THE USE OF CSR IN E-COMMERCE AS A WAY TO COMPETE

The article deals with the impact of corporate social responsibility (CSR) on small-medium companies (SMEs) in the field of e-commerce. As many people today are aware of the exhaustion of resources, ethical codes as well as working standards, CSR has become a strong competitive tool. Additionally, with the global increase in economy, e-commerce users have come to be regarded favourably in terms of environmental friendliness, with e-commerce becoming a popular tool of purchase. However, previous research offers little understanding about the relationship between CSR and e-commerce. To shed some light on this issue, two questionnaire surveys and interviews with seven managers of selected companies were conducted in the Czech Republic. The participants in the first study were e-commerce customers (N = 207), and the second study was aimed at SMEs in e-commerce (N = 63). The research shows that the implementation of CSR may influence sales positively. The findings also indicate that consumers prefer companies with CSR as well as the necessity of good implementation of CSR in the company process by managers. The most discussed issue of CSR by SMEs managers concerned working standards. The research also shows big differences between formal acceptance and certified SMEs for CSR. CSR is not only a competitive advantage but also one of the ways to maintain sustainable corporate development with ethical codes and transparent corporate policy.


INTRODUCTION
In the Czech market in the field of e-commerce, 36,200 e-shops, shopping galleries and specialised stores are currently in business (Aktuálně.cz, 2017).Nevertheless, this sector has experienced a slight decline over the past three years, especially among firms that are failing to attract clientele in a highly competitive environment, such as small companies.Individual eshops, especially the larger ones such as Alza & Mall, focus on massive marketing campaigns and have sophisticated customer relationship management.In 2016, Ahold, Tesco and Lidl entered the Czech e-commerce market, which increased the pressure on individual operators.Due to the competitive environment and current scientific knowledge in the environmental field, some companies, as a means of establishing a competitive advantage, have begun procuring certificates reflecting their dedication to maintaining a sustainable environment, sustainable development and social responsibility.Furthermore, many customers have indicated the use of their own moral codes as criteria for making shopping decisions (Roy et al., 2018).Therefore, the application of CSR in a particular business may influence a customer's decision to buy a specific product.CSR has already been used for building company brands (Mantovani et al., 2017).The question then arises as to what extent customers in the field of e-commerce in the Czech Republic are affected, if at all, by these CSR certificates.In short, does CSR serve as a purchase incentive?Very few studies about CSR and e-commerce have been performed in the Czech Republic.Small and medium-sized enterprises (SMEs) are more sustainable for this research, because SMEs are susceptible in a competitive market with big companies, but they can implement new technologies or procedures (Sipa et al., 2015).SMEs make up a significant part of annual GDP (Europa, 2017).CSR can influence a company's performance, but this depends on the structure of the company.Large companies have indicated a number of problems with CSR (Kao et al., 2018).On the other hand, the advantage of SMEs in this area can be seen in terms of these firms' simple structure.
For this research, a mixed research strategy was used which combined two research approaches, quantitative and qualitative ( Johnson et al., 2007).These approaches complement each other.The research was set up as a study divided into two main parts, with the first part emphasising insights into CSR in the e-commerce field from the point of view of SMEs managers.The purpose of second part was to identify the possibilities of using CSR as a means of competitive advantage for SMEs in e-commerce in the Czech Republic.The results from the Czech Republic can be applicable to countries with a similar history such as Poland, Slovakia and Hungary.The secondary aim is to determine the extent of CSR impact on SMEs in the Czech Republic.As one indicator, the revenue of SMEs was chosen, as revenue shows if a firm is performing well or not (Selmi & Chaney, 2018).Another indicator chosen was CSRU, which was determined by the implementation rate of CSR in SMEs.

E-commerce
At the turn of the millennium, we witnessed a significant development of IT technology, i.e.Web 2.0.As the expansion of the society is becoming more dynamic with hyper-consumption, consumers no longer have the time or are unwilling to spend time shopping at traditional shops.Especially the young generation of people prefers more convenient shopping from home or work (Thomson & Laing, 2003;Kim & Ammeter, 2018).As a result of IT technologies, there is a more frequent use of internet shops (Hallikainen & Laukkanen, 2018).E-commerce is continually evolving due to technological advances in IT.Technological progress has also had an impact on the quality level of service itself (Khan & Mahapatra, 2009).
A generally accepted definition of e-commerce does not exist due to the constant development of this sector.However, a general description of OECD (2014) can be mentioned which defines the field of e-commerce as business transactions that are executed through internet networks.
This means that business in e-commerce is done through online transactions between a buyer and a seller.A similar definition is provided by Devendra et al. (2013), who defines commerce or e-commerce as consisting of shopping or offering goods or services via the internet or computer networks.Different definitions are mentioned by Kalakota & Whin (1996), who perceive e-commerce as a means of communication for the delivery of information, products, services or payments through computer networks.In the Czech Republic, e-commerce is defined by the APEK association of e-commerce as a transaction through the internet using e-shops.
The implementation of an e-commerce concept for an enterprise has positive impacts on business efficiency and profitability if it is done appropriately.According to Baršauskas et al. (2008), it is essential to consider higher stock costs as a result of accepting customers' needs of fast delivery in e-commerce.Several studies deal with the acceptance of the B2C e-commerce concept, for example, Liao et al. (2006) and in B2B Alam et al. (2007).Both of these studies are focused on consumers.E-commerce has had an impact on consumers, but also on business partners and the organisational structure of businesses.(Gorla et al., 2015) E-commerce is available through the internet and has an intangible appearance, i.e.only on a internet site.There is no physical interaction like in retail shopping.It is necessary to use various strategies to attract and keep customers.Furthermore, data collection about the user can help to improve the percentage of completed transactions by the customer (Hui et al., 2007).Therefore, user data collection is appropriate, as it can be used for marketing campaigns and the personalisation of internet stores.Personalization is identified as one of the critical factors in modern marketing strategy (Salonen & Karjaluoto, 2017).Based on research by Pappas et al. (2017), the personalisation of an internet store is one of the major factors that leads the customer to buy.Research by Ho & Bodoff (2014) was focused on the customer's conviction to buy the product.A similar study was carried out by Xu et al. (2011).Both studies were focused not only on the factors affecting the purchase itself, as many others, but also on why customers decided to visit the internet store in the first place.The findings indicate that three main elements are price, services and availability.These factors can vary, and they can be combined.Each customer perceives the factor value quite differently (Ganesh et al., 2010).Research by Close and Kukur-Kinney (2010) defines another factor, namely customer ratings or reviews and product information.
Customers do not act impulsively, and they think lomng and hard about their purchases (Hallikainen & Laukkanen, 2018).Customers collect information about the seller or product (Hampson & McGoldrick, 2013), a contention also confirmed by Swaminathan (2004) as well in a study in which shows that customers collect information about prices, products and brands before buying.According to Morgan-Thomas & Veloutsou (2013), sellers choose and gather the same information as customers.Customers purchase not only the goods but also the image of the company, with a customer's decision based not only about factors like low price, product quality and services, as mentioned by Close & Kukar-Kinney (2010).However, the image of an internet store is also linked to the product.This image connects the customer to the vendor by the image of a company, e.g. with CSR or exclusivity.A typical combination of appropriate factors can lead to purchase and the return of the customer as well (Pappas et al., 2017).A study provided by Karaosmanoglu, et al. (2016) shows that consumers may be positively affected by CSR in ecommerce.

Corporate social responsibility
CSR is defined as a corporate citizenship, corporate social performance, creating shared value and conscious capitalism focused on businesses meeting their economic, social and environmental responsibilities (Carroll & Shabana, 2010).CSR has been commonly accepted as an essential issue for companies to address in order to ensure their sustainable development and competitive advantages.Successful companies balance economic and social goals by integrating social concerns into their core operation frameworks and business strategies.(Porter, 2006;Chang & Yeh, 2017).One model of CSR by Carroll (1979) shows three responsibility dimensions: economics, legality and ethics.Some authors have examined CSR from different dimensions, e.g.ethics (Goel & Ramanathan, 2014;Tuan, 2012), the environment (Senay & Landrigan, 2018;Disegni, et al., 2015), working standards (Glavas, 2016) and transparency (Dubbink et al., 2008).Nowadays, the importance of CSR for consumers is growing significantly (Christopher & Luke, 2013).Kennedy et al. (2001) has indicated that CSR facilitates the development of relationships that are formed on the basis of honesty and the belief in the other's promises and actions, something beyond legalities and contractual arrangements.One of the possible ways to attract new customers and increase their loyalty to a company may be CSR.However, much emphasis has not been put on CSR as a tool of increasing reliability (Liu et al., 2011).Lehtonen (2004) states that the global importance of CSR is expanding.CSR usually consists of legal, ethical and philanthropic obligations that represent a society's interest in culture (Stanaland et al., 2011).These activities, if constructively implemented, can have a significant social impact (Bice, 2014).A study by He & Li (2010) shows that CSR associations can influence customer satisfaction.CSR also helps to create a better identification with the company, with customers carrying a higher identification with a company more prone to be satisfied with the company.Some studies have shown a correlation between CSR and the growth of financial performance and the evaluation of their products (Lee et al., 2012).On the other hand, Galant & Cadez, (2017) have found that the relationship between CSR and corporate financial performance is ambiguous.Selcuk & Kiymaz (2017) determined that CSR has a moderate impact on finance performance from the perspective of company size.According to Flammer (2015), CSR improves accounting transparency and thus provides better insight into financial performance for managers.A study by Park et al. (2017) has demonstrated the positive impact of ethical standards on customer loyalty in the retail industry.In the case of CSR implementation, customers are more confident.Another study says that CSR can form a crucial element of a business success with consumers (Luo & Bhattacharya, 2006).A study by Chernev & Blair (2015) suggests that CSR elicits positive affective and behavioural responses from consumers.The implementation of appropriate, sufficiently sophisticated activities contributes to more favourable impacts on consumers (Bhattacharya & Sen, 2003).A close relationship is forged by CSR, thus there is more confidence from consumers (Benjamin, 2001;Rodrigues & Borges, 2015).Also, CSR has a positive effect on social capital (Lins et al., 2017).The authors mentioned above confirmed the impact of CSR on the positive perception of consumers, i.e. the customers of individual retail businesses.These studies show a positive effect on a firm's performance.These studies were conducted abroad and mostly with an unambiguous definition of the form of activity through e-commerce or retail.The research question we have created is: What experience do Czech managers have with e-commerce in terms of CSR? Furthermore, considering the above-mentioned findings, the following hypotheses were set: H 1 : There is a statistically significant association between the CSR as a motivation factor and CSR as a factor of loyalty in e-commerce.
H 2 : There is a statistically significant association between the size of the implementation ratio of CSR and the amount of company's revenue per employee in e-commerce.
H 3 : Index C size was significantly affected by the size of SMEs.

Participants
The first part of this study consisted of qualitative research carried out in the form of a semistandardised interview with selected e-commerce managers in the Czech Republic.Seven managers of selected SMEs operating in the field of e-commerce from across the country were interviewed between May and July 2017.The gender of the interviewees were 57% men and 43% women, the average age was 29.8 years old (SD = 8.85), and practice average length was 11 years.
The second part of the study was quantitative research focused on the consumers and the SMEs themselves.This research was carried out in the form of an electronic questionnaire divided into sub-sections.The first sub-section was addressed to 2,890 consenting consumers who were selected via a customer database.It garnered 267 responses, however, due to data errors, 60 questionnaires were withdrawn from the data process pool.Therefore, 207 responses were analyzed.The average age of participants was 37.6 years old (SD = 9.47), 43% women and 57% men.
The second sub-section of the study was focused on SMEs operating in the field of e-commerce.63 firms participated in this survey out of a total of 629 firms.Finally, 57 firms' responses were able to be statistically processed.The firms were selected from publicly available data.A prerequisite for selection was that the entity registered for business in the Czech Republic offers goods or services via the internet.Due to incomplete data, 2 questionnaires were withdrawn from the data process pool.The average size of the company was 72 (SD = 7.66).The focus of the companies was on the sale of goods from the field of industrial machinery, retail, grocery and office equipment.Both questionnaires were anonymous, and participants were informed about the aim of the study.

Measures
The structure of the consumer questionnaire was divided into two parts, each containing closed questions using the Likert scale, from 1 (strongly disagree) to 5 (strongly agree).In total, there were ten questions (α = .85)along with three other questions that were used for demographic differentiation.The questions were focused on 1) CSR of SMEs as a motivation factor to buy goods [CSRM] and 2) CSR of SMEs as a motivation factor to build loyalty [CSRL].The questions were focused on the decision-making of the respondent among the cases presented.An example of the questions is "Trade A offers a substitute for the product B, while trade B guarantees that the goods have a minimum carbon footprint.From which store would you most likely buy?"These questions were prepared on the basis of interviews with SMEs managers and other research, e.g.Thorne et al. (2014) and Mantovani et al. (2017).
The questionnaire for SMEs included a total of 18 questions using Likert scaling from 1 (strongly disagree) to 5 (strongly agree).The questionnaire was divided into two thematic parts, with the first part focused on the level of CSR implementation [CSRU] and divided into thematic subcomponents according to these authors Tuan (2012): ethics, Disegni, et al. (2015): the environment, Glavas (2016): working standards and Dubbink et al. (2008): transparency.The ethics subscale consisted of 4 items (α = .76),the environment subscale consisted of 4 items (α = .79),the working standards subscale consisted of 4 items (α = .87)and the transparency subscale consisted of 4 items (α = .74).The second part of the questionnaire consisted of the information necessary to calculate the C index.SMEs were divided into three groups according to the European Union by shorting the staff headcount for the first group 1-10, the second group 11-50 and the third group 51-250.The questions in this part of questionnaire were also based on interviews with the SMEs managers.

Procedure
Semi-standardised interviews with managers consisted of four questions focused on corporate ethical codes, corporate identity with CSR principles, and, if the company had adopted CSR methods, on the CSR implementation process.Interviews with the SMEs managers were used as a preliminary step to prepare the questionnaire surveys and to provide insight into the use of CSR in SMEs in the e-commerce field.
Assumptions were determined for the consumers' part of the questionnaire survey and used to compare the perceived preferences of managers and members of APEK with the findings of this research.The assumptions were based on data from interviews with managers of SME e-commerce firms as well as APEK.The managers were allowed to express their assessment of individual factors and their degree of affinity.APEK users also had this option in a direct survey taken during the E-business forum 2017.CSRM p and CSRL p will have a positive association.Based on the above, the following assumptions have been made on the most frequently represented values.Additionally, it is supposed that both CSRM p and CSRL p would be higher than 4.00.The CSRM x is determined by the following equation: where o xi is the appropriate question value, and n is total number of questions.This calculation can be performed analogically for CSRL x .
Similarly, an assumption for the SMEs was determined as follows: CSRUp > 4.00.The assumption is for the index C p > 6.00, which indicates a moderate dependence on CSR efficiency.The calculation of the CSRU x is determined as follows: where o is the appropriate question value and n is total number of questions.
Index C considers the CSRU size of the previous part of the poll, the number of customers K, and the amount of T revenue for April 2016 to April 2017.As index C contains two variables (the amount of revenue per customer and CSRU) and the values of the first variable were in the order of thousands, whereas the second variable in the order of units, a logarithmic transformation of the first variable was used in order to make the influence of both variables equally distributed.Thus, index C was determined as follows: where K is the total number of customers and T the amount of revenue.Both indicators are based over a period of 12 months.57 SMEs were registered for CSR or certificated, while 6 are not, thus they could not be statically allocated.

Data analysis
Data collection was done using an individual questionnaire method in which each participant responded individually and without any guidance.Data were collected by the SurveyMonkey and distributed via link by MailChimp.For the statistical data analysis, IBM® SPSS® Statistics software was used.The data were tested by a Shapiro-Wilk test, Cronbach alpha and Pearson correlation, Jonckheere's test and Kruskal-Wallis test.The interview was analysed by thematic analysis with open coding.

RESULTS
From the interviews with managers, which have been analysed by semi-thematic analysis with open coding, it turns out that managers feel to have a stronger corporate brand when they apply CSR, which has its results in a better competitive position.The managers indicated that CSR allowed their firm to distinguish itself from competitors.According to the managers, the implementation of CSR requires a high commitment and co-ordination of company employees using these principles.As for CSR, its weaknesses are increased costs at the start of CSR implementation and while using CSR principles.According to the participants in the interview, the CSR process is quite tricky, which may result in higher prices and the requirements for an employee.Managers see that effective use is possible and there are potential future advantages, e.g. in the better handling of waste and in germs of corporate ethics.Managers were most concerned about the inappropriate implementation and possible abuse of CSR.The greatest benefit of e-commerce managers is seen in the easy presentation of CSR in their e-shops, which enables them to present their certification immediately.Managers agree that CSR is a long-term commitment and is not suitable for just any e-commerce business.
Descriptive statistics indicate that CSR of SMEs [CSRMp] can motivate consumers to purchase goods, since M = 4.77, SD = 1.54, which means that participants preferred to buy the products of firms with CSR.Similarly, CSR of SMEs can build loyalty, as participants showed loyalty to firms with CSR [CSRLp], M = 4.17, SD = 0.94.For a normality test of CSRL and CSRM data, Shapiro-Wilk was used.This test indicated that statistically the data are not significantly different for a CSRL t(207) (p = .28)and CSRL t( 207) (p = .31).This data has a normality distribution function due to greater p > α .05,with the following testing done by non-parametric tests.The correlation between the CSRM motivation and CSRL loyalty of CSR SMEs is not statistically significant ( p >.05).Thus, H 1 hypothesis was not supported.
To confirm or refute the assumption set in the methodological section, descriptive statistics were used indicating that [Index C p ] CSR of SMEs can motivate consumers to purchase goods, with the assumption 6.00 M = 11.85,SD = 5.99.With this result, the assumption for index C p can be accepted.For a normality test of index C data and CSRU, Shapiro-Wilk was used as well.This test indicated that data are not statistically significantly different for index C t(57) (p = .34)and CSRU t( 57) (p = .49).This data has a normality distribution function due to greater p > α .05.The following testing was done by non-parametric tests.The correlation between the CSRU implementation CSR rate of each SMEs and index C of SMEs were positively correlated, Pearson's r(57) = .95,p < .001.These data are statistically significant due to greater p > α .05.This relationship shows that CSR affects both SMEs and customers.In light of these results, the Pearson correlation between CSRU and C index is about 0.95, which indicates that there is a strong positive relationship between the variables.For this reason, H 2 hypothesis was supported.

Fig. 1 -Scatter plot. Source: own, IBM SPSS
Figure 1 shows correlation on the scatter plot.A positive correlation between CSRU and Index C is evident from the graph.To test the following hypothesis, the non-parametric test of Kruskal Wallis was used.Index C is significantly affected by size of SMEs, H 3 = 17.08, p < .001.Considering the C index, the step-down follow-up analysis showed that firms from the first category (1-10 employees) are similar to the firms from the second category, p = .228.However, the biggest SMEs have a significantly higher C index, as can be seen in Figure 2. Similarly, Jonckheere's test revealed a significant trend in the data, i.e. as the size of the company grows, the median C index rises, J = 741, z = 4.23, p < .001,r =.56.In light of these findings, hypothesis H 3 was supported.The SMEs survey questionnaire provided interesting insights.The working standards were discussed most often with greater interest in an open question in the survey.On the other hand, transparency is not the main aim of SMEs.Also, the environment policy of SMEs showed satisfactory results in the form of internal regulations.

DISCUSSION
The purpose of this mixed study was to investigate the impact of CSR on SMEs in e-commerce in the Czech Republic.The findings refute this statement by Friedman (1970): "CSR has a negative effect on corporate financial performance."The results indicate that CSR should be used in Czech e-commerce as one of the possible tools of competitive advantage.CSR may motivate consumers to buy goods, especially in the area of maintaining a sustainable environment, where this factor is perceived as the most powerful.Several studies have brought the same findings, e.g.Karaosmanoglu et al. (2016), Becker-Olsen et al. (2006) and Brown & Dacin (1997).The social capital of a firm may lead to better performance (Chiu & Sharfman, 2009).If a company seeks and maintains customer relationships, CSR is one of the means to maintain loyalty, as outlined in the questionnaire survey.The impact of CSR on loyalty is confirmed by another research by Martínez & Bosque (2013).The weaknesses of CSR from a managers' point of view are named in Ding et al. (2016).
There are small differences between companies which do not have CSR certification but do accept formal principles of CSR.The formal acceptance of CSR by SMEs may not sufficiently convince the customer, therefore CSR had a lower impact rate on customer motivation in the formal acceptance of CSR in SMEs, with the difference at only 1.7% of total annual revenue.However, the difference between SMEs with certification or with mere formal acceptance of CSR in comparison to SMEs without CSR in total year revenue is significantly higher, with the average difference found to be 17.8% in this research.
To sum up, SMEs with certification or formal acceptance of CSR principles can feature have a logo with CSR on their e-commerce website that may attract customers, however the relationship between CSR and perception as a motivational tool in customer loyalty is unconfirmed.Therefore, it is not possible to confirm that if a customer perceives CSR significantly, there is also a higher probability of his/her loyalty.Empirical evidence indicates that participants showed sympathy or motivation and loyalty to SMEs with CSR.Chen et al. (2012) found that a strong correlation exists between the intention to engage in behaviour and the behaviour; therefore, behaviour intention itself is a reliable proxy to predict actual behaviour.It can be assumed that intention conforms with real customer behaviour.Last but not least, CSR has a significant impact on the revenue of SMEs.The SME size affects the C index.SMEs in the first and second groups have similar results, but the result of SMEs in the third group was significantly higher.Analogous results can be seen in the research of Madueño et al. (2016), which shows that larger SMEs using CSR show better results in enterprise performance.One explanation for this is provided by Perera & Baker (2007), i.e. that this can be explained by higher financial funds or by the larger number of employees in the third group of SMEs, compared to the first and the second group of SMEs.
According to Yue et al. (2017) e-commerce exerts a significant influence on the information customers take in, a finding which corelates with the statements of managers.Managers have assessed the an impact of CSR on the corporate environment positively, mainly expressing their negative concerns about the inappropriate implementation of CSR.Research by Moskolaï (2016) shows similar results as this research.The managers remain wary of the inappropriate implementation of CSR.They see the main disadvantages of CSR in increased direct costs and administrative difficulty.Analogous results are shown by research by Rhou et al. (2016), with one of the interesting findings being that the companies which have only a formal acceptance of CSR principles have a lower C index rate than companies which are certificated for CSR.The difference between these two cases is 23%.

CONCLUSIONS
Previous studies have provided a limited understanding of the relationship between CSR and SMEs and have not dealt with e-commerce.Based on the extant research, CSR is a means of competitive advantage in e-commerce in the Czech Republic.This finding can bring profit to individual businesses operating in this area due to the growing trend of purchases through the internet in the Czech Republic.CSR represents not only a competitive advantage but also one of the ways to create the sustainable corporate development by the use of ethical codes and a transparent corporate policy.From the data mentioned, 75% of the companies surveyed had a CSR greater than assumed.This represents significant progress, and the current trend is favourable for the Czech e-business field.However, it is also important to implement CSR the right way and promote it as well.CSR does not only influence customer behaviour but also the financial profit from a particular customer, a factor also shown by the social behaviour of the customer.Nevertheless, the company's awareness of CSR is equally important.SMEs with CSR can obtain a higher profit than SMEs without CSR.Therefore, SMEs should promote the fact that they have CSR certification.If consumers find that the brand pages have the CSR certification, it should lead them to make a purchase on their page.The size of SMEs has a crucial effect on CSR and performance itself.The difference between the first and the second group of SMEs is not as vital as for the third group.SMEs with a 51-250 staff headcount implementing CSR more effectively.According to managers of SMEs, CSR it is not appropriate for every business, but if it is implemented correctly, positive results can be seen, as evidenced by the index C.This research has some limitations, but presents opportunities for future research.The research was done in the Czech Republic and so the data cannot be used for other regions of the world, or, if so, only with significant barriers.The most suitable countries for application are countries with similar historical development as the Czech Republic such as Poland, Slovakia, Hungary.The sample of companies was specific to company size.37,000 firms do business in the Czech market within the field of e-business.This research covers only a portion of these subjects.Nevertheless, the segment of e-commerce keeps on growing and the differences within this segment are not as essential as they are in Britain.Market segments were not specified, so there may be differences with regard to other market segments, though the basic framework of this research would likely be the same in all markets.The interviews were held in SMEs with a turnover of up to CZK 50 million.
SMEs are the biggest part of the Czech economy and they participate significantly in the Czech GDP.Because different results can be seen for larger companies, future research could compare this study with other countries or include even bigger companies in the research.