An Assessment of Corporate Social Responsibility, Customer Satisfaction and Customer Trustworthiness: Does Corporate Image matter for the Chinese Economy?

Research Article
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An Assessment of Corporate Social Responsibility, Customer Satisfaction and Customer Trustworthiness: Does Corporate Image matter for the Chinese Economy?

Muhammad Hafeez 1* , Junaid Jahangir 2 , Abdul Ghafoor 3 , Khuram Shahzad 4
  • 1 Institute of Business Management Sciences, University of Agriculture Faisalabad, Pakistan    
  • 2 Preston University, Islamabad, Pakistan    
  • 3 Institute of Business Management Sciences, University of Agriculture Faisalabad, Pakistan    
  • 4 Research Institute of Business Analytics and Supply Chain Management, College of Management, Shenzhen University, China    
  • *corresponding author Muhammad.Hafeez@uaf.edu.pk
Published on 21 March 2023 | https://doi.org/10.54254/2754-1169/3/2022830
AEMPS Vol.3
ISSN (Print): 2754-1169
ISSN (Online): 2754-1177
ISBN (Print): 978-1-915371-15-7
ISBN (Online): 978-1-915371-16-4

Abstract

In light of the increased universal interest in corporate social responsibility (CSR), this article investigates how CSR characteristics impact customers’ satisfaction (CS) and customers’ loyalty (CT), as well as whether the corporate image (CI) has a moderating influence on the links among CSR and customer satisfaction (CS) and customer trustworthiness (CT). Consumers in impoverished and affluent economies may have distinct prospects for CSR. Structural equation modelling (SEM) is used for hypothesis testing in this study. According to findings, this study suggested that CSR has a substantial positive impact on CS and CT and that CS has a positive impact on CT. Consumer protection (CP), ethical responsibility (ETR), philanthropic responsibility (PR), green economic responsibility (ECR), and environmental contribution (EC) are conscripted in order of significance. Corporate Image (CI) has a significant moderating effect on the association between CSR and CS. Thus, authorities should execute CSR features from the consumer's perspective, which will persuade customers to be concerned with the businesses sympathetically. The assumption makes commendations for potential future study and marketing practice.

Keywords:

Customer Satisfaction, Corporate Image, Corporate Social Responsibility, customer trustworthiness

Hafeez,M.;Jahangir,J.;Ghafoor,A.;Shahzad,K. (2023). An Assessment of Corporate Social Responsibility, Customer Satisfaction and Customer Trustworthiness: Does Corporate Image matter for the Chinese Economy?. Advances in Economics, Management and Political Sciences,3,526-535.
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1 Introduction

Until now, corporate social responsibility (CSR) has been predominantly handled as a common problem. Most of the literature on this subject is composed of a managerial viewpoint. It examines how effectively firms retaliate to particular requests from largely extrinsic stakeholders, and that corporate social responsibility endeavours escalate corporate performance, thus persuading companies to become involved in CSR [1]. A study reveals that 76% of executives expect a positive contribution by CSR to everlasting investor value, and 55% believe that sustainability assists their enterprises in creating a durable prestige [2]. In addition to this, the CSR degree level may be used to represent both the overall performance of the firm as well as the kind of business that it is. It is a significant commercial and cosmopolitan thoroughfare at the same time. Corporate social responsibility (CSR) initiatives are determined not only by the ideological reasoning that businesses can be a compelling and pragmatic vigour for societal change but also by a variety of merchandising rewards that organizations can derive from their efforts. This is because the ideological reasoning that businesses can be a compelling and pragmatic force for societal change is driven by the belief that businesses can be a compelling and pragmatic force for societal change. This is because CSR initiatives have become increasingly popular in recent years. In addition to this, CSR has the potential to be the most important factor in the development of the economic market in the People's Republic of China [3, 34]. 

China eventually recognized its significance in the latter half of the year 2006, either legally or through public initiatives. The persistence of this article is to improve a better sympathetic of the level of consumer insight on CSR in China by using an indicator for measuring the social performance of business franchises [4]. The social execution differs along with a gamut that ranges from acquiescence interim to avoid negative significances to persuasion acting to create a positive impact. One end of this continuum is compliance acting to avoid bad consequences, while the other end is conviction acting. On one end of this spectrum is the practice of complying with rules and regulations to avoid undesirable consequences. As a result, the continuum differs in the amount of dedication it has to each of the following four variables for choosing how to assess social responsibility: economic, lawful (ecological impact and consumer safety), ethical, and humanitarian [5].

The study intends to determine how corporate social responsibility (CSR) influences customers' perceptions in terms of pleasure and dedication, in addition to the significant demand for CSR components in China. Further, it scrutinizes the moderating impacts of corporate image in correspondence with consumer fulfilment and consumer allegiance.

2 Literature Review and Hypotheses

2.1. Corporate Social Responsibility (CSR)

"The devotion of merchandise to aid to ecological profitable growth operating with workers, the public, their people, and the society to enhance their living standard, through a path that is beneficial both for institution and progress, it’s related to [6]. Regarding Kotler and Lee, "CSR is the dedication to polish up community welfare through permissive business methods and inputs of corporate assets" [7]. According to Campbell, "CSR adjusts a minimal behavioural flag that focuses at no anguish to stakeholders and if it occurs then amend once it is detected" [8-10]. 

Customers assess companies and goods in terms of their corporate social responsibility (CSR), but unfortunately, bad CSR federations are more common and have more harmful consequences than positive ones. Federations of companies that practise positive CSR have an impact on the globe. However, firms that take a realistic approach encourage customers to evaluate both their own company and the things they sell [11]. It was previously thought that the impact that corporate social responsibility has on customers' willingness to make purchases is straightforward, but it turns out that this is not the case [35, 36]. CSR can affect customers' buying purposes either directly or indirectly, and both of these scenarios are complex. Accordingly, both the empirical data and the theoretical data suggest that positively perceived CSR activities lead to improved levels of customer satisfaction and loyalty in the context of consumer evaluations. This is the case for both groups of data. This study will concentrate on several aspects of corporate social responsibility (CSR) in China, such as humanitarian, ethical, economic, legal, ecological, and consumer safety activities. 

2.2. Customer Satisfaction (CS)

According to previous study, happiness in the service and product itself, as opposed to gratification, is mostly composed of the customer's opinions about the features of the product or facility and how they link to the individual [12]. However, various consumers will exhibit differing degrees of pleasure while having the same type of service interaction and experiences [13]. According to the research that has been conducted in the field of retailing, customer happiness has been regarded as an important component of corporate policy and a primary factor in determining a company's ongoing serviceability and market worth [14, 15]. On the other hand, it is generally accepted that CSR and customer satisfaction are favourably correlated with one another.

H1: Consumer’s perception (CP) of CSR has a significant impact on customer satisfaction (CS).

2.3. Customer Trustworthiness (CT)

As customer trustworthiness (CT) is scrutinized as an important objective for a company's endurance and production, creating an honest consumer base has not developed the main marketing objective [16], even so, it is a significant basis for emerging a sustainable competitive benefit [17]. Understanding fidelity retentiveness is therefore reviewed as the main part in transferring the everlasting corporate cost-effective, as profits can rise throughout the lifespan of a consumer through his/her retention [18-20].

Studies done in the past have indicated that corporate social responsibility has a substantial impact on the beliefs of customers, the aims of consumers, customer-company recognition, loyalty, and pleasure. Primary findings indicate that clients do take a company's commitment to CSR initiatives into consideration when making judgments about businesses and the products they offer [21]. It is a commonly held belief that satisfied customers lead to increased levels of customer loyalty, purposeful spending, and positive word-of-mouth marketing. As a result, it is expected that corporate social responsibility and the happiness of customers would surely be related to customers' trustworthiness.

H2: Customer’s Perception (CP) of CSR has the significant impact on customer trustworthiness (CT) [22-24].

H3: Customer satisfaction (CP) has a significant impact on customer trustworthiness (CT).

2.4. Corporate Image (CI) as Moderator

According to previous study, consumer reaction to total offers is the definition of corporate image. Corporate image is connected to the firm's designation, product or service diversity, customs, philosophy, and the intuitive understanding of excellency of dialogue by each individual cooperating with the organization [25]. An organization can gain a distinguishing and dependable appeal, as well as a more appropriate type of variety and a source of competitive advantage, by possessing a laudatory corporate image and eminence. This can be accomplished by cultivating and maintaining a reputation for excellence within the company. It is believed that the image of a company is not only an exercise in "window dressing," but rather a genuine indication of the likelihood that an organization will continue to exist in the future [26].

Researcher indicates that the corporate’s image characteristics and reputation are the results of two categories of components: the first is more genuine and includes aspects such as the company's proficiencies and economic performance, while the second is further sentimentally driven and includes aspects such as communal culpability and the institution's uniqueness or personality [27]. A social marketing initiative and corporate intercommunication can build a positive customer perspective toward the corporate image (CI) [28]. Organizations can craft dominant, persuasive pictures that intrigue customers' psychological and social desires [29].

H4: Corporate image (CI) has a significant moderating impact between CSR and customer satisfaction (CS).

H5: Corporate image (CI) has a significant moderating impact between CSR and customer trustworthiness (CT).

H6: Corporate image (CI) has a significant moderating impact between customer satisfaction (CS) and customer trustworthiness (CT).

The hypothesis relationship we investigate is shown in Fig. 1.

/word/media/image1.png

Fig. 1. Proposed Model.

3 Methodology

It was initially developed in English as the sampling technique for the questionnaire, and then it was interpreted into Chinese. After then, a second person who is fluent in both languages worked to translate it so that the English and Spanish versions would have a meaning that was more comparable to one another. Both translators have a significant amount of expertise in their respective industries. The investigation focused on perceptions of CSR variables, customer satisfaction (CS), demographic information, corporate image (CI), and customer trustworthiness (CT). China's main cities like Beijing, Taiyuan, Shanghai, Shenzhen, Guangzhou and Chengdu, were the focus of observation carried out through the use of email and social networks. It was requested of the candidates that they fill out a questionnaire based on their most recent experiences. 450 people were given access to the online observation form. From the pool of 450 applications, we had a response rate that was 61.33 per cent overall. 

4 Results and Conclusion

Questions of some variables like philanthropic responsibility (PR), ethical responsibility (ETR), legal responsibility (LR) and green economical responsibility (ECR) were taken from Carroll & Shabana (2010), environmental contribution (EC) and consumer protection (CP) were taken from Sandhu & Kapoor (2010), corporate’s image (CI) Ishaq (2012), customer’s satisfaction (CS) Kaur and Soch (2012) and customer’s trustworthiness (CT) is taken from Ishaq (2012). A 7-point Likert scale is used to analyze the observations like 1 is equal to strongly agree to 7 is equal to strongly disagree. Demographic detailed analyses are shown in table 1. In Table 3, At the 0.01 significance level, it was statistically significant across the board for all confirming factors [30], [36]. Moreover half of all constructs had an average extracted variance (AVE) that was greater than 0.5 [31]. The lowered squared correlations between the two constructs [32] provide evidence that the study can discriminate between the groups that were investigated. In the following sections, we will investigate some proposals based on our findings in the context of Chinese CSR. In addition, we acknowledge that there are certain caveats to the most recent observations and suggest avenues for further investigation. This survey evaluates a nomological network of design that leads to CT, which adds to a thorough knowledge of the CSR level in China. When it comes to creating a lasting competitive advantage via customer satisfaction, one of the most important foundations to lay is the foundation of a loyal customer base.

Table 1.Demographics Profile (N = 276).

City

Position

Age

Taiyuan

56.00%

Student

36.70%

18-24

28.00%

Beijing

16.00%

Company employee

47.30%

25-30

61.70%

Shanghai

14.00%

Government official

3.70%

31-40

8.30%

Shenzhen

7.30%

Others

12.30%

Gender

Guangzhou

4.30%

 

 

Male

52.70%

Chengdu

2.30%

 

 

Female

48.30%

Education level

Know CSR

The level of CSR

Under high school

0.30%

Yes

53.70%

Low

45.70%

High school

2.30%

No

46.30%

Middle

51.70%

College graduate

64.70%

 

 

High

2.70%

Postgraduate or PhD.

32.70%

 

 

 

 

Table 2.Confirmatory Factor Analysis and Constructs.

Variables

Items

Estimate

S.E.

SE

C.R.**

CR

AVE

 

PR2

0.931

0.063

0.896

14.706

 

Philanthropic responsibility (PR)

PR3

1

-

0.897

-

0.871

0.697

 

PR4

0.681

0.065

0.669

10.485

 

 

 

ETR1

0.98

0.095

0.807

10.328

 

Table 2.(continue)

Ethical responsibility (ETR)

ETR2

1

-

0.846

-

0.815

0.596

 

ETR3

0.664

0.079

0.593

8.352

 

 

 

LR1

1

-

0.744

-

 

Legal responsibility (LR)

LR2

0.831

0.101

0.776

8.209

0.829

0.618

 

LR3

0.78

0.071

0.748

11.061

 

 

 

ECR2

0.815

0.061

0.715

16.361

 

Green Economical responsibility (ECR)

ECR3

1

-

0.952

-

0.896

0.742

 

ECR4

0.825

0.052

0.794

15.895

 

 

Environmental contribution (EC)

EC1

0.898

0.168

0.744

5.332

0.838

0.721

EC2

1

-

0.734

-

 

CP2

0.777

0.084

0.72

9.236

 

Customer protection (CP)

CP3

1

-

0.811

-

0.832

0.623

 

CP4

0.889

0.089

0.712

9.619

 

 

 

CI1

0.891

0.069

0.811

12.451

 

Corporate Image (CI)

CI2

1

-

0.874

-

0.876

0.703

 

CI3

0.841

0.071

0.716

12.021

 

 

 

CS1

0.911

0.047

0.883

18.513

 

Customer satisfaction (CS)

CS2

1

-

0.923

-

0.943

0.847

 

CS3

0.892

0.051

0.904

18.418

 

 

 

CT2

1

-

0.926

-

0.852

0.664

Customer’s Trustworthiness (CT)

CT3

0.725

0.069

0.63

10.521

CT1

0.968

0.05

0.932

19.409

Note: x2 (263) = 441.91, GFI = 0.883, RMSEA = 0.052, p = 0.000, TLI = 0.957, AGFI = 0.839, CFI = 0.971, ** p<0.01

Table 3.Discriminant validity.

Factors

Mean

SD

1

2

3

4

5

6

7

8

9

Philanthropic responsibility (PR)

4.603

0.996

0.697

 

 

 

 

 

 

 

 

Ethical responsibility (ETR)

4.548

0.954

0.408**

0.596

 

 

 

 

 

 

 

Legal responsibility (LR)

4.47

1.022

0.514**

0.439**

0.618

 

 

 

 

 

 

Green Economical responsibility (ECR)

5.425

1.032

0.226**

0.339**

0.240**

0.742

 

 

 

 

 

Environmental contribution (EC)

3.918

1.304

0.114

0.171*

0.15

0.035

0.721

 

 

 

 

Consumer’s protection (CP)

4.459

1.075

0.567**

0.388**

0.616**

0.183**

0.118*

0.623

 

 

 

Corporate’s image (CI)

4.473

0.925

0.464**

0.362**

0.461**

0.358**

0.314**

0.581**

0.703

 

 

Customers’ satisfaction (CS)

4.389

1.04

0.445**

0.271**

0.451**

0.281**

0.188**

0.481**

0.565**

0.831

 

Customer Trustworthiness (CT)

4.101

1.002

0.415**

0.270**

0.425**

0.199**

0.029

0.423**

0.486**

0.628**

0.664

Table 4.Direct Path Analysis.

Hypothesis

Std estimate

S.E.

t-value

p-value

Result

H1: CSR→Customer satisfaction (CS)

0.592

0.258

5.241**

0.000

Positively Accepted

H2: CSR→ Customer Trustworthiness (CT)

0.191

0.078

2.464*

0.014

Positively Accepted

H3: Customer satisfaction→ Customer Trustworthiness (CT)

0.655

0.063

4.627**

0.000

Positively Accepted

Note: x2 (221)=351.93, p = 0.000, NFI = 0.913, GFI = 0.916, AGFI = 0.881, RMSEA = 0.052, TLI = 0.931, CFI = 0.941. * p < 0.05, ** p < 0.01.

Table 5.Moderating Analysis.

Paths

Low

High

Free

Constrained

Coefficient

t-value

Coefficient

t-value

model

model

CSR X CI → CS

0.419

0.799

0.512

3.381

x2 (442) = 818.019

χ2 (443) = 822.29

Chi-square-difference-test: △ x2 (1) = 4.11, p value < 0.05. H4 is positively accepted

CSR X CI → CT

0.189

0.011

0.511

2.348

x2 (442) = 818.019

χ2 (443) = 819.21

Chi-square-difference-test: △ x2 (1) = 1.06, p value > 0.05. H5 is rejected

CS X CI → CT

0.312

5.415

0.264

5.219

x2 (442) = 818.019

χ2 (443) = 818.31

Chi-square-difference-test: △ x2 (1) = 0.16, p value > 0.05. H6 is rejected

In the People's Republic of China, the question of whether or not aspects of CSR may play an important role in the intensification of customer happiness and loyalty is investigated in this study. The poll also investigates the influence that a company's image has on the relationship between corporate social responsibility (CSR) and consumer happiness and loyalty. As a result of these observations, there are several theoretical and practical ramifications.

To begin, this research modified Carroll's definitions of CSR to include consumer and environmental safeguards (economic, legal, ethical, and charitable duties). Recently, a significant number of Chinese residents have expressed concern on issues related to consumer and environmental protection. Consumer protection (CP) is the most essential component of corporate social responsibility (CSR), whereas environmental contribution (EC) is the least important component. Consumers need to be made aware of the importance of their role in protecting the environment (EC).

Second, this study found that corporate image (CI) has a significant positive association between CSR and customer satisfaction (CS). The positive influence on customer satisfaction is directly proportional to the strength of the company's corporate image (CI) (CS). How customers view the company's image (CI) affects the degree to which they are satisfied. Ratings of a company's image are affected by the customers' expectations regarding CSR actions (CI). Therefore, companies have to consciously increase the amount of money they spend on CSR. CSR initiatives such as community and environmental help, as well as customer interactions, are something that companies may take into consideration. Customers' favourable feelings are likely to be boosted when a company participates in CSR programmes, which might then lead to changes in consumer behaviour.

Third, businesses must use their corporate social responsibility (CSR) funds in ways that are beneficial not only to society but also to the stakeholders of the company. This is the case even though businesses are required to promote social wellbeing and act as good corporate nations.

Fourth, the rapid economic growth of China has captured the attention of people all around the world. CSR (corporate social responsibility) projects have lately seen a surge in popularity among Chinese consumers. Even though CSR is primarily the responsibility of the corporation, engaging in CSR initiatives can increase business success. It is more likely that China's CSR strategy will affect the operations of foreign companies since China's economy is a global development engine. Therefore, Korean enterprises need to understand the perspectives of Chinese customers on CSR to survive and thrive in China.

The findings of this study should not be taken at face value due to the limitations of the investigation. To begin, a cross-sectional approach was taken in the design of this study. If you use a cross-sectional approach, you run the risk of missing the implications of shifting client opinions towards CSR projects. An inquiry that was both longitudinal and qualitative would provide more theoretical knowledge.


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Cite this article

Hafeez,M.;Jahangir,J.;Ghafoor,A.;Shahzad,K. (2023). An Assessment of Corporate Social Responsibility, Customer Satisfaction and Customer Trustworthiness: Does Corporate Image matter for the Chinese Economy?. Advances in Economics, Management and Political Sciences,3,526-535.

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Conference website: https://www.icemgd.org/
Conference date: 6 August 2022
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.3
ISSN:2754-1169(Print) / 2754-1177(Online)

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