The Extent of the Impact of Social Responsibility Practices on Customer’s Loyalty: Evidence from Jordanian Telecommunication Companies ()
1. Introduction
The customer is the focus of companies and institutions as the primary source of revenue resulting from sales or service provision by the company, as companies try to provide the utmost attention to them as companies launch plans and programs to increase customer satisfaction with the services and goods provided by them. With the increase in customer awareness as a result of the increase in supply and ease of access to services and goods through online electronic means, it has become difficult to achieve this satisfaction through traditional means, as technological and electronic development required the development of marketing methods that attract new customers, but the most difficult challenge for companies is to maintain existing customers while companies do not look for transient customers, they are interested in building loyalty by the customer, as the customer who has loyalty is considered a marketing and promotional base, as the sustainable customer promotes the services and goods of the company without his intent or without direction from the company itself.
Also, because customers have become more understanding of reality, more aware, more able to analyze the services provided by companies, and more diversified with regard to competing services, companies have moved to form a new conceptual framework related to customer perception, by introducing new attraction methods that make the customer more willing to obtain service or continuing to receive it until the longest possible period. The companies’ plans moved from gaining the customer’s loyalty through personal focus, to focusing on society and providing some volunteer or humanitarian services to it. This is especially true in societies with a high tendency towards collectivism, such as the Jordanian society. So satisfying the group may be an important way to satisfy the individual, so companies in such a society play on the collective chord, such as providing additional services for people with special needs, or offering special offers to members of the armed forces, or providing doctors with special packages of services in light of the Corona pandemic, which makes the individual more inclined to deal with these companies as they care about the privileged groups in society and provide them with special services that help them perform their duties. Therefore, practicing social responsibility plays an important role in attracting the emotional side of customers and convincing them of the societal, voluntary and purposeful role that companies play away from profitability [1].
The study of [2].howed that the awareness of Jordanian telecom companies’ customers of the concept of social responsibility was moderate, with a slight impact of social responsibility on the loyalty of these customers. Also, this research did not find any significant differences in the awareness of social responsibility or loyalty in terms of different companies.
However, it remains unclear whether charitable, ethical and environmental actions are viewed as equally important to clients and affect their behavioural and attitudinal loyalty to the same extent in telecommunication sector in Jordan. So this study aims to deepen the research on the impact of the dimensions of corporate social responsibility (charitable, ethical, and environmental) in influencing customer loyalty (attitudinal and behavioural loyalty).
The importance of this research comes from the fact that it delves into the analysis of customers’ perception of the corporate social responsibility practices implemented by the company and thus their final attitude or behaviour loyal towards the responsible practices of the company. Therefore, the study of the customer value structure and the perception of corporate social responsibility in Jordan constitutes valuable knowledge giving the scarcity of research in this field.
2. Conceptual Background and Hypotheses Development
The problem of the study lies in studying the relationship and impact between the practice of social responsibility and customer loyalty, by focusing on the dimensions of social responsibility (charitable, ethical, and environmental) and linking them with the dimensions of customer loyalty behaviour, namely, attitudinal and behavioural loyalty. The study problem can be summarized through the following questions:
The main question is to what extent does the practice of social responsibility by Jordanian telecom companies affect the loyalty of their customers?
1) What is the impact of Charitable Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecommunications companies?
2) What is the impact of Ethical Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecommunications companies?
3) What is the impact of Environmental Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecommunications companies?
4) What is the impact of Charitable Social Responsibility on the Behavioural Loyalty of customers in Jordanian telecommunications companies?
5) What is the impact of Ethical Social Responsibility on the Behavioural Loyalty of customers in Jordanian telecommunications companies?
6) What is the impact of Environmental Social Responsibility on the Behavioural Loyalty of customers in Jordanian telecommunications companies?
2.1. Research Objectives
This study mainly aims to achieve the following objectives:
Main objective is to investigate the extent of the impact of social responsibility practice by Jordanian telecom companies on the loyalty of their customers.
1) Investigate the impact of Charitable Social Responsibility on the attitudinal loyalty of customers in Jordanian telecommunications companies.
2) An investigation of the extent of the impact of Ethical Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecommunications companies.
3) To investigate the extent of the impact of Environmental Social Responsibility on the attitudinal loyalty of customers in Jordanian telecommunications companies.
4) Investigate the impact of Charitable Social Responsibility on the Behavioural Loyalty of customers in Jordanian telecommunications companies.
5) Investigate the impact of Ethical Social Responsibility on the Behavioural Loyalty of customers in Jordanian telecommunications companies.
6) An investigation of the impact of Environmental Social Responsibility on the Behavioural Loyalty of customers in Jordanian telecommunications companies.
2.2. Research Importance
The importance of this study lies in the fact that it examines the awareness of the customers of Jordanian telecom companies (Zain, Umnia and Orange), about the concept of social responsibility, and the extent of their perception of the practices of the company who receive its services, which are related to social responsibility. On the other hand, this study provides a new perception of the importance of social responsibility practices, and the extent of their reflection on the customer’s perception of the company. It is expected that this study will contribute to creating a new research basis that researchers in the field of social responsibility can rely on, as this study deals with various segments and groups of society, from different orientations and scientific, professional and living backgrounds.
2.3. Operational Definitions
Corporate Social Responsibility (CSR): The actions that a company does help it to be accountable in the society [3].
Customers Loyalty: The likeness of the customer to repeat it experience with a particular firm or product [4].
3. Literature Review and Research Hypotheses
Social responsibility has defined Ward (2004) [5].s: “the commitment of business owners to contribute to sustainable development by working with the community to improve people’s livelihoods in a way that serves both the economy and development”.
Also International organization for standardization ISO (2015) [6].efines social responsibility as: “the responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that contributes to sustainable development, including health and the welfare of society; takes into account the expectations of stakeholders”.
On the other hand Customers Loyalty defines by Cunningham, (1956) [7].s “Consumers repeatedly purchase a specific product”. While Uncles et al. (1994) [8].bserves that the devoted consumer is unaware of any unfavorable aspects or knowledge about the product or firm to which he is devoted. On the other hand, there is a widespread perception that consumer loyalty is not just based on the product or the brand, but rather to the customer’s own actions, in which it is defined by Ehrenberg et al., (1999) [9].s the customer’s proclivity to buy a specific product as part of a larger group of products, rather than because it is a distinctive brand that he chooses to buy on a regular basis.
Alsulami (2021) [10].tudied the main factors in enhancing customer loyalty in the stores’ sector, and found that customer loyalty is achieved through the willingness of supermarkets to provide the best services that they can get. Customer loyalty can be enhanced by several factors such as discounts, membership, and product availability. The primary importance with regard to the loyalty of customers and supermarket owners is the quality of service, offering more products with more flexibility and at reasonable prices.
The goal of Alafi & Hasoneh (2012) [11].esearch is to see how much of a link there is between social responsibility and customer happiness in the Jordanian Housing Bank, in addition to researching the link between CSR and the bank’s financial performance. For the bank, a sample of 203 consumers was chosen, and the results revealed that social responsibility and customers’ satisfaction have a positive association. Furthermore, there is a link between social responsibility and the bank’s financial performance. Customer satisfaction appears to operate as a buffer between CSR activities and a bank’s financial performance, according to the findings.
By delivering (600) questionnaires to consumers of telecommunications firms in Jordan, the Humaidan (2016) [12].tudy aims to determine the degree of the impact of social responsibility on customer satisfaction. The findings revealed that CSR in all of its dimensions (economic, charitable, moral, and legal) has a statistically significant impact on customer satisfaction and consequently loyalty, whereas there were no statistical variations based on the customer’s gender.
Al-najjar (2016) [13].tudy intends to investigate how social responsibility might help Jordanian telecom firms gain a competitive advantage. This study was carried out at three telecommunications firms, with (190) supervisors being chosen. The study found that social responsibility had a significant statistical impact on the competitive advantage of the organizations studied. According to the study, an increase in social responsibility and a competitive advantage will be recognized in the company’s profitability, which will participate to the company’s rising volunteer projects and, in turn, improving consumer loyalty.
The study by Al-Ma’ani et al. (2019) [14].ttempts to determine the degree of the impact of external and internal social responsibility on Jordanian telecom firms’ financial and non-financial performance. By distributing (500) surveys among these companies, the study sample covers all three Jordanian telecom providers. The findings revealed that social responsibility had a favourable impact on both financial and non-financial performance, with external social responsibility having a negative impact on organizations’ non-financial success, Furthermore the study proved that the social responsibility aspect is a mail factor in Jordanian telecom firms, since it has a direct and positive impact on customer loyalty, starting with employee satisfaction and progressing through customer satisfaction.
The study of Al Nsour (2019) [15].ims to investigate how Jordanian Islamic banks might improve customer satisfaction by maintaining a culture of social responsibility. A questionnaire was prepared and delivered to (384) customers of Jordanian Islamic banks for this aim. The findings revealed that, despite their high productivity at the national level in Jordan, Jordanian Islamic banks have a low level of application of the notion of social responsibility in all dimensions. Furthermore, the survey discovered that customer satisfaction with performance in terms of social responsibility is clearly lacking. According to the survey, Jordanian Islamic banks should market their social responsibility initiatives more effectively.
3.1. Ethical Corporate Social Responsibility
Ethical social responsibility practices are defined as practices related to lofty values and principles, as they relate to the noble practices carried out by the organization in order to achieve the ethical dimension. These practices often appear in the food and pharmaceutical sectors, as they relate to the materials and components from which these foods are prepared, as many preservatives can contain preservatives that may cause diseases or defects in the human genetic code [16].
The presence of these practices is an important factor that may lead to increased respect by the customer towards the company producing such type, if the image of this organization will become whiter, which leads to an increase in loyalty among these customers.
H1: There is an impact of Ethical Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecom companies.
H2: There is an impact of Ethical Social Responsibility on the Behavioral Loyalty of customers in Jordanian telecommunications companies.
3.2. Charitable Corporate Social Responsibility
Charitable social responsibility practices are defined as the grants, aid, and donations that companies make without waiting for a direct return from these practices. However, organizations that do charitable work may gain respect and trust from customers because of their noble behaviour, which improves the loyalty of these customers towards the products of this company [17].
H3: There is an impact of Charitable Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecom companies.
H4: There is an impact of Charitable Social Responsibility on the Behavioral Loyalty of customers in Jordanian telecom companies.
3.3. Environmental Corporate Social Responsibility
Environmental social responsibility is defined as the practices carried out by the organization in order to preserve the environment, combat industrial waste, or reduce environmental pollution resulting from these wastes, or they are practices that contribute to creating a clean natural environment and mitigating the damage caused by industrial waste. These practices are important for the local community, those concerned with the environment and advocates of using green energy and alternative energy, which may increase the demand of these customers for these companies and improve the loyalty of existing customers to them [18].
H5: There is an impact of Environmental Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecom companies.
H6: There is an impact of Environmental Social Responsibility on the Behavioral Loyalty of customers in Jordanian telecom companies.
3.4. Telecommunication Sector in Jordan
The telecommunications sector in Jordan is considered one of the most important sectors in terms of serving the public, as this is one of the sectors that include more consumers for its services. The Jordanian telecommunications sector includes three mobile phone service providers, also they hold a license to provide Internet services (Zain, Umniah, and Orange). The report of the Jordan Telecom Regulatory Commission (2019) [19]. mentioned that the percentage of subscribers to mobile phone services reached 73% of the total population by (7,778,000) subscriptions, while the percentage of Internet service subscribers in Jordan reached 89%, at (9,380,000) subscriptions. The value of the investment in this sector is (17,800,000) Jordanian dinars. Also the telecommunications sector employs about (5000) citizens, at a rate of (0.0005) of the population.
4. Methodology
This study relies on the descriptive and analytical approach that seeks mainly to describe a specific research concept or phenomenon where this study seeks to describe the concept of customer loyalty and the most prominent factors affecting it, as this study will address the concept of social responsibility and the extent of its impact on customer loyalty. Since customer loyalty is a complex concept and is not easily achieved, but is affected by many determinants, it is necessary to study other factors that contribute to determining the relationship between social responsibility and customer loyalty. The study selected the most frequent factors in previous literature.
4.1. Research Instrument
The instrument used to collect the primary data of this study was the questionnaire. Five-points Likert scale ranging from “Strongly Disagree” to “Strongly Agree” with “neutral “ as a fifth option to minimize random and blank answers. The questionnaire was developed based on the previous similar studies in order to measure certain aspects that were found to be critical for revealing the nature of the relationship between corporate social responsibility (Charity Responsibility, Ethical Responsibility, Environmental Responsibility) and Customers Loyalty (Attitudinal Customers Loyalty, Behavioral Customers Loyalty).
The researcher depended on [20]. [28].n building the questionnaire.
The research instrument was assessed through a pilot study in which copies of the questionnaires were send to a panel of expertise for final evaluation and upon their notes the final questionnaire was distributed to few random customers and friends. 100 copies were collected and tested for validity and reliability.
4.1.1. Validity
The content validity was established based on the fact that the questionnaire was formed based on previous similar studies that measured the same variables, the feedback received from the panel of experts, and the 100 pilot study respondents. The language, clarity of statements and time needed to fill the questionnaire were also assessed during the pilot study.
4.1.2. Reliability
The Cronbach alpha test was implemented to establish the reliability of the research instrument; the results are presented in Table 1 below.
Table 1 indicates the results of Cronbach alpha analysis to measure reliability for the Items of: corporate social responsibility (Charity Responsibility, Ethical Responsibility, Environmental Responsibility) and Customers Loyalty (Attitudinal Customers Loyalty, Behavioral Customers Loyalty). The value for the whole questionnaire is (95.4). The reliability values reflect a satisfactory reliability level (knowing that the maximum value that could be reached is 1.00) any value above 0.7 is considered a good value [29]. Accordingly, a conclusion that the research instrument is reliable can be concluded.
4.2. Research Sample
The study sample consists of 1000 customers from the customers of the three Jordanian telecommunications companies (Orange, Zain, and Umniah). A questionnaire was distributed to a random sample of customers visiting these companies’ Galleries.
5. Data Analysis
Table 2 shows the distribution of the study sample according to the Demographic Characteristics of Sample Members, let’s start with gender, where the
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Table 2. The frequencies of demographic variables.
*Jordanian dinar equals approximately 1.41 US dollars.
percentage of males’ representation in the sample was 58%, while the percentage of female representation was 42%.
Also, the table shows the distribution of the study sample according to the ages of the sample members. The results show that the largest percentage of the age group was within the middle group (30 - 50 years), where the distribution percentage reached 32.6%, which is the overwhelming majority, while the lowest percentage was for the group greater than 50 years old and was only 17.2%.
On the other hand the table shows the distribution of the study sample according to the educational level. The results show that the largest percentage of the study sample was the Undergraduate education category, which indicates of university education (Bachelor), The percentage reached 39%, which is more than one third of the study sample. While it the lowest percentage for the category of School Education by 9.9%.
Another variable shows among the table, which is the distribution of the study sample according to the region. The sample was divided into three sections according to the place of residence (north, middle, and south). The majority respondents of the sample were from the north of the kingdom (54.8%), while the lowest percentage was in the south of the Kingdom at (7.4%).
The table shows the distribution of the sample members according to the monthly income too. The largest percentage was for the middle class (220 - 400 JD) by 59.9%, while the lowest percentage was for the group (greater than 700 JD) with only 2.4%. Note that the category (Less than 220) also includes people without clear income.
As for the distribution of the sample members according to the company providing the service, table shows that the largest percentage was for (Orange) customers with a percentage of (41.50%), while (Zain) came in second place with (30.3%), the lowest percentage was for (Umniah) With a percentage of (28.2).
5.1. Means and Standard Deviations
5.1.1. Corporate Social Responsibility Items
Charity Social Responsibility
Table 3 shows the mean and standard deviation of the respondents ‘responses about the extent of their awareness of the social responsibility practices related to charitable work carried out by their company.
The Aggregate mean (2.85) indicates that the sample members do not have awareness of the charitable practices carried out by their company meaning that they either do not follow up these practices or they do not believe they exist.
Ethical Social Responsibility
Table 4 shows the mean and standard deviation of the respondents ‘responses about the extent of their awareness of the social responsibility practices related to Ethical acts carried out by their company.
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Table 3. Means and standard deviation for charity CSR items.
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Table 4. Means and standard deviation for ethical CSR items.
The Aggregate mean (2.58) indicates that the sample members do not have awareness of the Ethical practices carried out by their company meaning that they either do not interesting with these practices or they do not thought about the realty of them.
Environmental Social Responsibility
Table 5 shows the mean and standard deviation of the respondents ‘responses about the extent of their awareness of the social responsibility practices related to Environmental acts carried out by their company.
The Aggregate mean (2.73) indicates that the sample members do not have awareness of the Environmental practices carried out by their company. This could be due to the sample’s belief that their company’s field of work may not affect the environment, as these companies provide services as they are not primarily industrial companies. But on the other hand, these companies depend on broadcasting towers that produce electromagnetic waves that may harm human health first and then the environment.
5.1.2. Customer’s Loyalty Components
Attitudinal Customers Loyalty
The results in Table 6 show that the answers of the sample members show their lack of awareness of the concept of Attitudinal Loyalty the aggregate mean (2.94), as the results indicate that the customers of the telecom companies among the sample individuals do not have the ability to continue with the company’s products in the event of a rise in their prices or in the event of imposing new commissions on these services.
Behavioural Customers Loyalty
It is also noticed through the results in Table 7 that the sample individuals of Jordanian telecom companies’ clients do not understand the concept of Behavioural loyalty, as they do not believe that they will request new services from the company. While the sample members did not agree that they do not want to join another company, which means that they do not hide their intention to switch to another company, and this indicates weak Behavioural loyalty.
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Table 5. Means and standard deviation for environmental CSR items.
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Table 6. Means and standard deviation for attitudinal customers loyalty.
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Table 7. Means and standard deviation for behavioural customers loyalty.
5.2. Correlation
Table 8 shows the values of the correlation coefficients between the study variables, and the results indicate the existence of a statistically significant correlation at the level of significance between all the study variables, and this indicates the existence of a relationship between the dimensions of social responsibility themselves in addition to the existence of a relationship between the dimensions of social responsibility and the dimensions of Customers Loyalty.
5.3. Regression Analysis
The Impact of CSR Components on Attitudinal CL
Table 9 shows the results of the regression test that tests the effect of social responsibility dimensions on Attitudinal Loyalty among customers of Jordanian telecommunications companies. The results show that there is an effect of the charitable social responsibility dimension, as the value of the moral function of it reached (0.017) level of Significant at α ≤ 0.05, which means accepting the first hypothesis which states that “There is an impact of Charitable Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecom companies”.
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Table 8. Person’s correlation coefficients.
**Correlation is significant at the 0.01 level (2-tailed).
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Table 9. Regression analysis for the impact of CSR on Attitudinal CL.
This result indicates that the company’s charitable work increases the customers’ desire to increase the period of contracting with it in order to obtain its services, and this is due to the human factor present with these customers, where a person appreciates noble practices and wishes to reward these companies for their commitment to them, which makes him more interactive with their products.
The results also show that there is no effect of the ethical social responsibility dimension, level of Significant at α ≤ 0.05 was (0.372), this means that not accepted the hypothesis “There is an impact of Ethical Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecom companies”. This can be explained by the fact that customers are not sure of the ethical role that companies with a commercial objective often play. Therefore, it is necessary to study the psychological factor related to the confidence of customers, which makes them more understanding of the ethical situation offered by the company.
On the other hand, the results also indicate that the environmental practices factor has an effect on the customer’s desire not to change the current company at the significant level of α ≤ 0.05, in addition to their tendency to speak positively about it, which indicates acceptance of the hypothesis “There is an impact of Environmental Social Responsibility on the Attitudinal Loyalty of customers in Jordanian telecom companies”.
The Impact of CSR Components on Behavioural CL
Table 10 shows the results of the regression test that tests the effect of social responsibility dimensions on Behavioural Loyalty among Jordanian telecom companies customers. The results show the existence of an impact of the charitable social responsibility dimension at the significance level of α ≤ 0.05, where the value of the moral function was (0.000), which means acceptance The first hypothesis which states that “There is an impact of Charitable Social Responsibility on the Behavioural Loyalty of customers in Jordanian telecom companies”. This result indicates that the company’s practice of some practices, such as providing grants to certain groups of society, such as the handicapped, university students or the armed forces, lead to an increase in the customer’s acceptance of the company’s services and an increase in the client’s ability to continue to supply the services of this company.
On the other hand, the results indicate that the ethical practices carried out by the company, such as not cutting off the service for people who have not paid their subscriptions, for example, have a statistically significant effect on the loyalty of customers of Jordanian telecommunications companies, which makes them more adherent to receiving services by the company itself and not changing the service provider, which means accepting the hypothesis which states “There is an impact of Ethical Social Responsibility on the Behavioural Loyalty of customers in Jordanian telecommunications companies”.
On the environmental level, the results of the regression analysis indicate that environmental social responsibility practices affect customer loyalty towards Jordanian telecom companies, at a significance level of α ≤ 0.05. These results are linked to people’s desire to see the environment cleaner, safer, and less affected by industrial waste. The climate change related to global warming that changed the nature of the seasons of the year may be a reason for customers’ desire to encourage these practices by continuing to obtain the company’s services, which means accepting the hypothesis that state “There is an impact of Environmental Social Responsibility on the Behavioural Loyalty of customers in Jordanian telecom companies”.
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Table 10. Regression analysis for the impact of CSR on Behavioural CL.
6. Conclusions and Recommendations
6.1. Conclusions
This study aimed to investigate the impact of social responsibility on customer loyalty in Jordanian telecom companies. This study examined three types of practices related to social responsibility, which are charitable, ethical and environmental, and their impact on the two types of loyalty was tested, namely behavioural loyalty and Attitudinal Loyalty. The results found that both charitable and environmental practices affect the attitudinal behaviour of customers of Jordanian telecom companies. These results can be discussed through the image of the company, as these practices improve the image of the company in front of its customers, which makes them more inclined to stay with it for a longer period, as it relates to the emotional side of the customer, as always anyone sympathizes with any of those with special needs, which makes them more appreciation of this company and improve their relationship with it, the presence of the Arab and Islamic culture that urges to do good and help everyone who needs help is the presence of Arab and Islamic culture, and any person or entity that carries out these practices is considered to have special respect for members of society, and this is reflected in Companies too.
On the other hand, the study found an effect of all dimensions of social responsibility on the behavioural loyalty of customers of Jordanian telecommunications companies, and this type of loyalty indicates the customer’s behaviour towards the company in terms of his tendency to continue dealing with it or moving to another company, in addition to his reactions to the practices of the company and its price policy, which makes this type of loyalty more influenced by the practices of a social nature carried out by the company, as these positive practices stimulate the customer towards obtaining more services provided by the company, or stability on the service he currently receives at least. This is what makes the practices of social responsibility factors of utmost importance in convincing the customer of the noble goals of the company in parallel with the material goal that all companies strive to achieve.
Finally, it can be concluded that the practice of social responsibility affects the loyalty of customers in Jordanian telecom companies, and this proposition is consistent with the results shown by previous studies conducted on the Jordanian telecommunications sector, such as the study of Al Humaidan (2016) [12]. where it was found that there is an effect of different dimensions of social responsibility on the loyalty of customers in Jordanian telecommunications companies. For his part, he found Al-Ma’ani et al. (2019) [14].hat the non-financial performance of Jordanian telecom companies is directly affected by social responsibility practices and this is directly related to customer satisfaction and positively affects their loyalty.
6.2. Recommendations
Based on the results, the following recommendations can be made:
1) Study the factors related to customer loyalty such as, corporate image, customer satisfaction, service quality, customer trust and customer commitment to find out the extent of their impact on the relationship between social responsibility and customer loyalty.
2) Study the effect of the society’s cultural values in shaping the customer’s perception of social responsibility practices. Cultural factors can contribute to reshaping the client’s position on the practices of his company, depending on the environment and culture to which he follows.
3) Increase the awareness of Jordanian telecom companies’ clients about the concept of social responsibility, its related practices and its role in improving the company’s image in front of society.