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Corporate Social Responsibility and Its Impact on Brand Building: Special
Reference to Employees of Selected Companies in Nepal
Article · March 2020
DOI: 10.9734/JEMT/2020/v26i230228
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Journal of Economics, Management and Trade
26(2): 64-71, 2020; Article no.JEMT.53596
ISSN: 2456-9216
(Past name: British Journal of Economics, Management & Trade, Past ISSN: 2278-098X)
Corporate Social Responsibility and Its Impact on
Brand Building: Special Reference to Employees of
Selected Companies in Nepal
Manoj Kumar Thapa Magar1*, Ashok Pandey2, Dila Ram Bhandari3,
Ramanand Pandit1 and Shravan Kumar Saini1
1
OPJS University, Churu, Rajasthan, India.
2Public Health Research Society Nepal (PHRSN), Kathmandu, Nepal.
3
Deen Dayal Upadhyaya Gorakhpur University, Gorakhpur, India.
Authors’ contributions
This work was carried out in collaboration among all authors. Authors MKTM and AP designed the
study, performed the statistical analysis, wrote the protocol and wrote the first draft of the manuscript.
Authors DRB and RP managed the analyses of the study. Author SKS managed the literature
searches. All authors read and approved the final manuscript.
Article Information
DOI: 10.9734/JEMT/2020/v26i230228
Editor(s):
(1) Dr. Pavle Jakovac, University of Rijeka, Croatia.
(2) Dr. Chen Zhan-Ming, School of Economics, Renmin University of China, Beijing, China.
(3) Dr. Olusegun Felix Ayadi, Jesse H. Jones School of Business, Texas Southern University, USA.
Reviewers:
(1) Anthony Tik-tsuen Wong, Hong Kong, China.
(2) Chung-Jen Wang, University of Science and Technology, Taiwan.
(3) Chang-Hyun Jin, Kyonggi University, South Korea.
Complete Peer review History: http://www.sdiarticle4.com/review-history/53596
Received 02 November 2019
Accepted 07 January 2020
Published 24 March 2020
ABSTRACT
This study identifies the impact of corporate social responsibility (CSR) and its impact on the
branding of the company. Many business companies in Nepal have integrated CSR and
philanthropic activities into day-to-day operations. The realization of social responsibility has led
them to share their profit with humanity and getting engaged in various areas of social well-being.
The result shows employees perceive a significant association on the branding of the company
especially in the areas of social/community service, ethical, health, environmental and education
activities.
Original Research Article
Magar et al.; JEMT, 26(2): 64-71, 2020; Article no.JEMT.53596
65
Keywords: Branding; corporate social responsibility; CSR performance; Nepal.
1. INTRODUCTION
There are countries with developed laws about
Corporate Social Responsibility (CSR) which
require organizations to work in a socially
responsible and calculated manner [1,2]. Such
practices have helped not only to sustain the
environment but grow the businesses as well
[3,4]. Yet in most of the nations around the world,
CSR is seen mostly from the voluntary
perspectives with companies being incentivized
and in some cases nudged towards it but very
rarely forced to donate [5,6,7].
The new industrial enterprise act entered in force
as some of its provisions force small, medium
and large industries with transactions over
rupees 150 million to spend at least one per cent
of their annual profits in CSR activities [8–11]. If
they fail to do so, they will be subject to a penalty
of 0.75 per cent of their annual turnover [8,12].
Similar provisions have been made in the laws
governing banking and financial institutions [13].
Business people are eagerly waiting for the
publication of the rules and regulations governing
CSR implementation.
The greater the contribution of companies in
CSR fund, the lesser will be their disposable
income. Investors seek predictability and security
in any potential investment destination [4,14,15,
16]. When there is a degree of political stability,
the government introduces new legislation, it is
natural for investors to start exploring alternative
destinations [6,17]. Nepal Rastra Bank (NRB)
has also issued a circular for banks and financial
institutions to contribute at least 1 per cent of
their net profit to various CSR activities [8,12].
Some school of thought said CSR activities are
sustainable only when done with the best interest
of all the stakeholders [12,18,19]. Marketawarded social responsibility for business is
more guaranteed than the government-mandated
one [20,21].
Giving is an “unspoken moral obligation” felt by
corporations, although (in some cases) image
branding and trust-building are the big motivators
[22]. Voluntary CSRs must be happening
because they are mutually beneficial to both the
shareholders and society. Companies try to align
CSR with company’s objectives to create a winwin situation. Branding, in this context, involves
using social responsibility to create that
differentiation. Instead of a specific name or a
logo, it uses an entity’s social responsibility
program, which is demonstrated through various
relevant actions. These actions will then
establish the company’s presence in the minds of
the consumers and the general public, as a
whole.
The media pays more attention to them and they
become instrumental in letting a wider audience
know about the company’s “good works”. The
objective of the study is to find out the
importance of sound CRS and its implication for
brand building of Nepalese companies.
2. MATERIALS AND METHODS
The study was conducted among the employees
of the different companies of Kathmandu valley
in Nepal. In Nepal, companies are categorized
into 9 groups. These are banks, development
bank, the insurance company, finance company,
hotel, trading company, hydropower company,
processing and manufacturing companies and
other categories. In the first stage, from the
Kathmandu valley, All the companies and their
CRS activities were listed. In the second stage, a
proportionate sampling was adopted to select the
different companies namely Yeti airlines, Dabur
Nepal, Standard chartered bank, Asian paints
and Ncell. In the third stage, simple random
sampling was adopted to collect the 204
participants among the listed employees from
five companies. The ethical approval was taken
from the institutional ethical review board, Om
Parkash Jogender Singh University (OPJS
University) and informed consent were taken
from participants before interviewing.
It contained the 13 factors namely CSR
social/community service, ethical CSR activities,
CSR health activities, CSR environmental
activities, CSR education, customer’s
performance, brand association/ identity, brand
position/relationship, brand awareness, brand
perceived quality, brand knowledge, brand
loyalty and organizational brand value which
consisted total of 65 statements (5 in each
factors) for identifying the impact of CSR on
branding from employee’s perspectives.
Collected data handled properly and stored in
both soft and hard copies. The frequency and
percentage analysis were one of the popular
statistical measures which are used in our
descriptive analysis. The detailed analysis of the
collected data was performed which is based on
Magar et al.; JEMT, 26(2): 64-71, 2020; Article no.JEMT.53596
66
the research objectives and hypothesis. A factor
analysis, regression analysis, ANOVA and t-test
were used to examine the research hypothesis.
Based on the findings of the study, necessary
interpretations and conclusions were drawn. The
data were analyzed through Statistical Packages
for Social Science (version 16).
2.1 For Qualitative Study
The in-depth interview (IDI) was done with the
manager, director, supervisor and head of the
selected companies. The 15 IDI was done based
on the perception and ethical ideology of
companies for CSR activities and their impacts
on their brand buildings. The study also
highlights the employees’ perception of
companies’ ethical ideology and the practices of
CSR. Transcribe and translation of IDI was done
within the same day using audio record and
notes taken during the interview. Developed
transcripts were discussed thoroughly with the
research team to identify confusing issues that
need further exploration during IDI. The issues
that need clarification or exploration were
covered in the following interviews. Field notes
were taken to keep written account what
researcher hears, sees, experiences and thinks
in the course of IDIs. Field notes were taken to
supplement the audio record to ensure real-life
depiction of the IDIs in the papers.
IDIs were transcribed in the Nepali language
from the notes taken and audio recorded during
the discussion of the interview. Nepali
transcriptions were then translated to English
and were thoroughly checked for consistency. In
the first round, researchers screened all the
transcripts to create possible codes for the
transcript. In the second phase, researchers
thoroughly read the transcripts line by line to
capture the real essence of data through open
codes. This was done using highlighting and
comment functions in Microsoft Word. Open
codes thus assigned to the transcript were taken
to MS Excel. Intensive analysis of codes in terms
of their meaning was done by the team of
researchers and any patterns, relationship or
similarities among those codes were assessed.
Similar codes were grouped to reduce and
narrow down the data. Broader codes thus
developed through grouping together of similar
codes were called as axial codes. Quotations
that were clear and express ideas that were
relevant and interesting in terms of the purpose
of the study were selected to cite as verbatim
while presenting the findings.
3. RESULTS AND DISCUSSION
3.1 Socio-demographic Variables
We have collected the responses from those
employees who were working in the selected five
different companies. A total of 204 employees
from various sites of Kathmandu valley were
considered. The demographic profile of the
participants was analyzed and results are
presented below (Table 1).
The majority 135(66%) participants were male
followed by 69(34%) female who was working in
the selected companies of Kathmandu. Less
than half 90(44%) of the participants were the
employees who were working Ncell company
followed by 44(23%) from Asian paints, 24(12%)
from Standard Chartered Bank, 23(11%) from
Dabur Nepal and 14(10%) from Yeti airlines.
(Table 1).
3.2 Reliability Analysis
According to Nunnally (1978), a reliability score
of 0.7 indicates relatively moderate reliability and
a reliability score of 0.9 and above indicates
higher reliability. Cuieford (1976) also considered
a Cronbach’s α of 0.7 or higher to signify that the
responses were highly reliable. As all factors in
this study scored higher than 0.7, the set was
reliable and stable and internal consistency was
good. The reliability scores of 65 different scales
in this study are 0.899 (Cronbach’s Alpha).
(Table 2).
Table 1. Employees of selected companies (n=204)
Company name Male Female Total
F % F % F %
Yeti airlines 14 6.9 6 2.9 20 9.8
Dabur Nepal 15 7.4 8 3.9 23 11.3
Standard Chartered Bank 14 6.9 10 4.9 24 11.8
Asian paints 30 14.7 17 8.3 47 23.0
Ncell 62 30.4 28 13.7 90 44.1
Total 135 66.2 69 33.8 204 100.0
Magar et al.; JEMT, 26(2): 64-71, 2020; Article no.JEMT.53596
67
Table 2. Reliability test
Statements Cronbach’s alpha
A. CSR social/community service
| Committed to donating to charity CSR also means giving back to society and helping people Poor CSR activity can harm the organizational brand value Consults the community before embarking on CSR activities Recruitment policies that favour the local communities in which it operates |
0.899 0.899 0.898 0.896 0.901 |
B. Ethical CSR activities
| Practices ethical business As far as I know, they do not encourage child labour Transparent to stakeholders Values of female employees Adverts are ethical C. CSR health activities |
0.901 0.894 0.900 0.893 0.895 |
| CSR activity Health line TV show Continue the Health line TV show CSR programmes organized to contribute to brand building Team up with health organizations Help with rural health in Nepal D. CSR environmental activities Involved in waste reduction in society Involved in the reduction of air pollution Considers environmental impact when developing new products The service provider uses environmentally friendly packaging CSR means environmentally responsible and green |
0.901 0.894 0.900 0.893 0.895 |
| 0.900 0.897 0.900 0.893 0.895 |
E. CSR education
| Communicate its CSR activities through all available channels I heard of Vodafone CSR activities through TV CSR activities should be communicated to all stakeholders Give more scholarships to needy students Build schools for communities in Nepal F. Customers performance Resolves customer complaints promptly |
0.900 0.897 0.900 0.898 0.896 |
| 0.901 | |
| Supplies clear and accurate information and labelling about their products 0.901 |
|
| and services Committed to providing value to customers Quality services and fair price The company should be customer-oriented |
0.894 0.900 0.893 |
G. Brand association/ identity
| The higher the level of brand image the higher the organizational brand value increases Profit maximization is the main driver of CSR activity Raises the profile of the brand in a consumer‘s mind Easily identify the brand I want to be associated with this brand |
0.895 |
| 0.901 0.898 0.896 0.901 |
H. Brand position/relationship
| Occupies a good position amongst network providers in Nepal Offers value for money compared with other brands Claim to be the most reliable network in Nepal is true I like my relationship with the Vodafone brand I would like to continue the relationship with these brand |
0.901 0.894 0.900 0.893 0.895 |
Magar et al.; JEMT, 26(2): 64-71, 2020; Article no.JEMT.53596
68
Statements Cronbach’s alpha
I. Brand awareness
| I am aware of these products and services Provides full and accurate information about its products to customers I can recall these adverts easily I can recognize these brands among other telecommunication products CSR creates brand awareness J. Brand perceived quality |
0.901 0.894 0.900 0.901 0.894 |
| Products are of high quality | 0.901 |
| Has good service quality | 0.894 |
| I am willing to pay more for products from companies which practice more 0.900 |
|
| CSR I like the professionalism of the staff Stands for quality K. Brand knowledge I can quickly recall the symbol or logo of brands that practice CSR activities Is a well-known brand in Nepal Is known for reliability The symbol stands for brands CSR makes the brand well known |
|
| 0.901 0.894 |
|
| 0.901 | |
| 0.894 0.900 0.901 0.894 |
L. Brand loyalty
| CSR activities do affect my choice of brand If other networks provide the same service, I will still choose Vodafone CSR activities increased the level of trust I have in the brand If the price is slightly higher than other brands, I will still choose these brands Brands perform well M. Organizational brand value CSR activities add values to the organization I am willing to buy shares in these brand I will recommend relations to invest The brand has a great future in Nepal Share value is likely to increase in future |
0.894 0.901 0.894 0.894 |
| 0.894 | |
| 0.901 0.894 0.901 0.894 0.896 |
Table 3. Principal Component Analysis (PCA)
on the component of CRS activities
| PCA on the component of ORS CSR social/community service Ethical CSR activities CSR health activities CSR environmental activities CSR education |
Component values 0.069 0.976 0.976 0.783 0.716 |
| Customers performance Brand association/ identity Brand position/relationship Brand awareness Brand perceived quality Brand knowledge |
0.928 0.037 0.976 0.923 0.923 0.923 |
| Brand loyalty | 0.539 |
| Organizational brand value | 0.388 |
3.3 CSR and Factors Influencing CSR
The social responsibility is also an ethical
framework that encompasses that obligation to
perform their duties, to maintain a state of
equilibrium between the economy and the
society. To reinforce its brand promise Standard
chartered bank was working for CSR on different
activities as ‘Believing in Life’ and ‘Green Your
Flight’ campaign. CSR is not just a means of
giving to society. CSR is the backbone of any
company. It is a strategy to do business and do
business ethically. Stakeholder management is
very important in today’s global business
environment.
“Without support from stakeholder and without
supporting stakeholder and I don’t think any
business in today’s changing and competitive
environment can sustain.”
– A Manager of the company
3.4 Factors that Lead to the Improved
Performance of the Various Brands
The participants reveal that the corporate social
responsibility improves a company’s public
Magar et al.; JEMT, 26(2): 64-71, 2020; Article no.JEMT.53596
69
Table 4. Scoring between the PCA component (n = 204)
PCA on the component of
ORS
Mean Std.
deviation
t Mean
difference
Lower Upper
| CSR social/community service 28.0637 4.42350 | 90.614 28.06373 116.952 26.50490 116.952 26.50490 77.390 25.13235 117.173 25.16176 146.847 27.21078 116.458 27.71569 116.952 26.50490 181.027 27.45588 181.027 27.45588 181.027 27.45588 101.087 28.33333 143.237 27.88235 |
27.4531 28.6744 26.0580 26.9518 26.0580 26.9518 24.4920 25.7727 24.7384 25.5852 26.8454 27.5761 27.2464 28.1849 26.0580 26.9518 27.1568 27.7549 27.1568 27.7549 27.1568 27.7549 27.7807 28.8860 27.4985 28.2662 |
| Ethical CSR activities CSR health activities CSR environmental activities CSR education Customers performance Brand association/ identity Brand position/relationship Brand awareness Brand perceived quality Brand knowledge Brand loyalty Organizational brand value |
26.5049 3.23694 26.5049 3.23694 25.1324 4.63836 25.1618 3.06712 27.2108 2.64662 27.7157 3.39915 26.5049 3.23694 27.4559 2.16625 27.4559 2.16625 27.4559 2.16625 28.3333 4.00328 27.8824 2.78028 |
*95% Confidence Interval of the difference
image, improves a company’s profit margins,
goodwill, trust and a good reputation.
“CSR is a way to show society that we are doing
business ethically and we are supporting the
society rather than just only focusing the profit.
We follow stakeholder theory in our business i.e.
customers are very important. Due to the
globalization of business and education, the
perception of the business has changed in the
recent past and has engaged more towards the
society and other CSR related activities.”
– A manager of Chaudhary Group
“Social responsibility also sets the companies
apart from their competitors, but only when done
right. Businesses treat their reputation as their
brand, and the best way to nurture their good
reputation is to put more efforts in improving their
corporate social responsibility.”
– A supervisor of the company
“The corporation is a creature of the state. It is
presumed to be incorporated for the benefit of
the public. It receives certain special privileges
and franchises, and hold them subject to proper
government supervision”.
– Ahead of the selected companies
4. CONCLUSION
The higher the credit rating has a corporate, the
better the scores of corporate governance and
corporate social responsibility are expected.
Perhaps the most important ingredient in using
social responsibility to improve your brand is
sincerity. There must be truth in the press
releases and media coverage that your CSR
activities generate. The result from this study has
provided the evidence and motivation to
companies in Nepal to take a serious view in the
implementation of good governance and thus
contribute more to the corporate social
responsibility. This study has proven the
importance of the corporate governance
characteristics in influencing the level of the CSR
initiatives for the Nepalese companies. The study
has also proved that regulatory guidelines are
not sufficient. Therefore, regulatory bodies
should focus more on these two components.
CSR activities have effects of reducing agency
costs by eliminating the information asymmetry
between internal and external stakeholders.
Companies can fundamentally improve their
social responsibilities with the public
announcement of proper financial reports and
investment risks. Corporate governance is a key
element of the internal control system, which is
also critical to provide timely and reliable
corporate financial information for outside
investors.
DISCLAIMER
The products used for this research are
commonly and predominantly use products in our
area of research and country. There is no conflict
of interest between the authors and producers of
the products because we do not intend to use
Magar et al.; JEMT, 26(2): 64-71, 2020; Article no.JEMT.53596
70
these products as an avenue for any litigation but
the advancement of knowledge. Also, the
research was not funded by the producing
company rather it was funded by the personal
efforts of the authors.
CONSENT AND ETHICAL APPROVAL
The ethical approval was taken from the
institutional ethical review board, Om Parkash
Jogender Singh University (OPJS University) and
informed and written consent were taken from
participants before interviewing.
COMPETING INTERESTS
Authors have declared that no competing
interests exist.
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