isbn 978-0-9925622-2-9 the impact of health · pdf fileour previous researches in indonesia...

Proceedings of the Asia Pacific Conference on Business and Social Sciences 2015, Kuala Lumpur

(in partnership with The Journal of Developing Areas)

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THE IMPACT OF HEALTH CORPORATE SOCIAL

RESPONSIBILITY (CSR) ACTIVITIES FOR CHILDREN IN

URBAN AREA ON BRAND ATTITUDE AND CUSTOMERS’

LOYALTY: CASE IN MAKASSAR AND SURABAYA,

INDONESIA

Tengku Ezni Balqiah

Universitas Indonesia, Indonesia

Nurdin Sobari


Elevita Yuliati


Rifelly Dewi Astuti


ABSTRACT

This paper examines whether health CSR activities – CSR activities concerning health and well-being of

mothers and children – conducted by companies will be able to promote perceived quality of life of the

recipients, consumers‟ brand attitude, and customers‟ loyalty, with subjective well-being serves as moderating

variable. The research will use both exploratory and conclusive researches. The survey conducted in two cities

in Indonesia; Makassar (representing eastern part of Indonesia) and Surabaya (representing western part of

Indonesia). The subjects of this research are the customers of three companies operating in Indonesia, namely

Pertamina, Danone-Aqua, and Frisian Flag, and also the people in the communities exposed to the companies‟

health CSR activities. These companies are chosen due to their continuous health CSR activities during the past

years. The total number of respondents are 240 respondents, consists of 90 customers and 30 community

members from each city. The data were analyzed using multiple regressions to test 9 research hypotheses. The

result shows that different motivations will be generated from different CSR activities by all those three brands,

and has different path to influence social and business performance.

JEL Classifications: M00

Keywords: Health Corporate Social Responsibility, Brand Attitude, Children Quality of Life, Subjective

Well-being, Customer Loyalty.

Corresponding Author’s Email Address: [email protected]

INTRODUCTION

A company is an economic‟s entity that is managed to provide products and services to society. The main

principle is to deliver products and services that are needed and wanted by customers with profit. In their

business activities, companies will be expected to comply with regulation and order.

Corporate Social Responsibility (CSR) is any corporate activity that has potential to create and strengthen the

relationship with stakeholders (Peloza dan Shang, 2011). Not only that CSR can increase profit but it also has

impacts on social and environmental issues (Peloza dan Shang, 2011). Many CSR activities are driven directly

or indirectly by stakeholders (Kiessling, Isaksson, dan Yasar, 2015). CSR and sustainability are the two themes

commonly used in discussions about the economic contribution of business, social, and environmental as

consequences of business activities (Torugsa, O‟Donohue, dan Hecker, 2013).

Various forms of CSR activities will deliver different values for different parties associated with those CSR

activities. Those CSR activities will have impacts on corporate profits and the value of a firm (Malik, 2015;

Gonzalez-Rodriguez, Diaz-Fernandez, dan Simonetti, 2015). Research of Liu, Wong, Shi, Chu, and Brock

(2014) showed three distinct forms of CSR activities that will improve s brand‟s perceived quality which can



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further improve brand‟s preferences. Some researchers had shown that CSR activities influence consumer

behavior (Maignan and Ferrell, 2004; Luo and Bhattacharya, 2006, Du, Bhattacharya, and Sen, 2007), and

develop corporate image, furthermore increase customer loyalty (Plewa, Conduit, Quester, dan Johnson, 2015).

Customers who are satisfied and loyal to the company are intangible assets that can generate income in the

future.

Our previous researches in Indonesia showed that CSR activities of Pertamina (Oil and gas, a state-owned

enterprise), Toyota (a global brand of Astra International), Sampoerna (a big local brand of cigarettes), Lifebuoy

(a global brand of Unilever), and Aqua-Danone (a big local brand of drinking water, owned by Danone)

influence directly and indirectly perceived quality of life in the communities exposed to the companies‟ CSR

activities (Balqiah, Setyowardhani dan Khairani, 2010, 2011). Meanwhile, regarding to the types and CSR

motives, a study is also conducted to examine the more specific relationship of CSR with the quality of life of

underprivileged children. The results showed a positive influence between CSR motives toward perceived

quality of life of underprivileged children where the CSR activities were conducted (Balqiah, Setyowardhani,

Daryanti and Khairani, 2012). These studies showed that CSR activities not only have impacts on customers but

also on communities or disadvantaged children, who are also stakeholders of the company.

This study was carried out by choosing companies which performed CSR activities related to children‟s health

and sustainability, reflecting the children‟s quality of life in Indonesia. In addition to affecting the quality of life

of children, there are also separate previous studies which examine the effect of CSR in general on attitude

towards brands and customer loyalty. This study also looked at how subjective well being will moderate

influence of health CSR activities on Children‟s Quality of Life and Brand Attitude.

This paper is organized as follows. The literature review of CSR and its benefit to influence stakeholder

perception is presented in section 2, model and methodology is presented in section 3, result and discussion in

section 4, and conclusion in section 5.

LITERATURE REVIEWS

Maignan and Ferrell (2004) stated that it is important to companies to enlarge their social activities not only to

their customers but also to other stakeholders. The stakeholders can be grouped into the parties who have direct

impact on corporate production process, such as employee and manager, and other parties who have indirect

impact such as investors and partners. Other stakeholders are parties outside the corporate such as customers,

policy makers, and local communities.

CSR activities should increase positive consumer behavior to the firm (Wilkie and Moore, 1999; Bronn and

Vrioni, 2001; Luo and Bhattacharya, 2006; Du, Bhattacharya, and Sen, 2007; Lee, Park, Moon, Yang, and Kim,

2009; Liu and Zhou, 2009; Vlachos, Tsamakos, Vrechopoulos, and Avramidis, 2009), and also give positive

impacts on the society and increase the quality of life (Sirgy dan Lee, 1996; Pava, 2008; Balqiah et al, 2010,

2011)

CSR and Stakeholders

CSR can be done with the goal of improving the quality of lives of the public at large. Maignan and Ferrell

(2004) stated that there were many marketing academics conducting tests on consumer response to CSR

initiatives, the importance of ethics and CSR in marketing practices, and the beliefs that ethics-driven view of

the underlying CSR will have a positive impact on the company rather than CSR activities based on the motives

of others. Additionally, Gaski (2001) also found that good marketing ethics would result in good business,

although this result is not in accordance with Smith (2003), which stated that there was no significant

relationship between good marketing ethics and business results. There are also some researches showing that

consumer attitudes are influenced by corporate ethics (Folkes and Kamins, 1999, Page and Fearn, 2005, Sasse

and Trahan 2007).

Although many companies have conducted CSR activities, it must be recognized that such activities are driven

directly or indirectly by stakeholders (Kiessling, Isaksson, and Yasar, 2015). This is the result of globalization

of the market, which makes companies face more diverse situations through interaction with various

stakeholders. CSR and sustainability issues are the two common themes in discussions related to the

contribution of business activities on economic, social, and environmental aspects (Torugsa, O'Donohue, and

Hecker, 2013).



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A CSR activity that is perceived positively will build a company‟s reputation, trust and customer loyalty

(Vlachos, Tsamakos, Vrechopoulos, and Avramidis, 2009). CSR activities are believed to enhance a firm's

reputation (Hillenbrand and Money 2007, Schnietz and Epstein, 2005, Tucker and Melewar 2005 Fombrun,

2005, Page and Fern 2005; Beckman, 2007; Mutch and Aitken 2009; Truscott, Bartlett, Tywoniak 2009; Mitra

2011), which will ultimately improve the financial performance of the firm (Redman, 2005, McWilliam and

Siegel, 2001, Schnietz and Epstein 2005).

Subjective Well Being

Subjective well-being is a concept that measure community well-being. This concept is widely used by

academics to develop and test theoretical and conceptual models that are associated with community welfare

and satisfaction. Sirgy, Widgery, Lee and Yu (2010) develop a better measurements to capture public

perceptions of the system and its environment (services and conditions of public services), those were

considered to have an impact on many domains of life, namely: social well-being, leisure well-being, health

well-being, safety well-being, family and home well-being, political well-being, spiritual well-being,

neighbourhood well-being, environmental well-being, transportation well-being, education well-being, work

well-being, financial well-being, and consumer well-being. Lin, Chen, and Wang (2014) showed a different

measurement of subjective well being from measurements of Sirgy et al (2010). Lin et al. (2014) used life,

physical, mental, apperance, achievement, evaluation, friendship, family, community, finance, future, happiness,

and society as measures of subjective well-being.

Child Well Being

Whether related to products, information, activities directed to them, or as labour, children are the most

vulnerable party. The impact on children is seen from indicators of Child Well Being, namely the principles of

survival and development of children (Bradshaw, Hoelscher, and Richardson, 2007; Bradshaw and Richardson,

2008),

Jozefiak, Larsson, Wichstrøm, Mattejat, and Sieberer (2008) defines quality of life as a subjective assessment

related to well-being in terms of physical and mental health, self-esteem and perception of personal activities

(playing/hobby), the perceived connection with friends and family as well as school. One instrument measuring

the children quality of life is KIDSCREEN, which is based on the definition of quality of life as a

multidimensional measure that includes physical, emotional, mental, social, and behavioral components related

to well-being and function, perceived by children or other individuals (Ravens-Sieberer, Herdman, Devine,

Otto, Bullinger, Rose, and Klasen, 2014). KIDSCREEN dimensions consists of Physical well-being,

Psychological wellbeing, Moods and emotions, self-perception, Autonomy, Parent relations and home life,

Social support and peers, School environment, Social acceptance (bullying), and Financial resources.

Brand Attitude

Consumers‟ attitude towards brands is the consumers‟ way to attach the brand in their memory that affects their

buying behavior (Low and Lamb, 2000). This attitude is significant in marketing because it will form a

perception in consumer behavior.

Attitude toward brand in multiattribute model is a function of some relevant attributes and benefits that

describes the functional and symbolic benefit of one brand (Keller, 1993). Functional benefit of a brand

describes the intrinsic advantage of product or service, while the symbolic benefit describes the extrinsic

advantage of a product and relates to the social actualization needs. Keller (1993) stated that the symbolic

benefit is relevant to symbolic products.

Customers’ Loyalty

Loyalty is customers‟ commitment to rebuy or repurchase the product or services in the future though

influenced by the situation factors and marketing efforts that could switch the customers‟ behaviour (Oliver in

Kotler and Keller, 2006).

Loyalty is “a deeply held commitment to rebuy or repurchase a preferred product/service consistently in the

future, thereby causing repetitive same-brand-set purchasing, despite situational influences and marketing

efforts having the potential to cause switching behavior” (Oliver, 1999, p. 34). Oliver (1999) stated that loyalty

is formed through four phases, cognitive loyalty, affective loyalty, conative loyalty, and action loyalty.



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a) Cognitive loyalty, provides all information which are related with brand attributes that makes one brand

preferred than other brand. Cognition is based on previous knowledge or experience. In this phase,

loyalty is directed to the attribute performance of the brand.

b) Affective loyalty, in this phase attitude toward brand built based on customer satisfaction. This reflects

the dimension of pleasure and satisfaction.

c) Conative loyalty, this phase is affected by continuous positive affective event toward brand. Conative

means commitment to repurchase one brand.

d) Action loyalty, to change intention become real behaviour depends on action control. Intention in

previous phase changes into readiness to do so, that is doing by adding the desire that overcome the

barriers to do.

Dick dan Basu (1994) concluded that loyalty is associated with behaviour, which is not enough to explain how

and why the brand loyalty is developed. In the concept of loyalty, Dick and Basu suggested to consider the

attitude and the condition that direct consumers to the buying behaviour. One of the loyalty consequences is

word of mouth, this the willingness of consumers to communicate their product experiences to other.

The customers‟ loyalty has become the competitive advantage in this dynamic competition. Losing customers

will affect the company‟s performance including the financial performance. The loyal customers are company‟s

asset that will affect the company‟s cash flow (Srivastava, Shervani, and Fahey, 1998). Reichheld (1996) in

Gupta and Lehmann (2005) stated that the more customers have relations with company, the more profit that

company will get.

METHODOLOGY

Research Model

Company use Corporate Social Responsibility (CSR) to develop and strengthen the relationship with

stakeholder, such as customer, supplier, channel member, competitor, shareholder, employee, top management,

public policy, society, media, and capital market institutions (Raghubir, Roberts, Lemon, and Winer, 2010).

When the target is society, the objectives are education, health, well being, happiness, and stability. Sirgy, Yu,

Lee, Wei, Huang (2012) explained that the performance of CSR could be measured using some indicators of

Quality of Life: economic, social, health, and subjective evaluation to happiness and life satisfaction.

In this paper, research model was developed to evaluate the outcome of CSR activities related to children health

(Health-CSR). The Outcome was evaluated through the relationship of CSR with customer attitude toward the

brand that implemented those activities (Brand Attitude), customer perception toward children‟s quality of life

(Child QOL), and customer loyalty. This model was constructed through literature review that had discuss about

all research variables. There are some previous researchs that had already study about how CSR influence

quality of life (Sirgy and Lee, 1996; Wilkie and Moore, 1999; Sen, Bhattacharya, and Korschun, 2006;

Castaldo, Perrini, Misani, and Tencati, 2009; Raghubir et al, 2010; Balqiah et al, 2010, 2011), relationship

between CSR and behaviour-directly or indirectly through mediation of quality of life and corporate reputation

(Lou and Bhattacharya, 2006; Du et al, 2007; Marquina, 2007; Vlachos et al, 2009; Balqiah et al, 2010, 2011).

The difference of previous researches with this research is the addition of subjective well being and brand

attitude variables. This accordance with Stanalad, et al (2011) that corporates‟ethics will influenced the

consumer perception toward CSR commitments.



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FIGURE 1. RESEARCH MODEL-MAIN CONSTRUCTS

Construct Definition

There are 6 constructs in this research. Health CSR is customer perception toward corporate motives in

conducting activities related to child health. Subjective well being is a thorough assessment of society‟s life

satisfaction. Child-QOL is perception toward children‟s physical, mental and social well-being. Brand Attitude

is consumers' overall evaluation of a brand that conduct the CSR activities. Loyalty is the level of customer

loyalty to the brand products from companies that conduct the CSR activities.

Hypotheses

Marin, Quetas, and Roman (2015) explained about the possibility that CSR acvitities will create positive or

negative customer‟s perception toward the company. Becker-Olsen, Cudmore, and Hill (2006) also had already

some arguments that there are various motivations of consumer responses to CSR actions. When motivations are

considered to profit related, attitudes toward the firm are likely to be negative; however, when motivations are

considered socially motivated or society/community focused, attitudes are likely to be enhanced.

Ellen, Webb, and Mohr (2006), also indentify who identify four different motivations that had different impact

on customer‟s respons. Egoistic motives related to exploiting the cause rather than helping it, strategic motives

that support the attainment of business while benefiting the cause, stakeholderdriven motives related to

supporting social causes solely because of pressure from stakeholders, and values-driven motives related to

benevolence-motivated giving. When motivations are considered firm serving or profit-related, attitudes toward

firms are likely to diminish; when motivations are considered socially motivated, attitudes toward firms are

likely to be enhanced (Becker-Olsen, Cudmore, and Hill, 2006).

In this paper, the author investigates specifically CSR activities involve with children healtiness. When

customers perceived the CSR activities were implemented focus to society and giving to society, especially

children, it will enhance the attitude to brand. Otherwise, if customer perceived those activities only concern

about the business aspects, such as sales, and profit, it will decrease the attitude.

H1: Health CSR will influence Brand Attitude

According to Sheehy (2014), there is perception form political participants that mention CSR as a means to

advance particular preferences with respect to corporate and economic policy of distinct political philosophies.

In other side, customers increasingly expect business to consider human rights in their employment practices

and demonstrate stewardship toward the natural environment, therefore companies around the globe suggests

that managers no longer see social engagement as ancillary to economic performance but rather as an integral

component of corporate strategy on which they will be judged by their constituents (Bronn and Vidaver-Cohen,

2009). Social Initiative in the business context is defined here as any program, practice, or policy undertaken by

Health-

CSR

Brand

Attitude

Loyalty

Child-QOL

Subjective

Well Being



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a business firm to benefit society. However, consumers distinguish between other centered, self-centered, and

win–win motives, most consumers assume companies have mixed motives for their CSR activities (Öberseder,

Schlegelmilch, and Murphy, 2013). If CSR‟s motives are sincere on giving back to society by providing social

projects for people in need (e.g. children as vulnerable stakeholder), it could increase their quality of life, vice

versa.

H2: Health CSR will influence Child‟s Quality of Life

Subjective Well Being (SWB) is conceptualized as a multidimensional construct, the survey‟s questions pertain

to overall life evaluations, self-assessed financial and health states, and personal views about future, community,

and society (Lin, Cheng, and Wang, 2014), which is individual characteristics and community level

characteristics will have an impact on subjective well-being, means that well-being depends not only on

individual abilities, or social position, but that it is also dependent on the context, on the „goodness of others‟

(Hooghe, and Vanhoutte, 2011). Therefore, different socio-demographic environment reflect different welfare

condition. This situation induces the effectiveness CSR activities on customer‟s perception. Referring to the

concept of SWB, when the target CSR activities aimed at people who are in a particular environment, then its

impact on society, customer‟s perception, and attitude would be different if carried on in other communities.

H3 : Subjective Well Being moderate the influence of Health CSR to Brand Attitude

H4 : Subjective Well Being moderate the influence of Health CSR to Child‟s Quality of Life

Concerning the four-type of CSR activities of the firm (Carroll, 1991, 1999), there must be social activities that

focus on supporting core business activities in relation to all stakeholders. Two-sided coin of CSR activities, one

side as social actitives that “give” to society, and the other side is to create competitive advantage (Gupta, 2002;

Hult, 2011; Hunt, 2011; Huang and Rust, 2011). Bronn and Vidaver-Cohen (2008) discuss about instrumental

motives of CSR revolve fundamentally around managerial beliefs that engaging in social initiatives can have a

direct impact on profitability. It can be concluded that the performance of the company in social activity will

have an impact on the performance of the company in business. Create a good quality of life for children who

are being targeted CSR activities will surely build a positive attitude of customers towards the brand. Based on

this reasoning, we propose the following:

H5 : Child‟s Quality of Life positively influence Brand Attitude

Corporate Social Responsibility (CSR) create strong relationships to the stakeholder, enhance profit, and also

has impact to social and environment issues (Peloza dan Shang, 2011). Social exchange is based on the

expectation of trust and reciprocation, as the exact nature of the return and the time frame is left unspecified

(Lii, and Lee, 2012). When company engages in a CSR innitiatives, consumers may perceive the company to be

altruistics, which lead to more favorable attitudinal and behavioral evaluation of the same company.We propose

here that these results shed some light on this issue of when brand attitude, that reflect the business capabilities,

and child quality of life that reflected social initiative, have jointly impact to the customer perception and

loyalty.We expect that perception about a value of company offering (brand) and quality of life significant

positive influence on customer‟s loyalty to the company‟s products. Based on this reasoning, we propose the

following:

H6 : Child‟s Quality of Life positively influence Customer Loyalty

H7 : Brand Attitude positively influence Customer Loyalty

Implementing CSR could create different reaction from different stakeholders. Cantrell, and Kyriazis (2014)

mention about stakeholder theory aids in the understanding of the influences and nfluencers on the organization,

and conversely in assisting to understand how the actions of the organization can affect different stakeholders.

Institutional pressures to develop a meaningful social agenda can emanate externally from customers,

transaction partners, government agencies, and local communities, internally from employees, and laterally from

salient business references groups such as competitors and industry associations (Bronn, and Vidaver-Cohen,

2008). When CSR implemented as social activities of the firm, it could be perceived differently by its

stakeholder, because their involvement and attention to those activities are different as the result of their

perceive to firm motivation to conducted. Subjective Well Being and Quality of Life are two indicators of

community welfare, that could be influence by social or business activities. Based on this reasoning, we propose

the following:

H8 : Subjective Well-Being will perceived differently between customers and community

H9 : Child-Quality of Life will perceived differently between customers and community



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Data

Data were collected by cross sectional survey in two cities-Makassar (representing eastern part of Indonesia)

and Surabaya (representing western part of Indonesia)-using self administered questionnaires from 240

respondents (30 respondents from each firm/brand and area) that were chosen by purposive sampling. There two

type respondents, customers and society. The objects are AQUA-DANONE (mineral water), PERTAMINA

(lubricant product), FRISIAN FLAG INDONESIA (milk). The backgroud to study these firms are the

heterogenity of health CSR activities that they do to support society, (eg. AQUA supply clean water for

children; PERTAMINA help children and mothers health lifestyle; and FRISIAN induce children to drink milk

and health lifestyle). These firms are big and well known company, and do continuous health CSR activities

during the past years.

Questionnaire development is done by conducting a study of the literature and previous studies associated with

each construct. To increase the validity of the instrument to, authors conducted preliminary research through a

Focus Group Discussion and In Depth Interview on several sources to construct extract operational definition on

the quality of life of children. The questionnaire consists of 43 questions with six points likert scale regarding

five research‟s constructs: 16 questions for Health CSR, 10 questions for Subjective Well Being, 8 questions for

Quality of Life, 3 questions for Brand Attitude, and 6 questions for Loyalty. Before the main survey, authors

conducted a pretest using 30 respondents to ensure reliability and validity of the constructs. It was aimed to

refine the questionnaires by reducing response error. Furthermore, after 240 datas was collected, Factor analysis

and multiple regression with SPSS 22 was used to test the hypotheses at each firm/brand and city at α=5%.

RESULT AND DISCUSSION

Pre test

Pretest was conducted to 30 respondents which is AQUA customers in Makasar. The purpose of the pretest is to

evaluate the construct reliability and validity. All constructs are reliable (cronbach alpha > 0.7). Exploratory

factor analysis conducted to develop dimension of Health-CSR and Subjective Well Being, generate 6

dimensions of Health-CSR (Table 1) and 3 dimension of Subjective Well Being (Table 2). The other constructs

are valid (standard loading all items > 0.7).

The 6 dimensions of Health-CSR represents 6 motives that perceived by respondents (customers) the motives of

company undertake CSR activities. According to Becker-Olsen, Cudmore, and Hill (2006), when motivations

are considered as firm serving or profit-related, attitudes toward firms are likely to diminish, otherwise when

motivations are considered socially motivated, attitudes toward firms are likely to be enhanced. Ellen et al.

(2006) divide these driving motives into two groups, depending on their effect on consumers‟ purchase

intentions, that is positive motives that is values-driven and strategic, and negative motives: egoistic and

stakeholder-driven.

In this study, business and benefit oriented, concern about economic performance that could harm the company

image. These motives represent strategic and egoistics motive that perceived as negative motives, because it

represented instrumental motives. Similarly with internal stake holder reflected that company execute CSR

because force by employee and shareholder, that was perceived not sincere as negative motives. This motive

could be perceived as institutional motives for social initiatives, suggesting that companies engage in social

initiatives primarily due to institutional pressures (Bronn, and Vidaver-Cohen, 2008). Otherwise, external

stakeholder, moral obligation, and value orientation represented as positive motives, because it show that the

company concern about social aspects of the business.



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Table 1. HEALTH-CSR DIMENSIONS

Dimension 1 Dimension 2 Dimension 3 Dimension 4 Dimension 5 Dimension 6

“Business

Oriented”

“External

Stakeholder”

“Moral

Obligation”

“Value

Orientation”

“Benefit

Oriented”

“Internal

Stakeholders”

Company's profit

through

collaboration with

other entities

(HC10)

High concern to

society (HC2)

Company's moral

obligations (HC1)

shareholder and

employee belief

(HC3)

Reduce income tax

(HC12)

Respond to

employee's demand

(HC7)

Support business

activities (HC11)

Allows customers

involved in the

company's

activities (HC4)

Respond to

society's demand

(HC9)

Balance take and

give to society

(HC5)

Publicity (HC13) Respond to

shareholder's

demand (HC8)

Getting more

customers (HC14)

Meet customers'

expectation (HC6)

Retain customers

(HC15)

Company get more

profit (HC16)

The 3 dimension of subjective well-being represent the community welfare concerning their health, economic,

an future condition that reflected their overall life satisfaction and emotional responses (Hooghe and Vanhoutte,

2011).

Table 2. SUBJECTIVE WELL BEING DIMENSIONS

Dimension 1 Dimension 2 Dimension 3

“Health Condition” “Economic

Condition”

“Future Orientation”

Satisfied with the

overall living

conditions (SWB1)

have a job that is able

to support family

(SWB4)

happiness (SWB7)

Physical conditions of

the community (SWB2)

kondisi ekonomi

(pendapatan) yang

mencukupi (SWB5)

adequate living

conditions (SWB9)

psychological

condition of

community (SWB3)

Financial conditions to

meet the needs of

family (SWB6)

hopes of better living

conditions in the future

(SWB10)

the social environment

(friends, neighbors) are

full of kinship (SWB8)



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FIGURE 2. RESEARCH MODEL-FULL

Based on the new model that show dimension of health CSR, therefore we develop more detailed as minor

hypotheses to examine how each dimension will influence child quality of life, and brand attitude, as follow:

H1a: Business oriented motives will negatively influence Brand Attitude

H1b: External stakeholder motives will positively influence Brand Attitude

H1c: Moral obligation motives will positively influence Brand Attitude

H1d: Value oriented motives will positively influence Brand Attitude

H1e: Benefit oriented motives will negatively influence Brand Attitude

H1f: Internal stakeholder motives will negatively influence Brand Attitude

H2a: Business oriented motives will negatively influence Child‟s Quality of Life

H2b: External stakeholder motives will positively influence Child‟s Quality of Life

H2c: Moral obligation motives will positively influence Child‟s Quality of Life

H2d: Value oriented motives will positively influence Child‟s Quality of Life

H2e: Benefit oriented motives will negatively influence Child‟s Quality of Life

H2f: Internal stakeholder motives will negatively influence Child‟s Quality of Life

H3a : Subjective Well Being decrease the negative influence of business oriented motives to Brand Attitude

H3b : Subjective Well Being increase the positive influence of external takeholder motives to Brand Attitude

H3c : Subjective Well Being increase the positive influence of Moral Obligation oriented motives to Brand

Attitude

H3d : Subjective Well Being increase the positive influence of Value oriented motives to Brand Attitude

H3e : Subjective Well Being decerase the negative influence of Benefit Orientation motives to Brand Attitude

H3f : Subjective Well Being decrease the negative influence of Internal Stakeholder motives to Brand Attitude

Business

Oriented

External

Stakeholder

Moral

Obligation

Value

Orientation

Benefit

Oriented

Internal

Stakeholder

Health-CSR

Brand

Attitude

Loyalty

Child-QOL

Subjective

Well Being



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H4a : Subjective Well Being decrease the negative influence of business oriented motives to

Child‟s Quality of Life

H4b : Subjective Well Being increase the positive influence of external takeholder motives to


H4c : Subjective Well Being increase the positive influence of Moral Obligation oriented motives to


H4d : Subjective Well Being increase the positive influence of Value oriented motives to


H4e : Subjective Well Being decerase the negative influence of Benefit Orientation motives to


H4f : Subjective Well Being decrease the negative influence of Internal Stakeholder motives to


Main Test

Refer to the result of pretest, the research model modified more detailed to exhibit each dimension of health-

CSR and Subjective Well Being (Figure 2). This section discusses the result of Multiple Regression for each

brand regarding to hypotheses tested. The significance of the path coefficients were evaluated by analyzing the

value for the parameters.

Mean score for each construct and brand show that for all brand show mean score above 3 which means tend to

high score (Table 3)

TABEL3. MEAN SCORE FOR EACH BRAND

PERTAMINA FRISIAN FLAG AQUA

Business Oriented 4.11 3.68 3.57

External Stakeholder 4.56 4.46 4.54

Moral Obligation 4.61 4.51 4.42

Value Oriented 4.58 4.60 4.50

Benefit Orientation 3.33 3.20 3.15

Internal Stakeholder 4.10 3.92 3.63

Subjective Well Being 3.80 4.65 3.83

Child's Quality of Life 4.16 4.83 4.27

Brand Attitude 4.47 4.25 4.84

Loyalty 4.00 3.92 4.04

MEAN SCOREConstruct



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Table 4. HYPOTHESES TESTING OF PERTAMINA

t value Conclusion

H1 partially supported

Business Oriented --> Brand Attitude -.785

External Stakeholder --> Brand Attitude 1.987

Moral Obligation --> Brand Attitude 1.529

Value Oriented ---> Brand Attitude .315

Benefit Oriented --> Brand Attitude -.155

Internal Stakeholder --> Brand Attitude -2.359

.55 H5 not supported

Adjusted R squared =0.113

H2 not supported

Business Oriented --> Child QOL -1.022

External Stakeholder --> Child QOL 1.135

Moral Obligation --> Child QOL -.884

Value Oriented ---> Child QOL .501

Benefit Oriented --> Child QOL -.008

Internal Stakeholder --> Child QOL .909


H3 : Moderating Subjective Well Being (SWB) H3 not supported



Moral Obligation --> Brand Attitude 1.136


Benefit Oriented --> Brand Attitude -.496



H4: Moderating Subjective Well Being (SWB) H4 partially supported

Business Oriented --> Child QOL .365


Moral Obligation --> Child QOL .111

Value Oriented ---> Child QOL 1.037

Benefit Oriented --> Child QOL -.392

Internal Stakeholder --> Child QOL -.037


0.13 H6 not supported

43.7 H7 supported

R squared =0.22

H8 : SWB-customers ≠ SWB-society -8.358 H8 supported

H9 : Child QOL-customers ≠ Child QOL-society -8.679 H9 supported

H7 : Brand Attitude --> Loyalty

H2 : Health-CSR --> Child QOL

Relationship

H1 : Health-CSR --> Brand Attitude

H6 : Child QOL --> Loyalty

H5 : Child QOL --> Brand Attitude

For Pertamina, table 4 shows that only H1b, H4b, H6, H7, H8, H9, were supported. These result indicate only

external stakeholder motivation could influence brand attitude. Likewise, the influence of external stakeholder

motivation to child‟s quality of life will increase if interact with Subjective Well Being of society. Interestingly,

both social performance (child‟s quality of life) and business performance (brand attitude) could influence

customer loyalty. Finally, there are differences between customer‟s perceived of subjective well being and

child‟s quality of life compare to society‟s. It means subjective well being and child‟s quality of life that

perceived by society higher than customers‟.



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Table 5. HYPOTHESES TESTING OF FRISIAN FLAG

t value Conclusion


Business Oriented --> Brand Attitude -2.230

External Stakeholder --> Brand Attitude -.222

Moral Obligation --> Brand Attitude .138


Benefit Oriented --> Brand Attitude .093

Internal Stakeholder --> Brand Attitude 2.325






Moral Obligation --> Child QOL .601

Value Oriented ---> Child QOL -.184

Benefit Oriented --> Child QOL -1.990

Internal Stakeholder --> Child QOL 1.412


H3 : Moderating Subjective Well Being (SWB) H3 partially supported

Business Oriented --> Brand Attitude -2.407

External Stakeholder --> Brand Attitude -.717


Value Oriented ---> Brand Attitude 1.122


Internal Stakeholder --> Brand Attitude 1.991


H4: Moderating Subjective Well Being (SWB) H4 not supported



Moral Obligation --> Child QOL 1.370

Value Oriented ---> Child QOL .346





7.086 H7 supported

R squared =0.47



Relationship




For Frisian Flag, there is no examination of H8 and H9, because we do not collect data from society perception.

Table 5 shows that only H1a, H2e, H3f, and H7 were supported. These results indicate even though the means

score of business oriented CSR motivations lower than Pertamina, it could influence brand attitude. Only

benefit oriented motivation could influence child‟s quality of life. It means that the lower perceived of benefit

oriented motives, the higher perceived child‟s quality of life. Furthermore, Subjective Well could decrease the

negative influence of internal stakeholder motive to brand attitude. Regarding to increase customer loyalty, only

business performance has influenced.

For Aqua, table 6 shows that only H2b, H4b, H6, H7, H8, and H9, were supported. These results indicate even

though the means score of Health CSR motivations tend to high, it couldn‟t influence brand attitude. Only



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external oriented motivation could influence child‟s quality of life. It means that the higher perceived of external

stakeholder oriented motives, the higher perceived child‟s quality of life. Furthermore, Subjective Well could

increase the positive influence of external stakeholder motive to child‟s quality of life. Interestingly, both social

performance (child‟s quality of life) and business performance could influence customer loyalty of AQUA.

Finally, there are differences between customer‟s perceived of subjective well being and child‟s quality of life

compare to society‟s. It means subjective well being and child‟s quality of life that perceived by society higher

than customer‟s.

Table 6. HYPOTHESES TESTING OF AQUA

t value Conclusion

H1 not supported




Value Oriented ---> Brand Attitude -.694


Internal Stakeholder --> Brand Attitude -.815

1.613 H5 not supported



Business Oriented --> Child QOL 1.442



Value Oriented ---> Child QOL -1.935




H3 : Moderating Subjective Well Being (SWB) H3 not supported




Value Oriented ---> Brand Attitude -1.158




H4: Moderating Subjective Well Being (SWB) H4 partially supported

Business Oriented --> Child QOL 1.085



Value Oriented ---> Child QOL -1.556


Internal Stakeholder --> Child QOL -.172


2.104 H6 supported

2.633 H7 supported

R squared =0.201

H8 : SWB-customers ≠ SWB-society -13.161 H8 supported

H9 : Child QOL-customers ≠ Child QOL-society -12.331 H9supported

Relationship






Discussion

Table 7 shows the various result of hyphoteses testing among PERTAMINA, FRISIAN FLAG, and AQUA.

Hyphotesis 1 partially supported for PERTAMINA and FRISIAN FLAG, but not supported for AQUA. Health

CSR of PERTAMINA means was the highest among three brands that could increase brand attitude. As this

motivation classified to positive motivation, it proved that PERTAMINA was perceived has positive motivation



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and influence brand attitude of its customers. On the contrarily, FRISIAN FLAG has the lowest mean in

business oriented motivation, that classified to negative motivation, could increase brand attitude. These results

consistent with Ellen et al (2006) that mention about positive motives has positive impact on customer

perception, and negative motives has negative impact.

According to Bronn and Vidaver-Cohen (2008), PERTAMINA and AQUA was perceived implemented CSR

activities with instrumental motives that engaging in social initiatives to affect business performance.

Meanwhile, CSR activities of AQUA, even though has high mean score but do not impact brand attitude, but

influence child‟s quality of life (H2b). It can be conclude that CSR activities of PERTAMINA only concern

about business performance, CSR activities of AQUA concern about social performance, and CSR activities of

FRISIAN FLAG concern to both performances, business and social performance. Consumers distinguish

between other centered, self-centered, and win–win motives, most consumers assume companies have mixed

motives for their CSR activities (Öberseder, Schlegelmilch, and Murphy, 2013), as it perceived to AQUA.

Regarding to H3 and H4, subjective well being has affect on relationship of internal stakeholder motives and

brand attitude at FRISIAN FLAG, but do not impact on other brand. In this condition subjective well being of

society could decrease negative impact of CSR motivation on brand attitude of AQUA. In line with instrumental

motivation (Bronn and Vidaver-Cohen, 2008), negative perception of CSR was implemented to intend business

performance, could minimize if implemented in society with good community welfare. In PERTAMINA and

AQUA, the opposite result, subjective well being of society increase positive impact of CSR motivation on

child‟s quality of life. The act of supporting a social initiative may seem to be a public serving action,

consumers‟ perceptions of the underlying motivations for the act may drive their evaluations of the firm and

impact beliefs, attitudes, and intentions (Becker-Olsen, Cudmore, and Hill, 2006). When presented with

evidence of a firm‟s social involvement, consumers are likely to elaborate on the message and assign one of two

primary types of motives to the firm-self serving-in this study-increase brand attitude, or public serving-in this

study-increase child‟s quality of life. These result show two-sided coin of CSR activities, one side as social

actitives that “give” to society, and the other side is to create competitive advantage (Gupta, 2002; Hult, 2011;

Hunt, 2011; Huang and Rust, 2011).

Unfortunetaly, in this study H5 was not supported for all brands. It can not be concluded that the performance of

the company in social activity will have an impact on the performance of the company in business. Create a

good quality of life for children who are being targeted CSR activities will surely build a positive attitude of

customers towards the brand, but has impact on loyalty (H6 and H7). CSR of AQUA was perceived could

enhance child‟s quality of life furthermore enhance customer loyalty, but CSR of PERTAMINA dan FRISIAN

FLAG could enhance loyalty only through developing brand attitude. These different path how CSR ativities

can enhance customer loyalty proved that different motives could have different impact on customer attitude and

behavior (Bronn and Vidaver-Cohen, 2008; Becker-Olsen, Cudmore, and Hill, 2006; Marı´n, Cuestas, and

Roma´n, 2015).

Interstingly, from stakeholder theory perspectives, customer perceived of subjective well being and child‟s

quality of life lower than society‟s perceived. This situation could be involve with ethical issues. Park, Lee, and

Kim (2014) mention that Ethical responsibilities require that businesses abide by the moral rules defining

appropriate behaviors in society and the law prescribes actions a firm must avoid, ethical responsibilities cover

activities that society expects companies to undertake. Institutional pressures to develop a meaningful social

agenda can emanate externally from customers, transaction partners, government agencies, and local

communities, internally from employees, and laterally from salient business references groups such as

competitors and industry associations (Bronn, and Vidaver-Cohen, 2008).



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TABLE 7. HYPOTHESES TESTING BETWEEN AMONG THREE FIRM/BRANDS

Hypotheses PERTAMINA FRISIAN FLAG AQ UA

H1a-1f:

Business Oriented Motives -----> Brand Attitude ns s ns

External Stakeholder Motives -----> Brand Attitude s ns ns

Moral Obligation Motives -----> Brand Attitude ns ns ns

Value Oriented Motives -----> Brand Attitude ns ns ns

Benefit Orientation Motives -----> Brand Attitude ns ns ns

Internal Stakeholder Oriented Motives -----> Brand Attitude ns ns ns

H2a-2f:

Business Oriented Motives -----> Child's Quality of Life ns ns ns

External Stakeholder Motives -----> Child's Quality of Life ns ns s

Moral Obligation Motives -----> Child's Quality of Life ns ns ns

Value Oriented Motives -----> Child's Quality of Life ns ns ns

Benefit Orientation Motives -----> Child's Quality of Life ns s ns

Internal Stakeholder Oriented Motives -----> Child's Quality of Life ns ns ns

H3a-3f: Moderating of Subjective Well Being on

Business Oriented Motives -----> Brand Attitude ns ns ns

External Stakeholder Motives -----> Brand Attitude ns ns ns

Moral Obligation Motives -----> Brand Attitude ns ns ns

Value Oriented Motives -----> Brand Attitude ns ns ns

Benefit Orientation Motives -----> Brand Attitude ns ns ns

Internal Stakeholder Oriented Motives -----> Brand Attitude ns s ns

H4a-4f: Moderating of Subjective Well Being on

Business Oriented Motives -----> Child's Quality of Life ns ns ns

External Stakeholder Motives -----> Child's Quality of Life s ns s

Moral Obligation Motives -----> Child's Quality of Life ns ns ns

Value Oriented Motives -----> Child's Quality of Life ns ns ns

Benefit Orientation Motives -----> Child's Quality of Life ns ns ns

Internal Stakeholder Oriented Motives -----> Child's Quality of Life ns ns ns

H5

Child's Quality of Life -----> Brand Attitude ns ns ns

H6

Child's Quality of Life -----> Loyalty ns ns s

H7

Brand Attitude -----> Loyalty s s s

H8

SWBc ≠ SWBs s - s

H9

Child's QOLc ≠ Child's QOL s s - s

s : significance at α=5%

ns : not significance



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CONCLUSION

This article has argued that CSR activities that related to child health will create social and business

performance. Kiessling, Isaksson, and Yasar (2015) explained that although many companies conducting CSR,

but it must be recognized that such activity is driven directly or indirectly by the stakeholders. it occurred

because apparently, the stakeholder could has different perception toward the reason why company engaged in

CSR activities (Ellen et al, 2006; Bronn and Vidaver-Cohen, 2008; Feldman and Vasquez-Parraga, 2013;

Cantrell et al 2014). The result of this study consistent with that has been said by the experts that Health CSR

activities will have positive and negative motives, perceived by customers.

There 3 dimensions of positive motives: external stakeholder oriented, moral obligation oriented, and value

oriented, and 3 dimensions of negative motives: business oriented, benefit orientation, and internal stakeholder

that has different impact on societies and customers. In PERTAMINA, only external stakeholder oriented

motives could influence brand attitude, and this motives must interact with Subjective Well Being of society to

enhance child‟s quality of life. Furthermore, both social performance and business performance could influence

customer attitude and behaviour, such as customer loyalty. Finally, subjective well being and child‟s quality of

life that perceived by society higher than customers‟.

For FRISIAN FLAG, different from Pertamina, precisely business oriented negatively influence brand attitude,

and benefit oriented motivation impact child‟s quality of life. When interact with Subjective Well Being,

internal stakeholder motive could decrease the negative influence of to brand attitude. Finally, this attitude could

drive customer loyalty as business out come. This result showed that CSR activities of FRISIAN FLAG were

motivated by instrumental and institutional motivation for social initiative, the motivation that had introduce by

Bronn and Vidaver-Cohen (2008).

Finally, in AQUA situation, all dimension CSR motives could not influence brand attitude, and only external

oriented motivation could influence child‟s quality of life. The magnitude of this effect will be stronger if

interact with subjective well being.Even though CSR motivation and Child‟s quality of life does not impact

brand attitude, this attitude could enhance customer loyalty. Similar with PERTAMINA, means of subjective

well being and child‟s quality of life that perceived by society was higher than customer‟s.

Limitation and Future Research

This study only investigate one format of CSR activities, that is health CSR activities for children which is

probably more prominent element of philanthropy. It will enrich, if the future study take into account other

forms of CSR activities of mutual support, such as different type of philanthropy (involve with scholarship,

facilities and infrastructures, or combination cross-form of activities, such as scholarship and cause related

marketing, or employee voluntaring.

The measurement of subjective well being and quality of life need to reevaluate and adjust regarding the social

dan physical environment of community living. Thus, the researcher should adapt the measurement of those

contructs for different geography, because the macro economic indicator could influence differently in diverse

province, especially in Indonesia.

CSR activities are implemented in some period, which can be carried out in short term or long term. The

limitation of cross sectional research is only capture snapshot event, that could not capture the longitudinal

aspect that will influence the performance of CSR activities. Therefore, it suggested in future research, the

researchers should consider the period of ongoing CSR activities



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