Research Proposal

Research Proposal for Doctoral Degree Program

Title of Research

Comparative Study How Corporate Social Responsibility influences on Customer

Satisfaction in Banking and Educational Sector of Pakistan and China

Applicant Name:

Application School:

Application Major:

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 Research Proposal

Research Objective:

The objective behind choosing this research is to identify factors that are influencing on
Customer Satisfaction towards Corporate Social Responsibility in relation to banking and
educational sectors of Pakistan and China.

The objective is to investigate the set of relationships between the corporate social responsibility
services and customer satisfaction. Organizations are using CSR to strengthen their relationship
between different stakeholders of Organizations like Customer, shareholders, employees, and
community (Alexander and Buchholz (1978). This research focuses on corporate social
responsibility in Pakistan and china with reference to its opportunities and threats regarding
achievement of customer satisfaction and their needs and wants. The knowledge of customer
behavior also enhances customer satisfaction in any field of research. The CSR investments also
helpful to measure market satisfaction of the firm in corporate environment (Ioannis Ioannou and
George Serafeim - 2014).

In this research, I will focus on how customer satisfaction effect by corporate social
responsibility in banking and educational industry. Banking industry is more conscious about
corporate social responsibility as compare to educational industry. Banks take active part in
every social and community service events, while education industry only focuses on delivery of
quality education (Zahid ul Md. Islam, Z., Ikram ul Hasan, I., & Sarwar Uddin Ahmed, S. 2012).

Banking and Education sectors are very important sectors both for china and Pakistan and have
significant impact of their stakeholders. The economy of Pakistan is the 26th largest in the world
in terms of purchasing power parity (PPP), and 41th largest in terms of nominal GDP. China
market economy is the world's largest economy by purchasing power parity and world's second
largest economy by nominal GDP (according to the IMF 2015). Total Share of Service Sector in
GDP from 2011 to 2015 in Pakistan and Chain is 54.1% and 48.1% respectively (according to
the World Bank 2015).

Research Background and Innovation:

In today’s competitive market environment, corporate social responsibility represents a high

profile nation that has strategic importance to many companies (Kotler and Lee 2004;
Lichtenstein, Drumwright, and Bridgette 2004). The value of corporate social responsibility
increases with the time. Organizations are directly involved to take steps to promote corporate
social responsibility to avoid media criticism and to build their goodwill in corporate
environment (Drumwright, 1996). Typically corporate social responsibility defines as “Corporate
Social Responsibility is the continuing commitment by business to behave ethically and
contribute to economic development while improving the quality of life of the workforce and
their families as well as of the local community and society at large” (Lord Holme and Richard
Watts).

It is also defined as “CSR sets a minimum behavioral standard that aims at doing no harm to
stakeholders and if it has happened then rectifies it as soon as it is identified” (Campbell-2006).

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Corporate social responsibility is an integral part of every organization. It is also a source of

community welfare, wealth creation and competitive advantage (Muhammad Mohtsham
Saeed and Faria Arsha - 2012)

There are inconsistent prior results and limited research on the banking systems of developing
countries about factors influencing customer satisfaction of banks in developing countries.
Furthermore, CSR relationships have been partly neglected in many studies conducted in
developing countries. These gaps or unresolved questions in the research motivated the current
study (Dr. Khaled Alafi, Dr. Fares Jamiel Husain Al sufy - 2012).

However such detailed research study was not conducted so far by any scholar or researcher,
which could elucidate comparison and different factor of CSR which helpful to measure
customer satisfaction in both countries and its impact on particular stakeholders.

Research Question:

 How Corporate Social Responsibility Influences on Customer Satisfaction of Banking

and Educational Sector of Pakistan and China?
 Is there any effect of corporate social activities on customer satisfaction?
 Is there any effect of corporate social activities on customer retention?
 Is there any effect of corporate social activities on customer loyalty?
 Which customer behavior will affect a change in customer satisfaction?

Significance of the Study:

This research will indicate a strong potential for corporate social responsibility of Pakistani
organizations as compare to Chinese, because Pakistan is under develop country and china is in
list between develop nations. In Pakistan mostly organizations are not following corporate social
responsibility practices, and there is huge room of improvement. China is already achieving
highest corporate social responsibility level in their organizations. Chinese Organizations also
face higher expectations as they move their business into global world. In promoting corporate
social responsibility, Chinese Government also support to organizations. Chinese Government
also revised different Laws and legislation related to corporate social responsibility since 2006
(WTO Law Com on December 31, 2006).

As Globalization rises, Global corporations move into underdeveloped nations like china from
western developed nations in late 1970s. In addition to state-of-the-art business patterns and
technologies, foreign companies introduced the local market the term CSR (Lu Tang, Hongmei
Li 2009).

Preliminary Literature Review:

“The idea of corporate social responsibility (CSR) in the West started at the turn of the 20th
century and was on the rise in the late 1970s and early 1980s when corporations faced increasing

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concerns with their images” (James E. Post, WIliam C. Frederick, Anne T. Lawrence and James
Weber – 1996)
“However, scholars have not reached agreement on a single definition of CSR. Some
perspectives espouse that businesses should only be responsible for internal stakeholders, such as
shareholders, employees, customers and suppliers. Some argue that companies should take
responsibility for government, regardless of the government level (e.g. local, state and national).
Still others argue that CSR should cover business performance in relation to the local society and
global economy where the business is conducted” (Mazurkiewicz, Piotr)

Consumers evaluate companies as well as products in terms of CSR, whereby negative CSR
associations are more influential and have a more detrimental effect than positive ones.
However, positive associations do boost company and product evaluation (G. J. Biehal and D. A.
Sheini-2007). Customer satisfaction is not inherent in the product or the service itself but,
instead, satisfaction primarily consists in the consumer’s perceptions of the attributes of the
product or service as they relate to that individual. Thus, different consumers will express
varying levels of satisfaction for the same experience or service encounter.
(C. Boshoff and B. Gray-2004)

“In the marketing literature, customer satisfaction has been recognized as an important part of
corporate strategy and a key driver of firm long-term profitability and market value. Thus, it is
expected that CSR is positively related to customer satisfaction”
(C. Fornell, S. Mithas, F. V. Morgeson, and M. S. Krishnan-2006)

According to Dowling, the attributes of corporate image and reputation give rise to two classes
of factors: one is more factual in nature including corporate capabilities and financial
performance while the other is a more emotionally driven such as social accountability and the
distinctiveness or personality of the organization (Dowling-2004)

“In our context, all else being equal, customers likely derive better perceived value and,
consequently, higher satisfaction from a product that is made by a socially responsible company
(i.e., added value through good social causes). Furthermore, engaging in CSR may allow firms to
understand their generalized customers better and thus improve their customer-specific
knowledge” (Sen and Bhattacharya-2001)

Customer satisfaction positively affects customer retention which leads indirectly, together with
customer loyalty, to greater profitability because they secure future revenues lower costs and
attract new customers, who as valuable assets increase profitability Reduced customer turnover
is advantageous; in particular, have shown that a 5 % increase in customer retention could
increase banks profitability by an average of 50 % (Carden and Dellifrain, 2004; Mququ, 2005;
Hansemark and Albinsson, 2004).

Firms can achieve long-term benefits of brand enhancement, goodwill, differentiation, increased
employer’s motivation, higher profitability and quality workforce retention by committing
themselves to CSR activities (Maignan and Ferrell, 2004).
In fact, when company’s ethical behavior exceed from customer expectation it will be positive
correlate with purchase intention of customer (Creyer and Ross 1997).

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“A company which is more socially responsible, research told the 88 percent of consumers is
more likely to buy from that company” (Smith, 1996). “The Customers who are CSR conscious
are willing to pay more for a product with an extra social dimension than for an identical product
without it”(McWilliams and Siegel, 2001).

Initial Research framework:

Independent variables

Customer Loyalty
Dependent variable

CSR Customer Retention Customer

Satisfaction
Customer Behavior

Data Sources and Research Methodology:

Data collection is the integral part of the Research design. The researcher are using variety of
research techniques now a days, like interviews, questionnaire, surveys, focus group, case
studies, research papers etc. I will prefer to collect primary data to conduct interviews,
questionnaires and surveys, which were based on corporate social responsibility and customer
satisfaction. The telephone and e-mail system will be used to fill the questionnaire from the
different respondents. The secondary data will gather through research papers. The data will be
recorded, that will helpful to measure and evaluate variables using different data evaluation
techniques and software. The sample size will decide after the detail discussion with research
supervisor.

Research Deliverables:

Reports

Report Questionnaire
Research
Milestone
Graphs, Charts

Other related Information

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Discussion and Conclusion:

This research will helpful to identify different factors like awareness, customer behavior, service
quality, loyalty and how these factors influences on organization’s image. Customer satisfaction
is very important for every organization. Organizations are trying to overcome customer’s
complaint by using different advance level research results that is very helpful to achieve
customer satisfaction.
This study examines whether corporate social responsibility factors can play an important role in
enhancing customer satisfaction or not in china and Pakistan. This study also investigates the
moderating effects of corporate image in the relationships between corporate social
responsibility and customer satisfaction and loyalty. The result of this research will helpful to
find out, how corporate social responsibilities affect the satisfaction level of customers for both
the nations.

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References:

 Alexander, G. J., & Buchholz, R. A. (1978). Corporate Social Responsibility and Stock
Market Performance. The Academy of Management Journal, 21(3), 479–486. Retrieved
from http://www.jstor.org/stable/255728
 Dr. Khaled Alafi, K., & Dr. Fares Jamiel Husain Al sufy, F. (2012). Corporate Social
Responsibility Associated With Customer Satisfaction and Financial Performance a Case
Study with Housing Banks in Jordan. International Journal of Humanities and Social
Science, 2(15), 102-115
 Ioannou, I., & Serafeim, G. (n.d.). The Impact of Corporate Social Responsibility on
Investment Recommendations. SSRN Electronic Journal. doi:10.2139/ssrn.1507874
 Kotler, P., & Lee, N. (2005). Corporate social responsibility: Doing the most good for
your company and your cause. Hoboken, NJ: Wiley.
 Drumwright, M. E. (1996). Company Advertising with a Social Dimension: The Role of
Noneconomic Criteria. Journal of Marketing, 60(4), 71. doi:10.2307/1251902
 Lichtenstein, D. R., Drumwright, M. E., & Braig, B. M. (2004). The Effect of Corporate
Social Responsibility on Customer Donations to Corporate-Supported Nonprofits.
Journal of Marketing, 68(4), 16-32. doi:10.1509/jmkg.68.4.16.42726
 Biehal, G. J., & Sheinin, D. A. (2007). The Influence of Corporate Messages on the
Product Portfolio. Journal of Marketing, 71(2), 12-25. doi:10.1509/jmkg.71.2.12
 Zahid ul Md. Islam, Z., Ikram ul Hasan, I., & Sarwar Uddin Ahmed, S. (2012). Corporate
Social Responsibility and Financial Performance Linkage Evidence from the Banking
Sector of Bangladesh. Journal of Organizational Management, 1(1), 14-21.
 Mohtsham Saeed, M., & Arshad, F. (2012). Corporate social responsibility as a source of
competitive advantage: The mediating role of social capital and reputational capital.
Journal of Database Marketing & Customer Strategy Management, 19(4), 219-232.
doi:10.1057/dbm.2012.19
 Ullah, I. (n.d.). Impact of Corporate Social Responsibility on Customer Loyalty and
Purchase Intention. SSRN Electronic Journal. doi:10.2139/ssrn.2164560
 Creyer, E. H. (1997). The influence of firm behavior on purchase intention: do consumers
really care about business ethics? Journal of Consumer Marketing, 14(6), 421-432.
doi:10.1108/07363769710185999
 Tang, L., & Li, H. (2009). Corporate social responsibility communication of Chinese and
global corporations in China. Public Relations Review, 35(3), 199-212.
doi:10.1016/j.pubrev.2009.05.016
 Frederick, W. C., Post, J. E., & Davis, K. (1988). Business and society: Corporate
strategy, public policy, ethics. New York: McGraw-Hill.
 Abrantes Ferreira, D., Gonçalves Avila, M., & Dias de Faria, M. (2010). Corporate social
responsibility and consumers' perception of price. Social Responsibility Journal, 6(2),
208-221.

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 Chung, K., Yu, J., Choi, M., & Shin, J. (2015). The Effects of CSR on Customer
Satisfaction and Loyalty in China: The Moderating Role of Corporate Image. JOEBM,
3(5), 542-547.
 Luo, X., & Bhattacharya, C. (2006). Corporate Social Responsibility, Customer
Satisfaction, and Market Value. Journal of Marketing, 70(4), 1-18.
 Narwal, M. (2007). CSR Initiatives of Indian Banking Industry. Social Responsibility
Journal, 3(4), 49-60.
 Chen, H., & Zhang, H. (2009). Two way communication strategy on CSR information in
China. Social Responsibility Journal, 5(4), 440-449.
 McWilliams, A., & Siegel, D. (2000). Corporate social responsibility and financial
performance: correlation or misspecification? Strat. Mgmt. J, 21(5), 603-609.

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