Customer‐centric corporate social responsibility

Abstract

PurposeThe purpose of this paper is to investigate customer‐centric corporate social responsibility (CSR) in Islamic banks of Bangladesh, Malaysia and the Arabian Gulf Region. The new framework is found from the incomplete link between managerial motivation and their actual involvement with CSR activities.Design/methodology/approachThe study uses annual reports of 16 Islamic banks from three regions. Using content analysis method, the study produces an ethical identity index on eight dimensions. The average index scores are ranked to get a view of the importance given by Islamic banks to the path of social responsibility.FindingsIn this study, the customer‐centric CSR framework assumes that there are two layers of CSR involvement in Islamic banks. The upper layer assures the commitment towards Allah (SWT) by operating under Islamic Shari'ah. The bottom layer ensures the commitment towards customers, employees and society. The reports of Islamic banks show that the selected banks are too customer centric and efficiency driven. However, that efficiency is targeted at the cost of sacrificing Shari'ah norms. Their commitments to basic Islamic rules fall far behind the average.Research limitations/implicationsThe study uses content analysis of the annual report to identify CSR involvement of the Islamic banks. There are various issues related to CSR and corporate management that are not reported in annual reports. Moreover, disclosure norms and regulation also have an influence on reporting standards. Thus, this study is limited to what is found in the reports only.Originality/valueThe study contributes to the existing literature on customer‐centric CSR and customer‐centric marketing. There is evidence that the findings from this study are consistent with other studies. Islamic banks are becoming customer centric because of the competition from conventional banks. However, they must not forget the very essence of the establishment of these banks which is the spiritual freedom based upon sole submission to Allah (SWT).

Bank customers’ preferences and responses to Corporate Social Responsibility (CSR) initiatives in Ghana

“…However, in obtaining positive behavioural responses such as purchase intentions, Berens et al (2005, in Mandhachitara & Poolthong, 2011 found that CSR only has a significant effect on purchase intentions when the company competency is high. This confirms that positive responses to CSR result only when the basic requirements of product and service quality are present, which McDonald and Lai (2011) and Rashid et al (2013) classify as customer-centric CSR. Hence the following hypothesis:…”

“…For example, employees may volunteer their expertise, talents, ideas or physical labour in such activities as clean-up exercises in the community, organising blood donations to a hospital or breast cancer screening (Hinson, 2012). Customer-centric CSR, however, refers to all corporate strategies centred on the satisfaction of customers (Rashid, 2010bin Rashid, Abdeljawad, Ngalim & Hassan, 2013. For example McDonald and Lai (2011) classify staff being able to handle complaints and the opening of more bank branches as customer-centric.…”

Do Corporate Social Responsibility Initiatives Favorable for Banks? Customer’s Perceptions

“…So, Bhattacharya (2009) has a view that, if a company wants to get good returns through corporate social responsibility practices, it should have to provide a particular return to individual stakeholders. Turnover and policies of an organization are interdependent (Rashid, 2010). So, to earn better profits ethical, legal and social structure of the organization should be developed in accordance with the interests of the relevant stakeholders (Rashid, 2010).…”

“…Turnover and policies of an organization are interdependent (Rashid, 2010). So, to earn better profits ethical, legal and social structure of the organization should be developed in accordance with the interests of the relevant stakeholders (Rashid, 2010).…”

“…According to Rashid (2010) there are four aspects of the customer centric initiative involved in corporate social responsibility activities of banks. The focus of these corporate social responsibility initiatives is on the following main points:…”