An Empirical Study on the Relationship among Corporate Social Responsibility, Brand Image and Perceived Quality

Transcription

1 An Empirical Study on the Relationship among Corporate Social Responsibility, Image and Quality 1 Yi Li, 2 Jianying Hu, 3 Jing Liu, 4 Xiaoping Liu, 5 Xianming Zheng 1 School of Economics and Management, Chongqing University of Posts and Telecommunications, Chongqing , China, yili.cqupt@gmail.com 2 School of Economics and Management, Chongqing University of Posts and Telecommunications, Chongqing , China, @qq.com 3 Chongqing Medical and Pharmaceutical College, Chongqing , China, joannalj01@gmail.com 4 School of Economics and Management, Chongqing University of Posts and Telecommunications, Chongqing , China, dodo_315@163.com 5 School of Economics and Management, Chongqing University of Posts and Telecommunications, Chongqing , China, Abstract Most of the present studies described corporate social as a holistic concept when investigating the relationship between corporate social and its outcomes. Few researches were done on the dimensions of corporate social and their effects. A fourdimension scale of corporate social is defined in this paper. They are economic, philanthropic, ethical, and legal. A conceptual model of corporate social, brand and perceived is proposed. Using the data gathered through a survey on 449 consumers, the hypotheses are tested by structural equation model. The results show that these four dimensions of corporate social have different effects. Economic and philanthropic have significantly positive effect on brand, and ethical has significantly positive effect on perceived, while legal has no significant effect on brand and perceived. Meanwhile, brand has significantly positive effect on perceived. Keywords: Corporate Social Responsibility, Image, Quality, Structural Equation Model 1. Introduce As a high-return strategy promoting corporation or brand differentiation, corporate social (hereinafter referred to as CSR) has drawn general attention from academic group and business world, and became an important object of many researches [1-7]. Those researches showed that corporations could enhance their brand and promote consumers purchase intention by positively engaging in CSR activities. However, most of the present studies described CSR as a holistic concept when investigating the relationships among CSR, brand and perceived [6][7]. Few researches were done on the dimensions of CSR and their effects. Basing on the data gathered from 449 customers, as well as the former research of Carroll, this paper tests how the four dimensions of CSR affect the brand and perceived by structural equation model and compares these four dimensions effects, which supplements the related theories and gives some guidance on the practice of CSR. 2. Literature review and hypotheses CSR was first proposed by Oliver Sheldon in 1924, but it had no unified definition, so an academic mainstream viewpoint was used in this paper, which referred to that the enterprise not only considered maximum profits for the shareholders as the goal of its existence, but also should maximize other social interests besides the shareholders. Carroll divided corporate social into four dimensions: economic, philanthropic, ethical, and legal Advances in information Sciences and Service Sciences(AISS) Volume5, Number6, March 2013 doi: /aiss.vol5.issue

2 [8]. Researches show that by fulfilling CSR, a corporation could make consumers form new associations or views to the corporation regardless of its ability or performance [9] CSR and brand refers to the characteristic feature of a corporation or its brand impressed on the minds of the public. reflects the public, especially the consumer s brand evaluation and cognition. and brand are inseparable. shows the characteristic feature presented by the brand, which reflects the strength and essence of the brand, so corporations should attach great importance to shaping brand. Mohr & Webb suggested the overall level of CSR affected corporate public and brand, and low level of CSR led to low or even negative corporate [3]. Becker-Olsen et al. observed that consumers took whether corporations fulfilled their social (active or passive) or not as a criterion to judge the corporations. Only enterprise actively fulfilling its CSR could enhance consumers evaluation and trust of the enterprise [4]. Through the empirical research on Thai banking sector, Poolthong & Mandhachitara found that CSR perceived by consumers had a significant positive effect on the corporate brand [5]. According to the research of Wang, CSR and brand were positive correlation and brand played a mediating role between CSR and consumers purchase intention, while actively fulfilling social could directly lead to the enhancement of brand and consumers purchase intention, at the same time the improvement of the brand was conductive to prompt consumers purchase intention [6]. Hence, the following hypotheses are advanced: H1a: Economic has a positive effect on brand. H1b: Legal has a positive effect on brand. H1c: Ethical has a positive effect on brand. H1d: Philanthropic has a positive effect on brand CSR and consumers perceived Different from the objectively actual, perceived refers to an abstract and subjective evaluation of a product or service from consumers through their comprehensive analyses of different information from the market, according to their intended use and demand of the product [7]. Relevant researches show that the main factors affecting the perceived are objective factors (i.e. clues. etc) and subjective factors (i.e. personal involvement. etc). So consumers can use some clues to evaluate product and these clues will affect their perceived. In theory, the CSR information is also a clue, and consumers can judge product on the clue. According to relevant researches, when consumers know a corporation actively fulfilling its social, they will have higher perceived to the corporation s products. Negative CSR would injure consumers evaluations of product, while active CSR would bring high consumers evaluations on product was found in the research of Brown & Dacin [9]. Salmoes, Grespo and Bosque also discovered that CSR could enhance consumers overall evaluation of corporate service, which would further improve consumers loyalty to the corporation [10]. Through the empirical research on Thai banking sector, Poolthong & Mandhachitara found that CSR perceived by consumers had a significant positive effect on the service perceived by consumers [5]. In addition, Zhang et al. also found that CSR perceived by consumers was positive correlated with perceived, but negative correlated with perceived risk, meanwhile, perceived and perceived risk played a mediating role between CSR and consumers purchase intention [7]. Based on the above analyses, the following hypotheses are set: H2a: Economic has a positive effect on perceived. H2b: Legal has a positive effect on perceived. H2c: Ethical has a positive effect on perceived. H2d: Philanthropic has a positive effect on perceived. 1178

3 2.3. and consumers perceived Products with good brand enable consumers to produce positive feelings. When consumers have cognitive deficiencies of a product or are difficult to obtain information about the product, consumers perceived risk will increase, but if there is a higher brand to be the product assurance, the consumers perceived of the product can be improved. Therefore, creating a good brand is one way to improve consumers perceived. With the help of empirical research of banking sector, Bloemer et al. found that brand could directly affect consumers perceived [11]. Guan & Dong developed brand scale in their thesis, which employed an empirical research on sports shoes. In their paper, three dimensions were defined to describe brand. They were brand performance, brand characteristic and company. The effects of three dimensions on consumers purchase behavior were also tested in the paper and it came to the conclusion that three dimensions had significant positive effects on brand perceived [12]. That brand had a significant positive effect on perceived service was also discovered in the empirical research of Poolthong & Mandhachitara on Thai banking sector [5]. Hence, the following hypothesis is proposed: H3: has a positive effect on perceived. 3. Research design 3.1. Conceptual model Based on the above theories and hypotheses, a conceptual model is set as Figure 1. Economic Legal Ethical Philanthropic Figure 1. Conceptual model 1179

4 3.2. Measures To ensure validity and reliability of measurement, we employed the scales adopted in literatures abroad, and revised them according to our study about the mobile communications industry. The scale of CSR perceived by consumers is taken from studies by Maignan. The scale of brand consults the scale used by Cretu & Brodie and the scale of perceived is selected from scales adopted by Harris & Goode. All the items are on 5-point Likert scale. Main scales and their references are shown in Table 1. Table1. Measurement of variables Variable No. Question Ref. CSR1 The operator reaches the maximum of profit CSR2 The operator strictly controls the costing of production CSR3 The operator conducts long-term planning of development CSR4 The operator constantly improves economic performance CSR5 The operator ensures the employee behavior abide by the low CSR6 The operator complies with its obligation under the contract CSR7 The operator abides by the low Corporate social CSR8 The operator follow the government s policy of regulation CSR9 The operator would sacrifice certain profit to abide by ethical problem [13] CSR10 The operator ensures the ethics take precedence over economic income CSR11 The operator is committed to make good moral principles CSR12 The operator won t damage the moral standard to achieve its target CSR13 The operator helps to solve social problems CSR14 The operator participates in public affairs management CSR15 The operator distributes some resources to public welfare activities CSR16 The operator creates economic profit and also make other contributions BI1 Popular trend BI2 The reputation of BI3 Advanced technology [14] BI4 Practical PQ1 Package collocation PQ2 The two-way communication to the operators PQ3 The convenience to pay for money PQ4 The service of the personnel of the service [15] PQ5 The preferential promotion and integral activity 3.3. Samples The sample in this paper is consumers. 500 consumers were randomly selected in Chongqing and mailed with questionnaires. In total, the mailings yielded 500 responses. There were 449 usable questionnaires, representing an 89.8% response rate Methodology SPSS is used to calculate the Cronbach α coefficient to test the reliability of the scales in this paper, also confirmatory factor analysis is done by LISREL to test the convergent validity and discriminant validity of the scales, based on structural equation model. A full model analysis of structural equation model is conducted with LISREL to test the hypotheses. 4. Data analysis and result 4.1. Reliability test Reliability test results are shown in Table 2. Generally, Cronbach α coefficient surpassing 0.7 indicates the questionnaire is reliable. However, in the exploratory study, Cronbach α coefficient>0.5 is acceptable. So the Cronbach α coefficient in table 2 manifests a comparatively good reliability. 1180

5 CSR Table 2. Reliability test Variable Item α coefficient Economic Legal Ethical Philanthropic Responsibility Validity Test Since the scales in this paper are revised according to existing research, there is good content validity in the scales. Confirmatory factor analysis (CFA) is done by using LISREL8.70. A six factor CFA model including 25 items in Table 3 shows an acceptable result of fit. Table 3. Confirmatory factor analysis fit index χ 2 df RMSEA GFI CFI NNFI IFI Meanwhile, known from Table 4, except one index of economic has a lower standard factor loading (0.43), the factor loading of the other 24 index is between 0.5 and 0.95, which achieves a high significance level (p<0.01) and manifests comparatively good convergent validity. The 95 percent confidence interval of the pairwise-related coefficients between factors doesn t contain 1; therefore it has good discriminant validity. Table 4. Standardized factor loading Variable No. Standardized solution T-values CSR *** Economic CSR *** CSR *** CSR *** CSR *** Philanthropic CSR *** CSR *** CSR *** CSR *** Ethical CSR *** CSR *** CSR *** CSR *** Legal CSR *** CSR *** CSR *** PQ *** PQ *** PQ *** PQ *** PQ *** BI *** BI *** BI *** BI *** Note: *** stands for P<

6 4.3. Hypothesis test A full model analysis is conducted with LISREL to test the hypotheses (χ 2 /df=1.69, RMSEA=0.039, CFI=0.972, GFI=0.927, NFI=0.934) and the result shows a comparatively good fit between SEM and data. Known from Table 5, 4 hypotheses are tested and 5 are not. Economic (r=0.40, t=5.01) and philanthropic (r=0.29,t=3.35) have significant positive effects on brand (H2a, H2d). Ethical (r=0.35, t=4.44) has a significant positive effect on perceived (H1c), also brand (b=0.62, t=6.12) has significant positive effect on perceived (H3). H1a, H1b, H1d, H2b and H2c are not significantly tested, so it s known that economic, legal and philanthropic have no significant effect on perceived, legal and ethical also have no significant effect on brand. The reason for H1a and H1d not tested maybe that consumer in the evaluation of the product is more concerned with CSR information related to their own interest, besides economic and philanthropic and product have no direct relationship. H1b and H2b are not tested. The reason may be that consumer exposure less to propaganda of the corporate legal, so they lack channels to get related information. This can explain why the legal has no significant effect on perceived and brand. reflects the strength of the brand, while ethical can not reflect brand. This may be the reason for H2c not tested. Economic Legal Ethical Philanthropic Economic Legal Ethical Philanthropic Table 5. SEM path coefficient and hypotheses testing result Path Path coefficient T-values Hypotheses Testing result H1a Non-support H1b Non-support H1c Support H1d Non-support H2a Support H2b Non-support H2c Non-support H2d Support H3 Support 5. Conclusion Through the empirical research in this paper, it s found that ethical has a significant effect on perceived, economic and philanthropic are significantly related to brand, and brand has a significant effect on perceived. This paper has discussed the effect of CSR on perceived and brand in its four dimensions but not in a holistic concept. The main contribution of this paper is to distinguish different mechanisms and effects of the four dimensions of CSR from each other. Furthermore, the results of this study refine relevant theories of CSR and supplement the field with new empirical evidence. The discoveries in this paper can also give some guidance on the practice of CSR to help the corporations set their focuses and directions clearly when fulfilling their social responsibilities. According to the research results in this paper, corporations should rationally allocate the resources invested in every aspect of CSR activities, basing on the different response of consumers to various aspect of CSR, which makes it possible for corporations to obtain greater benefits from inputs of CSR activities. 1182

7 The limitation of this paper includes two aspects. One is that this paper studies only a single industry (mobile communications industry), and the other is that the data are all from Chongqing. So the results have no strong universality. Future research can be extended to other industries or consumer groups in other areas to test the findings in this paper [16][17]. In addition, dividing brand into different dimensions to analyze the relationships between CSR and brand detailedly can also be explored in future research. Role of moderator variables (consumers CSR-support, etc.) is worth studying too. 6. Acknowledgments The work presented in this paper has been supported by Grants from MOE (Ministry of Education in China) Project of Humanities and Social Sciences (no. 12YJA630077, to Xiaoping Liu) and Grants from Project of Social Science Foundation of Chongqing University of Posts and Telecommunications (no. K , to Xianming Zheng). 7. References [1] Archie B. Carroll, Kareem M. Shabana, The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice, International Journal of Management Reviews, vol. 12, no. 1, pp , [2] Lucia Gatti, Albert Caruana and Ivan Snehota, The Role of Corporate Social Responsibility, Quality and Corporate Reputation on Purchase Intention: Implications for Management, Journal of Management, vol. 20, no. 1, pp , [3] Lois A. Mohr, Deborah J. Webb, The Effects of Corporate Social Responsibility and Price on Consumer Responses, Journal of Consumer Affairs, vol. 39, no. 1, pp , [4] Karen L. Becker-Olsen, B. Andrew Cudmore, Ronald P. Hill, The Impact of Corporate Social Responsibility on Consumer Behavior, Journal of Business Research, vol. 59, no. 1, pp , [5] Yaowalak Poolthong, Rujirutana Mandhachitara, Customer Expectations of CSR, Service Quality and Effect in Thai Retail Banking, International Journal of Bank Marketing, vol. 27, no. 6, pp , [6] Quanbao Wang, The Empirical Study on Corporate Social Responsibility The Effect on CSR to Image and Purchase intention, China Collective Economy, vol. 18, no. 6, pp , [7] Guangling Zhang, Xiangwei Fu, Xiao Xiong, A Study on the Mechanism on How Corporate Social Responsibility Influences Purchase Intention, Journal of WuHan University (Philosophy and Social science edition), vol. 63, no. 2, pp , [8] Archie B. Carroll, A Three-dimensional Conceptual Model of Corporate Performance, The Academy of Management Review, vol. 4, no. 4, pp , [9] Peter A. Dacin, Tom J. Brown, The Company and the Product: Corporate Associations and Consumer Product Responses, Journal of Marketing, vol. 61, no. 1, pp , [10] Ma del Mar Garcia de los Salmoes, Angel Herrero Crespo, Ignacio Rodriguez del Bosque, Influence of Corporate Social Responsibility on Loyalty and Valuation of Services, Journal of Business Ethics, vol. 61, no. 5, pp , [11] Josee Bloemer, Ko de Ruyter, Pascal Peeters, Investigating Drivers of Bank Loyalty: The Complex Relationship between Image, Service Quality, International Journal of Bank Marketing, vol. 16, no. 7, pp , [12] Hui Guan, Dahai Dong, A Empirical Study on How Chinese local Image Affects Quality, Customers Satisfaction and Customers Loyalty, Journal of Management, vol. 5, no. 4, pp , [13] Isabelle Maignan, Consumers Perceptions of Corporate Social Responsibilities: A Cross- Cultural Comparison, Journal of Business Ethics, vol. 30, no. 1, pp , [14] Anca E. Cretu, Roderick J. Brodie, The Influence of Image and Company Reputation Where Manufacturers Market to Small Firms: A Customer Value Perspective, Industrial Marketing Management, vol. 36, no. 2, pp ,

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