A study on the effect of csr activities on customer loyalty the case of shinhan bank’s in vietnam

In this situation, this study aims to analyse, empirically, in four sub-level measures of corporate social responsibility activities, how they affect consumers' confidence in their busin

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2019

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS NGUYỄN NGỌC THẮNG

HÀ NỘI - 2019

DECLARATION

The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article

The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration

Date 25/06/2019

ACKNOWLEDGEMENT

Firstly, I would like to make the most of this opportunity to thank my company, Shinhna Bank which has given me a lucky chance to study at HSB In addition, they have also reassured me all the time through their knowledge and experiences in order to accomplish this project Secondly, I would like to thank my wife who always supports me and takes care of children without my help in South Korea Thirdly, I would like to show my sincere gratitude to Assoc Prof Dr Nguyen Ngoc Thang for his enthusiastic support throughout the process of composing this project Without his valuable advices, I would not be able to accomplish the project with a clear orientation Lastly, big thanks to all my colleagues at work, all my friends at HSB, especially all HSB - MBA15 classmates, who have supported me with laughter and joy, and comforted me when I was depressed

Owing to the fact that limited time and ability so it can not avoid some mistakes in my research topic I look forward to receiving comments from lecturers and colleagues in order have more accomplished and better achieved of research result and application in my career

Thank you again for those who have supported me, and best wishes to all

Date: 6th June, 2019

Cho Kwang mae

TABLES OF CONTENTS

LIST OF TABLES i

LIST OF FIGURES ii

INTRODUCTION 1

CHAPTER 1: THEORETICAL BACKGROUND 8

1.1 Concepts of Corporate Social Responsibility 8

1.1.1 Concept of Corporate Social Responsibility 8

1.1.2 The scope of corporate social responsibility (CSR) 11

1.1.3 The Significance and Importance of Corporate Social Responsibility (CSR) 16

1.2 Advanced research of Corporate Social Responsibility(CSR) 18

1.3 Definition and Advanced research of Customer Trust 20

1.4 Concepts of Resistance to Negative Information and Advanced research 23

1.5 The Concept of Customer Loyalty and Advanced research 26

CHAPTER 2: ANALYSIS OF SHINHAN BANK`S CSR AND ITS EFFECT ON CUSTOMER LOYALTY IN KOREA 29

2.1 Research Methodology 29

2.1.1 Research Model 29

2.1.2 Research Hypothesis 29

2.2 Survey Design 35

2.2.1 Sample Design 35

2.2.2 The composition of the questionnaire 35

2.2.3 Operational definition and measurement of variables 36

2.3 General characteristics of a sample 40

2.4 Reliability and Feasibility Analysis 41

2.4.1 Reliability analysis 41

2.4.2 Confirmatory Factory Analysis 43

2.4.3 Evaluating a measurement model 44

2.5 Correlation analysis 47

2.6 The verification of the theory of research 48

2.6.1 Path analysis result 48

2.6.2 The verification of the theory of research 48

2.7 Discussion and Implication of Research 50

CHAPTER 3: THE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES OF SHINHAN BANK 52

3.1 Economic Corporate Social Responsibility of Shinhan Bank 52

3.1.1 Product that puts customer revenue first 52

3.1.2 Customized solution based on big data & Transform digital channels and services 52

3.1.3 Customer-centric management 53

3.1.4 Financial Consumer Information Protection 55

3.2 Legal Corporate Social Responsibility of Shinhan Bank 56

3.3 Ethical Corporate Social Responsibility of Shinhan Bank 56

3.3.1 Implementation of strict ethics compliance principles 56

3.3.2 Internal Control and Insider Reporting System 57

3.3.3 Anti-mononey lundering system 57

3.4 Charitabal Corporate Social Responsibility of Shinhan Bank 58

3.4.1 Social contribution activities/ Sponsorship 58

3.4.2 Support for small business owners / small businesses 59

3.4.3 Financial support for low-income people/financial education 60

3.4.4 Expending eco-friendly work services 61

3.4.5 Development of eco-friendly financial products 62

CONCLUSION 63

REFERENCES 65

SURVERY 69

LIST OF TABLES

Table 1.1: Definition of Corporate Social Responsibility 9

Table 1.2: Different Concepts of Academies for Social Responsibility 10

Table 1.3: Definition of Corporate social responsibility of Carroll 14

Table 5.1: Data analysis procedure and analysis method 35

Table 5.2: The composition of the questionnaire 36

Table 6.1: General characteristics of a sample 40

Table 6.2: Reliability Analysis of Each Research Unit 42

Table 6.3: Measurement Model Analysis Results 44

Table 6.4: Correlation analysis results 47

Table 6.5: Result of the verification of the theory of research 48

Table 2.1: Shinhan Financial Group's client complaint handling 54

Table 2.2: Customer personal information leakage status in Korea 55

Table 2.3: Strengthen ethics education 57

Table 2.4: Current status of volunteer activities of Shinhan bank 58

Table 2.5: Low-interest small business loans 60

Table 2.6: Support for disabled companies 60

Table 2.7: Financial support for low-income people 61

Table 2.8: Shinhan Bank Energy Usage 62

LIST OF FIGURES

Figure 1.1: Carroll's Corporate Social Responsibility (CSR) Pyramid Materials: Carroll, A B (1979), "A Three-dimensional Conceptual Model of Corporate

Performance", Academy of Management Review, vol 4 13

Figure 1.2: Kang's analysis level, business entity, and corporate responsibility model 15

Figure 1.3: Firm’s Sustainable Competitiveness Pyramid, Source: Hoang Dinh Phi, 2015 16

Figur 4.1: Research Model 29

Figure 6.1: Path analysis result 48

Figure 2.1: Percentage of deposits subscribed by mobile in Shinhan bank 53

Figure 2.2: Customer Satisfaction of Shinhan Bank(three research companies) 54

Figure 2.3: Shinhan Bank's Greenhouse gas emissions 62

INTRODUCTION

1 Background Information and Rationale

After several crises around the world, capital markets and consumer markets have lost confidence in efficiency As a result, managers face the challenge of improving corporate image or reliability (Marin & Ruiz, 2007), to solve the problem of such a decline in reliability, companies are focusing on and strengthening corporate social responsibility (CSR)

Corporate social responsibility is to demonstrate business management activities, exchange with stakeholders, and corporate activities related to society and the environment that arise from pursuing sustainable businesses (Carroll, 1999) Nevertheless, in the '90s, the corporate social responsibility began to be used pragmatically as a business term (Carroll, 1999) Over the past decade, in most industries, companies have invested and made efforts to develop corporate social responsibility with the aim of improving the intangible characteristics of the brand image (McDonald & Rundle - Thiele, 2008) For example, 90 percent of Fortune

500 companies already carry out their social responsibilities and more than 80 percent of them post their activities on their websites This trend is expanding to most developed countries or to many developing countries (KPMG, 2011)

The company's ability to improve the company's image, reputation and trust depends on the degree to which the company's social responsibility is consistent with its stakeholders' expectations for the sector (form) of corporate social responsibility performed by the company (Dawkins & Lewis, 2003; McDonald's & Hung Lai, 2011) In this regard, scholars said that resources should be distributed not only to society but also to stakeholders such as customers, employees, investors, suppliers, strategic partners, and governments (Poolthong & Mandachita, 2009) This is because when stakeholders' expectations of corporate social responsibility coincide, firms can generally increase their friendly attitudes from stakeholders (Vassilikopoul, Siomucos, & Mylonakis, 2005) Conversely, failure to get stakeholders to understand the means of corporate social responsibility results in

inefficient corporate social responsibility implementation (Augger, Deviney, & Louviere, 2007)

As a result, retail banks pay a high percentage of the costs associated with corporate social responsibility to improve their reputations and improve stakeholder, particularly their customer relationships (McDonald & Rundle-Thiele, 2008) Banks and financial companies implement corporate responsibilities through microcredit, environmental funds, and credit transfer programs (Prior & Argandoffia, 2009) For example, in India, the social responsibility of the banking industry is focused on education, balanced growth, health, environmental marketing, and customer satisfaction (Narwal, 2007) Over the past 25 years, the Spanish savings bank has spent 20 to 30 percent of its revenue annually on social contribution activities, and the combined social responsibility index of companies in

32 major banks in Europe, the United States and the Pacific countries has improved significantly since 2000 (Scholtens, 2009)

Corporate social responsibility and sustainable development of the business environment cannot be left society The two are interdependent Social responsibility as the driving force of social development leads companies to become responsible global and local neighbors in a rapidly changing world The most widespread corporate issue facing change is corporate social responsibility (Engle, 2007)

The World Sustainable Development Committee (WBCSD, 1999) called the social responsibility of companies as the ethical activities of companies continuing

to improve the quality of life for workers and their families and contribute to local

or national economic development

The EC Green Paper (EC, 2001) incorporates social and environmental concerns by allowing companies to voluntarily operate business or interact with stakeholders in the Promoting a European Framework for CSR, the Act was defined

as sustainable management Concepts related to social responsibility relate to sustainable development According to ISO 26000, sustainable development refers

to a company's desire for the environment on Earth so that it does not pose a risk to

future generations The link between corporate social responsibility and sustainable development is to ease recent challenges and use resources efficiently If sustainable development is viewed as a result of current activities, regardless of the future of the enterprise, social responsibility is primarily aimed at minimizing risk exposures from interactions between economic, regional and natural environmental entities and maximizing synergies (Hediger, 2010)

In Korea, companies and public institutions have been publishing the Sustainability Report (SR) in accordance with the global guideline of the Global Report Initiative (GRI) since 2003

According to the financial sector, banks have been publishing annual reports

on six areas, including academic, educational, seminar, physical education, environment and global, since June 2006 Corporate social responsibility activities

by financial institutions are still in the early stages of internal and external evaluation and detailed discussions Corporate social responsibility activities are limited to charitable, environmental, and institutional financial support, and the results of assessment of performance are not well received as they are often only formal

The lack of social responsibility activities by domestic financial institutions can be seen as a lack of awareness and practice that financial institutions develop with society only when their social responsibility activities harmonize with the essential characteristics of financial activities in overall management activities It can be said that financial institutions recognize corporate social responsibility activities as a concept of cost by emphasizing only philanthropic and environmental aspects, and that they focus only on the visible performance system of productivity improvement and profit creation as a competitive indicator to maximize their business performance

In the case of financial institutions, the emergence of new technologies such as globalization, deregulation, financial innovation, and FinTech, which have changed the traditional distribution channel of financial services, makes it difficult for financial institutions to differentiate themselves, and consumers are not aware of

real differentiation in products and services On the other hand, in an increasingly competitive global environment, corporate social responsibility is becoming the most important strategic factor in improving business performance through marketing differentiation strategies Local financial institutions are in the early stages of developing and implementing strategic corporate social responsibility activities that will maximize corporate performance through corporate social responsibility activities Theoretical and practical corporate social responsibility success models have not been presented, such as the division of specific corporate social responsibility-related activities that reflect the inherent nature of financial institutions and the development of measures to measure the social responsibility, the development of stakeholder-oriented value activities, image and reputation, and the establishment of marketing strategies to build sustainable and strong brand assets

In this situation, this study aims to analyse, empirically, in four sub-level measures of corporate social responsibility activities, how they affect consumers' confidence in their businesses, and how they affect customer loyalty and resistance

to negative information Through this process, we are going to present suggestions

on how to strategically develop corporate social responsibility activities, thereby enhancing bank customer loyalty and leading to business performance

2 Aims of Research

First, we need to know the concept of CSR correctly After looking at many CSR activities at Shinhan Bank, we will look at how these activities affect customer trust and loyalty And with the results of this study, companies should also be encouraged to do CSR activities in Vietnam in the future Therefore, the followings are the main aims of this thesis:

- Accurately understand the concept of corporate social responsibility;

- Understanding the Corporate Social Responsibility Activities of Shinhan Bank;

- Analyze the impact of corporate social responsibility activities on customer reliability and loyalty through surveys

3 Objects of Research

In this study, theoretical and practical studies were combined to achieve the objectives of the study First, research questions were raised based on research on existing social responsibilities(Carroll, 1979; Lichtenstein, Drumwright, & Braig, 2004; Powell, Balmer, Melewar, Podnar, & Golob, 2007; Claydon, 2011; Green & Peloza, 2011; Lamond, Dwyer, Arendt, & Brettel, 2010; Porter & Kramer, 2002) and, accordingly, research models and theories were derived

Next, to verify the research model and research theory empirically, the survey was conducted on the general financial consumers of Shinhan Bank who transacted with Shinhan Bank and used it as basic data for analysis

Analysis of the collected data was performed using SPSS 21.0 to identify demographic characteristics of the sample, to perform a confidence analysis on the research unit, and to verify the structural relationship This study consisted of five chapters, each of which is as follows

In order to reach the above-mentioned aims, the research focuses on the following main objects:

- Presents the need for this study, the purpose of the study, the method of research, and the scope of research;

- Explained the rationale behind the company's social responsibility and explained, for example, the corporate social responsibility activities of Shinhan Bank.;

- Established research models and hypotheses based on theoretical and prior studies, and the design of the empirical investigation provided operational definitions of variables and specific measurement questions for each variable

- We conducted an empirical survey and analysis to verify the hypothesis of this time

- The results of the study were summarized, the limitations of the research, and the direction of future research

- Factors of Vietnam business environments that impact the operation of FDI firms from South Korea

4 Scope of Research

- Focus on the main aims and main objects

- Country: Target Shinhan Bank customers in Vietnam

- Time: The survey was conducted from December 1 to 31

- Survey customers: 500 customers

The data were collected through a survey of 500 Shinhan Bank customers directly For primary data or soft data, the in-depth interview method was applied in this research and played an important role in helping the author get more factual and reliable required information

6 Thesis Structure

Besides the Introduction Chapter, the thesis as 6 main chapters:

Chapter 1: Theoretical background

Chapter 2: Customer trust, resistance to negative information, customer loyalty

CHAPTER 1: THEORETICAL BACKGROUND

1.1 Concepts of Corporate Social Responsibility

1.1.1 Concept of Corporate Social Responsibility

Corporate CSR activities have long been a subject of discussion in academia.(Mcguire,1963) However, the names associated with the social needs and responsibilities of the company are diverse in the use of CSR ( Corporate Social Responsibility), Corporate Responsibility (CR), and Social Responsibility (SR) and there are various arguments and discussions on CSR(Foreign cramp, 2015) In general, corporate social responsibility is defined as 'responsible activities to satisfy stakeholders through business activities and to positively influence the communities and society in which the business belongs' (Kim Hyun-soo, 2006) These definitions

of corporate social responsibility are defined separately by international institutions and scholars, as mentioned above

The following is a review of definitions made by major international agencies

on social responsibility through Table 1 and a review of definitions by scholars Thus, while the definitions of social responsibility in various international institutions are expressed differently, it is common to see that laws and systems define a wider range of social responsibilities than the social responsibilities required by businesses

The existing scholars at home and abroad also set various definitions of corporate social responsibilities, which Bowen (1953) defined in "The Social Responsibility of the Businessman" as "the responsibility of entrepreneurs to pursue and make the desired policies in terms of goals or values in our society, and to make such decisions" Ells and Walton (1961) argued that an entity's social responsibility should be taken from the perspective of the problem arising from its activities and the ethical principle that governs the relationship between the entity and society

Table 1.1: Definition of Corporate Social Responsibility

International

agency name Definition of corporate social responsibility Term

UNCTAD How companies respond and influence the needs

ISO

to benefit people and society as a whole through their contribution to economic, social, and environmental issues

SR

EU

Concepts by which companies voluntarily integrate social and environmental concerns into corporate activities and interactions with

stakeholders

CSR

OECD the actions companies take to mature and develop

ILO The impact of the company on stakeholders

voluntarily beyond its legal obligations CSR

IOE

Voluntary and positive activities of companies in various social, economic, and environmental distributions beyond legal compliance

CSR

WBSCD

the will of companies to contribute to sustainable development and improve the quality of life of their work by working with employees, families, communities and society as a whole

CSR

ICC the willingness of companies to do business in a

Data: Ko Dong-soo (2006), "Company's Social Responsibility (CSR): Trends

in International Issues and Our Countermeasures," KIET Institute

McGuire (1963) requires companies to be responsible for society as a whole as well as for its economic and legal obligations, the emphasis was especially placed

on corporate social services as a form of corporate responsibility for society

Sethi (1979) defined an enterprise's social responsibility as addressing social and environmental problems and complying with the ethical principles, and ultimately it is an entity's actions that can go beyond its legal and economic obligations and harmonize with its social norms, values, and social expectations

The views on corporate social responsibility by Sethi (1979) were structured

in Carroll (1971)'s "Three-dimensional conceptual model of corporate performance," which systematically organized academic discussions that lasted for about 20 years after a full-scale discussion of social responsibility by Bowen (1953) According to this, corporate social responsibility is a constructive concept, including all economic, legal and ethical expectations that society has about the business at a given point in time In other words, the model explains that a company has four responsibilities Economic profit creation, legal compliance, ethical responsibility, and philanthropic responsibility

Table 1.2: Different Concepts of Academies for Social Responsibility

Ells and Walton

(1961)

the conduct of ethical principles by projecting a firm to desirable things

in order to coordinate its relationship with the society McGuire

Wood, D

(1991)

the exercise of the decision-making rights of each individual who is a business that pursues profit but does what it does in the moral and legal respects

Lee sangmin

(2000)

A normative system of corporate behavior that must meet the needs or expectations of the stakeholders and society as a whole by addressing social and economic problems arising from business activities

Ban Hye Jung

(2009)

Concepts that cover diverse activities such as environment, human rights, labor, service, and donation as well as compliance with various laws

Data: Choi Eun-young (2012), "Company's Relationship Between Social Performance and Financial

Outcomes"

1.1.2 The scope of corporate social responsibility (CSR)

The conceptual discussion of CSRs has evolved into a discussion of priorities

by level of social responsibility Steiner (1971) divided the contents of social responsibility into internal and external responsibilities Internal responsibilities are related to the use of employees and resources, such as employment, training, working conditions, and efficient use of resources External responsibilities include assistance to the social and cultural underprivileged, protection of citizens' basic rights, and contributions to the recognition and respect of human existence Mondy (1990) divided CSR content into the provision of employment opportunities, safe working conditions, pollution management, efficient use, maintenance of resources, and operation of social activities programs

Until now, however, the definition of Carroll (1979) is most commonly used

to discuss the level of corporate social responsibility (CSR) Corporate social responsibility pyramids were largely defined as four categories: Economic Responsibility, Legal Responsibility, Ethical Responsibility, and Philanthropic Responsibility

Charitable Responsibility

Ethical Responsibility

Legal Responsibility

Economic Responsibility

Figure 1.1: Carroll's Corporate Social Responsibility (CSR) Pyramid Materials: Carroll, A B (1979), "A Three-dimensional Conceptual Model of Corporate Performance", Academy of Management Review, vol 4

Table 1.3: Definition of Corporate social responsibility of Carroll

Types of

Economic

Responsibility

Purpose with which the corporate itself exists

The responsibility to produce goods and services, sell them at an appropriate price, and to make a profit to compensate investors

Legal

Responsibility

Compliance with relevant laws and regulations

Compliance with the laws of the environment, consumers, and workers

Responsibility left to the discretion or choice of the company

Cultural activities, donation activities, volunteer activities, etc

Materials: Carroll, A B (1979), "A Three-dimensional Conceptual Model of Corporate Performance", Academy of Management Review , vol 4

The Kang (1995) extended the model of Carroll (1979), arguing that Carroll's hierarchical rule indicates the sequence and weight of social responsibility, and that

if management's attention is all focused on economic responsibility, it would violate the ethical and legal boundaries for the protection of economic losses or the increase

in profits Thus, he changed the hierarchical order in Carroll's model, arguing that ethical responsibility is fundamental to all humans, followed by legal responsibility, and finally economic responsibility."

Figure 1.2: Kang's analysis level, business entity, and corporate responsibility

Legal Responsibility

institutional

systematic

individual

a single economic organization

An organization that forms the network of society

1 human (the ethical proxy)

individual

1.1.3 The Significance and Importance of Corporate Social Responsibility (CSR)

As quoted by Hoang Dinh Phi [2], firm’s competitiveness is a degree to which a firm can, under normal market conditions, develop its capabilities to produce goods

or services that can be marketed with profit and growth while fulfilling its obligation toward its corporate social responsibility(CSR) and environmental protection Firm’s sustainable competitiveness is understood as the firm’s competitiveness to be maintained for firm’s profit and growth for a long and desired period of time despite the market challenges

Figure 1.3: Firm’s Sustainable Competitiveness Pyramid, Source: Hoang Dinh

Phi, 2015

After several crises around the world, capital markets and consumer markets have lost confidence in efficiency As a result, managers face the challenge of improving corporate image or reliability (Marin & Ruiz, 2007), to solve the problem of such a decline in reliability, companies are focusing on and strengthening corporate social responsibility (CSR)

The discharge of corporate social responsibility is now a duty from past corporate choices The International Organization for Standardization (ISO) hosted

an international conference in June 2005 to index corporate social responsibility

PROFIT

CSR

ENVIRON PROTECT

MARKET SHARE (Domestic, Exp., Brand )

PRODUCTI/SERVICE & VALUE FOR USERS (Productivity, quality, price)

INVEST & DEVELOP FUNDAMENTAL CAPABILITIES (Corp governance, security, technology, finance, human, marketing, train,

culture )

activities (CSR) that were not understood in the context of environmental, labor, human rights and community donations, and published a CSR guideline for completing standardization work by 2007 and for reference by international organizations, financial institutions and companies This standard could be used as

an international compulsory regulation, such as to comply with various bids or stock listing Thus, the CSR is now expected to be a necessary condition for corporate survival, not an option, as companies that fail to comply with social responsibility will be disadvantaged in international transactions and investment, and NGOs can also be used as a means for monitoring their businesses

The various effects of corporate social responsibility

Recently, the international community has undergone many changes in terms

of society and economy Through the roles required by the entity at this time, Lee Pil-sang, 3 others (1998) argue that the effects of CSRs are:

1 If CSR performance is high, company and product image will improve

2 High performance of CSR results in the inflow of talented employees and won't leave much

3 Higher CSR performance reduces pressure from government and stakeholder groups, allowing unnecessary cost savings and autonomous management

4 If performance of CSR is high, timing and effectiveness will be improved when deciding resource allocation

5 In the process of improving CSR performance, all members of the management as well as the members' affection and self-esteem will be increased, and a smooth labor-management relationship will be established

6 Higher CSR performance will secure a large number of investors and protect shareholders' interests in the long run

7 By ensuring a managerial vision in the process of enhancing CSR performance, the short- and long-term management strategies can be established and implemented effectively with consistency

8 In order to improve performance of CSR, a communal corporate culture can be established naturally

9 In the process of improving CSR performance, modification of the evaluation system, and development of the accounting and information system can be made

10 In the process of enhancing CSR performance, a smooth government relationship can be maintained and information sharing and cooperation with key interest groups can be promoted

Therefore, companies need to change their management concept so that it is in the interests of companies that are recognized in society by behaving in a fair and clean manner, rather than maximizing profits, one of the basic goals of companies

1.2 Advanced research of Corporate Social Responsibility(CSR)

Adam Smith argued that it would be best when he was free from the pressure

of business interests or efficiency in The Wealth of Natios (Lantos, 2001) From Milton Friedman's neoclassical standpoint, proponents of the Adam Smith theory believe that profits are the final outcome of social responsibility achieved by operating businesses ethically and legally Applying the framework of proxy theory, Friedman said that businesspeople's responsibility for society is not inappropriate as social services This model, known as the shareholder model, began with academic questions For example, Bowen introduced the social responsibility activities of businessmen in a broader context than purely profit-seeking behavior

The '60s and '70s are times when academic attention has increased in the field

of corporate social responsibility The concepts of corporate social responsibility were discussed in depth with the emergence of the corporate model, the discussion

of business ethics and the management meaning of corporate social responsibility, and the discussion of corporate social response (Carroll, 1999) The main focus of the discussion was the CSP (corporate social performance) which was mainly noted

in the 80s, and in the 90s stakeholder theory and stakeholder management models were created Since the 1990s, corporate social responsibility has been used as "the

base point" or other related concepts have been incorporated as components A recent study discusses the application of public sectors in the form of networks rather than private sector (Scholl, 2001)

Although there is a core part of the discussion about business roles in society, the concept of corporate social responsibility has a question concerning the definition of economic survival

Matthew Bishop, editor of The Economist, said corporate social responsibility programs are simply attempts at the needs of the more cornered citizens than to respond to stakeholders as much as shareholders' attention(Salls, 2001) Furthermore, Bishop argued that the requirements for corporate decisions in society inhibit the development of the current economic system, which has been globally proven over the past decade (Salls, 2004)

The shareholder-publicized model will not be valued as in Asia or Europe as

in the United States (Emiliani, 2001) Although there are many guidelines and standards, there are no absolute standards for corporate responsibility and they change from generation to generation depending on culture (Daugherty, 2001) So standards change depending on the society being discussed

Public relations marketing positively improves the goodwill and willingness of consumers to buy businesses or their products (Brown & Dacin, 1997; Ross, Paterson, Hunnicut, & Stutts, 1992) In some cases, negative perceptions about the intentions of companies that develop public-linked marketing can be reinforced (Drumright, 1996; Webb & Mohr, 1998)

Consumers tend to take the intent as an innocent entity because they believe that the ultimate goal of all advertising in the media is to generate profits in the end, and the effectiveness of public-linked marketing tends to be halved (Drumright, 1996) In today's market, where consumer reputation and brand image are absolute, corporate management can be compared to crossing minefields

Lantos (2001) stated that an entity should strategically carry out its social responsibilities and make use of them to meet and communicate with consumers, employees and various stakeholders With increasing interest and demand for

corporate social responsibility, companies have come to realize that not only are they pressured into social responsibility, but also that philanthropy and donation activities are investments that can increase the value of a company's assets

That is, a company's reputation as a recognized consumer through its social activities can be an important yardstick for the consumer's purchasing decisions and its perception of whether the company is ethical, honest, environmentally friendly or responsive to the consumer's needs is a strong advantage for the company (Caudron, 1997)

On corporate social responsibility activities, Barone, Miyazaki & Taylor (2000) said that it is a strategy to promote the achievement of marketing goals such

as product sales by supporting social causes and an important tool to differentiate itself from the brands of competing companies

Cho Hyung-oh (2000) said that corporate social responsibility is a marketing technique that enables companies to pursue both economic and social goals at the same time In addition, Corporate social marketing, Social services marketing, Mission marketing, and Passion marketing are used in similar terms (Arnott, 1994) Looking at the above literature, we can see that the two goals of corporate social responsibility, practice and profit-seeking, coexist in complementary and not in antagonistic relationships (Varadarajan & Menon, 1988)

1.3 Definition and Advanced research of Customer Trust

Trust is sometimes defined as a single concept (Rotter, 1971), but is defined as a multidimensional concept (Mayer, Davis, & Schorman, 1995; Rousseau, Sitkin, Burt,

& Camera, 1998) As such, it is defined in a variety of ways according to scholars' views Psychologists define trust as a tendency to trust others (Rotter, 1971), and sociologists define trust as a recognition of the trustee (Rempel, Holmes, & Zanna, 1985) Sociologists define trust as a characteristic of the institutional environment Trust is very important for consumers' purchasing behavior because it helps overcome the perception of uncertainty or risk that they have The recognition of uncertainty or risk is more important for new entities (McKnight,Choudhury, & Kacmar, 2002) Trust has traditionally been recognized as difficult to define or

measure (Rousseau et al., 1998) Therefore, researchers define trust as confusing odor (Shapiro, 1987), conceptual confusion (Lewis & Weigert, 1985), conceptual marshes (Barber, 1983; Carnevale & Wechsler, 1992)

McKnight & Chevany (1996) refers to a tendency to rely on others or other targets for safety, even if there is a possibility of negative Luhmann (1982) viewed trust as a similar concept to confidence and said that although risk is sufficiently recognised in some circumstances, it is possible to continue to expose itself to the other party Lewis & Weihert (1985) also defined trust as confidence in the future Bauer, Gretter, and Leach (1999) defined confidence as the expectation that they would not do so even if they had the opportunity to act opportunistically Rotter (1967) defined trust as a generalized expectation that someone or other group will be able to believe promises made verbally or in writing In addition, Jarvenpa, Tractinsky, and & Vitale (2000) defined consumer confidence as a situation in which consumers can rely on businesses and expose their own weaknesses

Trust plays an important role in developing long-term relationships with customers and maintaining customer loyalty In service marketing, trust is required

to build relationships because the customer must purchase them before experiencing the service typically due to a number of characteristics such as the intangible nature

of the service (Parasuraman, Berry, & Zeithaml, 1991)

Trust is defined as the willingness to trust an exchange partner with confidence, and brand trust is generally considered to be an essential element for a successful relationship (Berry, 1995; Moorman, Deshpande, Zaltman (1993); Morgan & Hunt, (1994) Schrew & Ozanne (1985) said confidence is the level of belief that the counterparty's promise is reliable and that the counterparty will comply with the requirements in the transaction relationship

Trust is an activity to predict the behavior of other parties in a relationship and

is defined by the belief that they will not act opportunistically even if given the opportunity (Weitz & Jap, 1995), which appears when they are confident about the other party's faith and integrity (Morgan & Japan, 1995) It is also explained by a firm belief that the other person's actions can be trusted with long-term interest in

helping the other party (Crosby & Lui, 1990) Gundlach & Murphy (1993) stated that trust is a factor that provides criteria for exchange behavior between the two parties that want a high level of relational interaction or expect to continue building

a relationship Customer confidence is defined by the belief in a product or service that will contribute to a consumer's long-term interest (Crosby, Evans, & Cowles, 1990)

Meanwhile, many researchers have presented the components necessary to define trust (Doney, Cannon, & Mullen, 1998; Ke & Knox, 1970) For example, Ke

& Knox (1970) defined five factors (substantial, situational, awareness of others, subjective trust, and behavioral confidence Mayer et al (1995) included recognition of the value of the propensity to trust, trust (voluntarily trust others) The prior study of trust is very diverse in many fields Morgan & Hunt (1994) said that trust is an important determinant of the will of the relationship and that the parties will become more involved in the relationships formed on the basis of trust They established a Key Mediating Variables (KMV) model that viewed the two variables of relationship penetration and trust as important parameters of relationship, confirming that involvement and trust act as important parameters in relationship marketing and trust are important determinants of relationship penetration

Anderson & Weitz (1989) said that trust among route members has a significant impact on maintaining a perceived relationship In a study of the marketing research industry, Moorman et al (1993) argued that the greater the confidence between market information providers and market information users, the more bound their relationships are

Morgan & Hunt (1994) proposed trust as an important parameter of successful relationship marketing, and Gruen (1995) said trust serves to bridge the lack of communication between the two parties due to shared values between buyers and sellers

Consumers evaluate a business, focusing on how well it is making the product or service That is, the judgements associated with the nature of the entity involved in the

assessment of consumers are linked to attributes such as whether the entity is reliable or professional in that area, which means that the reliability of the entity is important to consumers in determining the entity, its products or services (Keller & Aaker, 1992) Ravald & Grenros (1996) assessed confidence at a higher level than satisfaction, suggesting that satisfaction could be an important source of trust

Gwinner, Gremler, & Bitner (1998) said that the psychological benefits of confidence and trust are more important than the social benefits of the customer's relationship with the service company

Berry & Parasuraman (2004) said that the service marketing requires trust to build relationships, and that the customer must purchase them before experiencing the service in advance

McNight et al (2002) identified the role of trust in an enterprise by dividing it into trust in goodwill, belief in competence, belief in integrity and belief in predictability

Macintosh & Lockshin (1997) studied that customer confidence in stores affects customer attitudes

1.4 Concepts of Resistance to Negative Information and Advanced research

Anyone who receives information about a company or product influences attitudes or purchase behavior (Brown & Reynen, 1987; Dichler, 1966) and affects sales of consumers who do not know the details of the information (Liu, 2006; Mahajan, Muler, & Kerrin, 1984)

Many scholars emphasized the damage effects of negative information when consumers were exposed to negative information about the company (Eisingerich, Rubera, Seifert, & Bhardwaj, 2010) Negative information impairs a company's reputation, reduces sales (Chevalier & Mayzline, 2006), and negatively affects future firm's unique return on capital (Luo & Tung, 2007) For example, dissatisfied

or angry customers disseminate more negative information than positive information (Richins, 1983) Also, negative information is more influential than positive information (Mahjan et al 1984; Wangenheim, 2005)

Negative information makes consumers feel like messages are presented in a different way than they are already familiar with or expected As a result, negative information appears relatively more prominent than positive information (Lau, 1982) The influence of negative information is explained by the theory of impression formation and negative effect According to impression formation theory, a person is weighted on negative information rather than positive information (Fiske, 1980; Klein, 1996; Skowonski & Carlston, 1989), which results

in more attention to negative information than positive information (Fiske, 1980) The explosion of social media such as YouTube, Twitter, Facebook, blogs and other online forums has brought about rapid dissemination of general and especially negative information (Ward & Ostorm, 2006), and today's consumers are seeing more negative information than they did a decade ago

The resistance to negative information is primarily because people tend to perceive losses more significantly than gains (Kim Jae-hwi & Kim Bo-young, 2004), and view negative information more carefully than positive information (Kim Hyo-sook 2010) Negative information plays an important role in the service industry for two reasons (Eisingerich et al., 2010): First, because quality of service cannot be evaluated objectively, negative information about a company has an adverse effect on consumers' attitudes or behaviors regarding sales of services Second, longer a transaction relationship increases the chance of exposure to adverse events during the period of the transaction

Typically, the sale of a service requires a lot of contact between consumers and service providers (Eisingerich & Bell, 2008), increasing the likelihood that it will not

be a normal transaction in a transaction relationship Depending on the spread of negative information outside of corporate control, companies may attempt to reduce the damage caused by negative information In the past, companies have made one-time strategies and have a broad and ambiguous reputation plan (Porter & Kramer, 2006) They were also small and focused on key service areas (Reichheld & Sasser, 1990) Brand preference is expected to respond positively to negative information (Roosendans, 2014) If customers often exchange cars and are not very emotional

about cars, then negative information is easily affected There is a willingness to pay a good price for good driving and, when faced with negative information, there

is no noticeable difference between a luxury car and a practical car

If you look at prior studies, negative information is diagnostic and has an informational value over positive information (Fiske, 1980; Maheswaran & Meyers-Levy, 1990; Skowonski & Carlston, 1989) Other studies also show that negative information is more diagnostic in decision making and more weight than positive information (Ahluwalia, Burn,ant, & Unnava, 2000) According to consumer behavior theory, people put more weight on negative information than positive information Richards (1983) presented a negative advantage effect that negative information has a more powerful effect on decision-making than positive information Negative information has a stronger impact on the consumer's information processing and decision-making process than positive information, which may also be more influential with respect to the consumer's memory

Negative corporate information refers to all information that can affect an entity's evaluation and be perceived as a risk to the entity's management activities, which, in unforeseen circumstances, could compromise its image or reputation and negatively affect its relationship with the air (Coombs, 2001; Otto, 1997)

While rumors or natural disasters are perceived to be relatively small in corporate responsibility as an unintended event, incidents involving corruption are considered to be deliberately related and the responsibility of the company is perceived to be strong (Timotic & Holladay, 2002)

Negative information is divided into different types depending on the cause of responsibility and the intent In addition, the level of negativity of information may vary depending on how serious the consumer is about that information Severity means how serious and important consumers are to take issue or time with respect

to negative information (Burger, 1981; Robbenol, 2000)

If negative information about a company makes customers feel a little uncomfortable, the problem is less serious, whereas if it directly hurts them, the problem is more serious (Laufer & Gillespie)

1.5 The Concept of Customer Loyalty and Advanced research

Customer loyalty studies have been studied extensively in the marketing field, and Dick & Basu (1994) defines customer loyalty as the relationship between the customer's relative attitude to the entity (brand/store/seller/service) and the self-centered behavior in the conceptual model for customer loyalty

Oliver (1999) said that despite the surrounding environment, customer loyalty

is a consumer's commitment to continuously purchase a particular brand or product without switching to another product or service Czepiel & Gilmore (1987) defined past experience as an attitude to continuously maintain the relationship with the service provider in use and described customer loyalty as a proponent of positive attitudes, prior knowledge, consistency and belief in certain situations

Jones & Sasser (1995) stated that customer loyalty is the willingness to repurchase a particular product or service in the future Customer satisfaction with the entity's products or services gives the customer a positive perception of the entity and the company is recommended to others

Singh & Sirdeshmukh (2000) said customer loyalty is an act to maintain a positive relationship between customer satisfaction and service providers Customer loyalty to the service provider has a positive impact in assessing the customer's corporate value after the customer purchases a company's product or service within the customer's relationship structure

If a customer's preference for a brand is always the same, the customer shows loyalty to that brand (Zeithaml, Bitner, & Grumler, 2006)

After the development of the theory of marketing, Kotler (2003) was concerned that many companies would retain new customers and limit the costs to current customers in customer relationships to five times the cost of maintaining existing ones Oliver (1999) divided loyalty into four levels: cognitive loyalty, emotional loyalty, active loyalty, and Behavioral loyalty Customer loyalty can be measured in four categories: willingness to repurchase, recommendation by others from a company or brand, acceptance of prices, and willingness to cross purchase (Gronholdt, Martensen, & Kristensen, 2000)

Fredericks & Salter (1995) said factors such as pricing, quality of service, product quality, innovation, and image affect customer recognition of the value of a product or service Jones & Sasser (1995) divided customer loyalty into three areas: purchase intent, primary behaviour and secondary behavior

Griffin (1996) defined loyalty as a customer who regularly repurchases a loyal customer, a customer who purchases a wide range of products and services from a particular company, and a customer who is not swayed by the strategies of a competitor, and divided customer loyalty into emotional attachment and repetitive purchases

Customer loyalty is that when a customer builds a positive attitude to the entity through their purchasing experience, they end up doing positive things to that entity (Dick & Basu, 1994; Jacoby & Chestnut, 1978) Dick & Basu (1994) said that customer loyalty is determined by a combination of relative attitudes and egocentric behavior That is, Dick & Basu (1994) explains that consumers with low relative attitudes and high behaviour have similar customer loyalty The types of customer loyalty can be classified as perception, effect, intent, and action (Oliver, 1999)

Cognitive customer loyalty is the initial loyalty phase in favor of a particular brand as the brand information available to consumers Cognitive customer loyalty directly affects the brand because recognition is based on prior or proxy knowledge and recent experience

Emotional customer loyalty is the second step, and customer loyalty is developed in a use environment that likes or satisfies the brand Emotional customer loyalty therefore represents satisfaction and both cognitively and emotionally represents consumers' preferences

Intentional customer loyalty is influenced by repetition of the positive impact

on the brand Intent means a single brand-specific decision for repeat purchases Thus, intentional customer loyalty is a more deep-seated customer loyalty status Motivated intentions in the course of previous customer loyalty in the behavioural

adjustment results are converted to readiness for action When promises are repeated and developed into action, they lead to repurchase

Berry (1982) said that managing existing customers is more important than exploring new customers in marketing activities

Reichheld & Sasser (1990) stated that a 5 per cent increase in customer loyalty results in a 25% to 85 per cent increase in the entity's total revenue

Schefter & Reichheld (2000) said companies that do not have loyal customers have a negative impact on the generation of long-term profits because loyal customers make more purchases, benefit from favorable recommendations to new customers, and perform sales functions that provide additional sources and advertising and advertising

Srinivasan, Anderson, & Ponavolu (2002) said that if an entity secures loyal customers, it can benefit from the customer, including positive drive, repurchase intentions, reduction in transaction costs, reduction in switching costs, increase in mutual sales success, and reduction in marketing costs

In addition, Bove & Johnson (2000) stated that customer loyalty has been recognized as a means of ensuring loyal customers by providing high-level services

to the employees of the entity to maintain the relationship with the customer, and through trust from the customers, customer loyalty is maintained

Duffy (2003) stated that customer loyalty is not only cost-cutting, but also recommended in good faith to acquaintances, that if problems arise, problems can

be solved by continuously complaining, and that purchasing through various channels can increase consumption and reduce the cost of doing business

Loyal customers say they tend to be more aware of the ancillary benefits

offered by the brand, and the subtle differences in customer loyalty make an impact

CHAPTER 2: ANALYSIS OF SHINHAN BANK`S CSR AND ITS EFFECT

ON CUSTOMER LOYALTY IN KOREA

Customer trust will be supportive of negative information about the company and will increase customer loyalty, which will affect the resistance to negative information and customer loyalty

In addition, the model was constructed that resistance to negative information would affect customer loyalty

Corporate social responsibility

Figur 4.1: Research Model

2.1.2 Research Hypothesis

2.1.2.1 The Relationship between Social Responsibility and Customer Trust

Customer Trust

Resistance

to negative information

Customer Loyalty

Economic CSR

Legal CSR

Ethical CSR

Charitable CSR

Trust is positively influenced by the company's social responsibilities (Ball, Coelho, & Informas, 2004; Kennedy, Ferrell, & LeClair, 2001; Swain & Chumpitaz, 2008), and customer confidence is influenced by sharing with the company and its customers (Morgan & Hunt, 1994) The execution of corporate social responsibility provides information about the characteristics and values of the entity (Brown & Dacin, 1997), and increases the organization's general confidence (Aaker, 1996)

Hosmer (1994) said that the ethical and responsible management principles of

an enterprise's decision-making strategy would increase the trust of all stakeholders, including customers (Martenez & Boaque, 2013)

The recognition that ethics and accountability are fundamental to all parties' exchange actions is above any legal contract (SWAN & CHumpitz, 2008) In support of this view, Pivato, Misani, & Tencati (2008) said that the creation of trust

is one of the challenges facing companies to achieve social performance and is the result of corporate social responsibility

A lot of research has been done on corporate social responsibility and organizational reliability Economic CSRs of corporate social responsibility influence the formation of customer confidence and affect the formation of trust by consumers through economic responsibility activities through efforts to enhance perceived quality of products or services (Morales, 2005)

If an entity strictly carries out its legal or ethical responsibility activities, customers will have a higher level of confidence in the firm (Hanju & Park Jong-chul, 2009; Folkles & Kamsins, 1999; Strahilevitz, 2003)

Charitable corporate accountability takes precedence over the interests of others and the community regardless of the interests of the company, which creates

a sense of morality and trust, which reduces uncertainty in the purchasing process Therefore, consumers will be more likely to build favorable confidence in companies that carry out charitable responsibilities (Lee Han-ju & Park Jong-chul, 2007)

Hosmer (1994) said that convergence of the principles of morality in an entity's strategic policies increases the reliability of all stakeholders, including consumers

Vlachos, Tsamakos, Vrechopoulos, & Avramidis (2009) said that the main effect of an enterprise's social responsibility is that the customer has confidence in the business

Therefore, based on the above prior research, the following assumptions were made in this study about the social responsibility of the company and the customer trust and the relationships at the lower level

H1: Corporate social responsibility will have a significant positive impact on customer trust

H1-1: Economic CSRs among the lower levels of corporate social responsibility will have a significant positive impact on customer trust

H1-2: Legal CSRs among the lower levels of corporate social responsibility will have a significant positive impact on customer trust

H1-3: Ethical CSRs at a lower level of corporate social responsibility will have a significant positive impact on customer trust

H1-4: Charitable CSRs at a lower levels of corporate social responsibility will have a significant positive impact on customer trust

2.1.2.2 Relationship between customer trust and customer loyalty

Customer trust is what the provider of a product or service thinks will be in the customer's long-term interest (Crosby et al, 1990) Trust is defined as a precondition for creating or maintaining a long-term relationship between the entity and the consumer (Morgan & Hunt, 1995) Especially in service marketing In this sense, Schefter & Reichheld (2000) said, "To achieve customer loyalty, we must first gain trust." The importance of trust in explaining customer loyalty was supported by scholars such as Chaudhuri & Holdrook (2001), Sirdershmukh, Singh, & Sabol (2002), Ball (2004), and Ball et al (2004)

The relational marketing theory has gained much support from the empirical study of marketing, and it has been demonstrated that trust is an important