Effects of corporate social responsibility activities on Corporate Image: evidence from food and beverage industry in Amhara Region

Abstract

Effects of ‘Corporate Social Responsibility’ activities on Corporate Image: Evidence from the Food and Beverage Industry in the Amhara Region, Ethiopia, is the topic of the researchers’ study. The study’s main goal was to look into how specific ‘Corporate Social Responsibility’ activities affected the corporate Image of a few particular firms. Finding CSR activities that can enhance a company’s Image, learning what CSR activities consumers believe are sufficient to meet the criteria for being socially responsible, and pinpointing tactics that encourage a positive Corporate Image of the organizations were among the study’s crucial specific goals. Both primary and secondary sources of information were employed to complete this study. Moreover, five food and beverage processing companies were chosen as a sample using a multi-stage selection methodology. Based on the judgmental sampling technique, the researcher selected 385 sample respondents. The characteristics that affect the corporate Image of food and beverage companies in the research region were investigated using structural equation modelling using SPSS software version 26 and Amos 23. Our findings add to past research that has primarily looked at the direct relationship between CSR activities and Corporate Image. The results showed a substantial direct effect of CSR activities, Economic, Ethical, Legal, and Philanthropic responsibilities on Corporate Image.

Keywords:

• Corporate social responsibility
• Corporate Image
• economic CSR
• legal CSR
• structural equation modeling
• Amhara Region

REVIEWING EDITOR:

• Len Tiu Wright
• De Montfort University Faculty of Business and Law, United Kingdom

SUBJECTS:

• Management Accounting
• Marketing Management
• Administration and Management
• Management & Organization

1. Introduction

Recently, academic research and the business sector have paid much attention to ‘Corporate Social Responsibility’ (CSR). Companies utilize CSR to gain a competitive edge and forge cooperative ties with stakeholders (Tiep et al., 2021). Industrialized countries are familiar with CSR, and its execution is essential to preserving the ecosystem for sustainable development, which benefits stakeholders, society, the environment, and enterprises. Though CSR is becoming more and more popular in developing countries, business CSR implementation is not voluntary since the potential benefits of CSR are not as firmly emphasized (Tiep et al., 2021).

In today’s brutally competitive economic world, organizations are quickly discovering the benefits of ‘Corporate Social Responsibility’ (CSR) as a tactical tool to enhance their brand image and reputation. Through voluntary actions referred to as ‘Corporate Social Responsibility’, businesses may decide to address societal and environmental challenges in addition to their legal obligations (Carroll & Shabana, 2010). The growing interest in CSR results from businesses realizing its many advantages, including greater consumer loyalty, improved brand perception, and long-term sustainability (Brammer et al., 2007). Corporate Image is an organization’s total standing and reputation in the eyes of its stakeholders, such as customers, shareholders, employees, and the general public (Roberts & Dowling, 2002). It is an essential intangible asset that significantly impacts a business’s success and competitive edge.

The business has popularized ‘Corporate Social Responsibility’ (CSR), which stresses firms’ social and environmental responsibilities. ‘CSR’ actions are voluntary steps companies take to address their economic, social, and environmental impacts (Carroll & Brown, 2018). Businesses must demonstrate their CSR commitment more than ever to build brand and customer loyalty. In this time of change, companies must become citizens who establish a corporate image by engaging in socially responsible activities and making long-term profits. As wealth concentration rises and countries become increasingly multinational, corporations must fulfil their social duties as a corporate strategy. CSR is a style of doing business that companies must willingly and honestly adopt to achieve long-term economic and social success (Cha & Jo, 2019).

According to the Commission of European Communities, most definitions of ‘Corporate Social Responsibility’ suggest that corporations voluntarily incorporate social and environmental issues into their operations and stakeholder relationships (European Commission. Directorate-General for Employment, 2001). Even if SMEs and cooperatives practise socially responsible business, large businesses drive the ‘Corporate Social Responsibility’ notion (European Commission. Directorate-General for Employment, 2001). A company’s social Responsibility includes Society’s economic, legal, ethical, and discretionary obligations (Carroll, 1979). The ‘Corporate Social Responsibility’ activities of economic, legal, and philanthropic corporate social duties greatly affected the firm Image (Cha & Jo, 2019). Many companies now practise CSR. Today’s businesses seek CSR benefits. CSR activities can boost stakeholders and public perception of the company (Stoyanov, 2017).

According to Zhang et al. (2020), CSR was found to increase corporate Image among service suppliers. If service companies enhance CSR, customers will like them. After thorough research on each CSR component, all four economic, ethical, legal, and philanthropic Responsibility hypotheses were accepted (Zhang et al., 2020). This study, which employed Amhara Region food and beverage industry data, will add to the knowledge of CSR’s influence on corporate Image. Organizations can learn how their CSR actions can positively impact consumer views and brand image by assessing customer happiness. This study will help organizations improve their reputation through CSR.

In conclusion, the food and beverage industries’ corporate Image regularly fall short of expectations. The research showed the strong relationships between CSR and CI but did not accurately reflect the state of these companies’ corporate Image. Investigating how corporate social responsibilities affect corporate Image will therefore give a lesson for current food and beverage processing corporations a lesson and enable them to make necessary adjustments.

Alrubaiee et al. argue that company image influences consumer value. Thus, consumer value and corporate Image are complementary. Therefore, business image affects customer value and vice versa. A study (Lee, 2014) found that each CSR action has a distinct effect on business Image, influencing corporate performance. CSR is also necessary for a positive corporate image (Cha & Jo, 2019). Reiterating their CSR can boost brand credibility. Social Responsibility and involvement improve corporate Image statistically; this implies that ‘Corporate Social Responsibility’ may boost Image (Huang & Lien, 2012). Huang and Lien (2012) found that few firms fully embrace CSR. The study concluded that the industry’s CSR implementation had room for improvement. Most surveyed companies are unaware of environmental protection. These studies show that CSR increases organizational performance and Image. ‘Corporate Social Responsibility’ (CSR), which corporations today use to improve their Image and reputation, is a crucial part of business strategy. Despite CSR’s growing popularity and potential benefits, CSR’s effects on business image need deeper study.

Earlier studies also suggest that a CSR model for the food and beverage sector hasn’t been developed. This study tries to tackle the issues stated by reviewing the literature and doing empirical research to provide a holistic understanding of the numerous aspects affecting a company’s corporate Image. This study is significant because of its addition to academic knowledge, applicability to corporate decision-making, conformance to changing societal standards, and support of the business case for CSR. This study should inspire more ethical and ecologically friendly business practices that benefit firms, clients, and Society.

Research questions

• RQ01: What is the impact of ‘Economic Responsibility’ on Corporate Image in the Food and Beverage Industry?

• RQ02: How does ‘Ethical Responsibility’ influence Corporate Image in the Food and Beverage Industry?

• RQ03: What is the relationship between ‘Legal Responsibility’ and Corporate Image in the Food and Beverage Industry?

• RQ04: How does ‘Philanthropic Responsibility’ Affect Corporate Image in the Food and Beverage Industry?

2. Literature review and hypotheses development

2.1. Underpinning theories

Stakeholder, attribution, and social identity theories are thoroughly examined in the study’s theoretical review portion. A possible impact on the corporate Image is made with a focus on economic, ethical, legal, and philanthropic responsibilities. By combining these viewpoints, we sought to provide a thorough understanding of the complex interactions between ‘Corporate Social Responsibility’ activities and corporate Image. In order to investigate the links between CSR activities and Corporate Image, this study uses a multi-theoretical approach.

The stakeholder theory states that enterprises should consider the requirements of all parties that can affect their operations and decisions. Freeman defines stakeholders as ‘any group or individual who can affect or is affected by the achievement of the organization’s objectives’ (Freeman, 1984). According to a study, interacting with stakeholders and considering their opinions helps organizations establish effective and long-lasting CSR practices (Mitchell et al., 1997). Stakeholders influence company perception stakeholders, clients, employees, investors, and the public influence a company’s reputation and Image. Wrong impressions or arguments with stakeholders can hurt a company’s reputation, whereas positive stakeholder engagement can boost it. Stakeholders evaluate the company based on CSR, morality, transparency, and responsiveness (Bhattacharya et al., 2009).

According to studies, customers evaluate CSR practices based on perceived motivations. According to attribution, customers may support a company’s CSR programs for ethical, strategic, or societal reasons (Sen et al., 2006). Customers’ motivations decide how authentic and credible CSR practices are, which affects their feelings and behaviour toward the organization. Customer attributions are crucial to CSR effectiveness and impact. According to the principle of attribution, ratings and support improve when customers attach internal motives (such as actual caring) to a company’s CSR activities. Attributing outside reasons, like selfish or strategic ones, may engender suspicion and diminish support (Du et al., 2007). Customers’ reason attributions affect their opinions, buying intentions, and loyalty to a company’s CSR activities.

Social identity theory studies how group membership and social categorization affect self-identification. Social identity theory states that people’s behaviour and attitudes are shaped by their desire to maintain a positive social identity. Social identity theory emphasizes comparison, categorization, and identification. Social categorization involves classifying oneself and others. Social identification is adopting a group’s values. Social comparison involves comparing one’s group to others to promote self-esteem and maintain a positive social identity (Sen & Bhattacharya, 2001).

CSR can affect customer identity by creating a social categorization and identification framework. When a company acts socially responsibly, customers may identify with the brand and its values and support its CSR activities. According to Sen and Bhattacharya (2001), CSR programmes can improve customers’ self-esteem and align them with the company’s values and humanitarian efforts. CSR impacts customer perception. Customers view CSR-engaged organizations as more trustworthy, reputable, and socially responsible, according to research (Sen & Bhattacharya, 2001). Tajfel and Turner (1986) said, ‘CSR efforts can improve customers’ perceptions of the company’s products and services and their general attitudes and intents.’ When CSR and customer values align, customer loyalty and company-customer relations increase. This concept holds that organizations shape people’s identities. CSR programs can boost customer satisfaction and business image by creating a shared identity between the company and its customers (Tajfel & Turner, 1986).

Therefore, Stakeholder theory helps us understand why stakeholders’ interests and concerns matter in organizational decision-making. Customers assign motives and intentions to CSR efforts using attribution theory. Social identity theory explains how CSR affects customer identity and attitudes. These theories have shown that ‘Corporate Social Responsibility’ activities affect the Corporate Image.

2.2. Introduction

This study examines the effect of CSR practices on corporate Image, allowing organizations to design strategies to improve their Image.

2.3. Corporate Social Responsibility

Morally promoting economic advancement is ‘Corporate Social Responsibility’ (DWBCSD, 1999). The OECD calls ‘Corporate Social Responsibility’ Business contribution to sustainable development. Thus, firms must balance shareholder earnings, employee compensation, consumer goods and services, and societal and environmental values (Gordon, 2001).

‘Corporate Social Responsibility’ incorporates Society’s expectations of corporations’ economic, legal, ethical, and discretionary giving performance (philanthropy). Accordingly, decision-makers must act in ways that benefit themselves and Society (Carroll & Buchholtz, 2008). Dahlsrud examined 37 CSR definitions and identified five primary dimensions: stakeholder, social, economic, environmental, and motivation to pursue CSR (Dahlsrud, 2008).

CSR is a company’s morality toward stakeholders. However, ‘Corporate Social Responsibility’ has several meanings and is not defined (Hopkins, 2012). Businesses can increase profits and consumer appeal by supporting social development. Many companies operate ethically. According to CSR, companies must protect stakeholders, the environment, and Society (Riano & Yakovleva, 2019).

Last, Maignan and Ferrell (2000) defined CSR as ‘the extent to which Businesses meet the economic, legal, ethical, and discretionary responsibilities imposed on them by their stakeholders.’ This definition is employed as the measure of CSR in this study.

2.4. Economic responsibility of CSR and corporate Image

Carroll defined CSR as ‘the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of corporations at a given time’ (Carroll, 1991; Jamali & Carroll, 2017). Businesses serve Society financially. According to this Author, it may seem unusual to view an economic need as a social obligation, yet Society expects and demands that economic Responsibility be able to sustain itself. Businesses have always supplied Society’s needs. The society promotes profits; Value-added companies make money for all stakeholders. Profits boost business growth when reinvested (Carroll, 1991; Jamali & Carroll, 2017). CEOs, managers, and business owners say ROI and profitability drive success. Most economies value company profits. Companies use various cost-effective techniques to meet their financial obligations. Revenues, cost-effectiveness, investments, marketing, strategies, operations, and other professional principles increase the company’s long-term financial performance. Economic performance and sustainability are vital in today’s competitive global corporate climate. When their businesses fail, any new liabilities are irrelevant. Competitive business environments necessitate economic accountability.

Kim et al. (2020) say CSR operations profit from appealing products and services. Customers want cheap, good products. Businesses can practice economic CSR by fulfilling and exceeding customer expectations. Commercial activities may disregard the environment or human rights. Economic CSR should be marketed as a desirable solution to a firm’s social and environmental challenges, not only as a marketing strategy for financial gain.

Carroll (1991) suggested merging four accountabilities: economic, ethical, legal, and charitable (engaging in volunteer activities). Carroll (1991) noted CSR advantages may harm stakeholders. The researcher presents the following hypothesis based on the previous study and Carroll’s (1991) four ‘Corporate Social Responsibility’ components. Profits are encouraged by Society, and value-added businesses generate profits for all parties involved. Profits, when reinvested, accelerate corporate growth (Carroll, 1991; Jamali & Carroll, 2017). ROI and profitability, according to CEOs, managers, and business owners, are crucial to success. CSR balances social and economic goals to advance Society (Carroll & Shabana, 2010). Virvilaite and Daubaraite (2011) point out that Scientists and marketers emphasize CSR in consumer decision-making. Since social Responsibility is growing more popular globally, CSR is crucial in building an attractive corporate Image, delivering competitive advantage and originality, and contributing to firm success by emphasizing the chosen topic. These studies underline the need for further investigation to enhance corporate Image regarding economic-based ‘Corporate Social Responsibility’. Based on the literature review provided, the researchers proposed the following hypothesis.

H1. Economic Responsibility (ECSR) positively influences corporate Image (CI)

2.5. Legal responsibilities of CSR and corporate Image

Enterprises are legal and governed by Society. These essential principles, including rules and regulations, explain critical ethical business activity determined by federal, state, and municipal legislators and constitute Society’s ‘codified ethics.’ Companies must observe these rules. Today’s firm organizational charts feature compliance officials (Carroll, 1991; Jamali & Carroll, 2017). Product, food, and ingredient disclosure rules apply to food service businesses. Ethical and legal CSR is more important than ever in a market that prizes strong consumer relationships. To fulfil their social Responsibility, firms have donated to organizations or supported charitable events, providing their employees with more significant benefits (Kim et al., 2020).

CSR enhances business image, service quality, and purchasing intentions, according to Huang et al. (2014). Corporations must follow the law and protect shareholders, customers, suppliers, governments, and the environment. Helping minorities and humanitarian activities can strengthen a company’s Image.

CSR affects corporate Image, but no strategy exists for Charity vs. CSR. Socially responsible enterprises must meet economic and legal norms to fulfil moral and charitable obligations (Virvilaite & Daubaraite, 2011). Company activities affect Corporate Image. Additionally, according to a study by Mousiolis et al. (2015), social Responsibility boosts a company’s reputation and brand image, boosts sales, fosters employee engagement and loyalty, boosts productivity, raises quality, and has other advantages. Based on the discussions here and their insights, the researchers developed the following hypothesis:

H2. Legal Responsibility (LCSR) positively influences corporate Image (CI)

2.6. Ethical responsibilities of CSR and corporate Image

According to Jamali and Carroll (2017), Society has legitimized enterprises and established their essential rules. These basic principles, which include rules and regulations, describe necessary ethical corporate conduct determined by federal, state, and municipal legislators and represent Society’s ‘codified ethics.’ Businesses must follow these rules to operate. Today, compliance officers are prominent in company organizational charts (Carroll, 1991; Jamali & Carroll, 2017). Food service businesses must observe product safety, food safety, and ingredient disclosure laws. Ethical and legal CSR is more crucial than ever in a market that values strong consumer relationships. To fulfil their social Responsibility, companies have donated to organizations or supported charitable events, giving their employees more benefits (Kim et al., 2020). Aluko et al. (2017) claim that CSR is an external marketing and communication role that can boost business image and prestige among external audiences, particularly host community inhabitants. The study found that company responsiveness to Society gives host community members a sense of societal participation and helps them realize the firm appreciates them. The study found that generosity boosts a company’s reputation. ‘Corporate Social Responsibility’ is a critical strategic tool for firms seeking a competitive edge and a positive public image to develop lasting partnerships with host communities.

CSR may boost brand image; as Production et al. (2020) claimed, customer satisfaction, business reputation, and trust drive consumer loyalty and buying intention. CSR promotes business and Society (Production et al., 2020). Based on the insight gained from this discussion, the researchers formulated the following hypothesis:

H3. Ethical Responsibility (ETCSR) positively influences corporate Image (CI)

2.7. Philanthropic responsibilities of CSR and corporate Image

Corporations donate philanthropically, and Volunteering is corporate philanthropy (Carroll, 1991). Corporate generosity is discretionary. Businesses and consumers tolerate volunteer work; Businesses engage in immoral social behaviour. Ethical companies give and desire morality; these Companies must ‘give back.’ Business-society links demonstrate that Corporations must act like humans today. Many companies offer cash gifts, donations of goods and services, employee and management volunteerism, community development, and other ad hoc stakeholder contributions. Most firms donate for good citizenship for the company’s reputation. Since business presents are unethical, the four-part model’s ethical and philanthropic categories differ. Society expects such gifts but does not label corporations ‘unethical’ based on how much they donate or if they provide enough.

Corporations donate voluntarily; this is ‘corporate citizenship.’ However, CSR encompasses charity. Finally, the four-part CSR paradigm addresses public expectations for corporate economic, legal, ethical, and philanthropic behaviour. Business must be ethical, legal, and profitable. Society ‘needs’ corporate legal accountability not only but also Society ‘expects’ commercial ethics (Carroll, 1979, 1991). Therefore, this four-category definition may change. Finally, firms must donate and volunteer (Kim et al., 2020). Corporate CSR must meet public, social, human, and environmental needs.

Non-profit companies sell more public benefit event advertising always sell. Philanthropic obligation outperformed the other three CSR characteristics (Huang et al., 2014). According to these authors, suggests that if firms sponsor philanthropic and minority groups, participate in public welfare, artistic, and cultural events, enhance the local environment through corporate volunteers, or donate resources, Society will recognize their honesty. Firms should encourage giving. Lastly, from this discussion, researchers formulate the following hypothesis:

H4. Philanthropic Responsibility (PCSR) positively influences corporate Image (CI)

2.8. Corporate Image

Despite extensive research, the concepts remain confusing; literature typically interchanges corporate identity and Image. These examples show these notions’ confusion (Shee & Abratt, 1989). Every company has a personality, and these distinguish one organization from another. Character traits indicate these cues shape audiences. Oliver describes corporate Image as stakeholder reputation. Ethical and socially responsible CSR programs increase firm Image (Oliver, 1980).

‘Corporate image’ is a company’s public Image. Scholars have defined the ambiguous concept. (Boulding, 1956) Images reflect a person’s knowledge-based subjective consciousness. Insufficient data may have caused these opinions. Shee and Abratt (1989) explored human factors like corporate friendliness. In Mazzarol (1998), Customers buy based on a company’s Image.

Corporate Image is functional and emotional, based on purchasing/consumption experience. The practical component is actual and quantifiable, whereas the emotional part is psychological. Organizational interactions and functional image indicator data processing produce these feelings (Tang et al., 2007). Thus, clients evaluate corporate traits to form a corporate Image.

Competitive markets make the company image more important; because of this, commodity and service values are competing and narrowing. Thus, company image matters more. Corporate Image affects brand choice (Ček, 2016). Clients value Image and reputation in competitive markets. Businesses compete for brand and reputation. A positive corporate Image boosts a company. Strong brands attract, keep, and expand customers.

Nguyen and Leblanc believe that customers’ experiences, attitudes, ideas, and expertise influence the company’s name, traditions, operational visions, and product and service offerings (Nguyen & Leblanc, 2001). Tang et al. (2007) defines corporate Image as the customer’s whole offering to organizations and the public’s impressions of various organizations. Corporate Image improves a firm Image: marketing, target market feedback, and corporate Image (Virvilaite & Daubaraite, 2011).

2.9. The conceptual framework

Corporate Image, competitive advantage, and commercial success depend on ‘Corporate Social Responsibility’ (Virvilaite & Daubaraite, 2011). Corporations can improve their Image by following the law and supporting charitable causes (Huang et al., 2014). No CSR-CI strategy exists. Socially responsible businesses must meet legal and economic norms. Marketing, corporate identity, and individualism comprise corporate Image. Corporate Image values ‘Corporate Social Responsibility’ but not most (Virvilaite & Daubaraite, 2011). ‘Corporate Social Responsibility’ stakeholders gain from ethical, legal, and charitable accountability (Carroll, 1991). ‘Corporate Social Responsibility’ boosts business performance, brand image, and competitiveness.

Literature uses corporate identity and Image interchangeably, yet they are related (Shee & Abratt, 1989). CSR boosts corporate reputation, competitiveness, and success (Virvilaite & Daubaraite, 2011). Corporations can also improve their Image by following the law and donating to charitable causes (Huang et al., 2014). Satisfaction is based on product performance against expectations. Research demonstrates an asymmetry between product performance, expectations, and customer satisfaction, influencing brand loyalty (Keller, 2016). Customer happiness drives CSR and Image (Oliver, 1997). Customer satisfaction increases (Alafi & Hasoneh, 2012). Customer satisfaction impacts corporate Image through CSR.

These studies emphasize the significance of understanding the relationships between corporate Image and economic, legal, ethical, and philanthropic responsibilities. This study focuses on several variables to examine the elements that affect corporate Image, including economic responsibility-based CSR, legal responsibility-based CSR, ethical responsibility-related CSR, and philanthropic responsibility-related CSR, as presented in (Figure 1). Filling in these knowledge gaps and limitations can improve research understanding of the food and beverage industry image dynamics and provide information for creating efficient policies and strategies that will encourage sustainable growth and stability.

Figure 1. Conceptual framework.

3. Research methodology

3.1. Research design and strategy

Design affects research goals and questions (Adams et al., 2012). It is a master plan for Data collection and analysis. This study was descriptive and explanatory. This study then critically investigated how CSR affects Company image in the studied domains. Second, the study examined how CSR actions affect company image using explanatory factors.

According to Saunders et al. (2019), combining qualitative and quantitative methodologies mitigates one method’s shortcomings. Combining approaches helps quantitative and qualitative researchers (Kothari, 2004). This study used qualitative and quantitative methods based on recommendations forwarded by Creswell (2009). Cross-sectional research studied CSR and Company image. The study method examines these factors simultaneously, exposing their correlations.

Populations are groups, events, or interests to study, according to Sekaran and Bougie (2016). The population or the ‘universe’ is all units. Features and qualities are elementary in this population (Kothari, 2004). Sample selection requires a target population. In line with this, researchers studied five of 101 local food and beverage manufacturing companies. The researcher examined respondents who were indefinite. An infinite population cannot be counted reasonably (Kothari, 2004). Researchers used an infinite population as a sample because the food and beverage customers were not definite.

3.2. Sample size and sampling techniques

The researcher extrapolates sample survey results to the population within random error (Ii et al., 2001). Amhara researched CSR and company image for numerous reasons. The researcher asks why people don’t trust the food and beverage industry, one of many poorly managed local sectors. Second, with multi-stage sampling, five food and beverage manufacturers were chosen through a judgemental sampling technique based on the company’s area coverage and due to time and resource constraints. Step three selected 385 sample respondents from five firms using the statistical formula developed by Cochran (1977). Stage four Convenience sampling technique was employed to select sample respondents who are the customers of selected food and beverage Industries determined by the statistical formula. The sample was taken from various ages, gender, and geographical variety to ensure generalizability. The statistical procedure used to determine sample size is presented as follows: $$n=\frac{Z^{2\mathrm{ }}\mathit{\text{pq}}}{e^2}$$

(Cochran, 1977)

where n = ‘sample size’; Z = ‘the value for the selected alpha level corresponding to the confidence level at 95% required from the statistical Table (1.96)’; p = ‘is the estimated proportion of attributes that is present in the population, which is (50%) or (0.5)’; e = ‘is the desired level of precision required which is (0.05)’; q = ‘is 1-p is the estimated variance’. $$n=\frac{{1.96}^{2\mathrm{ }}\left(0.5\right)(1-0.5)}{{0.05}^2}$$ $$n=384.16\approx 385$$

Table 1. KMO and Bartlett’s Test.

Kaiser-Meyer-Olkin Measure of Sampling Adequacy		.801
Bartlett’s Test of Sphericity	Approx. Chi-Square	3943.816
	df	528
	Sig.	.000

The researcher used primary and secondary data for this research. According to Dawson (2009), researchers used Primary or secondary data sources. Preliminary data is collected primarily for specific research for the first time (Kothari, 2004).

The researcher employed structured questionnaires for literate respondents and enumerator interviews for illiterates. The data was gathered using a standard questionnaire survey with a Likert scale of 1–5, where level 1 strongly disagrees and level 5 is strongly agree, being given to clients in a particular industry. Researchers saved time and money by using structured surveys. Semi-structured interviews were used to collect CSR data from company Leaders. Five enumerators took the data; the researcher taught data enumerators data collection methodologies and frequently supervised and followed up to gather more reliable data from respondents.

Secondary data was obtained and compiled and analyzed. The researcher must choose data for his study and design a data collection procedure (Kothari, 2004). Secondary data needs searching numerous sources, Published or unpublished secondary data.

The study used descriptive and inferential analysis to examine how ‘Corporate Social Responsibility’ influences company image. Inferential statistics explore correlations between two or more variables and how various independent factors can explain the Variance in a dependent variable (Sekaran & Bougie, 2016). SPSS (version 26) sequential confirmatory factor analysis was used to assess and measure attributes. The study used Cronbach’s alpha to measure consistency. AMOS 23’s structural equation model analysis tested the study’s hypotheses.

Nomological, discriminant, and convergent validity tested the structural model’s validity (Anderson & Gerbing, 1988). Model validity is nomological or general. Convergent validity maintains indicator and constructs homogeneity, while discriminant validity addresses the degree of construct divergence, i.e. each factor reflects a separate dimension (Fornell & Larcker, 1981). Previous research determined the Likert scales’ suitability for the industry under review. Purified measurements assessed dimensionality, dependability, and validity.

The researcher created unidimensional measures using successive confirmatory component analysis, following (Gerbing & Hamilton, 1996). The researcher assessed the new scale’s factor structure and dimensionality using several responses (Hair et al., 1998), arguing that CFA needs five scale item observations. The validation stage’s 385 qualified responses exceed statistical power. Item-to-total correlations and standardized residual values excluded a few items from each construct’s final collection (Byrne, 2012).

4. Result, discussion, and interpretation

4.1. Reliability and validity tests

4.1.1. Test for normality

The sample size is substantial, and Kurtosis’s Critical Region (CR) does not surpass 3.0. Skewness greater than 1.0 can be handled by SEM employing the maximum likelihood estimator (MLE), such as AMOS. Regularly distributed Kurtosis must range from -10 to +10 (Collier, 2020). According to the current data, skewness and Kurtosis are normal. CR is 1.709.

4.1.2. Multicollinearity test

The variance inflation factor (VIF), a threshold of tolerance level above 0.2, and a VIF threshold below 10.0 were employed to determine the presence of multicollinearity. The results showed that all independent variables’ VIFs and tolerance levels were within the threshold’s range.

4.1.3. KMO test

Exploratory factor analysis uses a maximum likelihood approach with Varimax rotation to examine the factor structure and associations between the scale’s elements. The output of the factor rotation matrix is shown in Table 1.

The KMO score is over 0.50, indicating that the sampling adequacy requirements have been satisfied. Bartlett’s Test of Sphericity is significant since the correlation matrix is statistically distinct from an identity matrix as anticipated (P < .05).

4.1.4. Common method variance

When self-report surveys collect data simultaneously from the same subjects, common method variance (CMV) may be problematic. This concern is exacerbated when the same respondent’s perceptual measurements explain the dependent and focal explanatory variables (Podsakoff et al., 2003). Most of the time, researchers use this test to look into CMV in their research. A post hoc study, a Harman one-factor analysis, is carried out after data collection to determine whether a single component is responsible for data variance (Chang et al., 2020).

Most of the time, researchers use this test to look into Common Method Variance in their research. After data collection, a post hoc analysis known as a Harman one-factor analysis is performed to ascertain whether a single factor is accountable for data variance (Chang et al., 2020). The absence of a single element that dominates the covariance indicates that Common Method Variance is not a big issue in the study. This method involves loading all items from each construct into a factor analysis to examine if one particular factor emerges or if one general factor accounts for the majority of the covariance between the measures (Chang et al., 2020).

There is likely to be significant common method variation if one factor emerges from the factor analysis or if one general factor accounts for the majority of the covariance between the measures (Podsakoff et al., 2003).

The generated Principal Component Analysis findings revealed that the unrotated factor only captured 26% of the overall variance in the data. The fundamental assumptions were that no single factor would emerge because the initial component did not account for the majority of the variance. The result showed that far less than 50% fulfilled the threshold value of Herman’s Single factor test (Tehseen et al., 2017). These results, therefore, suggested that the Common method variance in this inquiry is not an issue. The end product that was produced (Table 2).

Table 2. Harman’s single-factor test.

Component	Initial Eigenvalues			Extraction Sums of Squared Loadings
	Total	% of Variance	Cumulative %	Total	% of Variance	Cumulative %
1	6.807	26.182	26.182	6.807	26.182	26.182
2	2.674	10.285	36.467
3	2.484	9.556	46.023
4	2.218	8.533	54.555
5	2.004	7.709	62.264
6	1.116	4.293	66.557
7	.939	3.610	70.167
8	.763	2.935	73.102
9	.727	2.795	75.897
10	.688	2.647	78.544
11	.601	2.312	80.856
12	.587	2.259	83.115
13	.545	2.096	85.211
14	.496	1.907	87.119
15	.445	1.713	88.832
16	.421	1.621	90.453
17	.395	1.519	91.972
18	.364	1.402	93.373
19	.348	1.340	94.714
20	.312	1.199	95.912
21	.290	1.114	97.027
22	.249	.957	97.984
23	.207	.796	98.780
24	.185	.712	99.492
26	.132	.508	100.000

Extraction Method: Principal Component Analysis.

Source: Researcher’s analysis.

4.1.5. Loadings and composite reliability

Factor loadings, as defined by Kothari (2004), are those numbers that describe how closely the variables are associated with each of the factors identified. These relationships are sometimes called factor-variable correlations. Factor loadings are essential for comprehending what the factors mean. When interpreting a factor, the absolute amount of the loadings rather than their plus- or minus signs is crucial (Table 3).

Table 3. Loadings, reliability, and composite reliability.

Factor	Standardized loadings	Standardized loadings square (A)	ME= 1-A	sum of SL	Sum of ME	^2 of sum of SL (C)	C + sum of ME	CR = C/C + SUM ME)
Economic Responsibility	0.688	0.473799	0.526200	3.043	1.668	9.259	10.927	0.847
	0.708	0.501254	0.498745
	0.797	0.634767	0.365232
	0.850	0.722343	0.277656
Ethical Responsibility	0.825	0.68002	0.319973	3.079	1.624	9.478	11.102	0.853
	0.725	0.524968	0.475031
	0.742	0.550722	0.449277
	0.787	0.619913	0.380086
Legal Responsibility	0.768	0.590569	0.409430	2.888	1.908	8.339	10.247	0.813
	0.679	0.461412	0.538587
	0.756	0.572022	0.427977
	0.684	0.467614	0.532385
Philanthropic Responsibility	.785	0.616790	0.383209	2.965	1.798	8.789	10.587	0.830
	.722	0.521424	0.478575
	.699	0.488992	0.511007
	.721	0.519472	0.480527
Corporate Image	0.769	0.590908	0.409091	7.251	4.406	52.581	56.987	0.917
	0.766	0.586880	0.413119
	0.836	0.699452	0.300547
	0.619	0.383077	0.616922
	0.755	0.569989	0.430010
	0.696	0.484511	0.515488
	0.705	0.496671	0.503328
	0.748	0.559248	0.440751
	0.647	0.418145	0.581854
	0.711	0.505492	0.494507

Source: Researcher’s analysis.

Cronbach’s alpha and composite reliability were used to evaluate construct reliability. Each of the study’s constructs had Cronbach’s Alpha values above the necessary threshold of 0.70 (Jum Nunnally, 1994). Above the 0.70 standards, composite reliability ranged from 0.75 to 0.91 (Hair et al., 2010). Construct reliability was demonstrated for each construct in the investigation (Table 4).

Table 4. Average variance extracted and composite reliability test.

Measures	Number of Items	Alpha	Composite Reliability
Economic Responsibility	4	.764	0.84
Ethical Responsibility	4	.779	0.85
Legal Responsibility	4	.753	0.81
Philanthropic Responsibility	4	.738	0.83
Corporate Image	10	.901	0.91

Source: Researcher’s analysis.

All factors have met the acceptable threshold of more than 0.7, the minimum standard point required to run the model at the composite reliability test for all items.

4.1.6. Convergent and discriminant validity

Convergent validity was assessed using scale item average Variance extracted (Fornell & Larcker, 1981). It exceeded 0.50. This study’s scale demonstrates convergent validity (Table 5). AVE values above 0.5 are acceptable. Table 5 shows that all AVE values are more than 0.5. AVE discriminant validity sqrt exceeds component correlations.

Table 5. Convergent and discriminant validity.

Factor	indicator		latent variable	standardized loadings	Sl square (A)	sum of (sl^2)	no of indicators	AVE	square root of AVE
Economic Responsibility	ER1	<---	F1	0.688	0.473799	2.332	4	0.583041	0.763
	ER2	<---	F1	0.708	0.501254
	ER3	<---	F1	0.797	0.634767
	ER4	<---	F1	0.850	0.722343
Ethical Responsibility	ET1	<---	F2	0.825	0.68002	2.376	4	0.593908	0.770
	ET2	<---	F2	0.725	0.524968
	ET3	<---	F2	0.742	0.550722
	ET4	<---	F2	0.787	0.619913
Legal Responsibility	LR1	<---	F3	0.768	0.590569	2.092	4	0.522905	0.723
	LR2	<---	F3	0.679	0.461412
	LR3	<---	F3	0.756	0.572022
	LR4	<---	F3	0.684	0.467614
Philanthropic Responsibility	PR1	<---	F4	0.785	0.616790	2.202	4	0.550388	0.741
	PR2	<---	F4	0.722	0.521424
	PR3	<---	F4	0.699	0.488992
	PR4	<---	F4	0.721	0.519472
Corporate Image	CI1	<---	F6	0.769	0.590908	5.294	10	0.529438	0.727
	CI2	<---	F6	0.766	0.586880
	CI3	<---	F6	0.836	0.699452
	CI4	<---	F6	0.619	0.383077
	CI5	<---	F6	0.755	0.569989
	CI6	<---	F6	0.696	0.484511
	CI7	<---	F6	0.705	0.496671
	CI8	<---	F6	0.748	0.559248
	CI9	<---	F6	0.647	0.418145
	CI10	<---	F6	0.711	0.505492

Source: Researcher’s analysis.

The HTMT Ratio and Fornell and Lacker criterion assessed the study’s discriminant validity. This criterion states that a contract’s square root of AVE is greater than its correlation with the other research components, proving discriminant validity. Instead of the Fornell & Lacker criterion, the researcher utilized the HTMT ratio to assess discriminant validity. All ratios were below 0.85 (Henseler et al., 2015), as depicted in (Table 5).

4.2. Confirmatory model analysis

AMOS performed a confirmatory factor analysis on the measurement model. One item (C11) was eliminated due to its low factor loading (<.50) in the confirmatory factor analysis. All model fit metrics (CMIN/df, GFI, CFI, TLI, SRMR, and RMSEA) were within their common acceptance levels, indicating the model’s overall goodness of fit. The five-factor model (‘Economic Responsibility, Ethical Responsibility, Legal Responsibility, Philanthropic Responsibility’, and corporate Image) fit the data CMIN/df= 1.427, GFI= 0.972, CFI= 0.972, TLI= 0.966, SRMR= 0.042, and RMSEA= 0.036 the resultant output generated (Table 6).

Table 6. Model fitness indices.

Fit Indices	Recommended value	Sources	Obtained Value
P	Insignificant	Bagozzi and Yi (1988)	.004
CMIN/df	3–5	Less than 2 (Ullman, 2006) to Schumacker and Lomax (2004)	1.434
CFI	> .90	(Bentler, 1990)	.942
TLI	> .90	(Bentler, 1990)	.936
SRMR	< .80	(Bentler & Hu, 1998)	.0484
RMSEA	< .08	(Bentler & Hu, 1998)	.036

4.3. Structural model analysis

Path analysis has the advantage over correlational analysis in that it enables evaluation of the relative impact of each antecedent or explanatory variable on the subsequent or criterion variables by first making the assumptions underlying the causal connections explicit and then by illuminating the indirect effect of the explanatory variables (Kothari, 2004).

AMOS-generated structural equation models explored the link. If the Confirmatory Fit Index (CFI) (Bentler, 1990) is >.90, the Tucker and Lewis (1973) Index (TLI), the goodness-of-fit (GIF) indices (Hair et al., 2010), and the CMIN/df value is < 5; then the model is considered to be well-fitting (Hair et al., 2010). Additionally, if the standardized root means square residual (RMR) value calculated by the AMOS was less than.05, and the Root mean square error approximation (RMSEA) was between 0.05 and 0.08, the researcher approved the model as adequately fitting (Hair et al., 2010). CMIN/df = 1.270, TLI =.968, CFI =.972, SRMR =.0452, and RMSEA =.029. All values were acceptable. The squared multiple correlations for Corporate Image were 0.43, demonstrating that economic, ethical, legal, and philanthropic Responsibility together explain 43 percent of the Variance in corporate Image.

Economic, Ethical, Legal, and Philanthropic Responsibilities affected Corporate Image in the study. The effect of Economic Responsibility on Corporate Image was positive and Significant (b = .582. t = 7.556, p < 0.001); hence, H1 was accepted. The impact of Ethical Responsibility on Corporate Image was Positive and significant (b = .566, t = 7.449, p < 0.001); hence H2 was accepted. H3 was accepted because there was a positive and significant impact of legal Responsibility on the Corporate Image at (b =.512, t = 7.982, p < 0.001), and H4 was accepted because there was a positive and significant impact of philanthropic Responsibility on the Corporate Image at (b =.521, t = 7.070, p < 0.001).

In order to support the study’s conclusions (Chen & Fritz, 2021), the bootstrapping method was employed to analyze the degree of each path coefficient. The study examined variable correlations using this method. The study examined the relationship between CSR activities (Economic, Ethical, legal and Philanthropic Responsibilities) and Corporate Image.

Kim et al., in their research, revealed a relationship between company image and customers’ civic conduct and the responsibilities of economic, philanthropic, ethical, and legal behaviour. The results also align with the widely held notion (Kim et al., 2020) and (Kim et al., 2017) that CSR significantly impacts a company’s reputation. Chang’s study found that CSR affects how public and high-tech executives view the business. It implies that organizations gain a better corporate image the more Responsibility they take on (Shen & Chang, 2009).

4.4. Result discussion

The Structural Model Analysis, using path analysis, examined the relationships between the four CSR dimensions (‘Economic Responsibility, Ethical Responsibility, Legal Responsibility, Philanthropic Responsibility’) and Corporate Image. The results demonstrated that all four CSR dimensions significantly and positively influenced Corporate Image. Specifically, Economic, Ethical, Legal, and Philanthropic Responsibility were found to have positive and significant effects on Corporate Image. This result is consistent with the finding of revealed significant and positive relationships among the variables in the model, such as CSR and firm performance (Tiep et al., 2021).

The R-square value of 0.43 indicates that Economic, Ethical, Legal, and Philanthropic Responsibilities together explain 43% of the Variance in Corporate Image. These findings suggest that consumers perceive a company’s responsible behaviors in economic, ethical, legal, and philanthropic aspects as significant drivers of their overall perception of the company’s Image.

The Structural Model (Figure 2) and the standardized estimates of the path coefficients (Table 7) illustrate the strength and direction of the relationships between the variables. All path coefficients were statistically significant (p < 0.001), supporting the acceptance of all research hypotheses (H1–H4). This result supports Tiep et al. (2021) findings, which suggest that a company’s reputation will gradually improve as its CSR performance increases. The statistical findings demonstrated that CSR and CR have the most influence compared to the other relationships in the model of this study.

Figure 2. Structural model.

Table 7. Structural model results.

Hypothesized Relationship	Standardized Estimates	t-value	p-value	Decision
Economic Responsibility-> CI	.582	7.556	***	H1 Accepted
Ethical Responsibility-> CI	.566	7.449	***	H2 Accepted
Legal Responsibility-> CI	.512	7.982	***	H3 Accepted
Philanthropic Responsibility-> CI	.521	7.070	***	H4 Accepted
R-Square
Corporate Image	.43
Model Fit
CMIN/df = 1.270, TLI = .968, CFI = .972, SRMR = .0452, and RMSEA = .029

* = p<.010, **= p<.005, *** = p < 001.

Source: Researcher’s analysis.

The bootstrapping method was used to validate the degree of each path coefficient, further confirming the robustness of the results. To further support the study’s conclusions, the bootstrapping method was used to analyze the degree of each path coefficient, examining variable correlations. The results reaffirmed the relationship between CSR activities (Economic, Ethical, Legal, and Philanthropic Responsibilities) and Corporate Image. The findings align with previous research (Kim et al., 2017, 2020), indicating that CSR activities significantly impact a company’s reputation and public perception. According to the research by Chen et al. (2021), philanthropic CSR had little effect on the corporate Image, while economic, legal, and ethical CSR had a substantial influence.

In conclusion, the research demonstrated that Economic, Ethical, Legal, and Philanthropic Responsibilities positively and significantly influence Corporate Image. This finding is consistent with the study done by Singh and Misra (2021) argued that CSR activities positively affect companies’ reputation and, according to Mousiolis et al. (2015), company reputation and brand image are improved by social Responsibility. Furthermore, the finding agreed with (Huang & Lien, 2012) increases in Corporate Social Responsibilities may boost Corporate Image. The study contributes to understanding the impact of various CSR dimensions on a company’s reputation. It highlights the importance of responsible business practices in shaping consumer perceptions and corporate Image. This positive perception of the company can have favourable implications for customer loyalty, brand trust, and overall business performance.

4.5. Conclusion

Investigating the connection between ‘Corporate Social Responsibility’ (CSR) efforts and company image was the goal of this research, Effects of ‘Corporate Social Responsibility’ activities on Corporate Image. This work has significantly added to our understanding of how CSR affects corporate Image through a thorough literature analysis, investigation of relevant ideas, and creation of hypotheses. The research’s conclusions shed light on how CSR and Corporate Image interact, offering valuable knowledge for Theory and practice. The study’s hypotheses were confirmed by empirical data, which showed a beneficial connection between CSR and business reputation. According to the findings, businesses participating in CSR activities are more likely to improve their reputation and brand. This study’s conclusions have several applications for managers and organizations. The findings underscore the need to incorporate CSR into business operations and strategies. The study also emphasizes how crucial it is for businesses to tell their stakeholders and customers about their CSR activities. It is critical to recognize the restrictions on this research investigation. The findings’ limited generalizability may be due to their reliance on a particular setting and sample. To further validate and build upon the conclusions of this study, future research can look at various markets, places, and client segments. As a result, this research study on the effects of CSR on corporate Image has contributed significantly to our understanding of the beneficial relationship between CSR and corporate Image. These findings promote the development of successful CSR strategies that improve corporate reputation and Image by adding to theoretical understanding and practical applications.

5. Implications and further research

The research study on the effects of ‘Corporate Social Responsibility’ (CSR) on Corporate Image has various consequences and suggests areas for further research. These consequences and opportunities for future inquiry are outlined below:

5.1. Theoretical implications

The CFA confirms the validity of the measurement model used in this study. It demonstrates that the selected items appropriately measure the underlying constructs of ‘Economic Responsibility, Ethical Responsibility, Legal Responsibility, Philanthropic Responsibility,’ and Corporate Image. The study’s findings contribute to understanding how consumers perceive companies based on their CSR activities. The positive relationships between CSR dimensions and Corporate Image imply that consumers value and recognize responsible business practices.

The study highlights the significant impact of CSR activities on Corporate Image. By prioritizing CSR, companies can enhance their reputation and improve consumer perceptions, ultimately influencing their competitive advantage in the market.

5.2. Managerial implications

This study’s findings underline the significance of incorporating CSR into business strategy. To boost the company’s reputation, managers should design comprehensive CSR activities that are connected with organizational objectives and customer expectations. Businesses need to tell customers and stakeholders about their CSR activities. Creating open and transparent lines of communication can boost customer understanding, comprehension, and perception of CSR activities, further enhancing the company’s reputation.

5.3. Future directions

This research conducted a cross-cultural study to investigate how CSR efforts affect corporate Image. Hence, tracking the long-term effects of CSR activities on company image through longitudinal studies would give information about the long-term consequences of CSR and how they change over time. To conclude, examining how CSR affects a company’s reputation and customer satisfaction from the viewpoints of a wide range of stakeholders, including its employees, investors, and communities.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Yilkal Andualem Demeke

Yilkal Andualem Demeke is an accomplished author with a profound interest in Entrepreneurship, Strategic Management, Marketing, Corporate Social Responsibility, Leadership, and Human Resource Management. With a robust portfolio, Yilkal has conducted extensive research, yielded different scholarly works and published more than five manuscripts across various reputable journals. Through these accomplishments, Yilkal showcases a deep understanding of business and management intricacies, making significant contributions to the field’s advancement. His dedication to exploring and enhancing various facets of business reflects a passion for driving innovation and sustainable practices.

Jaladi Ravi

Professor Jaladi Ravi holds an impressive academic background with a Master of Commerce, a Master of Business Administration, and a PhD in Commerce and Management Studies. His expertise spans Commerce, Management, Human Resource Management, Entrepreneurship, and Marketing Strategies, reflecting a diverse and comprehensive understanding of business principles and practices.