MSc in International Business and Management

MSc in International Business and Management

A case study of the impact of the Corporate Social Responsibility (CSR) in the brand image of “Chaudhary Group”

Dissertation

Literature Review

The environment for doing business is constantly changing with the change in the society. The needs and demands of the consumers along with their expectation from the business companies has also been different from the couple of decades before. Therefore, to tackle with such changes in the environment, many profit-oriented corporations have adapted various strategies in order to survive in the competitive business world. Among all those various strategies is the integration of Corporate Social Responsibility into their business model. There is also unique interdependence between the business and the society. It is because business requires stable society and good environment with empowered workforce and the people in the society gets their needs and demands fulfilled by the services, goods and products from the business companies. This points out that a socially responsible company which helps the society and wins the heart of the consumer has more chances of doing a good business. The concept of CSR is such that the companies should give back the benefits back to the consumers and the stakeholders. Though the concept of Corporate Social Responsibility has been developed for the global sustainable development in terms of both the company and the society there is very less evidence of its real impact on the overall level. This can be due the very limited amount of study on the impact of CSR activities. Therefore, With the help of this research we will be able to understand the impact of CSR activities on the perception that the consumer has towards the business companies from which they are either buying the product or using some kind of service.

Every individual, community or be it business corporations, have certain responsibility towards their society. Such ethical behavior of the business companies that urges them to help is called Corporate Social Responsibility. In today’s world, corporations are not only limited to make the profits of their own but are also expected to do some charity and make some difference in the society and the environment (Lindgreen, A. & Swaen, V. 2010). Some scholars also believe that CSR activities are the behaviors that impact on building up the brand (Chomvilailuk and Butcher, 2010; Hoeffler and Keller, 2002; Roll, 2006). In the present context many corporations are arranging CSR programs in their business just to gain positive attitudes among the consumers by changing their perceptions and behaviors through the social work. Involvement in CSR activities is prevalent in various types of business and industries in many countries. CSR has been more important in present days due to the scandal that are linked to dangerous products, services, corruption, involvement in politics and so on. Those scandals of business companies showed the irresponsible behavior of theirs. In order to correct their mistake those companies are conducting the activities that attract the general people and make them like the brand and the business companies.(“LINKING CORPORATE SOCIAL RESPONSIBILITY WITH REPUTATION AND BRAND OF THE FIRM – ProQuest,” n.d.)

Though there has been growing interest in the CSR and the reputation of corporates there is very less systematic study and research that unveils the link between them. And the result from existing researches and study proves contradictory views. It is very difficult to know whether there is direct relationship between the CSR activities with the brand image or not. A seminal empirical study conducted by Fombrun and Shanley provides some evidence that social responsiveness which was measured by the charity and donations made by the corporate was positively linked with the reputation of the corporate. The study also found that the effect of social performance varies with the sectors and even within the sectors the types of social performance by the corporates. Along with this Williams and Barrett argue that the charitable providing of the corporates can also help in restoring the firm’s reputation after if they have committed any illegal activities. These two arguments made by different scholars directs us to think about the strength of appropriate CSR activities in perceiving the brand image and reputation of business companies and corporate.

On the other side there are few researchers who are suggesting that CSR activities have massive impact and influence on several factors such as choice in buying, brand selection as well as recommendation and brand loyalty. Although this seems to push the idea that the CSR has positive impact on the brand image but there are other groups of scholars with the ideas and researches that indicate that there is no any direct relationship between the CSRF activities and the brand image. some even claim that there is no any relevance in the CSR and consumer’s decision (Anon, n.d.).

For any company, brand image is the overall assessment in the mind of people, and it is the image of the corporate or the company in the mind of the people. Since the image is a kind of idea therefore it comes from a process through experiences and feelings that are obtained from the memory and mental image about the company (Aiden&Ozer, 2005). Aaker has defined brand image as the set of associations that are organized in meaningful way. Brand image is also responsible for reflecting the performance of the company through the person’s memory. Brand image is often considered as the constellation of ideas and pictures in the minds of people that reflects the knowledge and attitudes towards the brand. Good brand image can lead to the brand loyalty, perceived quality, brand awareness, and brand awareness. From all the definitions, it is clear that brand image is subjective rather than objective concept formed in the mindset of the people. Though it is the product that initiates the purchase but the brand image also plays significant role in their buying behavior (Arslan and Phil, 2014) Hence, it is important that the company leaves a good imprint the mind of people.

Any company which is committed to development in economy; has good ethical considerations; constantly helps the employees and their families; supports non-profit groups and takes care of the needs of the society has better image in the minds of the people (Esmaeilpour and Barjoei, 2016).

But as business companies have started using CSR as a strategy in their business some researchers are finding the drawbacks of it. According to university of Chicago’s John A. List, though CSR activities encourages good employees to join the company and the quality in the production might also increase but sometimes CSR can backfire, and companies must learn ways to manage it. Though there have been debates among the scientist about the relationship between the corporate responsibility and the reputation of the company but it cannot be denied that CSR is a major tool of the enterprise to increase the sustainable development in the society (Balmer and Geyser, 2003, 2006).

Time and again there have been deep studies regarding the corporate reputation and the image of the company. The research related to this issue has been done regarding marketing, branding and communication and there are no strong empirical and theoretical proof about the relationship between the CSR and the brand image. The direct impact of corporate social activities on the perception of the consumer about the company has not been explained which creates a gap to be filled. Hence, this research tries to relate the influence of the CSR activities conducted by the company to develop positive attitude among the consumer.

A survey was conducted in Taiwan to find out the similar relation that this research is trying to find that is whether the difference in level of understanding about the CSR makes difference in the relationship among the brand image, brand attitude, purchasing intension as well. The participants were given the valid questionnaire and the results found that the image on brand attitude was very strong among the CSR aware one than less and completely not aware one(Wu, 2015).

In today’s business world CSR is very important but it is also necessary for companies to have good sense of choosing CSR activities. For the large food companies like Mac Donald’s CSR is found to have relevance and has great impact and the high dependence on economy, society and the environment.

The most known and leading paradigm of social responsibility in the felid of management was developed by a researcher named Caroll which is called a paradigm of corporate social responsibility. It encompassed wide range of economic, legal, ethical and philanthropic activities of business in any given time without any hierarchical order (Caroll,1997). Mohr’s study also became important reference for defining and classifying CSR. But unlike present time, in the past environmental CSR was given more priority in the study than these two types because environmental CSR was more visible and feasible (Tingchi Liu et al., 2014).

The findings and the results of the researches and studies done previously has provided certain academic perspectives. But there are gaps than needs to be filled. For example, the earlier researches were using limited dimensions to find out about the CSR. Mostly focused on ethical and philanthropic corporate responsibilities (Liu et al., 2019). Some study was done to find the impact on financial sector of banks and food companies. There is also not enough literature to show the impact of CSR on the psychology and understanding of the consumer about the company. Not many of the researchers have found the impact on multidimensions. Thus, this research tries to fill the gab about the influence of branding and customer responses to CSR activities. Company’s CSR activities create intangible asset in terms of reputation and image which are difficult to copy. Such activities help the company to increase its financial condition and helps in its overall sustainable development (Louis et al., 2019).

Nepal is a developing country and like in many other countries there are several national and international companies doing business. Several companies are making huge profits without taking any serious concern for the society and the environment. They are creating messy and disordered business environment in the country. Big national and international companies taking the benefit of political instability. Some companies have CSR mentioned in their annual plan, but they are not performed and very few of them are taking their corporate social responsibility and helping the society in different forms. Some are contributing in the health sector, some on education. For the country like Nepal where most of the people are under privileged and deprived of many of their need smallest of the help from those big companies could mean anything.

There has been rise in interest about CSR across the globe because CSR activities are seen to be adopted in many corporate in developed as well as developing countries. So, is in the case of Chaudhary Group (CG). CG has taken CSR initiatives in order to make difference in the society.

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Private companies are always up to more profit and larger amount of sale and business. Sometimes only good product and services doesn’t allow profit the good image about the brand should be there in the eyes of customers for that.

Ahmadian, A. & Khosrowpour, S. 2017, “Corporate Social Responsibility: Past, Present andSuccess Strategy for The Future”, Journal of Service Science (Online), vol. 10, no. 1, pp. 112

Arslan, M., Phil, M., 2014. Impact of Corporate Social Responsibility on Brand Image: A Study on Telecom Brands 7.

Esmaeilpour, M., Barjoei, S., 2016. The Impact of Corporate Social Responsibility and Image on Brand Equity. Glob. Bus. Manag. Res. Boca Raton 8, 55–66.

Echeverría-Ríos, O.M., Abrego-Almazán, D. & José, M.M. 2018, “Corporate social responsibility in affective brand image and brand reputation”, Innovar, vol. 28, no. 69, pp. 133-148.

LINKING CORPORATE SOCIAL RESPONSIBILITY WITH REPUTATION AND BRAND OF THE FIRM – ProQuest [WWW Document], n.d. URL https://search-proquest-com.proxy.library.dmu.ac.uk/docview/2216254392?pq-origsite=summon (accessed 3.2.20).

Liu, M.T., Liu, Y., Mo, Z., Zhao, Z., Zhu, Z., 2019. How CSR influences customer behavioural loyalty in the Chinese hotel industry. Asia Pac. J. Mark. Logist. 32, 1–22. https://doi.org/10.1108/APJML-04-2018-0160

Louis, D., Lombart, C., Durif, F., 2019. Impact of a retailer’s CSR activities on consumers’ loyalty. Int. J. Retail Distrib. Manag. 47, 793–816. https://doi.org/10.1108/IJRDM-12-2018-0262

Wu, S.-I., 2015. The Interference Effect of Perceived CSR on Relationship Model of Brand Image. Int. J. Bus. Manag. 10, p35.https://doi.org/10.5539/ijbm.v10n10p35

Lindgreen, A. & Swaen, V. 2010, ”Corporate Social Responsibility”, International Journal of Management Reviews, vol 12, no. 1, pp. 1 – 7.

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