Consumer perception towards corporate social responsibility on brand equity
Karpal Singh, Dara Singh
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While the Malaysian government continues to encourage companies to adopt CSR practices, consumers’ preference and demands for products and services deemed ethical is expected to encourage firms to adopt the CSR agenda. Consumers are often regarded as one of the primary drivers of CSR amongst organizations, however, little is known about the impact CSR has on consumers more so in a Malaysian context. The primary purpose of this study is to examine consumers’ perception towards CSR and its effect on brand equity. This study investigates the drivers that motivate firms to adopt CSR and the effect of CSR dimensions on brand equity. The study also investigates the moderating effect of customer awareness and religiosity on the relationship between CSR and brand equity. In addition, the study also investigates the effect of brand equity (resulting from CSR practices) on consumer buying behaviour. Having reviewed scores of literatures, the study identified six drivers of CSR (intra-organizational factors, competitive dynamics, institutional investors, customers, government regulators and non-governmental organization) that were adopted as the antecedents of the study. Three CSR models were reviewed and synthesized which resulted in a proposed CSR model containing six dimensions (value creation, legal compliance, good governance, philanthropical engagements, workplace concerns and environmental integrity). These CSR dimensions were adopted as the independent variables of the study which were tested against brand equity, the dependent variable of the study. To attain the objectives, the study adopted a quantitative approach and questionnaires were developed and distributed to the chosen sample and collected back for relevant analyses and discussions. The geographical scope of the research comprised 12 states in Peninsular Malaysia targeting 120 people from each state contributing to a sample size of 1440 people, based on a quota based sampling plan in order to investigate the views of customers from the multi - racial population of Malaysia. A total of 909 usable questionnaires were used for analysis. The exploratory factor analysis and reliability analysis was undertaken to test the validity and consistency of all questionnaire items. The findings revealed that all the six drivers were able to motivate organizations to adopt CSR practices. As for the effects of CSR dimensions on brand equity, the study revealed that value creation, legal compliance, philanthropical engagements, workplace concerns and environmental integrity were significant predictors of brand equity. However the study found no convincing evidence to support the effect of good governance on brand equity. Hence, 5 hypotheses relating to CSR dimensions and brand equity were accepted while 1 hypothesis was not supported. In terms of the moderating variables, the study found that customer awareness was able to moderate the relationship between philanthropical engagement and brand equity while religiosity only had a moderating effect on the relationship between legal compliance and brand equity. In addition, the study also found that brand equity (resulting from CSR practices) had an effect on consumers buying behaviour which meant that customers were willing to consider products and services from organizations that were committed to CSR.