Banking on Corporate Social Responsibility

Abstract

This exploratory study set out to understand the true value of Corporate Social Responsibility (CSR) in the banking sector. Businesses, including banks, actively participate in CSR but the question of value still persists. What does the bank receive in return for participating in CSR? Do banks get more customers as a result of their CSR programmes? Do banks have a better customer retention rate because of their CSR programme? Will customers change banks purely because they disagree with their banks CSR programme? These were some of the issues addressed but due to the small sample size, the findings cannot be generalised. The study did not find any significant, positive nor negative relationship, between CSR and the bank customers; meaning the tests could not provide evidence that for instance CSR programmes should be targeted towards female customers or customers of a certain age or income bracket. More importantly 80% of the respondents did not consider CSR an issue that was important enough to affect their choice of banks. They will not switch banks purely based on a bank's CSR programme. Understandably they were more interested in bank fees and interest rates. These issues directly affected their reason for choosing a particular bank. So the question of why banks, and presumably other businesses, still participate and spend a lot of money on CSR when their customers do not seem to place much value on it, still persists. The findings suggest that a much larger study on the topic is warranted. It will aid banks and other businesses decide on their role in corporate social responsibility. Whose needs are being satisfied by participating in CSR?

Consumer's Attitudes to Corporate Social Responsibility and Green Marketing

“…The results show that consumers appreciate philanthropy more than sponsorship and cause related marketing (Lii and Lee, 2012). In contrast, other works show that CSR activities present a rather indifferent element that does not provide consumers with a motive strong enough to switch companies (Rice and Peter, 2015). A virtually negative influence on consumers is exerted by inappropriate social responsibility policy that is not in harmony with the company's objectives (Becker-Olsen et al, 2006).…”

Factors that Determines the Success of Corporate Sustainability Management

“…There is no one culture that is suitable for any CSM issues being faced by the management, therefore, management is required to have the ability to build and change the organizational culture accordance with the demands of CSM issues that exist. Campbell (2009), Rice (2009) and Barrett (2001) states that a corporation is an artificial person having a certain level of requirements that are identical to the hierarchy of human needs according to Maslow (as cited in Campbell, 2009;Rice, 2009). Barrett (2001) states that the lowest requirement is to improve financial performance and employee engagement (survival).…”

“…Next is the need to build quality relationships between customers, suppliers and employees (relationship), to build better business practices (self esteem), continuous product development (transformation), build unity and awareness of interdependence within the company (internal cohesion), strengthening relationships and engagement among employees (inclusion) and the highest requirement is the need to build a strong relationship of mutual dependence between internal and external stakeholders (unity) and the need to be "good citizens" (Falck & Heblich, 2007). Furthermore, according to Rice (2009), the needs of the company can be divided into eight levels, namely (1) the need to maintain a sense of security from the threat of business risk (security), (2) the need to build relationships (connection), (3) the need to control the environment and freedom (control), (4) the need to gain the attention of the stakeholders (esteem), (5) the need to reflect personal ideas (aesthetics), (6) the need to always be assisted to learn to grow (cognitive), (7) the need for assisted reaching the target company and (8) the need to pay attention to others and practice good values are believed companies (transcendence). Furthermore, Campbell (2009) split the company in accordance with the hierarchy of needs Maslow's opinion that the physical (lowest), feeling safe, loved, recognized, and finally, self-actualization.…”

“…Highest need is the need to consider the interests of stakeholders and act good for others. The views Campbell (2009), Rice (2009) and Barrett (2001) suggest that any company can be at the level of different needs and this affects the awareness of the management to fullfill its social and enviromental responsibilities.…”

“…Conversely, the higher the company's ability to meet its economic needs, the company will increasingly be more sensitive and proactive to social and environmental issues (Lee & Ball, 2003). The view of Campbell (2009), Rice (2009), Marrewijk and Werre (2003), Lee and Ball (2003) and Barrett (2001) show that financial motivation is the most urgent needs. It can be used as an explanatory research findings Ameer and Othman (2012) where the average global companies are able to enjoy better financial performance by applying the concept of CSM and the ability of Starbuck in "forcing" its competitors to jointly run a program of environmental protection (Kiron et al, 2012).…”