MEASURING THE INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY ON CONSUMER RESPONSES

Abstract

In the last two decades, increasing rate of corporate scandals in the emerging economies foster the business to be socially and ethically responsible. Growing complexity of business, increasing concern for sustainable development, need for managing of natural resources and call for enhanced transparency have not only magnified the significance of corporate social responsibility (CSR) but also heightened the inclination towards integration of CSR principles in the corporate activities. It is challenging for companies and managers to make the right choice of strategic CSR orientation or activities for achieving their business goals. It is important to understand whether, when and how consumers perceive and react differently to the various CSR options available to companies. Despite a significant interest given to CSR activities, studies examining how customers relate to CSR activities are relatively a new line of research and more information is needed in this regard. Many studies in the literature have found that CSR initiatives have a positive influence on consumer behavioral responses. Despite a surging popularity of the concept of CSR in the academia and a promising issue on the corporate agenda, the inconclusiveness of the results suggest that CSR is yet to find a traditional place in the criteria of purchase behavior especially in the context of services and this calls for further research in this area. Previous studies suggest that traditional criteria such as quality, price and services are still the most dominant criteria in the purchase behavior. Acknowledging the significant role of corporate ability in the services, this study incorporates these two distinct views and measures the influence of both CSR and corporate ability on consumer purchase intention. This study also investigates the moderating role of consumer level of awareness of banks CSR activities. This study also identifies the CSR activities carried out by Indian banks. For such purpose, various brainstorming sessions and personal interviews were conducted with several academicians and managers. Through a well-accepted scale development procedure, a reliable and valid measuring instrument has been developed which was also utilized to measure the influence of CSR activities on consumer responses in the Indian banking sector. Further, a conceptual model has been proposed to examine the path relationship between CSR, corporate ability, and purchase intention. Further, hypothesis testing is performed using SEM in AMOS 22.0. iv This research has attempted to give its major contribution in the body of literature. The main contributions of this research work are as follows:  An extensive and inclusive literature review was undertaken, on the basis of which, various research gaps were identified. This aims to provide a concrete platform to accomplish further research work in this arena.  Literature reveals various gaps that need to be addressed in future studies. This study contributes to existing literature by examining consumer responses to CSR activities in a developing country such as India and fills the gap that existed due to research being limited only to developed markets.  The present research has applied a modeling technique and developed a reliable and valid measurement scale for the CSR activities. This study adds to the literature by providing another measure of CSR, specifically focused on stakeholder perception.  Moreover, this study has tested the customer awareness of CSR activities in the real market place which has not been done in previous studies. In past studies, consumer awareness is either assumed or tested in the artificial setting. Keywords: Corporate social responsibility, CSR, Corporate ability, Purchase intention, Consumer responses, Scale development, India, Banking industry