Corporate social responsibilities, corporate image, consumer trust, and behavioral. intention: South Korean consumers' perspectives

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3 Corporate social responsibilities, corporate image, consumer trust, and behavioral intention: South Korean consumers' perspectives Sang-Lin Han Professor of Marketing, Hanyang University, Seoul, South Korea Seong-Ho Lee Instructor, Hanyang University, Seoul, South Korea Ji-Hyo Moon Doctoral Candidate, Hanyang University, Seoul, South Korea Abstract This study investigates the multi-dimensional measurements of CSR based on Carroll s social performance framework (Carroll, 1979), as well as a distinctive measurement of hospitality industry setting. The results of this study show the most relevant and influential dimensions of CSR, as well as the impact of these dimensions on restaurant customers perception toward company. Furthermore, the understanding of these relationships contributes to establish the distinction between corporate image and consumer trust. Key words: CSR, Corporate image, Intention, Trust, Philanthropy 1. INTRODUCTION This study adopts multi-dimensional measurements of CSR based on Carroll s social performance framework (Carroll, 1979), as well as a distinctive measurement of hospitality industry setting based on (Doan) s approach (2011). The results of this study will shed light on the most relevant and influential dimensions of CSR, as well as the impact of these dimensions on restaurant customers perception toward company. Furthermore, the understanding of these relationships contributes to establish the distinction between corporate image and consumer trust and to help management use them more effectively in its marketing strategy, thereby enhancing the firm's 1

4 positioning. The study consists of four parts. We will present, in the first instance, an overview of corporate image and consumer trust, and their links with revisit intention. Secondly, the model and the methods used to investigate the relationships between these concepts will be explained. Thirdly, the results of the investigation analyzed and explained. Finally, a discussion of managerial implications concerning the use of corporate image, consumer trust, and revisit intention as positioning tools, and future researches related to these concepts will be provided. 2. LITERATURE REVIEWS 2.1 Relationships between CSR and Corporate Image Bowen (1953, p. 6) defined social responsibilities as the obligations of businessmen to pursue those policies, make those decisions, or follow those lines of action which are desirable in terms of the objectives and values of our society. This has since been conceptualized and operationalized as CSR, which Incorporates economic responsibility, legal responsibility, ethical responsibility, and philanthropic responsibility dimensions (Carroll, 1979). Meanwhile, The concept of corporate image has been studied by researchers in the fields of marketing. Numerous researchers in marketing have recognized the critical roles of corporate image in customer's buying behaviour (Barich and Kotler, 1991; Zeithaml, 1981). Corporate image is described as the overall impression made on the minds of the public about a firm (Barich and Kotler, 1991; Dichter, 1985; Finn, 1961; Kotler, 1982). It is related to the various behavioral attributes of the firm, such as variety of products/services, tradition, ideology, and to the impression of quality communicated by each person interacting with the firm's clients (Nguyen and Leblanc, 2001). In this regard, a company with an excellent CSR image/reputation, by contributing to reducing conflicts between management activities and society, delivers a positive image to its stakeholders, which consequently affects these stakeholders perceptions of various aspects (Brown and Dacin, 1997; Fombrun and Shanley, 1990; Klein and Dawar, 2004; Montgomery and Ramus, 2003). Based on this discussion, we developed the followed hypotheses. H1: A company's CSR activities positively affect its corporate image. 2

5 H1a: A company's economic responsibility activities positively affect its corporate image. H1b: A company's legal responsibility activities positively affect its corporate image. H1c: A company's ethical responsibility activities positively affect its corporate image. H1d: A company's philanthropic responsibility activities positively affect its corporate image. 2.2 Relationships between CSR and Consumer trust Trust is defined from a consumer perspective as the consumer's belief that a corporation will perform in a manner consistent with expectations regarding its expertise, integrity, and goodwill (Park, Lee, and Kim, 2013). Also, Trust develops as a result of a firm belief that the trustee is reliable, honest and benevolent (McKnight et al., 2002; Morgan & Hunt, 1994). Prior researchers have found that consumer trust, as an essential factor in promoting corporate image, leads to improved behavioral and performance outcomes (Lee et al, 2013). To this end, CSR strategies can positively enhance the perceptions that consumers tend to trust companies that recognize and resolve social problems in an ethical manner (Hosmer, 1995). Based on this discussion, we developed the followed hypotheses. H2: A company's CSR activities positively affect its consumer trust. H2a: A company's economic responsibility activities positively affect its consumer trust. H2b: A company's legal responsibility activities positively affect its consumer trust. H2c: A company's ethical responsibility activities positively affect its consumer trust. H2d: A company's philanthropic responsibility activities positively affect its consumer trust. 2.3 Relationships among Corporate image, Consumer trust, and Revisit intention H 3 : Corporate image will positively affect revisit intention. H 4 : Consumer trust will positively affect revisit intention. 3. METHODS 3

6 3.1 Measurement The questionnaires were completed in the presence of the field researchers, allowing for rigorous monitoring of the data collection process. 400 questionnaires were distributed and 340 questionnaires were collected, representing a response rate of 85%. The data were coded for analysis. Collected data were analyzed with the structural equation modeling (SEM) using SPSS (SPSS, 2001) and EQS (Bentler & Wu, 1995). 3.2 Data analysis This study employs a structural equation modelling approach using SPSS and EQS (Bentler and Wu, 1995) to test research hypotheses in the proposed model. In estimating measurement and structural models, the two stages of testing procedure recommended by Anderson and Gerbing (1988) are adopted. In the first stage, Confirmatory Factor Analysis (CFA) estimates the measurement model for items in the research model. In the second stage, structural relationships among the constructs in the research model are estimated to evaluate the structure model and test the research hypotheses. 4. RESULTS The parameter estimates and goodness-of-fit of the SEM were evaluated to determine whether the hypothesized structural equation model fit the observed data. Based on the results of the SEM analysis as shown in Figure 1, the proposed structural model fit the data well; S-B χ = , df = 279; NFI = 0.924; NNFI = 0.952; CFI = 0.959; and RMSEA = The path relationships among the constructs were evaluated to test the four hypotheses previously proposed. The explained variance in endogenous constructs was 39.4% for corporate image, 26.3% for consumer trust, and 59.7% for revisit intention. The results of hypotheses testing indicate that CSR subfactors (Economy responsibility, Legal responsibility, Ethical responsibility, Philanthropic responsibility) had an effect on Restaurants image (β eco ima = 0.351, t = 5.471, p < 0.01; β eth ima = 0.229, t = 2.892, p < 0.01; β phi ima = 0.275, t = 3.412, p 4

7 < 0.01) and consumer trust (β eth tru = 0.257, t = 2.580, p < 0.01; β phi tru = 0.279, t = 2.901, p < 0.01). Thus, H 1a, H 1b, and H 1c were supported. Economy responsibility, Ethical responsibility, and Philanthropic responsibility had a positive effect on corporate image, whereas Legal responsibility was not associated with corporate image. Compared to the absolute value of standardized coefficient, Economy responsibility has a more impact on corporate image in a restaurant setting. H 2c, H 2d were supported. Ethical responsibility and Philanthropic responsibility had a positive effect on consumer trust, whereas Economy responsibility and Legal responsibility was not associated with consumer trust. In summary, Economy responsibility, Ethical responsibility, and Philanthropic responsibility was a significant antecedent of corporate image (β eco ima = 0.351, t = 5.471, p < 0.01; β eth ima = 0.229, t = 2.892, p < 0.01; β phi ima = 0.275, t = 3.412, p < 0.01), supporting H 1a, H 1c, and H 1d. Also, Ethical responsibility and Philanthropic responsibility was a significant antecedent of consumer trust (β eth tru = 0.257, t = 2.580, p < 0.01; β phi tru = 0.279, t = 2.901, p < 0.01), supporting H 2c and H 2d. Moreover, corporate image (β = 0.724, t = , p < 0.01) and consumer trust (β = 0.134, t = 2.638, p < 0.01) was significant determinant of revisit intention, supporting H 3 and H 4. Compared to the absolute value of standardized coefficient, corporate image has a more impact on customers revisit intention. In summary, many research hypotheses were supported. It is interesting to note that each CSR strategy as a unique CSR activity exerted different impacts on customers perceived corporate image and consumer trust. Also, there is a significant relationship between corporate image, consumer trust, and revisit intention. This finding indicates that CSR strategy implemented by hospitality industries can influence revisit intention via corporate image and consumer trust. 5. CONCLUSION In the service industry, corporate image and consumer trust play an important role in the company including restaurants because they usually keep in touch with their customers directly. 5

8 Therefore, it would be useful to investigate the impact of the CSR strategies, as restaurant companies unique CSR strategies, on customers perception and attitudes toward company. References - Available upon request - 6