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CORPORATE SOCIAL RESPONSIBILITY AS A DETERMINANT OF CORPORATE

REPUTATION: A CASE STUDY OF NCELL

Thesis · February 2018

DOI: 10.13140/RG.2.2.36784.81928

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 CORPORATE SOCIAL RESPONSIBILITY AS A
DETERMINANT OF CORPORATE REPUTATION:
A CASE STUDY OF NCELL

Yudina Poudel
Apex College
Exam Roll No.: 15570083
PU Registration No.: 2015-2-22-0074
Section: BLAZE

A Graduate Research Project Submitted to

Apex College
Pokhara University

Submitted for the degree of

Master of Business Administration

Kathmandu
February, 2018
 APPROVAL SHEET

Recommendation for Approval

This GRP report prepared and submitted by Ms. Yudina Poudel in partial fulfillment of the
requirements for the degree of Master of Business Administration has been supervised by me
and recommends it for acceptance.

Name and Signature of the Advisor

Date:

Acceptance of the External Examiner

I approve the GRP submitted by Ms. Yudina Poudel. The grade sheet has been submitted to
the Dean, School of Business, Pokhara University through the college on a separate
evaluation sheet.

Name and Signature of the External Examiner:

Date:

Viva Examination
Ms. Yudina Poudel has successfully defended the GRP. We recommend it for acceptance.
The grade sheet has been submitted to the Dean, Pokhara University through the college on a
separate evaluation sheet.
External Examiner:
GRP Advisor:
Other Members:
Date:

i
 CERTIFICATE OF AUTHORSHIP

I hereby declare that this submission is my own work and that to the best of my own work and
that, to the best of my knowledge and belief, it contains no material previously published or
written by another person nor material which to a substantial extent has been accepted for the
award of any other degree of a university or other institution of higher learning, except where
due acknowledgement is made in the acknowledgement.

………………

Yudina Poudel

Date: February 18, 2018

ii
 ACKNOWLEDGEMENTS

The Graduate Research Project entitled “Corporate Social Responsibility as a determinant

of Corporate Reputation: A case study of Ncell” has been prepared to fulfill the partial
requirement for MBA degree of Pokhara University.

I would like to express my deepest gratitude to Prof. Dr. Prem Raj Pant, Faculty Development
Advisor, Apex College for his inspiring suggestions and encouragement that helped me to
coordinate my project especially in writing this report.

I am extremely thankful and indebted to Prof. CM Gautam for sharing expertise, valuable
guidance and encouragement that helped me in all the time of research. His technique and
approach helped in gain newer insight in regards to writing a research paper. Prof. Gautam
remained available during odd hours to guide through the process. I again would like to thank
Prof. CM Gautam for all the path he has shown & time he has provided me in completing this
research paper on time.

Moreover, I would also like to express my appreciation to the Apex Library Team of Mr.
Jagadish Raj Basnet, Mr. Yogesh Sitaula and Mr. Upendra Chaudhary for providing excess to
use the required resources during my research. Along with Prof. Dr. Mahendra Prasad Shrestha,
who provided me with the energy to complete the research paper with high enthusiasm. Finally,
and most importantly, I must thank my family & friends who supported and encouraged me to
complete this work.

Thank You.

Yudina Poudel

February 18, 2018

iii
 LIST OF ABBREVIATIONS

CSR Corporate Social Responsibility

CBS Central Bureau of Statistics

NTA Nepal Telecom Authority

CED Committee for Economic Development

GDP Gross Domestic Product

LTE Long Term Evolution

iv
 EXECUTIVE SUMMARY

The history of telecommunication service in Nepal dates back to 1970 and has rich history in
its evolution. Ncell rose itself as alternative telecommunication service provider in Nepal,
breaking held by the state-owned Nepal Telecom, by building a new arena in mobile telephony
services. Ncell has adopted the approach that mobile communication is not a luxury but a
necessity. Since then Ncell has been prominent in providing telecommunication service by
bringing not only the latest technologies, but also the most modern business process and
knowledge, we help develop Nepal’s business environment, infrastructure and economy. The
study was done with the purpose of knowing the impact of CSR on Corporate Reputation.

This graduate research project entitled “Corporate Social Responsibility as a determinant

of Corporate Reputation: A case study of Ncell” is survey based research study. The main
purpose of this study is to study and analyze the relationship of CSR and Corporate reputation.
The main objective of the study to examine the practices of CSR towards corporate reputation
and to examine the relationship of CSR and corporate reputation. The study was conducted
among Ncell users of Kathmandu Valley. A total of 163 respondents participated in the survey.
The research study uses descriptive statistical tools to analyze the data and correlation is used
to find the significance of relationship between variables.

A comprehensive literature review was conducted in which the necessary information related
to the CSR, Brand Image, Corporate reputation and conceptual framework were reviewed and
discussed. A research design was adopted which involved descriptive, correlation and
regression approaches which were analyzed through the use of Statistical Package for Social
Science (SPSS). A sample of 163 consumers was selected from different locations within
Kathmandu valley. The Primary data were collected through survey questionnaire for this
research purposes questionnaire were distributed to the target respondents. The data were also
collected through mailed questionnaire. With reference to the demographic profile, the study
focused on six components: gender, age, education qualification, and monthly income. Out of
total 163 respondents in this survey, around 65.6% were male and 34.4% were female.
Similarly, among the respondents in this survey, 31.28% were under 25 years, 64.41% were in
the age of age group of 26-35 years, 2.45% were in the age 36-45 years, 1.86% were above 46
years of age. The majority of the respondents had masters and above as the highest level of
education with 50%, followed by bachelors’ degree with 42.1% and intermediate level with
7.9%. Similarly, out of 163 respondents, 7.97% had income below NPR 8,000, 15.95% had

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income between NPR 8,000 - NPR 15,000, 33.74% had income between NPR 15,000 - NPR
30000 and 42.34% had income above NPR 30,000. Similarly, 26.38% were student, 16.56%
were executive, 21.47% were manager, 10.42% were entrepreneur, 9.81% were freelancer and
remaining 15.09% were employee. The respondents were purposively selected from different
stratum to get genuine and unbiased result.

There are two independent variables and they are CSR and Perceived Service Quality
campaign, whereas dependent variable is corporate reputation with mediating variable brand
image. The empirical findings of the research showed significant relationship between CSR
and corporate reputation. CSR, perceived service quality and brand image are significant
drivers of corporate reputation. Corporate reputation is positively affected by the CSR activities
and the quality of services perceived by the customer. Thus, companies may work on
conducting more CSR activities to draw the attention towards their brand. Companies that want
to run effective CSR campaigns should take into consideration the values offered to the society
through these campaigns and what makes the consumers more likely to develop brand image
leading towards positive corporate reputation. Finally, recommendation for further research
which has not been touched by this study is also provided so that upcoming researchers could
analyze relationship of CSR and corporate reputation in more details and incorporate other
variables to create more reliable and valid conclusion.

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 TABLE OF CONTENT
APPROVAL SHEET ............................................................................................................................. I

CERTIFICATE OF AUTHORSHIP ................................................................................................. II

ACKNOWLEDGEMENTS ............................................................................................................... III

LIST OF ABBREVIATIONS ............................................................................................................ IV

EXECUTIVE SUMMARY ................................................................................................................. V

LIST OF TABLES ................................................................................................................................. I

LIST OF FIGURES ............................................................................................................................. II

CHAPTER I INTRODUCTION ......................................................................................................... 1

1.1 BACKGROUND OF THE STUDY................................................................................................ 1

1.1.1 Corporate Social Responsibility and the Nepalese Context.............................................. 2

1.1.2 Company Background....................................................................................................... 3

1.2 STATEMENT OF THE PROBLEM ............................................................................................... 5

1.3 OBJECTIVE OF THE STUDY ..................................................................................................... 5

1.4 RESEARCH QUESTION ............................................................................................................ 6

1.5 SIGNIFICANCE OF THE STUDY ................................................................................................ 6

1.6 RESEARCH HYPOTHESES ........................................................................................................ 8

1.7 LIMITATION OF THE STUDY ................................................................................................... 8

1.8 DEFINITION OF TERMS ........................................................................................................... 9

1.9 ORGANIZATION OF THE STUDY ............................................................................................ 10

CHAPTER II LITERATURE REVIEW AND THEORETICAL FRAMEWORK .................... 12

2.1 CORPORATE SOCIAL RESPONSIBILITY................................................................................. 12

2.2 THEORIES RELATED TO THE CORPORATE SOCIAL RESPONSIBILITY ................................... 13

2.2.1 CSR Pyramid................................................................................................................... 13

 2.2.2 Triple Bottom Line Theory ............................................................................................. 15

2.2.3 Stakeholder Theory of Corporate Social Responsibility................................................. 16

2.3 PERCEIVED SERVICE QUALITY ............................................................................................ 19

2.4 BRAND IMAGE ..................................................................................................................... 20

2.5 CORPORATE REPUTATION ................................................................................................... 22

2.6 CSR AND BRAND IMAGE ..................................................................................................... 24

2.7 PERCEIVED SERVICE QUALITY AND BRAND IMAGE ........................................................... 25

2.8 BRAND IMAGE AND CORPORATE REPUTATION ................................................................... 26

2.9 CORPORATE SOCIAL RESPONSIBILITY AND CORPORATE REPUTATION .............................. 27

2.10 PERCEIVED SERVICE QUALITY AND CORPORATE REPUTATION ......................................... 28

2.11 CRITICAL ANALYSIS OF LITERATURE REVIEW ................................................................... 28

2.12 CONCEPTUAL FRAMEWORK FOR THE STUDY ...................................................................... 29

CHAPTER III RESEARCH DESIGN AND METHODOLOGY .................................................. 33

3.1 INTRODUCTION .................................................................................................................... 33

3.2 RESEARCH PLAN .................................................................................................................. 33

3.3 DESCRIPTION OF SAMPLE .................................................................................................... 33

3.4 INSTRUMENTATION.............................................................................................................. 34

3.5 DATA COLLECTION PROCEDURE .......................................................................................... 34

3.6 PILOT STUDY ....................................................................................................................... 35

3.7 RELIABILITY AND VALIDITY ................................................................................................ 35

3.8 ANALYSIS PLAN................................................................................................................... 37

CHAPTER IV RESULTS AND DISCUSSION ............................................................................... 38

4.1 RESPONDENT’S PROFILE ...................................................................................................... 38

4.1.1 Gender of Respondents ................................................................................................... 38

 4.1.2 Age of Respondents ........................................................................................................ 39

4.1.3 Income of the Respondents ............................................................................................. 40

4.1.4 Occupation of the Respondents....................................................................................... 41

4.2 DESCRIPTIVE ANALYSIS ...................................................................................................... 42

4.2.1 Corporate Social Responsibility...................................................................................... 43

4.2.2 Perceived Service Quality ............................................................................................... 44

4.2.3 Brand Image .................................................................................................................... 45

4.2.4 Corporate reputation ....................................................................................................... 47

4.3 INFERENTIAL ANALYSIS ...................................................................................................... 48

4.3.1 Correlations Analysis ...................................................................................................... 48

4.3.2 Hypothesis Testing .......................................................................................................... 50

4.4 REGRESSION ANALYSIS ....................................................................................................... 52

4.5 DISCUSSION ......................................................................................................................... 56

CHAPTER V SUMMARY AND CONCLUSION ........................................................................... 58

5.1 SUMMARY OF FINDINGS ...................................................................................................... 58

5.2 CONCLUSION ....................................................................................................................... 61

5.3 RECOMMENDATION FOR FUTURE RESEARCH...................................................................... 63

BIBLIOGRAPHY

ANNEXURE
 LIST OF TABLES

Table 1-1 Snapshot of CSR in Nepal ......................................................................................... 3

Table 2-1 Chronologies of Corporate Social Responsibility Theories .................................... 19

Table 3-1 Cronbach’s Alpha Coefficients ............................................................................... 36

Table 3-2 Reliability Statistics ................................................................................................. 37

Table 4-1 Distribution of Respondents based on Gender ........................................................ 39

Table 4-2 Distribution of Respondents based on Age ............................................................. 40

Table 4-3 Distribution of Respondent on the basis of Income ................................................ 41

Table 4-4 Distribution of Respondent on the basis of Income ................................................ 42

Table 4-5 Descriptive Statistics of Corporate Social Responsibility ....................................... 43

Table 4-6 Descriptive Statistics of Perceived Service Quality ................................................ 44

Table 4-7 Descriptive Statistics of Brand Image ..................................................................... 46

Table 4-8 Descriptive Statistics of Corporate reputation ......................................................... 47

Table 4-9 Correlation Analysis ................................................................................................ 48

Table 4-10 Correlation Analysis .............................................................................................. 49

Table 4-11 Model Summary .................................................................................................... 53

Table 4-12 ANOVAa ............................................................................................................... 53

Table 4-13 Coefficientsa .......................................................................................................... 54

Table 4-14 Model Summary .................................................................................................... 54

Table 4-15 ANOVAa ............................................................................................................... 55

Table 4-16 Coefficientsa .......................................................................................................... 55

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 LIST OF FIGURES

Figure 2-1 CSR Pyramid.......................................................................................................... 14

Figure 2-2 Conceptual Model of Corporate Social Responsibility Effects on Dimensions of

Brand Image ..................................................................................................................... 30

Figure 2-3 Conceptual framework highlighting the relationship between CSR, Brand Image
& Corporate Reputation ................................................................................................... 31

Figure 2-4 Conceptual framework highlighting the relationship between CSR & Corporate
Reputation ........................................................................................................................ 31

Figure 2-5 Conceptual Framework .......................................................................................... 32

Figure 4-1 Distribution of Respondent based on Gender ........................................................ 39

Figure 4-2 Distribution of Respondents based on Age ............................................................ 40

Figure 4-3 Distribution of Respondent on the basis of Income ............................................... 41

Figure 4-4 Distribution of Respondent on the basis of Income ............................................... 42

ii
 CHAPTER I

INTRODUCTION

1.1 Background of the study

Corporate Social Responsibility (CSR) is increasingly becoming an important way for

companies to differentiate themselves from the competition. It is also a way for them to
engage their stakeholders into doing meaningful things for the society. With the business
scape changing so much over the last decade, and people having information about a
company’s non-core activities like never before, Corporate Social Responsibility has now
become an important strategic tool for any organization.

Scholars have been arguing both sides of the CSR issue, there are those who are in support
of an organization participating in solving social problems, and there are those who don’t
think its any of a company’s business. Milton Freidman (1962) famously argued that it was
a company’s duties to lookout for its shareholders, and not society in general.

More recently authors suggest that it is in the company’s best interest to be socially
responsible. Firms that increase societal obligations and help society end up creating a new
marketplace for their products and services (Carroll & Shabana, 2010) & (Drucker, 1984).
With this in mind firms all around the world are embracing Corporate Social Responsibility
and are treating it like one of their core functionalities. Considered a long-term investment,
it can lead to numerous competitive advantages (Carroll & Shabana, 2010); (Kang, 2009);
(KPMG, 2011); (Orlitzky, Schmidt, & Rynes, 2003).

While the concept of CSR has evolved over the last fifty or so years, the world has seen a
growth in population which has been characterized into various generations-the baby
boomers, generation X, generation Y and generation Z. Generations are not just defined by
what age they are, or when they were born, they are defined by what influences them such
as wars, politics, scientific discoveries, world culture and education (Purshouse, Meier, &
Brennan, 2009). The term generation X originated from a book, Generation X: Tales for an
Accelerated Culture written by Douglas Coupland (1991) (Coupland, 1991). Generation X
is considered to be those born after the baby boomer generation, between 1961 and 1979.
Generation X was the generation on the threshold to technology. The succeeding generation,
Generation Y was born into an age of technology and knows more about it than the previous
1
generations. Characterized as being born between 1980 and 2000, Generation Y makes up
about 59% of the current Nepalese population (CBS National Report, 2012), making it an
important part of any growing economy. Understanding what drives this generation is
important to consumption decisions and patterns in the future. Generation Y has been
brought up in a constantly changing climatic situation and has been taught to care for the
environment, our finite resources and each other. Generation Y is one with technology and
social activism.

After becoming a republic at the end of a decade long Maoist People’s War (1996-2005),
Nepal is currently in a state of transition. Having elected two different constitution
assemblies, the Nepalese people have been waiting on Government’s to initiate plans on
growth, development and policy that will benefit industry, services and agriculture.
Generation Y is waiting in the wings to take charge of driving the economy, identifying
anything relating to their consumption habits will be a big advantage to companies’ in the
country as well as the country itself.

1.1.1 Corporate Social Responsibility and the Nepalese Context

Culturally, religiously and with similar socio-political background the Nepalese society
have a lot of similarities with its Southern neighbor India. Most of our goals while dealing
with poverty alleviation, education and development are also the same. With a royal family
leading the way, and as a part of the culture Nepal has always been a giving society. Whilst
the giving as a society can be traced back decades, the same cannot be said about corporate
giving, or corporate responsibility towards society. Without a proper corporate structure in
place, and having a lot of private enterprises, Nepal needs to develop better codes of conduct
to be practiced, not just in CSR but also in corporate governance, etc. In the words of
Chapagain (2008), Nepalese companies still believe that profit is their primary motive,
while activities like CSR are optional.

Nepal’s corporate history is relatively short. Plagued with labor strikes, lockouts, extortion,
load-shedding Nepal is hardly the best place to start any industry. But it recent years there
have been reforms in the industry sector, and with a growth in the consumption and demand,
companies are again at a place where they can donate a portion of their profits to CSR
initiatives. While still in its preliminary stages, companies in Nepal are embracing the need
for CSR, not just as a way to benefit society but as a strategic tool to create brand value as
well.
2
In summary, CSR is not an unknown phenomenon in Nepal. Companies have been well
versed in the need to practice CSR and are engaged in CSR activities. These initiatives are
helping them associate their brand names with positivity and societal change. A wide variety
of CSR programs are in place, from education, to health and entrepreneurship development;
but most of these initiatives are just superficial. Only times will tell how the implementation
of these programs will help companies and the society in general.

Table 1-1 Snapshot of CSR in Nepal

Company Activity Intensity

Dabur Nepal Social Welfare *
Youth Integration
Samling Group of Industries Healthcare *
Education
Yeti Airlines Social welfare *
Community services
Jyoti Group Transport *
Healthcare
Education
Surya Nepal Health **
Community Empowerment
Environmental Protection
* Basic concepts are known and basic things are done **Active and visible player ***Active CSR driver.
Source: New Business Age, 2016

1.1.2 Company Background

Nepal is a small South Asian country with a population of 31 million and has agriculture
based economy with a Gross Domestic Product (GDP) of $42.1billion (World Almanac,
2015). The Nepalese economy consists of three main components, agriculture at 36%,
services at 48% and industry at 15%, although there has been growth in the services sector,
there has been a sharp decline in agriculture and industry (World Bank: Nepal at a glance,
World Bank 2012).

According to the Nepal Telecom Authority (NTA), the regulatory body for the
telecommunications industry in Nepal, there are seven telecom service providers providing
fixed and mobile telecom connections to the Nepalese public. Nepal Telecom, a state owned
telecom along with Ncell Nepal have the largest number of subscribers, making up 21
3
million of the total 24 million subscribers (Nepal Telecom Authority (NTA), 2014). As of
2009, the telecom industry has been contributing 1% to the GDP.

The cellular telecom industry of Nepal is made up of four competitors. Nepal Telecom-the
state owned telecom operator, Ncell-the large privately held Telecom Company, Smart
Telecom Private Limited and United Telecom Limited – a large CDMA telecom company
held by Indian and Nepali companies. Ncell has committed itself to Nepal actively investing
in infrastructure development projects to increase its capacity as a 3G provider. Ncell is also
looking into investing into any 4G LTE spectrums that are to be announced. The telecom
sector is seeing large growth Ncell alone has seen a growth in sales, around 15% CAGR
(Compounded Annual Growth Rate), resulting in a 2013 sales figure of NRS 46.16 billion.
Ncell has shown itself committed to Nepal in more ways than one with investments in CSR
activities, community development programs and the ways of sponsorships for sports and
other tournaments.

Ncell is the largest GSM mobile operator in Nepal, with a market share of 56% as of June
2014. It is a part of the Axiata group, a Malaysian telecommunications company with
operations in 10 countries, and had revenue of $5.2 billion in 2016. The headquarters of
Ncell Nepal is in Nakkhu, Lalitpur, Nepal.

Despite being a largely agricultural economy, Nepal is slowly making strides in promoting
service as a major contributor of its GDP. Communications, which are essential in any
business, are growing exponentially, for a country that has a mobile penetration of only 13%
in 2007 now has 70% in 2013 (Harpur, 2017). Ncell is a privately owned GSM mobile
operator in Nepal offering 2G, 3G and 4G LTE services to its customers. By the end of
2010, Ncell Nepal had coverage in all 75 districts, 22% of the landmass and 60% of the
people.

Ncell came into the Nepalese market with the slogan ‘Here for Nepal’, and has since made
investments into infrastructure development and shown its softer side by investing into
Corporate Social Responsibility projects. Most of Ncell’s CSR efforts have been fociused
on the new generation and like other companies before it, has heavily invested its CSR into
education. Through programs such as ‘adopt a school’ Ncell has been investing in the
recreation of school infrastructure which was lost during the decade long civil war. It has
adopted 42 schools in rural Nepal. Ncell has also setup a scholarship scheme for girl children
as it in many South Asian countries considered not necessary for girls to have education.
4
Western Nepal is more impoverished than the rest of the country and parents are unable to
send all of their children to school. Girls are usually the ones left at home; Ncell has been
providing scholarships to twenty girls annually. Ncell also has a digital library program in
the works, which helps rural schools link up with modern day educational materials.

Outside of the realm of education, Ncell’s other CSR activities include starting a body
against the trafficking of women, and charitable giving to various organizations and
disaster relief agencies (Ncell, 2014).

1.2 Statement of the problem

With Corporate Social Responsibility becoming a more integrated part of business

functions, it is important for companies for evaluate the effect they have on the reactions
they create in terms of their market base. Not all CSR activities have tangible returns for
companies that partake in them, but for more companies to engage in CSR activities it is
important for them to see the benefit. The factors used in this research have been adopted
as measures of CSR in the Nepalese market place in context with the best target population
to understand and evaluate those activities when making decisions. If there is no relationship
between the independent variables of this research and the corporate reputation, then it can
be concluded that the market is not at the point to where it is evaluating CSR actions as an
indicator for corporate reputation decisions.

Despite all of its investments in Nepal, Ncell has a negative brand image about it. More
people claim they have been victims of Ncell’s unfair business practices. This has led Ncell
to reconsider its brand image, as a part of a larger equation of gaining a stronger foothold in
Nepal. Looking towards the future Ncell has made inroads and investments in CSR in the
form of scholarships, adopting schools and philanthropic activities, knowing that the next
generation of cellular phone users will develop the corporate reputation based on more than
the quality of service and the brand image.

1.3 Objective of the study

The objectives of this research are to identify the effects CSR has on brand related attributes
of products and services and the corporate reputation of services in the Nepalese
marketplace. The researcher intends to study the independent variables used in the study to
see if the correlation or relationships developed from the framework can be adapted into a

5
real life model, helping firms carry out meaningful CSR activities yet, having a tangible
benefit for them from the investment in aforementioned CSR activities.

The objectives of the research are to study:

1. The relationship between Corporate Social Responsibility and Brand Image,

2. The relationship between Corporate Social Responsibility and Corporate Reputation,
3. The relationship between Perceived Service Quality and Brand Image,
4. The relationship between Perceived Service Quality and Corporate Reputation,
5. The relationship between Brand Image and Corporate Reputation,

1.4 Research question

Some research questions are important to achieve the above mentioned objectives. So this
research will spread some light to the following questions:

The questions to be addressed by the research are as follows:

1. Does a relationship exist between Corporate Social Responsibility and Brand
Image?
2. Does a relationship exist between Corporate Social Responsibility and
Corporate reputation?
3. Does a relationship exist between Perceived Service Quality and Brand
Image?
4. Does a relationship exist between Perceived Service Quality and Corporate
reputation?
5. Does a relationship exist between Brand Image and Corporate reputation?

1.5 Significance of the study

The research will help marketers better understand the relationships between strategic CSR
initiatives taken by companies, and the effect of their importance on the perception of the
companies in public spaces. Many studies have been carried out on CSR and its effect on
consumer perception, its relationship with financial performance, and corporate reputation.
Most of these studies have been conducted in western societies where the development and
history of both corporations and CSR is long. In Nepal where corporate culture is still new,
and there is a shift from an agricultural economy to a service economy the findings of this

6
research will benefit managers, researchers, scholars in crafting CSR policy as well as
providing necessary tangible numbers to extend the amount invested in CSR activities.

Ncell, whose CSR and services are being used as a platform for this research will benefit
from the results as a means to gain insight into one of their most important customer
demographics. It will help Ncell focus its CSR spending and help them with changing
strategy such that CSR is included as a business process and not as an add-on.

a) Managers will be able to use the frameworks and the findings of the research to map
out a cost/benefit ratio amongst the CSR spending companies have versus the
measurable performance based returns. It will help managers quantify their spending
and create better company policy related to CSR.
b) Researchers or scholars interested in Corporate Social Responsibility in the service
sector, can use this study as a basis for any further study and research using different
industries and variables. With the Nepalese economy slowly growing out of its
deficit, the research into different industry sectors could prove to be very valuable
in the future.
c) Policy makers can use the findings of the research to determine the kind of coverage
any policy or legislation changes that need to be made to have more active
participation in CSR from companies. Thus contributing to societies’ general
welfare.

Having a long history of philanthropic giving, Nepal needs companies to actively involve
themselves in CSR activities. Having been in a decade long people’s war and now having a
growing economy companies have the ability to contribute in the form of corporate
governance and helping social causes.

The researcher expects outcome of the research will help access the effectiveness of their
CSR, thus encourage them to further engage in different kinds of CSR activities. Of the
current company’s working in Nepal-Surya Nepal, Dabur Nepal, Yeti Airlines and Jyoti
Group have the largest CSR footprint (Adhikari, 2012). Although these companies believe
in the investment of technology, they also believe in the investment of society and are
making headway into the development of CSR programs and initiatives in Nepal. This
research aims to help provide support to companies whilst making decisions to invest in
technology viz. invest in CSR.

7
1.6 Research hypotheses

In order to find which factors affect the corporate reputation, following are the research
hypothesis of the study:

• H1: Corporate Social Responsibility has a significant relationship with Brand Image.
• H2: Perceived Service Quality has a significant relationship with Brand Image.
• H3: Brand Image has a significant relationship with Corporate reputation.
• H4: Perceived Service Quality has a significant relationship with Corporate reputation.
• H5: Corporate Social Responsibility has a significant relationship with Corporate
reputation.

1.7 Limitation of the study

While conducting any kind of research, there are a certain number of limitations that will
ultimately affect the final outcome and the effectiveness of the study. In the process of this
research, one of the important limitations to have affected the study is the time constraint.
The researcher feels that in order to make a more in-depth and conclusive study the time
frame should be enhanced. With only a limited time, the research that could be done to
access the effectiveness of the selected dependent and independent variables studied in the
research. With a longer timeframe, the researcher believes that more variables could be
added to the framework to make it more precise than it already is.

The circumstances under which the study has been carried out can be called a limitation as
well. As Nepal is going through major changes both politically and socially the data
collected today may not be relevant in the future. The results that hold true in today’s Nepal
as a new a country with its corporate structure and industry in stages of infancy may not
hold true in the future.

Data is collected through self-administered questionnaire. Data collected from the

individual understanding of the respondent. Respondents may provide wrong information.

• There might be chance of response errors because of factors such as unawareness of

the respondents, hesitation of respondents, misinterpretations, etc.
• The researcher has limited the research to available literatures and observations for
theoretical and general part of this study.

8
 • The study has a geographic limitation as the survey was conducted only on
customers who live in Kathmandu valley.

1.8 Definition of terms

Corporate Social Responsibility

CSR is defined as the integration of business operations and values, whereby the interests
of all stakeholders including investors, customers, employees, and the environment are
reflected in the company’s policies and actions (CSRwire, 2014).

Brand Image

Brand image comprises the attributes and benefits associated with a brand that make the
brand distinctive, thereby distinguishing the firm’s offer from competition (Webster &
Keller, 2004).

Brand Awareness

Brand Awareness refers to a consumers’ ability to recognize and recall a certain brand
with which they are familiar (Aaker, Managing Brand Equity: Capitalizing on the Value of
a Brand Name, 1991).

Brand Loyalty

Brand Loyalty can be defined as the degree to which consumers are loyal to a brand and
are willing to repurchase the brand or products of the brand. It is a consumers’
commitment towards repurchase (Oliver R. L., 1997)

Brand Satisfaction

Brand Satisfaction is defined as a customer’s judgments based on a brand’s ability to

exceed or failure to meet expectations (Oliver R. , 1980).

Generation Y

Generation Y is a term used to define that segment of the population born between 1982
and 1999, and are characterized as technologically embedded and socially aware (Xu,
2007)

Perceived Service Quality

9
Perceived Service quality has been defined as the extent to which a service meets
customers’ needs or expectations (Lewis & Mitchell, 1990) &; and (Dotchin & Oakland,
1994).

Corporate Reputation

Corporate Reputation is considered as the critical intangible resource that leads to

competitive advantage (Deephouse, 2000) & (Siltaoja M. E., 2006).

1.9 Organization of the study

This study has been divided into five chapters. They are Introduction, Literature Review,
Research Methodology, Data Analysis and Presentation, Summary and Conclusions.

Chapter I: Introduction

Introduction chapter gives a brief outline of the topic of the study. This chapter states the
background of the research studies, research problem statement and clarifies the objectives,
significance and limitations of this study.

Chapter II: Literature Review and Conceptual Framework

This chapter includes reviews of previous writing, studies, and related literatures that are
relevant to the problem being explored, and within the framework of the theory structure.
Selected variables and proposed conceptual framework are also presented and discussed in
this chapter using the previous research, articles and university publications. Likewise, a
conceptual framework of this study is also provided in this chapter.

Chapter III: Research Design and Methodology

It includes all the topics describing how the entire data have been collected and designed to
carry out the entire tasks of the thesis report work. It basically defines: what research design
was used for the research, what methods and tools were used to gather data from the
respondents and what is the data processing and analysis procedure and the methodology
used for the study. Also the validity and reliability of the variables are examined in this
chapter.

Chapter IV: Analysis, Result and Discussion

10
This chapter first defines the type of analysis used to process the data gathered for the
research. Then it identifies the degree of relationship between various independent variables
and dependent variables being identified for the study. Basically, this chapter analyses
various data gathered and tried to find out relationship between factors identified for the
research with the help of various statistical tools. The results help in concluding the research
and interpreting results of the research.

Chapter V: Summary and Conclusion

Finally, this chapter summarizes the whole research finding and appropriate
recommendations are forwarded on the basis of the conclusion of the research. It comprises
of summary, conclusions based on research question and the chapter ended with the
recommendations. This chapter is based on the interpretation and findings of the results.

11
 2 Chapter II

LITERATURE REVIEW AND THEORETICAL

FRAMEWORK

In this chapter the researcher will discuss the definitions and theories related to the independent
and dependent variables. The researcher will further look into the relationships that exist
between the independent and dependent variables. Finally, the chapter will be concluded with
a summary of previous empirical studies carried out on the subject matter.

2.1 Corporate Social Responsibility

Corporate Social Responsibility (CSR) is increasingly becoming a high profile concept and has
a great deal of strategic importance to companies. Up to 90% of fortune 500 companies now
have and mention having CSR initiatives on their websites and literature (Kotler & Lee, 2004)
(Lichtenstein, Drumwright, & Braig, 2004). Companies are engaging in CSR activities
different forms, which could be cash donations, in-kind donations, cause marketing and
employee volunteering programs.

The term CSR seems to be a new word and a new concept to the corporate world today, but,
literature reveals that the concept of CSR has been in existence for several decades and the
definition of each decade has supported and evolved the concept of CSR known today.

Between the 1920’s and the 1950’s, there were several definitions of the term that were coined.
Windsor (2001) professes, since the 1920’s business leaders have been a part of some of the
conceptions of responsibility and responsiveness practices. Other arguments have been made
that it started in the 1930’s. Meick Dodd in particular cited that it was the community that held
the corporations in trust (Boatright, 1924). Bowen in 1953 conceptualized CSR as an obligation
borne by the corporation towards the society (Maignan & Ferrel , 2004). Carroll, one of today’s
foremost researchers and academics on Corporate Social Responsibility has elevated Bowen’s
status and has called him the ‘father of corporate social responsibility’ (Carroll, 1999).

12
The 1960’s are not that favorable towards the concept of CSR as the decades that preceded it.
Freidman (1962) declared that businesses had a singular social responsibility, which was to
maximize returns for their shareholders.

The concept of CSR gained a lot of attraction in the 1970’s. In 1971 the United States
Committee for Economic Development described CSR as a concept related to products, jobs,
economic growth aimed at improving the social environment of the firm (Committee for
Economic Development., 2003) The CED model for CSR is often described as an important
step in the evolution of CSR. Eells and Walton further described CSR as a representation of
the concerns of the needs of society beyond the economic, and since business system of today
exist in society, CSR represents business’ role in supporting and improving the said society
(Eells & Walton, 1974).

The 1980’s, during processes of defining and refining existing definitions of CSR, a lot of
research was done on the subject leading to the emergence of splintered concepts such as public
policy, business ethics, stakeholder theory, corporate social performance (Carroll, 1999). CSR
as a prominent tool for sustainable development emerged in this decade. It was in the 1980’s
that the concept of sustainable development was conceptualized and the world conservation
strategy was developed.

2.2 Theories related to the Corporate Social Responsibility

American and European theories on CSR are greatly different. In the USA traditionally, CSR
has been defined as a philanthropic model in which companies give back a certain share of
their profits to charitable causes. The European model on the other hand is more focused on
operating all core business activities in a manner, which is more responsible towards society.
Bergkamp (2002) has described CSR as a concept in which companies voluntarily decide to
help in bettering society. The definition of CSR has been conceptualized and changed
according to the context of the business and the society in which business operates. The
following are theories put forth by researchers, which are most relevant in the understanding
of Corporate Social Responsibility.

2.2.1 CSR Pyramid

After debating for years the legal and economic responsibilities of a corporation, Archie Carroll
in 1979 conceptualized a pyramid for CSR, which included economic and legal as well as the

13
ethical and discretionary (philanthropic) responsibilities of a company as well. The main point
behind Carroll’s concept was that businesses had to address the entire spectrum of obligations
to both the society it operates in and the shareholders towards it is beholden. Carroll’s pyramid
is depicted in figure 2.1.

Figure 2-1 CSR Pyramid

Source: Carroll and Pinkston, Journal of Business Ethics, (1996), pp 199-206

The Economic Responsibility

The most important responsibility of a firm towards its stakeholders is to make money. Before
setting forth any other goals a firm must work towards its basic and most important goal, which
is to generate economic wealth for its shareholders. All other responsibilities of a firm lay in
balance of the results of this one responsibility, without economic responsibility the form will
most certainly perish.

The Legal Responsibility

Although a firm’s principle responsibility is to make profit, the sound most important
responsibility of a firm is to follow the rule of the law while doing so. Firm’s are expected to
follow the rules and regulations of the land at all times, and are expected not to skirt, curtail or
break the law even if the repercussion in doing so is much lower than the income to be
generated from it. Businesses are expected to fulfill their end of an unwritten social contract,
which holds them responsible to pursue their economic goals within the framework of the law.

14
The Ethical Responsibility

Ethical responsibility of a firm outlines that a firm is expected to do what is right even when
the law does not require it. In certain countries and conditions, the law does not state the ethical
treatment of workers, the disposal of poisonous waste etc., but firms are expected to do the
right thing in this context and be socially responsible. Business ethics movements have made
this an important CSR component, which shares a dynamic relationship with the legal
responsibility of a firm.

The Philanthropic Responsibility

Firms are expected to contribute to a society’s projects even when they do not match the goals
of the firm. It is in this instance that firms are to act as corporate citizens and engage in activities
that are beneficial for the larger society and not just the business society that firms deal with.

The order of the pyramid is from bottom to top. A firm that cannot generate profit or income
cannot be expected to engage in philanthropic needs of the society.

In the case of Nepal as a whole, Philanthropic responsibility is the one that is most easily seen.
Due to the country’s topographic makeup it often finds itself in natural disasters and
corporations and companies are always giving in cash and kind to help those in need. The
government also follows the same rule of thumb and only looks at philanthropic responsibility.
The scope of Corporate Social Responsibility in Nepal is not yet defined, thus, companies are
free to do as much and/or as little as they want.

2.2.2 Triple Bottom Line Theory

Elkington coined the term triple bottom line in the mid 1990’s. The term lends itself to a
framework, which was developed to measure sustainability. It encompasses not just the
economic side of things but also incorporates social and environmental impacts of firm’s
activities. The dimensions of the triple bottom line (TBL) have become known as the 3P’s
(Profit, Planet and People).

Economic Sustainability

Firms should value long -term profits over risky and short term gains. Larger corporations have
a responsibility towards society to draw up business plans allowing for stable investments and
actions.

15
Social Sustainability

Firms must value the balance between the way to do business and the way their business affects
the life of people in society. In order for a business to be stable in the long run, opportunities
and wealth need to be spread to cover large numbers of the society. Social responsibility
doesn’t just end with the money distributed or redistributed but also has to do with the way
people are treated and respected. The fair-trade movement is a good example of the execution
of social sustainability.

Environmental Sustainability

Most of the natural resources at our disposal in order to create wealth are finite and eventually
will be depleted. If the rate of depletion is high, then the future generations to come will not be
allowed to enjoy the same quality of life as us. Thus, it has become a part of a firm’s
responsibility to operate in such a way that the impact it has on the environment is minimal
and that it works in spheres of environmental protectionism.

In recent years, this approach has come under criticism for being limited and its measures are
misleading. It is still used as a measure of corporate social performance.

2.2.3 Stakeholder Theory of Corporate Social Responsibility

Companies are being expected not just to be serving the interests of their shareholders but in a
larger scope, the interests of their stakeholders too. In case of the stakeholder theory of
corporate social responsibility, companies are expected to show the same ethical standards in
all the countries they operate (Pilkington & Carroll, 1994). As there is more and more
stakeholder involvement in the running of companies, especially transnational companies;
companies are expected to fulfill their economic, legal, ethical and philanthropic
responsibilities whilst keeping an eye on what they stakeholders want (Sen & Bhattacharya,
2001).

In modern age company is considered as a member of society, so they have an inherent

responsibility towards the following stakeholders of society.

Shareholder / owners / investors

Company has responsibility towards shareholders and investors or owners. The company has

16
to take care of the maintenance of the value of their investments providing them fair return on
shares.

Workers / employee

Workers are the assets to a corporation / company. If the management offers an appropriate
monetary salary and various incentives salary to them, they will be motivated to work
effectively and efficiently. This is an obligation of company arising out of social responsibility
to works (Kamik, 1976).

Consumers

Company also has a responsibility toward consumers. The consumers have a right to get
standard product as right price at the right time. Company has a duty to produce standard goods
and service and provide them to consumer at a right price and right time.

Society

Corporations have responsibility towards the society, where the Corporations are located;
service to community can be accomplished by donations to social educational institutions,
charitable institutions, hospital, sport and others social welfare institutions. Besides this, a
company should participate in solving the social problem like poverty, educations,
overpopulation, environmental degradation and unemployment etc. In USA companies have
donated millions of dollars for the bene t of the disadvantaged section of society (Dolan, 1998).

Environment

Company has also a responsibility towards environmental protection. Like global warming,
environmental pollution has become a burning problem in developing and developed countries
today. The companies are the contributors of pollution, so they are required to contribute for
mitigation of pollution problem. Companies have to take necessary preventive and remedial
measures to address environmental problems. Major corporations are under a society duty to
help devise and follow some strategies to eradicate environmental pollution (Kerry, 1998).

State

Company is responsible to the state as well as authority and legal entity to pay fair tax and
other contribution in accordance with law. The company has to perform its duty observing the
laws and regulations in business activities. Companies must not indulge in malpractices and

17
illegal activities and should not avoid tax paying responsibility. It has a duty not to bribe and
push officials in corruption for the benefits of the company. It must contribute the state in
promoting social stability, development and progress.

These are the main theories related to Corporate Social Responsibility, additional
information regarding the timeline of theories related to Corporate Social Responsibility can
be found addressed in the next section.

Title of Research Key Ideas Representative Author

Roots of Business Business leaders must become Dempsey, 1949

Responsibility involved in public and social affairs
beyond economic scope of company

Social Responsibilities Obligations of a businessman other Howard R. Bowen, 1953

of the Businessman than economic

Social Responsibilities How businessmen have defined and Morell Heald, 1970
of Business: Company embraced CSR over sixty years
and Community 1900-
1960

Corporate Social Responsibility and William Frederick, 1986

Corporate Social Responsiveness,
Corporate Accountability

Pyramid of Corporate Four Responsibilities, Archie B. Carroll, 1991

Social Responsibility Discretionary, Ethical, Legal and
Economical

21st Century CSR Business practices, including Orgizek, 2001

environmental management
systems, human resource policy and
strategic investment for a
sustainable future.

Employee relations and diversity Kinder, Lydenberg, Domini, 2004

programs, ethical materials
sourcing, product design, marketing

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 programs, the environment, human
rights, and corporate governance

Table 0-1 Chronologies of Corporate Social Responsibility Theories

2.3 Perceived Service Quality

Today, the quality of service has become an important determinant measuring the success of
industries. Service Quality has always been associated with consumer’s perception of a service
and their satisfaction derived from said service. Oliver (1997) describes customer satisfaction
as a judgment on a product or service, after favorable consumption, and goes on to describe
service quality as the difference between the expectations of service and their perceptions of
the service provider. According to Oliver’s description, it can be said that if the experience is
better than the expectation of service, that service is deemed excellent, if customer’s
expectations and service experience are the same, then the service is termed as good, but if the
expectations of service are higher than the experience of the service, then the service is deemed
poor.

Asunonteng et al. (1996) stated that service quality is the difference between the expectations
of a service before it is encountered compared to the perceptions of the service after its
encounter. Early definitions of service quality are circled around the terms expected service
and perceived service. Grönroos (1984) had proposed a two dimensional approach to service
quality, namely technical quality and functional quality. While technical quality is understood
as the result attained from the service, the functional quality is defined as the process of how
the service was delivered.

Among the new theories related to service quality, the SERVQUAL model is one of the most
used. Conceptualized by Parasuraman et. al. (1988), the SERVQUAL model has five
dimensions reliability, responsiveness, assurances, empathy and tangibility compared to an
earlier two. The model incorporates the differences felt in the expectation of customers and the
service performance perceptions held. Rust and Oliver (1994) developed a new model for
service quality with three dimensions, the service product, the service environment and the
service delivery. The service product is defined as the primary undertaking purchased by the
consumer. The service environment, which is the physical locations where the service is
delivered. The service delivery i.e., what customers actually get when the service is purchased.

19
While businesses use service quality as a measurement of their performance, consumers see
service quality as the difference between what they want, what they expect and the actual
service they encounter. This experience of the consumer determines if the services provided
by the business are matching the consumer’s expectations, thus determining the performance
of the business.

Perceived quality is the customer’s judgement about an entity’s overall excellence and
superiority (Parasuraman, Zeithaml, & Berry, 1985). Izogo (2015) defined perceived service
quality from the managerial point of view when he noted that “managing perceived service
quality means that the firm has to match the expected service and perceived service to each
other so that consumer satisfaction is achieved”. Thus, perceived service quality is a key
indicator of performance. According to Ladhari and Leclerc (2013), one of the key ways
through which telecommunication firms can differentiate themselves from competitors and
create customer loyalty is to provide superior service quality. Service quality enables
organizations to survive in competitive markets (Reichheld & Sasser, 1990). Hence, the
components or dimensions of perceived service quality ought to be clearly defined in
measurable terms to enable firms to monitor service quality over time, compare performance
with that of competitors and compare performance between different branches within a
company or even service performance within the industry (Izogo & Ogba, 2015).

2.4 Brand Image

Aaker (1991) defined a brand as a unique identity of a seller or sellers of goods and services,
which can be a name and/or a symbol, which differentiates company’s offerings to that of its
competitors. The driver behind brand creation and development is to produce a symbol, which
consumers can believe in and trust. Based on Bearden and Etzel (1982) as well as Park and
Arinivasan (1994) arguments, brand image is closely related to the uniqueness of a particular
product classification. According to Hsieh & Li (2008) strong brand image does create a
superior brand messages of a particular brand over the rivalry brand. Consequently, customer’s
behaviour will be affected and determined by brand image (Burmann, Schaefer, & Maloney,
2008). Consumers employ a product’s brand image in deriving overall perceptions of the
specified product, a product with higher brand image may be inferred by consumers as product
of superior quality and value (Richardson, Dick, & Jain, 1994). Furthermore, Jacoby et al.
(1971) conduct an experiment research and have discovered that consumers’ perception of
quality and value are significantly affected by brand image.

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Brand Image is defined as by the American Marketing Association (AMA), the perceptions
and reflections of a brand in people’s lives. Its people’s emotions combined with their belief
of what the brand ought to be (AMA, 2010). Brand Image is considered a reflection of the past
performance of the business put together with the present situation feelings of the population
in the target market in which it operates.

Brand image is the part of brand equity that influences a customer from their point of view,
and thus is considered the most important part of Brand Equity. Brand image is inclusive of
four components, namely Brand Awareness, Brand Loyalty, Perceived Quality and Brand
Satisfaction (Naqvi, S.M.M.R., Ishtiaq, Kanwal, & Ali, 2013).

In marketing literature great attention is focused on brand image which is studied from two:
company’s and consumer’s perspectives. The approach of a company is directed towards the
improvement of marketing activity, connected with strategies of positioning and retaining of a
positive brand image. Consumer's approach is based on consumer's attitude towards the
interpretation of brand image and brand equity. The importance of brand in the market is
influenced by company's ability to evaluate the fact how consumers interpret the image of
brands and company's ability to manage the strategy of brand positioning, adequately revealing
brand’s equity to a consumer (Kotler, 2001). Brand associations consist of brand image, brand
knowledge and brand awareness (Keller & Aaker, 1998).He further says that brand associations
include perceptions of brand quality and attitude towards the brand. Keller (1993) defined
brand image as “perceptions about a brand as reflected by the brand association held in
consumer memory”. These associations refer to any brand aspect within the consumer’s
memory (Aaker, 1996). Basically, brand image describes the consumer’s thoughts and feelings
towards the brand (Roy & Banerjee, 2007). In other words, brand image is the overall mental
image that consumers have of a brand, and its uniqueness in comparison to the other brands
(Faircloth J. , 2005). Brand image comprises a consumer’s knowledge and beliefs about the
brand’s diverse products and its non-product attribute. Brand image represents the personal
symbolism that consumers associate with the brand, which comprises of all the descriptive and
evaluative brand-related information (Iversen & Hem, 2007). When consumers have a
favorable brand image, the brand’s messages have a stronger influence in comparison to
competitor brand messages (Hsieh & Li, 2008). Therefore, brand image is an important
determinant of a buyer’s behavior (Burmann, Schaefer, & Maloney, 2008). In the B2B market,

21
brand image also plays an important role. Brand image can be defined as the reasoned or
emotional perception a consumer attaches to specific brands and is the first consumer brand
perception that was identified in marketing literature. Brand image consists of functional and
symbolic brand beliefs. Brand image, is the totality of consumer perceptions about the brand,
or how they see it, which may not coincide with the brand identity. Companies have to work
hard on the consumer experience to make sure that what customers see and think is what they
want them to, thus highlighting the notion of brand identity. Brand identity is “the strategically
planned and operationally applied internal and external self-presentation and behavior of the
company” (Blombäck, 2005). Brand identity is a vague but vital aspect of a company and now
is considered to be one of the most important factors in the strategic positioning of products in
the minds of the consumers (Bounfour, 2002). A brand tries to establish a coherent perception
of the company for its different stakeholders and reflects a good corporate reputation in the
eyes of the general public (Hatch & Schultz, 2003). Nevertheless, the single most important
public of a brand is its end consumers, who are drowning in the overwhelming abundance of
brands and brand communication. A favorable brand image would have a positive influence
on consumer behavior towards the brand in terms of increasing loyalty, commanding a price
premium and generating positive word-of mouth (Martenson, 2007). Marketing studies argue
that brand image is an important factor affecting brand equity (Biel, 1992). Faircloth (2001)
also found that the more positive the brand image, the more consumers are willing to pay and
thus the greater the brand equity. A brand image can be an association set and is usually
organized in some meaningful way (Aaker, 1991). Keller (1993) has argued that if a brand’s
image is related to association (e.g. attribute and attitude), the brand’s association gains,
favorable strength and uniqueness in the mind of the consumer. A positive brand image is
created by marketing programs that link powerful and unique associations to a consumer’s
memory of the brand (Keller & Aaker, 1998). That is, brand image can create associations that
elicit positive feelings and attitudes towards the brand (Porter & Claycomb, 1997).

2.5 Corporate Reputation

The importance of intangible assets has grown quickly to create market entry barriers, to foster
customer retention and of course to strengthen competitive advantages (Schwaiger, 2004).
Early research on topics related to corporate reputation started with work on corporate image,
corporate identity, and corporate personality. Between the 1950s and the 1970s the focus was

22
primarily on the image that external stakeholders held of a firm or store and the graphic design
elements were often central. During the 1970s and early 1980s strategy moved to center stage
and corporate identity and corporate personality became salient (Caruana & Chircop, 2000).
Since the late 1980s the focus has shifted to corporate reputation, which reflects not only the
current image of the firm, but also its past behavior (Fombrun & Shanley, 1990). In the 1990s,
the literature also explored links between corporate brand management and reputation. It can
also be seen as the outcome of a competitive process in which firms signal their essential
characteristics to constituents to maximize social status (Spence A. , 1974).

Fombrun (1996)defines corporate reputation: “is a perceptual representation of a firm’s past

actions and future prospects that describes the firm’s overall appeal to all of its key constituents
when compared with other leading competitors”. Black and Carnes (2000) add corporate
reputation seen as representative of public’s cumulative judgements of firms over time. It is
internally developed over a period of time and is not readily transferable to other parties. Fill
(1999) express that the firm’s reputation represents a set of deeply held images and adds that
“this concept refers to an individual’s reflection of the historical and accumulated impacts of
previous identity cues, fashioned in some cases by near or actual transactional experiences”.
Herbig and Milewicz (1995) define reputation as “the estimation of the consistency over time
of an attribute of an entity. This estimation is based on the entity’s willingness and ability to
perform an activity repeatedly in a similar fashion. An attribute is some specific part of the
entity-price, quality and marketing skills”. The definitions offered of the corporate reputation
fall into two schools of thought: The Analogous School of Thought; the Differentiated School
of Thought. The analogous school perceived the corporate reputation as synonymous with the
corporate image. It has been suggested that this school is largely supported by early writings in
the field throughout the 1960s and 1970s. The reasoning for this is that the corporate image was
a more fashionable area for research during this period. The analogous school perceived as “an
image, whether of a product or a firm, takes many years to cultivate” (Gotsi & Wilson, 2001).
Reputational content of the corporate level of reputation may be derived from the inside and
the outside of a firm’s boundaries. An internal source, the level of individual reputation can be
defined as including reputation of particular individual who are employed by the firm, or
associated with the firm by outside observers (T, Schweizer, & Wijnberg, 1999). Spence (1974)
states that ‘the outcome of a competitive process in which firms signal their key characteristics
to constituents to maximize social status’.

23
Corporate reputation perceived as the net perceptions of a firm’s ability to meet the expectation
of all its stakeholders. In general, the reputation of a firm perceived as the strong relationship
between the customers and the firm, which viewed as client relationship building. That
considered being an important element that contributes to successful firm (Hebson, 1989) ;
(Howard, 1998) ; (Fombrun C. , 1996). Schweizer and Wijnberg (1999) and Howard (1998)
indicate that corporate reputation has been classified as a component of a firm’s pool of
resources. Therefore, an exceptional reputation should enhance the well-being of any firm, it
will separate and distinguish the firm from its competitors.

According to Caruana and Chircop (2000) , Fombrun (1996) the definitions of corporate
reputation have considered four main elements: corporate reputation represents the net
effective or emotional reaction based on the overall estimation in which a firm is held by its
constituents. The object specific components based on the facts that the firm is well known:
good or bad past actions (Brown, 1995). At this point corporate reputation is defined as a set
of economic and non-economic attributes ascribed to a firm and inferred from the firm’s past
behavior (Weigelt & Camerer, 1988). Information cues actions that result from direct and
indirect experiences and information received (Fombrun & Shanley, 1990).

2.6 CSR and Brand Image

Nowadays, customers have influential CSR expectations on companies and this influence is
growing stronger due to the increased importance of CSR. As mentioned earlier, customers
have expectations on the value system (which includes both emotional and social values)
(Popoli, 2011). Brands based on emotional values are more protected from competitive erosion
(Martínez, Pérez, & Rodríguez, 2014). CSR can be seen as an emotional aspect of brand image
which enhances a company’s competitive advantage (Martínez, Pérez, & Rodríguez, 2014). If
a company’s positioning strategy is based on its’ CSR activities, the core values are permeated
by the core values of CSR (Du, Bhattacharya, & Sen, 2010). One outcome of integrating CSR
into the marketing strategy is to insure the brand from attacks (Werther & Chandler, 2005).
This means that CSR can work as a “damage insurance” to protect the brand. A company with
a strong brand is less likely to have problems with e.g. reputation (Casado-Díaz, Nicolau-
Gonzálbez, Ruiz-Moreno, & Sellers-Rubio, 2014). When CSR is communicated, it becomes a
strategic branding tool to manage customer’s expectations (Werther & Chandler, 2005). Du,
Bhattacharya & Sen (2007) state that CSR initiatives form a positive customer’s attitude and
behavior. This in turn strengthens the company’s brand image, which is one of the main reasons

24
for the company to engage in CSR activities (Du, Bhattacharya, & Sen, 2007) (Swedish trade
federation, 2014). CSR and brand image are strongly linked to each other. CSR is becoming a
core component that affects brand image in a positive way and is therefore considered to be a
strategic necessity, rather than something that only contributes to the customer’s social value
(Salmones, Crespo, & Bosque, 2005); (Cretu & Brodie, 2007) ; (Werther, Jr, & Chandler,
2005) ; (Idowu & Leal Filho, 2009); (Wu & Wang, 2014). Casado Diaz et. al. (2014) state that
customers favor companies that are involved in CSR. When customers perceive a company as
socially responsible, they will be positively influenced when evaluating the service quality.
Customers assume that social responsibility is linked to high service quality and may therefore
use CSR information to decrease the uncertainty of a service (Casado-Díaz, Nicolau-
Gonzálbez, Ruiz-Moreno, & Sellers-Rubio, 2014). Martínez, Perez and Rodriguez del Bosque
(2014) state that CSR has a positive influence on brand image which in turn engages the
customer in brand loyalty. Furthermore, the authors show that a strong brand image increases
the word of mouth and the purchase intentions in a positive way (Martínez, Pérez, & Rodríguez,
2014). However, it is important to effectively communicate the company’s CSR actions to
increase the customers’ awareness and attitude, in order for them to develop a strong brand
image (Martínez, Pérez, & Rodríguez, 2014). The service industry is the fastest growing sector
and, as mentioned previously, even product-based companies are to some extent developing
their businesses into service businesses. Consumers today have more knowledge of
sustainability and an increased awareness of companies’ actions which means that CSR has
gained influence. Meanwhile, brand image is becoming known as one of the most important
marketing components. Still, the number and the scope of the research on how the different
CSR dimensions influence brand image is limited and needs further investigation.

Naqvi et al. (2013) conducted a study on the Impact of Corporate Social Responsibility in
different FMCG’s in Pakistan. The findings show significant relationships exist between
corporate social responsibility and brand image, which consists of brand awareness, brand
loyalty, and perceived quality and brand satisfaction.

2.7 Perceived Service Quality and Brand Image

According to research conducted by the Dean (2007), if the quality of the services provided by
the company is better than expected consumer it will create customer loyalty to the company.
In another study similar results were found, the quality of services provided with excellent will
give a positive impression and make customers more loyal (Ivanauskiene & Volungenaite,

25
2014); (Huang & Phusit, 2014) ; (Amiruddin, 2013) . Therefore, the quality of services
provided to consumers is a matter that needs to be considered by the company so as to increase
consumer loyalty to a product. Based on the results of research conducted by Crespo & García
(2016), argued that good quality services are often the benchmark in creating a positive brand
image for a company. This statement is also supported by the results of other studies which
state that first interaction when customers receive the quality of service will determine how the
brand image is formed in the minds of consumers (Huei & Chiek, 2015) ; (Hashmi, Khalid,
Akram, Saeed, & Rizwan, 2014) ; (Benazira & Suryadana, 2012); (Malik & Nasir, 2011). From
various studies that have been done, it can be concluded that the quality of services provided
to consumers will determine how the brand image formed in the minds of consumers. Research
conducted by Lee (2014), states that a good brand image positively affect the level of consumer
loyalty to a company. Likewise expressed by the results of other studies, if a positive brand
image has been embedded in the minds of consumers, will have a very big role in shaping
consumer loyalty (Agyei & Kilika, 2014); (Chang & Liu, 2014); (Ishaq, Bhutta, Hamayun, &
Rizwan Qaiser Danish, 2014); (Kavosh, 2014); (Chao & Yen, 2015) . From various studies
that have been done, it can be concluded that the brand image is formed in the minds of
consumers will determine the level of customer loyalty to a company.

2.8 Brand Image and Corporate reputation

Previous studies have found that corporate reputation and brand image share a positive
relationship, rather than equivalency. Inferring a causal relationship between the two constructs
is difficult due to the nature of survey research, as only associations between the constructs can
be established (Verhoef & Leeflang, 2009). In addition, studies have found that this
relationship may work both ways depending on the scenario, as corporate reputation may
influence or be influenced by brand image (Wang, Kandampully, Lo, & Shi, 2006). Others
have found that even though an unfavorable corporate reputation dampens brand image, a
favorable corporate reputation may not guarantee stronger brand image (Ettenson & Knowles,
2008); (Page & Fearn, 2005); (Wang, Kandampully, Lo, & Shi, 2006). Similarly, Nguyen &
Gaston (Nguyen & Leblanc, 2001) suggests that the degree of brand loyalty has a tendency to
be higher when perceptions of institutional reputation and institutional image are favorable. A
favorable image is viewed as a critical aspect of a company’s ability to maintain its market
position, as image has been related to core aspects of organizational success like customer
patronage (Granbois, 1981) ; (Korgaonkar, Lund, & Price, 1985). It is also widely

26
acknowledged that a positive reputation is a strategic factor that can be employed to earn above-
average profits (Weigelt & Camerer, 1988). As Nguyen and Leblanc (2001) have concluded,
reputation can be used as an effective means of predicting the outcome of the service-
production process, and can, perhaps, be considered the most reliable indicator of the ability of
a service firm to satisfy a customer's desires leading towards establishing a different brand
image.

2.9 Corporate Social Responsibility and Corporate Reputation

Many theoretical and empirical studies have demonstrated that CSR has a significant positive
effect on the corporate image of a company. For instance, Turban and Greening (1997) indicate
that independent dimensions of corporate social performance are positively related to firms’
reputation. Similarly, Siltaoja (2006) suggests that companies that maintain ethical behavior as
part of the CSR and not compromise on their license by engaging in wrong activities to gain
profitability in the short term are able to enhance the corporate image. According to Abdullah
and Aziz (2013), initiation and effective management of CSR programs is important for a
company because it shapes the corporate identity of the company and strategically ensures the
achievement of the ultimate business asset-corporate reputation in the long term. Fombrun &
Shanley (1990) suggest that a level of corporate charitable donations is associated positively
with corporate reputation. Quevedo-Puente et al. (2007) puts it this way; there is no controversy
that CSR influences firm’s reputation. McWilliams et al. (2006) argue that CSR can be
considered a form of strategic investment because it contributes to the building and sustaining
of corporate reputation. Kwarteng et al. (2016) have documented that sustainability constructs
(economic, social and environment) have a positive impact on the corporate image. Thus, the
implementation of CSR programs helps to build a positive reputation and brand image of a
company, and Porter and Kramer (2006) suggest that many companies use reputation to justify
social actions.

Brammer & Millington (2005) analyzed the determinants across industries of corporate
reputation of large UK companies. They find that companies with higher levels of philanthropic
expenditures are perceived as more socially responsible and enjoy stronger reputations than
those with lower expenditures. Lai et al. (2010) find the relationship between CSR and brand
performance is partially mediated by corporate reputation. This implies that buyers’
perceptions about suppliers’ CSR initiatives positively relate to corporate reputation. Ker-Tah
Hsu (2012) finding suggests CSR initiative enhances corporate reputation along with brand

27
equity and customer satisfaction. advertising effect of CSR initiatives on corporate reputation
is only informative, managers should employ CSR initiatives to build corporate reputation
without expecting to build policyholder numbers in the short term. In other words, managers
should invest in CSR only for CSR itself without any other purpose when building corporate
reputation. Similarly Famiyeh et.al. (2016) examined the impact of CSR on firm’s reputation,
the result revealed CSR initiative does enhance the firm’s reputation as well as their overall
performance in terms of profit, sales growth and market share.

2.10 Perceived Service Quality and Corporate Reputation

Service quality as defined by Parasuraman et. al. (1988) results from the comparison of
customers’ expectations with perceived performance of services. Santos (2003) described
service quality as the customers’ overall judgment of the excellence of service offering. Service
quality is also affected by the ability of an organization to satisfy customers’ needs, according
to their expectation level (Yoo & Park, 2007). In current literature of marketing, corporate
reputation has got paramount importance and has been recognized as primary instrument to
enhance firm’s financial performance in today’s competitive market. Researchers tried to find
out the links between reputation and its key determinants (Guo, Xiao, & Tang, 2009) ;
(Balabanis, Reynolds, & Simintiras, 2006) whereas service quality has been considered as the
key driver of establishing reputation (Lai, Griffin, & Babin, 2009).

Furthermore, as Dabholkar et al. (2000) have established, it is better to consider factors

associated with service quality such as reliability and responsiveness) as being antecedents to
customer perceptions of service quality rather than as dimensions or components of the
construct. As Dabholkar et al. (2000) have shown, such an approach offers greater
understanding of the evolving service-quality construct. For example, satisfaction was
originally defined in terms of disconfirmation and, later, disconfirmation was considered an
antecedent to satisfaction (Oliver R. , 1980).

2.11 Critical Analysis of Literature Review

During the previous studies, the results obtained by researchers in the context of CSR and its
relationships with corporate reputations has varied. While research carried out in the western
and more developed world have found strong relationships existing between CSR and
corporate reputation, whereas the studies in Asia have results that show a low or moderately
significant relationship between CSR and reputation. This could be down to the fact that Asian

28
consumers are not as aware of CSR as are western consumers, and also that they are more
conscious about price in their daily consumptions.

While all previous research has clearly stated that CSR activities have an impact on corporate
reputation, the researcher would like to test the extent to which the results obtained in different
settings can be applied to this research.

Looking at the results of the studies, the researcher has been able to come up with variables
that are essential to the study of the phenomenon of the effects of CSR on brand image which
leads to corporate reputation. The previous researches have shown that when determining
factors for corporate reputation that consumers often look towards product/service quality as
one of the motivating factors.

2.12 Conceptual Framework for the Study

Conceptual frameworks are structured from a set of broad ideas and theories that help a
researcher to properly identify the problem they are looking at, frame their questions and find
suitable literature. Most academic research uses a conceptual framework at the outset because
it helps the researcher to clarify his/ her research question and aims.

The researcher has modified and developed the conceptual framework based on variables in
the basis of major research models. The first research model is from the research Impact of

Corporate Social Responsibility in different FMCG’s in Pakistan, Navqi et al. (2013). The
second research model is from the An Investigation of the effects of corporate social
responsibility on corporate reputation and customer loyalty – evidence from the Taiwan non-
life insurance industry conducted by Lee et. al. (2017). The final model from The Advertising
Effects of Corporate Social Responsibility on Corporate Reputation and Brand Equity:
Evidence from the Life Insurance Industry in Taiwan , Hsu (2012).

All of these theoretical frameworks are vital components in the development of the researchers’
conceptual model.

29
Conceptual Model of Corporate Social Responsibility Effects on Dimensions of Brand Image

Figure 2-2 Conceptual Model of Corporate Social Responsibility Effects on Dimensions of Brand Image

Source: Naqvi S.M.M.R., Ishtiaq M., Kanwal N., Ali M., Inderyas S. (2013). Impact of Corporate Social Responsibility on
Brand Image on different FMCG’s of Pakistan. Interdisciplinary Journal of Contemporary Research in Business, 5(1), 79-93

Naqvi et al. (2013) conducted a study on the Impact of Corporate Social Responsibility in
different FMCG’s in Pakistan. The objective of the research was to examine the relationship
between corporate social responsibility and brand identity-which consists of brand awareness,
brand satisfaction, brand loyalty and perceived quality in developing markets. From the
literature, the researchers set forth four hypotheses. The research was conducted across 22
universities and had a total of 180 respondents, all of whom knew what the concept of corporate
social responsibility was. The findings show significant relationships exist between corporate
social responsibility and brand image, which consists of brand awareness, brand loyalty, and
perceived quality and brand satisfaction.

Conceptual framework highlighting the relationship between CSR, Brand Image & Corporate
Reputation.

30
Figure 2-3 Conceptual framework highlighting the relationship between CSR, Brand Image & Corporate Reputation

Source: Chen-Ying Lee, Wei-Chen Chang, Hsin-Ching Lee, (2017) "An investigation of the effects of corporate social
responsibility on corporate reputation and customer loyalty – evidence from the Taiwan non-life insurance industry", Social
Responsibility Journal, Vol. 13 Issue: 2, pp.355-369


Lee et al. (2017) investigated on Effects of corporate social responsibility on corporate

reputation and customer loyalty on non-life insurance industry of Taiwan. The objective of the
research was to investigate the effect of CSR on corporate reputation and customer loyalty.
From the literature, the researchers set forth five hypotheses. The research had a total of 362
valid respondents. The findings show significant relationships exist between corporate social
responsibility and brand image, corporate reputation and customer loyalty.

Conceptual framework highlighting the relationship between CSR & Corporate Reputation

Figure 2-4 Conceptual framework highlighting the relationship between CSR & Corporate Reputation

Source: Hsu, K.-T. (2012), “The Advertising Effects of Corporate Social Responsibility on Corporate Reputation and Brand
Equity: Evidence from the Life Insurance Industry in Taiwan”, Journal of Business Ethics, 11(4), pp. 189-201.

Hsu (2012) conducted a study on Effects of corporate social responsibility on corporate

reputation and brand equity on life insurance industry of Taiwan. This study investigates the
persuasive advertising and informative advertising effects of CSR initiatives on corporate
reputation and brand equity based on the evidence from the life insurance industry in Taiwan.
From the literature, the researchers set forth five hypotheses. The study finds, first,
policyholders’ perceptions concerning the CSR initiatives of life insurance companies have
positive effects on customer satisfaction, corporate reputation, and brand equity. Second, the
advertising effects of the CSR initiatives on corporate reputation are only informative. Third,
the impacts of CSR initiatives on brand equity include informative advertising and persuasive

31
advertising effects. The obtained results in this research first identify the informative
advertising effects and persuasive advertising effects of CSR initiatives.

The conceptual framework for the research “Corporate Social Responsibility as a determinant
of Corporate Reputation: A case study of Ncell” is shown below.

Independent Variables Dependent Variables

Corporate Social
Responsibility H1 H5

Brand Image H3
Corporate
Reputation

H2 H4

Perceived Service
Quality

Figure 5-5 Conceptual Framework

32
 3 CHAPTER III

RESEARCH DESIGN AND METHODOLOGY

3.1 Introduction

This chapter is designed to explain the research methods used to meet the stated objectives of
the study. The methodologies undertaken in relation to the research paradigm are sampling
process, data collection and analysis techniques to study the Corporate Social Responsibility
as a Determinant of Corporate Reputation are explained in this chapter. This chapter also
explains the collection procedure of data and methodology used by researcher for analyzing
the available data. It includes preparation of the questionnaire to be answered by the people. A
description of method and procedure employed for collecting and analyzing the data has been
explained.

3.2 Research Plan

A descriptive as well as explanatory research was carried out for the purpose of carrying out
this research. The findings of this research were based upon the primary survey. The data had
been collected by formulating a set of questionnaire and the questionnaire was distributed to
the respondents. The questionnaire was self-administered. The findings had been totally based
in the data and facts provided by sampled respondent. Apart from questionnaire, the expert
opinion was obtained depending upon the necessity of the research.

The study is based on various statistical tests such as correlation, regression, mean, standard
deviation and etc. The software called Statistical Package for social science (SPSS) and
Microsoft Excel was used to analyze and interpret the quantitative data. This software is
commonly used by researchers an easily available in business setting. The reliability of scales
is analyzed using Cronbach’s alpha since Cronbach’s alpha test is best measure for multiple
scale items and it is also the most popular test for the inter-item consistency reliability.

3.3 Description of Sample

Selection of sample is very important part to carry out during the research. Population for this
study was the consumer within Kathmandu valley who are the users of Ncell product. For the
accuracy in result, only those respondents have been selected who are well aware about Ncell
and its services.
33
For this, Survey method is used. The overall survey and study is guided by the objectives of
the study that is set in the first chapter. The study was designed to understand the perception
of individuals towards corporate social responsibility and its relationship with the corporate
reputation. The respondents of the research were those people who use Ncell’s product and
services. So the level of understanding of the respondents was considered while designing the
sample. The researcher distributed 180 questionnaires to respondents and response from 163
respondents were collected. Out of the 163, primary 10 responses were considered for
validation of the data. The result of the data came positive therefor, the researcher moved
forward with the questionnaire without any further changes to the questionnaire.

3.4 Instrumentation

At the initial phase, for the purpose for developing conceptual framework the data collection
procedure was secondary. Basically, the secondary source of data was internet, books, journals,
newspaper and articles. Whereas, in the later stage, the primary source of data collection was
used for the purpose of collecting data so as to analyze data for making findings. Thus, the
major tool used in data collection was questionnaire. There are altogether 29 structured
questions in the research work. The first part of the questionnaire deals with demographic
information which includes gender, age, monthly income & occupation. The second part deals
with the various factors or relationship of corporate social responsibility with corporate
reputation. The questionnaire had multiple response question, ranking question and six point
Likert scale questions. “Likert scale is named after its developer, Rennis Likert, is widely used
rating scale that requires the respondent to indicate a degree of agreement or disagreement with
each of a series of statement about the stimulus objects.” It is widely used rating scale that
requires the respondent to indicate a degree of agreement or disagreement with each series of
statement. Each scale item response categorizes ranging from “strongly agree” to “strongly
disagree.”

3.5 Data collection procedure

3.5.1.1 Data collection

In this research, primary data collection method was used. Primary data refers to data that is
first used to test the working hypothesis and then used as evidence to support a researcher’s
claim. Secondary data was used to support primary data wherever needed.

34
The study of descriptive research and involved the use of survey method. Primary data was
collected with questionnaire survey and was administered to obtain quantitative data. Paper
based survey and electronic survey methods were used as the mode of administration. In paper
based survey, researcher personally visit and provide the hardcopy of the questionnaire to
respondents. In electronic method, links were sent to respondents using the internet as a
medium to conduct survey.

3.5.1.2 Questionnaire Development

A structured questionnaire was prepared and distributed to the respondents. The respondents
filled out the questionnaire following the instructions given in the questions. Then the
responses were collected from the respondent. The questionnaire contained close-ended
questions so that it takes less time when filling in the answer. Most of the close-ended questions
were measured using 5 rating Likert scales to create and easy to answer an unbiased
questionnaire. Scores on the scale items varies from a low of 1(strongly disagree) to a high of
5(strongly agree), with disagree, neutral, and agree as interval points.

3.6 Pilot Study

Pilot study was conducted using the survey questionnaires over a selected group of 10
respondents from customers of service organizations before conducting the major survey over
the sample population. This study was done to understand how the respondents understood and
responded the questionnaire. Full set of questionnaire was sent to small group of target
respondents as per convenience. The questionnaire was distributed randomly to the customers.
Some feedbacks were collected from them for review and questionnaire was adjusted
accordingly.

3.7 Reliability and validity

The validity of research design and plan is checked by discussion with the experts and also
comprehensive research instrument used to develop and test before starting the real
investigation. The questionnaire was developed after discussion with the supervisor. The items
were carefully designated considering the research question. The main purpose of the validity
and reliability analysis is to determine whether data are trustworthy or not.

Validity refers to how well a measurement truly represents characteristics that exist in the
phenomenon being investigated. In order to assure external validity, measures were taken to
35
collect a sample that is as representative as possible. To maximize content validity, a
comprehensive literature review was done in order to grasp the major variables that can affect
the perception of customers in inferring the service quality.

Reliability refers to the correlation of an item, scale or instrument with a hypothetical one
which measures what it is supposed to. P value is compared in terms of 0.01. If p value is less
than 0.01, the null hypothesis is rejected else if it is equal to or more than 0.01, the null
hypothesis is accepted.

Means were also compared to assess the reliability of scales. The value ranges between 1 to 6
and mean is 3.5. Generally it is thought that the mean value more than 3.5 is positive response,
the mean value 3.5 means adequate and less than 3.5 is negative response. The values are if
above 3.5 it can be concluded that the scales are reliable.

Cronbach’s Alpha was calculated for the reliability test. If the calculated Cronbach’s alpha is
above 0.7 then collected data are reliable. From the test, it can be inferred that the questionnaire
prepared was reliable for the study as each Cronbach alpha is more than 0.7. The result of the
reliability test is shown in Table 3.1.

S. No. Variables Cronbach’s Alpha

Corporate Social
1 0.897
Responsibility

2 Perceived Service Quality 0.911

3 Brand Image 0.918

4 Corporate reputation 0.919

Table 0-1 Cronbach’s Alpha Coefficients

Table 3.1 shows the Cronbach’s alpha coefficients of independent & moderating variables
CSR, Perceived Service Quality and Brand Image. It is typically associated with internal
consistency and its value ranges from 0 to 1. Sekaran (2000) stated that Cronbach’s Alpha
coefficient less than 0.6 are considered poor; greater than 0.6 but less than 0.8 are considered
acceptable and greater than 0.8 are considered good. Here, Cronbach’s Alpha of all the

36
variables are considered as good. Therefore, the instruments used in this research are
considered to be reliable.

Cronbach's Alpha No. of Items

.961 25
Table 0-2 Reliability Statistics

Table 3.2 Cronbach’s alpha for the data is 0.961 which reveals the internal consistency of the
studied construct and the data is reliable and valid. The Cronbach’s alpha of 0.961 also shows
that 96.1 percent of the data taken for the study is reliable while the remaining 3.9 percent of
data consists of error. It can be inferred that the questionnaire prepared was reliable for the
study as the overall Cronbach’s Alpha was 0.961 (Number of items = 25).

3.8 Analysis Plan

After gathering all the questionnaires from the respondents, SPSS and Excel were used for the
analysis of the data. Total responses collected from the respondent were coded and tabulated
into SPSS worksheet. Depending upon the nature of the question such as Likert scale, the
coding was followed as per the rule.

The data obtained from the research was analyzed by using SPSS software. For presentation of
data, several graphical tools such as tables, charts, diagrams and graphs have been used. Mean
and standard deviation have been presented for the descriptive study of variables. Correlation
analyses were carried out followed by stepwise regression analysis. Test of significance have
been conducted to make the results more effective. All the observed relationship and findings
have been interpreted to drive the meaningful conclusions regarding the relationship between
CSR, Perceived Service Quality, Brand Image and Corporate reputation.

37
 4 CHAPTER IV

RESULTS AND DISCUSSION

This chapter is based on the analysis, discussion, and interpretation of data collected during the
study. The analysis is mainly based on primary data which were collected through the
questionnaire filled by 163 respondents. The data has been analyzed with references to the
objectives of the study as mentioned in the chapter I. The data are presented with tables and
diagrams to make it convenient possible to interpret.

The chapter is sub-divided into five parts. The first part deals with the respondents’ profile. It
gives detail information regarding the respondents’ gender, age, income level & occupation.
The second part analyses and interprets the collected data through descriptive analysis. The
third part deals with testing all those hypotheses formulated for this research. The fourth part
deals with regression analysis. Lastly, the final part of this chapter deals with discussion and
inferences that are drawn.

4.1 Respondent’s Profile

This section deals with the demographic analysis and interpretation of primary data collected
through questionnaires. The analysis of demographic profile is done by the interpretation of
the responses collected. Respondents profile was categorized according to their gender, age,
income level and occupation. The respondents of the research were those people who use Ncell
products and services.

180 respondents were selected for this study and the questionnaire were distributed to them
through personal visit, online and through email.

Out of the 180 questionnaires, only 163 valid responses were collected. Hence, the response
rate was 90.55 percent.

4.1.1 Gender of Respondents

The gender of respondents consists of male and female. The aim was to determine the
percentage of distribution of respondents by gender. The frequency and percentage of the
gender of the respondents is depicted in Table 4.1 and Figure 4.1.

38
 Gender Frequency Percent
Male 107 65.6%
Female 56 34.4%
Total 163 100%
Table 0-1 Distribution of Respondents based on Gender

Gender

56

107

Male Female

Figure 0-1 Distribution of Respondent based on Gender

Table 4.1 and Figure 4.1 show the gender distribution of respondents. They show that the
participation of female respondents was more than that of male respondents in the sample size
of 163. The percentage of male and female respondents was 65.6% and 34.6% respectively.

4.1.2 Age of Respondents

The questions in this section were aimed to find out how individuals perceived CSR. The age
of the respondents is categorized into five different groups as below 20 years, 20-30 years, 30-
40 years, 40-50 years, 50 years and above. The tabulations of age group were generated to
explore the distribution of the age group of the respondents. This was to determine the

39
percentage distribution of the age groups of person who responded as shown in Table 4.2 and
Figure 4.2.

Age Frequency Percent

Below 25 51 31.28%
26-35 105 64.41%
36-45 4 2.45%
46 and above 3 1.86%
Total 163 100%
Table 0-2 Distribution of Respondents based on Age

Age
70.00% 64.41%

60.00%

50.00%

40.00%
31.28%
30.00%

20.00%

10.00%
2.45% 1.86%
0.00%
Below 25 26-35 36-45 46 & above

Age

Figure 0-2 Distribution of Respondents based on Age

Table 4.2 and Figure 4.2 show the age of the respondents. Out of 163 respondents, large number
of respondents belongs to age group 26-35 years consisting 64.41% of the total respondents.
In addition to this, 31.28% respondents were of age group below 25 years, 2.45% respondents
were of age group 36-45 years, and 1.86% respondents were of age group above 46 years.

4.1.3 Income of the Respondents

The income level of the respondents are categorized into four groups as below NPR 8,000,
between NPR 8,000 to NPR 15,000, between NPR 15,000 to NPR 30,000 and more than NPR
30,000. The tabulation of income was generated to explore the income level of the respondent

40
in a month. The frequency distribution of respondents as per their income is shown in Table
4.3 and Figure 4.3.

Income Frequency Percent

Below NPR 8,000 13 7.97%
Between NPR 8,000 to NPR 15,000 26 15.95%
Between NPR 15,000 to NPR. 30,000 55 33.74%
Above 30,000 69 42.34%

Total 163 100%

Table 0-3 Distribution of Respondent on the basis of Income

Monthly Income
45.00% 42.34%

40.00%
33.74%
35.00%
30.00%
25.00%
20.00% 15.95%
15.00%
10.00% 7.97%

5.00%
0.00%
Below 8,000 Between 8,000 to 15,000 Between 15,000 to Above 30,000
30,000

Monthly Income

Figure 0-3 Distribution of Respondent on the basis of Income

Table 4.3 and Figure 4.3 show the income level of the respondents. The majority of the
respondents had the income level above NPR 30,000 which is 42.34% of the total sample. In
addition to this, 33.74% respondents had income level of Rs. 15,000-Rs. 30000, 15.95%
respondents had income level of Rs. 8,000-Rs. 15,000, and remaining 7.97% respondents had
income level of below NPR 8,000 which suggests that they might have been unemployed.

4.1.4 Occupation of the Respondents

The occupation of the respondents are categorized into six groups as below student, executive,
manager, entrepreneur, freelancer, employee. The frequency distribution of respondents as per
their income is shown in Table 4.4 and Figure 4.4.

41
 Income Frequency Percent
Student 43 26.38%
Executive 27 16.56%
Manager 35 21.47%
Entrepreneur 17 10.42%
Freelancer 16 9.81%
Employee 23 15.09%

Total 163 100%

Table 0-4 Distribution of Respondent on the basis of Income

Occupation
30.00%
26.38%
25.00%
21.47%
20.00%
16.56%
15.09%
15.00%
10.42% 9.81%
10.00%

5.00%

0.00%
Student Executive Manager Entrepreneur Freelancer Employee

Occupation

Figure 0-4 Distribution of Respondent on the basis of Income

Table 4.4 and Figure 4.4 show the occupation of the respondents. The majority of the
respondents are student which is 26.38% of the total sample. In addition to this, 21.47%
respondents are manager, 16.56% respondent are executives,15.09% respondents are
employee, 10.42% respondent are entrepreneur and remaining 9.81% are freelancers.

4.2 Descriptive Analysis

This section deals with the descriptive analysis of the data collected through the questionnaires
during the research process. Descriptive statistics is the discipline of quantitatively describing
the main features of a collection of data. Descriptive statistics help us to simplify large amounts
of data associated with these variables in a sensible way. Descriptive analysis incorporates

42
calculation of statistical measures such as mean, standard deviation, including minimum (min)
and maximum (max) values.

For this purpose, ‘Five Point Likert Scale’ questions were asked to the respondents which
scaled from 1 (strongly disagree), 2 (disagree), 3 (neutral), 4 (agree) and 5 (strongly agree) for
all variables in survey research. Number of respondents (N) in each question item was 163.
Questions related to each determinants and their descriptive statistic are shown below which
shows the agreement level of the respondents.

4.2.1 Corporate Social Responsibility

Corporate Social Responsibility is the independent variable of this research. Descriptive study
of each questions drafted and overall descriptive study on CSR is shown below:
Std.
Code Statements N Mean
Deviation
Ncell emphasizes the importance of
CSR1 its social responsibilities to the 163 2.86 1.012
society.

Ncell contributes to schools & parks

CSR2 163 2.64 0.908
according to the needs of the society.

Ncell contributes to campaigns and

CSR3 projects that promote the well-being 163 2.88 1.064
of the society.
Ncell participates in activities, which
CSR4 aim to protect and improve the quality 163 2.84 1.018
of the natural environment.

Ncell makes sufficient financial

CSR5 163 2.81 1.022
contribution to charities.

Ncell provides full & accurate

CSR6 information about its products to the 163 2.90 1.280
customers.

Ncell tries to help the government in

CSR7 163 2.42 1.065
solving social problem.

Corporate Social Responsibility 163 2.76 1.052

Table 0-5 Descriptive Statistics of Corporate Social Responsibility

43
The results in Table 4.5 show the descriptive statistics of an individual item and as whole of
corporate social responsibility. There are seven statements used to measure the CSR. Each of
the 163 respondents submitted their responses in the five-point Likert scale. The Table 4.5
shows that the items have a mean value ranging from 2.42 to 2.90 i.e. the response is negative.

The table shows that CSR6 has the highest mean and CSR7 has the lowest. The highest mean
of 2.90 indicates that it is the most agreed statement, stating that Ncell provides full & accurate
information about its products to the customers. Lowest mean of 2.42 shows that respondents are
less agreed by the statement, stating that the Ncell tries to help the government in solving social
problem.

Additionally, the table shows that AC4 has the highest standard deviation whereas CSR2 has
the lowest standard deviation. This means respondents have more deviation with the statement
“Ncell provides full & accurate information about its products to the customers.” i.e. the values in
the data set are farther away from the mean, on average.

The aggregate mean of CSR is 2.76 with standard deviation of 1.052. This shows that the
respondents disagree that CSR done via Ncell doesn’t affect corporate reputation.

4.2.2 Perceived Service Quality

Perceived Service Quality is the independent variable of this research. Descriptive study of
each questions drafted and overall descriptive study on contents is shown below.
Std.
Code Statements N Mean
Deviation

PSQ1 The network coverage of Ncell is good 163 3.40 1.158

PSQ2 The voice quality of Ncell is good 163 3.50 1.135

The data services (2G/EDGE/3G/LTE) of
PSQ3 163 3.39 1.173
Ncell are fast and reliable
Ncell provides simplified billing resolution
PSQ4 163 2.87 1.108
of billing issues.
The customer service representatives are
PSQ5 163 3.18 1.123
courteous and knowledgeable.
Perceived Service Quality 163 3.27 1.140
Table 0-6 Descriptive Statistics of Perceived Service Quality

44
The results in Table 4.6 show the descriptive statistics of an individual item and as whole of
perceived service quality. There are five statements used to measure the content. Each of the
163 respondents submitted their responses in the five-point Likert scale. The Table 4.6 shows
that the items have a mean value ranging from 2.87 to 3.50 i.e. the response is positive.

The table shows that PSQ4 has the highest mean and PSQ2 has the lowest. The highest mean
of 3.50 indicates that it is the most agreed statement, stating that The voice quality of Ncell is
good. Lowest mean of 2.87 shows that respondents are less agreed by the statement, stating
that Ncell provides simplified billing resolution of billing issues.

Additionally, the table shows that PSQ1 has the highest standard deviation whereas PSQ4 has
the lowest standard deviation. This means respondents have more deviation with the statement
“The network coverage of Ncell is good” i.e. the values in the data set are farther away from the
mean, on average.

The aggregate mean of perceived service quality is 3.27 with standard deviation of 1.140. This
shows that the respondents agree that perceived service quality of Ncell helps in corporate
reputation.

4.2.3 Brand Image

Brand image is the moderating variable of this research. Descriptive study of each questions
drafted and overall descriptive study on updating contents is shown below:

Std.
Code Statements N Mean
Deviation
The names of this brands are well-
BI1 163 4.09 1.234
known

I can recognize their brands among

BI2 163 4.04 1.196
competitive brands

These are the leading brands among

BI3 163 3.64 1.201
competitors

The products of Ncell are my first

BI4 163 2.60 1.199
choice

45
 Even with many choices, I shall not
BI5 163 2.45 1.156
choose alternative brands

BI6 I am loyal to these brands of Ncell. 163 2.46 1.234

The products of Ncell usually meet

BI7 163 2.83 1.200
my expectations

The products of Ncell are at the

BI8 163 2.88 1.216
desirable level

The products and services of Ncell

BI9 completely satisfy my 163 2.90 1.313
telecommunications needs
Brand Image 163 3.10 1.22
Table 0-7 Descriptive Statistics of Brand Image

The results in Table 4.7 show the descriptive statistics of brand image. There are nine
statements used to measure the brand image. The brand image can be measured through three
components and they are brand awareness, brand loyalty and brand satisfaction. Statement 1
to 3 talks about brand awareness, 4-6 talks about brand loyalty and 7-9 talks about brand
satisfaction. Each of the 163 respondents submitted their responses in the five-point Likert
scale. The Table 4.7 shows that the items have a mean value ranging from 2.45 to 4.09 i.e. the
response is negative.

The table shows that BI1 has the highest mean and BI5 has the lowest. The highest mean of
4.09 indicates that it is the most agreed statement, stating that the names of Ncell brands are
well-known. Lowest mean of 2.45 shows that respondents are less agreed by the statement,
stating that even with many choices, we shall not choose alternative brands.

Additionally, the table shows that BI1 & BI6 has the highest standard deviation whereas BI5
has the lowest standard deviation. This means respondents have more deviation with the
statements “The names of this brands are well-known” and “I am loyal to these brands of Ncell”
i.e. the values in the data set are farther away from the mean, on average.

The aggregate mean of Brand Image is 3.10 with standard deviation of 1.22. This shows that
the respondents agree that brand image helps in corporate reputation.

46
4.2.4 Corporate reputation

Corporate reputation is the dependent variable of this research. Descriptive study of each
questions drafted and overall descriptive study on content popularity is shown below:

Std.
Code Statements N Mean
Deviation

Ncell has good reputation among its

CR1 163 2.69 1.230
users.

Ncell is well respected & well thought

CR2 163 2.87 1.203
of service provider in Nepal.

CR3 Ncell is reputable service provider. 163 2.50 1.096

Ncell has a superior status among

CR4 163 2.40 1.153
competitors.

Corporate Reputation 163 2.62 1.170

Table 0-8 Descriptive Statistics of Corporate reputation

The results in Table 4.8 show the descriptive statistics of the dependent variable, corporate
reputation. There are four statements used to measure the corporate reputation. Each of the 163
respondents submitted their responses in the five-point Likert scale. The Table 4.8 shows that
the items have a mean value ranging from 2.40 to 2.87 i.e. the response is negative.

The table shows that CR2 has the highest mean and CR4 has the lowest. The highest mean of
2.87 indicates that it is the most agreed statement, stating that the respondents are happy to
recommend other to use Ncell. Lowest mean of 2.40 shows that respondents are less agreed by
the statement, stating that they would not switch to a competitor, even if they had a problem
with the products/services of the company.

Additionally, the table shows that CR1 has the highest standard deviation whereas CR4 has the
lowest standard deviation. This means respondents have more deviation with the statement “I
would continue using Ncell rather than any other brands available in the market” i.e. the values
in the data set are farther away from the mean, on average.

The aggregate mean of Corporate reputation is 2.62 with standard deviation of 1.170. This
shows that the respondents response on corporate reputation is negative.

47
4.3 Inferential Analysis

The purpose of this section is to present the method for analyzing the empirical results, test the
hypothesis set, built in previous chapter. Inferential statistics are procedures used that allow
researchers to infer or generalize observations made with samples to the larger population from
which they were selected. It enables use of one or more samples of observations to infer values
of a population. Inferential analysis test hypotheses to determine if observed differences
between groups or variables are real or occur simply by chance. It produces new information
by making predictions and generalizations based on samples. This section consist of two
analysis tools which are:

4.3.1 Correlations Analysis

Correlations Analysis between variables were studied to find relations among them. Pearson’s
correlations analysis was carried out for variables having simple multi option answers.
Correlation matrix was computed to assess the extent or degree of relationship in between the
research variables. A positive correlation reveals that the direction of the relationship is positive
with one increasing in reaction to the other’s increase. Meanwhile, a negative correlation
reveals an inverse of the above; an increase in one when the other decreases.

Correlation between Independent and Moderating variables is shown in Table 4.9

Independent Variables Brand Image

Pearson Correlation .705**
Corporate Social Responsibility Sig. (2-tailed) .000

N 163
Pearson Correlation .764
Perceived Service Quality Sig. (2-tailed) .000
N 163
**. Correlation is significant at the 0.01 level (2-tailed).
Table 0-9 Correlation Analysis

4.3.1.1 Relationship between Corporate Social Responsibility and Brand Image

The Pearson Correlation coefficient between the independent variable CSR and moderating
variable Brand Image is 0.705, which implies that the two variables are positively correlated.
The positive coefficient of correlation is 0.705 at 1% significant level.

48
4.3.1.2 Relationship between Perceived Service Quality and Brand Image
The Pearson Correlation coefficient between the independent variable Perceived Service
Quality and moderating variable Corporate reputation is 0.764, which implies that the two
variables are positively correlated. The positive coefficient of correlation is 0.764 at 1%
significant level.
Correlation between Independent, Moderating & Dependent variables is shown in Table 4.10

Independent & Moderating Variables Corporate reputation

Pearson Correlation .627**

CSR Sig. (2-tailed) .000

N 163
Pearson Correlation .556**
Perceived Service Quality Sig. (2-tailed) .000
N 163
Pearson Correlation .787**
Brand Image Sig. (2-tailed) .000
N 163
**. Correlation is significant at the 0.01 level (2-tailed).
Table 0-10 Correlation Analysis

4.3.1.3 Relationship between Corporate Social Responsibility and Corporate reputation

The Pearson Correlation coefficient between the independent variable CSR and dependent
variable Corporate reputation is 0.627, which implies that the two variables are positively
correlated. The positive coefficient of correlation is 0.627 at 1% significant level.

4.3.1.4 Relationship between Perceived Service Quality and Corporate reputation

The Pearson Correlation coefficient between the independent variable Perceived Service
Quality and dependent variable Corporate reputation is 0.556, which implies that the two
variables are positively correlated. The positive coefficient of correlation is 0.556 at 1%
significant level.

4.3.1.5 Relationship between Brand Image and Corporate reputation

The Pearson Correlation coefficient between the moderating variable Brand Image and
dependent variable Corporate reputation is 0.787, which implies that the two variables are
positively correlated. The positive coefficient of correlation is 0.787 at 1% significant level.

49
4.3.2 Hypothesis Testing

Descriptive analysis was conducted on the independent variables CSR, PSQ, the moderating
variable brand image and the dependent variables corporate reputation. The analysis continued
with correlation analysis with the aim of testing research hypothesis of this research study.
This section of analysis covers all the statistical analysis made to verify the hypotheses and
ascertain the significance CSR and its relationship with Corporate reputation.

Pearson correlation test was conducted to see the correlations between the independent variable
and dependent variables. In addition to the Pearson correlation test, a simple bivariate analysis
was conducted for the hypotheses testing using corporate reputation as a dependent variable
and CSR and PSQ as independent variables and Brand image as moderating variable in order
to see if there are relationships and to determine the relative importance of each CSR activities
in increasing corporate reputation.

Five hypotheses were drawn for the purpose of identifying relationship between dependent and
independent variables in this study. Each hypothesis is tested on the basis of the Pearson’s
correlation coefficient presented in Table 4.13. Test on each of these hypotheses is discussed
below:

Hypothesis 1
H1: Corporate Social Responsibility has a significant relationship with Brand Image.

From the correlation analysis, there is a positive correlation between CSR and Brand Image.
The correlation is significant because the p-value is less than alpha i.e. 0.001< 0.01 which
means that the result obtained from the sample can be generalized. Hence we reject the null
hypothesis at 1% level of significance so that the above stated hypothesis H1 is accepted i.e.
Corporate social responsibility has a significant relationship with Brand Image.

Thus, there exists a significant positive relationship between Corporate Social Responsibility
and Brand Image.

Hypothesis 2
H2: Perceived Service Quality has a significant relationship with Brand Image.

From the correlation analysis, there is a positive correlation between Perceived Service Quality
and Brand Image. The correlation is significant because the p-value is less than alpha i.e.
0.001< 0.01 which means that the result obtained from the sample can be generalized. Hence
50
we reject the null hypothesis at 1% level of significance so that the above stated hypothesis H2
is accepted i.e. Perceived service quality has a significant relationship with brand image.

Thus, there exists a significant positive relationship between Perceived Service Quality and
Brand Image.

Hypothesis 3
H3: Brand Image has a significant relationship with Corporate reputation.

From the correlation analysis, there is a positive correlation between Brand Image and
Corporate reputation. The correlation is significant because the p-value is less than alpha i.e.
0.001< 0.01 which means that the result obtained from the sample can be generalized. Hence
we reject the null hypothesis at 1% level of significance so that the above stated hypothesis H3
is accepted i.e. Brand Image has a significant relationship with corporate reputation

Thus, there exists a significant positive relationship between Brand image and Corporate
reputation.

Hypothesis 4
H4: Perceived Service Quality has a significant relationship with Corporate reputation.

From the correlation analysis, there is a positive correlation between Perceived Service Quality
and Corporate reputation. The correlation is significant because the p-value is less than alpha
i.e. 0.001< 0.01 which means that the result obtained from the sample can be generalized.
Hence we reject the null hypothesis at 1% level of significance so that the above stated
hypothesis H4 is accepted i.e. Perceived service quality has a significant relationship with
corporate reputation.

Thus, there exists a significant positive relationship between Perceived Service Quality and
Corporate reputation.

Hypothesis 5
H5: Corporate Social Responsibility has a significant relationship with Corporate reputation.

From the correlation analysis, there is a positive correlation between CSR and Corporate
reputation. The correlation is significant because the p-value is less than alpha i.e. 0.001< 0.01
which means that the result obtained from the sample can be generalized. Hence we reject the

51
null hypothesis at 1% level of significance so that the above stated hypothesis H5 is accepted
i.e. Corporate social responsibility has a significant relationship with corporate reputation.

Thus, there exists a significant positive relationship between Corporate Social Responsibility
and Corporate reputation.

4.4 Regression Analysis

A correlation analysis can only tell whether or not a strong relationship exists between two
variables. But even if a correlation coefficient indicates that a strong relationship exists
between two variables, the exact shape of the relationship between the two variables cannot be
determined. In this case, regression analysis provides more information about the slope of the
relationship. It is used to describe the nature of a relationship and to make predictions. So, for
deeper understanding of the relationship between corporate social responsibility and corporate
reputation, the regression analysis is conducted. This section determines which independent
variable explains variability in the outcome, how much variability in dependent variable is
explained by independent variables and dependent variable, and which variables are significant
(over other variables) in explaining the variability of the dependent variable. Multiple
regression was used to explore the impact of independent variables (corporate social
responsibility and perceived service quality) on moderating variable (Brand image) and
dependent variable (corporate reputation).

Multiple Regression Model

Ŷ= α + β1X1+ β2X2+ ei.

Where,

Ŷ = Brand Image (Dependent variable)

X1 = Corporate social responsibility

X2 = Perceived service quality

α = Constant

βi = Coefficient of slope of regression model

ei = Error term

52
Tables below show the findings of regression analysis between independent variables and
moderating variable.

Table 0-11 Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate
1 .842a .679 .675 .53873
a. Predictors: (Constant), Corporate Social Responsibility and Perceived Service
Quality

Model summary indicates the R- square also known as coefficient of determination which can
help in explaining variance. R-square value is 0.679 which means 67.9% variation in brand
image (BI) is explained by independent (CSR & PSQ). However, it is still leaves 32.1% (100%
- 67.9%) unexplained in this research. In other words, there are other additional variables that
are important in explaining brand image that have not been considered in this research.

Similarly, adjusted R-square is 0.675 which means 67.5% variation in brand image(BI) is
explained by corporate social responsibility and perceived service quality after adjusting
degree of freedom (df). Model summary also indicates the standard error of the estimate of
0.53873 which shows the variability of the observed value of brand image from regression line
is 0.53873 units.

Table 0-12 ANOVAa

Sum of
Model Squares df Mean Square F Sig.
1 Regression 98.160 2 49.080 169.09 .0001b
Residual 46.436 161 .290
Total 144.596 163
a. Moderating Variable: Brand Image (BI)
b. Predictors: (Constant), Corporate Social Responsibility and Perceived Service Quality

Based on ANOVA, the p-value is 0.001 which is lesser than alpha value 0.01. Therefore, the
model is a good descriptor of the relation between the dependent and moderating variables. As
a result, the independent variables (corporate social responsibility and perceived service
quality) are significant in explaining the variance brand image.

53
 Table 0-13 Coefficientsa

Unstandardized Standardized
Model Coefficients Coefficients T Sig.

B Std. Error Beta

(Constant) .208 .163 1.274 .205
CSR .438 .064 .386 6.885 .000
PSQ .514 .054 .532 9.502 .000
a. Moderating Variable: Brand Image

Taking corporate social responsibility and perceived service quality as independent variable
(X1, X2) and brand image as moderating variable, model is constructed with equation as below:

Ŷ= α + β1X1+ β2X2 + ei.

Based on the coefficients, the regression equation for the brand image can be written as

Ŷ = 0.208+0.438X1+0.512X2.

Regression coefficient of CSR and PSQ are 0.438, 0.512 respectively are the significant
moderating variables (p > 0.05). This illustrates that 1-unit increase in CSR activity and service
quality will bring 0.438, 0.512 respectively increase in brand image.

Table 4.13 depicts beta for all the attributes or independent variables taken in the study to
determine its influence on brand image. Since, the beta of perceived service quality is highest
i.e. 0.532, it has the most dominant influence in increasing brand image.

The correlation coefficient had shown that there is significant correlation between CSR, PSQ
and Brand Image.

Table 0-14 Model Summary

Adjusted R Std. Error of the
Model R R Square Square Estimate
1 .787a .619 .617 .65064
a. Predictors: (Constant), BI

Model summary indicates the R- square also known as coefficient of determination which can
help in explaining variance. R-square value is 0.619 which means 61.9% variation in corporate
reputation (CR) is explained by brand image. However, it is still leaves 38.1% (100% - 61.9%)

54
unexplained in this research. In other words, there are other additional variables that are
important in explaining corporate reputation that have not been considered in this research.

Similarly, adjusted R-square is 0.617 which means 61.7% variation in corporate reputation is
explained by brand image after adjusting degree of freedom (df). Model summary also
indicates the standard error of the estimate of 0.65064 which shows the variability of the
observed value of brand image from regression line is 0.65064 units.

Table 0-15 ANOVAa

Sum of
Model Squares df Mean Square F Sig.
1 Regression 110.74 1 110.749 261.614 .0001b
Residual 68.156 162 .423
Total 178.906 163
a. Dependent Variable: CR
b. Predictors: (Constant), BI

Based on ANOVA, the p-value is 0.001 which is lesser than alpha value 0.01. Therefore, the
model is a good descriptor of the relation between the moderating and dependent variables. As
a result, the moderating variable (brand image) are significant in explaining the variance
corporate reputation.

Table 0-16 Coefficientsa

Unstandardized Standardized
Model Coefficients Coefficients T Sig.

B Std. Error Beta

(Constant) -.095 .175 -.544 .588
BI .875 .054 .787 16.174 .000
a. Dependent Variable: Corporate reputation

Taking BI as moderating variable (X1) and brand image as moderating variable, model is
constructed with equation as below:

Ŷ= α + β1X1+ β2X2 + ei.

Based on the coefficients, the regression equation for corporate reputation can be written as

Ŷ = -0.095+0.875X1

55
Regression coefficient of Brand Image (BI) is 0.875, is the significant moderating variables (p
> 0.05). This illustrates that 1-unit increase in BI will bring 0.875 increase in corporate
reputation.

Table 4.16 depicts beta for moderating variable taken in the study to determine its influence on
corporate reputation. Since, the beta of BI is 0.787, it has the dominant influence in increasing
corporate reputation.

The correlation coefficient had shown that there is significant correlation between BI and CR.

4.5 Discussion

The main purpose of this study is to study and analyze the relationship of Corporate social
responsibility and corporate reputation. This study helps to determine to what extent corporate
social responsibility, perceived service quality and brand image influence corporate reputation.
The sample for the research was taken from consumer at Kathmandu valley of Nepal.

The result of this research show that perceived service quality is the most significant drivers of
brand image among CSR activities & PSQ. The result is somewhat similar to Crespo & García
(2016) who argued that good quality services are often the benchmark in creating a positive
brand image for a company. Similarly, this statement is also supported by the results of other
studies which state that first interaction when customers receive the quality of service will
determine how the brand image is formed in the minds of consumers (Huei & Chiek, 2015) ;
(Hashmi, Khalid, Akram, Saeed, & Rizwan, 2014) ; (Benazira & Suryadana, 2012); (Malik &
Nasir, 2011).

Similarly, CSR does leave a significant impact on the BI itself. The finding is supported by
Werter & Chandler (2005) “ when CSR is communicated, it becomes a strategic branding tool
to manage customer’s expectations.” Du, Bhattacharya & Sen (2007) state that CSR initiatives
form a positive customer’s attitude and behavior. This in turn strengthens the company’s brand
image, which is one of the main reasons for the company to engage in CSR activities.

Multiple regression analysis was also conducted to explore the relationship of moderating
variables (BI) on dependent variable (CR). The correlation coefficient had shown that there is
significant correlation between BI and CR. This result is consistent with the finding of Wang
et. al. (Wang, Kandampully, Lo, & Shi, 2006), relationship may work both ways depending on
the scenario, as corporate reputation may be influenced by brand image. Similarly, Nguyen &

56
Gaston (2001) suggests that the degree of brand loyalty which is a part of brand image has a
tendency to be higher when perceptions of institutional reputation.

57
 5 CHAPTER V

SUMMARY AND CONCLUSION

This chapter gives a brief overview of findings and conclusion of the study. It draws the
inferences from the findings which lead to make the generalization. This chapter consists three
sections: summary of the findings, conclusion of the study and suggestion for further research
or study.

5.1 Summary of Findings

In this study, the main purpose was to understand and analyze the corporate reputation through
corporate social responsibility (CSR). Based on the literature review, various relevant
independent variables and moderating variable were identified. The independent variable
includes CSR and PSR along with moderating variable as Brand Image which has significant
relationship with corporate reputation. Specifically, this study sought to examine whether these
independent variables has relationship with corporate reputation (dependent variable). The
study focused on the CSR practices adapted and the perceived service quality of Ncell via
consumer. The conceptual framework of the study was developed on the basis of dependent
and independent variables identified through literature review.

The overall plan of a research study was presented in third chapter. Convenience sampling was
used as data collection procedure. The data was collected with the help of self-administered
questionnaire. The study was conducted based on the sample size 163. The questionnaire was
made available to the respondents through mail and through direct distribution of questionnaire
in different locations. This was done as per ease of respondents as well as the researcher. Before
conducting the survey for the research, pilot test was conducted with the help of 10 respondents.
This was done to identify the reliability of the research as well as the questionnaire developed.
The participants were asked to comment on the format and appropriateness of questions, and
to suggest any items that they believe to be included in the questionnaire. This was done to
check the validity of research and questionnaire. In view of their suggestions, several
amendments were incorporated into some questions that improved the clarity. Similarly,
reliability scores are expressed numerically as a coefficient. This was tested with the help of
Cronbach’s alpha which resulted that the research to be reliable. This pilot test had assured the
reliability and validity of the research which had important role to decide whether to carry the
study further or not.
58
The research has addressed the following important issues:

• The factors influencing corporate reputation through CSR.

• The relationship of independent and moderating variable with dependent variable.
• The most important factors that influence corporate reputation.

The research is descriptive and explanatory in nature. The overall research method is conducted
through the collection of primary data. With reference to the demographic profile, the study
focused on four components: gender, age, income level and occupation. Out of 163 respondents
in this survey, 107 were male i.e. 65.6% and 56 were female i.e. 34.4%. Similarly, among the
respondents in this survey, 31.38% were under 25 years, 64.41% were in the age group of 26-
35 years, 2.45% were in the age 36-45 years, 1.86% were in the age 46 and above. Similarly,
out of 163 respondents, 7.97% had income below NPR 8,000, 15.95% had income between
NPR. 8,000 – NPR 15,000, 33.74% had income between NPR. 15,000 – NPR 30,000 and
42.34% had income above NPR. 30,000 Furthermore, out of total 163 respondents in this
survey 26.38% were students, 16.56% were executives, 21.47 were manager, 10.42 were
entrepreneur, freelancer were 9.81% and remaining 15.09% were employee.

The descriptive statistics study and the hypothesis test were conducted and the final result was
presented. The results obtained from descriptive statistics for the dependent variables and
independent variables are summarized as below:

● The overall average mean value of corporate social responsibility is 2.76 which shows that
respondents disagree that CSR is a determinant for corporate reputation.
● The overall average mean value of perceived service quality is 3.27 which shows that
respondents agree that perceived service quality is important factor that affect corporate
reputation.
● The overall average mean value of brand image is 3.10 which shows that respondents agree
that brand image is important factor that affect corporate reputation.
● The overall average mean value of corporate reputation is 2.62 which shows that
respondents disagree on corporate reputation.

Table: 5.1 Summary of Descriptive Findings

Variables N Mean Std. Deviation

CSR 163 2.76 1.052

59
 Perceived Service Quality 163 3.27 1.140

Brand Image 163 3.10 1.22

Corporate reputation 163 2.62 1.170

The descriptive finding shows that perceived service quality has the highest mean of 3.27
among the two independent variables. This shows that if the Ncell’s services are perceived as
better than that can leads towards corporate reputation.
Similarly, the dependent variable, corporate reputation has mean 2.62 and standard deviation
of 1.170. This shows that corporate reputation of Ncell are not quite affected by CSR. Standard
deviations of all variables are around the level of 1.00 which depicts that variation in responses
of the respondents was not high.

The significance of the hypothesis between the variable are also analyzed from the significant
value drawn from the sample. All null hypotheses are rejected, which mean alternate
hypothesis are accepted.

The following five hypotheses were tested during this study:

H1: Corporate Social Responsibility has a significant relationship with Brand Image.

H2: Perceived Service Quality has a significant relationship with Brand Image.

H3: Brand Image has a significant relationship with Corporate reputation.

H4: Perceived Service Quality has a significant relationship with Corporate reputation.

H5: Corporate Social Responsibility has a significant relationship with Corporate

reputation.

Table 5.2 shows the results of descriptive analysis and hypothesis testing result as follows:

Table: 5.2 Summary of Hypothesis

Estimate
Hypothesized Relationship
Mean Correlation/Significance Conclusion

H1: CSR BI 2.76 0.627 Supported

60
 H2: PSQ BI 3.27 0.556 Supported

H3: BI CR 3.10 0.657 Supported

H4: PSQ CR 2.61 0.556 Supported

H5: CSR CR 2.62 0.627 Supported

In Table 5.2, CSR: Corporate Social Responsibility, PSQ: Perceived Service Quality, BI: Brand
Image and CR: Corporate reputation
The results of test of hypothesis indicated that there exists positive correlation between CSR
activities and brand image. Hence, hypothesis one “Corporate social responsibility has a
significant relationship with brand image.” is supported. The results of test of hypothesis
indicated that there exists positive correlation between perceived service quality and brand
image. Hence, hypothesis two “Perceived Service Quality has a significant relationship with
brand image.” is supported. The results of test of hypothesis indicated that there exists positive
correlation between brand image and corporate reputation. Hence, hypothesis three “Brand
Image has a significant relationship with Corporate reputation.” is supported. The results of
test of hypothesis indicated that there exists positive correlation between perceived service
quality and corporate reputation. Hence, hypothesis four “Perceived Service Quality has a
significant relationship with corporate reputation.” is supported. The results of test of
hypothesis indicated that there exists positive correlation between CSR and corporate
reputation. Hence, hypothesis five “Corporate Social Responsibility has a significant
relationship with corporate reputation.” is supported.

5.2 Conclusion

Nowadays, competition is more intense in the manufacturing and services sectors, which makes
corporate reputation more prominent than past. Corporate reputation leads to a positive face to
face advertising, creating substantial obstacles for opponent, invigorating company in
responding competitive threats, creating more sales and more revenue and declining customers’
sensitivity to opponents’ marketing efforts. Corporate reputation is, generally, important from
various aspects. Positive corporate reputation helps organization determine predictable growth
in terms of sales and increase brand image and equity. Furthermore, it is more likely that
customers familiar with an organization brand recommend it to their friends and relatives,

61
hence, affect product evaluation and feedback cycle of organization, which has a vital
importance in recent business environment.

The aim of this study was to understand the relationship of CSR on corporate reputation from
the perspective of the consumers. The results of the study are believed to put significant
contribution to practice and literature since CSR can be defined as a new, but rapidly growing
platform for relationships building with various stakeholders and forming positive image of
the brands in their eyes. As true for every philanthropically activities, CSR is eagerly explored,
dug up, and utilized by the companies. Therefore, research is timely and needed to ensure some
direction in this quest.

The results of this study shows CSR, perceived service quality and brand image are significant
drivers of corporate reputation. Corporate reputation is positively affected by the advertised
CSR and the quality of services perceived by the customer. Thus, companies may work on
conducting more CSR activities to draw the attention of their consumers. Companies that want
to run effective CSR campaigns should take into consideration the values offered to the society
through these campaigns and what makes the consumers more likely to be develop positive
corporate reputation.

Since the degree to which CSR commitments translate into corporate benefits is contingent on
how well consumers recall and recognize CSR endeavors (Green & Peloza, 2011) , the limited
respondent knowledge of CSR should be of concern to managers. The study clarifies that the
extent to which consumers are aware of, interested in and able to remember CSR initiatives
depends not only on the explicitness of CSR communication, but more inherently, on their
level of involvement in CSR decision-making. Managers failing to encourage interactive CSR
communication offer limited incentives for consumers to feel influential and gain emotional
value from a brand image. Executives are encouraged to listen and respond to ethically
conscious and influential young adult consumers through communication which is open to their
suggestions in terms of influencing CSR initiatives and directions. The implications are that
engaging consumers in CSR decision-making can protect and enhance their brand image and
corporate reputation.

Thus, the research shows that the corporate social responsibility has relationship with the
corporate reputation. The information that obtained will be able to give helpful information to
the business personnel and executive in identifying the factors that corporate reputation. It
helps them to further understand and intensify CSR activities for higher corporate reputation.
62
The information of this research, may an industry or organization as well as other businesses
to take the right action in building corporate reputation via number of CSR activities.

5.3 Recommendation for Future Research

It is known that corporate social responsibility is being more popular among all level of
organization which has been able to draw the attention of researchers. The primary objective
of this research is to study influence of CSR on corporate reputation, in light of determinants
derived from extensive literature review. Besides CSR, PSQ and BI are other factors that can
have effect on corporate reputation. So, other variables can be taken into consideration for
future research. So there are lots of areas which need further study and some recommendations
are follows:

• This study is purely an academic research, so sample size is small. For the professional
research purpose, in order to reduce the error and to make the result more pervasive
sample size should be increased.
• This research was confined within Kathmandu valley.
• This study has taken only considers PSQ and BI which affect corporate reputation at
through CSR. Besides there might be other factors relating to CSR and corporate
reputation. So other variables can be taken into consideration for future research.
• The data were collected only through an online source like Google Form, survey form
and Facebook. Further studies can collect the response through conducting a detailed
interview technique to understand the CSR and corporate reputation.

Whilst the research has limitations common to qualitative research in terms of its
generalizability, the research objective of exploring a relatively under-researched area of CSR
and its effects on corporate reputation made the choice of a qualitative research methodology
appropriate. The influence of interactive CSR vs non-interactive CSR communication would
be an interesting avenue for future research, exploring in particular the degree to which
interactive CSR communication has a similar potential influence on corporate reputation for
corporations operating in other sectors, consumer segments and national contexts.

Finally, this research provides a scope for several other researchers who want to research in
CSR and its relationship with corporate reputation. It can aid Ncell marketing team in the
development of strategies to develop corporate reputation. So, it leaves a room for further
research to expand and explore more related strategies

63
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 7 ANNEXURE

Corporate Social Responsibility as a determinant of Corporate reputation:

A case study of Ncell Nepal
This questionnaire is made in order to collect data for a study ‘Corporate Social Responsibility
as a determinant of Corporate Reputation: A case study of Ncell Nepal”. The researcher would
like to thank you for your time in filling out this questionnaire.

Yudina Poudel

1. Gender

Female Male
2. Age

18-23
24-29
30-33
3. Income level (per month):

Less than 10 000 NPR Between 10 000 to 20 000 NPR

Between 20 000 to 30 000 NPR More than 30 000 NPR
4. Occupation

Student Employee
Manager Unemployed
Freelance Entrepreneur
For each statement, please express your opinion by marking the extent to which you believe to
be true. Measurement scale:
1= strongly disagree, 2= disagree, 3= neither agree nor disagree, 4= agree, 5= strongly agree
Corporate Social Responsibility

1. Ncell emphasizes the importance of its social

1 2 3 4 5
responsibilities to the society.

2. Ncell contributes to schools & parks according to the needs

of the society.

3. Ncell contributes to campaigns and projects that promote the

well-being of the society.
4. Ncell participates in activities, which aim to protect and
improve the quality of the natural environment.

5. Ncell makes sufficient financial contribution to charities.

6. Ncell provides full & accurate information about its products

to the customers.
 7. Ncell tries to help the government in solving social problem.

Brand Image

Brand Awareness

8. The names of these brands are well-known 1 2 3 4 5

9. I can recognize their brands among competitive brands
10. These are the leading brands among competitors
Brand Loyalty

11. The products of Ncell are my first choice

12. Even with many choices, I shall not choose alternative
brands
13. I am loyal to these brands of Ncell
Brand Satisfaction

14. The products of Ncell usually meet my expectations

15. The products of Ncell are at the desirable level
16. The products and services of Ncell completely satisfy my
telecommunications needs

Perceived Service Quality

17. The network coverage of Ncell is good 1 2 3 4 5

18. The voice quality of Ncell is good
19. The data services (2G/EDGE/3G/LTE) of Ncell are fast and
reliable
20. Ncell provides simplified billing resolution of billing issues
21. The customer service representatives are courteous and
knowledgeable

Corporate Reputation
1 2 3 4 5
22. Ncell has good reputation among its users.

23. Ncell is well respected & well thought of service provider

in Nepal.

24. Ncell is reputable service provider.

25. Ncell has a superior status among competitors.

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