See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/263685424

The impact of corporate social responsibility on customer

satisfaction and corporate reputation in automotive industry:
Evidence from Iran

Article  in  Journal of Islamic Marketing · March 2014

DOI: 10.1108/JIMA-05-2013-0033

CITATIONS READS

7 637

2 authors, including:

Kambiz Heidarzadeh Hanzaee

Science and Research Branch, Islamic Azad University, Tehran, Iran
14 PUBLICATIONS   154 CITATIONS   

SEE PROFILE

All content following this page was uploaded by Kambiz Heidarzadeh Hanzaee on 25 April 2015.

The user has requested enhancement of the downloaded file.

 The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1759-0833.htm

Impact of
The impact of corporate social corporate social
responsibility on customer responsibility
satisfaction and corporate
125
reputation in automotive industry
Received 1 May 2013
Evidence from Iran Revised 22 September 2013
Accepted 9 November 2013
Kambiz Heidarzadeh Hanzaee
Science and Research Branch, Islamic Azad University, Tehran, Iran, and
Mona Sadeghian
Qazvin Branch, Islamic Azad University, Qazvin, Iran

Abstract
Purpose – This study aims to evaluate the impact of the most important dimensions of corporate
social responsibility (CSR) as a part of social marketing (SM) according to the current economic crisis
and conditions on customer satisfaction (CS) and corporate reputation in the automotive industry and
also to create a new approach in the field of CSR with considering the minimum and major
stakeholders by a localized model of the most basic and important responsibilities to open up a new
perspective to managers to increase the efficiency of production in automotive and other industries.
Design/methodology/approach – In this study, the authors used descriptive statistics and a
questionnaire survey of 245 executive managers of the market leader (Iran Khodro Co.) in automotive
industry in Iran. The structural equation modelling (SEM) technique used to examine the hypothesized
relationships.
Findings – The findings of this study conclude that legal and economic responsibilities can be considered
as prerequisites for companies. There is no proportional correlation between execution of economic
responsibility and CS and corporate reputation; instead, this is regarded as the basic responsibility of
companies.
Practical implications – This research can present CSR as a useful tool that can aid companies’
long-term performance and its benefits can become visible in future with preserving their sustainability.
Originality/value – Although the importance of CSR is more obvious to managers, this study opens
up a new aspect of CSR by considering it as an informal structure of corporations.
Keywords Corporate social responsibility, Customer satisfaction, Corporate reputation,
Islamic business ethics
Paper type Research paper

1. Introduction
Acting ethically and being responsible of all aspects of corporate performances (CPs),
through numerous market competitors, being a market leader and maintaining firm
reputation with high level of customer satisfaction (CS) for long-term existence of the
firm is the most important part of providential managers. Since more than three Journal of Islamic Marketing
Vol. 5 No. 1, 2014
decades, many scholars have proposed that high degrees of CP can be obtained by pp. 125-143
considering corporate social responsibility (CSR) as a critical part of all executive q Emerald Group Publishing Limited
1759-0833
managers’ responsibilities. We can assume that CSR as a guideline for a firm’s activities DOI 10.1108/JIMA-05-2013-0033
JIMA can involve all parts of organisational processes to have a reciprocal relationship with
5,1 society and stakeholders’ objectives (Wood, 1991; Galbreath, 2010a, b).
As many as social developments when the ancient marketing was ended
immediately other ways of marketing and assumptions getting started (Wilson and
Grant, 2013). New perspectives to CSR also consider employees, suppliers,
communities, governments and natural and work environment (Shum and Yum, 2010).
126 Although there is no accepted unique definition for CSR, it includes performances,
organisational processes and accepted obligations of a company against its society or
stakeholders (Galbreath, 2010a, b). Considering existing challenges related to business
sustainability and competition as well as development, continuous attention to social
and environmental issues still draws attentions (Samy et al., 2010).
There are two perspectives to CSR, one related to behavioural corporate
responsibilities and ethical dimensions, and the other to managing risk of
corporations and maintaining corporate reputation (Ararat, 2008). According to
Wilson (2012), the interest and applicability of Islamic markets has achieved withdrawal
of protection of any of Islamic trust. Many companies that engage in CSR activities
report that CSR can be beneficial for firm reputation. In large companies and many
corporations, we can see it as a critical tool to promote their public images (Mattila, 2009).
In fact, in Islam much importance has given to community welfare that started new
CSR concepts and relate it to the business closely more than current world business. In
Islam social responsibility of a corporation points to three responsibilities such as:
stakeholders, the natural environment and the community. Although Islam punctuates
stakeholders as employees, partners, suppliers or clients to be considered in corporate
aims and protecting their rights. According to Quran (17:34) “Give to the labour his
own wages before his sweat gets dry”. And there are verses as guidelines for
corporations to gain their aims and perform their responsibilities towards the natural
environment. A business in Muslim market is not just as a profitable machine but is as
a set of the Muslim community that should obey its rules such as preventing the
development of all pollutions that threats natural life. As the Quran (30:41) says that
corruption has occurred on ground and seas cause of the reward men hands have
gained that Allah gives them for even if they turn to him (Alserhan, 2011).
In Islam there are practices and ethics of international marketing framework means
that marketing activities stand in ethical principle that can improve the products
standards with no risk of reduction of services or products quality that offers to
customers. On the other hand maximising merchants and consumers behaviour
standards to some extent and creating cooperation beyond international traders and
their Muslim target markets (Saeed et al., 2001).
Despite these attitudes, there are several CSR definitions and models that can
indicate how CSR can play a vital role by dominating managerial decisions. The pace
of technological advances and transfer rate of information as well as becoming
up-to-date societies are major factors in business analysis. So experts have always been
developing perspectives towards such advances. Creation of profitability through a
variety of activities and process performances is the main factor that influences
businesses to step forward towards a progressive way (Shum and Yum, 2010).
In addition, the vision applied by most of provident businesses indicates the way
they rose to be the market leaders and head of manufacturers and service providers so
that they build their reputation beyond country borders. Since penetration into local
and foreign markets is prerequisite to business survival, CS is a precondition to Impact of
profitability and achieving business reputation (McWilliams et al., 2006). Nowadays, corporate social
companies’ social responsibility is the most important issue of many societies in which
there are some specific companies that are committed to social responsibility against responsibility
their stakeholders under such economic crises and intense competition in the market
(Galbreath, 2010a, b) while other companies are committed towards profitability and
productivity. 127
CS is a sort of an aggregate assessment of experiences gathered through time and
interactions with companies by customers. It acts as an indicator of past, current and
future performances of companies (Homburg et al., 2005). Satisfaction could also be
considered as fulfilment or dissatisfaction felt by an individual that is conceived
through analysis of performances, quality of products consumed or utilising a service
in comparison with his/her expectations (Katler, 1999).
CSR is increasingly in connection with strategic options, alternatives, performances
and production procedure and has become a part of signalling process of a company.
The said two items are the main tools of CSR that direct positively affect stakeholders’
assessments (Mahon, 2002). Companies are used to utilising such approach in the form
of voluntary CSR to communicate some features and characteristics to their
stakeholders in connection with their social responsibility. It is expected that such an
approach brings about a corporate reputation (McWilliams et al., 2006).
Although the side effects of such single-dimension perspective are neglected, market
competition, population growth and resource scarcity have made organisations utilise
modern management models that require commitment to social responsibility. By
accepting that external support to business beyond its territory in the current global
conditions is not a voluntary task and should become a major part of business
processes, note to social responsibilities and commitment to the society could be
regarded as a response to requirements and challenges of circumstances. In fact, social
responsibility could be regarded as paying attention to CP and impact of organisational
processes on the society and its stakeholders. Social responsibility, based on definitions,
is a novel approach to management in which organisations take actions with positive
impact on society welfare and improvement of public services that provide customers
with appropriate products and services under affordable prices, in accordance with
their requirements and needs. Social responsibility, on the other hand, goes far beyond a
positive viewpoint towards environment, because considering various consumption
aspects of products in practice and its influence on environment, it attempts to hinder
negative consequences in each part of the production, distribution, consumption and
extinction processes. Creation of an appropriate subjective image of a corporate in
customers’ viewpoint as an excellent company in manufacturing and providing services
may contribute towards higher CS in addition to aforesaid items, which would result in
decrease of costs related to personnel displacement and waste of time. Regarding such
factors and applying them towards social responsibility against society, individuals,
customers and even personnel, today’s reputable companies throughout the world have
succeeded in creating more robust position than their competitors and accordingly
become powerful leaders in their respective industries. Besides, paying more attention
to social responsibility could corroborate companies’ activities against several threats
and competitions, and manifest their effectiveness in production, manufacturing,
JIMA providing services and presenting a comprehensive paradigm to settle satisfaction,
5,1 sustainability and security in the society.
According to the International Organization of Motor Vehicle Manufacturers
“Organisation Internationale des Constructeurs d’Automobiles” (OICA, 2011),
Iran Khodro Co. the Islamic top and largest company in Iran that has a lot of native
and international agencies, named as the 13th automaker in the world in 2011 and
128 gained its socially responsible behaviour with providing the best products and
services, paying too much attention to quality, creativity, innovation, community,
customers and employees to get proved. And also have been the market leader despite
of market competitive conditions and rapidly changing of customer preferences by
increasing its market share. Recently the company has participated in the National
Quality Awards and Iranian Excellence Model (Supplied by the Productivity and
Human Resources Institution) that is the biggest and considerable benefit in market
competitive situations.
On the other hand, in Islamic countries (such as Iran), with their limitations and
extensive resources as well as restrictions on advertising and other social performance,
CSR can be implemented effectively. Extensive marketing efforts by companies can
make up a significant part. Most of the marketers assume that marketing in Islamic
countries is just a niche area (Wilson et al., 2013).
In accordance with most definitions, CSR is a sort of accountability that includes not
only maximising companies’ profit but could bring also about something far better.
Many researchers believe that social responsibility includes a wide spectrum of
stakeholders such as shareholders, investors, personnel, suppliers, societies,
government and the environment (Shum and Yum, 2010). Social responsibility in
businesses may bring about outstanding opportunities such as competitive
advantages, increased market share and creation of a new market niche (Samy et al.,
2010). According to Pearce and Doh (2005), social responsibility as a comprehensive
universal concept is now regarded as an essential part of executive careers in
commerce and among senior managers. In addition, Mintzberg (1983) has also stated
that dealing with CSR may contribute towards such accountability in practice in
accordance with values defined by an executive management (Milton et al., 2010).
Table I illustrates how CSR has changed in the past 30 decades.
Andrews (1987) refers to the four-part formulation and adoption of social strategies,
including market opportunities, resources and business skills, values and goals and
awareness in the community and stakeholder engagement. As Molteni (2006) states
that social responsibility can be used as a tool, as a part of corporate strategy to find
innovative solutions based on stakeholder expectations. Similarly, Zadek (2006)
confirms that there are several ways in which such competition, innovation, flexibility
and corporate responsibility can be used to gain points directly to specific business.
The researchers compared the companies and introduced three types of social
investment (friendly, selfish and strategic) and concluded that strategic investment
shows better results for companies that are trying to simultaneously maximise profits
and social performance, which includes creating positive benefits for the local
community. Companies will also have to include additional benefits, such as enhancing
reputation, skilled and qualified workforce, differentiated products (Milton et al., 2010).
So, despite all the benefits, emulating the values of a profit-motivated manager with a
strong sense of financial responsibilities to their CSR is difficult. This has led to
 Year Definition Reference

Peter Dracker 1973 The first and most important responsibility for the implementation of the Mehalu (2001)
enterprise understands their duties and if the firm fails to perform well in his
major work, no other business will be conducted
Vartyk and Cochran 1985 Practices, organisational processes and commitments by a company towards Galbreath (2010)
society or stakeholder
Griffin and Barney 1992 Duties and obligations that must be set in order to protect and assist the Barney and Griffin (1992)
community in which it operates, to perform
Samuel Certo 1993 Management commitment and responsibility to safeguard and promote the Robbins (2006)
welfare of the community and do things that interests the key element for the
survival of any corporation
Solomon and Stuart 1997 Style of management that the organisation measures its impact on society and Solomon and Stuart (1997)
the promotion of public goods to be doing. The negative effects on society
must be eliminated and consumer attitudes and behavior, it must be changed
Bookholds and Vozental 1997 Is a term that is common to many other assumptions, labour relations, CSR as Shum and Yum (2010)
not only a wide range of stakeholders, including shareholders, including
investors, but also employees, suppliers, communities and the environment
Hosted and Allen 2000 Management that includes a form of moral relationships and clears the Milton et al. (2010)
company is all stakeholders
Sen and Bhattacharya 2001 Practices, organisational processes and commitments by a company towards Bhattacharya (2009)
society or stakeholders
Maten and Crane 2005 CSR as not only a wide range of stakeholders, including shareholders, Shum and Yum (2010)
including investors, but also employees, suppliers – suppliers, communities
and the environment
Horne and Warren 2007 There is no single accepted definition of CSR Galbreath (2010)
Lamandi 2007 Is the responsibility of the prospective manager commitment between the Lamandi (2007)
organisation and the community and reflect changing social expectations
about the performance of the organisation, the main purpose of the product to
gain more profits in a competitive environment
Jeremy Galbreath 2010 There is no single accepted definition, however, can include CSR practices, Galbreath (2010)
organisational processes and commitments by a company towards society or
stakeholders
responsibility
corporate social

Review of potential
definitions of CSR
129

Table I.
Impact of
JIMA criticism of corporate social voluntary responsibility, as an effective activity in creating
5,1 a positive image of the company, which will not have any effect on a company’s
internal processes. In relation with CSR, there are theories that will be discussed more
widely, including stakeholders, social, legal and other contracts. However, there are no
plausible explanations for why and how managers carry out their financial
responsibilities, as a function of CSR motivated by profit and benefit from a strong
130 sense (Shum and Yum, 2010). According to most models of CSR we can see that within
the range of all responsibilities of managers, they need enough time to recognise the
most important responsibilities and its dimensions.
As we can see in Table II several dimensions are available in most of the important
CSR models. Using the Caroll model with four responsibilities, Denison model with
society and environmental, Bhattacharya stakeholders and Azizi and Bagheri’s
dimensions, we can collect the minimum responsibilities with widespread dimensions.

2. Development of hypotheses and conceptual model

To find the relationship between CSR on CS, equity theory can be used. According to
the social interaction theory, equity theory focuses on the fairness, integrity or proper
judgements that individuals or groups of people they receive. In this theory, it is
assumed that if customers have a sense of equality and fairness (the input is equal to
output is exchanged) in the transaction, satisfaction can be achieved. Hence, customers
incur costs (input) in exchanging for a certain level of output (Galbreath, 2010a, b).
Therefore, we expected that:
H1. CSR has a direct impact on CS.
Companies are used to utilising such approach in the form of voluntary CSR to
communicate some features and characteristics to their stakeholders such as society
and the market in connection with their social responsibility. Under such responsibility,
companies demonstrate publicly a clear representation of their philanthropic
performances in the society and create a positive subjective image (McWilliams et al.,
2006) to make their customers satisfied of the company products and services more than
competitors. Actually it is an essential act for corporation that looks for maximising its
profit should cope with social benefits, that is, in addition to creation of its competitive
advantages it is required to bring about profits for the society (Denison, 2000). Thus:
H1a. Corporate voluntary-social responsibility from the viewpoint of society and
market (CVSR-SM) is directly related to CS.
Hersey and Blanchard (1977) expressed that labour is the most important resource of
any company; there is an expectation of the managers and the organisations that treat
to their employees in a best way and continually enhance their productivity, pay them
more attention, respect their legal rights and also respect to their character (Azizi and
Bagheri, 2010). Managers and administrators are expected to pay more attention to
their personnel, their legal lawful rights and reward their good performances in due
time (Denison, 2000). Therefore:
H1b. Corporate moral-social responsibility from the viewpoint of workplace
(CMSR-W) is directly related to CS.
Model Year Dimensions Reference

Milton Friedman 1970 Economic activities Friedman (1970)

Social goals
Provision of social norms and values Social responsibility
Sethi 1975 Expectations of functions Das Gupta (2012)
Social accountability
Institutional principles Principles of CSR
Organisational principles
Personal principles
Environmental assessment
Wood 1991 Stakeholder assessment The process of CSR Meehan and Richards (2006)
Managerial aspects
Social effects Outcomes and firm performance
Social programs
Social practices
Carroll 1997 Economic responsibility Galbreath (2010)
Legal responsibility
Moral responsibility
Voluntary responsibility
Mc Kenzy 2000 Shareholders Azizi and Bagheri (2010)
Staff
Customer
Natural environment
Cultural values
Denison 2000 Society Denison (2000)
Environment
Morality
Economic responsibility
Druker 2007 Responsibility to complete the tasks Mehalu (2001)
Responsible products and services
Processes responsible
Moral responsibility
Bhattacharya 2009 Stakeholder interests Bhattacharya (2009)
Quality of communication between stakeholders
Corporate profitability
Achieving to corporate goals
Stakeholder expectations
responsibility

CSR models: dimensions

corporate social

131

Table II.
Impact of
JIMA Social responsibility as an unwritten instruction code includes avoiding social
5,1 harassment and harm to society, preserving the environment and creating a safe and
secure place as well as appropriate living situations for people to meet social
expectations and requirements (Denison, 2000). So this responsibility can absorb
customers’ attentions to the company and its present and future ecological programs.
Thus:
132 H1c. Corporate moral-social responsibility from the viewpoint of ecological
environment (CMSR-E) has a direct relationship with CS.
Economic responsibilities of a company can be defined as making decisions concerning
inter-organisational processes, mission and vision, procedures and guidelines,
instruction code, rules and manuals as well as manufacturing products in accordance
with customers’ requirements respecting individuals’ rights and so on (Carroll, 1979)
about what can customers achieve of the company of qualified products and services
versus their payments. Although a company can do its economic responsibility by
giving its stakeholders enough profit of their investments. Therefore:
H1d. Corporate economic-social responsibility from the viewpoint of leadership
(CESR-L) is directly related to CS.
As other dimensions workplace is so important why customers are in connection with
labours and what managers decide about the workplace can effect on labours, and
customers can be affected by them. If a workplace well managed, labours can treat
customers much better than ever. Some important decisions such as: enough attentions
to labours payments, rewarding systems and fairness in hiring and, etc. Thus:
H1e. Corporate economic-social responsibility from the viewpoint of workplace
(CESR-W) is directly related to CS.
Observation of leaders’ legal and lawful rights could be categorised as one of such moral
responsibilities and commercial units are expected to observe such responsibility to
respect individuals’ rights and prevent any social harm. This kind of responsibility is
essentially rooted in observation and securing human rights (Mehalu, 2001) what can
make customers satisfied with the company. Therefore:
H1f. Corporate moral-social responsibility from the viewpoint of leadership
(CMSR-L) is directly related to CS.
From a scientific perspective, although financial performance is of a company’s
primary interest, reputation is considered as a scale to measure the company’s success
and benefits. In addition, many scientists have expressed that a positive reputation is a
strategic asset that helps companies create and maintain competitive advantage
(Galbreath, 2010a, b). Corporations can handle their reputations by doing social
responsibilities and good public relations in the society and the corporation itself.
Thus:
H2. CSR has a direct impact on CR.
The voluntary responsibility is one of the important part of CSR efforts, which may
include the identification of organisational resources and external partnerships to
achieve company goals, identify opportunities for collaboration with suppliers,
the identification of the company’s resources priorities, informing customers and those Impact of
provisions of the environmental and social responsibility of corporate products and corporate social
services, supporting corporate relationship with NGOs and social enterprises and
membership in some of them, supporting charities and voluntary organisations, responsibility
supporting social researches and educational activities and enhancing the image of
corporate for society (Denison, 2000):
H2a. CVSR-SM is directly related to CR. 133
As mentioned in above, managers and administrators are expected to pay more
attention to their workplace such as labours, job environment and some important
items about them. Moral responsibilities can be active in all company systems that can
make the workplace the best place to have job. In the effect of this responsibility moral
responsibility enables companies to overcome regulatory constraints and keep their
perseverance (Mehalu, 2001) after making customers being satisfied can make a good
image from the company and improve its reputation. Therefore:
H2b. CMSR-W is the direct link to the CR.
A company for achieving competitive advantages should act in such way that there is
no harm or threat for the society. In other words, while the corporation creates
competitive advantages for itself by paying attention to the benefits to society and
make it for them more than the past (Denison, 2000). Environmental responsibility
could be clarified through production processes, establishment of waste management
system throughout the company departments, development and promotion of
environmental perspective in all internal and external activities. Thus:
H2c. CMSR-E has a direct relationship with the CR.
It is a de facto economic responsibility, which includes return on investment, shareholders’
profits and fair payment of dividends to personnel, creation of new resources, promotion of
technology, innovation and creation of new services and products. In fact, profitability as
the organisation’s primary objectives has been considered here (Mehalu, 2001). Leadership
in social responsibility is the sense of processes of decision making within the organisation,
mission and vision, policies and procedures with respecting to ethical codes, rules and
regulations (Galbreath, 2010a, b) that can improve the company reputation. Therefore:
H2d. CESR-L has a direct relationship with the CR.
Protecting and creating a safe and healthy environment that is free of any harm and
loss and creating a space for people to live is one of the corporate responsibilities. This
major aspect of CSR in the field of production processes, the establishment and
implementation of waste management systems in all parts of corporation and
development and expansion of environmental attitudes in all activities within the
boundary, ensure compliance with legal requirements, is so crucial to create a positive
image of the corporate in community viewpoint (Galbreath, 2010a, b). Thus:
H2e. CESR-W is directly related to the CR.
CSR can be considered as one of the responsibility of a prospective manager who
can observe the commitment between the organisation and the community and
reflect changing social expectations about the performance of the organisation
JIMA (Lamandi, 2007). Leadership can make the corporation being affected by performing
5,1 moral responsibilities to overcome regulatory constraints and keep their sustainability
by improving reputation. So this responsibility contains all activities that are not
necessarily defined through legislation (Mehalu, 2001). Therefore:
H2f. CMSR-L is directly related to the CR.
134
3. Methodology
Applied objectives and descriptive case reviews as well as statistical surveying
analysis have been utilised in this study. Data were collected via membered sections
management levels of CSR committee of Iran Khodro Co. Data analysis was completed
in February. The data collection was conducted over a four-week period.
We used a localized questionnaire using Likert five-options to obtain individuals’
feedback. We regarded 245 samples to collect data. This company has 245 managerial
levels from units that are engaged in the CSR committee. The study questionnaire
includes 107 queries concerning the four dimensions of the well-known Carroll (1979)
model of CSR and the model used in Iran Khodro Co. as well as the stakeholders
dimensions (Figure 1) conducted in this field of research. So attempts have been made
here to design and customise queries in accordance with CP.
The sources of measurment scale items are demonstrated in Table III.
For descriptive statistics we used six general anonymous queries regarding age,
gender, education level, department unit, working background in car manufacturing
industry and other industries that 90 per cent were male, the ages between 36 and 40,
with 42.2 per cent got the most frequent and 11-15 years experienced managers with
41 per cent and 0 to five years of experience in other industries got the most frequent.
In this research, questionnaires were first distributed among 30 experts of automotive
industry in order to verify validity of the main concept that resulted in 33 per cent
accepted level using gathered information and data and considering ratio of concept
validity in accordance with Lawshe’s table. We used SPSS to enter data and structural
equation modelling (SEM) technique was used for confirmative factor analysis (CFA).
Reliability and validity data gathering tools in collecting authentic data leading to
consistent results require retest-reliability using the Pearson’s solidarity coefficient.

H1a Customer
Voluntary Satisfaction
Society & Market H2a
Responsibility

H1d H2d
Economic leadership H1f H2f Corporate
Responsibility Social
H1b H2b Responsibility
Workplace H1e H2e
Moral
Figure 1. Responsibility H1c Corporate
CSR dimensions Ecological Reputation
H2c
conceptual model environment
The Pearson’s solidarity coefficient results among 30 CSR committee managers is Impact of
(PSC ¼ 0.998) appropriate. corporate social
Reliability and convergent validity were assessed through a series of measurement
models using AMOS with the measurement models. All items have been loaded more responsibility
than the recommended 0.7 threshold and loading factors were at least 0.50 percentage.
The average variance for each latent construct that have been extracted (0.5) all
exceeded for the recommended thresholds. 135
According to the results of exploratory factor analysis (EFA) that were repeated
four times, the answers were obtained for each factor according to the CSR literature,
this concept can be expressed in six elements. In other words, CSR has become to the
sixth overtone in this study, our results showed that factors are expressed as CVSR-SM
the second factor is CSMR-W, CMSR-E and the fourth CESR-L, the fifth is CESR-W and
the last is CMSR-L.
Kaiser’s indicator for data adequacy (that should be higher than 0.7) and Bartlet test
for rejection of zero assumption have been utilised for data validity and cause-and-effect
analysis. Considering 0.0001 error probability and significant K2, zero assumption
(Table IV) could be rejected and confirm the correlation among observed variables.
Exploratory cause-and-effect analysis is then assessed using SPSS software as a
platform.
Analysis of main components has been made to identify the relationship among
elements while Warimax has been used for rotation analysis and eigenvalue was
utilised for selecting number of components. Modelling the structural equations, which
has already been verified through software analysis (as measuring model), is then
formed in advance of structural model.
The CFA produced acceptable fit so that evidenced by the CFA fit statistics
CMIN/DF ¼ 1.642; RMSEA ¼ 0.055; GFI ¼ 0.81; AGFI ¼ 0.80; CFI ¼ 0.903.

Scale measure Source

Corporate social responsibility

Economic responsibility
Voluntary responsibility
Moral responsibility
Customer satisfaction
Corporate reputation
Galbreath (2010), Bhattacharya (2009), Denison (2000); CSR
committee documents of IKCO
Lindgreen et al. (2009), Mouly Potluri and Temesgen (2008),
Galbreath (2010); CSR committee documents of IKCO Table III.
Lewis (2003), Galbreath (2010); CSR committee documents Sources of measurement
of IKCO scale items

CSR CS CR

Kaiser-Meyer-Aulkin index for adequate sampling 0.926 0.921 0.942

Bartlett’s – spherical test
K-Squair 5,643.395 1,943.01 2,751.49 Table IV.
Degrees of freedom 1,035 171 253 Calculation KMO and
Measurement error 0.000 0.000 0.000 Bartlett’s test
JIMA Which are usual with large samples, other fit indices indicate acceptable fit beyond the
5,1 minimum accepted level so that the model has achieved proper fitness level.
As we have in results (Table V), the all variance extracted (AVE) values are more
than the corresponding squared inter-construct correlation (SIC) estimates that has
been accomplished by the assessment of the total confirmatory factor analysis (CFA).
According to the calculations made here, it could be stated that all the extracted
136 variances are more than 0.50 and results indicate greater combined reliability
coefficient. Analysing divergence validity concerning the social responsibility variable
requires distinguishing concepts extracted from exploratory cause-and-effect analysis
because correlation among social responsibility factors are less than 0.85. As the
research structural model (Figure 2) the variables CS and CR, each of which was divided
into two other factors since the correlation were less than 0.85, cannot be regarded as
independent concepts. So, a single unique concept has been utilised for each item in the
structural model. In the same way, following assumptions could be considered after
execution of the required modification on the model.

Scale or latent variables

combined reliability Items Estimate Critical value Load factor CR AVE

CESR-W Item no. 18 1.000 0.900 0.74 0.60

Item no. 19 0.505 5.204 0.618
Item no. 10 1.000 0.625
Item no. 11 0.791 5.948 0.532
CESR-L Item no. 4 1.000 0.655 0.72 0.51
Item no. 5 0.857 7.052 0.631
Item no. 6 0.972 8.340 0.761
CMSR-E Item no. 15 1.000 0.591 0.87 0.52
Item no. 20 1.355 7.871 0.679
Item no. 25 1.373 7.645 0.671
Item no. 26 1.261 7.292 0.629
Item no. 27 1.411 8.234 0.754
Item no. 28 1.256 8.015 0.707
Item no. 31 1.376 8.472 0.789
CMSR-W Item no. 7 1.000 0.741 0.91 0.54
Item no. 9 1.085 10.501 0.730
Item no. 13 1.028 10.565 0.725
Item no. 14 1.306 11.899 0.816
Item no. 22 0.923 9.655 0.675
Item no. 23 0.959 10.012 0.700
Item no. 29 1.047 10.473 0.735
Item no. 30 1.111 11.268 0.781
CVSR-SM Item no. 39 1.000 0.792 0.90 0.50
Item no. 46 0.976 10.961 0.722
Item no. 46 0.969 10.070 0.666
Item no. 44 0.994 11.180 0.724
Item no. 43 0.985 11.761 0.755
Item no. 42 0.995 11.002 0.723
Item no. 41 1.029 11.478 0.745
Table V. Item no. 40 0.924 10.128 0.667
Converge validity Item no. 38 0.774 9.081 0.607
(CR-AVE) Item no. 33 0.761 8.621 0.582
 0.59 Customer Impact of
Voluntary
Society & Market 0.57
Satisfaction corporate social
Responsibility
responsibility
0.18
0.13
Leadership
Economic Corporate
Responsibility social 137
0.56 0.37 Responsibility
Workplace 0.003 0.10
Moral
Responsibility 0.15 Corporate
Ecological Reputation Figure 2.
0.16 The structural model
environment

Considering the antecedents of attitudes, significant paths were found such as CVSR-SM
and CMSR-W ( p , 0.000) supporting H1a, H1b in relation with CS and H2a and H2b in
relation with corporate reputation. However, results show that CMSR-E ( p , 0.098),
CESR-L ( p , 0.019) and CESR-W ( p , 0.964) were non-significant antecedents, failing
to support H1c-H1e in relation with CS and CMSR-E ( p , 0.112), CESR-L ( p , 0.122)
and CESR-W ( p , 0.145) supporting H2c-H2e in relation with CR. As the coefficient of
determination by computing regression that investigate the relation between CSR on CS
and corporate reputation as Table VI. Both CS and corporate reputation both can
be affected by corporate voluntary social responsibility with considering social and
market and corporate moral social responsibility by considering workplace dimension in
automotive industry.

4. Conclusion
Despite a variety of dimensions and aspects of CSR and the usefulness of execution of
such dimensions, CSR should necessarily utilise two approaches: voluntary and moral.
Moral and voluntary actions could bring about outstanding results on public
subjective attitude and mentality as well as CS, and accordingly increase the CR in its

Effect of Effect on Regression Rejected/approved

Hypothesis structural structural weights t p hypothesis

H1a CVSR-SM CS 0.599 5.972 * Approved

H1b CMSR-W CS 0.561 6.196 * Approved
H1c CMSR-E CS 0.152 1.656 0.098 Rejected
H1d CESR-L CS 0.181 2.347 0.019 Rejected
H1e CESR-W CS 0.003 0.045 0.964 Rejected
H2a CVSR-SM CR 0.574 5.087 * Approved
H2b CMSR-W CR 0.375 3.970 * Approved
H2c CMSR-E CR 0.165 1.591 0.112 Rejected
H2d CESR-L CR 0.132 1.547 0.122 Rejected
H2e CESR-W CR 0.108 1.457 0.145 Rejected
Table VI.
Note: Significant at: *less than 0.001 Assumptions relationship
JIMA related industry. The findings of this study conclude that two responsibilities defined as
5,1 legal and economic are prerequisites for companies. As observed through the study
findings, there is no proportional correlation between execution of economic
responsibility and CS and CR; instead, this responsibility is regarded as a basic one
for companies. Therefore, some companies with considerable capital investment take
the initiative towards execution of social responsibility. In other words, decisions on
138 corporate-economic social responsibility should be made in advance of process
commencement so that the company would not encounter any issues post such actions
and could grow in the competitive market. Considering findings, it could be concluded
that the observation of morality in social responsibility as conceived publicly should
meet environmental requirements and customer needs. One of the main issues that
appear in many companies as illustrated in the study results could be stated as lack of a
proportional relationship between economic aspects of CSR and leadership concerns
and CS. Considering the findings of the study, company’s economic-social responsibility
under working area circumstances does not show direct relationship with CS and CR
that are involved with long-term vision and establishment of viewpoints and decisions
made on social responsibilities along with the main objectives of the companies.
However, there are some existing perspectives concerning barriers to decision making
in official company structures and can be regarded as general objectives of companies.
Therefore, attempts should be made so that all decisions and performance of social
responsibilities could be aligned with the strategies and major planning criteria as well
as official company structure while avoiding unofficial structures. Companies are
required to consider a multi-objective approach together with long-term viewpoint
towards the CSR. As considered in the present study, its influence on CS and CR could
be evaluated concerning companies’ performance and their competitive advantages as
well as other main marketing variables. This study could possibly bring about better
and more reasonable results if it had been carried out during in previous year.

References
Alserhan, B.A. (2011), The Principles of Islamic Marketing, Gower, Aldershot, pp. 14-16.
Andrews, K. (1987), The Concept of Corporate Strategy, McGraw-Hill, Homewood, IL.
Ararat, M. (2008), “A development perspective for corporate social responsibility”, Corporate
Governance, Vol. 8 No. 3, pp. 271-285.
Azizi, S. and Bagheri, J. (2010), “Basic strategies for social responsibility”, Corporate Social
Responsibility Bulletin, Vol. 4 No. 4, pp. 95-122.
Barney, J.B. and Griffin, R.W. (1992), The Management of Organizations: Strategy, Structure and
Behavior, Houghton Mifflin, Boston, MA.
Bhattacharya, D. (2009), “Strengthening stakeholder – company relationship through mutually
beneficial corporate social responsibility initiative”, Journal of Business Ethics, Vol. 85
No. 2, pp. 257-272.
Carroll, A.B. (1979), “A three-dimensional conceptual model of corporate performance”, Academy
of Management Review, Vol. 4 No. 4, pp. 497-505.
Das Gupta, A. (2012), “Corporate social responsibility and strategy: a bird’s eye view”, Global
Business Review, Vol. 13 No. 1, pp. 153-165.
Denison, D. (2000), Organizational Culture and Corporate Social Responsibility: Can It Be a Key Impact of
Lever for Driving Organizational Change? Chapter 2, International Institute for
Management Development, Lausanne. corporate social
Friedman, M. (1970), “The social responsibility of business is to increase its profits”, responsibility
The New York Times Magazine, September.
Galbreath, J. (2010a), “How does corporate social responsibility benefit firms? Evidence from
Australia”, European Business Review, Vol. 22 No. 4, pp. 411-431. 139
Galbreath, J. (2010b), “The impact of strategic orientation on corporate social responsibility”,
International Journal of Organizational Analysis, Vol. 18 No. 1, pp. 23-40.
Hersey, P. and Blanchard, K.H. (1977), Management of Organizational Behavior: Utilizing Human
Resources, Prentice-Hall, Englewood Cliffs, NJ.
Homburg, C., Koschate, N. and Hoyer, W.D. (2005), “Do satisfied customers really pay more?
A study of the relationship between customer satisfaction and willingness to pay”,
Journal of Marketing, Vol. 69 No. 2, pp. 84-96.
Katler, P. (1999), Katler on Marketing Management, Fara Publication, Tehran, (translated by
A. Rezaei Nejad).
Lamandi, I. (2007), “Corporate social responsibility and social responsiveness in a global
business environment – comparative theoretical approach”, Romanian Economic Journal,
Vol. 10 No. 23, pp. 3-18.
Lewis, S. (2003), “Reputation and corporate responsibility”, Journal of Communication
Management, Vol. 7 No. 4, pp. 356-366.
Lindgreen, A., Swaen, V. and Johnston, W. (2009), “Corporate social responsibility: an empirical
investigation of US organizations”, Journal of Business Ethics, Vol. 85 No. 2, pp. 303-323.
McWilliams, A., Siegel, D.S. and Wright, P.M. (2006), “Corporate social responsibility: strategic
implications”, Journal of Management Studies, Vol. 43, pp. 1-18.
Mahon, J.F. (2002), “Corporate reputation: a research agenda using strategy and stakeholder
literature”, Business and Society Journal, Vol. 41 No. 4, pp. 415-445.
Mattila, M. (2009), “Corporate social responsibility and image in organizations: for the insiders or
the outsiders?”, Social Responsibility Journal, Vol. 5 No. 4, pp. 540-549.
Meehan, J. and Richards, A. (2006), “Corporate social responsibility: the 3C-SR model”,
International Journal of Social Economics, Vol. 33, pp. 386-398.
Mehalu, K. (2001), Social Responsibility and Managerial Ethics – A Focus on MNCs, The 2nd Peter
Drucker’s Challenge, Vienna.
Milton, J., Soares, L., Pasa, C. and Farache, F. (2010), “Strategic corporate social responsibility
management for competitive advantage”, Brazilian Administration Review, Vol. 7 No. 3,
pp. 294-309.
Mintzberg, H. (1983), “The case for corporate social responsibility”, Journal of Business Strategy,
Vol. 4 No. 2, pp. 3-15.
Molteni, M. (2006), “The social competitive innovation pyramid”, Corporate Governance, Vol. 6
No. 4, pp. 516-526.
Mouly Potluri, R. and Temesgen, Z. (2008), “Corporate social responsibility: an attitude of
Ethiopian corporates”, Social Responsibility Journal, Vol. 4 No. 4, pp. 456-463.
Pearce, J.A. and Doh, J.P. (2005), “The high impact of collaborative social initiatives”, MIT Sloan
Management Review, Vol. 46 No. 3, pp. 29-39.
Production Statistics (2011), OICA, available at: http://oica.net/category/production-statistics/
2011-statistics
JIMA Robbins, C.M. (2006), Modern Management; Quality, Ethics and the Global Environment,
Management, 9th ed., Prentice-Hall, New York, NY.
5,1 Saeed, M., Zafar, U.A. and Masooda, M. (2001), “International marketing ethics from an Islamic
perspective: a value-maximization approach”, Journal of Business Ethics, Vol. 32 No. 2,
pp. 127-142.
Samy, M., Odemilin, G. and Bampton, R. (2010), “Corporate social responsibility: a strategy for
140 sustainable business success – an analysis of 20 selected British companies”, Corporate
Governance, Vol. 10 No. 2, pp. 203-217.
Shum, P.K. and Yum, Sh.L. (2010), “Ethics and law: guiding the invisible hand to correct
corporate social responsibility externalities”, Journal of Business Ethics, Vol. 98 No. 4,
pp. 549-571.
Solomon, M.R. and Elenara, W. (1997), Marketing (Real People, Real Choice), Prentice-Hall
International, Englewood Cliffs, NJ, pp. 5, 83-84 and 390.
Wilson, J.A.J. (2012), “The new wave of transformational Islamic marketing: reflections and
definitions”, Journal of Islamic Studies, Vol. 3 No. 1, pp. 5-11.
Wilson, J.A.J. and Grant, J. (2013), “Islamic marketing – a challenger to the classical marketing
canon?”, Journal of Islamic Marketing, Vol. 4 No. 1, pp. 7-21.
Wilson, J.A.J., Belk, R., Bamossy, G., Sandikci, O., Kartajaya, H., Sobh, R., Liu, J. and Scott, L.
(2013), “Crescent marketing, Muslim geographies and brand Islam”, Journal of Islamic
Marketing, Vol. 4 No. 1, pp. 22-50.
Wood, D.J. (1991), “Corporate social performance revisited”, Academy of Management Review,
No. 1, pp. 691-718.
Zadek, S. (2006), “Corporate responsibility and competitiveness at the macro level: responsible
competitiveness: reshaping global markets through responsible business practices”,
Corporate Governance, Vol. 6 No. 4, pp. 334-348.

Corresponding author
Mona Sadeghian can be contacted at: sadeghian.mona@yahoo.com

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints
Appendix. CSR effects on CS and corporate reputation Impact of
Appendix: Corporate social responsibility effects on customer satisfaction and corporate social
corporate reputation: responsibility
Section A: Demographic

Please tick the boxes and fill the gaps: 141

Gender: Male Female
Age: 30-35 36-40 41-45 46-50 46-50 51-55 56-60
Education Level: B.A. M.A. Dr.
Unit: ----------------
Experience in automotive industry: ------
Experience in other industries: ------

Section B: CSR effects on CS and CR:

1. It seems that the productivity of workers in manufacturing is constantly increasing.
2. Company managers are aware of producer’s environmental rules.
3. I think the company's operating costs are reduced.
4. Long-term strategies have been developed for the company.
5. All products of the company have approved by standard.
6. The company has always had interest in regional cooperation.
7. In my opinion, the performances of all managers are in compliance with organizational regulations.
8. Observing justice about the company partners is a very important issue.
9. The company managers do not consider discriminatory to the Staff in rewarding.
Company delivers notable contributions to charities and people with specific diseases, organization
10.
supporting orphans and other.
11. Programs are planned to reduce energy waste.
12. The company is actively involved in the religious and cultural programs.
13. It seems that the rules of hiring employees are exactly respected.
It seems that ethical responsibilities (such as:employee rights, reacting appropriate with the staff,
14.
motivating staffs and etc.) is so important.
15. Programs have been developed to reduce the amount of waste in the company.
16. Performing duties ethically will lead to long-term profitability for the company, finally.
17. Doing ethics is essential for the survival of the company.
18. Giving spirit to staffs is the main priority of the company.
19. Increasing shareholders' rights has high importance in the company.
20. Environmental laws are respected in the company.
21. It is important for the company to preserve employer’s health.
22. Observing principles of behavioral and ethical in a high level is considered for all employees.
23. Intimate and friendly environment is considered for staffs.
24. The company invests in training and development of its workforce.
It seems that the company does more than expectations and government regulations to participate in
25.
environmental protection.
26. The first priority of company managers to participate in decisions is about the environment.
27. The company sponsors of environmental initiatives.
28. The environmental functions goals are also included In enterprise programs.
29. Employees express their opinions freely without fear of being fired in the company.
30. I think the staffs got promotion with no discrimination.
31. The company continually measures its environmental performance.
32. It seems that the company tries to minimize its environmental activities impacts.
33. Managers consider policies to protect the health and safety of employees at work.
34. The company regularly provides the shareholders by its financial reports.
35. The company expresses its long-term environmental strategies and programs for stockholders.
(continued)
JIMA 36. Special educations in relation to the environment are given to the staffs during the manufacturing process.
37. Stakeholders are continually informed by company voluntary activities.
5,1 Specific methods and technology are designed to produce products that are compatible with the
38.
environment.
39. The company support researches in the field of new technologies in the manufacturing sector.
40. The company products are designed to lead reduction in fuel consumption.
The company plans and designs for job creation in society and contribute to develop the national
142 41.
economy.
42. It seems that the company is actively working with various universities and supports them.
43. In my opinion the company has already increased the production knowledge in the country effectively.
44. I think the company has abundant effects on the national economy, regional and global of the country.
45. It seems that the company established manufacturing bases in other cities that lead to resulted society
justly industry distribution.
46. It seems that the company has been able of appropriate regional cooperations.
47. Gaining the customer satisfaction has particular importance for the company.
48. In company productions preserving health and of our customers are as well assumed.
49. The company performance is in a more appropriate level than competitors.
50. The company uses its assets as well in production.
51. To improve new products, the results of previous researches are numerous used.
52. Customers are given the necessary training in the case of consumption.
53. Product prices are determined in accordance with their qualities.
54. Specific payment terms are considered for customers.
55. The customers are informed of all risks of the goods by the company.
56. Innovation is very important in production.
57. Customers receive qualified products based on their payments.
58. Company tries to market the products with high quality.
59. Company products will be provided enough to the consumer market
60. The company productions have possibility distribution to all over the country.
61. All products are offered with reasonable price.
62. Products are offered according to customers' opinion.
63. The company has possibility to produce customized products.
64. The company products can be supply to other countries.
I think the company products are being interested by customers because of their
65.
technical capabilities.
66. All customer complaints will be investigated.
67. Quality of products is continually improved.
68. Customer satisfaction is considered as an indicator of company operations.
69. Customers consider the company more successful than competitors.
70. It appears the company is committed to all of its customer's obligations.
71. The company is always concern about the customers' time along purchasing.
72. The company licensed agencies are always responder to customers.
73. Production spare parts are abundantly produced/imported and are available for customers.
It seems that the company service providers should have respectful and appropriate behavior
74.
to customers.
75. The company dealers use various methods for selling products to customers.
76. The products customers won't meet any defects after the delivery.
77. The company has chosen its agencies that can meet the needs of customers.
78. The products are so tough.
79. Customers have attracted by product.
80. All products of the company are safe enough.
81. All agencies branches and service centers are competent and trustworthy.
82. All company advertisements are right and consistent with the facts.
83. Services are provided efficient and effectively.
(continued)
 Company distribution channels are banned of inappropriate commercial activities
84. (such as: Low retail expensive sales and etc.)
Impact of
85. The rights of all individuals are respected.
corporate social
86. The company offers a much better product compared to its competitors. responsibility
87. The company products have the potential of distribution in global markets.
88. The company produces products that meet everyone's expectations.
89. The probability that the company's products offer by consumers to others, is very high.
90. One of the strengths of the company is planning to increase public satisfaction. 143
91. All products are covered by the company's after-sales service.
92. Products of the company are very popular.
93. Public information about the company's products is enough.
94. The Company products are with no rival.
95. Products, has been touted by the media enough.
The company Respond to potential problems of its product quality and act responsively and
96.
immediately to resolve it.
97. I think public have positive attitude to the company.
98. Investing in the company can be profitable.
99. The company is an appropriate location for employment.
100. Shareholders are still loyal to the company.
101. Company's financial performance is good.
102. The staffs are treated very well.
Company is the leader of the market in this industry (The largest market share ccomparing with
103.
competitors)
104. Customers assume the company professional in comparing with competitors.
105. Clear vision is perceived for the future of the company in this industry.
106. Market opportunities are well known and be used.
107. The company is reliable in public opinion.

View publication stats