The impact of environmental uncertainty on increasing customer satisfaction through corporate social responsibility

Abstract

PurposeThis paper aims to examine the relationship between corporate social responsibility and customer satisfaction and evaluate the impact of this relationship on firm performance, specifically the moderating impact of environmental uncertainty on the corporate social responsibility to customer satisfaction relationship.Design/methodology/approachThe authors constructed a panel data set by collecting data from Fortune Magazine’s World’s Most Admired Companies and Compustat. The authors used two methods, Newey–West and White–Cluster robust regressions, to estimate the empirical models.FindingsThe results from this moderating analysis of environmental uncertainty are largely consistent with this study's hypotheses. In particular, the authors find that corporate social responsibility contributes to increased customer satisfaction for large firms, in highly competitive environments and in highly dynamic industries. This paper also finds that in high growth environments, corporate social responsibility can result in decreased customer satisfaction.Research limitations/implicationsThe study is limited to environmental factors in the examination boundary conditions. Researchers should broaden the moderators to include criteria such as market orientation, marketing and/or operations capability.Practical implicationsThe empirical results provide practitioners with insight to better translate corporate social responsibility into higher levels of customer satisfaction.Social implicationsThe empirical results support corporate social responsibility as a viable and productive means of increasing customer satisfaction.Originality/valueThis study is the first that builds upon the work of Luo and Bhattacharya (2006) and Saeidiet al.(2015) by examining environmental factors that influence the relationship between corporate social responsibility and customer satisfaction. This research provides useful implications for marketing theories as well as business practice.