Can Corporate Fairness towards Public Authorities Enhance Customer Loyalty? A Multi-Sectorial Investigation in a Developing Country

Ovidiu I Moisescu,Camelia Ancuța Müller,Victor O Müller,Oana A Gică

doi:10.3390/su12010187

Ovidiu I Moisescu, Camelia Ancuța Müller + Show 2 more

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https://doi.org/10.3390/su12010187

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Journal: Sustainability	Publication Date: Dec 25, 2019
Citations: 4	License type: CC BY 4.0

Affiliation: Babeș-Bolyai University

Abstract

This paper investigates how customer loyalty can be enhanced by improving customers’ perceptions of corporate fairness towards public authorities, taking into account the mediating role of customer-company identification, in a multi-sectorial context, in a developing country in Central and Eastern Europe. The investigation is conducted comparatively within four main industries (telecom services, retail banking services, dairy products and personal care products) and depicts the particular impact these perceptions have on customer loyalty in each domain, with practical implications concerning corporate social responsibility (CSR) communications. A consumer survey was designed and implemented among a sample of 1464 customers from Romania. The collected data was analyzed by means of partial least squares structural equation modeling (PLS-SEM). We found that customers’ perception of corporate fairness towards public authorities has a significant and positive impact on customer loyalty in all investigated industries, both directly and indirectly via customer-company identification, with a higher impact for services, especially for retail banking services.

Highlights

According to the stakeholder-based framework, corporate social responsibility (CSR) encompasses responsibilities towards various stakeholders, among which public authorities play an important role [1,2]
Collected data was analyzed by means of partial least squares structural equation modeling (PLS-SEM), using the SmartPLS 3 software [50]
As our research was focused on prediction, trying to estimate the impact of corporate responsibility to public authorities on customer loyalty, PLS-SEM was employed for our data analyses because, as compared to covariance-based SEM methods, it is generally better suited for exploring relationships, as it is focused on prediction [51]

Summary

Introduction

According to the stakeholder-based framework, corporate social responsibility (CSR) encompasses responsibilities towards various stakeholders, among which public authorities play an important role [1,2]. Businesses should regard taxation, law compliance and any other aspect of their relationship with national, regional or local governments as part of CSR [3]. Many companies are nowadays often criticized for not fully complying to the rules imposed by public authorities, trying to elude the law, cheating on taxes, or offering actual or disguised bribes to public officials [4,5]. Many customers expect companies to be good corporate citizens and to show fairness to their stakeholders. It can be stated that a good CSR image among customers can enhance customer loyalty. Researchers have emphasized that customer loyalty has a positive impact on business performance [10,11]

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