Corporate social responsibility practices and customer brand engagement evidence from vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Quoc Trung CORPORATE SOCIAL RESPONSIBILITY PRACTICES AND CUSTOMER BRAND ENGAGEMENT: EVIDENCE FROM VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City –2015 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Quoc Trung CORPORATE SOCIAL RESPONSIBILITY PRACTICES AND CUSTOMER BRAND ENGAGEMENT: EVIDENCE FROM VIETNAM ID: 22130089 MASTER OF BUSINESS (Honours) SUPERVISOR: LE NGUYEN HAU Ho Chi Minh City – 2015 ACKNOWLEDGEMENT Firstly, I would like to express my deepest gratitude to my supervisor Assoc Prof Le Nguyen Hau for his professional guidance, valuable comments, and continuous encouragement as well as helpful support that made this thesis possible I am sincerely thankful to proposal examination committee Their valuable suggestions contributed significantly to this study and supported me in completing with best results Special thanks to all of my classmate in MBUS class, who gave me useful support for conducting this study I also would like to express my grateful thanks to my friends and people in Vietnam who participated in filling the questionnaires for providing the valuable information to this study Personally and finally, the deepest and sincerest gratitude go to my beloved family for the boundless support, abundant love and encouragement throughout my period of study Therefore, I devote this work as a gift to them all ABSTRACT In the Vietnam context after Doimoi, Vietnam is one of the transition economic nations strongly affected by global market With expectation, this research explores the effect of customer perception of a firm’s corporate social responsibility on customer brand engagement through a survey of 226 people who live in Ho Chi Minh City The collected data was analyzed and evaluated by SPSS program with analysis of reliability, factor analysis, and multiple regression analysis Current study finds out that economic, legal, ethical, and philanthropy CSR perception have significant impact on customer brand engagement Generally, this study contributes ideas about CSR to brand owners as well as managers Customer also identify more clearly about CSR practices and reorient their chosen These finding suggest that the brand owners, managers should carefully consider the ethical practices, then philanthropy, economic and legal practices in order to engage more customer Besides, the managers should state out their practices, which enhance perception of customer about their practices Key words: economic CSR perception, legal CSR perception, ethical CSR perception, philanthropy CSR perception, customer brand engagement Contents Abbreviation List of Figure List of table CHAPTER 1: INTRODUCTION 1.1 Research background .1 1.2 Research problem 1.3 Research gap 1.4 Research objectives 1.5 Significance of study 1.6 Research scope and methodology 1.7 Research structure CHAPTER 2: LITERATURE REVIEW 2.1 Customer engagement (CE) 2.2 The concept of corporate social responsibility (CSR) 2.3 Corporate social responsibility (CSR) theories 10 2.3.1 Stakeholder theory .10 2.3.2 Caroll’s CSR conceptualization-Carroll’s CSR pyramid 11 2.4 Research framework .12 2.5 Research Model 15 CHAPTER 3: METHODOLOGY 17 3.1 Research design 17 3.1.1 Research process 17 3.1.2 Qualitative research .19 3.1.3 Quantitative research .19 3.2 Measurement scale .19 3.3 Research sample 21 3.4 Data collection 22 3.5 Data analysis method 23 3.5.1 Descriptive statistic .23 3.5.2 Cronbach’s Alpha 23 3.5.3 Exploratory Factor Analysis (EFA) 24 3.5.4 Multiple Regression Analysis .25 CHAPTER 4: DATA ANALYSIS 27 4.1 Sample description .27 4.2 The reliability analysis: Cronbach’s Alpha test 28 4.3 Exploratory Factor Analysis (EFA) for measurement scale 29 4.3.1 Independent factors: CSR perceptions 30 4.3.2 Dependent factor: Customer brand engagement 32 4.3.3 Validity analysis 35 4.4 Multiple regression analysis: testing hypothesis 36 4.4.1 Assumption testing 36 4.4.2 Hypothesis testing: relationship between independent variables and dependent variable 38 4.5 Discussions on the results 40 CHAPTER 5: CONCLUSIONS, IMPLICATIONS AND LIMITATIONS 46 5.1 Conclusion 46 5.2 Managerial implication 47 5.3 Limitation and further research 49 References 51 Appendix Guidelines for In-depth Interview Respondents’ information 63 Appendix 2: English version of Questionnaire Survey .65 Appendix Vietnamese version of Questionnaire Survey 69 Appendix 4: Brand Frequency .73 Appendix 5: Charts of multiple regression analysis 74 Appendix 6: Rotated Component Matrix before removing items 75 Abbreviation i CSR Corporate social responsibility CE Customer engagement ACCA The Association of Chartered Certified Accountants CIMA The Chartered Institute of Management Accountants CIM Canadian Investment Manager WTO World Trade Organization TNCs Transnational corporations 3MCPD 3-chloropropane-1, 2-diol WBCSD World Business Council for Sustainable Development CSP Corporate social performance List of Figure Figure 1: The pyramid of Corporate Social Responsibility ………………………… .12 Figure 2: Concept model…………………………………………………………… … 15 Figure 3: Research process……………………………………………………………… 18 Figure 4: Histogram of Customer Brand Engagement ……………………………………74 Figure 5: Normal P-P plot of Customer Brand Engagement …………………………… 74 Figure 6: Scatter plot of Customer Brand Engagement ………………………………… 74 ii List of table Table 3.1 Measurement scale …………………………………………………………… 20 Table 4.1 Sample Characteristic ……………… ……………………………………… 27 Table 4.2 Result of Cronbach’s Alpha ………………………………………………… 28 Table 4.3 KMO and Bartlett's Test……………………………………………………… 30 Table 4.4 Total Variance Explained …………………………………………………… 30 Table 4.5 Rotated Component Matrix ………………………………………………… 31 Table 4.6 KMO and Bartlett's Test ……………………………………………………….32 Table 4.7 Total Variance Explained …………………………………………………… 32 Table 4.8 Component Matrix ………….………………………………………………….32 Table 4.9 Cronbach’s Alpha after reducing items ………………………………….…….34 Table 4.10 Correlation Matrix ……………………………………………………… … 35 Table 4.11 Coefficients Matrix ………………………………………………………… 37 Table 4.12 Model Summary ………………………………………………………………38 Table 4.13 ANOVA ………………………………………………………………………38 Table 4.14 Summary of hypotheses testing result ……………………………………… 40 Table 6.1 Rotated Component Matrix …………………………………………………… 75 Table 6.2 Reliability Statistic …………………………………………………………… 75 iii Schaufeli, W.B., Salanova, M., González-Romá, V., & Bakker, A.B (2002) The measurement of engagement and burnout: A two sample confirmatory factor analytic approach Journal of Happiness Studies, 3(1), 71-92 Schmeltz, L (2011) Customer-oriented CSR communication: Focusing on ability or morality? An International Journal, 17(1), 29-49 Sen, S., Bhattacharya, C.B., & Korschun, D (2006) The role of corporate responsibility in strengthening multiple stakeholder’s relationship: A field experiment Journal of Academy of Marketing Science, 34(2), 158-166 Shevlin, R (2007) Engagement myopia The Financial Brand Retrieved April 24, 2015 from http://thefinancialbrand.com/46392/engagement-myopia/ So, K.K.F., King, C., & Sparks, B (2014) Customer engagement with tourism brands: Scale development and validation Journal of Hospitality & Tourism Research, 38(3), 304-329 Steenkamp, J.B.E.M., & Trijp, H.C.M.V (1991) The use of LISREL in validating marketing constructs International Journal of Research in Marketing, 8(4), 283-99 Tabachnick, B.G., & Fidell, L.S (1991) Using multivariate statistics (3rd ed.) New York: Harper Collin The Economic Intelligent Unit (2007) Beyond loyalty: Meeting the challenge of customer engagement, economist intelligence unit Retrieved April 24, 2015 from http://www.adobe.com/engagement/pdfs/partI.pdf Van, M.M (2001) The concept and definition of corporate social responsibility Amsterdam: Triple Performance Center Verhagen, T., Swen, E., Feldberg, F., & Merikivi, J (2015) Benefitting from virtual customer environments: An empirical study of customer engagement Computers in Human Behavior, 48(2015), 340-357 61 | P a g e Vu, H.L (2012) Antecedents of shopper loyalty in the Vietnamese supermarkets Unpublished Master Thesis, University of Economics Retrieved December 1, 2015 from: http://isb.edu.vn/ISBResearch.aspx?page=1 Wang, J.S., & Pho, T.S (2009) Drivers of customer intention to use online banking: An empirical study in Vietnam African Journal of Business Management, 3(11), 669677 Waworuntu, S.R., Wantah, M.D., & Rusmanto, T (2014) CSR and financial performance analysis: Evidence from top ASEAN listed companies Social and Behavioral Sciences, 164(2014), 493-500 Windsor, D (2001) The future of corporate social responsibility International Journal of Organizational Analysis, 9(3), 225-256 Wirgau, J.S., Farley, K.W., & Jensen, C (2010) Is business discourse colonizing philanthropy? A critical discourse analysis of (PRODUCT) RED International Journal of Voluntary and Nonprofit Organizations, 21(4), 611-630 Wirtz, J., Lwin, M.O., & Williams, J.D (2007) Causes and consequences of customer online privacy concerns International Journal of Service Industry Management, 18(4), 326-348 Wood, D.J., & Jones, R.E (1995) Stakeholder mismatching: A theoretical problem in empirical research on corporate social performance International Journal of Organization Analysis, 3(3), 229-267 World Business Council for Sustainable Development Center (2015) Corporate social responsibility Retrieved April 23, 2015 from: http://www.wbcsd.org/workprogram/business-role/previous-work/corporate-social-responsibility.aspx Xuan, L.T.T., & Gregory, T.A (2011) Development in defining corporate social responsibility Journal of Science and Technology Development, 14(2), 106-115 62 | P a g e Appendix Guidelines for In-depth Interview Respondents’ information Original measurement scales Comment Final Economic CSR perception from Arli and Lasmono (2010) I believe that this brand must Respondents suggested that maximize profit instead “maximize profit”, the brand should prioritize the “benefit of customer” I believe that this brand prioritize customer’s benefit than profit I believe that this brand must Respondents suggested that for always improve economic better economic performance, performance brand should uses high technology equipment I believe that this brand using high technology for producing I believe that this brand must To make this clearer, plan for their long term success respondents suggested that this long term plan should focus on improve product quality I believe that this brand always improves product quality Legal CSR Perception from Arli and Lasmono (2010) I believe that this brand must Respondent recommended for refrain from putting aside their more understanding that “refrain contractual obligations from putting aside” should be changed by “avoid refusing” I believe that this brand must avoid refusing their contractual obligations I believe that this brand must Respondent suggested that refrain from bending the law “refrain from bending” should even it this helps improve the be changed by “avoid nonperformance abiding” I believe that this brand must avoid non-abiding law even it this helps improve the performance Ethical CSR Perception from Ho and Rashid (2003); Mulki and Jaramillo (2011) I think this brand would not lying that the product is “new and improved” Respondent suggested that brand should commit about the “new and improved” I think this brand does commit that the product is “new and improved” I think that this brand would not Respondent suggested that give deceptive instructions “deceptive” should be changed by “incorrect” I think that this brand does not give incorrect instructions 63 | P a g e I believe ethical problems not Respondent suggested that occur at this brand brand should not be “related” to unethical issues I think that this brand not related to unethical issues Philanthropy CSR Perception from Oppewal, Alexander and Sullivan (2006) I think that this brand have good Respondent suggested that activities at provision for “support scholarship for poor education in this City student” is suitable than I think that this brand always support scholarship for poor student I think that this brand have good Respondents recommended activities at support for better “support labor safety and work condition in local industry welfare” for workers I think that this brand supports labor safety and welfare for workers I think that this brand have good Respondents recommended activities at helping local people “communities” more suitable in need than “people in need” I think that this brand have good activities at helping communities I think that this brand have good Respondents recommended activities at support for national deleting “good activities” cultural and sport events I think that this brand supports for national cultural and sport events I think that this brand concern for Respondents thought confusing local natural environment with “natural environment” and suggested with “ protect environment” I think that this brand concern for protecting local environment Customer Brand Engagement So et al (2014) When someone praises this All respondents thought this brand, it feels like a personal sentence not suitable in Vietnam compliment 64 | P a g e This item was deleted Appendix 2: English version of Questionnaire Survey Questionnaire Dear sir/madam I am Tran Quoc Trung, a student of Master Program of University of Economics Ho Chi Minh City I am undertaking the research to investigate the impact of corporate social responsibility practices and customer engagement Please give me minute for answering this questionnaire, your help is very important to my research I commit that your information responsing to this research will be secret and used for only statistic I am very pleasure to reply your requirement for result of this research Content of Survey Part A: This part relating to your brand which you are using Among all brands below, please choose only one brand which you are using recently Vinamilk 65 | P a g e Unilever Nestle If your answer is “Not know”, you could stop your work here Thank you for your time spending in completing this questionnaire If your answer is “Yes”, please continue your work by answering the questions in Par B and part C 66 | P a g e Disagree Neither agree nor disagree agree Strongly agree To what extent you agree with each of the following statements, please indicate your answer using the following 5-point scale where 1-Strongly disagree 2-Disagree 3- Neither agree nor disagree 4- Agree 5-Strong agree I believe that this brand must control their production cost strictly I believe that this brand using high technology for producing I believe that this brand always improves product quality I believe that this brand prioritize customer’s benefit than profit I believe that this brand must ensure that their employees act within the standards defined by the law Strongly disagree Part B: the statement below relating to brand which you has chosen in Part A 5 5 5 5 5 5 5 5 5 20 I think that this brand concern for protecting local environment 21 I think that this brand have good activities at helping communities I concentrate a lot on this brand I feel excited about this brand When interacting with the brand intensely, I feel happy In general, I thoroughly enjoy exchanging ideas with other people in the brand community 1 2 3 4 5 5 10 11 12 13 14 15 16 17 18 19 22 23 24 25 I believe that this brand must avoid refusing their contractual obligations I believe that this brand must avoid nonabiding law even it this helps improve the performance I believe that this brand must always submit to the principles defined by the regulatory system I think this brand would not marketing unsafe product I think this brand does commit that the product is “new and improved” I think that this brand does not give incorrect instructions I think that this brand would not sell defectives products I think that this brand would not irritation in advertisement I believe that this brand salesperson is honest with me I think that this brand not related to unethical issues I believe this brand is a highly ethical brands I think that this brand always support scholarship for poor student I think that this brand supports labor safety and welfare for workers I think that this brand supports for national cultural and sport events 67 | P a g e Part C: General information Please tell us the following information to serve the classification and presentation of statistical data: Gender: Male Female Age: From 18 to 24From 24 to 30Over 30 Level of education: undergraduategraduatepostgraduate Income ( millions VND per month): less than From to 10 Over 10 68 | P a g e Appendix Vietnamese version of Questionnaire Survey Phiếu Khảo Sát Kính chào Anh/Chị, Tôi tên Trần Quốc Trung, học viên cao học Trường Đại học Kinh Tế TP Hồ Chí Minh Tôi nghiên cứu thực tiễn trách nhiệm xã hội gắn bó khách hàng Rất mong Anh/ Chị dành khoảng phút để trả lời Phiếu khảo sát Sự hỗ trợ Anh/ Chị quan trọng nghiên cứu Tôi cam kết đảm bảo thông tin Anh/chị cung cấp giữ bí mật sử dụng cho nghiên cứu dạng thống kê Tôi sẵn lòng hồi đáp Anh/Chị qua email Anh/Chị có nhu cầu tham khảo kết khảo sát Chân thành cám ơn hỗ trợ nhiệt tình Anh/ Chị! Nội dung khảo sát Phần A: Phần liên quan đến thương hiệu anh chị sử dụng Trong nhãn hiệu Anh/ Chị chọn nhãn hiệu anh chị sử dụng gần (chỉ chọn nhãn hiệu) Vinamilk 69 | P a g e Unilever Nestle Nếu câu trả lời Anh/Chị “Không biết” thương hiệu trên, Anh/ Chị dừng việc trả lời phiếu khảo sát Chân thành cảm ơn hỗ trợ nhiệt tình Anh/ Chị Nếu câu trả lời Anh/ Chị “ Có biết”, Anh/ Chị vui lòng tiếp tục khảo sát cách trả lời câu hỏi bên 70 | P a g e Hoàn toàn đồng ý Trung dung/Không có ý kiến Hơi đồng ý Không đồng ý Xin cho biết mức độ đồng ý Anh/Chị với phát biểu sau cách đánh dấu vào ô tương ứng, với: 1-Hoàn toàn không đồng ý 2-Không đồng ý 3- Trung dung/Không có ý kiến 4- Đồng ý 5- Hoàn toàn đồng ý Hoàn toàn không đồng ý Phần B: Các phát biểu liên quan đến nhãn hiệu mà Anh/Chị chọn bên 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Tôi tin thương hiệu phải quản lí chi phí sản xuất khắc khe Tôi tin thương hiệu tìm cách cải thiện chất lượng sản phẩm Tôi tin thương hiệu sử dụng công nghệ cao để tạo sản phẩm Tôi tin thương hiệu ưu tiên lợi ích người mua hàng lợi nhuận bán hàng Tôi tin nhân viên thương hiệu tuân thủ theo quy định pháp luật Tôi tin thương hiệu không chối bỏ trách nhiệm cam kết Tôi tin thương hiệu không lách luật việc giúp nâng cao hiệu Tôi tin thương hiệu tuân thủ quy định hệ thống luật nước sở Tôi nghĩ thương hiệu không quảng cáo sản phẩm “không an toàn” Tôi nghĩ thương hiệu cam kết thật sản phẩm “mới có cải tiến” Tôi nghĩ thương hiệu không cung cấp thông tin lệch lạc sản phẩm Tôi nghĩ thương hiệu không bán sản phẩm lỗi Tôi nghĩ thương hiệu không nói quảng cáo Tôi tin người bán hàng thương hiệu thành thật với Tôi tin thương hiệu không liên quan đến vấn đề vi phạm đạo đức Tôi tin thương hiệu thương hiệu có đạo đức Tôi tin thương hiệu có tài trợ học bổng giáo dục cho trẻ em nghèo Tôi nghĩ thương hiệu có hỗ trợ an toàn lao động phúc lợi cho người lao động Tôi nghĩ thương hiệu có hỗ trợ cho hoạt động văn hóa quốc gia kiện thể thao Tôi nghĩ thương hiệu quan tâm đến bảo vệ môi trường địa phương Tôi nghĩ thương hiệu có hoạt động tốt giúp đỡ cộng đồng Tôi ý thương hiệu nhiều Tôi cảm thấy thích thương hiệu Khi tiếp xúc (sử dụng sản phẩm của) thương hiệu này, cảm thấy vui Nhìn chung, thích trao đổi thông tin với người có sở thích giống 71 | P a g e 5 5 5 5 5 5 5 5 5 5 1 2 3 4 5 5 Phần C: Thông tin chung Phần liên quan đến thông tin cá nhân Xin Anh/ Chị cho biết số thông tin sau để phục vụ cho việc phân loại nhóm khảo sát Giới tính: Nam Nữ Tuổi: Từ 18 đến 24từ 24 đến 30Trên 30 Trình độ học vấn: Sinh viên chưa tốt nghiệpĐại học Thu nhập (triệu đồng/ tháng): Dưới Từ đến 10 Trên 10 72 | P a g e Thạc sĩ Appendix 4: Brand Frequency Brand Frequency Valid Percent Valid Percent Cumulative Percent AXE 9 Clear 17 7.5 7.5 8.4 Closeup 11 4.9 4.9 13.3 Comfort 12 5.3 5.3 18.6 1.3 1.3 19.9 10 4.4 4.4 24.3 Maggi 2.2 2.2 26.5 Milo 1.3 1.3 27.9 Nestcafe 2.7 2.7 30.5 Nestea 4 31.0 26 11.5 11.5 42.5 9 43.4 21 9.3 9.3 52.7 Pond's 1.3 1.3 54.0 Sunlight 4.0 4.0 58.0 Thương hiệu khác 1.3 1.3 59.3 90 39.8 39.8 99.1 Viso 9 100.0 Total 226 100.0 100.0 Knorr Lifebuoy Omo Ông thọ P/s Vinamilk 73 | P a g e Appendix 5: Charts of multiple regression analysis Figure 4: Histogram of Customer Brand Engagement Figure 5: Normal P-P plot of Customer Brand Engagement Figure 6: Scatter plot of Customer Brand Engagement 74 | P a g e Appendix 6: Rotated Component Matrix before removing items Table 6.1 Rotated Component Matrixa Component PET5 792 PET6 777 PET8 674 PET3 671 PET7 620 PET4 606 PET1 PPC3 836 PPC5 825 PPC1 792 PPC2 735 PPC4 650 PLC4 769 PLC3 757 PLC2 706 PLC1 692 PEC2 822 PEC3 805 PEC1 651 PEC4 545 PET2 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Table 6.2 Reliability Statistic Scale Mean if Item Scale Variance if Item Corrected Item-Total Cronbach's Alpha if Deleted Deleted Correlation Item Deleted PEC1 8.1372 3.008 440 844 PEC2 7.6991 2.469 672 585 PEC3 7.8274 2.535 683 576 Cronbach’s Alpha: 75 | P a g e 761 ... CSR on Customer brand engagement In summary, this chapter presents the literature review about definition and theoretical background of corporate social responsibility and customer brand engagement. .. Figure 4: Histogram of Customer Brand Engagement ……………………………………74 Figure 5: Normal P-P plot of Customer Brand Engagement …………………………… 74 Figure 6: Scatter plot of Customer Brand Engagement …………………………………... International School of Business Tran Quoc Trung CORPORATE SOCIAL RESPONSIBILITY PRACTICES AND CUSTOMER BRAND ENGAGEMENT: EVIDENCE FROM VIETNAM ID: 22130089 MASTER OF BUSINESS (Honours) SUPERVISOR: