Tài liệu A study on the effect of csr activities on customer loyalty the case of shinhan bank’s in vietnam

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- CHO KWANGMAE A STUDY ON THE EFFECT OF CSR ACTIVITIES ON CUSTOMER LOYALTY: THE CASE OF SHINHAN BANK’S IN VIETNAM ẢNH HƯỞNG CỦA TRÁCH NHIỆM XÃ HỘI DOANH NGHIỆP ĐẾN LÒNG TRUNG THÀNH CỦA KHÁCH HÀNG. NGHIÊN CỨU ĐIỂN HÌNH TẠI NGÂN HÀNG SHINHAN BANK VIỆT NAM LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2019 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- CHO KWANGMAE A STUDY ON THE EFFECT OF CSR ACTIVITIES ON CUSTOMER LOYALTY: THE CASE OF SHINHAN BANK’S IN VIETNAM ẢNH HƯỞNG CỦA TRÁCH NHIỆM XÃ HỘI DOANH NGHIỆP ĐẾN LÒNG TRUNG THÀNH CỦA KHÁCH HÀNG. NGHIÊN CỨU ĐIỂN HÌNH TẠI NGÂN HÀNG SHINHAN BANK VIỆT NAM Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS NGUYỄN NGỌC THẮNG HÀ NỘI - 2019 DECLARATION The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article. The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given. The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration. Date 25/06/2019. ACKNOWLEDGEMENT Firstly, I would like to make the most of this opportunity to thank my company, Shinhna Bank which has given me a lucky chance to study at HSB. In addition, they have also reassured me all the time through their knowledge and experiences in order to accomplish this project. Secondly, I would like to thank my wife who always supports me and takes care of children without my help in South Korea. Thirdly, I would like to show my sincere gratitude to Assoc. Prof. Dr. Nguyen Ngoc Thang for his enthusiastic support throughout the process of composing this project. Without his valuable advices, I would not be able to accomplish the project with a clear orientation. Lastly, big thanks to all my colleagues at work, all my friends at HSB, especially all HSB - MBA15 classmates, who have supported me with laughter and joy, and comforted me when I was depressed. Owing to the fact that limited time and ability so it can not avoid some mistakes in my research topic. I look forward to receiving comments from lecturers and colleagues in order have more accomplished and better achieved of research result and application in my career. Thank you again for those who have supported me, and best wishes to all. Date: 6th June, 2019 Cho Kwang mae TABLES OF CONTENTS LIST OF TABLES ...................................................................................................... i LIST OF FIGURES.................................................................................................... ii INTRODUCTION .......................................................................................................1 CHAPTER 1: THEORETICAL BACKGROUND.....................................................8 1.1. Concepts of Corporate Social Responsibility ......................................................8 1.1.1. Concept of Corporate Social Responsibility .....................................................8 1.1.2. The scope of corporate social responsibility (CSR)........................................11 1.1.3. The Significance and Importance of Corporate Social Responsibility (CSR) .......16 1.2. Advanced research of Corporate Social Responsibility(CSR) ..........................18 1.3. Definition and Advanced research of Customer Trust.......................................20 1.4. Concepts of Resistance to Negative Information and Advanced research ........23 1.5. The Concept of Customer Loyalty and Advanced research ..............................26 CHAPTER 2: ANALYSIS OF SHINHAN BANK`S CSR AND ITS EFFECT ON CUSTOMER LOYALTY IN KOREA .....................................................................29 2.1. Research Methodology.......................................................................................29 2.1.1. Research Model ...............................................................................................29 2.1.2. Research Hypothesis .......................................................................................29 2.2. Survey Design ....................................................................................................35 2.2.1. Sample Design ................................................................................................35 2.2.2. The composition of the questionnaire .............................................................35 2.2.3. Operational definition and measurement of variables ....................................36 2.3. General characteristics of a sample ....................................................................40 2.4. Reliability and Feasibility Analysis ...................................................................41 2.4.1. Reliability analysis .........................................................................................41 2.4.2. Confirmatory Factory Analysis .......................................................................43 2.4.3. Evaluating a measurement model ...................................................................44 2.5. Correlation analysis ............................................................................................47 2.6. The verification of the theory of research ..........................................................48 2.6.1. Path analysis result ..........................................................................................48 2.6.2. The verification of the theory of research .......................................................48 2.7. Discussion and Implication of Research ............................................................50 CHAPTER 3: THE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES OF SHINHAN BANK ....................................................................................................52 3.1. Economic Corporate Social Responsibility of Shinhan Bank ...........................52 3.1.1. Product that puts customer revenue first .........................................................52 3.1.2. Customized solution based on big data & Transform digital channels and services ......................................................................................................................52 3.1.3. Customer-centric management .......................................................................53 3.1.4. Financial Consumer Information Protection ...................................................55 3.2. Legal Corporate Social Responsibility of Shinhan Bank ..................................56 3.3. Ethical Corporate Social Responsibility of Shinhan Bank ................................56 3.3.1. Implementation of strict ethics compliance principles ...................................56 3.3.2. Internal Control and Insider Reporting System ..............................................57 3.3.3. Anti-mononey lundering system .....................................................................57 3.4. Charitabal Corporate Social Responsibility of Shinhan Bank ...........................58 3.4.1. Social contribution activities/ Sponsorship .....................................................58 3.4.2. Support for small business owners / small businesses ....................................59 3.4.3. Financial support for low-income people/financial education ........................60 3.4.4. Expending eco-friendly work services ............................................................61 3.4.5. Development of eco-friendly financial products ............................................62 CONCLUSION .........................................................................................................63 REFERENCES ..........................................................................................................65 SURVERY ................................................................................................................69 LIST OF TABLES Table 1.1: Definition of Corporate Social Responsibility ..........................................9 Table 1.2: Different Concepts of Academies for Social Responsibility ...................10 Table 1.3: Definition of Corporate social responsibility of Carroll ..........................14 Table 5.1: Data analysis procedure and analysis method .........................................35 Table 5.2: The composition of the questionnaire ......................................................36 Table 6.1: General characteristics of a sample .........................................................40 Table 6.2: Reliability Analysis of Each Research Unit ............................................42 Table 6.3: Measurement Model Analysis Results ....................................................44 Table 6.4: Correlation analysis results ......................................................................47 Table 6.5: Result of the verification of the theory of research .................................48 Table 2.1: Shinhan Financial Group's client complaint handling .............................54 Table 2.2: Customer personal information leakage status in Korea .........................55 Table 2.3: Strengthen ethics education .....................................................................57 Table 2.4: Current status of volunteer activities of Shinhan bank ............................58 Table 2.5: Low-interest small business loans ...........................................................60 Table 2.6: Support for disabled companies ...............................................................60 Table 2.7: Financial support for low-income people ................................................61 Table 2.8: Shinhan Bank Energy Usage ...................................................................62 i LIST OF FIGURES Figure 1.1: Carroll's Corporate Social Responsibility (CSR) Pyramid Materials: Carroll, A. B. (1979), "A Three-dimensional Conceptual Model of Corporate Performance", Academy of Management Review, vol. 4. ........................................13 Figure 1.2: Kang's analysis level, business entity, and corporate responsibility model......15 Figure 1.3: Firm’s Sustainable Competitiveness Pyramid, Source: Hoang Dinh Phi, 2015. ..........................................................................................................................16 Figur 4.1: Research Model ........................................................................................29 Figure 6.1: Path analysis result .................................................................................48 Figure 2.1: Percentage of deposits subscribed by mobile in Shinhan bank ..............53 Figure 2.2: Customer Satisfaction of Shinhan Bank(three research companies)......54 Figure 2.3: Shinhan Bank's Greenhouse gas emissions ............................................62 ii INTRODUCTION 1. Background Information and Rationale After several crises around the world, capital markets and consumer markets have lost confidence in efficiency. As a result, managers face the challenge of improving corporate image or reliability (Marin & Ruiz, 2007), to solve the problem of such a decline in reliability, companies are focusing on and strengthening corporate social responsibility (CSR). Corporate social responsibility is to demonstrate business management activities, exchange with stakeholders, and corporate activities related to society and the environment that arise from pursuing sustainable businesses (Carroll, 1999). Nevertheless, in the '90s, the corporate social responsibility began to be used pragmatically as a business term (Carroll, 1999). Over the past decade, in most industries, companies have invested and made efforts to develop corporate social responsibility with the aim of improving the intangible characteristics of the brand image (McDonald & Rundle - Thiele, 2008). For example, 90 percent of Fortune 500 companies already carry out their social responsibilities and more than 80 percent of them post their activities on their websites. This trend is expanding to most developed countries or to many developing countries (KPMG, 2011). The company's ability to improve the company's image, reputation and trust depends on the degree to which the company's social responsibility is consistent with its stakeholders' expectations for the sector (form) of corporate social responsibility performed by the company (Dawkins & Lewis, 2003; McDonald's & Hung Lai, 2011). In this regard, scholars said that resources should be distributed not only to society but also to stakeholders such as customers, employees, investors, suppliers, strategic partners, and governments (Poolthong & Mandachita, 2009). This is because when stakeholders' expectations of corporate social responsibility coincide, firms can generally increase their friendly attitudes from stakeholders (Vassilikopoul, Siomucos, & Mylonakis, 2005). Conversely, failure to get stakeholders to understand the means of corporate social responsibility results in 1 inefficient corporate social responsibility implementation (Augger, Deviney, & Louviere, 2007). As a result, retail banks pay a high percentage of the costs associated with corporate social responsibility to improve their reputations and improve stakeholder, particularly their customer relationships (McDonald & Rundle-Thiele, 2008). Banks and financial companies implement corporate responsibilities through microcredit, environmental funds, and credit transfer programs (Prior & Argandoffia, 2009). For example, in India, the social responsibility of the banking industry is focused on education, balanced growth, health, environmental marketing, and customer satisfaction (Narwal, 2007). Over the past 25 years, the Spanish savings bank has spent 20 to 30 percent of its revenue annually on social contribution activities, and the combined social responsibility index of companies in 32 major banks in Europe, the United States and the Pacific countries has improved significantly since 2000 (Scholtens, 2009). Corporate social responsibility and sustainable development of the business environment cannot be left society. The two are interdependent. Social responsibility as the driving force of social development leads companies to become responsible global and local neighbors in a rapidly changing world. The most widespread corporate issue facing change is corporate social responsibility (Engle, 2007). The World Sustainable Development Committee (WBCSD, 1999) called the social responsibility of companies as the ethical activities of companies continuing to improve the quality of life for workers and their families and contribute to local or national economic development. The EC Green Paper (EC, 2001) incorporates social and environmental concerns by allowing companies to voluntarily operate business or interact with stakeholders in the Promoting a European Framework for CSR, the Act was defined as sustainable management. Concepts related to social responsibility relate to sustainable development. According to ISO 26000, sustainable development refers to a company's desire for the environment on Earth so that it does not pose a risk to 2 future generations. The link between corporate social responsibility and sustainable development is to ease recent challenges and use resources efficiently. If sustainable development is viewed as a result of current activities, regardless of the future of the enterprise, social responsibility is primarily aimed at minimizing risk exposures from interactions between economic, regional and natural environmental entities and maximizing synergies (Hediger, 2010). In Korea, companies and public institutions have been publishing the Sustainability Report (SR) in accordance with the global guideline of the Global Report Initiative (GRI) since 2003. According to the financial sector, banks have been publishing annual reports on six areas, including academic, educational, seminar, physical education, environment and global, since June 2006. Corporate social responsibility activities by financial institutions are still in the early stages of internal and external evaluation and detailed discussions. Corporate social responsibility activities are limited to charitable, environmental, and institutional financial support, and the results of assessment of performance are not well received as they are often only formal. The lack of social responsibility activities by domestic financial institutions can be seen as a lack of awareness and practice that financial institutions develop with society only when their social responsibility activities harmonize with the essential characteristics of financial activities in overall management activities. It can be said that financial institutions recognize corporate social responsibility activities as a concept of cost by emphasizing only philanthropic and environmental aspects, and that they focus only on the visible performance system of productivity improvement and profit creation as a competitive indicator to maximize their business performance. In the case of financial institutions, the emergence of new technologies such as globalization, deregulation, financial innovation, and FinTech, which have changed the traditional distribution channel of financial services, makes it difficult for financial institutions to differentiate themselves, and consumers are not aware of 3 real differentiation in products and services. On the other hand, in an increasingly competitive global environment, corporate social responsibility is becoming the most important strategic factor in improving business performance through marketing differentiation strategies. Local financial institutions are in the early stages of developing and implementing strategic corporate social responsibility activities that will maximize corporate performance through corporate social responsibility activities. Theoretical and practical corporate social responsibility success models have not been presented, such as the division of specific corporate social responsibility-related activities that reflect the inherent nature of financial institutions and the development of measures to measure the social responsibility, the development of stakeholder-oriented value activities, image and reputation, and the establishment of marketing strategies to build sustainable and strong brand assets. In this situation, this study aims to analyse, empirically, in four sub-level measures of corporate social responsibility activities, how they affect consumers' confidence in their businesses, and how they affect customer loyalty and resistance to negative information. Through this process, we are going to present suggestions on how to strategically develop corporate social responsibility activities, thereby enhancing bank customer loyalty and leading to business performance. 2. Aims of Research First, we need to know the concept of CSR correctly. After looking at many CSR activities at Shinhan Bank, we will look at how these activities affect customer trust and loyalty. And with the results of this study, companies should also be encouraged to do CSR activities in Vietnam in the future. Therefore, the followings are the main aims of this thesis: - Accurately understand the concept of corporate social responsibility; - Understanding the Corporate Social Responsibility Activities of Shinhan Bank; - Analyze the impact of corporate social responsibility activities on customer reliability and loyalty through surveys. 3. Objects of Research 4 In this study, theoretical and practical studies were combined to achieve the objectives of the study. First, research questions were raised based on research on existing social responsibilities(Carroll, 1979; Lichtenstein, Drumwright, & Braig, 2004; Powell, Balmer, Melewar, Podnar, & Golob, 2007; Claydon, 2011; Green & Peloza, 2011; Lamond, Dwyer, Arendt, & Brettel, 2010; Porter & Kramer, 2002) and, accordingly, research models and theories were derived. Next, to verify the research model and research theory empirically, the survey was conducted on the general financial consumers of Shinhan Bank who transacted with Shinhan Bank and used it as basic data for analysis. Analysis of the collected data was performed using SPSS 21.0 to identify demographic characteristics of the sample, to perform a confidence analysis on the research unit, and to verify the structural relationship. This study consisted of five chapters, each of which is as follows. In order to reach the above-mentioned aims, the research focuses on the following main objects: - Presents the need for this study, the purpose of the study, the method of research, and the scope of research; - Explained the rationale behind the company's social responsibility and explained, for example, the corporate social responsibility activities of Shinhan Bank.; - Established research models and hypotheses based on theoretical and prior studies, and the design of the empirical investigation provided operational definitions of variables and specific measurement questions for each variable. - We conducted an empirical survey and analysis to verify the hypothesis of this time. - The results of the study were summarized, the limitations of the research, and the direction of future research. - Factors of Vietnam business environments that impact the operation of FDI firms from South Korea. 4. Scope of Research 5 - Focus on the main aims and main objects. - Country: Target Shinhan Bank customers in Vietnam - Time: The survey was conducted from December 1 to 31. - Survey customers: 500 customers 5. Research Methodology First, the theory of corporate social responsibility collected data from research books and books researched by existing scholars. In addition, the social responsibility activities of Shinhan Bank's various businesses were checked through its booklet, homepage and website. Besides that, public information was also gathered to make the analysis more convincing. Based on public information on Corporate Social Responsibility through Internet, via newspapers, magazines. The data were collected through a survey of 500 Shinhan Bank customers directly. For primary data or soft data, the in-depth interview method was applied in this research and played an important role in helping the author get more factual and reliable required information. 6. Thesis Structure Besides the Introduction Chapter, the thesis as 6 main chapters: Chapter 1: Theoretical background Chapter 2: Customer trust, resistance to negative information, customer loyalty Chapter 3: Methodology 1. A Case Study on the CSR Activities of Shinhan Bank 2. Research design 3. Survey design Chapter 4: Result and Disscussion 1. Verification analysis Conclussion 6 7 CHAPTER 1: THEORETICAL BACKGROUND 1.1. Concepts of Corporate Social Responsibility 1.1.1. Concept of Corporate Social Responsibility Corporate CSR activities have long been a subject of discussion in academia.(Mcguire,1963). However, the names associated with the social needs and responsibilities of the company are diverse in the use of CSR ( Corporate Social Responsibility), Corporate Responsibility (CR), and Social Responsibility (SR) and there are various arguments and discussions on CSR(Foreign cramp, 2015). In general, corporate social responsibility is defined as 'responsible activities to satisfy stakeholders through business activities and to positively influence the communities and society in which the business belongs' (Kim Hyun-soo, 2006). These definitions of corporate social responsibility are defined separately by international institutions and scholars, as mentioned above. The following is a review of definitions made by major international agencies on social responsibility through Table 1 and a review of definitions by scholars. Thus, while the definitions of social responsibility in various international institutions are expressed differently, it is common to see that laws and systems define a wider range of social responsibilities than the social responsibilities required by businesses. The existing scholars at home and abroad also set various definitions of corporate social responsibilities, which Bowen (1953) defined in "The Social Responsibility of the Businessman" as "the responsibility of entrepreneurs to pursue and make the desired policies in terms of goals or values in our society, and to make such decisions". Ells and Walton (1961) argued that an entity's social responsibility should be taken from the perspective of the problem arising from its activities and the ethical principle that governs the relationship between the entity and society. 8 Table 1.1: Definition of Corporate Social Responsibility International agency name UNCTAD Definition of corporate social responsibility How companies respond and influence the needs and goals of society Term CSR to benefit people and society as a whole through ISO their contribution to economic, social, and SR environmental issues Concepts by which companies voluntarily EU integrate social and environmental concerns into corporate activities and interactions with CSR stakeholders OECD ILO the actions companies take to mature and develop symbiotic relationships with society The impact of the company on stakeholders voluntarily beyond its legal obligations CR CSR Voluntary and positive activities of companies in IOE various social, economic, and environmental CSR distributions beyond legal compliance the will of companies to contribute to sustainable WBSCD development and improve the quality of life of their work by working with employees, families, CSR communities and society as a whole ICC the willingness of companies to do business in a responsible manner CR Data: Ko Dong-soo (2006), "Company's Social Responsibility (CSR): Trends in International Issues and Our Countermeasures," KIET Institute. 9 McGuire (1963) requires companies to be responsible for society as a whole as well as for its economic and legal obligations, the emphasis was especially placed on corporate social services as a form of corporate responsibility for society. Sethi (1979) defined an enterprise's social responsibility as addressing social and environmental problems and complying with the ethical principles, and ultimately it is an entity's actions that can go beyond its legal and economic obligations and harmonize with its social norms, values, and social expectations. The views on corporate social responsibility by Sethi (1979) were structured in Carroll (1971)'s "Three-dimensional conceptual model of corporate performance," which systematically organized academic discussions that lasted for about 20 years after a full-scale discussion of social responsibility by Bowen (1953). According to this, corporate social responsibility is a constructive concept, including all economic, legal and ethical expectations that society has about the business at a given point in time. In other words, the model explains that a company has four responsibilities. Economic profit creation, legal compliance, ethical responsibility, and philanthropic responsibility. Table 1.2: Different Concepts of Academies for Social Responsibility Scholar Bowen, H. R (1953) Definition a duty to make decisions and pursue principles in accordance with actions that are considered desirable for the purposes and values of society Ells and Walton the conduct of ethical principles by projecting a firm to desirable things (1961) McGuire (1963) Sethi (1975) in order to coordinate its relationship with the society To fulfill not only economic and legal obligations for society, but also overall responsibility for society in addition to these obligations. corporate behavior that transcends legal and economic obligations and harmonizes with social norms, values, and expectations 10 Carroll, A.B. (1979) McFarland (1982) Wood, D. (1991) Lee sangmin (2000) McWilliams and Siegel(2001) Mohr et al. (2001) Maiganan and Ferrell (2004) Heo Gap Soo (2006) Ban Hye Jung (2009) the timely implementation of economic, legal, ethical and charitable responsibilities for society To recognize interdependencies between individuals, organizations, and social institutions and to translate such perceptions into action within the moral, ethical and economic values the exercise of the decision-making rights of each individual who is a business that pursues profit but does what it does in the moral and legal respects. A normative system of corporate behavior that must meet the needs or expectations of the stakeholders and society as a whole by addressing social and economic problems arising from business activities the level required by law and the company's actions to make society better beyond its grasp Companies are legal entities that have rights and obligations and are 'citizens' of the area in which they operate the degree to which the economic, ethical and discretionary responsibilities conferred by the company's stakeholders are fulfilled A duty by moral and instrumental rationale to meet and exceed the norms of stakeholders Responsibility for creating and making corporate decisions, both in the interests of individual companies and in the interests of society as a whole Concepts that cover diverse activities such as environment, human rights, labor, service, and donation as well as compliance with various laws Data: Choi Eun-young (2012), "Company's Relationship Between Social Performance and Financial Outcomes" 1.1.2. The scope of corporate social responsibility (CSR) 11