Measuring the Impact of Corporate Social Responsibility Practices on Competitive Advantage: A Mediation Role of Reputation and Customer Satisfaction

Abstract

Corporates are facing increasing pressure to operate in a socially responsible ways. The importance of Corporate Social Responsibility initiatives is due to their relation to competitive advantage, financial result, customer behavior, and corporate reputation as well. Therefore, the purpose of this study is to examine the mediating role of consumer satisfaction and corporate reputation on achieving competitive advantage for corporates, and then measuring the impact on creating competitive advantage for corporates that apply social responsibility in the Kingdom of Saudi Arabia. The experimental results of the study have demonstrated that the initiatives of (CSR) are affected by the economic, legal, ethical, and discretionary activities. The tests have also confirmed the direct relationship between the initiatives of (CSR) and competitive advantage as a strong positive relationship. The results of this study emphasize on the ability of customer satisfaction and corporate reputation to play completely mediating role between (CSR) and competitive advantage. Customer satisfaction also affects more strongly the achievement of competitive advantage. It affects with direct and indirect relationship through corporate reputation. This has been concluded based on the results from a sample of 300 Saudi corporates. The results of this study indicate that (CSR) appears as an effective strategic objective. Therefore, Saudi corporates should consider the initiatives of (CSR) as a way to construct intangible assets such as customer satisfaction and corporate reputation. Saudi corporates, therefore, need to exert all their efforts to engage in the activities of corporate social responsibility, which represent a powerful strategy for those corporates.

Corporate social responsibility and competitive advantage: A developing country perspective

“…The study established that CSR activities strengthen companies' competitiveness. This finding is consistent with the experimental results of El‐Garaihy et al () whose study confirmed a strong positive and direct relationship between CSR initiatives and CA. Besides, our findings are also consistent with Battaglia et al () who reported a significant relation between CSR and CA within the fashion industries of France and Italy.…”

“…Furthermore, experimental results of a study conducted by El‐Garaihy, Mobarak, and Albahussain () from a sample of 300 companies that measured the impact of CSR practices on CA, demonstrated that CSR initiatives are affected by economic, legal, ethical, and discretionary activities. The study also confirmed that a strong, positive, and direct relationship exists between CSR and CA.…”

Predictors of Reputation Through University Social Responsibility Practices in a Malaysian Private University: The Customer’s Perspective

“…Besides, the results of El-Garaihy et al, (2014) showed that all four facets of CSR, namely economic, legal, ethical, and philanthropy are contributing positively to the corporate reputation. In addition, the findings of Park et al, (2014) also found similar results that economic and legal aspects of CSR will have a positive impact on corporate reputation.…”

Corporate social responsibility practice and its effects on community well-being in Southeast Sulawesi, Indonesia

“…Carroll's model states that CSR comprises four types of social responsibility: economic, legal, ethical, and philanthropic (Carroll, 1991). This model is the most acceptable for measuring the implementation of CSR programs (Carroll and Buchholtz, 2006;Carroll and Shabana, 2010;Taneja et al, 2011;El-Garaihy et al, 2014;Al-Zyoud, 2017). The summary of CSR dimensions is shown in Table 1.…”