Antecedent and Consequences of Consumer Expectations and Evaluations Toward CSR Activities: Case Study of an MNC Operating in Indonesia

Abstract:     
This paper investigates the causal relationship between the antecendents and consequences of consumer expectations and evaluation to CSR activities. Many firms are seeing Corporate Social Responsibility (CSR) as necessary investments in the community where the firms operate in order to ensure and safeguard sustainable operation for the future (Wibisono, 2007). Consumers are seen as stakeholders who expect corporations to behave responsibly, as well as actively participate in developing the communities in which they operate. Their expectation is also important in their perception toward the current CSR activities done by the firm, which in the end might influence their attitudes and behaviors toward the firm’s product and services (Waddock dan Graves, 1997; Chi-Shiun, Chiu-Chih, Yang-Chin and Pai-Da, 2010; Stanaland, Lwin and Murphy, 2011).

The research employed 175 women in the Greater Jakarta region as respondents, which consists of 92 housewives and 83 career women. Respondents are existing consumers of a multinational consumer goods firm operating in Indonesia. Data analysis was performed using Structural Equation Modeling with LISREL for WINDOWS 8.51 Full Version (Jőreskog and Sőrbom, 2001). Final model showed that customer’s evaluation on the firms’ financial and ethical statements positively influences expectations and evaluations, while Consumer evaluation of a firms’ CSR has indirect effect but no direct effect to Consumer’s Trust, Loyalty and Perceived Risk.

Number of Pages in PDF File: 19

Keywords: Corporate Social Responsibility, Consumer Expectations and Evaluation, Consumer Trust and Loyalty, Corporate Image, Perceived Purchase Risk

JEL Classification: M14

working papers series