IMPACT OF CSR STRATEGY ON THE CUSTOMER COMMITMENT AND BRAND EQUITY: A CASE STUDY OF TELIASONER

The focus of companies now a day is increasing on CSR activities. The companies are getting involved in these activities to increase their reputation in the market to build the image of their brand. The present study is an endeavour to evaluate the role of CSR activities in determining customers’ commitment and brand equity. The CSR activities have been distributed into four distinct categories in the present study. These categories are economic CSR, legal CSR, ethical CSR and philanthropic CSR. The impact of these dimensions of CSR has been evaluated on customer’s commitment and brand equity. The study has been performed in the context of single company i.e. TeliaSonera. The customers of TeliaSonera are the population of the present study. The data from these customers have been collected through questionnaire. The data has been analyzed using regression analysis. The results of the study show that CSR activities have a noticeable impact on customer’s commitment and brand equity. However, brand equity is effect more by CSR activities as compared to customer’s commitment. The customer’s commitment is only affected by economic CSR and ethical CSR. The brand equity is positively affected by economic CSR, ethical CSR and philanthropic CSR. The company should increase its focus on these activities to increase customer’s commitment and brand equity. However, it is pertinent to note that the firm should take CSR activities as the primary determinant of customer’s commitment and brand equity.


 

Table of Contents

 

Abstract i

Table of Contents. ii

List of Tables. v

List of Figures. vi

1.    Introduction. 1

1.1.      Background of the Study. 1

1.2.      TeliaSonera. 4

1.3.      CSR in TeliaSonera. 4

1.3.1.    Supply Chain. 5

1.3.2.    Customers and Markets. 5

1.3.3.    Shareholders and Investors. 6

1.3.4.    Society. 6

1.4.      Problem Statement 7

1.5.      Research Questions. 7

1.6.      Objectives of Study. 7

1.7.      Rationale of Study. 8

1.8.      Delimitations of the Study. 8

1.9.      Structure of the Remainder of the Study. 8

2.    Literature Review.. 10

2.1.      Corporate Social Responsibility. 10

2.2.      Defining CSR.. 11

2.3.      Types of CSR.. 13

2.3.1.    Economic CSR.. 13

2.3.2.    Legal CSR.. 14

2.3.3.    Ethical CSR.. 16

2.3.4.    Philanthropic CSR.. 16

2.4.      Importance of CSR from Firm’s Perspective. 17

2.5.      CSR and Brand Equity. 19

2.6.      CSR and Customers’ Commitment 20

2.7.      Theoretical Framework. 22

2.8.      Hypotheses. 23

3.    Research Methodology. 25

3.1.      Introduction. 25

3.2.      Type of the Study. 25

3.3.      Study Settings. 25

3.4.      Research Philosophy. 26

3.5.      Research approach. 26

3.6.      Population of the Study. 27

3.7.      Sample of the Study. 27

3.7.1.    Sample Size and Sampling Strategy. 28

3.7.2.    Sample Characteristics. 28

3.8.      Data of the Present Study. 29

3.9.      Data Collection Method. 29

3.9.1.    Questionnaire. 29

3.10.    Validity Analysis. 30

3.11.    Reliability Analysis. 30

3.12.    Analysis Procedure. 31

3.13.    Ethical Considerations. 32

4.    Results and Analysis. 33

4.1.      Descriptive Analysis. 33

4.2.      Meeting the Assumptions of Regression. 35

4.2.1.    Normality of the Data. 35

4.2.2.    Linearity. 37

4.2.3.    Homogeneity of Variance. 39

4.2.4.    Absence of Serial or Auto Correlation. 41

4.2.5.    Homoscedasticity. 42

4.2.6.    Normal Distribution of Errors. 43

4.2.7.    Multicollinearity. 44

4.3.      Regression Analysis. 46

5.    Findings, Conclusion and Limitations. 55

5.1.      Findings and Discussion. 55

5.2.      Conclusion. 57

5.3.      Limitations of the Study. 58

References. 59

QUESTIONNAIRE.. 66

 


 

List of Tables

Table 1: Inter Item Consistency – Cronbach’s α. 31

Table 2: Descriptive Statistics. 33

Table 3: Meeting the Assumption of Regression – Normality. 36

Table 4: Meeting the Assumption of Regression – Linearity (Correlation Matrix) 37

Table 5: Meeting the Assumption of Regression – Homogeneity of Variance. 38

Table 6: Meeting the Assumption of Regression – Absence of Multicolinearity. 43

Table 7: Model Summary. 44

Table 8: ANOVA.. 45

Table 9: Coefficients of Regression. 45

Table 10: Model Summary. 47

Table 11: ANOVA.. 48

Table 12: Coefficients of Regression. 49

 


 

List of Figures

Figure 1: CSR Issues Faced by TeliaSonera. 5

Figure 2: Theoretical Framework. 23

Figure 3: Meeting the Assumption of Regression – Homoscedasticity (P-P Plot) 39

Figure 4: Meeting the Assumption of Regression – Homoscedasticity (P-P Plot) 40

Figure 5: Meeting the Assumption of Regression – Normal Distribution of Error Terms. 41

Figure 6: Meeting the Assumption of Regression – Normal Distribution of Error Terms. 42

 

 

1.Introduction

1.1.Background of the Study

When people faced challenges about the environmental change at the start of twenty first century, people living in the society start demanding from the companies performing in the society about the socially responsible activities. Consumers and people living in the society became more conscious about their society and they demanded that companies should perform some socially responsible activities for welfare of society and people living in that society.  People demanded that from all companies because these companies are active participants of the society and consumers thinks that corporate social responsibility is also their responsibility from where these companies are generating revenue (Marquina & Morales, 2012).

Increasingly local communities, the media, NGO’s, consumers and civil society in general are demanding that businesses should be carried out in an ethical and socially responsible manner. Many companies are willing to comply with standards of corporate social responsibility (CSR). Rules of a game are set by big organizations most belongs to developed nations. The companies publicly provide the information about their CSR activities to portray an image of a socially responsible firm. This disclosure of information about CSR activities of the firm takes place through internet and annual reports. Some companies also publish separate reports on CSR activities of the firm. Companies have different kind of motivation by disclosing their CSR activities. Some of the companies are of the view that this practice may improve their relationships with their stakeholders that may have a positive impact on financial aspect of the company in the long run. The valuable intangible assets are created through this practice. Such assets can become a source of competitive advantage for the firm in market. Another purpose of this disclosure is confirming the compliance with the norms and values of the society (Branco & Rodrigues, 2008).

Society is the reflection of culture and art, society catches any change in the culture and art that’s why the survival of society lies in the survival of culture and art. By keeping in view the fast conservative economic environment, it’s necessary for societies to keep supporting culture and art (Bulut & Yumrukaya, 2009).

In competitive market environment customer places value to CSR activities and it further influence their buying behavior. Customers show concern over service quality, time and behavior of management at time of interaction with them. Customers are more educated now a day and will respond in a negative way as their interest are violated e.g. unfair pricing policy, and misleading ads etc. all that aimed to facilitate customer in general but in reality they causes a big threat to customer . Customer always prefer a fair treatment in this regard because they exchange all this by  paying  money against it .once customer comes to know about the careless attitude of any business they switch to other competitive brands which cause business to give up their market share, reduction in sales etc. (Arrigo, 2013).

Corporate social responsibilities of a company affect the behaviour of its employees as well as customer towards the organizations. Mainly, the employees look for ethical and social friendly atmosphere available at workplace for example minimum pay scale, health and safety protection, limitation of working hours and etc. Similarly customers prefer to buy products which are not harmful to them, satisfy their demand in times at a reasonable price etc. The CSR practices are likely to have a greater impact on the intended behaviour of the employees and customers and they prefer to become a part of such CSR oriented organizations. The firms that have a negative repute with respect to CSR in the market is going to suffer through high turnover rate, low morale and destruction at workplace, customer turnover, and decline in customer loyalty (Cacioppe et al., 2008).

Corporate social responsibility effects the reputation and overall image of the firm when it works within an industry. It is a matter of concern for the society that how much a firm invest in socially responsible activities e.g.  Firms’ spending on creating environmental friendly products like recyclable material in production, shifting towards more environmental friendly production methods that cause less pollution and damage to environment, and creating greener programmers, encourage tree plantation etc. The main advantage of good reputation of a firm is that it creates good intangible asset of a firm that cannot be copied easily (Melo & Garrido?Morgado, 2012)

 Financial stress of a company increases initially when it adopts corporate social responsibility but corporate reputation is increased when it invest in charity, education and environmental protection programme. Corporate social responsibility should be long term objective as it ensures economic stability of a firm (Smith, 2007). Few firms are going to include references about their spending on social friendly activities in their advertisement to improve the image of organization in market.

Marketing communication play a vital role in community, highlighting the corporate social responsible polices of firms to its stakeholders and how the corporate reputation and brand image is attached to it. Communication will be essential for firm’s survival, as well as for maintaining ethical image of a firm in market (Jahdi & Acikdilli, 2009). Importance of corporate social responsibility is vested in the competitive edge provided by CSR practices in this competitive environment. Developed nations are more concerned about this issue as compared to developing countries companies. However, passage of time awareness among these companies is also increasing with the passage of time (Jamali & Mirshak, 2007).

1.2.TeliaSonera

TeliaSonera is a telecom company providing network access and telecommunication services. The company is providing its service to a wide area from Nordic countries to Nepal. The company is providing services in Baltic region along with Turkey, Russia and Spain. The company was founded in 1850 and it is one of the pioneers in telecom industry. Currently, it is fifth largest mobile operator in Europe.

The company has earned a remarkable repute of trust and reliability in all countries and regions where it is carrying outs its operations. The company is following a well structured code of ethics and conduct, drafted under the guidelines of OECD.

1.3.CSR in TeliaSonera

TeliaSonera is facing various challenges related to CSR. Some of the key issues involved in the operations of CSR are being discussed here in the light of the CSR report published by the company. An overview of CSR practices being carried out by TeliaSonera has been provided here in Figure 1.

Figure 1: CSR Issues Faced by TeliaSonera

 

Source: (TeliaSonera, 2011)

1.3.1.Supply Chain

The company is required to ensure environmental and social acceptability in its supply chain operations. It is required to show compliance with the ethical business practices, human rights and labour laws. The company is required to provide good environment ensure health and safety of its work force. Moreover, company is also working on improving eco-efficiency.

1.3.2.Customers and Markets

The company is facing CSR issues related to customers and market. Company is ensuring the privacy of its customers. The market is being provided with clear pricing models by the company and misleading ads are being avoided. The company also ensures that its products and services provide an opportunity to its customers to reduce carbon footprints.

1.3.3.Shareholders and Investors

TeliaSonera has emerged as a preferred company for the investment including domestic, foreign and Socially Responsible Investors (SRI) as well. Most of the shareholders of the company are from the states of Sweden and Finland. Both of these states are following robust criteria of CR practices for the firm operating in these states.

1.3.4.Society

The company is facing the challenge of protecting the privacy of customers and governmental surveillance and freedom of expression as well. The company is trying to make compliance with the standards of human rights and freedom of expression along with protecting customers’ privacy. The telecom service can be used for sexual abuse of children. The company in collaboration with regulatory bodies is ensuring to prevent this sexual abuse. Moreover, the concern about the exposure of society to electromagnetic fields around the base stations is increasing. TeliaSonera is ensuring the transparency of its operations and supporting independent research on this issue.

1.4.Problem Statement

The firms have an ultimate objective of increasing profitability. This profitability is increase through increasing the brand loyalty and creating brand equity. This brand equity increases the commitment of the employees. The basic motive behind every activity performed by a business organization is profitability. Apparently, beneficiary of CSR practices is society. However, it is important to evaluate that if it is beneficial for the firm in terms of creating brand equity and increasing brand commitment.

1.5.Research Questions

The present study is an attempt to find out the answer to following important research questions:

  1. What is the impact of CSR practices on brand equity?
  2. What is the impact of CSR practices on customer commitment?

1.6.Objectives of Study

The present study is likely to achieve following important research objectives:

  1. To identify different CSR practices being executed in a firm.
  2. To evaluate the impact of various CSR practices on brand equity.
  3. To analyze the role of CSR practices in increasing customer commitment.

1.7.Rationale of Study

The present study is being conducted to highlight the importance of corporate social responsibility issues to firm as well as customer in competitive markets. Social responsibility includes environment protection policies, employee protection, consumer protection etc. This study is focusing on the customers’ perspective of CSR. The role of CSR in creating or increasing brand equity and customer commitment is being explored. This study is likely to create and increase the awareness among firms and customers regarding the CSR practices and their impact on brand equity and customer commitment. The firm may start and align their CSR activities in the light of the present study.

1.8.Delimitations of the Study

The present study is only evaluating the customers’ perspective here and employees’ perspective has not been considered here. Moreover, the present study is only evaluating the role of CSR practices in TeliaSonera Only.

1.9.Structure of the Remainder of the Study

This study has been distributed into five chapters. The first chapter has explained the background of the study, research questions, and research objectives, rationale of the study and delimitations of the study.

Chapter 2 is comprised on literature review. The perspective of previous researchers about CSR practices and their role in creating beneficial effects for the company has been explained in this section. This section lays the foundation for the development of theoretical framework and hypotheses that have been tested in this study. This theoretical framework and hypotheses have also been provided at the end of this chapter.

Chapter 3 is related to research methodology being used in the present study. This chapter provide all the information related to population and sample of the study and methods of data collection. It has also been explained that how the collected data has been analyzed.

Chapter 4 is comprised of results and analysis. The collected data has been analysed and results have been reported in this chapter. The interpretation of all the statistical tools is provided here in this chapter.

Chapter 5 is comprised on findings and discussion, conclusion and recommendation. The results have been discussed in the light of the literature review. The most significant findings of the study have been highlighted. The conclusion and recommendations along with implications have also been provided here in this chapter.

 

 

2.Literature Review

2.1.Corporate Social Responsibility

The literature review provides a guideline to conduct research study on topic in the current scenario. This research aims to study the relationship of social responsibility with brand equity and customer commitment. Previous work has been done on the related topic in different scenarios (Bjorklund, 2010).

According to a past study corporate social responsibility effects consumer behavior in two conditions, first one is that, if corporation do commitment with consumers to protect their rights and other one is that, if corporation is not involved in any type of unethical behavior which is harmful for society and people living in that society.  These two conditions affect consumer behavior positively for that corporation (Castaldo et al., 2009)

Nowadays people are demanding CSR practices by retailing businesses. In order to develop good image in customers’ mind retailers take solid steps towards CSR initiatives such as denoting money for charity purposes and etc. Nowadays retail outlets should implement the policy of fair ads just to prevent any irresponsible behavior and represents the practice in such a way that it is seen as a good action. Companies are responsible for exerting a positive impact and minimizing their negative impact upon society. All the information that a person’s holds about a company will effectively play a vital role in consumer buying behavior (Wagner & Bicen, 2008).

Corporate social responsibilities should be designed in such a way that they should not conflict with traditional believes and with leavings of collectivist expectations. They should be for all races of people. They should not target any particular group or religious. “Doing Right” is the most common corporate social responsibility rule to get organization goals the interviews showed Education, Personal communications and public communications are expected factors of change (Petersons et al., 2009).

Now a day’s firms moves from corporate social responsibility to corporate accountability that require firm to place emphasis on moral compulsion, but rather says that companies are responsible for their action, need to answer about their performance to stakeholder and may have to face some element of punishment or suction in case of failure or misrepresentation. The rights or freedom of companies can only be balanced when they have responsibilities, voluntary initiatives along with some obligation (Waddock & Graves, 1997).

2.2.Defining CSR

Formal definitions of CSR started began to thrive during the 1970s. The trail of these definitions was on CSP (Sethi, 1975; Carroll, 1999). During this period extensive discussion was made on the concepts of corporate social responsibility, corporate social responsiveness and corporate social performance. The important aspect during this period was not the assumption of responsibility by the organization, but organizations were responding to the social context (Ackerman, 1973; Murray, 1976). Frederick (1978) distinguished corporate social responsibility from corporate social responsiveness. The focus of corporate social responsibility is on the sense of responsibility assumed by the organization, whereas, corporate social responsiveness deals with the behaviour of the organization that is developed in response to the changes occurring in environment (Frederick, 1978). The academician and practitioners also started emphasizing on CSP during 1970s. CSP emphasized on the outcomes of CSR1 and CSR2 (Carroll, 1979; Wartick & Cochran, 1985; Wood, 1991).

Many of new definitions of CSR were developed during 1980s. The definition of CSR is no longer a mystery. Many of the researchers have provided different definitions of CSR. Business for Social Responsibility (BSR) defines CSR as, “achieving commercial success in ways that honour ethical values and respect people, communities, and the natural environment”. According to McWilliams and Siegel (2001) CSR can be defines as, “actions that appear to further some social good, beyond the interest of the firm and that which is required by law”.  It should be noted that CSR is not only a phenomenon that is in accordance with the law (McWilliams & Siegel, 2000). Moreover, Frooman (1997) provided a definition of CSR that explain the essence of CSR. He states CSR as, “An action by a firm, which the firm chooses to take, that substantially affects an identifiable social stakeholder’s welfare” (Frooman, 1997).

Defining CSR more briefly is that companies/business decisions shows commitment of their contribution towards society (Kotler & Lee, 2010). Now a day CSR took a very important place in corporate world due to awareness among society. As compared with the past, now a day companies are investing more and more on social well being of public, their development and more importantly on environmental protection.

CSR fosters the companies to come forward to help the society and devise the policies and implements the practices that are beyond the requirements of major stakeholders. These practices should be contributing to the well-being of the society. CSR is a set of policies, procedures and practices that are integrated into business operations, supply chain, company decision-making process, often including business ethics, social investment, and environmental issues related to this problem, then governance, human rights, market and workplace (Konar & Cohen, 1997).

2.3.Types of CSR

According to Carroll (1991), CSR can be categorized into four types:

  1. Economic CSR
  2. Legal CSR
  3. Ethical CSR
  4. Philanthropic CSR

2.3.1.Economic CSR

Production of goods and services that are desired by the society and selling them at reasonable price by adding the profits is the economic responsibility of a business (Carroll, 1979). The businesses perform their primary responsibility as an economic entity in the society. The important question is this that how much profit should be pursued by the organization. According to Carroll (1991), the principle of profits was set as “acceptable profit” that later on changed to “profit maximization”. The dogma of profit maximization is rooted in the economic view of Friedman (1962). According to him, “there is one and only one social responsibility of business – to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (Friedman, 1962). An alternative view to the classical economic view was presented by Drucker (2006). He is of the view that there are three main functions performed by profits. Firstly, it is a yardstick to measure the effectiveness of any business. Secondly, it ensures the long term survival of the business by providing a risk premium to the business. Thirdly, continuous supply of capital is also ensured by profit. He stated, “A profitability objective, therefore, measures not the maximum profits the business can produce, but the minimum it must produce” (Drucker, 2006).

Barnett (2007) presented a novel point of view. According to him, maximization of shareholders’ wealth principle is not in the best interest of shareholders themselves. A high level of financial performance diminishes the influence of the organization over its stakeholders (Barnett, 2007). Barnett (2007) stated:

“Doing too well can lead stakeholders to perceive that a firm is not doing enough well. Excessive CFP indicates that a firm is extracting more from society than it is returning and can suggest that profits have risen because the firm has exploited some of its stakeholders in order to favour shareholders and upper management. This can indicate untrustworthiness to stakeholders looking to establish or maintain relations with the firm”.

2.3.2.Legal CSR

There are several positive and negative obligations imposed upon the businesses by the regulators and governments. These obligations are referred to legal responsibilities of business. There is a slight disparity among the researchers regarding the components that constitutes legal responsibilities of the company. All researches have the consensus that organizations are required to adhere with the laws of the lands and social regulations. The existing difference among the researchers is about the scope and nature of these obligations. Regarding the nature of legal responsibilities, one group of researchers and practitioners argues that overall responsibility of business towards the society can be referred to the legal responsibility, whereas other groups is of the view that societal responsibility of the business is not part of legal responsibilities (Carroll & Shabana, 2010).

Regarding scope of the legal responsibilities, some are of the view that these responsibilities must include more regulations. They argue that it is necessary to impose regulations for the complete implementation of CSR. De Schutter (2008) states that implementation of CSR “rests on certain presuppositions about markets and the business environment, which cannot be simply assumed, but should be affirmatively created by a regulatory framework for CSR” (De Schutter, 2008). Other group is of the view that organization must engage voluntarily in CSR activities and developing relationships with stakeholders. The claim about stakeholder theory, explaining that the relationship of management with stakeholders, and promotions and expansion in laws and regulations affect firm’s performance, was rejected by Phillips et al. (2003). It is not required for the viability of stakeholder theory to changes the existing laws and regulations (Phillips et al., 2003).

2.3.3.Ethical CSR

The ethical CSR implies to uphold the corporate value about dealing with customers, employees and society. Ethical considerations emphasize to maintain the highest standard of business ethics in all business operations of the company. The organization must restrain from the mischievous activities. The company may create a favourable environment for it by following ethical practices. These practices improve the relationship of organization with the society (Garriga & Melé, 2004). The businesses must define their moral values and appropriate behaviours to be followed for upholding these values. The moral rules should be abided by all the employees and departments of the organization (Qu, 2007). These moral value must govern the decision making process and management is required to ensure that none of the ethical values are violated while taking different business decisions (CSR) (Branco & Rodrigues, 2006). Many a time organizations refrain from undertaking the business activities that may yield harmful effects for the society. The firms tend to accept the social responsibilities under ethical considerations. These responsibilities are considered as ethical obligations (Garriga & Melé, 2004). Ethical practices are in fact the essence of CSR.

2.3.4.Philanthropic CSR

The ultimate aim of the organization behind implementing CSR practices is to ensure its sustainability. The companies implement these practices in a similar way regardless of their size. These practices promote the culture of equal opportunities for every one avoiding any type of discrimination in work place. According to Turban and Greening (1996), the companies, who follow discretionary or philanthropic CSR practices, easily recruit a talented pool of employees. This is highly beneficial when there is a scarcity of human resources and economy has a tight labour market. These practices also increase the retention level of employees. Turnover rate is significantly reduced in the organizations, thereby reducing the training and recruitment cost of the organization (Waheed, 2000).

Philanthropic CSR Activities are directly related with the major operations of the business but these activities are desired by the society. Therefore, organizations undertake these activities to respect the desire of the society that is likely to improve the image of the company in society (Blomback, 2009). These activities are executed to become a better organization not only for the management and shareholders but for society as well (Qu, 2007). 

2.4.Importance of CSR from Firm’s Perspective

Under corporate social responsibility we take resource based perspective as per resource based perspective of corporate social responsibility provide internal or external both to firm. An internal benefit of corporate social responsibility to a firm is to develop new resources which are related to know how corporate culture .Whereas external includes corporate social responsibility effects a corporate reputation. Mean to say whether firm is engaged in decision making practices that are aligned with social responsibility activities or how its decision impact over society. Corporate social responsibility is considered a form of reputation building (Branco & Rodrigues, 2006)

Corporate social responsibilities can benefit the firms in bottom-line outcomes firstly, employee turnover can reduce through social responsible activities, and employees feel secure and trust on their employer. Secondly, customer satisfaction is increased due to fulfilling needs of customers. Overall firm reputation is increased by the corporate social responsible activities as it helps the stakeholders to infer positive characteristics of firms (Galbreath, 2010).

Three forms of value are being offered to customer by corporate social responsibility. These forms are Social, Emotional and functional. Value proposition for consumers is affected by all these three forms. These forms could increase or decrease value propositions. Other product attributes can be increased or decreased by value created by one form of corporate social responsibility (Peloza & John, 2011).

The consumer trust plays an important and mediating role in the corporate social responsibility assessment framework. Management should monitor the consumers trust which is an important factor that how the consumers are thinking about the corporate social responsibility work done by the organization and whether they have a trust on that social responsible work or activity done by the organization and how they evaluate the effort done by the organizations management on that act of social responsibility (Vlachos et al., 2009)

Financial stress of the company increases initially when they adopt the corporate social responsible activities, but corporate reputation is increased when company invest in charity, education and environmental protection. Through corporate social responsibility the authenticity of foresighted returns increases with distribution of short term gains. While investing in some business the investor not only think about the return on investment, but they also see whether the firm is social responsible or not. Corporate social responsibility should be long term objective as it guarantees the economic stability of any firm (Smith, 2007)

2.5.CSR and Brand Equity

Previous research finds that there is some positive connection between CSR activities and Brand evaluation but this relationship doesn’t work if there is a high corporate brand familiarity. It is found that product evaluation of corporate social responsible firms is much higher than non-social responsible firms. The brand familiarity plays a moderating role which affects the relationship between corporate social responsibility and brand equity. CSR activities are good investment by the company for strong brand building (Perera et al., 2013).

During the formation of company strategies, decision maker should consider corporate social responsibilities while making decisions, because consumers are motivated by different corporate social responsible activities. Companies who are not making strategies for corporate social responsible activities in this competition, they will face serious challenges in coming future. Corporate social responsible activities also allow company to maintain long term relationship with consumers (Pérez & Bosque, 2013).

Apart from good quality of services and products in reasonable prices consumer also expect some social responsible activities from corporation. Customers also wants that company should behave honestly with consumers and also with other stake holders. High awareness of CSR leads to positive response of consumers towards the company. According to a survey 49% of consumers said that they will advise their family and friends to use product of CSR companies and 45.6% of consumers told that they consider corporate social responsibility in purchase decision. Consumers also told that they will prefer product of CSR Company if its price is same to the competitor’s product, so it will be important for corporations to invest in corporate social responsible activities to keep loyal relationship with their consumers (Kolkailah et al., 2012).

Firms are following the corporate responsibility behaviour in order to improve their image in industry by following some code of conduct to increase profit. They have to follow the rules of the game; firms have responsibility to their environment which is beyond their economic obligation. Therefore, market estimations should be aligned with their social dimensions. Now a day in an advance world, people are highly concerned with the actions of firm and how they will have impact on them. Firm following corporate social responsibility are rated highly in market and it result in better sales and brand of the firm receive a wide recognition (de los Salmones et al., 2005).

2.6.CSR and Customers’ Commitment

Relationship between company and customer cannot be built without trust .Loyalty and repurchase are the results of trust. But what build trust is still largely remains unanswered. A model was developed to illustrate the relationship between clarity, social responsibility, trust word of mouth and repurchase intention (Castaldo et al., 2009).

In competitive market environment, corporate social responsibility has a strategic importance to any companies.  They declare corporate social responsibility not a right thing to do rather it’s a smart thing to do. Companies are taking direct and visible steps to communicate their corporate social responsibility programs and they have a significant influence on several customer related outcomes. Companies need to follow the rules of game prescribed by competent commission or a regulatory body. In case of product development and innovation strategies they need to take care of patents, copyrights and other legal formalities. Need to take care in advertising campaigns, avoid from misleading add weight and measure issues fair price that may cause any doubt in customer mind. These steps will create an a good impression in customers’ mind and they will feel more inclined towards associating with the company (Luo & Bhattacharya, 2006)

How consumer perception about a firm following corporate social responsibility influences or make consumer mind to buy the product marketed by that company. Focus is made on products that need to comply with ethical requirement and the level to which companies made commitment to protect consumer’s rights. Companies that are socially oriented can successfully market their products with high symbolic values. Corporate social responsibility is a tool used by companies to attract buyers in market. Sometimes the social reputation is transited by communication crises, consumer will trust for companies that have strong reputation to believe what it promises to deliver by all means. Customers in return show more loyalty to such firms and this lead to an increase in market share and profit ratio (Castaldo et al., 2009).

Attitudinal loyalty is very strongly demonstrated by Cooperate Social Responsibility (CSR). Corporate social responsibility has genuine association with attitudinal loyalty. Corporate social responsibility has directly proportional relationship with attitudinal loyalty. The relationship between Cooperate Social Responsibility (CSR) and behavioural loyalty is intervened by perceived service quality. Perceived service quality effects both behavioural and attitudinal loyalty the results showed. Positive results were established between attitudinal and behavioural loyalty (Mandhachitara, 2011).

Marketing communication plays a vital role in communicating, highlighting the corporate social responsibility policies of firm to its stake holders and how the corporate reputation and brand image is attached to it. Communication will be essentials for firm’s survival, as well as for maintaining ethical image of a firm in market. Maintaining customers’ commitment and their deduction to corporate social responsibility in a holistic manner is absolutely crucial (Jahdi & Acikdilli, 2009).

Corporate social responsibility affects the organization commitment of customers and employees based on the social identity theory. Corporate social responsibility creates a good reputation for business and increases its attractiveness as an employer and supplier. People or more concerned about environmental declaration; therefore, the commitment of employees and customers to an organization which works for all of its stakeholders is greatly affected by its CSR practices (Turker, 2009).

2.7.Theoretical Framework

Theoretical framework has been developed on the basis of the literature review. The framework has been provided in Figure 1.

Figure 2: Theoretical Framework

 

2.8.Hypotheses

The present study is testing following hypotheses.

H1: Economic CSR has a positive impact on customers’ commitment.

H2: Legal CSR has a positive impact on customers’ commitment.

H3: Ethical CSR has a positive impact on customers’ commitment.

H4: Philanthropic CSR has a positive impact on customers’ commitment.

H5: Economic CSR has a positive impact on brand Equity.

H6: Legal CSR has a positive impact on brand Equity.

H7: Ethical CSR has a positive impact on brand Equity.

H8: Philanthropic CSR has a positive impact on brand Equity.

 

 

3.Research Methodology

3.1.Introduction

This chapter is about the research methodology deployed in the present study. This chapter provides the details about the population and sample of the study along with the methods of data collection and analysis.

3.2.Type of the Study

The present study is causal and Correlational. This study seeks to analyze the impact of CSR activities on brand equity and customer commitment in case of TeliaSonera. The study has evaluated that brand equity and customer commitment is being affected by the CSR activities being performed by the TeliaSonera. 

3.3.Study Settings

This study is being performed in the field settings or natural settings. This setting is useful in evaluating the original trend and original effect of CSR activities on brand equity and customer commitment in case of TeliaSonera. The study is not an experimental study. Therefore, no lab setting is required for this study.

 

3.4.Research Philosophy

The research philosophy is important in determining patterns of a study. The use of various tools and techniques is decided on the basis of research philosophy (Offredy & Vickers, 2010). There are main four philosophies i.e. pragmatism, interpretivism, realism and positivism. The present study is following the philosophy of positivism (Saunders et al., 2009). The philosophy of positivism follows the approach of natural scientists. It deals with observable phenomenon. The researcher following this philosophy produces the data, develops the hypotheses and tests these hypotheses through the collected data. The use of real life data and statistical tools increase the validity and generalizability of the studies following this philosophy. The subjectivity is controlled under this philosophy and researcher is able to perform an objective analysis (Saunders et al., 2009). The researcher has developed the hypotheses and the data has been collected through an instrument. This data has been analyzed through statistical tools to evaluate the impact of CSR activities on brand equity and customer commitment.

3.5.Research approach

There are two widely followed approaches in research i.e. quantitative and qualitative approach (Ramamurthy, 2011). There are certain advantages and disadvantages of both approaches. However, the present study is following quantitative approach. This approach is useful in case of shortage of time and resources (i.e. the situation faced by the researcher during the present study). A researcher under this approach quantifies various elements and makes an objective analysis. The quantification is necessary for performing a quantitative analysis. The use of quantitative analysis makes the research more reliable and generalizable. The personal biasness is controlled through quantitative analysis (Cooper & Schindler, 2007). Unlike to qualitative approach, researcher’s biasness can easily be identified in this approach.

The present study is aimed at evaluating the impact of CSR activities on brand equity and customer commitment. The study is determined to make a through investigation of the relationships between the selected variables. The researhcer has formulated the hypotheses and data will be collected through an instrument. This data will be analyzed by the use statistical tools and hypotheses will be rejected or accepted on the basis of the results obtained from the data.  

3.6.Population of the Study

The customers of TeliaSonera are the population of the present study. The sample has been taken from this population. The customers have been asked about the CSR activities of the company and brand equity and customer commitment of TeliaSonera have also been measured through asking questions from the customers.

3.7.Sample of the Study

Sample of the present has been collected from the population above. The sample has been chosen regardless of any discrimination and customers from various age groups and both genders have been selected.

 

3.7.1.Sample Size and Sampling Strategy

According to Sekaran (2003), a sample size of 300 is sufficient for performing a rigorous statistical analysis. Therefore, a sample of 300 employees was selected for the data collection. This sample has been selected on the basis of convenience sampling strategy. The convenience sampling has been used because of time and budget constraints faced by the researcher during the present study (Cooper & Schindler, 2007). However, the response rate has been 74%. Therefore, the final sample size used in the analysis was 223.

3.7.2.Sample Characteristics

There were total 223 respondents included in the sample. Most of the respondents were male in the sample. However, the differences are nominal. The male respondents were 52% of the total sample; whereas, female respondents were 48% of the total sample. Most of the respondents were from the age category of 21-30 i.e. 55% of total sample. The education of most of the respondents was equivalent to graduation. This education level of majority of the respondents authenticates the validity of the responses collected from them. Most of the users are using the services of TeliaSonera for more than 5 years and mostly their use was for the personal purposes. These results are also important in evaluating the validity of the overall results of the survey.

3.8.Data of the Present Study

The researcher has collected primary data for the present study that is cross sectional in nature. The data has been collected on a single time period from various elements of the population i.e. customers of TeliaSonera. This will not be used for any other research. The data has been collected exclusively for the present study. Therefore, this data can also be referred to pure data.

3.9.Data Collection Method

The researcher has collected the data through self administered questionnaires. The quantification of the variables was made possible through this questionnaire.

3.9.1.Questionnaire

The survey questionnaire comprised of 35 items related to 6 variables. There are 5 items measuring Economic CSR, 5 items covering Legal CSR, 7 items related to Ethical CSR, 5 items for Philanthropic CSR, 7 items for Brand Equity and 6 items related to customer commitment. These items do not include demographic section. Demographic section is separate from the above mentioned items. The researcher has developed the instrument. All the items have been rated on 5 point likert scale (5 = Strongly Agree to 1 = Strongly Disagree).

3.10.Validity Analysis

Validity of the questionnaire means that it has the ability to test the phenomenons that is intended to be tested in the study. The questionnaire items must be based on the variables under discussion and their expected patterns of relationship (Saunders, et al., 2009). The researcher tested the content and construct validity of the instrument. The researcher discussed the developed instrument to various academicians and practitioners. This validity was performed before the data collection. The input provided by the practitioners and academicians were incorporated in the questionnaire before finally floating the same into the market. This validity becomes more important in terms of questionnaire developed by the researcher in this study (Saunders et al., 2009).

3.11.Reliability Analysis

The consistency of the results from an instrument can be referred to the reliability of the instrument. The items mentioned in the instrument must have an internal consistency as well. The data obtained through the instrument must be dependable in terms of performing a meaningful analysis. The entire data should be consistent and the inferences could be drawn from them without any doubt. The data must be useful in terms of solidifying the facts and figures (Ramamurthy, 2011). The research instrument (questionnaires) should also be developed in a reliable manner so that the data established through it is trustworthy. The reliability of the instrument has been tested through measure of inter-item consistency i.e. Cronbach’s alpha. The results have been reported in Table 1. The value of Cronbach’s α for all variables is above 0.6 that authenticates the reliability of the instrument.

Table 1: Inter Item Consistency – Cronbach’s α

Description

Cronbach  α

N

Economic CSR

0.762

5

Legal CSR

0.728

5

Ethical CSR

0.677

7

Philanthropic CSR

0.674

5

Customer’s Commitment

0.714

6

Brand Equity

0.751

7

3.12.Analysis Procedure

After collecting the data in quantitative form through self-administered questionnaires, it was entered into SPSS for statistical analysis. The data was analysis by applying various statistical tools. The study is causal in nature; therefore, the main test performed on the collected data was regression analysis. The researcher tested 7 assumptions of regression before applying the regression analysis in order to provide more reliable and trustworthy results.

3.13.Ethical Considerations

Ethical considerations are extremely important in a research study and a researcher is obliged to take care of ethical considerations of the research (Sekaran, 2003). The researcher in the present study has given due importance to ethical issues. The researcher has not tried to take any undue credit during any stage of the research. All citations have been made properly without any manipulations in the concepts or reference. The plagiarism has been completely avoided. The researcher has tried to follow the code of conduct provided by his institution. It has not been tried to influence perception of respondents and data has been collected and analyzed in its true letter and spirit. The respondents were provided the full liberty to provide their response in order to maintain neutrality of the respondents.

 

 

4.Results and Analysis

This chapter deals with the results and analysis of the collected data. The collected data was entered into SPSS and it was analyzed using various statistical tools. The results are being reported here.

4.1.Descriptive Analysis

The descriptive analysis is performed to observe the trend of the data. The results of the descriptive analysis are shown in Table 2. This table shows the values of minimum, maximum, mean and standard deviation.

Table 2: Descriptive Statistics

 

         N

Minimum

Maximum

Mean

Std. Deviation

Economic CSR

223

1.20

4.80

4.1130

.66071

Legal CSR

223

1.00

5.00

4.7907

.96280

Ethical CSR

223

2.00

5.00

4.2798

.62162

Philanthropic CSR

223

1.25

5.00

4.6738

.87303

Customer’s Commitment

223

1.00

4.80

3.5453

.74184

Brand Equity

223

2.00

5.00

4.3413

.83337

 

 

The minimum and maximum values for all of the variables are within the ranges of 1-5 that authenticates the correctness of the data and no mistake is identified in the computation and entry of the data. The descriptive analysis reveal that company is not only actively taking part in CSR activities but these results also prove that customers of the company are also aware of these activities undertaken by the company. The highest compliance is shown with the legal CSR activities. The company is showing a strict compliance with the legal framework of the countries where it is executing its operations. This compliance is necessary as non-compliance may lead to some punitive action against the company. The results are also showing the company is actively undertaking activities relation to philanthropic CSR. The company is upholding a discretionary responsibility to perform the activities for the betterment of the society in which it is operating. These results are quite evident of a soft image of the company being portrayed in the market because of such activities performed. Ethical CSR activities have a mean value 4.27. Though, this value is lower than that of legal and philanthropic CSR but still it is showing that these activities are also being actively performed by the company. Economic CSR has the lowest mean value among all other CSR activities being executed by the company.

The mean value of customer’s commitment is pointing out towards a bit worrisome situation for the company as this value is quite lower. The value is 3.54. Although, the value is evident of a satisfactory level of customer commitment, but in the fact of ever increasing competition, there is a dire need to take appropriate steps to increase this customer’s commitment. However, the mean value of second dependent variable i.e. brand equity is quite good. It is 4.34. The company TeliaSonera is enjoying good brand equity in the market.

4.2.Meeting the Assumptions of Regression

The present study is evaluating the cause and effect relationship and regression analysis is the main tool for evaluating these types of relations. However, it is important to test regression assumptions before performing the regression analysis. The statisticians have difference of opinion about the regression assumptions. A group of statistician advocates about testing 4 core assumptions, while other group advocates about testing 7 assumptions of regressions, especially in case of multiple regression. Presently, 7 assumptions have been tested here in this study (Asteriou & Hall, 2011).

4.2.1.Normality of the Data

The primary assumption for all parametric tests is normality of the data. Regression analysis is also a parametric test; therefore, normality is also primary assumption of regression. Normality is tested through various tests. The present study has used the techniques of skewness and kurtosis to test the reliability of the data. The acceptable range for skewness and kurtosis is +1/-1. If the values of skewness and kurtosis lie with this range, data is proved to be normal (Leech et al., 2005). The results have been shown here in Table 3. This table shows that the values of skewness and kurtosis are within acceptable range for all variables. Therefore, it can be concluded that data is normal. This fulfils the first assumption of regression i.e. normality of data.

 

 

Table 3: Meeting the Assumption of Regression – Normality   

 

Skewness

Kurtosis

 

Statistic

Std. Error

Statistic

Std. Error

Economic CSR

.255

.163

.212

.324

Legal CSR

-.076

.163

.273

.324

Ethical CSR

-.980

.163

.536

.324

Philanthropic CSR

-.242

.163

.769

.324

Customer's Commitment

.584

.163

.810

.324

Brand Equity

-.877

.163

-.446

.324

 

4.2.2.Linearity

Second assumption of regression is linearity. Linearity is the second assumption of regression. There must be a linear relationship among the independent variables and dependent variables as per this assumption of regression. This assumption is tested through correlation matrix.

Table 4 is correlation matrix that checks the linearity between IVs and DVs. This table shows that the correlation values of economic CSR and Ethical CSR are significant with Customer commitment (p < 0.05); whereas, the correlation values of Economic CSR, Ethical CSR and Philanthropic CSR are significant with Brand Equity (p < 0.05). These results prove that there is a linear relationship of Economic CSR and Ethical CSR with customers’ commitment. Brand Equity has a linear relation with Economic CSR, Ethical CSR and Philanthropic CSR. Only Legal CSR has an insignificant relationship with both of the dependent variables.

 

 

Table 4: Meeting the Assumption of Regression – Linearity (Correlation Matrix)   

 

 

Economic CSR

Legal CSR

Ethical CSR

Philanthropic CSR

Customer's Commitment

Brand Equity

Economic CSR

1

 

 

 

 

 

Legal CSR

.146*

1

 

 

 

 

Ethical CSR

-.023

.549**

1

 

 

 

Philanthropic CSR

.369**

.269**

.107

1

 

 

Customer's Commitment

.437**

.082

.247**

.120

1

 

Brand Equity

.355**

.145

.286**

.488**

.207**

1

 

 

4.2.3.Homogeneity of Variance

Third assumption of regression is homogeneity of variance. The variance in the independent variables should be constant among all the observations of dependent variables. This assumption has been tested through Levene’s test. The results have been reported here in Table 5. This tests checks the null hypothesis i.e. Variance across the mean values of dependent variable is homogeneous. The results provided in Table 5 shows that this hypothesis has been accepted for all of the independent variables except legal CSR in case of both of the dependent variables. Thus, homogeneity of variance assumption has been fulfilled for 3 out of four independent variables.

 

 

Table 5: Meeting the Assumption of Regression – Homogeneity of Variance    

 

Levene Statistic

df1

df2

Sig.

DV: Customer’s Commitment

Economic CSR

.309

16

205

.987

Legal CSR

2.377

16

205

.003

Ethical CSR

1.557

16

205

.089

Philanthropic CSR

3.581

16

205

.000

DV: Brand Equity

Economic CSR

1.898

15

207

.098

Legal CSR

10.433

15

207

.000

Ethical CSR

1.457

15

207

.117

Philanthropic CSR

.802

15

207

.654

 

4.2.4.Absence of Serial or Auto Correlation       

There should be no serial or auto correlation. This assumption is tested through Durbin Watson. The value of Durbin Watson computed during regression analysis with the dependent variable of customer commitment is 1.973 and with the dependent variable of brand equity this value is 1.811 i.e. within acceptable range of 1.5-2.5. Thus, fourth assumption of regression stands fulfilled here.

 

 

4.2.5.Homoscedasticity

Homoscedasticity is the fifth assumption of regression analysis. This assumption has been tested through P-P Plot, reported in Figure 3 and Figure 4. The figure 3 is for customer’s commitment. This figure shows that the position of homoscedasticity is quite disturbed here and heteroscedasticity is evident in this situation. However, the figure 4 is showing a good level of homoscedasticity.

Figure 3: Meeting the Assumption of Regression – Homoscedasticity (P-P Plot)

 

Figure 4: Meeting the Assumption of Regression – Homoscedasticity (P-P Plot)

 

4.2.6.Normal Distribution of Errors

According to sixth assumption of regression analysis, error terms must have a normal distribution. This assumption has been tested with the help of histogram, shown in figure 5 and figure 6. The situation is not good in Figure 5. The error terms are not normally distributed in case of customer’s commitment; whereas, this normal distribution is quite evident in case of brand equity. The bell shape of the histogram authenticates the normal distribution of the errors here in figure 6. This fulfils the assumption of the regression that the data should be normally distributed (for the variable of brand equity).

Figure 5: Meeting the Assumption of Regression – Normal Distribution of Error Terms

 

4.2.7.Multicollinearity

Multicolinearity is a potential problem that may generate highly misleading results. This problem arises because of high correlation between independent variables. The correlation matrix provided in Table 4 shows that most of the correlations among independent variables are insignificant and for rest of the variables the correlation values are less than 0.8, negating the presence of multicolinearity. However, multicolinearity has also been tested here through VIF and Tolerance values. The results are reported here in Table 6. This table shows that the tolerance values of all the independent variables are greater than 0.25 and the variance influence factor (VIF) values of the independent variables are less than 4. These values authenticates that there is no problem of multicolinearity. Hence, seventh assumption of regression also stands fulfilled here. Multicolinearity is very crucial assumption of the regression analysis and its presence may make the whole results of regression analysis unreliable and invalid.

Figure 6: Meeting the Assumption of Regression – Normal Distribution of Error Terms

 

 

Table 6: Meeting the Assumption of Regression – Absence of Multicolinearity

 

Collinearity Statistics

Tolerance

VIF

Economic CSR

.791

1.265

Legal CSR

.601

1.665

Ethical CSR

.689

1.451

Philanthropic CSR

.751

1.332

 

4.3.Regression Analysis

Regression analysis has been performed to evaluate the relationships between independent variables and dependent variable. The results have been reported from Table 7 to Table 12. The regression analysis has been performed separately for both of the dependent variable i.e. commitment.

Firstly, the regression analysis has been performed by taking the customer’s commitment as dependent variable. The results have been reported from Table 7 to Table 9. Table 7 is the model summary table. The value of R, R Square and adjusted R Square are shown in this table. R that is also referred as multiple R is the multiple correlation coefficient showing the value of overall correlation of all independent variables with dependent variable. This value is 0.488 revealing the presence of a moderate correlation between the CSR activities and customer’s commitment. R Square is the enormity of the existing relationship between independent variables and depend variable. The explanatory power of the model is shown by the value of R2.  The value of R2 here in table 7 is 0.238. This value shows that CSR activities cause a 23% variation in the customer commitment i.e. dependent variable. The explained variation of the model is shown by the value of R2. R2 has an improved version as well, known as adjusted R2. The value of adjusted R2 is always less than R2. This value is computed after adjusting the errors. Standard error shows the unexplained variation that is not explained by the variables taken in the present study. This variation in dependent variable is because of some extraneous factors that have not been included the framework of the present study. The value of standard error of the estimate here is .7342 that shows 73.42% variation in dependent variable i.e. customer’s commitment because of external factors. In other words, this variation is not explained by the CSR activities.

Table 7: Model Summary

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

Durbin-Watson

1

.488a

.238

.224

.73422

1.973

a. Predictors: (Constant), Philanthropic CSR, Ethical CSR, Economic CSR, Legal CSR

b. Dependent Variable: Customer's Commitment

 

Table 8 is ANOVA Table. This table shows the fitness of model.  A null hypothesis is tested in this table. According to this hypothesis there is no relationship between any of the independent variables with dependent variable. The value of F-statistics here is 17.001 (p < .01). The results reject the null hypothesis stated above and accepts the alternate hypothesis i.e. at least one of the independent variables is associated with the dependent variable. The model fitness is proved through these results and regression analysis is approved by this model fitness.

Table 8: ANOVA

Model

Sum of Squares

df

Mean Square

F

Sig.

1

Regression

36.660

4

9.165

17.001

.000a

Residual

117.521

218

.539

 

 

Total

154.180

222

 

 

 

a. Predictors: (Constant), Philanthropic CSR, Ethical CSR, Economic CSR, Legal CSR

b. Dependent Variable: Customer's Commitment

 

Coefficients of regression analysis are shown in Table 9. This table provides the information about the individual relationships of independent variables with dependent variables. This table contains the values of beta coefficients, standard errors, t-statistics and significance. There are two types of beta coefficient reported in this table i.e. unstandardized coefficients and standardized coefficients. The researcher has focused here on unstandardized scale because of the uniformity of the scale used in the instrument.

Table 9: Coefficients of Regression

Model

Unstandardized Coefficients

Standardized Coefficients

t

Sig.

B

Std. Error

Beta

1

(Constant)

3.564

.404

 

8.830

.000

Economic CSR

.360

.084

.285

4.292

.000

Legal CSR

.208

.066

.240

1.148

.194

Ethical CSR

.209

.095

.156

2.190

.030

Philanthropic CSR

.080

.065

.084

1.228

.221

a. Dependent Variable: Customer's Commitment

The beta value of the constant is 3.56. Constant value shows the value of dependent variable when all independent variables are equal to zero. This value is significant here as t-statistics is 8.830 (p < 0.01).

The beta value of economic CSR is .360. This shows that there is a positive relationship between economic CSR and customer’s CSR. The beta value shows the slope of the relationship. One unit change in economic CSR is likely to bring a change of .360 units in customer’s commitment. This relationship is significant as shown by the value of t-statistics. The value of t-statistics is 4.292 (p < 0.01). These results stipulate to accept H1

H1: Economic CSR has a positive impact on customers’ commitment. (Accepted)

The beta value of legal CSR is .208. This value shows that there is a positive relationship between legal CSR and customer’s CSR. However, this relationship is insignificant here. The value of t-statistics is 1.148 (p > 0.05). These results lead to the rejection of H2.

H2: Legal CSR has a positive impact on customers’ commitment. (Rejected)

The beta value of ethical CSR is .209. This value shows that there is a positive relationship between ethical CSR and customer’s commitment. One unit change in ethical CSR is likely to bring .209 unit changes in customer’s commitment in a positive direction. Both variables are directly related here. This relationship is significant here. The value of t-statistics is 2.190 (p < 0.05). These results lead to the acceptance of H3.

H3: Ethical CSR has a positive impact on customers’ commitment. (Accepted)

The beta value of philanthropic CSR is .080. The relationship is positive here but this relationship is insignificant. The value of t-statistics is 1.228 (p > 0.05). These results lead to the rejection of H4.

H4: Philanthropic CSR has a positive impact on customers’ commitment. (Rejected)

Secondly, the regression analysis has been performed by taking the brand equity as dependent variable. The results have been reported from Table 10 to Table 12. Table 10 is the model summary table. The value of multiple R is .519. The value shows the presence of a moderate correlation between the CSR activities and brand equity. The value of R2 here in table 10 is 0.269. This value shows that CSR activities cause a 26.6% variation in brand equity i.e. dependent variable. The value of adjusted R2 is .256. The value of standard error is .6398. This variation in dependent variable is because of some extraneous factors that have not been included the framework of the present study. Thus, 63.98% variation in brand equity is because of extraneous variables that have not been included in the study.

Table 10: Model Summary

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

Durbin-Watson

1

.519a

.269

.256

.63987

1.811

a. Predictors: (Constant), Philanthropic CSR, Ethical CSR, Economic CSR, Legal CSR

b. Dependent Variable: Brand Equity

 

 

Table 11 is ANOVA Table. This table shows the fitness of model.  The null hypothesis is rejected by the results provided in this table. The value of F-statistics here is 20.098 (p < .01). The results reject the null hypothesis stated above and accepts the alternate hypothesis i.e. at least one of the independent variables is associated with the dependent variable. The model fitness is proved through these results and regression analysis is approved by this model fitness.

Table 11: ANOVA

Model

Sum of Squares

df

Mean Square

F

Sig.

1

Regression

32.915

4

8.229

20.098

.000a

Residual

89.257

218

.409

 

 

Total

122.173

222

 

 

 

a. Predictors: (Constant), Philanthropic CSR, Ethical CSR, Economic CSR, Legal CSR

b. Dependent Variable: Brand Equity

Coefficients of regression analysis are shown in Table 12. This table provides the information about the individual relationships of independent variables with dependent variables.

The beta value of the constant is 2.214. Constant value shows the value of dependent variable when all independent variables are equal to zero. This value is significant here as t-statistics is 6.295 (p < 0.01).

The beta value of economic CSR is .545. This shows that there is a positive relationship between economic CSR and brand equity. The beta value shows the slope of the relationship. One unit change in economic CSR is likely to bring a change of .545 units in brand equity. This relationship is significant as shown by the value of t-statistics. The value of t-statistics is 7.455 (p < 0.01). These results stipulate to accept H5

H5: Economic CSR has a positive impact on brand equity. (Accepted)

Table 12: Coefficients of Regression

Model

Unstandardized Coefficients

Standardized Coefficients

t

Sig.

B

Std. Error

Beta

1

(Constant)

2.214

.352

 

6.295

.000

Economic CSR

.545

.073

.485

7.455

.000

Legal CSR

.148

.058

.193

1.580

.081

Ethical CSR

.398

.083

.333

4.780

.000

Philanthropic CSR

.464

.057

.436

5.132

.000

a. Dependent Variable: Brand Equity

 

 

The beta value of legal CSR is .148. This value shows that there is a positive relationship between legal CSR and customer’s CSR. However, this relationship is insignificant here. The value of t-statistics is 1.580 (p > 0.05). These results lead to the rejection of H6.

H6: Legal CSR has a positive impact on customers’ commitment. (Rejected)

The beta value of ethical CSR is .398. This value shows that there is a positive relationship between ethical CSR and brand equity. One unit change in ethical CSR is likely to bring .398 units change in brand equity in a positive direction. Both variables are directly related here. This relationship is significant here. The value of t-statistics is 4.780 (p < 0.01). These results lead to the acceptance of H7.

H7: Ethical CSR has a positive impact on brand equity. (Accepted)

The beta value of philanthropic CSR is .464. This value shows that there is a positive relationship between philanthropic CSR and brand equity. One unit change in philanthropic CSR is likely to bring .464 units change in brand equity in a positive direction. Both variables are directly related here. This relationship is significant here. The value of t-statistics is 5.132 (p < 0.01). These results lead to the acceptance of H8.

H8: Philanthropic CSR has a positive impact on brand Equity. (Rejected)

 

 

5.Findings, Conclusion and Limitations

This chapter provides the important findings of the study in a summarized manner along with conclusion and limitations of the study.

5.1.Findings and Discussion

The study has evaluated the relationship of CSR activities with customer’s commitment and brand equity. The four dimensions of CSR were taken i.e. economic CSR, legal CSR, ethical CSR and philanthropic CSR. The results of the present study reveal that CSR activities have a quite noticeable impact on customers’ commitment and brand equity in the case of TeliaSonera.

The firm’s involvement in economic CSR and ethical CSR practices is likely to increase the commitment of customers. The economic CSR of the company was measured with customer perspective that how much company is trying to facilitate in economic terms. This relationship has proved insignificant. The firm can increase its customer’s commitment by increasing its focus on economic CSR. These results are in line with the previous studies (Drucker, 2006; Barnett, 2007). Moreover, the results of the present study also signifies that the involvement of firm in economic CSR activities increase the brand equity of the firm. The facilitation of customers in economic terms encourages the customer to spread the word in their circles about these activities of the firm (Barnett, 2007). This is likely to increase the brand equity of the firm.

The results of the study reveal that legal CSR activities of the firm are irrelevant to increasing customer’s commitment. Legal CSR activities are those activities that are firm’s legal obligations. The firm is bound to show its compliance with the framework introduced by the regulatory bodies of the regions where firm is operating. The customers are of the view that these activities are being executed in the interest of customer but a firm is obliged to do so. Therefore, the relationship of legal CSR with customer’s commitment is insignificant (De Schutter, 2008). The legal CSR activities of the firm are more internal in nature. These activities are as a result of a linkage being established between regulatory bodies and the company. The customer and market seems least bother about these activities (Carroll & Shabana, 2010). This study proves that there is an insignificant relationship between legal CSR activities and brand equity as well.

Ethical CSR has a significant relationship with customer’s commitment as per the results of the present study. Ethical CSR practices of the firm have been measured in terms of business ethics following in advertising and provision of services to the customer. The customer feel that the firm is showing a compliance with high ethical standards and the violation of ethical issues involved in provision of services to customer is non-prevalent. This increases the confidence of the customer in the company and resultantly they show a high commitment with the company  (Garriga & Melé, 2004). Ethical CSR activities also create a good reputation in the market. The company builds the image of company with high ethical standards. This image is building is crucial in create brand equity in the market (Branco & Rodrigues, 2006).

Philanthropic CSR practices are the discretionary practices performed by the firm for the betterment of the society. These practices are not linked with the services offered by the company. The customer commitment is likely to be affected by the quality of the services provided by the company. The absence of a relationship between the services and philanthropic CSR does not allow establishing a relationship between philanthropic CSR and customer’s commitment (Qu, 2007). Philanthropic activities of the firm portray a rosy image of the company in the society. The people who do not use the services of the company also appraise the efforts made by the company for the development of the society. This appraisal by the society increases the brand equity of the firm (Waheed, 2000; Galbreath, 2010).

5.2.Conclusion

The purpose of this study was to investigate the role of CSR activities of TeliaSonera in creating customer’s commitment and brand equity. The results of the study manifest that three dimensions of CSR activities i.e. economic CSR, ethical CSR and philanthropic CSR are playing a significant role in customer’s commitment and brand equity. However, brand equity is more affected by CSR activities. Philanthropic activities are the major contributor to the creation of brand equity of the firm. However, it is interesting to know that philanthropic activities do not play any significant role in increasing the customer’s commitment. These results shows that although CSR has positive impact on customer’s commitment and brand equity, but CSR activities cannot be taken a primary factor, especially in case of customer commitment. Most of the times, customer decision of keep using the services of a company does not depend on its CSR activities being executed for the betterment of the society. They might be interested in quality and price of the services in order to take their decision for using the services of company for a longer period of time.

The findings of the present study emphasize that firms should get itself engaged in CSR activities to increase customer’s commitment and especially brand equity, but some factors are also required be explored that can play a remarkable role in creating customer’s commitment with the company. This commitment can also be referred to customers’ retention. The company that is successful in retaining the customers for a longer period of time are likely to sustain a competitive advantage in the market. The philanthropic activities should be executed with a good combination of economic and ethical CSR activities for greater benefits.

5.3.Limitations of the Study

The researcher tried his best to explore the relationship between CSR activities and customer’s commitment and brand equity. However, the study has certain limitations that are fairly reported here.

  1. The present study is only confined to the TeliaSonera. The results may not be generalizable to company working in other sectors apart from telecom sector. However, the results are partially generalizable to firms operating in the same sector.
  2. The study took the sample through convenience sampling because of the time and budget constraints. The use of random sampling can increase the reliability of the study.
  3. The researcher did not evaluated the differences that may prevail among different types of customers e.g. individuals and customers.
  4. The study did not evaluate the differences between the genders.

 

 

 

 

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QUESTIONNAIRE

 

Please fill the questionnaire avoiding overly negative or overly positive responses. All the information will be used for research purpose only and no respondent will be identified in his/her individual capacity.

 

Demographics

Gender                        Male                                      Female                        

 

Education: _______________________

 

Age: ­____________________________

 

How long you have been using services of TeliaSonera? _____________________

 

What is the purpose of your usage of services of TeliaSonera?

Business                                Personal                                Other               

 

Please show your level of agreement against each of the statement about TeliaSonera.

SA = Strong Agree; A = Agree; N = Neutral; D = Disagree; SD = Strongly Disagree

 

Economic CSR

 

 

SA

A

N

D

E

1.

TeliaSonera has a proper procedure in place to deal with customers’ complaints.











2.

The company is continually improving the quality of its services for the community.











3.

The company is giving preference to customer satisfaction.











4.

The company is charging reasonably for the offered services.











5.

The company is creating a balance between what is offered and what is charged.











 

Legal CSR

 

 

SA

A

N

D

E

1.

The company is following the legal framework of the land.











2.

The services offered by the company are in compliance with legal standards.











3.

The company is addressing all legal issues in providing services.











4.

The company is addressing all legal issues while advertising its products and services.





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



5.

I did not hear of any legal violation made by the company.











 

 

Ethical CSR

 

 

SA

A

N

D

E

1.

TeliaSonera has a comprehensive code of conduct.











2.

The staffs of company deal the customers in a professional manner.











3.

The company considers the negative impact of its operations on community.











4.

The community is made aware about any negative effects of its operations on community.











5.

The salesperson and staffs provide accurate information about services of company.











6.

The company’s advertisements do not provide any misleading information.











7.

The company has a proper system for reporting any ethical issues to the management.











 

Philanthropic CSR

 

 

SA

A

N

D

E

1.

The company actively contributed towards the well-being of the society.











2.

The company welcomes suggestions by the customers.











3.

The company’s employees actively participate to join community work.











4.

The company is undertaking various initiatives for the betterment of the society.











5.

The company has an active presence in various public projects.











 

Customer Commitment

 

 

SA

A

N

D

E

1.

I consider myself to be loyal with TeliaSonera.











2.

I always recommend TeliaSonera to my friends and family.











3.

I do not have any intention to switch to another company.











4.

I would like to keep using TeliaSonera despite any other company offer same services.











5.

I am using the services for a long period and intend to do so in future.











6.

I will remain using the services of TeliaSonera even if a company offers services with lower price.











 

Brand Equity

 

 

SA

A

N

D

E

1.

When I think about the telecom services, TeliaSonera is the first that comes to my mind











2.

The services provided by TeliaSonera are unique as compared to the competitors in the market.











3.

I can easily recall the characteristics of services provided by TeliaSonera.











4.

I can easily recall the symbol of TeliaSonera.











5.

TeliaSonera has a strong identification in the market.











6.

The services provided by TeliaSonera are best in the market.











7.

I always trust on the services provided by TeliaSonera.











 

Researcher is thankful for your valuable contribution.

 

 


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