Corporate social responsibility and customer's responses: CSR authenticity and government intervention during the COVID-19 pandemic

Abstract

COVID-19 had unparalleled social and economic impacts in many countries, including Indonesia. Companies are urged to develop corporate social responsibility (CSR) in this challenging environment to support society. As CSR enters a more developed stage, the government's role in initiating and promoting it has also been recognized. First, this study explores the company's motives for engaging in CSR, as well as the role of government by interviewing three CSR officials. Further, this study investigates the effects of CSR motives, CSR authenticity, and corporate brand image on community well-being and customer citizenship behavior, with government intervention as a moderating variable, by an online survey to analyze nine hypotheses. Using purposive sampling, 652 respondents from five local companies in Indonesia participated in the survey, and the data were analyzed using SmartPLS. The interviews showed two CSR motives and the role of government, and the survey showed mixed results on the impact of CSR motives on CSR authenticity and corporate brand image, the positive impacts of CSR authenticity and corporate brand image on community well-being, and customer citizenship behavior. Although high levels of government intervention are noticeable, this variable was not found to be a significant moderator. This study highlights the importance of how customers perceive CSR motives and authenticity, so companies should consider it when developing CSR activities. Engaging in CSR initiatives during a crisis may improve a company's brand image and customer citizenship behavior. However, companies should appropriately manage their CSR communications to avoid customers' suspicion about the CSR motives.