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Proceedings of the Asia Pacific Conference on Business and Social Sciences 2015, Kuala Lumpur
(in partnership with The Journal of Developing Areas)
ISBN 978-0-9925622-2-9
286
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
Universitas Indonesia, Indonesia
Elevita Yuliati
Universitas Indonesia, Indonesia
Rifelly Dewi Astuti
Universitas Indonesia, Indonesia
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
Proceedings of the Asia Pacific Conference on Business and Social Sciences 2015, Kuala Lumpur
(in partnership with The Journal of Developing Areas)
ISBN 978-0-9925622-2-9
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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.
Proceedings of the Asia Pacific Conference on Business and Social Sciences 2015, Kuala Lumpur
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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
Proceedings of the Asia Pacific Conference on Business and Social Sciences 2015, Kuala Lumpur
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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
Child‟s Quality of Life
H4c : Subjective Well Being increase the positive influence of Moral Obligation oriented motives to
Child‟s Quality of Life
H4d : Subjective Well Being increase the positive influence of Value oriented motives to
Child‟s Quality of Life
H4e : Subjective Well Being decerase the negative influence of Benefit Orientation motives to
Child‟s Quality of Life
H4f : Subjective Well Being decrease the negative influence of Internal Stakeholder motives to
Child‟s Quality of Life
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
Adjusted R squared =0.00
H3 : Moderating Subjective Well Being (SWB) H3 not supported
Business Oriented --> Brand Attitude -.566
External Stakeholder --> Brand Attitude 1.310
Moral Obligation --> Brand Attitude 1.136
Value Oriented ---> Brand Attitude .140
Benefit Oriented --> Brand Attitude -.496
Internal Stakeholder --> Brand Attitude -2.416
Adjusted R squared =0.086
H4: Moderating Subjective Well Being (SWB) H4 partially supported
Business Oriented --> Child QOL .365
External Stakeholder --> Child QOL 2.369
Moral Obligation --> Child QOL .111
Value Oriented ---> Child QOL 1.037
Benefit Oriented --> Child QOL -.392
Internal Stakeholder --> Child QOL -.037
Adjusted R squared =0.478
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
H1 partially supported
Business Oriented --> Brand Attitude -2.230
External Stakeholder --> Brand Attitude -.222
Moral Obligation --> Brand Attitude .138
Value Oriented ---> Brand Attitude .644
Benefit Oriented --> Brand Attitude .093
Internal Stakeholder --> Brand Attitude 2.325
.370 H5 not supported
Adjusted R squared =0.135
H2 partially supported
Business Oriented --> Child QOL .040
External Stakeholder --> Child QOL 1.681
Moral Obligation --> Child QOL .601
Value Oriented ---> Child QOL -.184
Benefit Oriented --> Child QOL -1.990
Internal Stakeholder --> Child QOL 1.412
Adjusted R squared =0.156
H3 : Moderating Subjective Well Being (SWB) H3 partially supported
Business Oriented --> Brand Attitude -2.407
External Stakeholder --> Brand Attitude -.717
Moral Obligation --> Brand Attitude .017
Value Oriented ---> Brand Attitude 1.122
Benefit Oriented --> Brand Attitude .228
Internal Stakeholder --> Brand Attitude 1.991
Adjusted R squared =0.13
H4: Moderating Subjective Well Being (SWB) H4 not supported
Business Oriented --> Child QOL .586
External Stakeholder --> Child QOL 1.411
Moral Obligation --> Child QOL 1.370
Value Oriented ---> Child QOL .346
Benefit Oriented --> Child QOL -2.563
Internal Stakeholder --> Child QOL .867
Adjusted R squared =0.402
.809 H6 not supported
7.086 H7 supported
R squared =0.47
H6 : Child QOL --> Loyalty
H7 : Brand Attitude --> Loyalty
Relationship
H1 : Health-CSR --> Brand Attitude
H2 : Health-CSR --> Child QOL
H5 : Child QOL --> Brand Attitude
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
Business Oriented --> Brand Attitude -.393
External Stakeholder --> Brand Attitude 1.137
Moral Obligation --> Brand Attitude .996
Value Oriented ---> Brand Attitude -.694
Benefit Oriented --> Brand Attitude .573
Internal Stakeholder --> Brand Attitude -.815
1.613 H5 not supported
Adjusted R squared =0.082
H2 partially supported
Business Oriented --> Child QOL 1.442
External Stakeholder --> Child QOL 3.106
Moral Obligation --> Child QOL -.512
Value Oriented ---> Child QOL -1.935
Benefit Oriented --> Child QOL -2.076
Internal Stakeholder --> Child QOL .339
Adjusted R squared =0.241
H3 : Moderating Subjective Well Being (SWB) H3 not supported
Business Oriented --> Brand Attitude -.135
External Stakeholder --> Brand Attitude 1.774
Moral Obligation --> Brand Attitude .829
Value Oriented ---> Brand Attitude -1.158
Benefit Oriented --> Brand Attitude .765
Internal Stakeholder --> Brand Attitude -1.454
Adjusted R squared =0.114
H4: Moderating Subjective Well Being (SWB) H4 partially supported
Business Oriented --> Child QOL 1.085
External Stakeholder --> Child QOL 2.835
Moral Obligation --> Child QOL -.151
Value Oriented ---> Child QOL -1.556
Benefit Oriented --> Child QOL -1.206
Internal Stakeholder --> Child QOL -.172
Adjusted R squared =0.280
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
H1 : Health-CSR --> Brand Attitude
H5 : Child QOL --> Brand Attitude
H2 : Health-CSR --> Child QOL
H6 : Child QOL --> Loyalty
H7 : Brand Attitude --> Loyalty
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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