Customer Perception of Csr Initiatives- Its Antecedents and Consequences

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    Social Responsibility JournalCustomer perception of CSR initiatives: its antecedents and consequences

    Samra Chaudary Zohad Zahid Saad Shahid Shamila N. Khan Sana Azar 

     Ar tic le information:To cite this document:Samra Chaudary Zohad Zahid Saad Shahid Shamila N. Khan Sana Azar , (2016),"Customer perception of CSR initiatives:its antecedents and consequences", Social Responsibility Journal, Vol. 12 Iss 2 pp. -Permanent link to this document:http://dx.doi.org/10.1108/SRJ-04-2015-0056

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    CUSTOMER PERCEPTION OF CSR INITIATIVES: ITS ANTECEDENTS AND

    CONSEQUENCES

    Abstract 

    Preceding examination on corporate social responsibility (CSR) investigates

    employee judgment; nonetheless, customer’s perception of CSR stands and remains

    considerably and principally unexplored. Organizational memoirs in addition to its virtues

    and capabilities of corporation emerge as assets for the competitive gain and consequently

    customer perceptions of CSR avocations execute a vital role in customer attachment and

    loyalty to their organization coupled with performance of the corporation. Subsequently, this

    research inspects and examines the way the perceived fit of culture in addition to CSR

    capability impacts customer attachment and additionally performance of corporation by

    means of the mediating constructs of their perceptions of CSR avocations. The empirical

    discoveries through structural equation modeling relating to 250 respondents endorse that

     perceived fit of culture along with CSR capability radically influences CSR perception within

    consumer minds and so, subsequently, customer attachment and overall performance of the

    corporation. The outcomes bestow significant ramifications for marketing and advertising

     philosophy combined with practice.

    Keywords: customer perception of CSR activities, CSR capability, Customer attachment,

    corporate performance 

    1. 

    Introduction

    A renegotiation is taking place between the society and business across the globe in

    the wake of recent global economic crises (Kemper and Martin, 2010). The crises had

    underlined the notion that ethics is no more prosthesis for businesses rather both ought to be

    integrated in this social relationship (Roberts, 2003). Indeed this integration effort has been

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    widely acknowledged after the macroeconomic and regulatory failures in liberal market

    economies (Garriga and Melé, 2013). Especially, the role of corporate social responsibility

    hereafter came to attention in both developed and developing countries.

    As per the classical view of Friedman (1970) the CSR cannot create value for the firm

    and the sole responsibility of a firm is to earn profits for its shareholders. Oliver (2014) puts

    forward that critics of CSR argue that it is simply an added expense that does not grant to the

    financial performance of the firm. Moreover, he also reported that higher green firms were

    found not to be significantly related to the financial performance. In contrast, the proponents

    of stakeholders’ perspective believed that firms can play a prolific role in a society by

    engaging in CSR related activities (Pedersen and Neergaard, 2008). For instance, firms can

    give valuable assistance to the societal and environmental aspects of the community (Kok,

    2001). CSR practices by the businesses are communicated to stakeholders to highlight and

    inform them for these value creating activities (Servaes and Tamayo, 2013). The

    communication of CSR practices has gained much popularity in the past few decades through

     promotional campaigns, company websites and annual reports. Due to established

    institutions, standards, and legal system in developed countries, CSR practices are

     predominantly considered as a Western phenomenon. However, weaker institutions of

    developing countries present significant challenge concerning CSR practices in developing

    countries including Asian countries (Mishra and Suar, 2010). Hence, it is pertinent that

    research on CSR practices should give due consideration to the relevant institutional context

    of a particular country or region (Brammer et al., 2012). 

    A recent survey by KPMG indicates that there has been extraordinary increase of 22%

    in social responsibility communication in the Asia Pacific region (KPMG, 2013). More

    importantly, there has been highest growth rate of reporting is recorded in India i.e. 53

     percent since 2011. Similarly, China has an increase of 16 percent since 2011. These statistics

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    emphasize the efforts and contribution of firms in the developing countries of the Asian

    region as regards to CSR practice and its communication. Hence, it has become relevant to

    examine the influences of CSR practices in the subcontinent region. Especially, India and

    Pakistan of this region have undergone epochal institutional reforms where it has become

    mandatory in India to spend 2 percent of net profits on CSR related activities. Similarly,

    Pakistan has already introduced regulatory interventions to address the externalities of

    modern corporations in 2009. Securities and Exchange Commission of Pakistan (SECP)

    mandated disclosure of CSR practices through SRO 2009. The SRO 2009 states that ‘Every

    company shall provide descriptive as well as monetary financial disclosures of the Corporate

    Social Responsibility related activities undertaken by it during each financial year’. Later in

    2013, a more comprehensive set of guidelines has been provided by SECP. These voluntary

    guidelines of 2013 aim at reinforcing practices of CSR in the Pakistani firms. This

    institutional backdrop highlights the fact that developing countries of Asian region like

    Pakistan are catching up with their developed counterparts regarding CSR practices.

    A number of studies have been conducted about CSR practices in the Indian context

    for example (Khan and Atkinson, 1987; Krishna, 1992; Sood and Arora, 2006; Mishra and

    Suar, 2010) however; there is dearth of research in its neighbouring country Pakistan about

    CSR practices and consumer perceptions. Therefore, this research aims to fill this gap by

    examining CSR practices in Pakistan which has similar historical and colonial roots with

    India. In doing so, this study ascertains the impact of CSR activities conducted on various

    consumer and corporate related dimensions that incorporate customer loyalty, consumer

    attachment, and corporate performance.

    2. Literature Review

    2.1 Green image

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    The public is increasingly becoming concerned about environmental issues. Green

    image marketing refers to the complete and whole management process responsible for

    identifying, anticipating, predicting and satisfying the needs of customers and society, in a

     profitable, sustainable and long lasting way (Paco, 2009). The emergence of green

    consumers sprouted in the beginning of 1990s (Lee et al., 2010). Ever since that point

    environmentalists have emerged and raised the issues regarding the green image of

    companies. The concept stemming from the new and well aware consumer and with ever

    increasing government regulations corporations have been driven to the edge to incorporate

    environmental aspect (Yusof et al., 2012). Dillion and Back (2014), on the contrary claim that

    much of CSR deals with incorporating and dealing with firm based problems.

    Green image has been the focal point of many authors due to the fact that the higher

    the investment in green image the more markets a company develops, the more competitive

    advantage a company is able to seek and the better corporate image a company is able to

    establish within consumer minds (Ko, 2013; Lee et al., 2010; Chen, 2008). Prior research has

    its focus on the entire energies on studying green image with respect to store loyalty and

    shopping value, the effects of green image directly on store loyalty as well as using shopping

    value as a mediator. However, literature also suggests that green image has a direct effect on

    the image within consumer minds (Ko, 2013). Hence this study aims to incorporate the

    customer’s perception of CSR activities finding out how is customer going to perceive a

    company based on its green image.

    H1: Green image positively affects customer perception of CSR activities

    2.2 Perceived fit between corporate culture and CSR activities

    One of the most important and useful concepts as far as building a brand image is

    concerned is the orientation of a culture of the corporation (Hatch, 2001). The link between

    an organization and its actions has been referred to as the link based on perception between a

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    cause and the image related to a corporation (Varadarajan, 1988). The fit between a company

    and its CSR activities has been tested in prior studies. Sen and Bhattacharya (2001) analysed

    whether that the fit leads to positive consumer responses and perceptions or not. Culture has

    also been studied in Asian context and its implications on organization’s performance have

    also been analysed. The culture’s relationship with organization’s performance turned out to

     be as predicted i.e. positive whereas it proved to be a shocking result when it turned out to be

    a non-significant result (Mathew et al., 2012). Hence this article defines perceived link of

    corporate culture with CSR activities as the degree to which customers deem that CSR

    actions are harmonious and synonymous with the culture of the corporation. 

    The previous

    studies that empirically tested the effect of perceived link of corporate culture with CSR

    activities on employee perception suggested strong positive results between the two while

    also portraying a significant result (Lee et al., 2013b).

    This study aims to add value and fill in the gap through testing it on customers since

     previously customers have not been presented as mediators as far as their perception is

    concerned regarding the link and congruency between corporate culture and CSR initiatives

    and hence the following hypothesis:

    H2: Perceived fit between corporate culture and CSR activities positively impacts customer

     perception of CSR activities.

    2.3 Perceived CSR capability

    Perceived CSR capability can be spotted as the planning, execution, evaluation and

    analysis of CSR activity based on organizations' knowledge, skills, and processes (Sharma

    and Vredenburg, 1998). One of the foremost elements considered in determining one’s

    strategy is capabilities of the firm (Grant, 1991). Empirical studies conducted show that

    quantity of a resource simultaneously with the level of CSR capability leads to a positive

    effect on CSR of a corporation and therefore resulting in a higher corporate performance

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    (Elsayed, 2006). A positive relationship exists between CSR and corporate ability for

    Peruvian consumers (Marquina and Morales, 2012). Moreover, customers are affected

    through a chain in which firm’s capability affects product attributes which in turn leads to

     product evaluation, thus capability of a firm has a link with consumers as well (Brown,

    1997).

    Prior research has studied perceived CSR capability in employee’s context and

     perception of CSR actions, however, this study aims to fulfil the gap and add value through

    studying it in relation with customers. Therefore, we devise the following hypothesis:

    H3: Perceived CSR capability positively affects customer perception of CSR activities.

    2.4 Customer perception of CSR activities

    CSR is commonly portrayed as the activities, related to society’s perception, as far as

    its obligations towards a society exist (Sen and Bhattacharya, 2001). Therefore, this work

    describes customer perception of CSR initiatives as the extent to which customers recognize

    that a company aids the actions related to a social cause (Lee et al., 2013b). Adding customer

     perception of CSR initiatives as a mediating variable adds the buyer’s perspective to CSR

    studies for the first time. This study distinguished customer perception of CSR activities in

    three parts; philanthropic CSR, environmental CSR and ethical CSR (Carroll, 1979).

    Emphasis has also been laid on the legal aspects of CSR where a firm is not only ethically

    responsible but has also legal concerns which are directed at the greater good of the society

    (Carroll, 1991). McWilliams (2001) also points out that CSR relates to doing what is positive

    and beneficial for the society which is beyond and in addition to doing what law requires.

    Customer perception of CSR incorporates wide array of concepts one must be able to

    understand its broad meaning (Maignan and Ferrell, 2001). Firstly, Philanthropy can be

    explained as the voluntary giving of time, money, and resources to benefit, or aid others or

    society without regard to personal gains (Seifert, 2004). The current professional

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    organizations demand candidates to excel and gain expertise in professional skills as well as

     philanthropic character, thus involving themselves in philanthropic CSR (Fontaine, 2012).

    Secondly, ethical CSR which can be defined as all those practices that improve the workplace

    and benefit society in all those ways that go above and beyond what a company is legally

    required to do (Nussbaum, 2009). Thirdly, the recent emphasis is not just on social

    responsibility but towards practising corporate environmental responsibility (Margolis and

    Walsh, 2003). Environmental CSR is explained as the impact of an organization’s actions on

    the ecosystem (Babiak and Trendafilova, 2011). Nussbaum (2009) goes on to define ethical

    CSR as all those practices that improve the workplace and benefit society in all those ways

    that go above and beyond what a company is legally required to do. (Marquina and Vasquez-

    Parraga (2013) found that company’s environmental commitment gives consumer’s utility the

    most in USA as well as in Peru.

    Prior research emphasized upon employee perception of CSR activities, with all the

    three dimensions being studied with job satisfaction and trust. The relationships of ethical,

     philanthropic and legal CSR were found to be positive and significant with job satisfaction

    and trust (Lee et al., 2013a). This study, however, adds value by taking customer perception

    of CSR as a mediator and proposing that the relationship between green image and perceived

    corporate performance is through customer perception of CSR and hence the following

    hypothesis:

    H4: Customer perception of CSR activities mediates the positive relationship between green

    image and perceived corporate performance.

    2.5 Perceived corporate performance

    Jin (2010) defines corporate performance as the organization's performance measures

    or outcomes namely revenues, market share and profits. There is a significant relationship

    and link between perceived corporate performance and CSR (Verschoor, 1999). Time series

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    analyses have been used to identify and portray that the cumulative effects of CSR on

    corporate performance strengthen over time thus proving a positive link between the two

    (Peters and Mullen, 2009). In Peru, managers with a high stakeholder orientation were

    highly satisfied with organisational performance (Angelopoulos, 2013). Prior research shows

    that there exists a positive significant relationship between philanthropic activities i.e. CSR

    and financial soundness (Lindgreen, 2009) and hence the following hypothesis:

    H5: customer perception of CSR activities positively affects corporate performance.

    2.6 Customer attachment

    Bowlby (1979) defines the variable as an attachment that is recognized such as an

    emotion-laden, distinctive bond between a human and an object, the attachment diverges in

    strength; tougher attachment is linked with much more powerful sentiment or moods of

    affection, attachment, passion, and fondness. The common topic of discussion holding much

    interest in the corporate world is regarding the employee attachment (Becker, 2003).

    Prior research has focused on emotional attachment towards brands, leading to a

     positive significant result (Grisaffe, 2011). More dedicated employees are most significant

    team players and more interested within their jobs (Yanhan, 2013). Therefore, we come up

    with the following hypothesis:

    H6: customer perception of CSR activities leads to positive customer attachment.

    2.7 Customer loyalty

    Evanschitzky (2006) defines loyalty as the intention and readiness to repurchase from

    a particular company or recommend a company. The most important aim of retailers is to

    consistently make their product unique within consumer minds (Verhoef, 2007). Companies

    aim to promote loyalty with the help of the unique attributes of the product within consumer

    minds hence satisfaction is the most associated factor with loyalty (Chen et al., 2008).

    Loyalty in consumers is triggered through satisfaction moderated by purchase size. The

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    common belief among the researchers has been proved accurate up to the last detail that

    satisfaction triggers loyalty although satisfaction relates to a range of measures that can be

    used to describe satisfaction of a consumer but it’s safe to establish the fact that once

    triggered, satisfaction leads to creation of loyalty among customers (Flavián, 2006).

    Christodoulides and Michaelidou (2010) also reinforce the same results. However, some

    researchers negate the findings that satisfaction plays such a critical role in provoking loyalty

    (Taylor and Hunter, 2003). Lamberg (2012) analysing the project of best practices of CSR

    communication in Peru suggests that in order to attract new investors and customers the

     businesses could diffuse information on the effect on the corporate outcome, the achieved

    employee commitment and loyalty and eventually operations efficiency generated by the

    motivated employees. These stakeholders keenly seek such CSR information thus the Peru

     project could be clustered with the release of the firms’ annual reports and CSR publications

    when targeting such stakeholders.

    This study aims to add value by determining whether customer perception based on

    CSR activities plays relatively more important role in initiating loyalty. This study aims to fill

    in the gap by focusing on the effect of customer perception of CSR on customer loyalty.

    H7: customer perception of CSR activities leads to positive customer loyalty.

    2.8 Repurchase intention

    Much of debate about repurchase intention relates to how repurchase intention is

    affected by transactional factors such as low price (Anderson and Srinivasan, 2003). It was

    found that there is a positive relationship between CSR and consumer buying behaviour and

    that Peruvian consumers are more responsive to CSR attributes of products than Spanish

    consumers (Marquina and Morales, 2012). Repurchase intention is not just affected by low

     price, therefore, other factors need to be explored. On the contrary some argue that there is no

    need to look beyond transactional factors (Bansal, 2004). To counter the argument some

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    suggest that analysing just a single factor i.e. transactional factors may not yield accurate

    results of what affects repurchase intention, the fact remains that single point focus never

    yields accurate results and single focus factor should not form the bases for concluding that

    only one factor establishes a causal relationship with repurchase intention and up to a great

    extent, other factors remain untested up till now (Burnham, 2003).

    Thus this study focuses upon identifying other factors that affect repurchase intention;

    defining repurchase intention as the common consumer's subjective probability of re-

     patronizing with a corporation, and is the major and significant determinant of buying action

    (Wu et al., 2014). This study has aims at identifying factors beyond transactional cost factors

    that lead to repurchase intention such as customer perception of CSR activities.

    H8: customer perception of CSR activities leads to positive customer repurchase intention.

    ..

    Figure 1: Conceptual Framework

    3. Methodology

    3.1 Sample: 

    Perceived

    Corporate

    Performance

    CustomerPerception of CSR

    Activities

    -PhilanthropicCSR

    -Environmental

    CSR

    -Ethical CSR

    Perceived fit

     between

    CorporateCulture and

    CSR Activities

    Perceived CSR

    Capability

    Customer

    loyalty

    CustomerAttachment

    Repurchase

    Intention

    Green Image H4 (+)

    H5 (+)H1 (+)

    H7 (+)

    H2 (+)

    H6 (+)

    H3 (+)

    H8 (+)

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    A self-administered questionnaire was rotated amongst the CSR consumers ranging in

    age from 17 to 45 to have a more range of point views. The individuals were considered

    “CSR consumers” who had some knowledge and awareness of CSR and green image being

    advertised and or labelled by the company (such as printing ‘Recycled’ or other eco-friendly

    images/labels on shopping bag, fliers, outlets etc.) and are consumers/customers of such

    firms. The income levels ranged between 10,000 Rs to 2 lakh Rs to measure our variables

    across SEC A and B. About 55% of the sample consisted of females and 44% fell into the age

     bracket of 20-25. Only about 4% crossed over 40 years of age. The participants of this

    research were expert enough in text book knowledge at least that is associated with CSR

    campaigns. Lack of practical knowledge (by respondents) of actual CSR initiatives

    incorporated by firms might have disclosed the higher expectations of the CSR practices.

    The respondent’s awareness was measured by asking them to recall organizations that

    might have eco-friendly policies. Almost 70% of the sample were able to recognize CSR and

    green marketing by grocery stores (20%), international fast food chains (30%), FMCG

    (15%), miscellaneous (5%) while almost 30% of the individuals that were contacted for data

    collection were not able to recognize any CSR activities. The study effectively targeted a

     population sample of up to 250 approximately towards the data collection period in

    accordance with the minimum requirement of structural equation model (SEM) of at least

    200 sample size (Shah and Goldstein, 2006). The data were collected in January (2014) – 

    April (2014).

    3.2 Measures:

    The research measures firm level construct such as CSR and green image at the

    individual level of analysis. The measures were adapted from literature that was reliable,

    valid and widely accepted. Seven items of Green image items were developed from Ko

    (2013). Corporate culture with CSR activities were adopted from Cable and DeRue (2002)

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    while perceived CSR capability was adapted from Vorhies (2003). Modified items of

     philanthropic CSR and Ethical CSR were utilized from their basic source and adapted in

    accordance with this current study (Lee et al., 2013b). Environmental CSR belongs to the

    same source of author with the exception of last item relating to solid waste that was adapted

    in accordance with this study (Mohr et al., 1998). The seven items relating to customer

    attachment that used a likert scale for their evaluation were borrowed from Thomson et al.

    (2005). Perceived corporate performance related factors modified to be in accordance with

    the current study were utilized from (Menon et al., 1996). Repurchase intention construct was

    developed from Khalifa and Liu (2007) and Zhou et al. (2009). Lastly loyalty related items

    were developed from Valvi and West (2013). All of the items utilized within this article have

     been extracted from existing data and literature and modified to suit the current study under

    discussion. The items use a 5-point likert scale ranging from 1 being strongly disagree to 5

     being strongly agree.Table1shows each items used for the development and analysis of this

    research.

    Table1: Variables with Measurement ItemsVariable Operational definition

    Green image

    (Ko, 2013)

    GI1: Your desired company distributes eco-friendly published fliers

    GI2: Your desired company deals with products with green labelsGI3: Your desired company increases sales of brands in eco-friendly products

    GI4: Your desired company has eco-friendly shopping space in their outlets

    GI5: Your desired company operates eco-shops to sell eco-friendly products

    Perceived fit between

    corporate culture and CSR

    activities

    (Cable and DeRue, 2002)

    F1: Your desired company's CSR activities are congruent with their corporate

    culture

    F2: Your desired company's CSR activities are relevant to its corporate culture

    F3: Your desired company's CSR activities are similar to its corporate culture

    F4: Your desired company's CSR activities reflect its corporate culture

    Perceived CSR capability

    (Vorhies, 2003)

    CSR1: Your desired company tries to understand its customer’s needs

    CSR2; Your desired company makes use of its customers’ informationCSR3: Your desired company considers its customer’s requirements

    CSR4: Your desired company serves its customer’s demands

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    Philanthropic CSR

    (Lee et al., 2013b)

    CSR1: Your desired company helps solve social problems

    CSR2: Your desired company has a strong sense of corporate social responsibility

    CSR3: Your desired company gives adequate contributions to local communitiesCSR4: Your desired company allocates some of its resources to philanthropicactivities

    CSR5: Your desired company plays a role in society that goes beyond the mere

    generation of profits

    CSR6: Your desired company encourages its employees to participate involuntarily activities

    Ethical CSR

    (Lee et al., 2013b)

    CSR1: Your desired company emphasizes the importance of its social

    responsibilities to its employees

    CSR2: Your desired company organizes ethics training programs for its

    employeesCSR3: Your desired employees are required to provide full and accurate

    information to all customers

    CSR4: Your desired company has a comprehensive code of conductCSR5: Your desired company is recognized as a trustworthy company

    Environmental CSR

    (Lee et al., 2013b)

    (Mohr et al., 1998)

    CSR1: Your desired company tries to offer environmentally friendly products

    CSR2: Your desired company has an environmentally related mission

    CSR3: Your desired company makes all-out efforts to maintain and preserve the

    environment

    CSR4: For your desired company solid waste or garbage problem is of little

    concern

    Perceived Corporate

     performance

    (Menon et al., 1996)

    PCP1: Your most preferable company has a competitive advantage in sales

    growth

    PCP2: Your most preferable company has a competitive advantage in market

    sharePCP3: Your most preferable company has a competitive advantage in profit

    growth

    PCP4: Your most preferable company has a competitive advantage in return on

    investment

    Customer attachment

    (Thomson et al., 2005)

    CA1: Positive customer perception of CSR activities elicits Affections towards

    your desired company productCA2: Positive customer perceptions of CSR activities give rise to Love towards

    your desired company’s product

    CA3: Positive customer perceptions of CSR activities lead to Friendly feelings

    towards your desired company’s product

    CA4: Positive customer perceptions of CSR activities results in sense of Passion

    towards your desired company’s product

    CA5: Positive customer perception of CSR activities lead to sense of Delightwhile purchasing your desired company’s product

    CA6: Positive customer perceptions of CSR activities make you feel Connected

    with your desired company’s product

    CA7: Positive customer perceptions of CSR activities help you form a Bond with

    your desired company’s product

    Customer loyalty

    (Valvi and West, 2013)

    CL1: I seldom consider switching to another product that I use regularly

    CL2: As long as the present service continues from my desired company, I doubt

    that I would switch products

    CL3: I try to use the same product whenever I need to make a purchase

    CL4: When I need to make a purchase, this product I use regularly is my first

    choiceCL5: I like using this product I use regularlyCL6: To me the product that I use regularly is the best retail product to buy

    CL7: I believe that that product is my favorite product which I use regularly

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    Repurchase

    intention(Khalifa and Liu,

    2007; Zhou et al., 2009)

    I1: I intend to continue to purchase goods from the company that I regularly use

    I2: I intend to recommend the product that I regularly use to people around me

    I3: I intend to use the product that I regularly use as the priority online product forfuture purchasesI4: Except for any unanticipated reasons, I intend to continue to use the product

    that I regularly use

    3.3 Analysis:

    The study incorporated structural equation modeling (SEM) which consists of the

    measurement model or confirmatory factor analysis (CFA) and the structural model or path

    analysis. The main objective of CFA is to incorporate the determination of the validation of a

     priori model as compared to a model that is suitable (Gefen and Straub, 2000). Any specific

    variable with a factor loading less than 0.5 was disregarded (Tang and Chang, 2010).

    Construct reliability refers to the existence of the vertical correspondence between an

    unobservable variable (Peter, 1981). Any value in excess of 0.7 is acceptable. The work made

    use of average variance extracted (AVE) or convergent validity for validity of instruments,

    their benchmark was assigned to be 0.5. The discriminant validity was also used for validity

     purpose of the items under consideration. CFA is followed by the path analysis which shows

    the results for hypotheses testing, significance values and explanatory power of the model.

    Model fits are checked for both measurement and structural models. CMIN having a

     benchmark of less than 3, GFI (goodness of fit), CFI (comparative fit index), NFI (normed fit

    index) and RMSEA (root mean square error of approximation), all to be having a standard

    value or benchmark of 0.9. The path analysis attempted to introduce CMIN/df i.e. the chi

    square was adjusted for the degree of freedom. Last but not the least the methodology strived

    to complete the milestone of parameter estimates while also portraying the sign and

    magnitude of the relationships highlighted. In the end the methodology also practiced to

    include significance level within the work.

    This research tested mediation through adaptation of Bootstrap technique while

    leaving out Baron and Kenny approach, which is popular and a well accepted mediation

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    technique. Baron and Kenny’s procedure has grown to become intensive to examine

    mediation, nevertheless, numerous statisticians have recognized flaws with the technique and

    thus prescribed substitute sturdy and robust methods to evaluate mediation (Mackinnon et al.,

    2007). Subsequently it was preferable to plausibly unlearn the “truth of Baron and Kenny’s

     procedure. Presented were the 4 stages in case one or more these particular interactions and

    relationships were insignificant, experts frequently, surmise that mediation is not feasible or

    simply very likely though this is not consistently valid and it tends to skip various accurate

    mediation results (Baron and Kenny, 1986).

    To test for mediation it is essential condition that the indirect effect is significant.

    Substantially more strenuous and dynamic test is bootstrap assessment (at 95% confidence

    interval) in place of Sobel test (Zhao and Lynch, 2010). Hence, mediation was tested and

    evaluated across two variables and relationship that incorporated green image and corporate

     performance by considering consumer perception of CSR activities as a mediator.

    4. Results

    4.1 Descriptive statistics

    Univariate normality was tested and put to scale in terms of variables as far as the

    usage of skewness and kurtosis is concerned and it was seen that the data was not skewed or

    had kurtosis since it was in the range of (+2 , -2).The study carried out the test of Harmon’s

    single factor which explains in depth variance explained by each variable (Podsakoff and

    Organ, 1986). The highest explanatory power of the variable was 33% and meets the

     benchmark. The study does not possess common method bias as it exceeds the requirement to

    arrive at the cumulative variance of 66% and the largest variance was 43% from a single

    factor.

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    About 55% of the sample consisted of females. Maximum number of respondents i.e.

    about 44% fell into the age bracket of 20-25. Only about 4% crossed over 40 years of age.

    Schooling years consisted of maximum audience falling into 10-15 years of education.

    4.2 Confirmatory Measurement Model

    Co-relations being latent trait were found not to be statistically significant from each

    other (Anderson and Gerbing, 1988).All the loadings exceeded the minimum value of 0.5. All

    reliability meets the criteria of 0.7. Convergent validity must be above 0.5 (Hair and Tatham,

    1992). Others resort to a lesser benchmark of 0.4 (Verhoef and Franses, 2002). Hence most of

    the AVE’s cross 0.5 whereas a few of them fall below 0.5 but do manage to fall well above

    0.4 (Refer to table 2).

    Table 2: Reliability and Validity ResultsVariables Authors Factor

    Loading

    (min- max)

    CR AVE DV Chronbach

    Alpha

    Loyalty Valvi and West,

    2013

    (0.61-0.76) 0.88 0.51 0.71 .87

    Green image Ko, 2013 (0.63-0.68) 0.84 0.52 0.72 .83

     perceived fit between

    corporate

    Cable and DeRue,

    2002

    (0.64-0.72) 0.77 0.46 0.68 .77

    Corporate performance Menon et al.,

    1996

    (0.64-0.71) 0.80 0.50 0.71 .77

    Customer attachment Thomson et al.,2005

    (0.61-0.67) 0.84 0.44 0.66 .84

    Corporate

    Capability

    Vorhies, 2003 (0.66-0.77) 0.77 0.46 0.67 0.80

    Repurchase

    Intention

    Khalifa and Liu,

    2007

    (0.54-0.71) 0.74 0.43 0.65 .74

    CSR•  Philanthropic

    •  Ethical

    •  Environmental

    Lee et al., 2013b;Mohr et al., 1998

    (0.61-0.74) 0.98 0.96 0.98 0.840.780.74

    Discriminant validity exists when the AVE of a construct exceed the co-relations of

    items (Brown, 2006). Constructs must represent distinctiveness among each other. Items must

    hang together as one unit (Gau and Pratt, 2008). An explanation here depicting lack of

    discriminant validity is that establishment of high co-relations between variables results in

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    low discriminant validities whereas to achieve good discriminant validities moderate co-

    relations must exist (Kline, 2005). The current study depicted strong co-relations among

    constructs hence satisfactory discriminant validities were established. Reliability (Internal

    consistency) must be well above its benchmark of 0.7 to ensure item’s reliability (Schmitt,

    1996). All variables are resting well above the benchmark of 0.7 (Refer to table 2).

     Next the study resorted to measure the uni-dimensionality which portrays items

    chosen belong to one construct (Cropanzano et al.,  1986). The benchmark considered

    effective for CMIN/df falls between 1 and 3 (Segars and Grover, 1998). It is not uncommon

    for the p-value to hold at insignificant level of 0.000 (Küster and Vila, 2011). X 2’s limitation

    lies in the fact that a biasness of this measure exists towards a large sample (Hu and Bentler,

    1999). CMIN/df came out to be 2.156 for the default model. Some authors believe GFI to be

    0.7 (Küster and Vila, 2011). The study showed a (GFI=.732) for the default model.

    The study jumped onto an (NFI=.724). Some authors claim and report NFI to be

    0.66 (Kushner et al., 1994). The model at hand has a (CFI=.829). Having a benchmark of 0.8

    shows a good fit of model (Küster and Vila, 2011). Some authors claim effective RMSEA to

     be at 0.8 (Lin and Wang, 2006). The (RMSEA=.067) shows a closer value to its benchmark

    thereby indicating a good model fit.

    4.3Structural Model

    All the hypotheses were accepted at 99% confidence interval. Explanatory power (R 2)

    of the endogenous variables lie above 0.8 for all constructs with the exception of customer

    attachment, loyalty and environmental CSR thereby concluding that the explanatory power of

    it arrives at 0.69, 0.73 and 0.78 respectively (Refer to table 3).

    Structural model depicted good model fits (p= .000, X2/df= 2.544, CFI=.772, NFI=.673,

    GFI=.709, and RMSEA=.077) all for the default model. The recommended value for

    RMSEA is and recognized at less than 0.8 (Lin and Wang, 2006). GFI is argued it to be at 0.7

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    also accepted p value is at .000 (Küster and Vila, 2011). CFI is deemed acceptable at 0.75

    (Hughes and Eastwood, 2006). NFI reported must be at 0.76 (Kushner et al., 1994).

    Table 3: Results of Structural ModelRelationships Estimates/β P-value Hypothesis

    Decision

    CSR (R =0.80)

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    The paper seeks to uncover the ongoing effects of customer perception of CSR

    activities, perhaps the most searched and popular topic nowadays within Asia, and its

    consequences. The study contributes to the dearth of CSR literature in Pakistani context and

     puts forward implications for managers to implement that are in line with customers’

     perceptions. First, it examines the holistic customers’ perceptions of CSR antecedents; green

    image and cultural fit and capability along with the direct and indirect effect of green image

    on corporate performance which shed importance on new relationship in this region. Second,

    the study takes further the perceptions to witness the outcomes. Most preceding work on

    CSR is either obsessed with employees or the corporate sector since the origin of CSR was

    firms who initiated the concept. Since then researches conducted on CSR were more

    corporate focused. This paper musters strength to conduct the research on a very practical and

    important segment previously untouched; customers. Previous researches on customers

    generally illustrate the effects of CSR on customers but none of them carry the link forward

    to determine that how this effect in return affects corporate revenues thus by incorporating

    consumer perception’s effect of company performance.

     Nonetheless developing countries (including Asian countries) present considerable

    challenges concerning CSR activities in developing countries (Mishra and Suar, 2010).

    KPMG (2013) survey reveals that an astonishing increase of 22% in social responsibility

    communication in the Asia Pacific region is observed. The paper strives to remove that

     biasness on the assumption and philosophy that different cultures react to different agendas

    and principles in a different manner thus the effects and results concluded with regard to CSR

    will perhaps hold true for the Western society but might fail to generate the same effects

    within Asia due to distinguished ethical and cultural backgrounds. 

    Green marketing was strictly thought to be a western related element whereas Asia

    was thought to be a step behind or totally ignorant of this concept (Ko and Wan, 2007). The

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    research findings can be used by marketers to shift the focus of consumers from the cluttered

    consumer variables (which fight for market share as point of parities) towards CSR as it

    results in purchase intentions. This diversion of consumer’s attention to eco-friendly products

    and the benefits they provide for the overall society may be emphasized - creating a point of

    differentiation for the brand.

    Corporate culture does stimulate CSR activities as Elsayed (2006) puts forward the

    level of CSR capability leads to a positive effect on CSR of a corporation and hence resulting

    in a higher corporate performance. Our results provide support to these claims, indicating that

    managers incubating a culture in their organizations that fosters CSR initiatives will dervice

     performance. The apptitude towards creating a better society is perceived to be practising an

    aggregrate approach to better standards of performance.

    However, through testing of mediating role of consumer CSR perception mesmerizing

     break-through was discovered. interesting fact remained centre of attention previously that

    image within consumer minds critically determines and predicts, in a retail environment, their

    repurchase attention (Ramasamy and Yeung, 2008). Hence showing green image has direct

    effect and perceived CSR by customers also have indirect affect on firms profitability. This

    research adds that positive consumer perception results in positive repurchase intention.

    Positive image within consumer minds leading to loyalty confirms the previous

    work (Karaodmanoglu and Melewar, 2006). The newly established hypothesis of positive

    user (customer) perception resulting in higher loyalty and attachment towards the firm’s

     products reveal and expose the inability of the previous works providing any sufficient

    empirical evidence to support their stance of only employees affecting customer attachment

    due to inefficient selection of survey objects i.e. customers.

    The study re-confirms the previously identified three rigorous components of CSR

    activities thereby adding authentication in (Lee et al., 2013b) as our data also empirically

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    confirms it is the second order variable which is yet a new idea. Research indicates that this is

    the primary and the only study that confirms the claim made by (Lee et al., 2013a). The

    research adds onto the Korean studies carried out to form connection and link between

    corporate images in determining corporate outcome in terms of performance of firms (Ellen,

    2006).

    CSR activities are primarily considered as a Western phenomenon. This research

    attempts to negate the mindset that developing countries struggle with lower order needs and

    thus are not concerned with higher order philosophical ideas like corporate social

    responsibility. We have managed to provide support that the corporate social responsibility

    has an impact of purchase intentions of the consumers as they perceive such organizations to

     be concerned with the consumers’ wellbeing, along with their orientation towards healthier

    employee and performance standards. Consequently, the current study contributes, uniquely,

    to both the literature and the industry.

    The research offers a number of vital implications for managers and marketing

    researchers. Managers gain insight through understanding that important stakeholders exist in

    the form of consumers other than employees. While planning and constructing plans

    regarding CSR consumer satisfaction must be imparted its fair share of importance. The

    article further discloses the effect of positive consumer perception of CSR activities in

    triggering and ensuring a user’s attachment to a company and in convincing a consumer to

    stay with the company for all their future transactions. Some customers might prefer to

     purchase products of socially responsible companies for their personal satisfaction. Hence

    managers must make sure that initiatives for societal benefit are well accepted and well

    recognized by consumers in a positive array of light.

    Corporations enthusiastically and devotionally involved in initiating CSR activities

    expect and forecast a positive year end income statement, the study guides managers into not

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    falling this misconception and pit by recognizing that sole CSR activities amount to nothing

    if the firm is missing some baseline constructs and practices such as matching the CSR

    actions with the internal culture of the firm, the fact is that the company managers must only

    expect higher performance levels once their CSR is in synchronization with the firm’s

    culture. Therefore it is critical to understand that spending funds on CSR activities is not

    going to help unless you invest in the alignment of the culture.

    Furthermore it is of utmost importance for the firm to enhance and establish the strong

    hold of their CSR capability, the more consistently the managers seek to reinvent new ways

    of increasing CSR capability the more positive feelings inspire within consumer minds

    regarding CSR initiatives, because it will eventually affect the financial performance.

    6. Future Research and Conclusion

    Lack of accessibility to an individual person’s desired firm’s performance represented

    un-surety regarding the firm’s actual performance. Future researches can ensure accurate

    collection of company financials of various consumers’ desirable firms. Also restrictive

    generalizability of the data raises questions, the study only resorts to customer related

    samples; in future various other stakeholders’ can be incorporated to reveal a more diverse

    view. Time constraints hindered the practice of the technique of cross sectional study and the

    enhancement of the sample size to a greater extent and the smaller the sample size the higher

    the characterization of greater X2 biasness (Jackson, 2003). Future researches can rely on a

    greater sample size that too not from single source to retrieve better model fits.

    Investigation was constructed to grasp in extensive minute detail regarding the formed

     perception relating to CSR within consumer minds and was allowed to display and act out a

    mediating role in order to cast out an impact on consumer attributes relating to their long term

    loyalty and attachment to their preferred organization. The key findings erupted were an

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    amalgamation that incorporated significance of consumer perception of CSR activities as a

    mediator. On the other hand statistically significant results were grasped that inferred that the

    green image initiatives by the firm positively affected consumer perception of CSR activities

    leading to higher consumer loyalty and attachment.

    The results suggest that the latest way to acquire loyalty and to provoke existing

     buyers towards repurchase, marketers must engage in CSR practice since it significantly

    impacts the consumer related traits. To influence CSR perception positively organizations

    need to engage in allocation of more resources to heighten their CSR capabilities along with

    launch of ever new campaigns to go beyond profit seeking motive.

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