UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS TRAN ANH TRUC RELATIONSHIP BETWEEN CORPORATE SOCIAL RESPONSIBILITY, BRAND EQUITY, COMPANY REPUTATION, AND CUSTOMER-COMPANY IDENTIFICATION IN HO CHI MINH CITY HOTEL INDUSTRY MASTER OF BUSINESS (Honours) SUPERVISOR: LUU TRONG TUAN, PhD Ho Chi Minh City - 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com i LIST OF FIGURES Figure 2.1: Conceptual model of CSR, REP, BRE, and CCI 16 Figure 3.1: Research process 18 Figure 4.1: Confirmatory factor analysis for CSR, BRE, REP 37 Figure 4.2: Confirmatory factor loading for CCI 38 Figure 4.3: Saturated model 39 Figure 4.4: Structural model 42 Figure 4.5: Competitive model 43 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ii LIST OF TABLES Table 3.1: Adopted measurement scale 23 Table 3.2: Cronbach’s Alpha result for pilot test 27 Table 3.3: Exploratory factors analysis result for pilot test 29 Table 4.1: Cronbach’s alpha result 32 Table 4.2: Exploratory factors analysis result for main survey 34 Table 4.3: CFA result for CSR, REP, and BRE 36 Table 4.4 CFA result of CCI 37 Table 4.5: CFA result for Saturated models 39 Table 4.6: Relationship between constructs in saturated model 40 Table 4.7: SEM result for structural model 41 Table 4.8: Relationship between constructs in structural model 41 Table 4.9: SEM result for Competitive model 43 Table 4.10: Relationship between constructs in competitive model 44 Table 4.11: Bootstrap for structural model 45 Table 4.12: Hypothesis testing result 46 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com iii LIST OF ABBREVIATIONS The following table describes the significant of various abbreviations used throughout the thesis. Abbreviation Meaning CSR Corporate Social Responsibility BRE Brand equity REP Reputation CCI Customer-company identification SEM Structural equation modeling CFA Confirmatory factor analysis LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT I gratefully acknowledge the constructive comments provided by Luu Trong Tuan, Phd. His ideas and suggestions play an important role in my research orientation. I would like to thank my colleagues who work in hotel and travel company, who gave me much valuable advice in the early stages of this work.
A lot of friends of friends who help me deliver my survey. And people who save time to reply my questionnaires. In addition, I want to thank you for my team at Trails of Indochina, who stood in the breach when I concentrated on research. Last but not least, my sincere thanks owe to my family who gave me good conditions to complete this work.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT This paper investigates relationship between four elements included corporate social responsibility (CSR), brand equity (BRE), company reputation (REP) and customer- company identification (CCI). In terms of methodology, this research uses quantities approach and collects primary data through question survey which help determine relationship between these four variables. The survey launched 105 questionnaires to clients of 14 hotels in category of 4-star and 5-star. The applied measurement scales have been adopt from the one already been developed from other previous researches about corporate social responsibility, customer- company identification, company reputation, and brand equity.
Furthermore, this is a cross-sectional research concentrate on current status of each variable. After data collected, structural equation modeling (SEM) method was used to analyze and evaluate through Analysis of Moment Structures (AMOS software). As a result, the research found that there is positive relationship between pairs of items included corporate social responsibility and company reputation, corporate social responsibility and brand equity, brand equity and customer-company identification. However the positive relationship between company reputation and customer-company identification do not exist.
This matter has been investigated in several industries and countries all over the world. However this time, the research delivers investigation within hotel industry in Ho Chi Minh City. Start from study about CSR the research exams its relations to identity of a LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com critical stakeholder, customers. By showing the positive relationship the research helps proving evidence for advising hotel to concentrate in social responsibility.
Keywords: Corporate social responsibility, brand equity, company reputation, customer- company identification. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Chapter 1 INTRODUCTION This chapter demonstrates the research background, problem statement which is the foundation of the research. The research aims, research scope, significance and structure of the research are also mentioned.1 Problem statement Nowadays, people more and more concern about corporate social performance of organization (Chen & Delmas, 2010). The concept about CSR has been developed from 1950s and its actual evolution contributes much into current organization successful (Bakker, Groenewegen & Hond, 2005).
In an ideal world, companies which invest in social responsibility will result into significant motivation from both internal (employee) and external (customers) environment (Holcomb, Upchurch & Okumus, 2007). In case of hotel industry, it involves much in environment, social-economics, and culture. Therefore CSR becomes one of critical factors positively impact on sustainable development of the industry (Mattera & Melgarejo, 2012). Recently, hospitality contributes a lot into economic of developing countries where have advantages about tourism such as breathtaking landscape or beautiful and unique culture (Olsen, 2008).
Among developing countries, Vietnam owns variety tourism sources like world natural, cultural heritages therefore hospitality industry was bloom during last LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com decade and occupied by many well-known international hotel groups like Intercontinental, Accord, Marriot, Starwood, Hyatt, etc. due to high demand of accommodation. In order to serve travellers, the number of hotel in Ho Chi Minh city also increase to more than 327 hotels in 2013 (Trip adviser – 2013). Unfortunately, Vietnamese government recently just commences managing CSR in private-sector by some single efforts like improving labor benefits or environment preservation (Fukada, 2007).
In this situation, researches that study about how helpful CSR to hotel business performance are needed in order to encouraging hotels pay attention on their social responsibility. High hotel business performance is concern to hotel reputation (Chun, 2005) and hotel brand equity (Prasad and Dev, 2000). Hotel‟s benefits specifically customer-company identification which definitely contribute into improve hotel business performance (Hildebrand, 2010). Therefore, a research about the relationship between CSR, reputation, brand equity, and customer-company identification is necessary.2 Research aims According to the problem statement, this research studies whether it is positive relationship from CSR to hotel reputation and hotel brand equity and from reputation and brand equity to hotel‟s customer-company identification.
The research aims state in details as below 1) The positive relationship between CSR and company reputation. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2) The positive relationship hotel reputation and CC Identification. 3) The positive relationship between CSR and hotel brand equity. 4) The positive relationship between hotel brand equity and CC identification.3 Research scope This research focus on examine the positive relationship between CSR and two items included reputation and brand equity.
Then the positive relationship between reputation, brand equity and customer-company identification are investigated. The paper investigates within hotel industry in Ho Chi Minh City only. In addition, since high-end hotel always much keen to do right things about CSR (Braw, 2013), this research focuses on hotels in high categories of 4-star and 5-star.4 Research contribution In the circumstance that CSR is not much cared in Vietnam (Fukada, 2007) and hotel industry is not an exceptional, this research offer evidences about positive relationship between CSR and some items that help hotels increase their performance such as company reputation, brand equity and customer-company identification. It could help future study about CSR in hotel business.
In terms of business, management boards of hotels in Ho Chi Minh City either have stronger supported evidences to included CSR into their business plans. In large scale, the research could motivate hotels within Vietnam. On the other side, the local society and environment will receive more supporting when hotels included CSR in their business activities. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.5 Research structure This research is included five chapters: Chapter 1 named introduction included the problem statement, research aims, research question, scope, contribution and structure of the research.
Chapter 2 included literature review and hypothesis development. The literature review demonstrates concept theory of corporate social responsibility, company reputation, and brand equity and customer-company identification. After then, hypotheses are developed based on relationship between these concepts. Finally, the conceptual model of the research is performed.
Chapter 3 describes research methodology which is included information about research design, research process, method of data analysis, variables measurement scale, and the result of pilot test. Chapter 4 presents about data analysis and discussion on the results. Chapter 5 is used to drawn conclusion, limitation and recommendation. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Chapter 2 LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT 2.1 Literature review Literature review delivers general concepts about four factors included CSR, CC identification, hotel reputation, and hotel brand equity which are used for hypothesis development.1 Corporate social responsibility Very early discuss from 1950s, literature of CSR develops into variety definition from different researchers.
One of the earliest one states corporate social responsibility is the desire of businessmen to drive their business policies, business decisions in lines of the objectives and values of society (Bowen, 1953). Later, one of the modern researchers argues that CSR is about the way management board manage their business processes to result in positive impact on society (Baker, 2004). According to these two definitions, the later argument about CSR much more emphasizes that business is affected to society than the society values impacts on business. Among these definitions, one the most cited conceptual is from Carroll, 1991 about CSR included 4 dimensions economic, legal, ethic, and philanthropy.
According to Caroll, CSR firstly is profitable business to archive it basic purpose about economy. Secondly that business must be legally according to the law of countries where operated. After that, acting ethically to employee, customer and communities is the third dimension. Finally, philanthropy is the last dimension which is LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com understood as the discretionary responsibility of the company.
Overall, corporate social responsibility is the concern of companies about the benefits of their customer, employee, and the community. CSR should be investigated via both two identifications factors included company CSR association and CSR participant (Kim, Lee, Lee & Kim, 2010). While CSR association strongly support to improve company reputation, CSR participant directly impact on customer identification.2 Customer-Company identification Customer – Company Identification is significant and meaningful relationship between customers and a company that leads them to become champions for the product or company that help them identify one or more important self-identification of them (Bhattacharya and Sen, 2003). Most of marketers would like to study about this relationship then they will have clients become good supporters to their products (Fournier, Dobscha, and Mick, 1998).
According to Bhattacharya and Sen, in order to have this kind of relationship existed, company identity should be attracted to customer in terms of identify their self- continuity, self-distinctiveness, and self-definitional. In other words company identity should include these below identity attractiveness. First is identity similarity. Customers are always attracted in company which is match to their own characteristic (Pratt, 1998).
For example, customers who love animals always have good impression to company which is care about animals. The more customer LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com perceive that company identity is similar to their own sense, the more company identity is attractive to them (Bhattacharya and Sen, 2003). Second one is identity distinctiveness. People always require themselves different from the others (Tajfel, 1974).
Therefore the more company identity distinguishes from the others the more it attracts customers. The third one is identity prestige. People always satisfy their self-enhancement by being loyal to a company which they perceive it is prestigious (Ashforth & Mael, 1989). By this way, customer increases their self-worth.
Thus prestige perceived is also one of company identity attractiveness to customer (Bhattacharya and Sen, 2003). According to Bhattacharya and Sen (2003), companies archive the below benefits as well as risk when customers identify with them.