The Impact of Corporate Social Responsibility on Corporate Image
Introduction and Statement of the Problem
Usually, the organizations undertake public relations campaign to build or maintain their brand image in the global marketplace. This implies that public relations are a tool that can help an organization to build goodwill in the market as well. For instance, when Virgin was introducing its mobile phones in the global market, Richard Branson conducted a press conference to present the new products, features, and the business to the stakeholders (Needham, 2012). This helped the new entity to gain a lot of popularity in the market. Also, it inculcated a lot of trust in the minds and hearts of the target audience thereby convincing them to make a purchase decision. Therefore, this example clearly shows the power of public relation in building a brand image for an organization. Another major example of maintaining and retaining the brand image during the turbulent times is Facebook. It is a much-known fact that Facebook is one of the most well-known social networking sites operating in the global market. In the year 2004, there were allegations that Mark Zuckerburg has copied the concept and format of Facebook from one of his college friends. However, with the help of an effective public relation campaign, Zuckerburg was able to sail through the tide of this hard situation (Hubbard, Rice, Galvin, 2015). He gave a lot of personal interviews to clarify the entire situation in front of the stakeholders. Therefore, public relations can assist an organization in building a positive brand image and may also assist it in retaining the brand image in the turbulent times. This implies that public relation has a primary objective that is associated with the goodwill of an organization.
As modern organizations organize their growth strategies, corporate social responsibility (CSR) is one area of focus for top managers. Also called corporate citizenship, CSR strategies ensure that firms not only observe the existing laws, regulations, and standards, but they go beyond these requirements to make a substantial positive impact on society (Bertels & Peloza, 2008). Firms with established CSR initiatives can connect with communities when they engage in practices and programs that influence the communities positively. To positively benefit the communities, the activities launched by organizations need to touch areas that affect communities on a daily basis. D’Amato, Henderson, and Florence (2009) noted that firms need to engage in activities that further social good to ensure that they impact stakeholders such as customers, workers, investors, communities, and shareholders. For most firms, engaging in CSR involves completing community service programs which engage locals and benefit the environment (Banerjee, 2009).
Some of the activities that can be completed by firms include environmental clean-ups, provision of food & water, health programs, and development of education & health facilities (Boeger, Murray, & Villiers, 2008). When firms undertake such initiatives, there is a positive impact on their identity and image. This achieved since the stakeholders see such companies as better entities compared to firms that do not complete such projects (Campbell, 2007). Consequently, it is reasonable to assume that there is a positive impact that results from a firm’s involvement in corporate social responsibility initiatives.
However, there are no studies that have provided clear findings on how CSR through community service efforts impacts the brand image of organizations. Low, Idowu, and Ang (2013) noted that brand image is the perception or impression that is held by stakeholders regarding a company or product. On the other hand, corporate image is determined by how a corporation presents itself to its stakeholders. Corporate image is determined by the initiatives or activities that shape the impression of interested parties about a company (Boeger at. al., 2008). Therefore, since the community service initiatives launched through CSR strategies engage these stakeholders, it is possible that they can change their perception. When community members experience highly beneficial activities of a firm, it is possible that their views can be exchanged based on the reality of the initiatives that launched by such a firm (Keinert, 2008).
Where a company is involved in unethical or unacceptable practices, it is possible that a bad corporate image is cultivated leading to resentment and hatred from the communities (Rajak, 2011). As noted by Arendt and Brettel (2010), community service initiatives affect the image, identity, and performance of firms. Nonetheless, there is limited knowledge about how the community service initiatives can benefit public relations departments (PRDs) of firms. In understanding how community service activities impact the image of firms, it is important to take an example organization and take an in-depth look at their activities and how they affect the corporate image. In this study, the Coca-Cola Company is chosen as the case study firm to help readers understand how community service can impact corporate image. In the recent past, it observed that Coca-Cola is investing a huge amount of money in the CSR activities. In fact, in the year 2015, the organization invested almost 4 percent of its profit in the CSR activities (Sharma, 2015). For instance, the organization undertook a comprehensive plantation drive in Vietnam and planted more than 1 million trees. Taking a case study approach is important to give the study the opportunity to take a detailed look at the activities of the firm and their outcomes on corporate image. Such an approach allows the study to integrate examples, theory, and other perspectives to answer research questions comprehensively. Achieved by making comparisons of the corporate different community service initiatives completed by Coca-Cola and their impact after completion. The study makes an assumption that the process of completing community service initiatives can positively impact public relations departments and eventually benefit the corporate image of firms.
Statement of the Problem
Corporate social responsibility is considered as an effective tool of public relations today. CSR is the systematic process of investing the company resources for the welfare of the society. This implies that an organization may invest its money, time and human resources to undertake the welfare activities for the entire society. According to Baker (2000), the societal marketing concept also states that every organization should give something back to the society as well and hence the concept of CSR has gained so much significance in today’s scenario. According to Blythe (2001), corporate social responsibility may assist an organization in creating an emotional bond with the entire society. This is mainly because the company representatives or the consultants goes to the society on behalf of the organization and undertakes welfare activities such as distributing free medicines, organizing medical checkup, imparting free education to the poor and much more. Taking this into consideration, numerous organizations have correlated the concept of public relations with corporate social responsibility. This implies that CSR is today considered as part and parcel of public relations and many organizations are undertaking such societal activities to make sure that they gain a lot of popularity in the marketplace. Hence, the public relation department may obtain a lot many benefits from the CSR activities, if they are undertaken in a strategic manner.
It is generally known that corporate social responsibility through community service initiatives can improve the relationship between an organization and its stakeholders (Idowu & Filho, 2008). However, there are no definitive studies that have examined how community service initiatives impact the public relations departments of organizations. It is this relationship that is the subject of this study to develop an understanding of how community service initiatives impact PR departments and generate positive impacts on corporate image.
Importance of the Study
This study is important to a variety of stakeholders since it can generate insight into how firms benefit from community service regarding corporate image. For managers or corporate executives, this study can provide them with insight about how they can successfully launch community service initiatives to improve the brand image of their companies. It also shows them example initiatives/case studies and their outcome regarding the brand image. For consultants or practitioners in this area, the results of the study provide insight into how CSR and community service can be leveraged to improve corporate image and the possible outcomes. Eventually, the study helps practitioners become better experts at community service initiatives and corporate image. The study also helps consumers and communities since it shows them how some companies can launch initiatives with the sole intention to improve corporate image. While such initiatives can help communities, it is important to understand that firms can exploit community service initiatives to improve their corporate and brand image. The study is also important to the research and academic community since it adds to the pool of available articles and information on community service initiatives and corporate image. The study also fills a gap in the literature and provides possible areas of study for future researchers.
Research Questions
The research will find out answers of the following questions (a) how do public relations departments; (b) PRDs benefit from corporate social responsibility; (c) what are some of the community service initiatives that firms can complete to improve their image? (d) what are the resources and knowledge/experience (capabilities) required to complete the community service initiatives? (e) How do firms account for and report these initiatives and the resources consumed? (f) How do PRDs justify their involvement in these initiatives and quantify the resulting positive corporate image (benefits)? (g) How can firms use CSR or community service to improve their image while avoiding community exploitation?
Structure of the Thesis
This study is arranged or structured into several sections/chapters. The following chapter (Chapter 2) reviews the current literature on the topic of study. After the review of the literature, the subsequent chapter (Chapter 3) discusses the methodology of the study or the technique used to collect data to answer the research questions. Chapter 4 presents the collected data or the results of the study. Chapter 5 provides a section to discuss and evaluate these results while Chapter 6 presents the conclusions, implications, and recommendations.
Literature Review
Preview
Organizations usually undertake community service initiatives within the framework of corporate social responsibility (CSR) and proved to be the most efficient way through which the attitudes of consumers can be improved concerning a particular company. Similarly, the CSR programs that the firms come up with are meant to promote the socially responsible actions that should be attended effectively according to the demands of the stakeholders. The customers are globally sensitive towards the institutions that are take part in community services because they form the basis of their purchase decisions. They are made aware of the activities of the enterprise through its involvement in the CSR practices. CSR, therefore, helps build the image of such companies thereby attracting more users to buy their products and services. The actions taken is an opportunity for any organization to build a strong trust with its clients thereby enhancing its image before the public, which regard such duties as ethical regardless of whether they earn profits or not (Maruf, 2013). They are not mandated by any laws or regulations, but they are a tradeoff between the profit margins that a firm can earn and its morality towards the environment they are operating in.
Definition of terms
The research used these terms as identified hereafter. Corporate image (CI) is the immediate mental perception that an individual develops towards a given bureau (Telofski, 2011). Corporate social responsibility (CSR) is an endless commitment that is shown by particular organizations through ethical behavior and its contribution to the community development to ensure that the stakeholders who are directly and indirectly related to it have an improved quality of life (Lenguyen, 2011). Public relations (PR) is how an individual/organization maintains a favorable public image. Public Relations Department (PRD) this is the unit of an agency that deals with managing the information that spreads to the public (Buttle and Maklan, 2015). Customer loyalty is the level to which the buyers of a company are connected to it resulting in a continued purchase (Harvard Business Review Press, 2011).
CSR and Corporate Image
The company’s involvement in the CSR activities helps build and improve its image before the public. Such organizations are considered to be exceedingly philanthropic compared to the ones that do not regard these practices. The business’s image depends on how best it is committed towards the CSR and ways through which the patronages perceive it. Most customers only shop in the institutions which positively contribute to the wellbeing of the society. Though CSR has no direct profit contributions, its benefits are indirect and can affect the well-being of any agency. They increase their fame before the consumers and become the most preferred one before them. Therefore, CSR is one of the ways through which a firm can clean up the negative view that people have towards it (Pompper, 2015).
One of the most widely covered subject matters in the literature is concerning how corporate social responsibility affects the image and/or reputation of an organization (corporate image). To this end, Arendt et al. (2010) contend that CSR triggers the corporate‐image‐building procedure and that its relationship to organization achievement changes fundamentally in light of organization size, industry and showcasing spending plan. Depends on a study they embraced to inspect the impacts of CSR on corporate character, image, and solid execution in a multi‐industry setting.
These findings cannot be farther from the truth as several other studies such as (Virvilaite & Daubaraite, 2015) have reached similar conclusions. Indeed, there is a close relationship between CSR and corporate image in that society tends to perceive the attractiveness of a corporation based on what it knows about it. Since CSR initiatives usually undertaken within the immediate community where the organization operates, it becomes easier for the society to know the organization for its CSR initiatives (Sohn, M., Sohn, W., Klaas-Wissing, T., & Hirsch, B. 2015).
That is why more often than not CSR will at the very least have an influence on the reputation and/or image of an organization. However, Arendt et al. (2010) rightly argue that this relationship mediated by factors such as company size, industry and marketing budget. This study is important for the research question in that it indirectly shows how CSR might be beneficial to organizations. Although it does not directly show how CSR benefits public relations departments, the fact that it addresses issues of reputation and image that are usually the responsibility of public relations departments makes it one of the key contributors to the research question.
In a related study, Bertels et al. (2008) deal with the issue of managing CSR reputation in an era of ratcheting expectations. They argue that the more organizations engage in CSR activities, the higher the societal expectations on them become. In essence, society will keep expecting organizations to be socially responsible. In a study whose aim was to use an institutional perspective to explore the interaction between a firm’s reputation for CSR. Also, the actions of its industry peers, the actions of its industry, and the actions of other firms in its local geographic community, Bertels et al. (2008) sought to explain why CSR norms become institutionalized within and across industries.
According to Bertels et al. (2008), the diffusion of CSR norms is a process that slowly results in the ratcheting up of expectations as time goes by. These expectations are, however, dependent on the nature of the industry in which the firms operate, with firms in very sensitive industries having to face and respond to higher CSR expectations for CSR than firms in industries that are less sensitive industries. They conclude by arguing that a vicious cycle has developed whereby the more CSR norms get diffused, the higher the expectations on firms from stakeholders; and the higher the expectations, the more firms will endeavor to engage in or widen their CSR activities (Bertels et al., 2008).
From the face of it, this study may appear to have nothing related to public relations. However, it actually addresses several public relations issues especially because it shows how and why growing CSR expectations push firms to act in socially responsible ways. It follows, then, that if firms fail to become more socially responsible (in line with societal expectations), they risk having a bad reputation especially in societies where there are higher CSR expectations and where people’s perceptions of organizations are mainly based on their social responsiveness.
Hsu (2012) investigated the persuasive advertising and informative advertising effects of CSR initiatives on corporate reputation and brand equity based using evidence from the life insurance industry in Taiwan. He found out that customer satisfaction, brand equity, and corporate reputation are first and foremost influenced by the perceptions of policyholders concerning CSR initiatives. He also found out that advertising through CSR initiatives only affects corporate reputation in terms of providing information to the general public. Finally, he found out that CSR initiatives have various impacts on brand equity; and these include persuasive advertising and informative advertising effects. In conclusion, he notes that CSR initiatives have immense advertising benefits for corporations especially in terms of enhancing the reputation of the corporation and adding value (brand equity) to the organization.
This study reiterates the already established fact that CSR initiatives are correlated with a corporate reputation (Sohn et al., 2015). This cannot be denied. However, it has not been known how CSR initiatives influence corporate image; and this study fills that gap by showing that CSR is a form of advertising. This cannot be farther from the truth because CSR initiatives target the community. Although the main goal is usually to give back to the society, that served by the organization (Hur, Kim &Woo, 2014). CSR initiatives, as this study confirms, can be used – and have actually been used – by public relations departments to advertise the organization as a brand (corporate brand).
This is no doubt why CSR positively influences both corporate reputation and brand equity. It means that an organization engaged in CSR tends to have more loyal customers whose loyalty is driven not necessarily by the quality of products offered by the organizations but by the organization’s commitment to CSR. Most important of all, it is true that CSR is a form of advertising. If fact it is one of the best forms of advertising as it ensures that the organization’s presence is felt by members of the public almost endlessly (Melo & Garrido‐Morgado, 2012).
The study by Hur et al. (2014) supported that by Hsu (2012) in that it explicitly shows how CSR initiatives contribute or lead to corporate brand equity using the mediating mechanisms of corporate brand credibility and reputation. The primary goal of the research was to investigate the relationships among four different variables namely CSR, corporate brand validity, corporate brand value, and corporate reputation. Like Hsu (2012), Hur et al. (2014) were categorical that corporate brand equity determined to a large extent by CSR. However, they added that this mediated by brand reputation and corporate brand credibility. They found that CSR positively impacts corporate brand credibility as well as corporate reputation.
Hur et al. (2014) essentially meant that an organization that is engaged in CSR is more likely to be perceived positively by members of the public than an organization in the same industry that is not involved in CSR. Basically, CSR makes the corporate brand more credible just as it gives the concerned organization a good reputation. Hur et al. (2014) also made a very significant finding that while CSR and corporate reputation are positively related, this relationship is mediated by corporate brand credibility. The other finding of the study is that there is the following relationship between CSR and corporate brand equity, a relationship which mediated by both corporate reputation and corporate brand credibility (Hur et al., 2014).
The discoveries of this study have far-reaching implication for corporations in that they underscore the importance of CSR initiatives to any organization. Clearly, makes a strong case for CSR. On this basis, public relations departments need to be more cognizant of this relationship if they hope to make better use of CSR as a reputation-building tool as well as a tool for improving their organization’s corporate brand credibility.
On their part, Kim and Park (2011) investigated how and why – and the extent to which – CSR can serve as an organizational attractiveness for prospective public relations practitioners. The aim of the study was to explore the perceptions of students majoring in public relations as a potential career about CSR as their attraction job condition. It determined that the students who convinced that CSR was a very important ethical fit condition of any company. Basically, therefore, the students chose to study public relations as prospective public relations practitioners because they believed – or perceived – that CSR was very important (Kim & Park, 2011).
It also established through the study that CSR is actually a very effective strategy for managing reputation especially among prospective employees and in times when an organization is suffering (Kim et al., 2011). Overall, therefore, it can be concluded that CSR is a very major attraction to an organization.
In a closely related study, Kim and Reber (2008) investigated the place of public relations in corporate social responsibility from the point of view of public relations practitioners. The main goal of the study was to understand what public relations practitioners perceived to be the role of public relations in CSR. It determined that public relations have different roles to play in CSR, including (but not limited to) significant management, value-driven, philanthropic, and communication. Some public relations practitioners even believed that public relations have no role whatsoever to play in CSR (Kim & Reber, 2008).
Significant findings are in this study and reflect the results of other studies (such as Vanhamme & Grobben, 2009; Yoon, Gürhan-Canli & Schwarz, 2006). For instance, public relations ensure that CSR is philanthropic and communicates it to the public. It also ensures that CSR is driven by value (Vanhamme et al., 2009). The significant management role of public relations in CSR, however, remains a bit unclear and less supported in the literature. Furthermore, it may not be necessarily correct to argue that public relations have no role to play in CSR when it is a fact that CSR in many organizations is a competitive strategy overseen mostly by public relations departments.
In yet another study, Lai, C. S., Chiu, C. J., Yang, C. F., and Pai, D. C. (2010) sought to establish whether or not CSR and an organization’s corporate reputation can lead to its brand equity in business-to-business (B2B) markets. The study has three main aims. The first objective was to investigate the effects of CSR and corporate reputation on industrial brand equity. Secondly, it sought to investigate the effects of CSR, corporate reputation, and brand equity on brand performance. Finally, it investigated the mediating effects of corporate reputation and industrial brand equity on the relationship between CSR and brand performance (Lai et al., 2010).
Based on the viewpoints of customers drawn from industrial purchasers from Taiwan small-medium enterprises, it was found that CSR and corporate reputation have positive effects on both industrial brand equity and brand performance (Lai et al., 2010). Moreover, it was established that corporate reputation and industrial brand equity play a partially mediating role in the relationship between CSR and brand performance (Lai et al., 2010). These findings are well-informed as they are in line with findings in other studies already discussed in this review (such as Hur et al. (2014) and Hsu (2012)).
Another study that has implications for public relations is that by Yoon et al. (2006). The study specifically investigated the effect of CSR activities on companies with bad reputations. It used theories of attribution and suspicion and three experiments to highlight the interceding role of the understood genuineness of motives processes in deciding the efficiency of CSR activities.
It was found that the actual effects that CSR activities have on an organization’s reputation or image depend on the perceived motives of consumers. When the motives of consumers are perceived as insincere, CSR activities hurt the image of the company. When these motives perceived as being sincere, then CSR activities improve the image of the company. Finally, CSR activities are ineffective when consumers’ sincerity of motives is ambiguous (Yoon et al., 2006). To the credit of the study’s authors, the study was able to establish further the various factors that influence consumers’ perceived sincerity. These include the source through which these consumers get to learn about the CSR activities, the benefit salience of the cause, and the ratio of CSR-related advertising and CSR contributions (Yoon et al., 2006).
This study deserves commendation because of its ability to challenge the common view that CSR activities always create value for organizations. The study shows that not all firms benefit from CSR activities, and those that get benefits do not get them all of the time. The study is right in finding that the impact which CSR activities have on a firm’s reputation is influenced by the sincerity of consumers’ motives. For indeed it is only when motives of members of the public (consumers) are positive that a firm’s CSR activities can actually help improve its reputation (Melo et al., 2012). Otherwise, there is no effect on reputation or the reputation suffers.
The rule of Public Relations in CSR
According to Capriotti and Moreno (2007), CSR has become not only an issue of international importance but also one that is very commonly used by public relations practitioners to advance their agenda. They argue further that this growing importance of CSR as a major component of public relations makes it necessary for firms to start making their CSR initiatives known to the general public through modern information communication technologies (ICTs) such as the Internet and corporate websites. It is their view that if organizations are to be taken seriously regarding their CSR initiatives, then they have to ensure that posting their CSR initiatives on their corporate websites becomes the norm and not the exception as the practice has tended to be for so long.
Indeed, not many organizations have been effectively communicating their CSR initiatives (especially using new and emerging technologies), a trend that could be attributed to lack of understanding and/or appreciating of the major role that CSR plays in an organization’s competitive strategy (Melo et al., 2012). Every public relations department of an organization has to ensure that even the most insignificant CSR initiative is posted on the organization’s website so as to make them better known and to enhance the level of interactivity between the organization and its target audiences (the general public) (Melo et al., 2012).
During the crisis periods, the two have a role to play. The PRD is the one to identify the areas that may have given rise to the conflict and ensure that the CSR works towards ensuring that it is solved amicably in a way that perceived as better before the society (Hershman, 2014). The PRD is the corporate monitor, and it should carefully follow what raises issues before the public and make sure that the same is reflected in the CSR programs so that it will not negatively affect their picture. If there are amendments that should do, they did through the techniques that CSR will employ.
The study by Vanhamme et al. (2009) investigated the impact of CSR on the image of a firm. However, its focus was more on how CSR can be used in times of corporate crises to ensure a firm maintains its reputations or improves it. From the very outset, the authors argue that while it is a widely accepted fact that effectively communicating a firm’s CSR activities can help restore the company’s reputation in times of corporate crisis, it is not clearly known how effective this can be. That is why they found it necessary to investigate how the length of a firm’s participation in CSR activities (as communicated to the public) is responsible for changing the firm’s image during corporate crises.
The study finds that to an enormous extent, the length of time a firm has participated in CSR activities plays a significant role in determining whether or not the communication of the company’s CSR activities will help the firm improve its corporate reputation during corporate crises. The longer a company’s CSR history, the more efficient its communication of CSR activities is likely to be in developing its reputation in such bad times (Vanhamme et al., 2009). This finding is no doubt justifiable because it is only natural to expect that firms that have had a longer history in CSR are more likely to be perceived positively by the public than firms whose CSR history is short. This is because the longer the history, the easier it is for the public to associate a firm with certain causes in society.
How CSR restores firm image
Some consortiums are struggling with reputational issues because of their past or present activities. CSR will ensure that it is fully involved in the corporate programs that work towards making the community gain maximally from its activities (Ordonez, 2015). It will identify some projects in the society that needs financial support and provide monetary donations to them so that they can complete. It will also make the donations that can be products or services to the public that aims at forming a strong partnership with the surrounding environment.
On their part, Minor and Morgan (2011) investigated the manner in which CSR can act as reputation insurance. Their focus was also on how CSR activities can be used to restore the image of a firm that is struggling with reputational issues. The study used a case study and a multi-year analysis of stock price responses for S&P 500 companies (following product recalls) to demonstrate that firms with higher ratings in terms of CSR activity or engagement tend to fare much better that those with lower CSR ratings (Minor & Morgan, 2011). The study also found another important relationship that has hardly researched. This is that firms that perceived as being both exceptionally good (in terms of CSR) and exceptionally capable of avoiding harm hardly ever suffer from any form of reputational damage as a result of negative media publicity (Minor et al., 2011).
The study’s findings are very important and offer immense insights for companies on how best to undertake their CSR activities. At the very least, it demonstrated that CSR ought to be used as much for public relations purposes as for philanthropy. Furthermore, CSR ought to be tailored to ensure that it is able to not only shield a firm from negative publicity but also help build a good reputation for the business.
In line with the findings of this study, companies might want to reevaluate their CSR activities so that they do not just undertake them for the mere sake of philanthropy but public relations as well to achieve the latter. However, it is necessary for firms to determine the right mix of their CSR activities. The right mix is that blend that is capable of offering the firm with the most effective insurance against reputational damage as a result of negative media publicity. Basically, too little or too much CSR might not necessarily work to the benefit of an organization’s reputation. This is why there is a need for those charged with the responsibility of using CSR for public relations purposes to ensure that the very right balance achieved.
PRDs are involved in a range of undertakings that are beneficial to their organization as a whole. They help in the preparation of speeches for the seniors that answer the questions of interest to the public and advise them of the need to get involved in the CSR practices. They maintain favorable relations with all the forms of media so that their CI will not be negatively portrayed because this will adversely affect them. Wherever any media platform inquires anything about their industry, they are the ones to disseminate such messages. The manner in which they communicate is the way their company will be known to the public (Virvilaite and Daubaraite, 2011).
For the efforts to be accomplished, the PRD department needs to have knowledge of business, people, and technicality. Business knowledge will enable them to make practical choices that involve all the activities affecting the enterprise like decision making and building an insight among others. The people skills, for example, building partnerships, will ensure that the CI is improved before the public whereas the scientific ones make the firm relate well with the surrounding. The necessary resources can be either monetary or nonmonetary (Ray and Silver, 2014).
The relationship between CSR and customer loyalty
it is imperative to find out the relationship that exists between the two, that the antecedents of subscriber loyalty be clearly defined as they divided into two, that is, customer and product related factors.
Customer related factors. They include the overall satisfaction with the company products and brand trustworthiness. Customer satisfaction plays a vital role in increasing the competitive advantage and ensuring that the current customers retained. It links consumers to the repeated purchase and spreading a positive word of mouth about the benefits of the particular firm. The contentedness can better define after consumption though some authors regard it as the difference that exists between perceptions and expectations. Favorable CSR leads to improved achievement from the way it increases patron identification and support that increases their loyalty. CSR also leads to positive customer behavior for those who are firmly attached to that agency (Chung, Yu, Choi, and Shin, 2015).
On the other hand, the CSR practices influence the customer trust positively. Once people identify themselves with a given institution, they satisfy their self-definitional needs as their attitude increases following the positive corporate behavior that makes their image more appealing than any other. The support given to the society wins the faith of all those who knows the commitments of that firm. Furthermore, the product promotions are perceived to be fit only if the perception of the bureau is good. It can be, therefore, concluded that the CSR activities and customer trust are directly related, and the same case applies to their loyalty (Diallo and Lambey-Checchin, 2016).
Product-related factors. Its components are the product quality and brand image. The affirmation of the goods and services ensures that the customers are satisfied, retained and remains loyal. CSR is the mediator between the perception that individuals have towards attribute and ardor. The morality of company practices determines the attitudes that people develop towards it and its products. The goods should be of the high standard because if they are inferior, the CSR will have too little to do with improving the client loyalty. It should remember that positive behavior does not substitute product characteristic and maintaining high standards does not compensate for the unethical practices. In general, CSR has a positive impact on loyalty through quality productions and servicing that makes a business unique from its competitors (Berg and Lidfors, 2012).
Similarly, word of mouth influences the way consumers behave and the attitudes developed towards the brand image (Raman, Lim, and Nair, 2012). This will be possible if there is the satisfaction that is stimulated by positive involvement in the CSR activities. The message will be spread from one individual to the other thereby improving the company image an indicator that the customers have remained firm to it throughout the period. If there are regions where the company is not known, the CSR programs make it familiar and its influence remains stable once the brand becomes unique from others. CSR also can act as differentiation methods from the operations of the competitors in case they do not exist because it is coupled with innovation. The associations that a consumer develops form a basis upon which a firm can be evaluated through such an assessment depends on the certain CSR practices (Asatryan, 2013). Managers should make use of the strategic perspective as a basis for decision-making because it shades light on how evaluations made by customers. The relationship between CSR and brand images controlled by other personal preferences. However, the corporate responsibilities favorably change the brand image and the customer loyalty as well.
Strength/limitation of the literature review
This literature review has its strengths in that it has identified in details how the corporate social responsibility affects the customer loyalty in different ways. It has identified the factors that directly affect the customer devotion and how they are influenced by the activities that take place after the corporation indulges itself in undertaking the community services regardless of their ability to earn them profits directly. The practices have proved how useful they are in the long run. Likewise, it has emphasized that high-quality products are not a guarantee that the firm should not get involved in events that are aimed at making the society a better place because that is one way of ensuring that their image is improved. The users of this research paper can get detailed information of what they can observe to maintain their consumers who will spread the message to attract more others.
Likewise, it has some weaknesses that properly analyzed before any decision made based the contents provided here. In that matter, therefore, the behavior of customers differs from one person to the other concerning particular companies and the products that they produce and thus their preferences are dissimilar. This study may not hold to all people because there are those who do not care much about the CSR provided the product maintains the standards they require. The previous practices may have created a strong base of purchase loyalty, and the same message circulating among people over time, and thus such companies may not be profoundly affected by their nonparticipation in the CSR activities.
Conclusion
The concept of corporate social responsibility has continued to play a key role in determining the way most businesses plan on improvement of their corporate brand. By looking at how public relation can benefit from CSR, how a firm can use CSR to improve its image, and how businesses in the modern world can use CSR for improvement without exploiting the community multinationals stand a chance to improve their business ventures. Indeed, CSR is an integral strategy for businesses; the concept does not only improve the corporate image of an organization or company, but it makes businesses to become interactive with the community. Evidently, previous research has showed that CSR has indirect impact to the organization since through CSR, firms can build a name that influences the consumer choice. In other words, CSR is the best strategy that an organization can use to build a positive reputation, as it creates a better corporate image for businesses.
Based on previous literature, it is apparent that CSR might be expensive for an organization but the initiative is important in its own ways. According to Naqvi, et al. (2013), CSR is a business model that has many advantages, as the concept paves way for a right organization image, safe working environment for the employees, fairness within an organization, and ensures that a firm improves the society through community services. As the study focuses on analyzing CSR and the way it influences different set of businesses, the review of the literature shows that CSR has become an important component for the public relations practitioners. The public relations department use CSR to deliver their agenda to the community, which is significant to the image of the PDR organizations. Finally, from the study, it is obvious to say that CSR is a light developing strategy and is relevant for the organizations to use the concept so that they can unleash the value of community services.
As such, this study focuses on the key role played by CSR in corporate image building. By using a company like Coca-Cola as a case study, this study will determine whether the organization has made efforts to ensure that they succeed in building their corporate brand by understanding key steps taken in CSR. Additionally, the study will suggest different moves that Coca-Cola can take in their journey or realizing a good corporate brand. As such, the information will also provide other organizations with key decision channels they could use to improve their corporate image.
Reference
Naqvi, S.R., Ishtiaq, M., Kanwal, N., Ali, M., Inderyas, S., (2013). Impact of Corporate Social responsibility on Brand image in Different FMCGs of Pakistan. Interdisciplinary Journal of Contemporary Research in Business, 5(1), 79-93
