Relationship Between Corporate Social Responsibility And Customer Behavior Marketing Essay

Globalization has brought not only industries and customers closer but also business philosophies. Since last decade, corporate social responsibility has been the object of researches and reinforced by the publicity of fallouts due to corporate wrongdoings. There is increasing interest in exploring the relations between corporate social responsibility and marketing. While the cost of being socially responsible may be significant, the cost of not practicing as a socially responsible organization may be greater than its cost. Many organizations than ever before are investing in corporate social responsibility activities. Organizations encouraged adopting corporate social responsibility efforts due to the pressures from customers, suppliers, employees, communities, investors, and other stakeholders.

The relationship between corporate social responsibility and customer behavior is one of the most important research focuses of management researches. Discussions have generally focused on the role of business firms in society and the nature of corporate social responsibilities. There has been only limited research conducted on customers’ expectations concerning the contribution of corporate social responsibility to their service suppliers. To date there has been extensive discussion of the benefits to organizations of being socially responsible, including: improved financial performance, building relationships with customers, improving product quality and even internal benefits such as increases in employee commitment and reduced employee turnover, and also improving society overall. Although the benefits of corporate social responsibility activities had been previously researched, there is still a need to continue investigating its’ benefits to the organization from marketing view because it’s an element that could affect service quality (Johnson, 2003; Dawkins and Lewis, 2003; Polonsky and Jevons, 2006).

Many services sectors such as financial services or telecommunication are facing increasing competitive environments. The quality and essence of a service can vary from service provider to provider, from customer to customer, and from situation to situation. That makes it more difficult to standardize services. The strongest relationship between the customer and the organization clearly arises in the services market. Because of the characteristics of intangibility, inseparability, and heterogeneity of services compared to tangible goods the user not only approaches purchase in a different way, but also establishes a stronger and more direct relationship with the service providers (Bamert and Wehrli, 2005).

Satisfying customers is only the beginning and the minimum required and may not be sufficient for survival in today’s world of intensive competition. Organizations should focus on getting customer loyalty by enhancing customer perceptions of service quality. A critical objective for any organization to its continued success is its capability to maintain current customers and make them loyal. Loyal customers could improve the organization businesses through buying more, paying higher prices, and providing new referrals through positive word of mouth over time (see section 4.4). Organizations could have many benefits from spending on corporate social responsibility activities if they know the impact of corporate social responsibility activities on customer behavior. By understanding customer reactions to corporate social responsibility, organizations can develop corporate social responsibility strategies that are optimal from not only a normative perspective, but also a business one (Bhattacharya and Sen, 2004).

Any organization through producing its’ products and services is affecting the society. Because of the relationship between organization activity and the society as a whole each customer knows that he/she is participating in organizations performance and sharing and in return has this expectation that organizations be responsible. This illustrate whether social responsibility is just a cost or organizations could be able to take advantage of benefits like loyalty of customer (Abbasi et al., 2012).

In summary, corporate social responsibility is the positive fulfillment of obligations and responsibilities to internal and external stakeholders through organizations systems and behaviors. Corporate social responsibility has legal and administrative aspects of the mandatory obligations, and moral aspects of voluntary actions including the organization’s economic responsibility, corporate legal liability, corporate ecological responsibility, corporate ethical responsibility, and corporate culture of responsibility, and all these corporate social responsibilities have benefits to organization and society (Zhuo, 2008).

1.2 Importance of the Study

Corporate social responsibility (CSR) is considered relatively new phenomenon for the Egyptian business environment. A limited number of studies have been conducted focusing on it. Therefore, this present study will provide a useful contribution to the literature and provide useful insights for further research in the field of corporate social responsibility, perceived service quality, customer loyalty and the relations between these three variables from customer point of view. It could be used as a marketing tool to enhance the organization image and profit and other many benefits. Marketers must fully understand and comprehend how their customers specially in the services sector, perceives corporate social responsibility and how this could affect customer valuation of the service quality and try to choose the corporate social responsibility activities that are important from customer’s point of view. Keeping in mind that if service customer perceives the quality of the service as it supposed to be perceived, therefore, they are likely to purchase and acquire the services of this organization and even recommend it to others which lead to customer loyalty to the service provider. In summary present study tries to analyze customers’ perspective on corporate social responsibility and how corporate social responsibility perception affects customer quality valuation of perceived service and customer loyalty particularly in mobile service organizations.

1.3 Research Problem

There are limited studies about the relationship between corporate social responsibility and customer behavior and attitudes. Based on literature review it has been realized that there is many benefits for corporate social responsibility especially from the financial perspective but there is still a need to investigate the benefits of corporate social responsibility as a marketing tool. There is limited researches have been conducted on customers’ expectations concerning the contribution of corporate social responsibility to the service provider so there is still a need to know how these corporate social responsibility activities of service provider could affect the customer perception. That is why it is necessary to introduce the following research that focus on the perception of customer for corporate social responsibility in services like telecommunication service and how it could affect the customer overall valuation of perceived service quality and how it could affect customer loyalty to the service provider from the perspective of mobile users.

1.4 Research Aims and Objectives

The research aims to review the literature of corporate social responsibility to investigate the previous studies about it and its’ relation to customer behavior. In addition the research tries to achieve the following:

To investigate the dimensions of corporate social responsibility from Egyptian mobile customer point of view.

To study the influence of corporate social responsibility on perceived service quality in mobile sector.

To study the influence of corporate social responsibility on customer loyalty in mobile sector.

1.5 Methodology

This present research is exploratory in nature. It is an empirical research to investigate the issue of corporate social responsibility and its’ effect on customer behavior. The research is trying to test some hypotheses that have been deduced after reviewing previous studies.

This present research is a quantitative research using a structured questionnaire that has been used in previous studies. Data collected using a systematic random sample from mobile users of the three mobile service providers in Egypt.

1.6 Research Questions

Present research is trying to explore the constructs of corporate social responsibility of the Egyptian mobile service provider from customer point of view and to explore the possible influence of these constructs on the customer perceived service quality and customer loyalty to the service provider. This research tries to answer the following questions:

Can a new presentation of constructs describing corporate social responsibility be realized?

Does customer perception of corporate social responsibility have a positive relation to perceived service quality?

Does customer perception of corporate social responsibility have a positive relation to customer loyalty?

1.7 Research Hypotheses

The following hypotheses were researched and deduced from previous research findings on this research problem that has been stated earlier.

H1 – The perception of corporate social responsibility is positively related to perceived service quality.

H1a: The perception of corporate social responsibility is positively related to perceived technical service quality.

H1b: The perception of corporate social responsibility is positively related to perceived functional service quality.

H1c: The perception of corporate social responsibility is positively related to perceived price service quality.

H2 – The perception of corporate social responsibility is positively related to customer loyalty.

H2a: The perception of corporate social responsibility is positively related to behavioral customer loyalty.

H2b: The perception of corporate social responsibility is positively related to attitudinal customer loyalty.

H3 – The perceived service quality is positively related to customer loyalty.

H3a: The perceived service quality is positively related to behavioral customer loyalty.

H3b: The perceived service quality is positively related to attitudinal customer loyalty.

1.8 Thesis Plan

This thesis consists of six chapters, in addition to this chapter there are five more chapters which can be described briefly as follows:

Chapter two – This chapter reviews the literature related to the subject under study, starting with corporate social responsibility, service quality as a backdrop for understanding customer evaluation of service quality. Moreover, customer loyalty and the effect of corporate social responsibility on service quality and customer loyalty to service provider has also been reviewed. Then the chapter illustrates a review of empirical studies done on variables under study.

Chapter three – This chapter outlines the history of telecommunication in Egypt and illustrates its importance and how the three mobile service providers that are working in this market begin. Then the chapter illustrates the corporate social responsibility activities of the three mobile service providers.

Chapter four – This chapter outlines the design of the research, research problem and the relative importance of the research problem. The research questions and hypotheses for the study are reviewed. Sampling, data collection, research model, and analytical methods are discussed.

Chapter five – This chapter reviews the descriptive analysis and detailed analysis of the pilot sample, then a factor analysis for the four dimensions of corporate social responsibility. The hypotheses are tested and findings are summarized illustrated the possibility of rejecting or fail to reject the hypotheses.

Chapter six – This chapter summarizes the research findings, draws conclusions from those findings, and illustrates the contribution of this thesis. Finally, the chapter considers limitations of the study and suggestions for further research in this field.