Buhalterinės apskaitos teorija ir praktika ISSN 2538-8762 eISSN 1822-8682
2021, Nr. 24, DOI: https://doi.org/10.15388/batp.2021.35

Interaction Between Social Business Sustainability and Consumer PurchaseDecision: Conceptual Framework

Aurelija Ulbinaitė
Vilnius university, Lithuania
Aurelija.Ulbinaite@ef.vu.lt
ORCID iD: 0000-0001-5025-7240

Neringa Raštutytė
Vilnius university, Lithuania
neringa.rastutyte@evaf.stud.vu.lt

Abstract. Due to the lack of research in social business sustainability development, it is necessary to investigate this problem, seeking community wellbeing. The goal of this paper is to elucidate the importance of sustainability development in relation to its different dimensions and the relationship between consumer perception and sustainability development. A systematic scientific literature analysis was performed. The results show that although sustainability is one of the main aspirations of companies, it is still difficult to achieve for effective transformation. The framework also reflects that sustainability is a particular change that has to be implemented over time, involving not only the business itself but also the surrounding environment (other systems). Furthermore, to achieve sustainable development it is essential to define which sustainability indicators will be selected, how they will be measured, and how the results will be tracked. A sustainable social business model must not be considered in isolation from its surrounding environment. Moreover, it is relevant to identify the public opinion, i.e., potential consumers, regarding effective sustainability development in order to get a more efficient result.

Keywords: social business, sustainability, system transformation, consumer behaviour

JEL code: Q56, D11, O44

Copyright © 2021 Aurelija Ulbinaitė, Neringa Raštutytė. Published by Vilnius University Press
This is an Open Access article distributed under the terms of the Creative Commons Attribution Licence, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Pateikta / Submitted on 20.09.2021

Introduction

The existing idea of social business shows that society is interested in solving global and national common problems. There is a demand to find more innovative ways of achieving human well-being. The resources used by traditional businesses are not being used to their full potential, while social business can achieve sustainable results by using different resources to sustain itself and create wealth by achieving more in a social perspective. Although social business is seen as a kind of expression of social well-being, it is not yet an ultimate method to reach positive outcome. Despite its positive results, social business is still criticised for its inability to contribute effectively to sustainable development practices. In addition, the contribution of the consumer to the development of sustainability is not clear yet, as there is a need to understand the consumer's approach towards sustainable development not only in social business organisations but also in society in general. The concept of sustainability has been extensively addressed in the academic literature (Donaldson, Walsh, 2015, Dyllick, Muff, 2016, Upward, Jones, 2016). When examining scientific research related to social business, there is a lack of efforts that examine the implementation of sustainability practices, as well as a lack of research that analyses sustainability from the perspective of the consumers. Social business as a system is understood as an open system that demonstrates the need to be inseparable from its environment - society as another important system. The current situation shows that sustainability as an aspiration is still a priority but remains only in first maturity stages.

Sustainability and its assessment in organisations are becoming an essential component of corporate performance management (Saeed, Kersten, 2017). In analysing the reasons of slow sustainability development, it is important to mention that there is still a doubtful understanding of the fundamentals of sustainability and an unknown return on investment for not only organizations, but also to the society (Naude, 2011). Also, Ketprapakorn and Kantabutra (2019) define the importance of not only the participation of organisations in sustainable development, but also the importance of society as another participant. It has been analysed that increased awareness and interest in sustainability will influence consumers purchasing behaviour (Paul, Modi, Patel, 2016, Azeiteiro et al, 2012). Studies show that consumer’s intention to purchase sustainable products or services is strongly influenced by positive attitudes and perceived value of sustainability (Rizwan, Ahmad, Mehboob, 2013, Vazifehdousta, 2013). However, despite this, it is still an under-researched area, and to understand the progress of sustainability, it is important to clarify the indicators of sustainability measurement and their relevance in social business organisations. Therefore, it is important to analyse not only the individual business, but also a society or government, to work towards sustainability in a more effective way.

The goal of this paper is to elucidate the importance of sustainability development in relation to its different dimensions and the relationship between consumer perception and sustainability development.

Research methods: systematic and comparative analysis of scientific research literature.

1. Sustainability in social business organizations and consumer behaviour

1.1. Sustainability management in social business organization‘s processes

Management is an important aspect for organisation's effort to develop sustainability. To assess and understand the existing dimensions of sustainability, it is important to categorise it. Therefore, sustainability and its assessment become an essential component of corporate performance management (Saeed, Kersten, 2017). To assess sustainability, both qualitative and quantitative studies have been conducted in the last two decades (Schaltegger et al., 2016; Martınez et al., 2017).

Business processes in organisations can be categorised according to the importance of the core process for the organisation itself, with the processes being divided into three main parts: core processes, secondary processes, which are as important as the supporting processes, and managerial processes. Nowadays, the importance of supporting processes for the company's performance success is notable (Kaziliūnas, 2004, Strazdas, Černevičiūtė, 2014, Sobotkiewicz, 2015). One of the most important supporting processes is continuous improvement, which marks an important significance and progress for the company. However, despite the different analyses of business processes, we still have a gap in both academic literature and practice (Carvalho, Rabechini, 2011, Marcelino-Sadaba et al., 2015, Singh et al., 2012, Thomson et al., 2011).

Analyzing the existing scientific literature about sustainability, it can be noticed that social businesses using circular economy principles achieve cost savings, new forms of income, long-term competitiveness, resource conservation, customer interest, and attract new customers, etc. (Stratan, D., 2017). However, the lack of clear financial benefits of sustainable implementation is still a barrier to the diffusion of sustainable development, and these benefits will not be achieved until end-users fully support the implementation of the new concept (Støre-Valen, M., Buser, M., 2018). Research on corporate sustainability shows that companies focus on society and values, but unfortunately, this is not the only principle that can be considered as a hallmark of a sustainable company. The current scientific literature on sustainability focuses on the impact of firms and industries; there is a lack of broader knowledge and newer insights involving other systems (Whiteman et al., 2013, Bansal and Gao, 2006). Sustainability has also become a component of corporate ethics in response to perceived public dissatisfaction with the long-term damage caused by the focus on short-term profits (Grant, M., 2020).

The key factors for implementing sustainability are the company's philosophy, customer needs, personal interest, organisational culture, and top management support. Importantly, disclosure of sustainability through reporting is a key aspect of companies developing sustainability. Research shows that while companies recognise the importance of sustainability, a large proportion do not pay practical attention to sustainability management (Bonini et al., 2010). Even though social business can focus on social value creation, it remains one of the most difficult part of implementing sustainability in social business organizations. Due to the need to develop sustainability, sustainable social business models are emerging in the scientific literature, as the sustainability practices of existing businesses are insufficient. It is also pointed out that the two concepts of corporate sustainability and social business are closely related, but it is still debatable whether they can coexist (Grant, M., 2020).

The main problems of sustainability implementation are the cost of the measures and the difficulty of measuring social and environmental aspects due to their qualitative nature and the lack of support from leaders (Corsi, K., Arru, B., 2020). Results show that some of the main barriers to the implementation of sustainability practices are the lack of knowledge in organisations, lack of time, and lack of commitment from managers (Elmualim et al., 2012). Researchers underline that there still exist challenges in terms of collaboration between practitioners and users (Thomsen et al., 2013; Risholt et al., 2013; Moum et al., 2017; Shah, 2007; Then, 2013). Practitioners tend to focus on technical solutions and take it for granted that consumers will accept this and behave according to regulations (Johansson, 2017).

This implies that to develop sustainability more effectively, it is also necessary to analyse public attitudes towards sustainability. As organizations are dependent on the natural environment, the actions and activities of organizations affect the same environment and provide some feedback (Starik, Rands, 1995, Starik, Kanashiro, 2013). Therefore, it is important to acknowledge the need to examine existing boundaries and recognise the dependence of organisations on societal, economic, and environmental aspects (Meadows et al., 2009, Rockstrom et al., 2009, Marcus et al., 2010, Whiteman et al., 2013, Winn, Pogutz, 2013). Research shows that while companies recognise the importance of sustainability, a large proportion of companies do not notice practical attention to sustainability management (Bonini et al., 2010). In analysing the reasons for this, it is important to mention that the perception of the fundamentals of sustainability is unclear and the duration of the return on investment is still unknown (Naude, 2011). For achieving positive change, sustainability management should be one of the key processes for improving company performance. Also, low awareness of the importance of sustainability and thinking about the return of the individual company is one of the main obstacles to sustainable development. Therefore, the sustainability improvement cycle is defined as a kind of supporting process for the company's activities, as part of the organisational development process, in which evaluation becomes one of the main aspects and outcomes.

Since the process of improving performance is essential not only to achieve more efficient results but also to make more effective decisions for the benefit of society, sustainability management is becoming one of the key tools that can help to bring significant change. Figure 1 illustrates the sustainability management cycle of an organisation, which consists of four main parts: planning, implementation, assessment, and feedback. Assessment is one of the key aspects here. This means that companies should not only improve and adapt the sustainability management resources, but also dedicate time and resources to innovation and learning. This situation highlights the need to analyse sustainability not only from the company's perspective, but also from the perspective of its stakeholders.

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Figure 1. Organization’s sustainability management cycle
Source: Asif, Searcy, 2014

To better illustrate the aspects of the topic under consideration, it is important to understand that the establishment of sustainability measurement indicators (as criteria) is a very important part of an organisation's efforts to continuously develop sustainability.

The process of sustainability management is complex, involving a number of execution steps that are designed with a long-term perspective (Figure 2).

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Figure 2. Steps for continuous improvement of the sustainability development process
Source: Asif, Searcy, 2013

Effective management of the sustainability development process requires deep knowledge of how we can achieve positive results. We still do not have a common approach to sustainable development and its management, but there is significant interest in this area. Certain stages of the process can be linked to a company's activity, but there is still a need for common evaluation criteria. However, it is clear that sustainability is about the long-term process to achieve effective change.

1.2 Consumer purchase decision from a sustainability perspective

An important aspect of the analysis of consumer attitudes towards sustainability is that changes in public attitudes, e.g., positive attitudes towards sustainability, facilitate the development of sustainability, not only in organisations but also in society. Sustainability needs an enabling environment to evolve and move towards a more mature form of sustainability. Therefore, it is important to identify how consumers feel about sustainability and what indicators they consider to be indicative of the link between sustainability and appropriate outcomes and positive change. The research shows that sustainable businesses see themselves as operating as an organisation in community and that a company cannot be sustainable if community is not sustainable itself (Ketprapakorn, Kantabutra, 2019). Therefore, in this case, it is appropriate to analyse the inclination of consumers to assess sustainability, and the behaviour conditioned by it, to achieve an effective sustainability development.

The analysis of the scientific literature shows that there is not enough information on consumer intentions to purchase sustainable products or services. Research shows that changes in the environment are influencing consumer perceptions and that the concept of sustainability is becoming increasingly important to consumers (Bonini, Oppenheim, 2008). This indicates a favourable environment for the development of sustainability, as consumer attitudes are an important factor in the development of sustainability. Increased awareness and interest in sustainability is expected to influence consumer purchasing decisions (Paul, Modi, Patel, J., 2016, Azeiteiro et al. 2012) and the consumption of sustainable products can be one of the approaches to sustainability development that should be further explored not only in the academic literature, but also in practice (Ritter, Borchardt, Vaccaro, 2015, Mont, Plepys, 2008). Most importantly, sustainable products are produced according to sustainable development principles, a trend that is gaining popularity among consumers worldwide (Paul, Modi, Patel, 2016, Ritter et al., 2015, Lijuan, 2003). Therefore, it becomes important to analyse indicators that show the development of sustainability and to involve users to understand the main challenges and to achieve sustainability more effectively.

Consumers will buy sustainable products when their needs in terms of safety, quality, accessibility, and convenience are fulfilled. It is also important that consumers understand that buying sustainable products or services can help solve societal problems (Ottman, 1992). To advance sustainable development, it is necessary to increase knowledge about sustainability and its implications. Previous research shows that demographic characteristics (such as age and education) influence the purchasing behaviour of sustainable products. What is more, knowledge about sustainability is an important factor influencing the purchase of sustainable products (Franzen, Meyer, 2010, Sidique, Lupi, Joshi, 2010, Arslan, Yilmaz, Aksoy, 2012, Vega-Zamora, et al., 2013, Paul, Modi, Patel, 2016, Yadav, Pathak, Young, 2016). This situation shows that the only initiative of social business organisations is not enough - the involvement of society in sustainable development is also needed. The literature distinguishes the theory of reasoned action and the theory of planned behaviour (Fishbein, M., 1979, Ajzen, I., 1991). The main aspects of the theory are that consumer behaviour is influenced by intention, by attitudes towards a certain behaviour, by a subjective norm and by perceived behavioural control, which can also directly influence consumer behaviour. The analysis of consumer behaviour becomes very important when analysing the choice of sustainable products or companies. Nevertheless, consumer behaviour is considered to be one of the most complex areas of marketing (Hoppe, Marques Vieira, Dutra de Barcellos, 2013). It is important to understand that the intention to purchase sustainable products is related to the consumer's intention to purchase a product or service that is less harmful not only to the environment but also to society (Mohd Suki, 2016). Research shows that consumers' intention to purchase sustainable products or services is strongly influenced by positive attitudes and perceived value of sustainability (Rizwan, Ahmad, Mehboob, 2013, Vazifehdousta, 2013). Hence, knowledge about sustainability and its value plays an important role as it helps to create positive attitudes and appreciation of sustainability and create favourable conditions for sustainability to flourish.

Consumers who have knowledge about sustainability and sustainable products or services with positive past experiences have a high tendency to acquire strong intentions to continue purchasing sustainable products due to the positive impact of the environment (Lin, Chang, 2012, Norazah, 2013). Feelings and positive image are the main factors that create customer attitudes and influence their inclination to purchase sustainable products/services or choose sustainable companies (Schiffman, Wisenblit, 2014, Thogersen, et al, 2015). It is also important to mention that consumers with a deeper knowledge of sustainability have more positive attitudes towards the environment and the purchase of sustainable products or services. (Rokicka, 2002, Huang, Yang, Wang, 2014). The results show that to achieve sustainable development, it is necessary to analyse not only the ability of companies to act sustainably, but also the contribution of consumers to sustainability by analysing consumers' tendency to value sustainability and their purchasing behaviour related to it.

2. Theoretical framework of interaction between social business sustainability and consumer purchase behaviour

For better understanding of existing interaction, a conceptual model was developed (see Figure 3). To develop sustainability, the whole ecosystem around businesses, together with the businesses themselves, needs to transform. Although sustainability development is one of the main ambitions of companies, the results show that we are still on unsustainable way. Empowering the population requires the support of community leaders (Waddock, 2020). Therefore, to achieve effective results, it is necessary to analyse not only individual organisations, but also to involve the public in the process of continuously promoting sustainability and achieving global well-being through collaboration and positive change.

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Figure 3. The conceptual framework of the interaction between social business sustainability dimensions and consumer’s decision to purchase sustainable products or services
Source: Fishbein, 1979, Ajzen, 1991, Asif, Searcy, 2014, Silvestre, Antunes, Filho, 2016, Upward, Jones, 2016, Saeed, Kersten, 2017, Goni, et al, 2020

Figure 3 presents a conceptual framework that focuses on a broader analysis of sustainability, going beyond the perspective of companies or consumers only, but involving both participants in the process. The analysed framework underlines the importance of understanding sustainability not only from the company's perspective, but also from the consumers' perspective. Increased knowledge of sustainability, by differentiating between sustainability dimensions and their benefits, may help consumers to have a positive perception of the implementation of sustainability practices in companies. It would indicate more favourable opportunities for sustainable companies. This implies that knowledge in the field of sustainability (such as certain measurement and positioning of indicators as one of the advantages of a company) encourages consumers to have a positive perception of sustainability and its development, and also leads to a preference for a more sustainable company. And, in this case, a more favourable assessment of sustainability influences the consumer's behaviour in terms of choosing more sustainable companies.

The analysis of the corporate perspective identifies three dimensions of sustainability, which require identifying corresponding indicators that measure sustainability. Social business is focused on creating social value. One of the biggest problems is the measurement of the social dimension, which relates to the creation of social value and the impact on society. However, the social dimension is the most complex to measure. Nicoletti Junior, Celia de Oliveira and Helleno (2018) argue that in developing a model for measuring sustainability, the social dimension should focus on the acquisition and transfer of knowledge, thereby creating social value. In this way, companies should focus on conforming to social norms in society and maintaining them in the process. The social dimension focuses on social impact, which means that to have a result, companies must pay attention to social investments. The social dimension focuses on human rights and anti-corruption and related measurements, human resources, public health and safety, training and education, also, analyzing consumer issues and compliance with social norms. However, the social dimension is still the most difficult dimension to assess and needs to be monitored and analysed more. (Saeed, Kersten, 2017).

Sustainability and its practical implementation in companies is a complex process. Uncertainty and the lack of clear measures complicate the situation. In order to also achieve results in the environmental dimension, it is important to understand the importance of the company's reputation in society and to ensure that environmental compliance is ensured in processes, focusing on environmental performance in the market and focusing on environmental investments in companies (Nicoletti Junior, Celia de Oliveira and Helleno, 2018). The environmental dimension is also an important one, which helps to highlight energy and material efficiency, correct water management, waste management, measurement of emissions, the use of land as a critical resource, compliance with environmental requirements and the evaluation of suppliers (Saeed, Kersten, 2017).

The economic dimension of sustainability also poses challenges, as it aims to balance the benefits of both the company and the environment/society. The economic dimension focuses on the attractiveness of the company, which means that the company has to be productive in its processes. In the marketplace, a company seeking to become attractive should focus on quality, cost reduction, and innovation, while generating adequate profitability that reflects the attractiveness of the company (Nicoletti Junior, Celia de Oliveira and Helleno, 2018). The development of the economic dimension is a relevant aspect of sustainability development, and when analysing it, it is important to analyse areas such as the stability and profitability of organisations, the distribution of income, the market advantage or the costs of sustainability development. Organisations that have a performance measurement system that is to assess the development of sustainable performance can manage sustainability (Nigri, G.; Del Baldo, M., 2018). The results show that the main problems of sustainability implementation are the cost of the measures, the difficulty of measuring social and environmental aspects due to their qualitative nature and the lack of support from leaders (Corsi, K., Arru, B., 2020).

The exploration and assessment of these dimensions of sustainability influences the consumer’s inclination to value sustainability, which in turn influences the consumer's purchasing behaviour, such as the purchase of more sustainable products/services, or influences the choice of sustainable social business.

Conclusions

  1. The concept of sustainability has been widely discussed in both literature and practice, with authors referring to different perspectives on sustainability. Achieving sustainability is a complex process. The aim of this practice is to act in such a way that future generations have a safe and secure life. The vagueness of the concept of sustainability raises a number of issues related to the measurement of sustainability in companies.
  2. Choosing the right criteria to measure the sustainability is crucial. A set of indicators or a framework for measuring the sustainability-related performance of organizations is needed. However, it is still an insufficiently defined approach as to how often some indicators should be measured.
  3. Current social business practices are insufficient to deliver sustainable development. Change in individual businesses is not sufficient to achieve sustainability and societal well-being. It is important to understand that the need for a change should be at the level of the system (systemic transformation).
  4. Social business is an integral part of society, the involvement of the local community is essential for the system to work. The scientific research shows that companies cannot be sustainable without society’s involvement in it. What is more, changes in the society environment (for instance, deeper knowledge about sustainability) are influencing consumer perceptions and that the concept of sustainability is becoming increasingly important to consumers.
  5. The scientific research analysis shows that to achieve economically, socially. and environmentally sustainable development, it is necessary to analyse not only the ability of companies to act sustainably, but also the contribution of consumers to sustainability by analysing consumer’s inclination to assess sustainability and their purchasing behaviour related to it.
  6. Further research should look at the ways to identify criteria for evaluating sustainability progress. Moreover, it is necessary to understand that in order to achieve sustainability common measures must be defined and research for preparing consumers to behave according to new sustainability rules and practices must be conducted.

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Dr. Aurelija Ulbinaitė: Associate Professor at Vilnius University, Faculty of Economics and Business Administration, Business Department. Scientific interests: business models, company performance evaluation, and consumer behaviour. Address of institution: Saulėtekio av. 9, II building, LT-10222, Vilnius.

Neringa Raštutytė: MSc student in Business Process Management at Vilnius University, Faculty of Economics and Business Administration, Business Department. Scientific interests: social business, sustainability, and consumer behaviour. Address of institution: Saulėtekio av. 9, II building, LT-10222, Vilnius.