UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Tran Quoc Trung

CORPORATE SOCIAL RESPONSIBILITY
PRACTICES AND CUSTOMER BRAND
ENGAGEMENT: EVIDENCE FROM
VIETNAM

MASTER OF BUSINESS (Honours)

Ho Chi Minh City –2015


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Tran Quoc Trung

CORPORATE SOCIAL RESPONSIBILITY
PRACTICES AND CUSTOMER BRAND
ENGAGEMENT: EVIDENCE FROM
VIETNAM

ID: 22130089
MASTER OF BUSINESS (Honours)
SUPERVISOR: LE NGUYEN HAU

Ho Chi Minh City – 2015


ACKNOWLEDGEMENT
Firstly, I would like to express my deepest gratitude to my supervisor Assoc. Prof. Le Nguyen
Hau for his professional guidance, valuable comments, and continuous encouragement as well
as helpful support that made this thesis possible.
I am sincerely thankful to proposal examination committee. Their valuable suggestions
contributed significantly to this study and supported me in completing with best results.
Special thanks to all of my classmate in MBUS 4 class, who gave me useful support for
conducting this study.
I also would like to express my grateful thanks to my friends and people in Vietnam who
participated in filling the questionnaires for providing the valuable information to this study.
Personally and finally, the deepest and sincerest gratitude go to my beloved family for the
boundless support, abundant love and encouragement throughout my period of study.
Therefore, I devote this work as a gift to them all.


ABSTRACT
In the Vietnam context after Doimoi, Vietnam is one of the transition economic nations
strongly affected by global market. With expectation, this research explores the effect of
customer perception of a firm’s corporate social responsibility on customer brand engagement
through a survey of 226 people who live in Ho Chi Minh City. The collected data was
analyzed and evaluated by SPSS program with analysis of reliability, factor analysis, and
multiple regression analysis. Current study finds out that economic, legal, ethical, and
philanthropy CSR perception have significant impact on customer brand engagement.
Generally, this study contributes ideas about CSR to brand owners as well as managers.
Customer also identify more clearly about CSR practices and reorient their chosen. These
finding suggest that the brand owners, managers should carefully consider the ethical
practices, then philanthropy, economic and legal practices in order to engage more customer.

Besides, the managers should state out their practices, which enhance perception of customer
about their practices.
Key words: economic CSR perception, legal CSR perception, ethical CSR perception,
philanthropy CSR perception, customer brand engagement.


Contents
Abbreviation .........................................................................................................................1
List of Figure ........................................................................................................................1
List of table ...........................................................................................................................1
CHAPTER 1: INTRODUCTION ............................................................................................1
1.1 Research background .....................................................................................................1
1.2 Research problem ...........................................................................................................2
1.3 Research gap...................................................................................................................3
1.4 Research objectives ........................................................................................................4
1.5 Significance of study ......................................................................................................5
1.6 Research scope and methodology ..................................................................................5
1.7 Research structure ..........................................................................................................5
CHAPTER 2: LITERATURE REVIEW .................................................................................7
2.1 Customer engagement (CE) ...........................................................................................7
2.2 The concept of corporate social responsibility (CSR) ...................................................9
2.3 Corporate social responsibility (CSR) theories ............................................................10
2.3.1 Stakeholder theory.................................................................................................10
2.3.2 Caroll’s CSR conceptualization-Carroll’s CSR pyramid ......................................11
2.4 Research framework .....................................................................................................12
2.5 Research Model ............................................................................................................15
CHAPTER 3: METHODOLOGY .........................................................................................17
3.1 Research design ............................................................................................................17
3.1.1 Research process ...................................................................................................17
3.1.2 Qualitative research ...............................................................................................19



3.1.3 Quantitative research .............................................................................................19
3.2 Measurement scale .......................................................................................................19
3.3 Research sample ...........................................................................................................21
3.4 Data collection ..............................................................................................................22
3.5 Data analysis method ...................................................................................................23
3.5.1 Descriptive statistic ...............................................................................................23
3.5.2 Cronbach’s Alpha ..................................................................................................23
3.5.3 Exploratory Factor Analysis (EFA) ......................................................................24
3.5.4 Multiple Regression Analysis ...............................................................................25
CHAPTER 4: DATA ANALYSIS .........................................................................................27
4.1 Sample description .......................................................................................................27
4.2 The reliability analysis: Cronbach’s Alpha test ...........................................................28
4.3 Exploratory Factor Analysis (EFA) for measurement scale ........................................29
4.3.1 Independent factors: CSR perceptions ..................................................................30
4.3.2 Dependent factor: Customer brand engagement ...................................................32
4.3.3 Validity analysis ....................................................................................................35
4.4 Multiple regression analysis: testing hypothesis ..........................................................36
4.4.1 Assumption testing ................................................................................................36
4.4.2 Hypothesis testing: relationship between independent variables and dependent
variable. ..........................................................................................................................38
4.5 Discussions on the results ............................................................................................40
CHAPTER 5: CONCLUSIONS, IMPLICATIONS AND LIMITATIONS ..........................46
5.1 Conclusion ....................................................................................................................46
5.2 Managerial implication ................................................................................................47


5.3 Limitation and further research ....................................................................................49
References ..............................................................................................................................51

Appendix 1. Guidelines for In-depth Interview Respondents’ information ..........................63
Appendix 2: English version of Questionnaire Survey. .........................................................65
Appendix 3. Vietnamese version of Questionnaire Survey ...................................................69
Appendix 4: Brand Frequency ...............................................................................................73
Appendix 5: Charts of multiple regression analysis ..............................................................74
Appendix 6: Rotated Component Matrix before removing items ..........................................75


Abbreviation

i

CSR

Corporate social responsibility

CE

Customer engagement

ACCA

The Association of Chartered Certified Accountants

CIMA

The Chartered Institute of Management Accountants

CIM


Canadian Investment Manager

WTO

World Trade Organization

TNCs

Transnational corporations

3MCPD

3-chloropropane-1, 2-diol

WBCSD

World Business Council for Sustainable Development

CSP

Corporate social performance


List of Figure

Figure 1: The pyramid of Corporate Social Responsibility ………………………….........12
Figure 2: Concept model……………………………………………………………...…...15
Figure 3: Research process………………………………………………………………...18
Figure 4: Histogram of Customer Brand Engagement ……………………………………74
Figure 5: Normal P-P plot of Customer Brand Engagement ……………………………...74

Figure 6: Scatter plot of Customer Brand Engagement …………………………………...74

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List of table

Table 3.1 Measurement scale …………………………………………………………….. 20
Table 4.1 Sample Characteristic. ………………...………………………………………..27
Table 4.2 Result of Cronbach’s Alpha …………………………………………………....28
Table 4.3 KMO and Bartlett's Test………………………………………………………..30
Table 4.4 Total Variance Explained ……………………………………………………...30
Table 4.5 Rotated Component Matrix. …………………………………………………...31
Table 4.6 KMO and Bartlett's Test ……………………………………………………….32
Table 4.7 Total Variance Explained. ……………………………………………………..32
Table 4.8 Component Matrix ………….………………………………………………….32
Table 4.9 Cronbach’s Alpha after reducing items ………………………………….…….34
Table 4.10 Correlation Matrix ………………………………………………………..…...35
Table 4.11 Coefficients Matrix. …………………………………………………………...37
Table 4.12 Model Summary ………………………………………………………………38
Table 4.13 ANOVA. ………………………………………………………………………38
Table 4.14 Summary of hypotheses testing result. ………………………………………..40
Table 6.1 Rotated Component Matrix ……………………………………………………..75
Table 6.2 Reliability Statistic ……………………………………………………………...75

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CHAPTER 1: INTRODUCTION
1.1 Research background

Corporate social responsibility (CSR) has received increasing attention by many
executives and researchers throughout the world, especially in recent decades. For example,
in 2011, the survey of KPMG international corporate about CSR practices in business in the
world showed that there were 3400 companies in 34 countries consider CSR as mainstream
in businesses, this figures in 2013 were 4100 companies in 41 countries (KPMG, 2013). In
addition, many professional bodies such as the Association of Chartered Certified
Accountants (ACCA), the Chartered Institute of Management Accountants (CIMA), the
Canadian Investment Manager (CIM) and universities have been reinforcing themselves by
identifying the role of CSR in sustainable business (Hassan, Nareeman & Pauline, 2013).
Carroll (1991) defines the CSR as the social obligations to many stakeholders, environment
while making profits for shareholders. CSR is the necessities that utilizing whole resources
of business in bring the harmony to the society and leading sustainability (Chung, Yu, Choi
& Shin, 2015). Cardebat and Sirven (2010) also argue that CSR activities help firms
improving their effectiveness and profits in current situation and in the future. Many
researchers have debated about the role of CSR, as declaration of Luetkenhorst (2004) CSR
plays a role that push corporation from a state of mere compliance to a mode of engagement,
from harm minimization to value creation. The resources of world recently are scarcer and
more dwindling, CSR is therefore founded on a stronger position in business activity as an
active partner.
CSR is a worldwide issue across all over the world and it has been observed in many
developed and developing countries, Vietnam with open economic conditions has also faced
with this impact. In Vietnam, the notion of CSR gained it momentum over past few years.
From Doi Moi reforms (economic renovation) in 1986 and open-door policy, Vietnam
government admitted and encouraged the privately-owned enterprises besides state-owned
bodies that was an initial mark for dynamic transition with the aim for better integration into
the global economy. With this shift, Vietnam market has been predominantly pushed by
international and transitional factors. In addition, joining the World Trade Organization
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(WTO) in 2007 was the further step in this direction that made more efforts in following codes
of conduct of global. Accompanying with the changes of economy is the popularity of CSR
which was spread early in Vietnam by Western transnational corporations (TNCs) (Debroux,
as cited in Hamm, 2012), those forces of economy bring the pressure not only to the Vietnam
government for setting up Vietnam Agenda 21 as a CSR-related sustainability strategy that
officially signed in 2004 for serious consideration of government about sustainable
development in Vietnam, but also to business to make more adaptation to compete with global
market.
1.2 Research problem
In Vietnam, the remarkable economic development recently has promoted the
integration of the Vietnam’s business into the global market deeply. With this, their brand
plays an important role for positioning the market. Contrary to the past, the development of
information age has supported customers, especially in connecting variety of information,
CSR is not excluded. Besides, customers have more opportunities for choosing brands from
numerous objectives. Recently, CSR become the new factor influence on their critical
decision making (Pham, 2011). For example, nearly 73 percentage of Vietnamese customers
willing pay more money for brands relating to CSR and they also most interest about CSR
when compare to the world (Nielsen, 2014). On the other hand, along with the open-door and
integration deeply, it is required that brands need innovating for engaging the belief of
customer. Brand managers are changing to adopt CSR for connecting more customers. Many
brand managers are striving to meet customer need by their best effort, not only the quality
of product and service, but also the responsibility to society. For example, the corporation
groups received the award Giai Thuong Sao Vang Dat Viet 2015 whose activities all relating
to CSR and the top 10 enterprises received CSR award are almost small and medium
enterprises (Lê Mỹ, 2015). However, CSR practices are not considered completely in
Vietnam. Pham suggests that there are companies consider CSR is only charity more than
real need of them. The knowledge of CSR is incomprehensive (Luu, 2011), most of
companies do not have right direction about CSR and its role as well (Central Institute for

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Economic Management, 2014). In addition, many large groups consider CSR activities should
begin from empathy to the society (Kim Yến, 2015). Besides, Pham states that the Vietnamese
customer awareness about CSR information is strong, but they do not have clear attitude.
There are customers just think that companies should have commitments to them and
community at large, whatever it is (Bui, 2010). Majority of them have very limited
information about CSR and just focus on price (Central Institute for Economic Management,
2014). Therefore, the practice of CSR by business and the perception of Vietnamese
customers about CSR are fairly ambiguous. Much worse, recently many issues occur that
destroy the belief of customers about CSR practices of companies such as: the violation of
environmental standards by Taiwanese food manufacturer, Vedan, who was accused of
destroying the Thi Vai Rivers for about 14 years; soy sauce 3MCPD; melamine-tainted milk;
petrol station fraud; etc... These things create the distance between customers and efforts of
companies to their brand. Hence, CSR practices has not yet contributed effectively to
relationship of customer and brands in Vietnam situation.
1.3 Research gap
Recently, some researchers propose that CSR concept lets the executives define the
social obligations and build trusting relationship according to their strategy (Kim, Hur &
Woo, 2014). Against this backdrop, the concept has been focusing on many aspects of
stakeholders such as owner’s wealth (Lee, Seo & Sharma, 2013), customer behavior (Nehme,
Charbel & Aline, 2013), employee attitude (Glavas & Kelley, 2014) and even financial
performance (Waworuntu, Wantah & Rusmanto, 2014), etc. Among studies on customer
behaviors, the previous researchers emphasize the importance of CSR toward engagement of
customer to brand, meaning that they have specific emotion and consideration to a certain
brand (Goldsmith & Goldsmith, 2012). According to Australian Consumer Association (as
cited in McDonald & Rundle-Thiele, 2008), the CSR activities without customer perception
that make the customers have highly switch brand behavior. These studies indicate CSR
perception has a positive impact on customer engagement to public listed brands which have
more confirmative reports (Mattera, Baena & Cervino, 2012). Similarly, in the study by

Popescu (2012) indicates that CSR reputation is constantly making efforts to enforcing brand
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trust and reputation. Therefore, customer perception to CSR is very important in customer’s
brand engagement because it decides the customer favor to a specific brand.
Based on statement of So, King and Sparks (2014), they believe that the
conceptualization of customer engagement covers both psychological and behavioral
dimensions including components, namely, enthusiasm which means strong level of
excitement and interest, attention which is conscious or unconscious, absorption which means
pleasant state, interaction which means sharing and exchanging, and identification which
means self-image overlap the brand’s image. In Vietnam, according to my best effort for
finding the literature about customer engagement, the application of customer engagement
concept is still new, there is few study relating to comprehensive knowledge of customer
brand engagement. The previous researches that just only focus on aspects of customer
behavioral and psychological separately and independently such as satisfaction, loyalty…
(Nguyen & Pan, 2015; Nguyen, 2015). Although many studies through the world have
investigated the customer brand engagement, particularly in the relationship between
customer’s perceptions to CSR and customer engagement, the application of CSR for
engaging customers in Vietnam is still limited. Therefore, there is remain a question for
relationship between customer perception to CSR and their brand engagement. Accordingly,
this study attempts to investigate the impact of customer’ CSR perception on customer brand
engagement in Vietnam market by investigating the relationship between the four dimensions
of CSR as developed by Carroll (1991) and customer brand engagement.
1.4 Research objectives
The main objective of this research is to investigate the relationship between
Vietnamese customer’s CSR perception and their brand engagement of many FMCG brands
in Ho Chi Minh City (HCMC).
Thus, this research is to answer two questions:
 Is there any relation between Vietnamese customer’s CSR perception and their brand

engagement?
 How customer’s CSR perception affects on their brand engagement?
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1.5 Significance of study
After this study, it is hopeful that the study founding will enable brand owners and
managers to develop suitable strategies to harmonize the social beneficiary and company and
to develop sustainable prospect for their operation. The findings of the research will also help
customers to have an overview of perceived CSR when they attend the purchasing process.
1.6 Research scope and methodology
The research was conducted on consumers in Ho Chi Minh City which is one of largest city
in Vietnam. It embeds all trading activities and gathers people from different geography area
and demographic characteristic in our country.
Because the CSR concept is still new in Vietnam. Therefore, this research just focuses on
general perception of customer about CSR practices impacting on their engagement.
Data analysis tool SPSS is used to process the collected data. Afterward, SPSS is used to test
the scale reliability (Cronbach’s Alpha), then factor analysis to determine which set of items
are answered similarly by the respondents. Finally, Multiple Regression is used to check the
relationship between independent variables and dependent variable.
1.7 Research structure
Chapter 1: Introduction
This chapter presents the research background of the study, research problems, research gap,
research objectives, the significance of the study, research scopes and methodology, and the
research structure.
Chapter 2: Literature review and hypotheses
In this chapter, the fundamental theories and definition for each mentioned concept are
presented. The conceptual model and hypotheses of the study are also built.
Chapter 3: Research Methodology
This chapter mentions about the research design, measurement scale, research sample, data

collection and data analysis method.

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Chapter 4: Data analysis and data results
For this chapter, the characteristics of collected data is summarized and result of the research
is presented after analyzing collected data. From that result, study shows discussion for the
research hypotheses proposed in Chapter 2.
Chapter 5: Conclusions, implications and limitations
This chapter illustrates the main results of the research, the contribution of the study in theory
and practice as well as the limitations of the study for future research.

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CHAPTER 2: LITERATURE REVIEW
This chapter present the theoretical concepts and conceptual framework as being the
platform for research. Hypotheses according to the conceptual framework selected for this
research are discussed and developed for testing.
2.1 Customer engagement (CE)
Engagement is early primarily studied in psychology (Morgan, Beatty & Vivek, 2012).
Kahn (1990) is the pioneer to use the concept of engagement to workshop that referred to
employee engagement. He suggests that people have multiple awareness in work roles that
influence engagement. From then, there is an evolution of concept among practitioners as
well as academics. The term “customer engagement” has been paying more attention since
2005 (Brodie, Hollebeek, Juríc & Ilíc, 2011). So et al. (2014) state that from the psychological
aspects, the fundamental of the employee engagement construct may provide a base for
customer engagement which means that engagement is “a positive, fulfilling, work-related
state of mind that is characterized by vigor, dedication, absorption” (Schaufeli, Salanova

González-Romá, & Bakker, 2002, p.74). In contrast, from marketing perspective, Marketing
Science Institute (2010) suggests CE as “customer’s behavioral manifestation toward a brand
or firm beyond purchase, which results from motivational drivers” (pp. 4). Such focus is in
behavior aspect and also being proved by other practitioners (Shevlin, 2007) and academics
(Bijmolt et al., 2010). Bijmolt et al. believe that these perspective more traditional and wellestablished with the key behavioral manifestations including word-of-mouth, co-creation and
complaining behavior. However, Patterson, Yu, and Ruyter (as cited in So et al., 2014) argue
that employee engagement is applicable to customer engagement but not enough. Focus of
customer engagement differs and goes beyond employee engagement in workplace, reflecting
both psychological and behavioral aspects (So et al., 2014).
In respect to the conceptualization of CE, Brodie et al. (2011) consider CE in both the
psychological aspects of engagement as well as behavioral participations. From this
perspective, the definition that is followed:

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Customer engagement (CE) is a psychological state that occurs by virtue of interactive,
co-creative customer experiences with a focal agent/object (e.g., a brand) in focal
service relationships (pp. 260).
While Brodie et al. (2011) definition concentrates CE in both psychological and
behavioral aspects, it seems that there remains another viewpoint in respect to the
conceptualization of the concept such as Bijmolt et al. (2010) respect to CE as a behavioral
construct that resulting from various motivational drivers.
The evidence for support the application of a multidimensional approach is
conceptualization of composite loyalty (e.g., behavioral and attitudinal) (So et al., 2014).
Jacoby and Chestnut (1978) suggest that composite loyalty is measured by behaviors alone
may lack a conceptual basic and insight into repeat behavior. The conceptualization of Brodie
et al. (2011) that covers both psychological and behavioral dimensions which are presented
fully complexity of CE and guarantee for truly engaged customers (So et al., 2014). Moreover,
Banyte and Dovaliene (2014) agree that conceptualization of Brodie et al. about CE has main

role in reflecting the interactive experience of customer co-creation in value creating in
marketing relationship.
In Vietnam situation, the term of Customer Engagement has not been observed much
because of new emergence though many previous studies about behavior aspect of customer
look at the loyalty, satisfaction and intention, etc. (Vu, 2012; Wang & Pho, 2009). However,
studies all over the world have proved that CE is a strategic issue supports for entity’s
profitability (The economic intelligent unit, 2007), superior competitive advantages (Sadley,
as cited in Brodie et al., 2011) and enable customers to continue on interactions rather than
make transactions as well as co-create value (Sashi, 2012). The conceptualization of Brodie
et al. (2011) is examined validity and reliability for customer engagement toward brand by
study of So et al. (2014). They also believe that a comprehensive understanding of CE concept
should include components, namely, enthusiasm which means strong level of excitement and
interest, attention which is conscious or unconscious, absorption which means pleasant state,
interaction which means sharing and exchanging, and identification which means self-image

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overlap the brand’s image. All these components represented for both psychological and
behavior dimension and these components also the base for this current study. Hence, for
examining the level of Vietnamese customer engagement toward specific brand, current study
uses the scale that is developed by So et al.
2.2 The concept of corporate social responsibility (CSR)
The concept of Corporate Social Responsibility is an achievement of 20th century. It
has diverse history of evolution and its assumption was early defined that businesses have an
obligation towards citizens and social responsibility during 50’s (Carroll, 1991). Despite nondevelopment of CSR literature in period 60’s and 70’s (Hanzaee & Rahpeima, 2013), Carroll
believes that Davis (1973) was among the most famous authors in this era as he had significant
contribution to concept of CSR which bring long-term advantages to a firm (Davis, 1973). In
period 80’s, a notion of continuous, long-term process was seen as the new fabric of CSR
concept (Freeman, 1984) and it then expands to a multidimensional perspective because of

globalization. In last decade, the international consideration has occurred in CSR which all
aspects such as human right, environment and social at global level (Hanzaee & Rahpeima,
2013).
Despite lively evolution of CSR concept with many comprehensive and integrated
definition, there is no consensus definition about CSR. Orlitzky (2005) believes that plurality
of the definitions causes ambiguous and ill-defined meaning of them. For example, Hopkins
(2007) defines CSR is concerned with “treating the stakeholders of the firm ethically or in a
responsible manner. ‘Ethically or responsible’ means treating stakeholders in a manner
deemed acceptable in civilized societies” (pp. 15-16). From the World Business Council for
Sustainable Development Center (2015) CSR is defined as “the commitment of business to
contribute to sustainable economic development, working with employees, their families, the
local community and society at large to improve their quality of life”. More generally, CSR
is a construct of policies, practices, and program that are integrated throughout business
operations and strategy decision-making processes, and for the purpose that ensures company
maximizes the positive impacts of its operations on society (Business for Social

9|Page


Responsibility as cited in Jamali, Safieddine & Rabbath, 2008). Despite many definition, the
mainly CSR is that corporate should decide for better participation with society. Therefore,
the consideration of CSR concept should be a solution for phenomenal gaps (Van, 2001).
Jamali et al. (2008) believes that the most common conceptualization of CSR that is of
Carroll (1991) which she defines that is the social obligation towards wider stakeholders,
environment white making profit for the shareholders. Xuan and Gregory (2011) suggest that
Carroll concept have a comprehensiveness of definition that integrating all existing aspects
and can be explained by all approaches of defining CSR. Many studies have used the concept
of Carroll as a base for observation throughout the world (Jamali et al., 2008; Hanzaee &
Rahpeima, 2013; Hassan et al., 2013). Similarly, the concept of Carroll is also examined the
validity and reliability in developing countries (Jamali & Mirshak, 2007; Hanzaee &

Rahpeima, 2013; Hassan et al., 2013) etc. In Vietnam, the CSR concept which is developed
by Carroll is used in many studies to investigate perception of corporate social responsibility
in Vietnam (Luu, 2012; Lai, Le & Truong, 2013). Moreover, Lai et al. states that CSR concept
of Carroll is most widely-accepted and used in academic and practical studies in Vietnam
even though there is remain a continuing controversy of how defining CSR. Thereforce, this
study applies framework of Carroll and the CSR values scale developed by previous studies
based on framework of Carroll.
2.3 Corporate social responsibility (CSR) theories
2.3.1 Stakeholder theory
Over decade, many researchers have observed the relationship between society and
business in context of corporate social responsibility (CSR) based on concept of Carroll
(1991) and stakeholder theory (Freeman, 1984). Beside, corporations also promote socially
responsible actions and policies to effectively respond to stakeholder demands. According to
Donaldson and Preston (1995) stakeholders including investors, political groups, customers,
communities, employees, trade associations, suppliers, government. Against this backdrop,
regarding to business responsibilities to society, Brown and Forster (2013) debate that
sometimes CSR and stakeholder theory are not agreed as to both nature and limit, and they

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are delineated by differences in difference objectives. However, many studies believe that
stakeholder is an important influencing factor that affects on corporate decision and strategy,
also a motivation for CSR (Lee et al., 2013; Nehme et al., 2013; Glavas & Kelley, 2014).
Moreover, Wood and Jones (1995) argue that there is a different influence of CSR on
performance because the expectation and evaluation of CSR differ from one stakeholder
group to another. Therefore, in this study, customer as an importance stakeholder will be
observed for more evidence.
2.3.2 Caroll’s CSR Conceptualization-Carroll’s CSR pyramid
In 1979, Carroll proposed a four-part definition of CSR that is embedded in concept of

corporate social performance (CSP), she believed that various responsibilities that society
expects businesses to assume were categorized into four-part framework including economic,
legal, ethical and discretionary. These four categories always simultaneously exist in
organization and not mutually exclusive. However, these four classes are simply that activities
can be categorized as primarily one or another of these four kinds. Business from this
perspective is the basic economic unit in society that Carroll suggested that during the history
of business is an early concentrate on economic aspect and then the legal aspect and later for
ethical and discretionary consideration.
In 1991, Carroll revised his four-part definition of CSR and reconstructed the notion
of corporate social responsibility in a pyramid structure as shown in Figure 1. In this pyramid,
economic responsibility is the basic foundation and discretionary is apex. From this
conceptualization, economic and legal responsibility are social requirement, ethical
responsibility are social expectation and philanthropy is social desire (Windsor, 2001).
However, Carroll implies that these distinct components always “in constant but dynamic
tension with one another” and of course they are as a unified whole without mutually
exclusive.

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Figure 1. The pyramid of Corporate Social Responsibility (Carroll, 1991)
2.4 Research framework
Carroll (1991) states that economic viability is ability business does for society as well
describe the economic component as a responsibility to produce goods and services that
customers want and do right thing what customers expect. This engage customer to brands.
Previous studies have shown the link between economic CSR and customer engagement such
as economic CSR positively related to customer enthusiasm, attention, absorption, interaction
and identification (Kim, Lee, Lee & Li, 2012; Alam & Rubel, 2014; Chung et al., 2015) which
are components for customer engagement (So et al. 2010).
More generally, Carroll (1991) divides economic dimension into being competitive

(high quality and low cost), operational efficiency, continuous profitability, shareholder’s
wealth maximization, and generate profit. Against this backdrop, Baron and Nambisan
(2009), Füller (2010), Roberts and Alpert (2010) indicate social benefits, economic benefits
(such as cost savings) and quality of products engage enthusiasm of customer. In addition,
Increase consumer expected utility may enhance brand equity which eliciting the customer
attention (Abdolvand & Charsetad, 2013). Greater operational competency provides greater
absorption to customer which enhance engagement of them (Hur et al., 2014). Beside, firms
can facilitate Customer Engagement by providing effective platforms for information

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exchange and interaction (Baron & Warnaby, 2011). Firms also enhance customer
identification by enhance perception to quality and innovation (Pérez & Bosque, 2015).
In empirical study, Fensel, Toma, García, Stavrakantonakis, and Fensel (2014); Lee,
Lee, Chan, Zheng, and Cheung (2014) argue that economic CSR practices (cost saving,
quality and operational efficiency) directly enhances customer engagement. Besides, in
theoretical study, Kaltcheva, Patino, Laric, Pitta, and Imparato (2014) believe that minimum
cost positively influences customer brand engagement. Therefore, it is expected that
customers with greater economic CSR perception will be more engagement to brand.
Hypothesis 1: there is a positive impact of perception of economic CSR on Customer
brand engagement.
Legal responsibilities of CSR dimension are measured in terms of the extent that
organization’s activities are consistent with laws and regulations, law-abiding corporate
citizen, fulfilling legal obligation, and goods and services must meet the minimal legal
requirement (Carrol1, 1991). Wirtz, Lwin, and Williams (2007) argue that customers with
greater trust and confidence when firms act in accordance with legal regulation to protect
consumer. This perception of trust and confidence engage customer’s interest because of
assessment of fairness in their mind (Bala, 2014). Customers also have more attention to
companies than others who incompliance with law and code (Dorsch, Swanson & Kelly,

1998). They feel more satisfaction (Hassan, et al., 2013), securitize and show more interaction
with legal firm (Lai, Nataraajan & Ndubisi, 2013). Furthermore, stronger compliance to legal
and standards of firms makes more identification to customer (Pérez & Bosque, 2015).
In empirical study, Sarabdeen (2014) argues that legal risks negatively affect to
customer engagement. Besides, in theoretical study, Doorn et al. (2010) believes that legal
action lead to customer engagement. Hence, it is expected that customers with greater legal
CSR perception will be more engagement to brand.
Hypothesis 2: there is a positive impact of perception of Legal CSR on Customer
brand engagement.

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Ethical responsibility of CSR dimension is measured in terms of societal mores and
ethical norms, extent that organization adjust themselves to emerging moral norms, degree of
compromising ethical standards or norms, corporate citizenship behavior accepted by society
and the extent that organization go beyond the legal and regulation requirements to maintain
integrity of the organization (Carroll, 1991). Adam (as cited in Bala, 2014) shows that people
have nature desire to engage in equitable relationship. People pay more attention with firms
who exhibit more “Citizenship behaviors” (Masterson, Lewis, Goldman & Taylor, 2000).
Furthermore, CSR-based moral capital of firms leads to brand credibility among customers
(Luo & Bhattacharya, 2009) because customers do not want a company to take advantage of
it relationship with them or to be cheated (Pérez, Cáceres & Alcañiz, 2010). The more ethical
consideration of firms that customers perceive, the more interaction to firms they make
(Ndubisi et al., 2013). Ethical perception spurs identification of customer to brands (Pérez &
Bosque, 2015).
In empirical study, based on study by Hammedi, Kandampully, Zhang, and Bouquiaux
(2015) that morality responsibility positively affects on customer engagement. Besides, in
theoretical study, Roberts and Alpert (2010) agree that corporate citizenship behavior
enhances customer brand engagement. Therefore, it is expected that customers with greater

ethical CSR perception will be more engagement to brand.
Hypothesis 3: there is a positive impact of perception of ethical CSR on Customer
brand engagement.
According to Carroll (1991), philanthropy is the highest level of CSR, where it is
measured in terms of philanthropic and charitable expectation of society, assistance provided
to fine and performing arts, extent that managers and employees of the organization
involvement voluntary charitable activities organized by community, and assistance provided
by organization to the projects that enhances “quality life”. Morgan et al. (2012) illustrates
that brands can engage individuals by their status value such as their humanitarian or social
value which have strong link to philanthropy. Firm’s social activities sent a signal of nonself-serving orientation which may generate positive attributions that affect to customer

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psychology positively (Godfrey, Merrill & Hansen, 2009). Lichtenstein, Drumwright and
Braig (2004) argue that non-profit or altruistic practices let to store emotional attachment to
customer. Further, customer also more value philanthropy on their interaction which show
more extra-role such as recommendation (Lii & Lee, 2012). Those aware of an actual
corporate philanthropy initiatives have stronger identification with brands (Sen, Bhattacharya
& Korschun, 2006).
In empirical study, Wirgau, Farley, and Jensen (2010) argue the donations encourage
customer engagement. Besides, in theoretical study Kaltcheva et al. (2014) agree that firms
do for society as an asocial firms enhance customer brand engagement. Therefore, it is
expected that customers with greater philanthropy CSR perception will be more engagement
to brand.
Hypothesis 4: there is a positive impact of perception of philanthropy CSR on
Customer brand engagement.
2.5 Research Model

Figure 2: Concept model


H1: There is a positive impact of perception of economic CSR on Customer brand
engagement.
H2: There is a positive impact of perception of Legal CSR on Customer brand engagement.
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