The study of consumers perceptions of corporate social responsibility toward consumers trust, attiude and purchase intention, evidence from vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TRAN THANH DANG SON THE STUDY OF CONSUMERS’ PERCEPTIONS OF CORPORATE SOCIAL RESPONSIBILITY TOWARD CONSUMERS’ TRUST, ATTITUDE AND PURCHASE INTENTION: EVIDENCE FROM VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2015 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business TRAN THANH DANG SON THE STUDY OF CONSUMERS’ PERCEPTIONS OF CORPORATE SOCIAL RESPONSIBILITY TOWARD CONSUMERS’ TRUST, ATTITUDE AND PURCHASE INTENTION: EVIDENCE FROM VIETNAM ID: 22130062 MASTER OF BUSINESS (Honours) SUPERVISOR: DR NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2015 Acknowledgement This final thesis concluded my academic study at University of Economics Ho Chi Minh City on the International School of Business (UEH-ISB) Although it was challenging, I am grateful to have been given this opportunity to study at UEHISB and to conduct this final research With this work, I have gained a good knowledge of Corporate Social Responsibility (CSR), which is a new field of study Nonetheless, it has received noticeable attention from the academics and scholars for its recognized roles in the economy I hope this study will be beneficial to the companies when it comes to CSR related decisions I offer my sincere appreciation for the invaluable learning opportunities provided by the committee during thesis process I would like to personally express my gratitude to Dr Nguyen Thi Mai Trang who has actively guided and provided me with valuable insights and suggestions to my dissertation Your thorough review of my dissertation has definitely made it perfect I am also deeply grateful to my course mate Ms Nguyen Thi Ha, who is resourcefulness to me My family, especially my wife, deserves special thanks for their valueless contribution to my education, upbringing and my life in general Tran Thanh Dang Son Abstract Corporate social responsibility (“CSR”) is currently becoming an emerging trend in many developing countries over the world Although the concept of CSR is a very new-born and unfamiliar with many people; however, Vietnamese consumers have recently demonstrated their perceptions of CSR through their environmental concerns, their “go-green” protection, their understanding about the activities of educational assistance and building houses for the poor performing by enterprises, etc This quantitative research is to examine the factors that encourage Vietnamese consumers’ purchase intention toward CSR enterprises’ products The research is to develop hypothetically suitable theoretical model that is then empirically tested through an internet survey of 224 respondents in Vietnam The respondents are chosen from diverse backgrounds Structural Equation Modeling technique is deployed in this study The results show that Vietnamese consumers’ CSR perceptions and their trust of CSR have positively relationship with their attitude toward firm and their purchasing intention toward products of enterprises that are engaged with CSR activities The research implications recommendations provide specific discussion about findings and future research and TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.1 RESEARCH BACKGROUND 1.2 RESEARCH OBJECTIVE 1.3 SCOPE OF THE RESEARCH .5 1.4 SIGNIFICANCE OF THE STUDY 1.5 STRUCTURES OF THE RESEARCH CHAPTER 2: LITERATURE REVIEW Introduction 2.1 CORPORATE SOCIAL RESPONSIBILITY (“CSR”) 2.2 PURCHASE INTENTION 17 2.3 CONSUMERS’ PERCEPTIONS OF CSR 19 2.4 CONSUMERS’ TRUST OF CSR .22 2.5 ATTITUDE TOWARDS FIRM 24 2.6 CONSUMER DEMOGRAPHICS 25 2.7 RESEARCH MODEL 27 Summary 27 CHAPTER 3: RESEARCH METHODOLOGY 28 Introduction 28 3.1 RESEARCH DESIGN 28 3.2 MEASUREMENT SCALES 30 3.3 DATA ANALYSIS METHODOLOGY 32 Summary 36 CHAPTER 4: RESULTS OF DATA ANALYSIS 37 Introduction 37 4.1 DATA COLLECTION 37 4.2 RESPONDENTS’ DEMOGRAPHICS 38 4.3 RELIABILITY STATISTICS BY CRONBACH’S ALPHA 40 4.4 FACTOR ANALYSIS 43 4.5 CONFIRMATORY FACTOR ANALYSIS (“CFA”) 45 4.5.1 CONVERGENT VALIDITY 45 4.5.2 DISCRIMINANT VALIDITY 46 4.5.3 MODEL FIT 46 4.6 STRUCTURAL EQUATION MODELING (“SEM”) 48 4.7 EFFECTS OF DEMOGRAPHICS IN THE RESEARCH MODEL 49 Summary 51 CHAPTER 5: CONCLUSIONS, IMPLICATIONS AND LIMITATIONS 53 5.1 CONCLUSIONS 53 5.2 MANAGERIAL IMPLICATIONS .53 5.3 LIMITATIONS 56 REFERENCES 59 APPENDIX A – Questionnaires in Vietnamese 64 APPENDIX B – Questionnaires in English 68 APPENDIX C: In-Depth Interview .72 Overview of tables Table 2.1.1 Economic and legal components of Corporate Social Responsibility (Carroll, 1991) Table 2.1.2 Ethical and philanthropic components of Corporate Social Responsibility (Carroll, 1991) Table 3.2 Measurement scales Table 3.3 Cronbach’s Alpha Table 4.1 Source of data collection Table 4.2 Respondents’ characteristics Table 4.3.1 Cronbach’s Alpha coefficients for each measurement scale (before eliminated item) Table 4.3.2 Cronbach’s Alpha coefficients for each measurement scale (after eliminated item) Table 4.4.1 KMO and Bartlett's Test Table 4.4.2 Total Variance Explained Table 4.4.3 Pattern Matrix Table 4.5.1 Convergent Validity Table 4.5.2 Discriminant Validity Table 4.5.3 Key goodness-of-fit indices Table 4.6.1 Unstandardized Regression Weights (SEM) Table 4.6.2 Summary of hypothesis and structural equation model analysis results Overview of figures Figure 2.1 The pyramid of Corporate Social Responsibility 10 Figure 2.7 Research Model 27 Figure 3.1 Research Process 28 Figure 4.5 Confirmatory Factor Analysis (Standardize estimates) .47 Figure 4.6 Structural results (standardized estimates) 48 Gender Figure 4.7.1.1 Multi group analysis 76 Figure 4.7.1.2 Constant group analysis 76 Age Figure 4.7.2.1 Multi group analysis 77 Figure 4.7.2.2 Constant group analysis 77 Income Figure 4.7.3.1 Multi group analysis 78 Figure 4.7.3.2 Constant group analysis 78 CHAPTER 1: INTRODUCTION 1.1 RESEARCH BACKGROUND Today, more companies are aware of the importance of Corporate Social Responsibility (CSR), and as such, have started to engage with responsible actions in different magnitudes CSR puts a company in a more advantageous position compared to its competitors These advantages can be in the form of better customer engagement, employee engagement, brand differentiation, customer retention, cost savings, publicity and media opportunities, and sometimes, access to other investment and funding opportunities (Porter & Kramer, 2006) Different ways of committing to CSR are available from which companies can choose Some companies may provide funding and resources for worthwhile causes, some others would produce products or provide services that are in the best interest of society such as job creation and economic development, use of safe materials and processes, integration of ethical practices into supply chain activities, etc According to Tian, Wang and Yang (2011), companies can derive enormous benefits when they are perceived as being socially responsible by their stakeholders Among all the stakeholders, one important group that appears to be particularly susceptible to a company’s Corporate Social Responsibility (CSR) initiatives is its consumers (Bhattacharya & Sen, 2004) The question today is no longer whether companies should incorporate CSR into their activities, but rather how they should this Research indicates that consumers seem to care about CSR and therefore it is in the best interest of the company to so as well (Boulstridge & Carrigan, 2000) Nevertheless, studies indicate that nowadays most consumers expect companies to go beyond delivering economic outcomes and contribute to society’s welfare, and sustainability by being socially responsible and will support them if they so (Sen & Bhattacharya, 2001) A growing body of academic research attests that CSR has positive influence on consumers’ evaluations and purchase intentions of company’s product | P a g e (Mohr & Webb, 2005; Sen & Bhattacharya, 2001), enhancing trust and strengthening relationship between consumers and business (Porter & Kramer, 2006) More companies are willing to increase their CSR investment and integrate it into the long-term strategic plan to maintain or even enhance long-term market performance (Mahoney & Thorne, 2005) The concept of Corporate Social Responsibility was first introduced widely in Vietnam in recent years through various activities of international NonGovernmental Organizations (NGOs) and multinational companies According to a CSR Survey conducted by SRI Vietnam (as cited in Pham, 2010), there are 90% of interviewees misunderstand the idea of CSR and related issues This survey reported that Vietnamese consumers’ perception toward CSR as well as other ethical behaviors remains virtually unknown 40% of interviewees consider CSR as a social obligation of businesses, which mainly consists of community works and events While the level of awareness about CSR of Vietnamese is still low, the suspicion of the media continues to add up to the difficulty in dealing with general public Lack of in-depth knowledge and professional research about CSR in Vietnam has led to incomplete information provided, which then turns into inaccurate news and articles that can influence consumers and governmental departments CSR programs are often cited as PR (Public Relations) activities, another communication concept in Vietnam, that is frequently misinterpreted as negative as well As a result, the main challenge is to raise the level of awareness of CSR among consumers, increase their appreciation of CSR and associate it in their choice of products to buy and to relate CSR with social concerns On the business side, lack of resources and commitment for CSR is the major cause for the current situation Many local companies resist to change and still maintain their conventional thinking system, in which business performance is measured by simple and more visible metrics They are more driven by short term incentives to make money, therefore using CSR as a branding tool is in fact more | P a g e Hồn tồn khơng u thích Hồn tồn thích 15 Nếu tơi có kế hoạch mua (dầu gội, sữa tắm), chọn sản phẩm Cơng ty X 12345 Hồn tồn khơng đồng ý Hồn tồn đồng ý 16 Xác suất tơi mua sản phẩm Công ty X 12345 Rất thấp Rất cao 17 Tôi chấp nhận trả giá cao chút mua sản phẩm hàng hóa Cơng ty X Hồn tồn khơng đồng ý Thơng tin cá nhân Giới tính *  Nam  Nữ Tuổi *  Từ 18 - 27 tuổi  Từ 28 - 39 tuổi  Từ 40 - 55 tuổi Thu nhập *  Dưới triệu đồng  Từ 10 triệu đến 19 triệu đồng  Từ 20 triệu đến 29 triệu đồng  Từ 30 triệu đồng trở lên 67 | P a g e Hoàn toàn đồng ý APPENDIX B – Questionnaires in English Part 1: Case study The Company X operates in fast moving consumed goods industry (“FMCG”) in Vietnam with the essential consumer products such as shampoo, shower milk, toothpaste, soap, detergent, etc The bellows are activities that the Company X implements during the past years up to now: The Company X supports 10 billion/ year by providing free clean washing hand soaps, and animated guidance for the washing hand properly for children and people over 50 provinces across the country in order to raise the habit of washing hands with soaps to fight germs The Company X supports 13.01 billion/ year by providing free kits of tooth brush and tooth paste for the pupils, animated guidance for the brushing teeth properly, providing free service of examination and treatments at school points at local community, and providing free surgery to help people have a good breath, white teeth and being confident The Company X builds 13 public gardens and 300 school yards in primary schools across the country to help 3.5 million of pupils have chance to play in international standard yards to help increasing physical health and participate in extracurricular activities for Vietnamese children with the investment costs more than 12 billion per year The Company X supports 19 billion per year by providing finance supports to the poor in provinces to help them improving their household economics and improving quality of life The Company X supports 4.9 billion VND for covering with trees of forest in the North West region of Vietnam This activity aims not 68 | P a g e only raising awareness of people in protection environment, but also helps alleviating poverty in these provinces from the wood Part - Questionnaires Company X supports good causes Strongly disagree Strongly agree Company X behaves responsibly regarding the environment 12345 Strongly disagree Strongly agree Company X is aware of environmental issues 12345 Strongly disagree Strongly agree Company X fulfills its social responsibility 12345 Strongly agree Strongly disagree Company X gives back to society Strongly disagree Strongly agree Company X acts in a socially responsible way 12345 Strongly disagree Strongly agree I think Company X’s socially responsible actions sincerely aimed at contributing to society 69 | P a g e Strongly disagree Strongly agree I think Company X’s socially responsible practices made a substantial contribution to the society Strongly disagree Strongly agree I think the Company took a lot of effort to be socially responsible 12345 Strongly disagree Strongly agree 10 The Company is a socially responsible company 12345 Strongly disagree Strongly agree 11 The Company is a successful company 12345 Strongly disagree Strongly agree 12 The Company is a trustworthy company 12345 Strongly disagree Strongly agree 13 The Company is an honorable company that benefits society 12345 Strongly disagree Strongly agree 14 Rate your feelings toward the Company 12345 Unfavorable Favorable 15 If I am planning to buy a product of this type, I will choose this product (from 70 | P a g e Company X) Strongly disagree Strongly agree 16 There is a great possibility that I will buy this product (from Company X) 12345 Very low Very high 17 I am willing to pay a little more for this product (from Company X) 12345 Strongly disagree Strongly agree Part - General information Gender *  Male  Female Age *  from 18 - 24 years old  from 25 - 39 years old  from 40 - 55 years old Income * • • • • Below million VND/month from 10 to 19 million VND/month from 20 to 29 million VND/month from 30 million VND/month and above 71 | P a g e APPENDIX C: In-Depth Interview List of respondents Name Mr Toan Nguyen Ms Quyen Bui Mr Lam Nguyen Mr Phuc Tran Ms Anh Le Mr Phong Tran Mr Tuan Tran Mr Chau Duong Results Respondent’s information Mr Toan Nguyen 72 | P a g e Mr Lam Nguyen Mr Phuc Tran Mr Tuan Tran Ms Anh Le Mr Phong Tran Ms Quyen Bui 73 | P a g e 74 | P a g e Mr Chau Duong 75 | P a g e GENDER Figure 4.7.1.1 Multi group analysis Figure 4.7.1.2 Constant group analysis 76 | P a g e AGE Figure 4.7.2.1 Multi group analysis Figure 4.7.2.2 Constant group analysis 77 | P a g e INCOME Figure 4.7.3.1 Multi group analysis Figure 4.7.3.2 Constant group analysis 78 | P a g e CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM Độc lập – Tự – Hạnh phúc -o0o - BẢN CAM ĐOAN Họ tên học viên: TRẦN THANH ĐĂNG SƠN Ngày sinh : 26/04/1981 Nơi sinh : TP.HCM Ngày trúng tuyển đầu vào năm : 2013 Là tác giả đề tài luận văn : The study of consumers’ perceptions of corporate social responsibility toward consumers’ trust, attitude and purchase intention: Evidence from Vietnam Giáo viên hướng dẫn : Dr Nguyễn Thị Mai Trang Ngành : Master of Business (MBUS) Mã số : 22130062 Bảo vệ luận văn ngày : 15/01/2016 Điểm bảo vệ luận văn : Trường Đại học Kinh tế TP.HCM, sở 59C Nguyễn Đình Chiểu, Quận 3, TP.HCM Tôi cam đoan chỉnh sửa nội dung luận văn thạc sĩ kinh tế với đề tài trên, theo góp ý Hội đồng chấm luận văn thạc sĩ TP Hồ Chí Minh, ngày 17 tháng 02 năm 2016 Người cam đoan Chủ tịch Hội đồng chấm luận văn Trần Thanh Đăng Sơn Hội đồng chấm luận văn 05 (năm) thành viên gồm : Chủ tịch : PGS.TS Trần Hà Minh Quân Phản biện 1: PGS.TS Phạm Ngọc Thúy Phản biện 2: PGS.TS Nguyễn Đăng Lâm Thư ký : PGS.TS Nguyễn Đình Thọ Ủy Viên : TS Phạm Phú Quốc Trần Hà Minh Quân ... 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