Airline Value Chain Capabilities and CSR Performance: The Connection Between CSR Leadership and CSR Culture with CSR Performance, Customer Satisfaction and Financial Performance

Abstract

This research examines Corporate Social Responsibility in Leadership (CSRL) and Culture (CSRC) as valuable resources of the value chain capabilities, and its influence on CSR Performance (CSRP), as well as its resulting effect on Customer Satisfaction (CS) and Financial Performance (FP) in the context of the airline industry. CSR entails the practice of social and environmental activities. These activities mainly concentrate on improving the relationships of a firm with its stakeholders, which consist of shareholders, charitable and community organisations, employees, suppliers, customers, and the environment (Sprinkle and Maines, 2010). It is therefore in this context that this research adopts the concept of CSR which consists of two aspects of social and environmental sustainability. Based on the traditional value chain model by Porter of the mid 1980's, this research however also focuses on other robust and contemporary business thinking such as culture and leadership within the CSR setting. Three carriers in the aviation industry within the US and Asia Pacific markets are analysed and some resulting academic and managerial implications are discussed. Findings from this research highlights the importance of cultivating and promoting CSR culture and leadership so as to positively influence CSR performance, which can in turn enhance other aspects of firm performance specifically customer satisfaction and financial performance. Hence, this research provides incentives for managers to invest in CSR in their quest for sustainable performance. Building on the hypothesis that firms achieve sustainable performance and ultimately financial performance through the identification of value chain capabilities such as CSRL and CSRC, the findings of this research indicate that there is a strong requirement for sustainable firm performance in the current environment but this can only be achieved where the approach is embedded in the core business, by CSR leaders who can apply the concepts of value creation through a strong CSR culture. This research is original as it is perhaps one of the first studies which examine the linkage between CSR-related constructs of leadership, culture and performance. Keywords: Corporate Social Responsibility, CSR Leadership, CSR Culture, Airlines, CSR Performance, Customer Satisfaction