Submitted Successfully!
To reward your contribution, here is a gift for you: A free trial for our video production service.
Thank you for your contribution! You can also upload a video entry or images related to this topic.
Version Summary Created by Modification Content Size Created at Operation
1
Yidan Huang
 -- 1676 2023-08-24 05:57:52 |
2 format correct
Catherine Yang
Meta information modification 1676 2023-08-24 07:20:34 |

Video Upload Options

Do you have a full video?
Send video materials Upload full video

Confirm

Are you sure to Delete?
Yes No
Cite
If you have any further questions, please contact Encyclopedia Editorial Office.
Yang, S.; Huang, Y.; Chan, H.; Yang, C. CSR Practices on Customer Value Co-Creation and Perception. Encyclopedia. Available online: https://encyclopedia.pub/entry/48404 (accessed on 04 July 2024).
Yang S, Huang Y, Chan H, Yang C. CSR Practices on Customer Value Co-Creation and Perception. Encyclopedia. Available at: https://encyclopedia.pub/entry/48404. Accessed July 04, 2024.
Yang, Shu, Yidan Huang, Hsin-Yi Chan, Cheng-Hsueh Yang. "CSR Practices on Customer Value Co-Creation and Perception" Encyclopedia, https://encyclopedia.pub/entry/48404 (accessed July 04, 2024).
Yang, S., Huang, Y., Chan, H., & Yang, C. (2023, August 24). CSR Practices on Customer Value Co-Creation and Perception. In Encyclopedia. https://encyclopedia.pub/entry/48404
Yang, Shu, et al. "CSR Practices on Customer Value Co-Creation and Perception." Encyclopedia. Web. 24 August, 2023.
CSR Practices on Customer Value Co-Creation and Perception
Edit
This entry is adapted from the peer-reviewed paper 10.3390/su15118567

The rapid development of digitalization has introduced greater variability and trust-related risks to the banking industry. Enhancing customers’ perception of value co-creation with banks is a critical issue that requires attention. Corporate social responsibility (CSR) practices have no impact on customer value co-creation in the digital context. CSR practices have a positive impact on customers’ perception of a company’s social responsibility.  customers’ perception of a company’s social responsibility has a positive impact on customer value co-creation; and customers’ perception plays a mediating role between CSR practices and customer value co-creation. 

digitization corporate social responsibility practices customer perception

1. Introduction

The development of Internet technology has fundamentally altered the relationship between businesses and consumers. In addition to facing competition from new players, businesses now face greater challenges from increasingly informed, capable, and active consumers. In a world where value is negotiated between individual consumers and businesses, it is essential for businesses to carefully study the convergence between production and consumption, and the co-creation of value by producers and consumers if they wish to maintain sustainable competitiveness. Fulfilling social responsibility is an integral part of this effort for businesses. With the application and popularization of 5G technology, enterprises are gradually digitizing and automating their production and operation. They are using Internet technology to build modern intelligent systems, improve their green innovation capabilities, strengthen relationships with customers, increase revenue and benefits for shareholders, and ultimately enhance corporate social responsibility [1].
Corporate social responsibility (CSR) was initially proposed by Sheldon (1923) [2], who believed that businesses should have a concept of commercial morality, which means that they have a responsibility to enhance social benefits while pursuing their own interests [3]. In recent years, the discussion on CSR has evolved from past definitions of corporate social responsibility and promotion of corporate operational responsibilities to include multiple topics, such as CSR practice and effect analysis [4][5]. With the promotion of digital technology, the effects and benefits of fulfilling social responsibilities have become increasingly clear, and CSR has been valued and recognized for its benefits [6]. Many business owners have listed CSR as part of their business strategy in various ways to establish a closer relationship between the enterprise and society [7]. Therefore, some scholars believe that CSR will be a new competitive strategy in the future [8].
Luu (2019) [9] believes that CSR is a concept of push–pull, in which enterprises encourage customers to contribute to their organizational mission and values. Through digital means, this can further extend the relationship between enterprises and customers. When customers perceive that the values reflected in the activities promoted by the enterprise are consistent with their own values, it will enhance their recognition of the enterprise. When customers perceive that the enterprise’s operations have surpassed established moral requirements, they may feel proud and exhibit positive behavior to recognize the organization. This behavior demonstrates that customers are co-creating value with the organization [10][11]. Based on previous research, it has been found that investment in CSR by enterprises will have a positive impact on customers’ attitudes, commitments, loyalty, trust, positive word-of-mouth, purchase intentions, and reputation [12][13]. Therefore, in the digital age, the fulfillment and promotion of CSR are indispensable and important components.
The customer-oriented approach is the foundation of value creation, highlighting the importance of customer interaction in value co-creation behavior [14][15][16]. Customers are partners and co-producers of value, services, and products (Mubushar et al., 2021) [10]. They not only have certain requirements for services but also contribute to the service delivery process. In addition, customers can have a significant impact on a company’s social responsibility activities [17][18]. When customers are skeptical about a company’s social responsibility practices, it can hinder the success of those activities [19][20][21]. With the influence of digital information, customers receive information about different brands and compare their services. As services are intangible in nature, a single company may find it difficult to understand how customers perceive service quality, leading to what is called a “service gap”. If a company regards its social responsibility practices as additional, non-essential services, the service gap may widen. To avoid significant cognitive errors between companies and customers, it is important for companies to ensure that their social responsibility practices are not seen as unnecessary strategies.
Taiwan’s banking industry is a franchised industry and has its own unique characteristics compared to other service industries, making the relationship between companies and customers particularly strong. Customer relationships are important resources for banks [22]. Both sides are involved in money lending and borrowing, requiring a high degree of trust [23]. Good relationships between companies and customers can only be achieved through high levels of trust [24][25]. With the emergence of digital Internet finance, the relationship and trust between banks and customers have become even more important [26].

2. Social Capital Theory

Social capital theory posits that social relationships and networks can facilitate cooperation and mutual support between individuals and organizations [27]. Recent literature has also explored the relationship between social capital theory and bank behavior [28][29]. In this study, corporate social responsibility (CSR) practices can be viewed as a means for banks to establish social relationships and networks that can promote interaction and trust with customers. Customer perception reflects how customers view a bank’s CSR practices and their level of trust in the bank. Ultimately, value co-creation can be seen as a relationship and network established between banks and customers based on mutual interests and trust, which can be achieved through CSR practices and customer perception.
Therefore, this study employs social capital theory to explain the relationship between CSR practices, customer perception, and value co-creation between banks and customers. This theory emphasizes the importance of trust, interaction, and mutual interests, which align well with the goal of establishing a strong relationship between banks and customers.

3. The Uniqueness of Taiwan’s Banking Industry

The control over deposit and loan product prices has led to the flourishing of Taiwan’s banking industry. However, the large number of banks has brought about fierce competition, with a peak of 53 banks in 2000. As the market size in Taiwan is not large, the excessive number of banks and their small sizes led to the removal of restrictions by the government on banks’ crossing different financial sectors. This was achieved through bank mergers and cross-industry operations to improve operational performance [30], ultimately reducing the number of banks to 38 in 2008.
Compared to other service industries, the banking industry is an enterprise endorsed by credit. The establishment of a good image can increase depositors’ confidence in it and increase the scale of the bank’s business. The products sold by the banking industry are also different from those sold by the traditional service industries, and its operations have their own unique characteristics. Therefore, this study believes that the relationship between banks and customers has more obvious differences compared to other service industries. This study revealed that there is a significant difference between the relationship between the banking industry and customers compared to other service industries. Banks have a role as financial intermediaries, creating revenue through financial lending. Banks’ own capital accounts for about 10% of their assets, and they also use debt to run their businesses, with most of the investment risks borne by creditors [31]. Banks attract customers’ deposits by lowering interest rates, which increases interest income. The increase in deposit amounts reduces the overdue loan ratio, leading to an increase in bank accounting profits [32][33]. The unique nature of the banking industry makes its operations highly risky [34]. For example, a bank in Taiwan launched a credit card with no loan threshold for loans to boost its performance and share price. Within a year, the credit card loan balance surged, leading to a deterioration of bad debts and triggering a credit card debt crisis. The bank could not create corresponding value, leading to a change in ownership.

4. CSR Practices at the Organizational Level

Bowen (1953) [35] proposed CSR that the bottom line for managers to execute any corporate policy, decision, or activity is to establish it based on fulfilling societal values and goals. Subsequently, many researchers proposed their personal opinions based on this foundation [36][37][38]. Turker (2009) [36] believed that the main focus of a company’s CSR behavior is to positively and proactively influence society and its stakeholders, making its actions go beyond economic interests. Dahlsrud (2008) [39] discussed and classified the definition of CSR, including voluntary, stakeholder, social, environmental, and economic responsibilities.
Based on the summary of existing literature, CSR has many positive impacts on organizational operation. Maintaining a good relationship with stakeholders can sustain wealth/long-term value growth [40] and maintain a good reputation for the company [13]. As an incentive mechanism, corporate social responsibility (CSR) drives companies to innovate in product design, processes, management, and policies, thereby promoting a shift in their profit and growth models. By improving production efficiency, changing production methods, expanding innovation domains, enhancing the business environment, and developing a circular economy, companies can increase their profits. While undertaking certain social responsibilities may increase short-term operating costs, it undoubtedly contributes to the establishment of a good corporate image, creating intangible assets and ultimately forming a competitive advantage, which brings long-term potential benefits to companies.
As a trust-based industry, the banking sector is particularly vulnerable to negative impacts on depositor confidence caused by news or announcements, especially in today’s digitized and economically challenging environment. Such events may lead to asset fluctuations or even bank runs. Therefore, this study considers that examining the CSR practices of banks is crucial for exploring their development.
Customers also respond with loyalty [41][42]. The relationship between enterprises and customers is essentially an exchange relationship, governed by the principle of reciprocity. Corporate social responsibility (CSR) practices can meet customers’ needs in terms of value, satisfaction, approval, and other dimensions, thus encouraging customers to actively engage in value co-creation with socially responsible enterprises [43]. Customer-perceived value (CPV) refers to the overall evaluation of the benefits customers perceive and the costs they incur when obtaining a product or service. Customers mainly consider the external characteristics of products, such as quality, packaging, and color, as part of the value they receive. In addition, higher-level abstract benefits, such as enterprise reputation, convenience, and image, also contribute to CPV, which fall within the scope of CSR [44].

References

  1. Chen, Y.Z. The impact of digital transformation on corporate social responsibility. J. Cont. Econ. Sci. 2022, 44, 109–116.
  2. Sheldon, O. The Philosophy of Management; Pitman: London, UK, 1923.
  3. Yang, L.; Guo, Z. Evolution of CSR Concept in the West and China. J. Int. Rev. Manag. Bus. Res. 2014, 3, 819.
  4. Wartick, S.L.; Cochran, P.L. The evolution of the corporate social performance model. J. Acad. Manag. Rev. 1985, 10, 758–769.
  5. Wood, D.J. Corporate social performance revisited. J. Acad. Manag. Rev. 1991, 16, 691–718.
  6. Carroll, A.B. Corporate Social Responsibility: Perspectives on the CSR Construct’s Development and Future. Bus. Soc. 2021, 1, 1258–1278.
  7. Carroll, A.B.; Brown, J.A.; Buchholtz, A.K. Business & Society: Ethics, sustainability, and stakeholder management. J. Bus. Res. 2018, 10, 10–17.
  8. Dupire, M.; M’zali, B. CSR Strategies in Response to Competitive Pressures. J. Bus. Ethics 2018, 148, 603–623.
  9. Luu, T.T. CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership and Relationship Marketing Orientation. J. Bus. Ethics 2019, 155, 379–398.
  10. Mubushar, M.; Rasool, S.; Haider, M.I.; Cerchione, R. The impact of corporate social responsibility activities on stakeholders’ value co-creation behaviour. Corp. Soc. Responsib. Environ. Manag. 2021, 28, 1906–1920.
  11. Ahmad, N.; Scholz, M.; Ullah, Z.; Arshad, M.Z.; Sabir, R.I.; Khan, W.A. The Nexus of CSR and Co-Creation: A Roadmap towards Consumer Loyalty. Sustainability 2021, 13, 523.
  12. Madrigal, R.; Boush, D.M. Social responsibility as a unique dimension of brand personality and consumers’ willingness to reward. J. Psychol. Mark. Res. 2008, 25, 538–564.
  13. Fauzan, N. The Effect of Corporate Social Responsibility to Corporate Reputation on Word of Mouth Toward Customer Trust. J. GMPI Conference Proc. Res. 2022, 1, 29–41.
  14. Vargo, S.L.; Lusch, R.F. Evolving to a New Dominant Logic for Marketing. J. Mark. 2004, 68, 1–17.
  15. Yen, C.-H.; Teng, H.-Y.; Tzeng, J.-C. Innovativeness and customer value co-creation behaviors: Mediating role of customer engagement. Int. J. Hosp. Manag. 2020, 88, 102514.
  16. Hur, W.-M.; Moon, T.-W.; Kim, H. When does customer CSR perception lead to customer extra-role behaviors? The roles of customer spirituality and emotional brand attachment. J. Brand Manag. 2020, 27, 421–437.
  17. Biggemann, S.; Williams, M.; Kro, G. Building in sustainability, social responsibility and value co-creation. J. Bus. Ind. Mark. 2014, 29, 304–312.
  18. Behnam, M.; Anagnostopoulos, C.; Byers, T.; Papadimitriou, D.A. The impact of perceived corporate social responsibility on value-in-use through customer engagement in non-profit sports clubs: The moderating role of co-production. Eur. Sport Manag. Q. 2021, 2, 1–22.
  19. Mohr, L.A.; Eroǧlu, D.; Ellen, P.S. The Development and Testing of a Measure of Skepticism Toward Environmental Claims in Marketers’ Communications. J. Consum. Aff. 1998, 32, 30–55.
  20. Lee, K.; Kim, J. Current status of CSR in the realm of supply management: The case of the Korean electronics industry. Supply Chain Manag. Int. J. 2009, 14, 138–148.
  21. Skarmeas, D.; Leonidou, C.N. When consumers doubt, watch out! The role of CSR skepticism. J. Bus. Res. 2013, 66, 1831–1838.
  22. Huang, C.J. Internationalization and Performance of Taiwanese Banks. J. Bus. Adm. Res. 2010, 2, 41–70.
  23. Uzzi, B. Embeddedness in the Making of Financial Capital: How Social Relations and Networks Benefit Firms Seeking Financing. Am. Sociol. Rev. 1999, 64, 481.
  24. Gulati, R.; Gargiulo, M. Where Do Interorganizational Networks Come From? SSRN Electron. J. 1999, 104, 1439–1493.
  25. Zucker, L.G. Production of Trust: Institutional Sources of Economic Structure, 1840–1920. Res. Organ. Behav. 1991, 16, 691–718.
  26. Lee, Y.-H.; Hsiao, C.; Chan, H.-Y.; Lee, I.-C. Explorations of employee-based brand equity in the banking industry from a perceived-leadership perspective. Int. J. Bank Mark. 2020, 38, 425–455.
  27. Coleman, J.S. Social capital in the creation of human capital. Am. J. Sociol. 1988, 94, S95–S120.
  28. Lu, H.; Wang, B.; Wang, H.; Zhao, T. Does social capital matter for peer-to-peer-lending? Empirical evidence. Pacific-Basin Finance J. 2020, 61, 101338.
  29. Zheng, C.; Cheung, A.W.K.; Cronje, T. Social capital and bank liquidity hoarding. J. Int. Financ. Mark. Inst. Money 2022, 80, 101653.
  30. Ma, T.C. Industrial structure and profitability: An empirical study of the Taiwan banking market. Fair Trade Q. Fair Trade 2005, 13, 61–92.
  31. Yuting, L. Re-thinking the peculiarity of corporate governance in the banking industry—On the establishment of information disclosure mechanism. Cen. China Econ. Law J. 2007, 18, 191–241.
  32. Ertan, A. Real Earnings Management in the Financial Industry (Working Paper). Master’s Thesis, Yale University, New Haven, CT, USA, 2013.
  33. Chen, C.Y.; Li, C.A. Substitution between Economic Cost Management and Real Earnings Management: Taiwan Banking Industry. Manag. Rev. Res. 2017, 26, 511–558.
  34. Riani, A.L. The Effect of Corporate Governance Mechanism to Organization (A Study of Banking). J. Int. Innov. Sci. Math. Res. 2014, 2, 2347–2905.
  35. Bowen, H.R. Social Responsibilities of the Businessman; Harper & Row: New York, NY, USA, 1953.
  36. Turker, D. Measuring Corporate Social Responsibility: A Scale Development Study. J. Bus. Ethics 2009, 85, 411–427.
  37. Carroll, A.; Buchholtz, A. Assessing ethics education in a business, government, and society course context. J. Toward Assessing Bus. Ethics Educ. Res. 2011, 15, 263–276.
  38. Sexty, R.W. Canadian Business and Society: Ethics & Responsibilities; McGraw-Hill Ryerson: Whitby, ON, Canada, 2011.
  39. Dahlsrud, A. How corporate social responsibility is defined: An analysis of 37 definitions. Corp. Soc. Responsib. Environ. Manag. 2008, 15, 1–13.
  40. Post, J.E.; Preston, L.E.; Sachs, S. Managing the extended enterprise: The new stakeholder view. J. Calif. Manag. Rev. Res. 2002, 45, 6–28.
  41. Abbasi, S.; Aghakhani, H.; Azizi, S.; Peikanpour, M.; Mehralian, G. Corporate social responsibility and customer loyalty during the Covid-19 pandemic: Evidence from pharmacy practice. Soc. Responsib. J. 2022, 19, 249–263.
  42. Au-Yong-Oliveira, M.; Sousa, M.J. Sustainable Marketing and Strategy. Sustainability 2022, 14, 3642.
  43. Wang, E.S.-T.; Liao, Y.-T. Effects of member similarity on group norm conformity, group identity and social participation in the context of social networking sites. Internet Res. 2023. ahead of print.
  44. Banik, S.; Rabbanee, F.K. Value co-creation and customer retention in services: Identifying a relevant moderator and mediator. J. Consum. Behav. 2023, 22, 646–663.
More
© Text is available under the terms and conditions of the Creative Commons Attribution (CC BY) license; additional terms may apply. By using this site, you agree to the Terms and Conditions and Privacy Policy.
Upload a video for this entry
Information
Subjects: Management
Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :
Shu Yang
,
Yidan Huang
,
Hsin-Yi Chan
,
Cheng-Hsueh Yang
View Times: 241
Revisions: 2 times (View History)
Update Date: 24 Aug 2023
Table of Contents
    1000/1000
    Hot Most Recent
    Video Production Service
    Feedback