Publication: Market share as an indicator for corporate social responsibility (CSR) spending: The study of Coca Cola’s market
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Abstract
Although, prior research has addressed the influence of corporate social responsibility (CSR) on perceived customer responses, market value, and bottom line, among other drivers for CSR, it is not clear whether the market share of a firm is an indicator for CSR spending in different markets. The study examined the relation between Cola-Cola’s market share in traditional soft-drinks markets and new markets to see if there is a correlation between spending on CSR and market share. The hypothesis that there is a negative correlation between market share and CSR spending was not corroborated with clear evidence. However, the interesting finding was that markets with low relative market share were found to have low spending, markets with medium relative market share (MS) show rather high spending and from there, generally speaking, the social spending declines with increasing market share. Hence, managers appear to invest more on CSR in areas with fierce rivalry, where they have medium market share.
Description
African Journal of Business Management Vol. 6(6) pp. 2234-2247, 15 February, 2012
Available online at http://www.academicjournals.org/AJBM
DOI: 10.5897/AJBM11.2133
Although, prior research has addressed the influence of corporate social responsibility (CSR) on perceived customer responses, market value, and bottom line, among other drivers for CSR, it is not clear whether the market share of a firm is an indicator for CSR spending in different markets. The study examined the relation between Cola-Cola’s market share in traditional soft-drinks markets and new markets to see if there is a correlation between spending on CSR and market share. The hypothesis that there is a negative correlation between market share and CSR spending was not corroborated with clear evidence. However, the interesting finding was that markets with low relative market share were found to have low spending, markets with medium relative market share (MS) show rather high spending and from there, generally speaking, the social spending declines with increasing market share. Hence, managers appear to invest more on CSR in areas with fierce rivalry, where they have medium market share.
Although, prior research has addressed the influence of corporate social responsibility (CSR) on perceived customer responses, market value, and bottom line, among other drivers for CSR, it is not clear whether the market share of a firm is an indicator for CSR spending in different markets. The study examined the relation between Cola-Cola’s market share in traditional soft-drinks markets and new markets to see if there is a correlation between spending on CSR and market share. The hypothesis that there is a negative correlation between market share and CSR spending was not corroborated with clear evidence. However, the interesting finding was that markets with low relative market share were found to have low spending, markets with medium relative market share (MS) show rather high spending and from there, generally speaking, the social spending declines with increasing market share. Hence, managers appear to invest more on CSR in areas with fierce rivalry, where they have medium market share.
Keywords
Corporate social responsibility (CSR) spending, market share (MS), business unit level (BUL), national level (NL), per capita spending, absolute spending