience exchanges (bakery council)

(6) Ursula Kellner, MSc. (House Manager of Ronald McDonald's Kinderhilfe Österreich Haus Wien)

Role description and personal responsibilities Large corporations and their responsibilities Social contribution of the house Vienna Cooperation with St. Anna and AKH Process of providing housing to families Capacities and capacity planning Communication, fund raising, external support Feedback from families Improvements by recent renovation Documentation of families' personal stories Wishes and aims for the future

Responsibility of large corporations can be appro-priately described by Ray Kroc's belief that they "need to give something back to the communities in which they operate".

Ronald McDonald's House Charity closes an impor-tant gap in the public health system as studies show that proximity of parents greatly supports the healing process of children

The house in Vienna closely cooperates with the St. Anna Kinderspital and the Vienna General Hospital (AKH)

(7) DI Maximilian Hardegg (Owner of Gutsverwaltung Hardegg)

Personal introduction Details on the farm and the business Cooperation and exchange with McDonald's Sustainability initiatives and certificates (e.g. DLG,

SAI, GAP, Flagship) Economic dimension of sustainability Personal motivation for pursuing sustainability goals Agriculture in Austria and sustainability Exchange with others to generate new knowledge

The farm and its owner in regular exchange with all kinds of partners in providing practical knowledge to further develop sustainability initiatives

Sustainable agriculture may occasionally be a bit more expensive and challenging, but high econom-ic, ecological and social standards are very impor-tant for the long-term success of the farm

Austria's agriculture is generally well-advanced, but its small structures challenge sustainability

(8) DI Michaela Dobes (Commercial Lead Bakery Products of McDonald's Europe)

Sustainability at McDonald's Official publications as data source Particularities of the Austrian market Role of suppliers in sustainability Quality assurance

Sustainability is an important and very dynamic topic at McDonald's

Many aspects are under constant review and de-velopment, which explains their sensitivity

Data and facts need to be drawn from publicly available sources

(9) Christine Marek (State Secretary in the Federal Ministry of Economy, Family and Youth)

Cooperation of the three sectors: economy, social society and politics

Role of politics in view of large corporations Support of responsibility in doing business Social involvement of companies Responsible purchasing by consumers

The government sees its role as partner in bridging the interests of the public and businesses

Apparently, there is a change from charity to social-ly responsible entrepreneurship, which is also ap-parent in the Ronald McDonald's House Charities as being an integral part of corporate philosophy

Consumers require more sustainability and are an important multiplier of CSR activities

(10) DI Gerald Hoeller (General Manager of SDL Handelsges.mbH)

Personal information and duties at SDL Facts and figures of SDL Background on logistics and distribution structure Environmental commitment "Biodiesel"

Since 2002 all trucks are operated with biodiesel from used frying oil in the warm period of the year between April and October

McDonald's can be considered a fairly demanding customer that aims at driving sustainability to the



Cooperation with McDonald's and exchange of ideas and experience

Ecological and social initiatives Certifications

next level but also supports initiatives of suppliers SDL achieved EMAS certification already in 2002

with the respective environmental and social stan-dards

(11) DI Gerfried Pichler (General Manager of Frisch & Frost Nahrungsmittel GesmbH)

Personal details and responsibilities at F&F Background information on F&F Importance of sustainability and requirements to-

wards suppliers Cooperation with McDonald's Biogas facility to produce energy External and McDonald's-related certifications Initiative "buy domestically" Consequences as result of changes in ownership

F&F sees its business relations with suppliers as long-term partnership commitment and supports its farmers in implementing sustainable agricultural practices

Complying also with McDonald's standards, F&F provides sustainable products of high quality

Since 2003, F&F operates its own biogas facility that produces about 40% of all energy required in the plant out of ecological waste

(12) Dr. Klaus Galle (Founder and General Manager of GUT Umwelttechnik GmbH)

Personal introduction Details on GUT Galle Umwelttechnik McDonald's recycling concept Milestones of the concept and examples Role of GUT in cooperation with McDonald's Licensing and differences to competitors Generating own knowledge Advice to suppliers of McDonald's Austria Certifications and logos

McDonald's has an integrated environmental con-cept in place that is call "McRecycle" and is based on the principles of "avoiding, reducing, recycling"

GUT operates as "outsourced environmental de-partment" of McDonald's Austria and is therefore always integrated in environmental matters, e.g. the design of new product packaging

Role of logos and certifications needs to be re-viewed skeptically as firms may only try to commu-nicate a better image rather than acting responsibly

(13) DI Andreas Poechlinger (Plant Manager of Esca Food Solutions GmbH & Co. KG)

Personal details and responsibilities at Esca Data and facts about Esca Corporate sustainability at Esca Cooperation and linkages with McDonald's Austria Standards for own suppliers Quality checks and tracing of beef Independent certifications

Esca is historically closely linked with McDonald's and thus very well integrated in the company's ef-forts to ensure sustainability in the value chain

Esca offers a price premium to its suppliers if they fulfill specific sustainability requirements

All beef processed to patties can be completely traced back to its origin

Appendix 13 - Questions for focus group discussions

Section I: Sustainability and the corporation

(1) What does “sustainability” mean to you? (2) What does “corporate sustainability” mean to you? What similar terms can you think of? (3) What role do you think a company should play? Towards government and civil society? Do you think there

are differences in Europe and the U.S.A.? (4) What power do consumers have? Can they influence corporations? (5) What does “responsible consumer” mean to you?

Section II: Purchasing sustainable food and beverages

(6) What do you refer to as “sustainable products”? Could you give examples? (7) What adjectives best describe someone’s attitude towards purchasing sustainable food and beverages? How

would someone describe the motivation for purchasing sustainable products? (8) What positive and negative emotions can be expected from purchasing sustainable products? How would

somebody feel? (9) What people are important to you? And what do they think about purchasing sustainable products? (10) Why would somebody purchase sustainable products? What reasons can you think of? (11) Would you want to purchase sustainable products? Why / Why not? (12) Do you actually intend to purchase sustainable products? Why / Why not? (13) How difficult is it to purchase sustainable products? Choice, availability? (14) How often and how many sustainable products have you purchased during the last four weeks?

Section III: Evaluating company perception

(15) What do you know about the following companies’ corporate sustainability strategies? Coca-Cola, Unilever, Nestlé, Kraft Foods, PepsiCo, Starbucks, McDonald's? Have you heard of their slogan for the sustainability approach?

(16) What products/brands do you regularly consume from these companies? What do you like most about them?



What about their sustainability (ecological, social) performance? Where do you think sustainability is relevant for food and beverage products? Are you satisfied with the current product range and availability of the com-panies' sustainable products?

(17) How do you inform yourself about companies’ and products’ sustainability performance? Have you got suffi-cient information? What about the format of this information?

(18) Could you try to assess the companies’ economic, environmental and social performance based on your knowledge? If no, why not?

Section IV: Personal involvement

(19) Have you ever been personally involved in promoting sustainable products? If yes, how? (20) What about “positive buying” (i.e. favoring products because of environmental and/or social reasons) and

“boycotting” (i.e. intentionally avoiding products of a certain company)? (21) Have you been active in NGOs/CSOs, contacted companies, worked with government? What did you do?

What were your experiences?

Section V: Ways to improve

(22) What barriers keep you from purchasing more sustainable products? How would you suggest overcoming them?

(23) What would you recommend companies to improve?

Appendix 14 - Detailed findings from focus group discussions

Austrian students American students

All input from Austrian and American students without direct quotations or particular order in these notes

Q1: Meaning of sustainability (attributes)

Intergenerational responsibility, thinking of grand-children’s needs, long-term orientation, caring, re-sponsible, thoughtful, respectful to others, future that lies in front of me

Environment, quality of life Careful use of resources, ensure future availability

of drinking water, avoid pollution Term is often used in the media, but people gener-

ally do not understand what it means Very broad term, which can be interpreted very

differently from one to another, several as-pects/facets exist

The term is heard often

Self-sufficiency, minimum waste, minimum envi-ronmental impact by society, careful use of re-sources, no depletion, water quality and security

Only associations in environmental terms, only minor connection to society

Able to provide something for itself for the long-term Environmentally friendly, nature, pureness Consistently reducing the impact on the environ-

ment Term is most known on the East and West coast, in

the Midwest not such a big topic, only maybe among some progressive farmers

From economic perspective, developed countries need to keep their position in a global world, e.g. in-vest in education for the long-term

Q2: Meaning of “corporate sustainability” and similar terms

Align company to follow certain values and beliefs, which might have been forgotten

Term not very well known, only maybe among busi-ness students

Honesty of corporations, realism, telling the truth, widespread corporate responsibility

Company pursuing long-term goals instead of aim-ing at short-term gains

Caring about employees: treating them fairly, offer-ing enough apprenticeship positions to give young people a job

No discrimination of workforce because of origin, race, sex, age,

Social dimension is most important after economic (employees, new jobs, support people in general)

Companies make deliberate use of the term for their own specific purposes: e.g. influence consum-ers, appear more responsible

Consumers need to be careful: maybe viewed criti-cally, trick of corporations, fallacy, illusion created

Growing environmental focus of corporations: e.g.

Business perspective of sustainability Cost perspective, efficiency, new technologies e.g.

solar panels Companies are responsible for avoiding lawsuits,

but not out of motivation to change the world for the better (“responsibility because of the law”)

“Going green” as a trend (responsibility because of social/eco marketing): e.g. to use all kinds of labels to charge price premiums or to promote cost saving initiatives like sending bill via email

Synonyms or related terms generally not very common

Only CSR as a more common term in the United States, but obvious focus on social issues (as “so-cial” is in the expression)

Others say, CSR is not popular either Business ethics as a shallow and useless concept

(“just keeping everybody happy”): you cannot teach somebody ethics, maybe only how to cope with eth-ical problems, but the decision of right or wrong de-pends on one’s own values

Philanthropy: making charitable contributions



healthy products with better ingredients, reduced packaging, more efficient transport routes

Companies may follow green trend for marketing reasons, e.g. McD changing color in Germany

Healthy nutrition is obviously appreciated by cus-tomers

Reasonable choice of location, regional orientation Corporation that allows its employees to act as

responsible human beings following moral values and beliefs to provide lasting results with little nega-tive impact

Responsibility, sense of duty, environmental con-sciousness

Term originally derives from forestry, i.e. controlled deforestation to make sure new trees grow again

Other terms: barely known, but heard of CSR CSR understood as synonym, maybe focusing on

people or internal stakeholders like employees

Corporate citizenship: not heard of, but makes sense after explanation, constitutional rights also applicable for corporations

Companies’ efforts not to pollute, to reduce their negative impact especially in sourcing and produc-tion

Corporate use of renewable resources, energy management, more efficient and less harmful processes

Eco-sustainability to highlight the ecological side, thinking green, going green

Strong associations of sustainability with the envi-ronmental side, to a lesser extent social issues, de-scribing social impact only if it is because of ecolog-ical factors provoked by the corporation

Business ethics, taught at college, is concerned with how a company treats people

Not so much known about corporations’ responsibil-ities, rather considered as marketing or PR topic, basic responsibilities of companies come from the law

Q3) Role of company towards government and civil society, differences in Europe and the U.S.A.

Optimal case, existing in theory: corporation is economically successful, ecologically responsible and creates social value

In reality, companies that get rich seek grey areas and may not apply best ecological or social practic-es -> skeptical that companies can succeed be-cause of responsible behavior?

Many companies are greedy, do not pursue real sustainability

To ensure good business conduct, governments must pass stringent regulation, introduce interna-tionally accepted norms together with NGOs to en-sure accountability

Companies need to play an active role to gain com-petitive advantage: sustainability is feasible, makes sense for foresighted businesses. Companies need to listen to consumers and society, but also often anticipate for themselves “what may be the future”

Companies lead the way, ahead of states or gov-ernments, politics always lags behind, it is compa-nies that move society and governments forward

Stakeholders need to be taken seriously, use their ideas positively, to avoid a negative reaction

Large companies have too much power, they use their size to play governments off against each oth-er, for tax cuts, advantages for their sites; govern-ments fear using their legitimate power because of possible job losses, need to impose higher penal-ties for misconduct

Civil society is rather weak, barely perceived as active, not much influence

Differences Europe/US stem from general condi-tions

Scarce resources are of higher importance in Eu-rope or at least have been seen as such for longer

US have shown that change can happen very quickly if a topic is considered of particular impor-tance; in Europe everything takes more time

In both regions mismanagement (misgovernment?), but in the US even worse as typically careless about the environment

European society is more sustainable, stronger on conservation in general

US: people are generally poorer, forced to buy

Firms should make profits, have responsibilities towards shareholders, but have no broader obliga-tions to society

Value of companies’ social contributions is difficult to quantify

Companies’ role towards government and society is to pay taxes, then government should decide how to spend taxes best for social purposes

Businesses should not play an active role in setting policies, also lobbying should be reduced dramati-cally, business leaders need to stay out of politics

Similarly, government should not interfere much with business or own corporations; businesses should be able to decide themselves how to best to make money within the law

Companies need to look at consumers’ interests first and foremost, consumers are the key to suc-cess and actually ensure the existence of the firm, also commit to shareholders' interests

Companies need to follow regulations imposed by the government, make profits within legal bounda-ries

Towards society, companies may make donations or support social projects, but only to a limited ex-tent, generally profits should be either reinvested in the company or distributed to owners

Often there are very close bonds between public authorities and businesses, e.g. schools in some states lack public funding, so corporations support them financially

NGOs only represent very specific interests of parts of society, so they do not represent civil society as a whole, they generally play a less significant role, nevertheless they can provide good contributions to research and offer particular viewpoints apart from business interests

Companies have to provide good products at a competitive price, nothing more but also nothing less

Differences exist between Europe and US European governments are much more involved in

influencing businesses Vast government control in Europe: e.g. opening

hours (no 24/7), employee and consumer protec-



cheap in bulk, and there is much greater choice, al-so unmanageable, large and wasteful package siz-es

US: companies have even more power than in Europe, fairly unregulated in their operations

EU: lacks own character, seeks to follow US in business orientation, but state still has historically more influence on largest firms, more consideration of their environment by firms

tion, pension system, health care Companies are “too nice” in Europe, could make

much more money More relaxed work ethics in Europe: they take a lot

of things for granted like Socialist idea of being giv-en things without needing to work for them

Large companies often support local communities, e.g. pay for school, giving something back to socie-ty, especially if state cannot afford to

Q4) Power of consumers and influence on corporations

Generally yes, but consumers are not well well enough organized and often not interested, too lazy, do not think much, do not seek information even if available

Influence by consumers is possible, consumers exercise their influence mainly through purchasing

Influence may vary across industries: stronger in foods than in other fields because of health aspects

Already important influence but increasing in the future even more: e.g. role of social networks like Facebook to connect concerned people

Companies need to listen to consumers who may provide very valuable ideas, high dynamics, mo-mentum can come from both sides: companies use ideas that were already part of consumer con-sciousness, but are just now taken seriously, on the other hand, demand from consumer increases, higher expectations; is like a ping-pong game

Strong influence through word-of-mouth, in inter-connected world, bad experiences can be shared very quickly

Consumer acting passively, looks at price and con-siders availability, but that’s it; often closes eyes to bad things (e.g. packaging waste, origin) because he doesn’t feel personally responsible

Influencing possible, even large companies do react to consumer complaints, change happens slowly and depends on critical mass

Consumer is the most important party for compa-nies: they decide ultimately on corporate profits and thus success

Influence: “absolutely, 100% yes” Even very large companies can be influenced: it is

an imperative for companies to listen to the con-sumer

Theoretically consumers have a lot of power, in fact they could have a lot of power, but in reality difficult for individuals to use it

Businesses have more consolidated power, but consumers may organize themselves or share opi-nions with each other much more easily today than in the past

Consumers follow certain buying habits, but they can change, and in total, corporations would expe-rience drop in sales pretty fast

Influence in both ways: consumers are skeptical, but nevertheless show their trust by purchasing a certain brand or consuming services from a certain company, therefore they are very receptive to com-pany communication; on the other hand, companies follow consumers’ demands, provide goods, servic-es and information they require

Finally, consumers find out if the company cheats or doesn’t tell the truth, and if trust is damaged, consumers purchase other goods as choice is broad, consumers remember well

Q5) Responsible consumer (attributes)

Consumer who considers resource usage or re-source intensity of the products he buys

Not just consume, but consider if product or service is really necessary

Prefers regional products Considers application of quality criteria and certain

labor standards in production “If one would always try to shop responsibly, he/she

must abstain from at least 80% of products” Seasonal consumption, e.g. no strawberries in

winter No “go-for-the-cheapest” or “the more the better”

mentality, but quality focus Responsibility is different from one occasion to

another, “selectively responsible” (also industry specific)

Responsibility / sustainability may be a question of gender: women (mothers) generally more receptive in food and beverages

Also age and income may play a role, but finally it is about setting spending priorities

Conscious of the environment Interested, questioning issues, critical One’s shopping budget (e.g. students) imposes

restraints, nevertheless priorities can lead even less well-situated people to consider more environmen-

Buying American products (e.g. campaign in Okla-homa to buy American to help the economy)

Think locally, act locally: support local, domestic products

Responsibility does not need to have a broader focus (e.g. environmental, social), it is just to make sure people have jobs and survive

Buying the cheapest (or value-for-money) products to reward economies of scale and efficiency, to re-ward competition: then companies are challenged to excel, consumers are responsible to support competitive business conduct

Cares about more aspects than just himself, e.g. environmental consequences of the choice

People who are willing to spend more to follow certain values

For students, it is hard to be responsible in deed because of budget restraints, but can already be sustainable in thought (inform oneself, tell people, prepare, define consumption principles)



tally and socially responsible choices

Q6) Sustainable products in food and beverages (examples and attributes)

Regional origin: important aspect of sustainability, more trust in regional products than in those shipped in from far away

Basic products purchased directly at the farmer, often with direct contact

Ingredients of processed products also important, but not as much as for “organic apple”, which is consumed directly

Organic or fair-trade certified Exotic products not necessary (only exceptionally),

variety already possible with local products Alternative products offered in specialized shops Regional products with short transportation routes Respondent immediately thought of vegetables Processed foods articles (like instant soup, etc) not

instantly associated with sustainability, but some aspects count there as well: packaging, ingredients, transportation… and might have huge impact be-cause of the large amounts of identical items sold

Packaging: preferably paper or paper board, at little plastic as possible, milk in glass bottles, reusable, biodegradable, natural ingredients

Ecologically friendly production with low amount of or no pesticides

Products in which the whole lifecycle is considered E.g. organic apple juice direct from the farmer,

bottled directly into reusable glass bottles Low resource intensity of ingredients, low water

usage Only little packaging (recyclable) Efficient and environmentally friendly production Good labor practices: no child labor, respect for

working hours Higher quality at higher price Transparency of ingredients Higher tolerance (for consumers who react nega-

tively to particular substances) Apart from F&B, products from the “Welt-Laden”,

which already won several prizes, are unnecessary because they are shipped in from such remote loca-tions, would be better to transfer financial aid direct-ly

No GMOs, no science to change food

Locally grown Agricultural products that do not deplete soil Ecologically friendly packaging Recycling, e.g. in EU: getting refund for returning

bottles Contradictory viewpoint: sustainable if more people

can be nourished by cheaper food, specifically use GMOs or other technological means to increase output

Locally produced, organically grown, socially desir-able

Reduced water usage and carbon footprint Produced in an environmentally friendly manner Difference between simple food products (e.g.

apple, organic vegetables) and processed/manufactured food

Manufactured products are much more complicated to produce sustainably, but every improvement has huge impact

Recyclable packaging, e.g. water bottles that can be recycled or even reused

Improved factories with less pollution No animal testing Short transportation routes Differences from state to state: e.g. Vermont is very

green state with lots of cooperative stores, local grocery stores -> so “more sustainability” in prod-ucts may mean different things from one place to another

Free range fish or eggs Have not thought so much about sustainability in

food and beverages, most important is taste (if I like it or not) and generally preference for well-known brands (because of other factors than ecology or social issues)

Q7) Attitude towards and motivation for purchasing sustainable food and beverages (attributes)

Caring for grandchildren Conscientious, faithful Responsible / irresponsible Critical Social Self-conscious Ecology-minded Environmentally aware Educated Curious Not too economical, generous spending Dutiful Future-oriented High moral values Specialized / selective consumption Sensualist, wants to experience with all senses Health-oriented Figure / weight conscious

Useless-useful Ineffective-effective Unpleasant-pleasant Unhealthy-healthy Self-approval: to feel good about oneself Supportive Responsible Outdoor oriented, pure nature seeking (-> men) World-saving Beneficial



Q8) Positive and negative emotions from purchasing sustainable products (attributes)

Satisfaction from a good deed In balance with oneself and the environment Proud to have made a responsible choice Pleased, happy Made a difference Healthier Quality of life increased (also for the future) Caring about the family Allowing oneself something special Relieved Joyful anticipation of more natural taste Skeptical if money was worth it or if product was

really the better choice

In grocery shopping, not so many emotions are involved

Long-term investments get more consideration But nevertheless some positive attachment to good,

locally grown vegetables: e.g. huge and perfect looking strawberries from Wal-Mart have no taste, whereas the smaller and less attractive ones from the farmers’ market are delicious

Feeling better Having wasted money Satisfaction to have supported local products Disappointment as organic food tastes less good

and looks worse

Q9) Influence of important people

Parents: very supportive, in favor of making more responsible choices generally, buy better products, but sometimes limited by available budget, consider origin of products

Family: originally very reluctant to consider organic products, she needed to convince them that regular tomatoes are worse for her allergy because of more chemicals than organic tomatoes -> but change in mindset successful

Male friends: often stereotypes persist, men who talk much about what to eat and what to choose are considered soft, sometimes gay or alternative

No topic among his closest, and five people who may talk about sustainability are likely to have five different opinions because of different definitions of the term

She often talks with her (female) friends and family about food and nutrition

Family and female friends talk about nutrition and food

Generally a female topic, men are uninterested or not yet aware of it, maybe they do not care, or the topic was not yet presented to them adequately

Men are interested in outdoor sports, pure nature, efficiency and power,… maybe there is something in sustainability for them after all

Parents: very supportive, very green, favor growing own food on the land, support solar energy

Friends from college: and as a student, value-for-money counts most: purchase less expensive prod-ucts, but American products

Family: buy free range fish instead of farmed fish, is healthier

Family, parents: are more environmental Macho attitude: normally women do grocery shop-

ping, is a female activity like cooking Sustainability stronger in Europe, folks back home

do not care so much

Q10) Reasons for purchasing sustainable products

To support quality To support fair labor conditions, workers’ protection Promoting regional products Health issues Consumption as a means to influence companies Self-expression as foresighted consumer Image, status Better natural taste Improve the world on a small scale Family Saving the future To take care of one's body, ensure health To fight exploitation of people and the planet Seriousness, setting new standards

Health Long-term orientation, preservation for others Sustainability itself if it is an important value Taste Environment

Q11) Desire to purchase sustainable products

Yes, even if it is difficult to assess products’ sustai-nability completely, especially from manufactured food and beverages

Basically rather yes, to increase well-being Depends on how much sustainability costs and if it

is really the better product

Generally yes, if price is ok But no purchasing decision because one attribute

alone is not sufficient for smart choice Do not know, probably feel better if I did



Strongly support regional products No, does not care so much, regular products are

fine Yes, because of health

Q12) Intention to purchase sustainable products

Concerning groceries, rather yes; in other domains, try to include environmental factors: e.g. computer with less energy consumption and more fuel effi-cient European car (honestly also cost considera-tions in regular usage afterwards)

Price is important factor in transition from desire to actual intention

Lack of trust in labeling is important issue, transpa-rency important

Not really, shopping for food is fairly spontaneous, purchases without desire

A little like donating for charity: “spend a cent more for the greater good”

Yes, out of beliefs and personal attitude Yes, but irregularly

No, only shopping for pasta (restrained by student budget)

Yes, likes eco stuff, but some trust issues (lack of transparency)

Probably not, price option very important If sustainable product is appealing, why not…

choice will be made in the supermarket At the moment, not much, but in 5-10 years proba-

bly regularly

Q13) Difficulty of purchasing sustainable products (incl. choice and availability)

Choice with some products in the past, but now not anymore: e.g. plastic PET-bottles; now only these are available

Concerning most items, there is choice; and if there is no choice between products, then non-consumption is also a choice and message to pro-ducers

Choice is generally ok, but not every “bio” is “bio” (organic: differences in labels), availability differs

Sufficient, but not so important on his agenda Yes, is difficult, choice is acceptable but could go

even further; availability limited for fresh goods Discount stores tend not to offer sustainable prod-

ucts, although more ecologically and socially friend-ly products appear on the shelves

Some regular products, including well-known brands (like fruit juices), actively promote sustaina-bility

If you look for the products, you find them Availability and choice are ok; maybe not every-

where but enough Not difficult, choice and availability ok, but you need

to intentionally look for such products Good, in California, for example, specific stores like

Safeway, New Leaf market, regional farmers’ mar-kets that provide sustainable products for good price

He does not browse through supermarkets, knows what he wants before and just buys it

Q14) Frequency and recency of sustainable purchases

Difficult to tell, concrete definition of sustainable products would be helpful; considering food and beverages, large portion regularly consists of re-gional or organic products

Sometimes proud of “non-consumption”, because thought carefully and realized that something would not have been really necessary

Very limited, “fairly limited intentional, systematic consumption”

About 2x/week, five products in organic store (not regular supermarket): Biosoja, apples, cane sug-ar,…

Sometimes eggs from the farmer directly Only Fairtrade coffee available at ÖH (student un-

ion) 5/8 products from last shopping “sustainable”: or-

ganic cream, curds, bread rolls, eggs, potatoes, … Apples, chicken,

Very occasionally, almost never Is a question of price: regular products are less

expensive and should be ok Very occasionally Hard to tell, maybe about 20% of all purchases

Q15) Perception of real companies' sustainability approach (Coca-Cola., Nestlé, Pepsi, Kraft Foods, Un-ilever, McDonalds, Starbucks) and awareness of slogan

Food and beverages industry makes people ill because of artificial products and ingredients: sim-ple, original, natural products much better, “back to

Yes, performance with purpose heard of, but not aware of any details

Creating share value sounds familiar but no further



basics” Does not know anything about Coca Cola or Nestle,

but nevertheless tries to avoid them; Unilever also, which is very difficult

Unfamiliar with corporate strategies of these multi-nationals, but generally these groups are not asso-ciated with sustainable business conduct (but no reasons for that can be mentioned!)

Generally difficult to judge, brand names are asso-ciated with other topics, e.g. Coca Cola is perceived as being cool, young & dynamic, rather than envi-ronmentally oriented

Actual activities of larger firms unknown, but surely comply with legal requirements; doubtful if they do more voluntarily

Nestlé was in the news recently, but does not know what for

Coca-Cola and “live positively” presented in Christ-mas advertising

clue No knowledge, too specific Unfortunately, no idea, does not care so much

about the company behind the products, but this could change, companies should draw attention to the topic, raise awareness

Q16) What products/brands do you regularly consume from these companies?

What do you like most about them?

What about their sustainability (ecological, social) performance?

Where do you think sustainability is relevant for food and beverage products?

Are you satisfied with the current product range and availability of the companies’ sustainable products?

Products from large corporations are generally not perceived as sustainable, e.g. in comparison to groceries at the farmers’ market

Packaging often does not look ecologically friendly Strong brands behind which the production compa-

nies tend to hide, e.g. Unilever, Nestlé Very limited knowledge, despite regular consump-

tion of products from these firms Austria: convenient and broad offer by farmers, so

possible to avoid large food companies Knorr, Nesquick, Bertolli, Maggi… but do not think

about sustainability when consuming these goods; nevertheless quality, transparency, taste, health, high standards of production etc expected from these well-known brands, but lacking information

Very irregular consumption of any of these compa-nies’ brands

Sustainability probably in packaging and transporta-tion, rather than in ingredients

Sustainability is important, but not communicated well

Consumer products all the time, although haven't thought so much about their eco-impact in the first place

Q17) Personal information about companies’ and products’ sustainability performance (incl. sufficiency and format)

Normally not much additional information sought if product is purchased for the first time, is enough to just try it out

Important that multinationals take up the topic, should be addressed even more often, more direct information to stimulate discussion and raise awareness

Consumers themselves do not actively research companies

Information from the media, occasionally the inter-net, called consumer service once

Information on the product is generally read more or less, but no further activities performed

Company information could be added on products, needs convenient and easily understandable format

Too lazy and/or busy to invest time in seeking background information

Differing opinion on whether or not a newsletter would be read

Information on ingredients, nutrition, origin is very important on the packaging; but all information must be reliable and trustworthy, sometimes presented in better way, e.g. color system to indicate nutritional

No information sought on their own, only catch something if it is in the news

For groceries, people do not look something up on the internet (despite regular consumption); but for large investments (e.g. car) background research on the company is done

Information on the packaging is read No interest in email newsletters, would directly go

into junk Not looked at their websites directly Packaging is very direct way for communication,

potential for more than just ingredients (if consum-ers want it)

In EU difficult to understand nutritional information, generally no serving size used for calorie refer-ences, but 100g

No leaflet to go with product, would not read Maybe provide information on how to best use a

product, old consumer ignorance or habits might be changed for the good

She actually read CSR reports of selected compa-nies, first in class but later out of interest, unfortu-nately most people are ignorant or lazy



value Idea: companies should use universally applicable

and understandable indices, which are certified by independent third parties, e.g. organic index, sus-tainability index following transparent criteria

From media, reading the newspaper, TV news, sometimes if article in online news portal is interest-ing, follow the link to the manufacturer’s homepage

Really loyal consumers know about the company also

Trend in Colorado to add information about a com-pany on plates and cups

Q18) Assessment of the companies’ economic, environmental and social performance

No information, just company names known Probably all economically strong, socially sufficient,

but environmental concerns about large corpora-tions

Missing direct information, rating based on gut feeling

Coca Cola probably better than Pepsi (reason un-clear)

Unilever could be better, seems to hide behind strong brands, company name generally unknown despite recent logo on products

Nestlé has some “Nes-…” brands, but do not know anything more

Read article about Nestlé’s good environmental performance, raw materials important

Just guessing, no precise knowledge All perform well economically, probably Environmental aspects: no info Social: heard of Coca Cola activities in the com-

munities, also Pepsi is socially active Coca-Cola to be well performing

Q19) Personal involvement in promoting sustainable products

Not officially, just informally if conversation shifts to such topics, tell opinion

Yes, specifically addresses issues regarding com-panies’ responsibilities

No, men talk about other things Spreading the word, but not formal promotion, tell-

ing good experiences

No, not at all Nope, and no interest in doing so either

Q20) Positive buying and boycotting

Avoids products from some companies, but only temporarily; always focus on regional aspect

Rather boycotting if negative news on corporations, e.g. Tschibo, Ikea, Kik

Some use positive buying, others use this tech-nique more often: depends on situation

Not for food, but in clothing: Nike (because of sup-pliers’ child labor practices)

Positive buying: seldom, occasionally Boycotting: did once concerning Wal-Mart, but

generally not It would need extreme situations to actually get

involved in boycotting, and she/he do not have enough information

If something is terribly wrong in a business, would directly inform the media: negative exposure has largest and most direct impact -> then maybe other people would boycott in large numbers

Tries to avoid Wal-Mart, but low prices are attrac-tive nevertheless

Positive buying of fair-trade coffee, chocolate and bananas

Q21) Personal activism (NGOs/CSOs, contacted companies, worked with government)

No, never, no active role No time or not worth the effort

No Does not seem necessary, would just contact the

media

Q22) Barriers from purchasing more sustainable products

Confusion: internationally different logos (what to believe?)

Price, sustainability should not require such high price premiums, e.g. organic products are so much more expensive, slightly higher price ok

Trust, consumers appear to be fooled Limited offer Lack of background information where the “sustai-

nability money” actually goes to Concept not ok: “I give you something so you do

Lack of trust, lack of transparency None, as this topic is at the very back of priority list,

no matter of urgency, not really on the radar Maybe selfish attitude, but do not feel bad about

consuming, other places (e.g. Dubai) are doing much worse

Price Skeptical about labeling, what this means



something good for me” -> why don’t I donate di-rectly myself?

Q23) Recommendations for improvement

Clear information policy Transparency and accountability, verification by

external parties Work closely with consumer, try to get their atten-

tion and interest to become involved in promoting sustainability

Address topic actively, communicate achievements in comprehensive and attractive manner

Consumer satisfaction can only be achieved if con-sumer is really treated as partner

Adopt uniform quality seals Basic question: how could packaging be used even

better to transmit information? Sell apples not in plastic, but simply out of wood

boxes Changing weird situation: that it is possible or ac-

cepted to offer a bad product (below certain mini-mum criteria) at a very low price, so that there is huge price pressure on quality / sustainable prod-ucts -> maybe lobby governments to raise minimum standards

Provide understandable packaging information on ingredients, best before-date, calories maybe with colors, company information, sustainability contribu-tion, advice on what customers can do

Companies need to carefully listen to consumer demands and respond adequately by fulfilling their needs

Maybe provide more precise and direct information in an attractive format, like directly on the packaging

No coherent eco-label, and only a certain percen-tage of green ingredients is needed -> develop and comply to international and transparent standards

Would be a good thing to know more about the company, but avoid information overload

Put small best practice boxes on the packaging Promote recycling, reusing, educate consumers to

care more in their choices about companies’ sustai-nability

Information on corporate responsibility on websites is extensive but hidden somewhere among other stuff, it might be a good thing to just let a small pop-up window appear with 1-2 sustainability highlights, that also change regularly

Although rather a female issue, educated men do care (especially business students), promote out-door aspect, pure nature -> sustainability can be marketed to both sexes but differently, e.g. quality, value experience, get something better

Appendix 15 - Questions for pretest interviews

Questions from pretest interview guide

(1) How did you like the questionnaire in general? a. What did you like best / worst? b. Are the questions understandable? c. How long did it take to answer the questionnaire? What do you think about the length? d. What would you improve?

(2) Let's talk about the sections in detail: I, II, III, IV, V. Any specific remarks? (3) How could you be motivated to participate in this survey? What is your motivation when answering question-

naires? What incentives do you think necessary? (4) Would you like to be provided a German version also? Do you think this would increase return? (5) The final version will be available online in the second half of June. Could you send the link to friends and

promote participation?

Appendix 16 - Main critical findings of pretest and consequent action

Aspect Main critical remarks Consequent action / change

Time to complete 15-25min on average Target: 15-18min

General A bit long and wordy Differences in questions not always

obvious Use of 4, 5 and 7-item scales Negative (left) towards positive (right)

answer orientation (vs. vice-versa) Add numbers to boxes to simplify

responding Add introduction to the topic and

concluding page at the end Replace section titles by section

guiding questions Consider gender correctness in

Shorten where possible, reduce text redun-dancies

Improve formatting, highlight important parts of question

Reviewed appropriateness of scales and changed to 5-item scales

No, keep orientation from negative (left) to positive (right)

No, boxes need to be sufficient No, would increase length and might influ-

ence responses No, keep section titles as they are more

straightforward



German version Maybe, evaluate to what extent necessary

Section I Q1, SQ ”e”: ‘share of what’ is unclear Q2: Rephrase question and add

“multiple choices possible”

Wording and overall formatting improved Necessary changes effected

Section II Most difficult and longest section to answer, appeared sometimes rather technical

Varying opinions on the introduction, generally favorable

Q3-Q5: minor remarks on some adjectives

Q6: a bit difficult and unclear to an-swer

Q8, SQ “a” & “b”: appear very similar Q9: “ease” to technical, question is

too far behind (model) Q10: phrasing of question about

“intention” not totally clear, feels re-dundant

Shorten slightly, change formatting, improve some subtitles

Keep introduction, but simplify and add clarifying examples

Review adjectives and replace if necessary Simplify Q6, content wise or formatting Eliminate one of the sub-questions Change wording, move question ahead Make phrasing more simple and highlight

difference to other questions

Section III Q12: “decision at the point-of-sale” unclear

Q13: “activism” too technical Q14: only two responses of “respon-

sible consumer” limit analyses

Replace by “purchasing behavior” Rephrase intro of the question Rephrase and change to a multiple item

scale (“To what degree…”)

Section IV Q16, SQ “a” & “b”: change phrase “Do you feel to be…”

Q16: add sub-question: Do compa-nies only report good things?

Q16, SQ “d” & “e”: confusion about ranking (some did, others didn’t)

Q16 overall: answering style ap-peared complicated

Q17 (German version): slight transla-tion mistake

Changed to “Do you feel you are…” New sub-question: “I believe that publicly

listed companies…” Transform ranking part into new question

and improve phrasing Regrouped questions and altered answering

format Translation improved

Section V Q18: phrasing unclear “If yes… check box”, but “do not know” also available

Rephrased to “Please try to…”

Section VI Q22: feedback question not neces-sary

Keep opportunity to provide feedback

Motivation to par-ticipate / incentives

Interest in the topic is a strong moti-vator

Some participate to support other students

But incentives probably necessary as additional motivator (because of length)

Raise interest by catchy description to in-crease participation

Provide little gifts for people who fill it out directly online on campus and lottery for all participants

German version Austrian participants reported some language-related difficulties

English version was translated into German (and also pretested)

Support for res-ponses

Try to use as many channels as possible

Use official as well as unofficial channels to reach possible respondents

Appendix 17 - Structure of the final questionnaire version

Section and description Focus Reference Scope Time



Introduction

Short introduction to research project - no questions (1/2min)

Section I: Corporate Sustainability

Cooperation in the three sector world, more active role of the firm, expectation of shareholder or stakeholder orientation, awareness of corporate sustainability and related terms

General Three-sector world, stake-holder theory (vs. share-holder orientation), sustai-nability-related terms

2 questions / 6 items;

1 page

2min

Section II: Purchasing from Sustainable Companies

Influence of attributes on desire, intention and intended behavior of purchasing from sustainable companies, strength of factors and connections

General Extended model of goal-oriented behavior (based on theory of planned behavior)


3 pages

4min

Section III: Consumer Role in Sustainability

Influence by purchasing behavior, economic vot-ing, personal activism, self-evaluation as responsi-ble consumer

General Power of consumers, ele-ments of consumerism, self-evaluation


1 page

2min

Section IV: Importance of Product and Communication in the Food and Beverages Industries

Importance of sustainability-related attributes for product / brand choice, satisfaction and trust in receiving information on sustainability, preferences of sources and channels, preference of product communication items

F&B Strategic management (product and communication strategy), corporate disclo-sure practices


2 pages

4min

Section V: Company Sustainability Practices

Awareness of the sustainability approaches of real companies, perception of their overall sustainability performance

F&B Extended sample of se-lected real companies of the food & beverages industry


1 page

2min


Demographic and educational facts; feedback on questionnaire

- - 9 questions / 9 items;

1 page

(1/2min)



Appendix 18 - Final version of the questionnaire

Questionnaire on “Corporate Sustainability”

Dear fellow students,

This questionnaire is used in the doctoral research project “Embedding Corporate

Sustainability – Company Strategies and Consumer Involvement” at the University

of Graz, Austria.

It is the basis for an investigation on how consumers stand towards responsible

purchasing behavior and what they expect from companies in terms of economic,

environmental and social performance.

Participants in this survey are students from the German-speaking parts of Western

Europe and from the United States.

I would be very grateful for your support in my academic research and request

about 15 minutes of your time to complete the following five parts of the question-

naire.

If you should have any questions or might be interested in the results of the re-

search, please do not hesitate to contact me directly at [email protected]

graz.at.

Yours sincerely

Mag. Rainer Matiasek, MIM (CEMS)

Please continue by answering the following questions!

All data obtained will be analyzed anonymously and serves academic research purposes only.



SECTION I: Corporate Sustainability

For this and all following sections, answers start with POSITIVE/BEST (=1) at the left

and end with NEGATIVE/WORST (=5) at the right.

1. Please indicate the level of your agreement/disagreement with the following

statements:

Strongly agree

Strongly disagree

“The government, private and civil sectors, should work together to meet today's global challenges.”

“Businesses should play a more active role in tackling the ecological and societal problems of the world, well beyond complying with legal standards.”

"The corporation’s first and foremost mission is to promote the interests of its stockholders.”

“All stakeholders, including owners, employees, suppliers, and customers should all receive a fair share of the value-added created by the business.”

“Businesses should aim at balancing economic, ecological and social obligations in a responsible manner for all stakeholders.”

2. Please mark all of the following terms that you know the meaning of:

Sustainable development

Business ethics

Corporate social respon-sibility

Corporate citizenship

Environmental sustainability

Corporate responsibility

Corporate sustainability



SECTION II: Purchasing from Sustainable Companies

Questions in this section refer to sustainable companies.

By definition "Sustainable companies" show a higher than average degree of responsibility towards

and transparency about their environmental and social impacts while pursuing economic goals. Sus-

tainable companies minimize their carbon dioxide emissions and improve product recyclability as well

as actively assisting in the career development of their employees and supporting local communities.

With their business partners (e.g. suppliers, customers) and various other parties (e.g. NGOs, gov-

ernments), there is close cooperation to improve business practices.

3. Purchasing from sustainable companies is…

Extremely Not at all Beneficial

Wise

Pleasing

Useless

Unattractive

Exploitation

4. When I purchase from sustainable companies, I feel…

Extremely Not at all Good

Responsible

Self-assured

Relieved

Satisfied

5. When I purchase from unsustainable companies, I feel…

Extremely Not at all Uncomfortable

Regretful

Guilty

Frustrated

Worried



6. Think about your personal reasons for purchasing from sustainable companies

(e.g., to reward responsible businesses, to purchase higher quality/value prod-

ucts, to help the environment and society, etc.), then insert your personal reason

in the blank space when you answer the following questions:

I desire to .................................…?

Absolutely true

Absolutely false

How strong is your desire to...............................? Very strong desire

No desire

7. Think about the influence of people who are important to you, then respond to the

following questions:

People who are important to me think I should purchase from sustainable companies.

Likely Unlikely

People who are important to me would approve of my purchasing from sus-tainable companies.

Completely Not at all

8. Think about the ease/difficulty of purchasing sustainable products, then respond

to the following questions:

How much control do you have over purchasing from sustainable compa-nies?

Complete control

No control

For me, purchasing from sustainable companies is... Easy Difficult

9. Think about your overall desire to purchase sustainable products, then respond to

the following statements:

Overall, I desire to purchase from sustainable companies. Strongly agree

Strongly dis-agree

How strong is your desire to purchase from sustainable companies? Very strong desire

Very weak desire



10. Think about your intention to purchase from sustainable companies, then answer

the following questions:

I intend to purchase from sustainable companies. Strongly agree

Strongly dis-agree

How strong is your intention to purchase from sustainable companies? Very strong intention

Very weak in-tention

11. Please report on your past behavior and future intention in purchasing from sus-

tainable companies:

How often have you purchased from sustainable companies in the past year?

Always Often Regularly Occasionally Never

How often have you purchased from sustainable companies in the past four weeks?

Always Often Regularly Occasionally Never

Currently, I purchase from sustainable companies. Strongly agree

Strongly dis-agree

How likely are you to purchase from sustainable companies in the next four weeks?

Highly likely Highly unlike-ly



SECTION III: Consumer Role in Sustainability


statements:

Strongly agree

Strongly disagree

“Companies are dependent on individual con-sumer's consumption choices.”

“As a consumer, my purchasing decision is my personal economic vote.”

"With my purchasing behavior, I can directly support those corporations that do business in an environmentally and socially responsible manner.”

“Consumers have the power to change business conduct.”

13. How active have you been in promoting sustainable consumption since becoming

an adult:

Always Often Regularly Sometimes Never

I have favored sustainable products over other products of comparable quality.

I have boycotted unsustainable products.

I have influenced my family and friends purchasing decisions for environmental and/or social reasons.

I have supported non-governmental organiza-tions (NGO) that pressure companies to pursue environmental and/or social goals.

I have contacted a company directly because of environmental and/or social reasons.

I have contacted governmental or public service agencies to report environmental and/or social issues with companies and/or companies’ products.

14. To what degree do you see yourself as a responsible consumer?

Very re-sponsible consumer

Very irres-ponsible con-sumer



SECTION IV: Importance of Product and Communication in the Food and Beverages Industries

15. How important are the following attributes in your decision to purchase food &

beverage products or brands:

Highly important

Not at all important

Sustainable ingredients

Sustainability of product benefits

Resource intensiveness of the pro-duction process

Distance from the production source

Sustainable packaging

Sustainability of the producer


statements:

I think that publicly listed companies of the food & beverages industries...

Strongly agree

Strongly disagree

“...provide sufficient information on their compa-ny’s environmental and social impact.”

“...provide sufficient information on their prod-ucts’ environmental and social impact.”

"...report the truth on their economic, ecological and social performance.”

“...focus entirely on reporting the positive as-pects of their sustainability performance."



17. Please rank the following entities from "1" (BEST) to "5" (WORST) as sources of

information on sustainable companies/products.

Non-governmental organizations

Government/public agency

Retailer Producer Media

18. Please rank the following formats from “1” (BEST) to “5” (WORST) for receiving

information about environmental and social impacts of the company and/or prod-

ucts...

Corporate report-ing

Online communi-cation

Traditional adver-tising

Product communi-cation

Point-of-sale communication

e.g. annual report, sustainability report

e.g. homepage, email newsletter, social network interaction

e.g. traditional mass media: TV, radio, print, outdoor

e.g. on-packaging information, leaflets packed in products

e.g. brochures, flyers, audio/video information in store

19. Please indicate what sustainability-related information you would like to receive

with the product you purchase, i.e. on the packaging or on an attached leaflet:

Definitely yes

Definitely no

all ingredients

genetic modifications of ingredients

geographic origin of the product

nutritional value in a comprehensive format

ecological and/or social impact of the product

how to make my own consumption more sustainable

ways to pursue a healthier lifestyle

independent sustainability labels (e.g. fair-trade)

experts' viewpoint (e.g. commentary, testimonials)

sources to get additional information (e.g. sustainability website)

transportation routes

supply chain (source/producer, intermediaries)

recyclability of the packaging

producer (company background information)

company sustainability initiatives (background)

company awards in sustainability

company partnerships with civil society organizations

company partnerships with government organizations



SECTION V: Company Sustainability Practices

20. Listed below are several slogans that represent different sustainability approach-es that Coca-Cola, Kraft Foods, McDonald's, Nestlé, PepsiCo, Starbucks, and Unilever have adopted and are currently using to project a sustainable image.

Please indicate which slogan belongs to which company (check the box and write the name of the company after the slogan in the space provided):

Corresponding company

“Live positively”

“XY's corporate responsibility"

“Adding vitality to life”

"XY's shared planet"

"Creating shared value"

"Performance with purpose"

"Working to build a better world"

"I am not aware of any of these corporate sustainability slogans."

21. How would you evaluate the sustainability performance of the following compa-

nies:

Very sus-tainable

Very un-sustainable

Coca-Cola

Kraft Foods

McDonald's

Nestlé

PepsiCo

Starbucks

Unilever




22. What is your gender?

Female Male

23. What year were you born?

............................................

24. What is your country of origin?

Austria Germany Switzerland United States Other European country

Other Non-European country

25. Your home university:

...........................................

26. Where is your home university located?

Austria Germany Switzerland United States Other European country

Other Non-European country

27. What degree program are you currently enrolled in or have recently completed?

Bachelor’s degree, undergraduate studies

Master’s degree, dip-loma degree, graduate studies

Doctoral, Ph.D., post-graduate studies

I'm not and have never been a student.

28. What is your main field of studies?

Economics or Business Administration

Law / Legal studies

Technology or Engi-neering

Natural Sciences

Humanities Medicine Formal Sciences

Any oth-er field of study

29. Finally, please provide your opinion: How did you like this questionnaire?

Very much Not at all

30. Please use the space below to provide any comments:

Thank you very much for participating in this survey and supporting my re-

search!



Appendix 19 - Background analysis output of survey results

(1) Test of normality for question twelve

(2) Test of normality for question thirteen

(3) Test of normality for question fourteen



(4) Test of normality for question fifteen

(5) Test of normality for question sixteen



(6) Test of normality for question twenty-one



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Curriculum Vitae

Personal details

Name

Date of birth

Nationality

Email

Rainer MATIASEK

08 December 1984

Austria

[email protected]

Education

10/2008-01/2011* (*expected)

08/2007-11/2008

10/2004-09/2008

University of Graz, Austria

Doctoral studies in Business Administration

Dissertation: "Corporate Sustainability. Company Strategies and Consumers"

Academic exchange and research in the United States

Community of European Management Schools, Pan-European

Master studies in International Management (CEMS MIM)

Academic exchange in Belgium and Denmark

Vienna University of Economics and Business (WU), Austria

Diploma studies in International Business Administration

Diploma thesis: "Marketing Strategies of International Retail Banks in CEE"

Academic exchange in Great Britain and the United States

Work experience

01-09/2010

10-11/2008

07-09/2008

03-07/2007

Horváth & Partners Management Consultants, Austria

Part-time work to provide support to consultants in various projects

McKinsey & Company, Austria

Internship with client engagement in telecommunications in Germany

A.T. Kearney, Austria

Internship with client engagement in automotives in Germany

Bayrische Motoren Werke AG, Germany

Internship in the sales department for the region China

Military service

Since 06/2004

10/2003-05/2004

Repeated voluntary service as sergeant of the reserve

Compulsory service with the Austrian Honor Guard, Vienna

Recent extra-curricular activities

11/2010

08-09/2010

05/2010

10/2009-06/2010

Participation in the Emerge 2010 Conference "India" at the University of St. Gallen

Participation in the three-week European Forum Alpbach 2010

Participation in the win² 2010 conference hosted by Uni Management Club Vienna

Voluntary involvement for the CEMS student community in the CEMS Club Vienna

Command of languages

German

English

French

Mother tongue

Fluent

Very good

Achievements in sports

1999-2003 Austrian national champion in artistic roller skating

Leisure activities

Sports (sailing, golf, skiing), traveling, ballroom dancing, musicals



Author's Declaration

Unless otherwise indicated in the text or references, this thesis is entirely the

product of my own scholarly work. Any inaccuracies of fact, or faults in reasoning, are

my own and accordingly I take full responsibility. This thesis has not been submitted

either in whole or part, for a degree at this or any other university or institution. This is

to certify that the printed version is equivalent to the submitted electronic one.

Dissertation Matiasek Corporate Sustainability Dec 2010

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Transcript of Dissertation Matiasek Corporate Sustainability Dec 2010