Perceived Sustainability of Startups: The Role of Relationship Equity and Chief Sustainability Officer

Abstract: Strategic decisions on how a company should invest resources is naturally a crucial decision, but for startups this decision is even more important as each small decision will have major repercussions on the longevity of a startup. This study seeks to deepen the understanding of the perceived sustainability of a startup by a customer - since this is a growing customer decision criteria - and how the customer’ relationship equity and Chief Sustainability Officer (CSO) influence this perceived sustainability. This study employed a vignette experiment, in which 71individuals with existing relationship equity of 4 startups answered a survey on relationship equity and perceived economic/social/environmental sustainability value. Half the respondents received a vignette containing a startup having a founding structure which included a Chief Sustainability Officer and the others without. Statistical analyses based on Multiple Regressions, specifically the PROCESS Procedure in SPSS, found full support for the first study hypotheses: Relationship equity of customers positively influences their perceived (a) Economic, (b) Social, and (c) Environmental sustainability value of a startup. Partial support was found for this study's second hypothesis: CSO moderates the strength of relationship between relationship equity of customers’ and their perceived (a) Economic and (c) Environmental sustainability value of a startup, such that the positive relationship is stronger under the presence of CSO. It did not support hypothesis 2 (c) concerning Social sustainability. This study increases the understanding of perceived sustainability and relationship equity and bridges the literature between startups and sustainability. This thesis will contribute to increased numbers of sustainability roles being appointed and as well as guide policy makers on startups.