When Corporate Social Responsibility Pays Off: The Power of Effective Communication for Customer Satisfaction

Abstract

The petroleum industry produces both toxic and non-toxic wastes at almost all stages of production. While petroleum companies satisfy market demand, they also want to meet consumers’ moral and ethical demands. Hence, CSR has become vital for the development of the companies as a whole. While CSR initiatives have the potential to bring many benefits to any business, their impact on customer satisfaction has remained a mystery. This study sets out to explore how petroleum companies can harness the full potential of CSR to communicate, integrate, and organize their projects effectively through CSR implementation to uncover how it can significantly boost customer satisfaction in Malaysian petroleum companies. Drawing on the latest insights from the Theory of CSR, Stakeholder Theory, and Social Influence Theory, this study takes a quantitative approach to fill crucial gaps in the CSR literature and provide valuable insights into the links between CSR activities and consumer behavior. 6 hypotheses were established for the activities and CSR Mechanisms on customer satisfaction. The research model was tested using Structural equation modeling of partial least square with the SmartPLS 3.0 software. The findings of this research can directly contribute to good management practices as the study can help managers appreciate how consumers understand the company’s CSR initiatives and the effect it has on customer satisfaction. Hence, this research can help build responsible managers.

Keywords

• corporate social responsibility
• social media
• word of mouth
• customer satisfaction