The Impact of Corporate Social Responsibility on Consumer Loyalty

More firms today are beginning to realise the importance of corporate social responsibility (CSR), and its impact on societal well being, apart from the overall governance of the supply chain processes of every organisation. Ratings are being developed to measure performances of most firms with regard to their CSR efforts besides their financial performance. This rating would then be used to measure each firm's progress in the business world. Many studies have been conducted linking CSR to consumer loyalty. It is found that the higher the CSR rating the stronger the bond would be between these two. Given this scenario, the main objective of this study is to find relevant evidence to link consumer loyalty and CSR initiatives within a company. A case study approach was used to empirically test our research model derived from the literature. Quantitative analysis based on a total of 100 responses from a leading electronics manufacturer in Malaysia was used to address the research objectives. The findings of this study suggest that the higher the practice of CSR the stronger is the consumer loyalty towards a particular firm. The study also shows that by investing in CSR, a firm could achieve a positive outcome in terms of its financial performance. CSR can provide the additional competitive edge to a particular firm. However, the linearity of this relationship warrants more testing and empirical research.