The Impact of Corporate Social Responsibility on Customer Satisfaction in Telecom Industry of Bangladesh


The concept of corporate social responsibility (CSR) has been predominantly treated as an issue concerning corporation management, and the majority of studies have been focusing on the management perspective (Jamali 2008). Nevertheless, CSR can be useful in contributing to building a stronger reputation, strengthening the long-term shareholder value, boosting performance, and facilitating social change within organisations (Chung et al. 2015). If to apply a similar logic, it can be asserted that CSR can contribute to increasing customer satisfaction and customer loyalty as these two factors directly relate to either good or bad organisational performance.

A broad investigation of the impact of CSR on brand loyalty and customer satisfaction is needed (Moisescu 2015), particularly in the context of the South Asian environment (Bangladesh) where businesses have peculiar ways of operation if to compare them to the West. The telecom industry of Bangladesh is of particular interest to the study since it is always evolving and growing even today, with telecom operators expanding to new territories (‘How the telecom industry is evolving in Bangladesh’ 2017). Thus, the goal of the current research is to explore the relationship between customers’ perception of CSR and their satisfaction and loyalty to telecom companies within the particular economic and socio-cultural context in the expanding market of Bangladesh in South Asia.

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Background/Literature Review

The definition of the term ‘corporate social responsibility’ is still being disputed in the scientific literature (Freeman et al. 2010). However, for the sake of current research, the following definition will be applied: CSR is the “commitment of business to contribute to sustainable economic development working with employees, their families, the local community, and society to improve their quality of life, in ways that are both good for business and good for development” (Carroll & Shabana 2010, p. 1). Customers usually evaluate companies as well as the products and services they provide in terms of CSR, so positive associations can boost company evaluations, as found by Biehal and Sheinin (2007).

Findings of multiple studies that examined the impact of CSR on customers’ loyalty and satisfaction suggest that strong connections exist. According to Kim and Kim (2016) that studied CSR in the context of the hospitality industry, corporate social responsibility can influence customer assessments through improving businesses’ images and trustworthiness as well as boosting customer satisfaction. Choi and La (2013) found that CSR initiatives should be associated with persistent long-term efforts for building consumers’ trust. Moreover, Walsh et al. (2009) concluded that there is a strong link between perceived customer loyalty and corporate social responsibility. Nevertheless, reaching a high level of reputation can be associated with both long-term and short-term cost outlays, as Su, Swanson, and Chen (2015) suggested.

However, it is important to mention that despite the fact that CSR initiatives can produce high levels of customer satisfaction and trust, it is still unclear whether such benefits contribute to loyalty since many consumers are reluctant to trade off CSR for core attributes, as stated by Kim and Kim (2016). Nevertheless, the concept of trust is essential to study in the context of corporate social responsibility; Hustvedt and Kang (2014) emphasized the role of trust in boosting customers’ perceptions of transparency in order to have a clear understanding of customer behavior related to loyalty. Similarly, according to Becker-Olsen, Cudmore, and Hill (2006), CSR-based promotions can be successful when the trust of customers for a company is high as well as when there is an interest in a good cause supported by the promotion. Customer loyalty is regarded an essential component for the growth and survival of a company, developing a solid customer base that has not only become the ultimate marketing goal (Mandhachitara & Poolthong 2011) but also is an important basis for creating and sustaining a company’s competitive advantage (Chung et al. 2015).

Overall, the majority of studies found that companies that invest efforts into effective CSR programs tend to do better in terms of customer loyalty and satisfaction (Michel & Buler 2016). For instance, Luo and Bhattacharya (2006), firms that have little innovativeness capability are at risk of reducing customer satisfaction and thus harming market value.

Rationale

The objective of the current research is to examine the effect of consumers’ perceptions of CSR on their satisfaction and loyalty towards telecom businesses within the particular socio-cultural and economic context of the ever-expanding market of Bangladesh. Since the concept of corporate social responsibility is now encompassing a variety of organisational areas and aspects (van den Berg & Lidfors 2012), CSR activities can take different forms depending on the nature of each organisation. The specific questions that the current research will aim to answer are associated with the concepts of loyalty, customer satisfaction, and specific efforts of companies to promote their corporate social responsibility:

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  • How do customers perceive corporate social responsibility?
  • How can companies affect trust and customer satisfaction?
  • What characteristics of the telecom industry in Bangladesh call for specific corporate social responsibility efforts?
  • What is the impact of corporate social responsibility on loyalty and customer satisfaction in the telecom industry of Bangladesh?

Method and Design

A similar study to the current one was conducted by Salmones de los, Crespo, and Bosque del (2005) that examined the impact of perceived CSR (with a consideration of legal, economic, legal, and social components) on the overall evaluation of brand loyalty by conducting a questionnaire with more than six hundred users of Spanish mobile telecommunication services.

To achieve the identified objective of the current research, conducting a survey with a large sample of users of telecommunication services is the most appropriate method. The questionnaire will be originally developed in English and then translated into Bengali to avoid any misunderstandings with those representatives of the sample who do not speak fluent English. For the data collection, a web-based survey through social networks and e-mail will be conducted in Dhaka, Rangpur, Barguna, Bandarban, Comilla, and other large cities around Bangladesh. Participants will be asked to respond to survey questions based on their recent experiences interacting with telecommunication companies. It is expected to collect approximately 300 helpful responses out of 500 participants. All items in questionnaires will be assigned a measure from the 7-point Likert scale (e.g. 1 – strongly disagree and 7 – strongly agree) (Rickards, Magee & Artino 2012). On the basis of the scales, the researcher will come up with the generalised answers to the survey questions that directly relate to the research questions described in the rationale section of the proposal.

Significance

Despite the fact that CSR was studied in a variety of contexts, the current research can make a significant contribution to the exploration of the socio-cultural and economic environment of Bangladesh. Business opportunities for the Bangladesh telecom sector are vast (BMI Research 2013); therefore, companies are interested in investing more efforts into developing a positive brand image that will gain trust from customers and ensure their satisfaction (Fierro, Polo & Olivan 2014).

The current research is expected to discover the specifics of the telecommunication industry of Bangladesh and determine whether companies in the region can influence their customers by implementing unique social responsibility programs (Harnrungchalotorn & Phayonlerd 2010). The results to be obtained in the course of the study will have managerial implications relevant for both perspectives of CSR implementation and adoption, as well as from the perspective of marketing communication (Filho et al. 2010). If to take into consideration the perceptions of customers regarding their experience with different telecommunication service companies of Bangladesh, it is expected that the responses of participants will point to the positive correlation between brand loyalty and CSE (Donnelly 2009).

Corporate social responsibility is an important component that can show how organisations can contribute to the improvement of the society. As such contributions can range from money donations to the implementation of environmentally-friendly policies (‘What is corporate social responsibility’ n.d.), it is crucial to investigate customers’ experiences regarding CSR so that companies know how to gain their trust, boost engagement, and ensure satisfaction (Korkchi & Rombaut 2007). According to the article by Forbes Contributors (2012), corporate social responsibility is not something that will solve every problem companies have with customers; however, there are many reasons why all companies should embrace CSR: customer engagement, long-term thinking, brand differentiation, cost savings, and innovation. Therefore, it is expected that the current research will help companies in the modern telecom industry of Bangladesh understand the benefits of CSR on the basis of customers’ experiences.

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Reference

Becker-Olsen, K, Cudmore, B & Hill, R 2006, ‘The impact of perceived corporate social responsibility on consumer behavior’, Journal of Business Research, vol. 59, no. 1, pp. 46-53.

Biehal, G & Sheinin, D 2007, ‘The influence of corporate messages on the product portfolio’, Journal of Marketing, vol. 71, no. 2, pp. 12-25.

BMI Research 2013, Bangladesh telecommunications report, Web.

Carroll, A & Shabana, K 2010, ‘The business case for corporate social responsibility: A review of concepts, research and practice’, International Journal of Management Reviews, vol. 12, no. 1, pp. 85-105.

Choi, B & La, S 2013, ‘The impact of corporate social responsibility (CSR) and customer trust on the restoration of loyalty after service failure and recovery’, J Serv Mark Marketing, vol. 27, no. 3, pp. 223-233.

Chung, K-H, Yu, J-E, Choi, M-G & Shin, J-I 2015, ‘The effects of CSR on customer satisfaction and loyalty in China: the moderating role of corporate image’, Journal of Economics, Business, and Management, vol. 3, no. 5, pp. 542-547.

Donnelly, M 2009, Building customer loyalty: A customer experience based approach in a tourism context, Web.

Fierro, J, Polo, I & Olivan, J 2014, ‘From dissatisfied customers to evangelists of the firm: A study of the Spanish mobile service sector’, Business Research Quarterly, vol. 17, no. 3, pp. 191-204.

Filho, J, Wanderley, L, Gomez, C & Farache, F 2010, ‘Strategic corporate social responsibility management for competitive advantage’, Brazilian Administration Review, vol. 7, no. 3, pp. 294-309.

Forbes Contributors 2012, Six reasons companies should embrace SCR, Web.

Freeman, R, Harrison, J, Wicks, A, Parmar, B, & De Colle, S 2010, Stakeholder theory: The state of the art, Cambridge University Press, Cambridge

Harnrungchalotorn, S & Phayonlerd, Y 2010, Starbucks with corporate social responsibility, Web.

How the telecom industry is evolving in Bangladesh 2017, Web.

Hustvedt, G & Kang, J 2014, ‘Consumer perceptions of transparency: A scale development and validation’, Family & Consumer Sciences, vol. 41, no. 3, pp. 299-313.

Jamali, D 2008, ‘A stakeholder approach to corporate social responsibility: A fresh perspective into theory and practice’, Journal of Business Ethics, vol. 82, pp. 213-231.

Kim, S-B & Kim, D-Y 2016, ‘The impacts of corporate social responsibility, service quality, and transparency on relationship quality and customer loyalty in the hotel industry’, Asian Journal of Sustainability and Social Responsibility, vol. 4, pp. 1-17.

Korkchi, S & Rombaut, A 2007, Corporate social responsibility, Web.

Luo, X & Bhattacharya, C 2006, ‘Corporate social responsibility, customer satisfaction, and market value’, Journal of Marketing, vol. 7, no. 4, pp. 1-18.

Mandhachitara, R & Poolthong, Y 2011, ‘A model of customer loyalty and corporate social responsibility’, Journal of Services Marketing, vol. 25, no. 2, pp. 122-133.

Michel, N & Buler, S 2016, ‘Maximizing the benefits of corporate social responsibility. How companies can derive benefits from corporate social responsibility’, European Scientific Journal, vol. 4, pp. 499-506.

Moisescu, O 2015, ‘The impact of customers’ perception of CSR on corporate brand loyalty: The case of the Romanian telecom industry’, Central European Business Review, vol. 4, no. 2, pp. 21-30.

Rickards, G, Magee, C & Artino, A 2012, ‘You can’t fix by analysis what you’ve spoiled by design: developing survey instruments and collecting validity evidence’, J Grad Med Educ, vol. 4, no. 4, pp. 407-410.

Salmones de los, M, Crespo, A & Bosque del, I 2005, ‘Influence of corporate social responsibility on loyalty and valuation of services’, Journal of Business Ethics, vol. 61, no. 4, pp. 369-385.

Su, L, Swanson, R & Chen, X 2015, ‘Social responsibility and reputation influence on the intentions of Chinese Huitang Village tourists: Mediating effects of satisfaction with lodging providers’, Int J Contemp Hosp M Journal, vol. 27, no. 8, pp. 1750-1771.

van den Berg, H & Lidfors, L 2012, The effect of perceived CSR on customer loyalty, Web.

Walsh, G, Mitchell V, Jackson P & Beatty, S 2009, ‘Examining the antecedents and consequences of corporate reputation: A customer perspective’, British Journal of Management, vol. 20, no. 2, pp. 187-203.

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