- Corporate Social Responsibility improves customer satisfaction
- Introduction
- Corporate social responsibility (CSR) remains an essential aspect that determines customer satisfaction with many of the businesses in the contemporary society incorporating the strategy as a competitive strategy. CSR not only remains an aspect of customer satisfaction but also an aspect that determines the customer retention plan since if the roles supporting corporate responsibility are executed I the appropriate manner. CSR has also proved to benefit many firms through enhancing customer good will as well as employee commitment. This explains the connection and the relation between the customer needs as well as the strategies that the company has incorporated to ensure that these needs are met in the most effective manner. To the organization or company, CSR is essential and functions as a key determinant of the requirements of the market and what it needs to address in order to ensure that the target group is satisfied with the efforts of the company to maintain and sustain them. Corporate social responsibility includes the key aspects of training customers on how to effectively use and enjoy the services of the company. This also includes ensuring that the employees as well as the other members of the organization clearly comprehend the needs of the customers. The financial sectors including institutions like banks have no alternative except to ensure that CSR has been met. Corporate social responsibility (CSR) is becoming a trend with corporate, big and small, incorporating this activity in society.
- Moreover the corporate social responsibility also has a global perspective where it is used to increase the reputation of the business through ensuring that the business carries out its activity in an open and transparent manner. The CRS also plays critical role in portraying the business as one of the leading in terms of offering innovative products in the market. It is also important to note that in most cases the CRS has a great impact on the company performance in the global market. CSR comes in where businesses take on the responsibility of taking care of problems that particular societies are facing. These actions go to show that businesses are concerned about societies and what goes on in these particular societies. However, the relatively new concept of CSR has not always been the case. In the past few decades there has been a noticeable disconnect between businesses and society. This disconnect has been able to negatively impact societies in which businesses operate. However, there are proponents that argue that a business is a business is a business. These people believe that the incorporation of society needs into any particular business is in essence a recipe for disaster. Such arguments have in essence implied that there exists a disconnect between society and business and that to some this disconnect is justified. The Barclays Bank United Kingdom has been a financial institution that has clearly observed the protocol of customer social responsibility and has seen the results despite of few hiccups here and there since none can completely be perfect in their strategies to focus on customer satisfaction. The paper includes a comprehensive review of the CSR application in the Barclays Bank United Kingdom.
- Company background
- Barclay’s group is one of the biggest financial service providers in the world. The bank has a history of over 300years operating in the financial sector. With regard to the UK market the company is among the leading company in terms of market capitalization. The bank headquarters are in Churchill place in London. The group’s major goal has been to ensure that it makes various services to help the customers to achieve their financial objectives. In order to attain their objective the group has implemented a safer and more secure financial system than other banks in Europe. The management has also implemented measure to ensure that they provide a bank industry that is equipped with ability to support the needs of the economy. It is also evident that the management of the company has also implemented measures to help in motivating their customers. This has in turn helped to ensure that the company provides quality services to its customers. In addition the management of the company has implemented measure to that they demonstrate credentials as a good citizen.
- The company has widespread global presence that helps it to enjoy economies of large-scale operation. The company has also managed to establish itself as one of strong brand in the global market especially through sponsoring the Barclays premier league football. In relation to this the banks is also associated with innovation where it is believed to be the first bank to introduce the credit card. The management of the company has also implemented measure to enhance customer satisfaction. For instance the bank has implemented measure to ensure that the employee are only rewarded based on the customer satisfaction. Investing in the various corporate social strategies has also helped to enhance customer satisfaction. This paper will therefore use the Barclays bank as model for how the corporate social responsibility has helped to enhance customer’s satisfaction.
- Corporate Social Responsibility in the U.K
- The term corporate social responsibility was first used in 1953. This term was initially used by the authors to refer to the responsibility of the business towards the society. The definition of the term initially included the various activities that the business can do towards the society. Among various businesses in UK the CRS started gaining lot significance in the mid 1990 where companies such as the Pricewaterhousecoopers entered the CRS service provision market (Idowu & Leal, 2008, p.133). At first various organizations began by taking into consideration their employee in the CRS services. Through taking into consideration the employee perspective the various industries aimed at ensuring that their employees are motivated to continue working for the organization. Various organizations in the UK market also started taking the government policies into perspectives. This is to help ensure that the various SCR services are in line with the government policies and regulations. Additionally some of the organizations in UK market have also started involving the NGO in their delivery of the SCR services. Involving of the NGO in the delivery of services is mainly meant to help promote quality service delivery and at the same time help to enhance transparency. Many of the NGO have been actively involved in the CRS services in order to ensure that the organization develop project that can be able to benefit the society.
- Role of corporate social responsibility in enhancing customer satisfaction
- Role of CSR in modern businesses in UK
- CSI has increasingly become more important in the businesses of contemporary society especially in the UK since it supports strategic decision making in the industrial sector. The regulated industries in UK are making great progress towards addressing CSI issues especially in the boardrooms. Business in the Environment (BiE) entails an organization in UK and it is majorly obligated on carrying out survey of the companies listed in the FTSE in order to identify those which are best perfuming in reference to environmental issues (Pohl & Tolhurst, 2010, p.321). Great examples of companies that have been rated best amongst the organizations that have incorporated CSI in UK include BT, Railtrack, Seven Trent, Powergen and Thames Water. These companies have generally improved the social and environmental performance together with enhancing their communication with stakeholders. These companies have experienced high customer relation due to the fact that the CSI incorporated helps in understanding exactly what the clients need as well as supporting sustainable relation strategies with the other stakeholders of the company. Through supporting the required business environment, these companies ensure that the businesses operate in the required standard and policy.
- Impact of the innovativeness climate
- Implementation of corporate social responsibility in most cases shows that a firm is able to fulfill the concern of the stakeholders. According to Ubius & Alas (2012, p.310) companies have to take into account the cultural difference when defining their corporate social responsibility strategies. The company in most cases is concerned with ensuring that the customers are more influenced by the image of the company. Nowadays some companies also engage integrate the social entrepreneurship into their core activity in order to develop socially innovate products and services. Companies also engage in the corporate social responsibility in order to demonstrate that they have the capacity to develop new products and services. Through engaging in such innovative venture the company is able to attract and retain its customer and at the same time prove to them that it is possible to help the business to achieve its objectives. Engaging in the corporate social responsibility strategy helps to ensure that the business is able to engage in the long term thinking strategy. This is because the business is able to develop its strategic in line with its social role in the society. This in turn helps to ensure that the company is able to fulfill its social responsibility in the society.
- According to study conducted by Ubius & Alas (2012, p.312) the corporate social responsibility of an organization is a good predictor of innovativeness of the company. This study showed that the innovativeness of the company toward social corporate responsibility depends on the employee level of education. In order to provide the connection between the corporate social responsibility and the innovativeness climate the authors had conducted an empirical study in 2007-2008 involving over 623 respondents in china, 1150 respondents in Russia, 684 in Japan and 1110 in Finland. However analysis of this study it is evident that the authors of the study failed to compiles quality information considering that they were carrying out the study involving many countries. In addition I also question the data collection method that was used considering that author incorporated the data from many counties there are is therefore a chance that the author did not take into consideration issues related to accuracy during data collection. Finally I also question the result indicated since the data collection and analysis are questionable.
- Corporate social responsibility and environment awareness
- According to a study carried out by Flammer (2013, p.759) corporate social responsibility also reflects the environmental awareness of an organization. The study aimed at establishing whether the shareholders are sensitive to corporation environmental issues. The author of this study aimed at proving the hypothesis that the company positive engagement with the environment helps to generate new competitive for the resource for the firm. Various corporations are facing external pressure to be responsibly to the environment, which in turn affects the value that the firm decides to take toward the environmental matters. Flammerr (2013, p.761) notes that the media attention has also played an important role in influencing the corporate social responsibility. This is evident since most of the local daily combines the term corporate social responsibility with the environment.
- The study by Flammer (2013, p.760) also showed that the shareholders react negatively whenever they are presented with announcement of eco-harmful corporate events. This clearly shows that the stakeholders are more concerned with the environmental matters. Due to pressure from the stakeholders various organizations have been forced to implement green strategies to promote the environment friendly strategies. The study by Flammer (2013) was able to show that over time the positive reaction from the stakeholders can help to enhance the relationship between the organization and the stakeholders. The author also found out that there was close association between the stock prices and the environmental corporate social responsibility. This study established that there is a positive relationship between the firm performance in the stock market and their corporate social responsibility strategy. I agree with this result considering that the author is able to base his argument from the data that was collected in the study. This paper therefore argues that the positive relations between the stakeholders and the management can play an important role in enhancing the customer’s satisfaction.
- Brand differentiation
- The corporate social responsibility plays an important role in brand differentiation strategy. This is because through engaging in the corporate social responsibility strategy the management of the organization is able to come up with services that are unique to the organization. Brand differentiation strategy provided by the corporate social responsibility play an important role in providing strong entry barriers that limit others organization from entering the market (Vallaster, Lindgreen & Maon, 2012, p.37). This is because once a brand has managed to enter the market it is not possible for another organization to enter the market. In relation to this the brand differentiations strategy provided by the corporate social responsibility strategy has played an important role in promoting brand dominance in the market. For instance the companies such as Barclays bank have been closely associated with the English premier league. It is also evident that many of the global organizations have been able to dominate the global market due to their involvement in the corporate social responsibility. Moreover according to Vallaster, Lindgreen & Maon (2012, p.37) the brand of a product must be perceived as different in order for an organization to win the market share.
- However use of the corporate social responsibility to promote the company brand is also faced with several challenges. This is because in most cases whenever a company announces that it will engage in a certain social event in most cases it faces threat from various interest groups that aim to counters their effort. In relation to this brand marketing can also evoke deep mistrust between various groups especially in the situations where they promise a certain server but later fail to fulfill or give inaccurate information to the customers. Suspicious consumers are more alert with the various activities that the company decides to undertake. It is also evident that in most cases engaging in the corporate social responsibility also makes corporate brands become more transparent to its customers and other stakeholders. This increased transparency therefore creates an avenue where the customers and other stakeholders are able to scrutinize the company operations (Ciprian-Dumitru, 2013, p.1675).
- Engaging with customers
- Corporate social responsibility also provides a good platform where the business is able to engage with their customers. The engagement in this case can be in the situation where the management is consulting the society on the best project that they need to invest while implementing their corporate socials responsibility strategy. The customer engagement provided by the corporate social responsibility strategy plays an important role in helping the organization to get the feedback from their customers regarding the best product and services they are offering in the market. The customer feedback help the organization to understand the feature that they need to improve in order to ensure that they are able to achieve their strategic growth objectives. The customer’s feedback helps to provide an organization with an opportunity to understand the market trends among the consumers. In relation to the organization can be able to learn the new products that have been introduced by the others competitors in the industry through the analysis of the consumers feedback.
- Moreover the customer engagement platform provided by the corporate social responsibility strategy helps an organization to establish whether the consumers are satisfied with the products and services that they are providing in the markets (Hiller, 2013, p.289). The customer engagement also helps to improve the relationship between the business and it customers. In relation to this customers engagement provided in the social responsibility strategy helps to create a notion that the business has a good customer relation. Additionally according to Rehbein, Logsdon & Buren, (2013, p.137) customers engagement provided a perfect opportunity for the business to gain honest opinion from the customers. The customers engagement also helps to save the business from the unnecessary cost that are incurred by a business through the customer survey. The customer engagement also provides the business with an opportunity to have positive changes through the implementation of the strategy that can help to fosters business growth. This paper therefore also argues that the customer engagement platform provided by the corporate social responsibility play an important role in customers’ satisfaction. Considering that the business is able to take into consideration the customer’s feedback in their long terms growth strategies.
- Cost saving
- Engaging in corporate social responsibility also helps various organizations to save on their cost of production. This can be linked to the fact that it helps to ensure that the organization only produces goods and services that can meet the demands of the market. The business is also able to improve on its reputation in the society thereby standing a better chance to attract more customers and at the same time retain the available customers (Tong, Wong, & Leung,2013) Engaging in the corporate social responsibility plays an important role in improving the reputation of a business. This in turn helps to save the business from the unnecessary cost related to product advertisement. This is because it provides a good platform for the business to expose the products and services that it selling to the consumers. The company can also engage in corporate social responsibility strategy in order to earn an extra income hence helping to reduce the cost of productions of goods and services. For instance Barclays bank is able to earn extra income through their strategy to sponsor the English premier league.
- Customer retention
- The corporate social responsibility also helps in the customer retention (Hiller, 2013, p.289). This was in accordance to the research that Hiller, (2013) conducted whereby the critique of this research is that the author did not comprehensively cover the key aspects which determine customer retention which was initially supposed to be addressed in the research questions. Viewing of cost of from a customer’s perspective can be seen as a price bases on the needs and the decision. Considering the search phase the customers in the first place engage in the searching in the price and the quality of the product. After purchasing the products the customers in most cases compare the product that they have with what they expected. The customers repurchase decisions can therefore be influenced by the corporate social strategy of the company (Vallaster, Lindgreen & Maon, 2012, p.35). However it is important to note that the consumer’s retention is influenced by the quality and the pricing strategy. This is because in the case where the perceived quality of the product is high then the customer’s value is high but if the cost is more than the quality then the customer’s value is low. This paper also presents an argument that the corporate social responsibility play an important role in helping the customers to make repurchase decision.
- Corporate social responsibility supports customer needs
- The CSR represents a high profile notion for having great importance to many businesses in the modern society. This is due to the fact that CSR supports the identification of customer requirements. According toLuov & Bhattacharya, (2006, p.2) through CSR, the organization is in a position to determine the market requirements and therefore develop strategies that will ensure these market requirements are met. The research carried out by Luov & Bhattacharya aimed to determine how the customers mediate on the manner in which the organization supports CSR and how it work to meet the customers requirements found out that CSR remains a key aspect that customers determine before reaching for their choice of the organization to shop. The methodology that these authors used was qualitative whereby other key aspects that the research aimed in determining included whether customers were ruled by the aspect of determining the organization that ensure customer loyalty.
- A similar research was carried out by Homburg, Stierl & Bornemann, (2013) who also aimed to determine the relationship that existed between CSR and customer loyalty whereby the results indicated that corporate social responsibility was a key determinant of customer satisfaction. The research also indicated that CSR was a key influence of customer satisfaction since from the supplier chain to the delivery of goods. This is due to the fact that the infrastructure of supporting the production products to the delivery of these products and service is purely dependent on the CSR. The critique of this research by Homburg, Stierl & Bornemann is that the research did not incorporate central research questions that directed to investigate the key aspects that determine high level of CSR in accordance to customer requirements. Malai, (2011, p.16) indicated that Corporate Social Responsibility (CSR) entails a concept whereby the organization considers determines and considers the interests of the society or through taking responsibility and being accountable of the impact of their activities on customers, employees, shareholders, the community as well as the suppliers and distributors and the environment.
- Customer loyalty and CSR work hand in hand to facilitate the organization with the right focus towards ensuring the customers are satisfied with the products as well as the services that they get from the organization. These were the key aspects that the research carried out by (Malai, 2011) aimed to determine whereby the researcher used survey in determining how the customers created a view of the level of customer loyalty and CSR that the organization supported. In all these researches, CSR is proving to be a key aspect in determining customer satisfaction as well as customer loyalty. Saxena & Kohli, (2012, p.39) explains the fact that CSR is a tool that is highly used by the corporate to meet or live up to the demands of the people and also ensure that organizations remain to be more responsible as well as being accountable to the actions they do to the community, the stakeholders and the environment. However, the research that Saxena & Kohli carried out only aimed to determine how the CSR applies in the financial sector whereby they found out that CSR was a key aspect to ensure that the organization addresses on the needs as well as the requirement of the customers. This argument by Saxena & Kohli is true based to the fact that Barclays Bank United Kingdom has been keen on CSR and this has ensured that its customers are satisfied.
- Corporate social responsibility as a link between the society and business
- Since the early 1990’s, corporate responsibility issues including the social obligations of corporations have attained prominence in political as well as business debates. This has been mainly in response to not only corporate scandals but also because of the realization that development centered only on economic growth paradigms is unsustainable thus there is a need for a more pro-active role by companies, states, and communities in a development process aimed at balancing economic growth with environmental sustainability and social consistency.
- Can it therefore be argued that there is a link between CSR and sustainable development?
- For a better understanding of the concept, it would have to be broken down into two parts. The first involves CSR and how businesses adopt it. The second part would be sustainable development. More often than not, sustainability in a business context is used to define organizations activities, which are usually voluntary in nature, which usually demonstrate that organizations concern for both social as well as environmental concerns. Therefore, CSR has implications of supporting the performance of business simply by ensuring that the business meets the needs of the customers.
- Significance of CSR to the business
- Without CSR the society cannot connect to the business since it creates the link through identifying what needs to be done in order to ensure that the members of the society are satisfied with the services as well as the products that business offers and also help the management to the business identify whatever is not done to satisfactorily and identification of what needs to be dome in order to ensure that the needs of the members of the society are met (Vallaster, Lindgreen & Maon 2012, p.37). The business organizations especially banks are not in a position to identify the requirements of the market without clearly integrating the CSR into the business operations. The essence here is that corporate social responsibility generally determines the key roles that the business has to perform as a requirement that businesses have to ensure.
- There are different reasons that have been given to justify the disconnect between society and business (Ciprian-Dumitru, 2013, p.1675). One of the main influences of this disconnect has been attributed to capitalism. It has been argued that capitalism has and is still the biggest hindrance to the achievement of businesses full potential as far as their meeting of their respective societal needs is concerned. The pressures in the societies are such that the businesses are under the pressure to produce short term results rather than examine and consider the repercussions that society is likely to face because of these decisions. Therefore, beneficial decisions such as cost-cutting as well as relocation of the businesses to low income areas might be advantageous to the businesses but are a bad idea for the society.
- Society on the other hand is not taking these decisions lying down. Society in general as well as governments and institutions are fighting businesses back by creating legislations as well as policies that limit the actions that businesses can take. This in a way goes to show that society is aware of the fact that businesses have put profit ahead of societies needs and therefore there was need to punish these actions. This is the great application of CSR and how it comes in to link the customers or the society at large with the business since it ensures the business has clearly identified the requirements of the customer or the society.
- Why CSR is applied in the financial sector
- The CSR is greatly applied in the financial sector due to the fact that it stands out to identify the level of service quality that the business needs to support in order to link with the demands of the society. Stated in more pragmatic and managerial terms, the CSR firm should strive to make a profit, obey the law, be ethical, and be a good corporate citizen’ (Vallaster, Lindgreen & Maon 2012, p.37). This was a conclusion that despite the fact that CSR plays a key role in supporting fair prices to the customers, the management of these organizations should also ensure that profit is a key focus of the business. The duty and functioning of any good company or enterprise is divided into four major functions. These include corporate competitiveness, governance, sustainability and CSR. The proper functioning of that particular organization will depend on how they are able to juggle any of the two if not all factors. The incorporation of sustainability aspects into general functioning of the business management is what plays the contributory role in this scheme. The general idea is that it would help the business fulfill its duty to society while on the other hand maintaining the shareholder demands creating a win-win situation.
- CSR in international corporations
- Currently the trend as far as corporations, more so international corporations, is that these corporations are practicing CSR in an unfair manner. This is because while on one hand the corporations adopt CSR in some countries that have strong policies on the matters, in countries with weaker policies, CSR is not practiced (Logsdon & Buren, 2013, p.137). However, the challenges that are faced by local businesses in a given country environment are very different from those that international companies are likely to face in similar environments.
- However, different businesses view CSR in different perspectives. While other view this option as an opportunity to give back to the society in which they operate, other view it as a costly hindrance. The trend is that organizations are adopting CSR as a form of advertisement for their global market. This is because businesses are no longer competing for the environments in which they operate in rather they compete for the global market. This global market on the other hand places a lot of pressure on companies more so international ones to pick up and conform to social responsibilities (Hiller, 2013, p.289).
- Conclusion
- From the above it is evident that the corporate social responsibility plays an important role in enhancing customer’s satisfaction. This is evident since it helps to ensure that the company continues implementing innovations strategy that in turns helps to ensure that an organization gains its market leadership. The corporate social strategy undertaken by the Barclays bank has played an important role in improving on its reputation. Improving on its reputation has in turn helped to raise the customers trust towards the management. The corporate social responsibility also helps to reduce the cost of operation in an organization. This can be linked to the fact that it provides the company with an opportunity to advertise their products and services to the potential customers thereby saving the organization from unnecessary cost of advertising. It is also evident that the corporate social responsibility helps to provide an organization with an opportunity to carry out market surveys regarding how the products and how their products are doing in the market. Additionally it is also evident that the corporate social responsibility helps to provide the company with an opportunity to engage their customer. In this case engaging their customers helps to ensure that the business is able to build a positive relation with their customers. In conclusion it is therefore possible to argue that effective implementation of the corporate social responsibility strategy can help to promote organization growth and development. The CSR also operates as a link between the society and the business whereby it determines what needs to be done by the management of the business in order to ensure that the society is satisfied by the services as well as the products offered by the business. Barclays as an organization that operates under the CSR and despite the fact that the business organization has been working to facilitate the requirements as identified by the CSR, it requires to review the aspects that tool entails as well as how the society can be connected to the customers and the entire society. In essence, CSR is essential for all businesses in identifying the requirements of the customers.
- Reference
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