International Business Management

Year: 2016
Volume: 10
Issue: 6
Page No. 1033 - 1043

Study of the Enhancing Brand Preference Through Corporate Social Responsibility in Banking Industry

Authors : Elham Taghipour, Arshad Hedayati and Arvin Fouladifar

Abstract: In recent years, companies and financial institutes have special attention to corporate social responsibility. Corporate social responsibility refers to the relations between firms and the society in various dimensions. In fact companies have responsibilities toward individual in society in various aspects. So, CSR focus on the impact of organization’s activities on society through their business. On the other hand, in today’s competitive world creating a popular brand for each organization is most important. Corporate social responsibility initiatives as affirmative activities have good impact on enhancing brand preference in companies. Due to the significant role of CSR in businesses, this study seeks to discover the impact of corporate social responsibility initiatives on enhancing brand preference in Iranian banking industry-case of bank Pasargad. In this research, four type of CSR activities (according to Carroll’s Model 1979) were tested against a predictor variable of perceived brand quality and moderated by age, education, familiarity with CSR and tendency to CSR. These dimensions of CSR activities are “economic, legal, ethical and discretionary (philanthropic)”. The research instrument of this study is the questionnaire which provides data from customers of bank Pasargad. Of 250 questionnaires distributed, 211 questionnaires were completed and returned. In the present study, Cronbach’s alpha was taken into account to examine reliability using SPSS21. Also for detailed examination of construct validity, parameters such as composite reliability, average variance extracted are calculated using standardized load factors from confirmatory factor analysis. Kolmogorov-Smirnov test was used in the present study to investigate the normal distribution of data that showed that the data has normal distribution. In the analysis of data obtained from the questionnaires, relevant analysis was done using inferential statistics. In the inferential section, the second-order confirmatory factor analysis was used. It was performed using Structural Equation Modeling (SEM) with Partial Least Squares approach (PLS) to assess the fitness of research model accurately and with high quality. The results are showed that CSR activities have an effect on brand preference. Discretionary and legal responsibilities are ranked first and second in influencing the brand preference among CSR dimensions. Economic and ethical responsibilities, with the same effect, are next in rank. The effect of perceived brand quality on brand preference is much stronger than the effect of CSR on brand preference. Also age, education, tendency to CSR and familiarity with CSR don’t moderate the relationship between the CSR activities and brand preference.

How to cite this article:

Elham Taghipour, Arshad Hedayati and Arvin Fouladifar, 2016. Study of the Enhancing Brand Preference Through Corporate Social Responsibility in Banking Industry. International Business Management, 10: 1033-1043.

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