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Corporate social responsibility in health sector: A case study in the government hospitals in Medan, Indonesia


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Contemporary society demands that every organization operate with a sense of social responsibility. Many organizations now include corporate social responsibility (CSR) activities in their work programs. In the health sector, however, the role of CSR has not been studied as intensively as in private corporations because the services provided by the health sector are already valued as directly serving humanity. This research aims to evaluate the impact of CSR on the health sector, specifically on government hospitals. This model was developed by analyzing the influence of CSR on hospital reputation, customer loyalty, and hospital values. By answering questionnaires, a total of 200 hospital patients from four government hospitals participated in the study. The proposed model was evaluated using path analysis with AMOS tools. The results of this study provide empirical evidence that overall, CSR positively affects the reputation of the hospital, patient loyalty, and hospital value. Although there is a direct negative effect of CSR on hospital value, the larger influence of indirect effect that occurs through the mediating role of reputation and patient loyalty variables shows that CSR is able to increase the hospital value. Practically, these results imply that CSR should be applied as a strategic tool in improving the value of the hospital.
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2018 19: 25–36
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by Carroll (1991) indicates that the elements of volunteer-
ing and charity in CSR activities are just a small portion of
aseries of organizational goals.e concentric circles of
CSR state that CSR is an organizational obligation to create
a better life (Geva 2008).CSR is an important marketing
tool that is largely considered able to promote the com-
pany’s competitive advantage, reputation, and performance
in both private and government-owned companies.
CSR activity is perceived as being able to generate an
organizations good reputation among stakeholders in the
long term (Susanto 2009).In the context of hospital ser-
vice, the implementation of CSR is generally performed in
line with hospital operations.CSR activities conducted in
hospitals involving patients are able to create perceptions
in the minds of patients (Bosho and Gray 2004, Tian et
al. 2011, Mostafa 2005). However, unlike CSR activities in
the private sector that mainly focus on outside working en-
vironment (Handayani et al. 2017), hospital CSR activities
Arlina Nurbaity LUBIS
Faculty of Economics and Business, Universitas Sumatera Utara, Medan, 20155 Indonesia
Received 14 December 2017; accepted 06 March 2018
Abstract. Contemporary society demands that every organization operate with a sense of social responsibility.Many organiza-
tions now include corporate social responsibility (CSR) activities in their work programs.In the health sector, however, the
role of CSR has not been studied as intensively as in private corporations because the services provided by the health sector are
already valued as directly serving humanity.is research aims to evaluate the impact of CSR on the health sector, specically
on government hospitals.is model was developed by analyzing the inuence of CSR on hospital reputation, customer loyalty,
and hospital values.By answering questionnaires,a total of 200 hospital patients from four government hospitals participated in
the study.e proposed model was evaluated using path analysis with AMOS tools.e results of this study provide empirical
evidence that overall, CSR positively aects the reputation of the hospital, patient loyalty, and hospital value.Although there is
a direct negative eect of CSR on hospital value,thelarger inuence of indirect eect that occurs through the mediating role
ofreputation and patient loyalty variables shows that CSR is able to increase the hospital value.Practically, these results imply
that CSR should be applied as a strategic tool in improving the value of the hospital.
Keywords: corporate social responsibility, hospital reputation, customer loyalty, hospital value.
JEL Classication: H75, L20, M14.
Corporate social responsibility(CSR)refers to a compa-
ny’s strategic actions in carrying out its business activities
in an ethical and social sphere (Aguilera et al. 2007, Tai
and Chuang 2014).e core concept of CSR is related to
empowering stakeholders and taking advantage ofavail-
ableresourcesin business activities (Bhattacharya et al.
2009).e scope of CSR activities is diverse, ranging from
cooperation, maintaining good relationships with employ-
ees and other stakeholders, and even activities inprotecting
the environment(Ismail2009, Babiak and Trendalova
2011, Frynas 2009, Torugsa et al. 2013).
e classical view of CSR only focused oncharitable
activities or solving social problems. Nowadays, this par-
adigm has shied as the business responsibility to solve
environmental and social problems (Handayani et al.
2017, Lee2008, Secchi2007). e CSR scheme proposed
that are conducted outside of the focus of healthcare ac-
tivities are deemed to disrupt the services.By considering
some aspects related to public awareness of the healthcare
sector, this study attempts to empirically evaluate the eect
of CSR on hospital value, reputation, and loyalty of patients
in state-owned hospitals in Medan City, Indonesia.is
study is valuable and has novelty due to the fact that CSR is
generally done by the private sector (e.g. Khan 2010, Lima
Crisóstomo et al. 2011, Fia 2012, Snider et al. 2003). As
a result of CSR usually being conned to the private sec-
tor, its practice in both government-owned agencies and
healthcare sector has attracted less attention.Publication of
CSR activities of private sector hospitals encourages public
trust in the use of private services rather than government
agencies, such as public hospitals (Pivato et al. 2008). is
leads to the phenomenon where private healthcare services
have a higher demand than that of government-owned hos-
pitals. is has encouraged the local government to start to
implement CSR in the regional hospitals they own.In the
last three years, government hospitals in Indonesia have
consistently performed CSR activities such as free eye treat-
ment and public health education, including healthy life-
style activities targeting a range of people from elementary
school children to students in higher education. For in-
stance, the government hospitals in Medan City have been
implementing such activities for the last three years. is
study was driven by the interesting question of the extent
to which the CSR in government hospitals is able to aect
reputation, value, and customer loyalty. is ultimately is
expected to have an eect on hospital performance in both
satisfaction of customer and nancial benet. is study
attempts to provide an insightful overview that focuses on
the patient’s perspective in evaluating the impact of CSR ac-
tivities implemented by government hospitals, rather than
focus on internal assessment of hospital service. Moreover,
this study is unique in that it investigates CSR in the health-
care sector which is considerably dierent from previous
studies that give more emphasis to the private sector.
1. Literature review
Corporate social responsibility and hospital reputation
Schermerhorn (2016) and Kurniawan (2017) states
thatgenerally there are four levels of CSR actions: prot-
ability, legitimacy, ethics, andphilanthropy. ese four are
grouped into two main groups. e rst group deals with
the scope of the company’s obligations that intersect with
applicable law.e other group relates to the persuasive
sphere leading to voluntary action.CSR is regarded as one
of the mostinstrumentalfactorsin beating the competi-
tion in the market (Wall 2008).Now, the community is
also strongly reacting to CSR activities that are considered
benecial to the community.CSR activities in the context
of hospitals generally relate to the education of paramedical
teams, health seminars, and charity activities for the public
to improve public health in general.CSR will strengthen the
reputation of the hospital as CSR activities conducted by the
hospital increase.Some studies, such as those by Susanto
(2012) and Gazzola (2014), identify a strong relationship
between CSR and the company’s reputation.Moreover,
Inleh, Bartlett, and May’s(2011) study reveals that one of
the reasons companies do CSR is that they do not lose
public reputation.
Doda’s (2015) study suggest a link between CSR prac-
tices and corporate reputat ion. is value is gained through
a comprehensive set of actions, involving consumers, in-
ternal human resources, client networks and innovation
exploration to add value to CSR practices. Dean (2003) pro-
vides empirical evidence of a positive relationship between
reputation moderated by certain types of donations with
CSR practices. McWilliams, A. (2000) states that CSR can
be used as a means to enhance the company’s reputation.
Other studies provide similar evidence (e.g Morsing and
Schultz 2006, Kotler and Lee 2008, Lai et al. 2010). More
specically in the health sector, Bear et al. 2010) suggest that
CSR ratings is less likely able to have a signicant eect in
the relationship between gender diversication in the board
of directors and corporate reputation. Clarke and Gibson-
Sweet, (1999) disclose that rms with high levels of public
scrutiny, as in the health sector, tend to use annual reports
to improve the reputation of the community.
Corporate social responsibility and customer loyalty
Previous studies have suggested that loyalty plays an im-
portant role in the long-term growth and sustainability
of a company’s business.Loyalty becomes more than the
ultimate goal of marketing(MandhachitaraandPoolthong
2011).In line with the concept of consumer behavior, con-
sumers would be more loyal to products that contain ethi-
cal elements and companies that consistently implement
CSR activities.Consumers consider CSR actions a factor
in evaluating the product of a company that leads to loyal
behavior (Öberseder et al. 2013).In this context, the hospi-
tals must consistently implement and budget CSR activities
in an eort to reach consumer loyalty.
Furthermore, a study from Vlachos et al. (2009) which
states that prot motive-based CSR has negative eect on
overall CSR value, has relevance and implication on health
sector, which generally implement social and humanity
based CSR (Grandón and Reinoso 2016, Mukhopadhyay
et al. 2014). In relation to loyalty, many studies show that
CSR is more likely able to increase the consumer loyalty
(García de los Salmones Sánchez et al. 2005). Whereas,
Sen and Bhattacharya (2001) reveal that under certain
circumstances, CSR is able to reduce consumer interest in
using company products. e model developed by Luo and
26 A. N. Lubis. Corporate social responsibility in health sector: a case study in the government hospitals...
Bhattacharya (2006) demonstrates the relationship between
CSR and customer satisfaction, which in turn can increase
the market value of the company.
Corporate social responsibility and hospital value
People are now increasingly conscious of human rights
and ethical behaviors which impacts the strong poten-
tialinuence of a company’s CSR activities. Brandaoet
al. (2013)reveal a new paradigm for an approach to social
responsibility in hospital management in whichhospitals
can perform CSR activities actively or passively.e ap-
proach to social responsibility that has been developed
and implemented by the private sector can now benet the
health services sector such as hospitals(Semplici 2011).In
a competitive market, the proper implementation of CSR
will likely increase the value of the hospital as CSR actions
will improve the eectiveness and eciency in providing
health services(Brandaoetal.2013).
CSR activities can attract the attention of workers as
well as shape the behavior expected of patients and para-
medics.is will encourage increased eectiveness and ef-
ciency of health services provided.However, some previ-
ous researchers indicated that CSR has no impact or even a
negative eect on the value of the hospital.Gherghinaand
Vintila (2016)show that there was no relationship between
CSR and corporate value, particularly in the form of CSR
stakeholders.In that study, the CSR activity was focused
on environmentalconservation. Communities are more
receptive to CSR actions related to the environment than
other forms such as education and counseling.Srivastavaet
al.(2012)asserts that CSR does not always bring increased
value and is even likely to decrease the consumer’s perceived
valueof the company.Sincepoorly implemented CSR ac-
tions may impair perceptions of value, the company’s social
responsibility to the environment in this case should be
applied wisely.
Hospital reputationand customer loyalty
Marketing literature suggests that customers evaluate their
perceived performance of a corporation and its product
based on its reputation.A stronger reputation will gain
more trust and customer loyalty (Keh andXie2009, Shirazi
et al.2013, Wahyuni and Ginting 2017).Brand identica-
tion theory also suggests that there is a positive relationship
between corporate reputation and customer loyalty.Hence,
a well-known product will be more likely accepted by new-
comers (Marinetal.2009).
A study from Bontis, Booker, and Serenko (2007) and
Budiharseno (2017) suggest that reputation aects loyalty.
Weiwei (2007) and Nugroho et al. (2017) state that with
respect to the nature of intangible in service business, the
use of the company’s physical aspects, direct contact and
communication is necessary to build a reputation for in-
creasing consumer loyalty. In addition, some studies (Helm
et al. 2010, Walsh et al. 2009) also reveal direct relationship
between company reputation and loyalty. In the context
of health sector, Bosho and Gray (2004), Wu (2011) and
Naidu (2009) show that assurance and the service quality
of hospital nurses has a positive impact on both satisfaction
and patient loyalty.
Hospital reputation and hospital value
As an action based ona cost-benetanalysis,CSR should
be able to increase the company›s value through the cre-
ation of reputation and competitive advantage in the long
term.However, the current study still does not provide
sucient evidence that CSR is likely able to increase the
value of the company as a whole.For instance, Doda (2015)
shows that CSR activities do not have an impact on com-
pany value. CSR is no longer just about social charity; it has
become an eective marketing tool used to promote the
image and value of the company(Folajin et al.2014,Geva
e relationship between the reputation and value
of a company has been identied as a valued relation-
ship (Knight and Pretty 2001). Companies that have a
high reputation will likely attract the attention of better
resources that can be used in increasing the value of the
company. Moreover, consumer perceptions of company
value will increase in well-known companies compared to
those which are lesser known.Haghkhah et al. (2013) states
that reputation is a source of growth and development in an
enterprise.Nicklin and Dickson (2009) state that reputation
in the form of hospital accreditat ion plays an important role
in the perception of the value of a hospital to the public.
Customer loyalty and hospital value
Many ndings of previous studies suggest that companies
carry out CSR activities to practically gain an edge and
sustainable growth in the long term(Carrolland Shabana
2010, KorkchiandRombaut 2007,Nasieku et al.2014).
However, it is worth noting that CSR may not solely achieve
decisive long-term benets for the company; it is consid-
ered to have costs as well. CSR activities require a certain
amount of costs to be incurred by the company.Some
studies argue that CSR will not likely be able to increase
the value of the company because of its very high level of
uncertainty. Four percent of the economic intelligence units
consider CSR to be entirely detrimental to the company
(Lev 2013).
In the health sector, such as in hospitals, the healthcare
provider’s reputation has an imp ortant role in attracting the
attention of consumers to use the health ser vices provided,
in addition to attracting awareness from others in the health
Business: eory and Practice, 2018, 19: 25–36 27
sector.is may be because a good reputation, for example
in terms of a healthcare provider’s service and hygiene, is
considerably demanded by users. Most people will very
likely not want to use the services of a hospital that does
nothave a good reputation.Most importantly, the hospi-
tal users will pay attention to hospital services and quality
problems, especially regarding hospital success rate and risk
of treatment failure(Meyeret al.2004). e patient’s loyalty
to the hospital also plays an important role in achieving
long-term growth.Marketing experts identify that one of
the expected behaviors of loyal consumers is the consump-
tion of services rendered, or the use of repeat services in the
future (Kotler and Keller 2012).
Kotler and Keller (2012) state that customer loyalty is
the key to achieving long-term growth and business conti-
nuity.e cost of acquiring new customers is generally ve
times more expensive than maintaining existing custom-
ers.Moreover, loya l customers will invite new prospects at no
additional cost.It becomes a potential for generating prots
for the company in t helongterm.e generated protscould
be used as investment to increase eectiveness and eciency
of existingservices that have an impact onbetter value.
2. Researchmodel andhypotheses
In line with the literature study conducted, the research
model was developed to meet the objectives of this
study.e model proposed in this study is summarized
in Figure 1.
In accordance with the prop osed model, this study pro-
posed eight hypotheses as follows:
– H1: ere is a direct positive inuence of CSR on hos-
pital reputation
– H2: ere is a direct positive inuence of CSR on cus-
tomer loyalty
– H3: ere is a direct positive inuence of CSR on hos-
pital value
– H4:ere is a direct positive inuence of hospital
reputationoncustomer loyalty
– H5: ere is a direct positive inuence of customer
loyalty on hospital value
– H6: ere is a direct positive inuence of hospital
reputation on hospital value
– H7: ere is a mediating role of hospital reputation
in strengthening the relationship between CSR and
hospital value
– H8: ere is a mediating role of customer loyalty in
strengthening the relationship between CSR and hos-
pital value
3. Research method
is study focuses on the patients perspective in evaluat-
ing the impact of CSR activities imposed by government
hospitals.erefore, the sample criteria are the patients
who know the CSR activity of the hospital.According to
Ghozali (2011), the minimum sample criterion for a path
analysis is 200–300. To get representative samples from
each hospital,50 inpatients from each one were randomly
invited toparticipate in this study.Participants were invited
randomly according to the list of patients present in each
hospital.If a selected sample was not willing to participate
in the study or was unable to participate because the select-
ed sample was out-patient, the samplewould be replaced
with a randomly selected sample that met the minimum
requirements.In thisstudy,allselected sampleswere able
to participate.
Location and time ofresearch
In terms of research location, this study was conducted
in the city of Medan, North Sumatra, that has four gov-
ernment hospitals: Putri Hijau Hospital, Haji Hospital,
Pirngadi Hospital, and Adam Malik Hospital. is study
was conducted from June to September, 2017.
Research scheme
e researcher visited four government hospital in Medan
to conduct the research. As the researcher visited, the par-
ticipants were gathered in the hall. Researcher give the basic
knowledge of CSR activities conducted in hospital, loyalty,
reputation, and value to the participants before collecting
the data. e researcher was accompanying the patients in
case they had a question about the statements.
is research was conducted using questionnaires as the
source of the data acquisition about patient perception of
the variables.Questionnaires were arranged based on the
Figure 1. e proposed model of CSR impact in government
28 A. N. Lubis. Corporate social responsibility in health sector: a case study in the government hospitals...
literature review and adjusted in line with the current situa-
tion in government hospitals in Medan City.e study also
interviewed inpatients who were randomly selected in an
eort to obtain specic information regarding the actual
situationinthegovernment hospitals.Documentation was
also conducted in an eort to obtain the necessary data in
discussing this research.
Validity and reliability
e distributed questionnaire has passed the validity test,
tested by Pearson Correlation, as well as a test of the reli-
ability of the instrument by using Cronbach’s Alpha. Both
instruments were used to ensure that the data measured
through the questionnaire is accurate and correct in mea-
suring each variable.e research questionnaires were
prepared with operationalization as shown in Table 1.
Data in this research was analyzed by using path analysis
with regression method.e statistical tool used in as-
sessing the path coecient estimation was the Analysis of
Moment Structures (AMOS).A Likert scale was used to
measure the patient’s perception of research variables.e
variable score of each patient is the average value of each
variable with the consideration of the number of dierent
indicators for each variable.
is research proposes a CSR model with the assump-
tion that CSR is able to aect the reputation of the hos-
pital, patient loyalty, and the value of government hospi-
tals.Reputation and loyalty both serve as mediating vari-
ables in an eort to increase the value of the hospital.is
study evaluated direct, indirect, and total inuence of the
CSR on the hospital reputation, loyalty, and hospital val-
ue.edirect, indirect, andtotal inuence were estimated
by AMOS soware, while the estimate of the signicance
of theindirecteect, of the relationship between the CSR–
hospital reputation – hospital value, and between the CSR
the customer loyalty – hospital valuewas evaluated by using
Sobel Test (Sobel 1982).
4. Result and discussion
Descriptive statistics
is study used descriptive statistical analysis to evalu-
ate the perceptions of inpatients about CSR practices that
have been implemented by hospitals, patient loyalty levels,
hospital reputation, and their perception of overall hospital
values.e value used is based on the average score of each
variable.e value of the mean or average score used was
to avoid score bias due to an unequal number of indica-
tors in each variable.e descriptive statistical tools used
in the analysis are the maximum, minimum, average, and
standard deviation values.Descriptivestatistical resultsare
summarized in Table2.
Table2shows that inpatients assessed perceived the level
of implementation of CSR at government hospitals as rela-
tively good with an average score of 3.13 from a ve-point
Likert scale. e level of the standard deviation(STDEV =
1.08)indicates that the response of the patient varies con-
siderably.Many implementations of CSR applied by govern-
ment hospitals are not well p erceived by the patient.A high
range of answers conrm that although there are patients
who are perceive CSR programs as very good,some do not
feel the same way.ey did not respond well to the CSR
program that the hospital applied.
Table 2 also indicates that the general reputation of
the hospital for patients has been good with an average
score of 3.70 on a scale of 5.00. e hospital is perceived to
have a good image in the public. is is a good sign for the
ma nagerial practices of CSR of government hospitals, in-
dicated by a small value of standard deviation. In line with
the reputation, generally inpatients of government hospitals
have a high level of loyalty. is is likely to enable the hospi-
tal management to expect future visits from these patients
Table 1. Operational denition and instrument reliability
Variables Operational denition Number of
rate Social
Patients’ perceptions
of the actionsof
applied by the hospital
6 0.871
Patient perception of
hospital health care
14 0.735
Consumer behavior
that shows repurchase,
retain, and recom-
mend attitudes
19 0.722
Perception of hospital
values based on nan-
cial aspects, eective-
ness, and eciency of
health services
9 0.924
Table 2. Descriptive Statistics Result
Varia b l e Min Max Mean Deviation
Hospital’s CSR 1.00 5.00 3.13 1.08
Reputation 1.60 4.60 3.70 0.54
Loyalty 1.50 4.50 3.53 0.60
Perceived Value 1.30 4.30 3.73 0.57
Business: eory and Practice, 2018, 19: 25–36 29
when they need health services or even advise others to
seek treatment at the hospital.With regard to the hospital
value, inpatients in the study on average consider that the
value of public hospitals is relatively good.is assessment
is based on three main aspects, namely nancialservices,
eectiveness, and eciency of hospital services rendered.
Path analysis
e model evaluation performed using a path analysis with
AMOS identied that CSR only explained 7.7 per cent of
the variance of hospital patient loyalty.Moreover,CSR and
the hospital reputation together account for 71 per cent of
the variance of patient loyalty.In this case, reputation plays
a major role in explaining the loyalty of the patient.In con-
nection with the value of the hospital, the three variables
of CSR, customer loyalty, and hospital reputation are able
to explain 66 per cent of variance.Based on the statistical
value of squared multiple correlation, the model proposed
in this research is able to predict the impact of CSR on the
government hospitals in Medan City.
e results of the estimation of the AMOS diagram used
in evaluating the research model are presented in Figure 2.
e results of the estimated value and hypothesis testing
of direct inuence between variables are summarized in
e direct eect
Table3indicates that CSR has a positive and signicant
impact on the reputation of the government hospitals, in-
dicated by the statistical result of hypothesis one of critical
ratio (C.R) 3.282 and p-value 0.001.Hence, there is statisti-
cal evidence to suggest that the more appropriately the CSR
is applied and well-perceived by the patient, the higher the
reputation the hospital gains.Since the rst hypothesisis
supported by statistical analysis, the hypothesis one stating
that there is a direct and positive inuence of CSR on the
hospital reputation is accepted.
e statistical analysis reveals that CSR has a positive
and signicant eect on the loyalty of inpatients, indicated
by the value of C.R and p-value of hypothesis two of 2.970
and 0.00, respectively.Accordingly, hypothesis two stating
the eect of CSR on customer loyalty is accepted. is allows
that patients will likely become more loyal as CSR activity
is implemented by the government hospitals.
Hypothesis three tests the eect of CSR activities on
the hospital value.e statistical testing reveals that there
is a negative and signicant impact of CSR on the value
of the hospital, indicated by the negative value of C.R
–2.905. Although the relationship is signicant, the nega-
tive sign proves that there is no direct inuence of CSR
on the hospital value. erefore, hypothesis three testing
the inuence of CSR on the hospital value is not statisti-
cally supported.
Furthermore, Table 3shows that the reputation of the
hospital is more likely perceived to have a positive eect on
loyalty of patients. is is supported by the statistical result
of C.R and p-value of 16.014, and 0.000, respectively. is
result statistically supports hypothesis four stating that CSR
has a direct and positive inuence on the patient loyalty in
hospital governments in Medan City. It means that the more
CSR programs are implemented by hospital governments,
the higher the customer loyalty will be.
Hypothesis ve tests the impact of the hospital reputa-
tion on the hospital value. e statistical testing reveals that
the reputation of hospital is likely perceived to have a posi-
tive and signicant impact on the value of the government
hospitals.is is indicated by the value of C.R of 1.983, and
Figure 2.AMOS path for estimate of CSR impact model
Table 3. Path analysis estimate and hypothesis testing
Hypotheses Estimate S.E C.R p-value Result
H1 Reputation CSR 0.155 0.047 3.282 0.001 Accepted
H2 Loyalty CSR 0.073 0.025 2.970 0.003 Accepted
H3 Value CSR –0.084 0.029 –2.905 0.004 Rejected
H4 Loyalty Reputation 0.707 0.044 16.014 *** Accepted
H6 Value Reputation 0.173 0.087 1.983 0.047 Accepted
H5 Value Loyalty 0.735 0.100 7.319 *** Accepted
*** signicant at <1%
30 A. N. Lubis. Corporate social responsibility in health sector: a case study in the government hospitals...
signicance level of 0.047. According ly, the hypothesis ve
is statistically supported. It means that the higher the hos-
pital’ reputation, the higher the hospital value.
Finally, hypothesis six tests the inuence of customer
loyalty on the hospital value. e statistical analysis shows
that there is a positive and signicant impact of customer
loyalty on the value of government hospitals, indicated by
the value of C.R of 7.319, and p-value of 0.000, meaning
that the more loyal patients in the hospital are more likely
to perceive increased value of the hospital.
e indirect eect
In order to evaluate the indirect eect of both mediating
variables of hospital reputation and customer loyalty in
strengthening the relationship between CSR programs and
the hospital value, this study used the Sobel test.e test
results of the Sobel testare summarized in Table4.
Table4 shows the indirect eect of CSR on the hospital
value through the mediating role of hospital reputation.
e result of Sobel test, indicated by the p-value of 0.006
demonstrates that there is a positive and signicant impact
of CSR on the hospital value. is means that the medi-
ating variable of customer loyalty is able to strengthen
the relationship between CSR and the hospital value.
Moreover, the relationship is likely to be stronger aer
the mediating variable of reputation is included, indicated
by the p-value of 0.000, and the value of indirect eect of
0.161. is means that the reputation together with loyalty
has a considerable role in an eort to increase the level
of the hospital value by conducting CSR activities. e
CSR, henceforth, is better able to enhance the reput ation of
government hospitals that will ultimately improve the pa-
tient’s perception of the value of the hospital.Accordingly,
the hypotheses sevenand eight are statistically supported.
e CSR Impact model proposed in this study provides the
indirect eect of CSR on the value of government hospi-
tals.Both the reputation and the loyalty of the patient are
also proved to signicantly play a role as intermediary vari-
ables that have an intervening eect on CSR in increasing
the hospital value.e direct, indirect, and total inuence
are summarized in Table5.
Table5shows that although directly CSR has a negative
impact on the hospital value, overall, CSR is more able to
increase the hospital value by inserting the mediating role
of the hospital reputation and patient loyalty.
5. Discussion
Direct eect of CSR on hospital reputation
e results indicate that CSR activities conducted by gov-
ernment hospitals will likely be able to improve the reputa-
tion of the hospital.According to reputation management,
an organization had to carefully set policy and action in
order to create hospital reputation among stakeholder in
long-term (Susanto 2009). Our ndings support the fact
that many organization commit to do CSR due to threat of
losing reputation for long term (Inleh et al. 2011). Susanto
(2012) and Gazzola (2014) also stated that CSR will en-
hance organizations reputation. Any CSR activity that is
announced or published will have more impact on the
company’s stakeholders.e community now has a very
high awareness of the “green-activities” and CSR activities
undertaken by the company, especially CSR that supports
the welfare of stakeholders in general.In this study, patients
were asked to respondto a credible form of CSR that has
been implemented by the hospital.When CSR activities
such as health education, providing free ser vices, and doing
Table4. Sobel test for indirect relationship
Path Indirect Eect p-value* Evaluation
CSRLoyalty Valu e 0.052 0.006 Accepted
CSRReputationLoyaltyValue 0.161 *** Accepted
* Calculated using Sobel test, *** Signicance value <1%
Table 5. Direct, indirect, and total eect
Independent Variable Dependent Variable Mediating Variable Direct Eect Indirect Eect Total Eect
CSR Loyalty Reputation 0.073 0.110 0.183
CSR Reputation 0.155  0.155
Reputation Loyalty 0.707  0.707
Loyalty Value 0.735  0.735
Reputation Va lu e Loyalty 0.173 0.520 0.707
CSR Valu e Loyalty; Reputation –0.084 0.161 0.077
Business: eory and Practice, 2018, 19: 25–36 31
devoted work are well perceived by the patients, in their
minds it is also attached to the stronger reputation of the
hospital.Reputation is associated witha good impression of
the service, impression of service reliability, the impression
of the service perception, the impression of good manage-
ment, and most importantly a general good impression by
stakeholders. erefore, in order to gain much more repu-
tation in public, government hospital must leave positive
impression to their CSR act. e better their CSR activities
perceived by patients, the better their reputation will be
Direct eect of CSR on patients’ loyalty
CSR activities applied by hospital and perceived by patient
are more likely able to encourage patient loyalty.e results
showed that statistically CSR will create patient loyalty to
government hospitals in Medan.Patients, as part of the
stakeholders, will interact directly with the CSR activities
undertaken by hospital.Moreover, unlike common char-
acteristics of CSR in the non-health sector, many of the
hospital’s CSR activities indeed take place in the hospital
environment itself.us, the customer as an inpatient will
become the rst party to have opportunities to interact with
CSR activities implemented.is activity will make people
trust more in these activities.is result is in line with the
studies of Chunget al.(2015), andAilawadiet al.(2014),
though these studies were not conducted specically in
the health sector.
Moreover,the results of this study are also consistent
with DialloandLambey-Checchin (2017), demonstrating
the positive impact of CSR on customer loyalty.When CSR
conducted by government hospitals is positively perceived
by inpatients, they increasingly show loyal behavior.ey
become more condent incommunicating the good experi-
ence at the hospital and recommend it to their colleagues, as
well as indicate the use of health care services in the future.
Our nding showed that even though the statistical result
of path coecient is relative small (less than 0.1), CSR is
signicantly able to aect the patients’ loyalty. Hence, pa-
tients will get more loyal to the gover nment hospital as they
perceived a better CSR activities implemented.
Direct eect of CSR on hospital value
e results indicate that CSR has a direct, negative and
signicant inuence on the hospital value.e result imply
that CSR activities, given there is no impact on reputation
and loyalty, will reduce the overall hospital value.e results
indicate that CSR has a direct and negative inuence on
the hospital value.is is seemingly caused by the budget
implementation of CSR activitieswith regard to the im-
position of operating costs that would make the patients
perceive that the hospital will nancially deteriorate at a
given level.is result is consistent with Srivastavaetal.
(2012), suggesting that CSR does not always have a posi-
tive impact on hospital values.Although it is in its initial
development, CSR would impose relatively large additional
costs, though, in theend,the hospital CSR would provide
benets by increasing levels of eectiveness and eciency
of services in addition to improved nancial performance
hospitalthrough the presence of a more skilled medical
personnel and the potential for morepatients. CSR alone
can be perceived in negative thought such as ineciency
use of service time and personal resource, waste of opera-
tional fund, also inecient schedule for the patients.
Direct eect of reputation in patients’ loyalty
e result regarding the positive relationship between repu-
tation and loyalty, is also supported by previous studies(e.g
Aliet al. 2012, Helm and Tolsdorf 2013).Shirazietal.
(2013)stated that a strong brand identity,for example, a
hospital that has a high reputation,is more likely to result
in consumer condence leading to the loyal behavior of
consumers. Hence, hospitals can update medical equip-
ment and training of medical workers to improve the ef-
fectiveness and eciency of the healthcare services. us,
the more reputable the hospital, the more loyal the patients.
Direct eect of loyalty on hospital value
Customer loyalty will improve hospital value. In accor-
dance with Kotler and Keller (2012), we believed that a
loyal customer will behave in three possible action, (1)
repurchase, (2) retain, (3) recommend. Each act of loyal
customer will improve hospital value. Basically a loyal cus-
tomer will bring more customer while retain themselves. If
hospitals had much more loyal customer, it will bring more
value to the hospital. Loyal customer become a source of
continuous income that can be used to improve hospital
value. Hospital may improve their equipment or undergo
training for medical sta which improve their eectiveness
and eciency level healthcare services. is result is consis-
tent with previous research that states that loyalty is key in
improving the value of business development(Haghkhah
et al. 2013,Keininghamet al. 2008). e statistical analysis
shows that loyalty is more likely able to improve the pa-
tients’ perceived information regarding the nancial aspect,
eectiveness and eciency of services, thereby improving
the hospital value
Direct eect of reputation on hospital value
e statistical testing also shows that there is a positive
and signicant inuence of hospital reputation on the
perception of the hospital value.is is consistent with
previous studies (Eccles et al. 2007, Cole 2012) highlight-
ing thepositive relationship between the reputation and
32 A. N. Lubis. Corporate social responsibility in health sector: a case study in the government hospitals...
value of the company.Reputation has an important role
in the eort to attract the attention of consumers and new
resources for the hospital.For example, doctors who are
more skilled or better paramedics will join a hospital that
has a high reputation.is will encourage the eectiveness
and eciency of health services that impact on the overall
value improvement.
Indirect eect of CSR on hospital value through loyalty
According to our research, most of CSR activities were
directed to the inpatients, thus they will be more likely
to experience the CSR conducted by hospital. It became
the moment of truth between patients, paramedics, and
hospital. As the CSR program delivered smoothly, it is
more likely improving the patients’ loyalty. e more they
loyal the more future nancial ow source established
to hospital. Loyal patient will be likely to repurchase the
services while spreading positive feedback to other. Loyal
patients will be taken care more eective and eciently
through patient database for references. Also, the nancial
ow can be used to improve equipment to operate more
Indirect eect of CSR on hospital value through
Reputation management (Susanto 2009) stated that some
organization commit to do CSR to maintain their reputa-
tion. Gazzola (2014) stated that CSR not only maintaining
the reputation but also improve hospital reputation on pub-
lic opinion. As public opinion increased, it will bring new
source of human resource to improve service quality and
service delivered to the patients. ey will be more eec-
tive and eciently while delivering the healthcare services.
Conclusionand implication
is study provides some important considerations re-
garding the applicability of CSR in the health sector. e
statistical testing of the study model provides empirical
evidence that CSR plays an important role in the creation
of value through the creation of a government hospital
reputation and patient loyalty. It should be emphasized
that by analyzing the Sobel test, the direct negative impact
of CSR will be covered by the strengthening role of hos-
pital reputation and patient loyalty variables.CSR activi-
ties can encourage loyalty and reputation of the hospital
directly. Overall, CSR is more likely to promote the value
of the government hospitals. Hence, CSR activities should
be applied strategically and should be implemented with
regard tothe core business of the hospital. CSR also has
to be communicated properly in the eort to create the
reputation of the hospital.Implementation of CSR is highly
recommended in direct contact with hospital stakeholders
such as patients and paramedics.erefore according to
our research we may conclude that CSR on government
hospital will improve the patients’ loyalty, reputation, and
overall value. However we should pay attention that CSR
should be conducted with care.
e study is fully supported and funded by the Universitas
Sumatera Utara under research grant of Non-PNBP USU
2017, No. 5338/UN5.1.R/PPM/2017, dated May 22, 2017.
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36 A. N. Lubis. Corporate social responsibility in health sector: a case study in the government hospitals...
... L a responsabilidad social corporativa se ha definido como la adopción de una estrategia de negocios enfocada en asumir responsabilidades voluntarias, con la finalidad de obtener mayores beneficios fuera de las ganancias económicas tradicionales (Abu Zayyad et al., 2020;Lubis, 2018). A partir de ello, muchas marcas emiten mensajes publicitarios socialmente responsables con el fin de concienciar a la población sobre diversas problemáticas. ...
... La publicidad con responsabilidad social desempeña un papel importante en el rubro de la salud, ya que es un fuerte impulsor informativo, preventivo y concienciador para la sociedad (Chiang & Jackson, 2016;Lubis, 2018;Mekawie & Hany, 2019). Actualmente, muchas marcas tienen interés por comunicar mensajes publicitarios que demuestren su responsabilidad social y desarrollen un vínculo emocional con los consumidores para que exista un cambio positivo y preventivo en su comportamiento (Fletcher-Brown et al., 2018;Jieun Lee & Hong, 2016;Xu, 2017;Zarouali et al., 2018). ...
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Introducción: Existe una creciente tendencia por parte de las marcas de tratar temas sociales y, en base a ello, los consumidores generan diferentes percepciones. Objetivo: Analizar cómo perciben las mujeres que han superado el cáncer de mama la campaña publicitaria “Ayúdanos a desaparecer el cáncer de mama” de Oncosalud. Metodología: El enfoque fue fenomenológico. Se utilizó la técnica de entrevista semiestructurada, con lo cual se analizaron las percepciones de quince mujeres que superaron esta enfermedad. Resultados: Los resultados indican que las mujeres sobrevivientes al cáncer de mama perciben la publicidad sobre este tema de manera positiva. Ellas exigen que, si la marca va a realizar una campaña sobre un tema tan delicado, el mensaje debe elaborarse de la forma más pulcra posible. Conclusiones: Su difícil experiencia de vida como pacientes oncológicas les otorga una percepción muy particular sobre lo que se debe mostrar tanto en los mensajes audiovisuales como en las redes sociales.
... Також виділяють специфічні та загальні фактори, що впливають на ефективність діяльності підприємства в умовах турбулентності бізнес-середовища. Загальні чинники є характерними всім сфер економіки, тоді як специфічні чинники виявляються умовах певної сфери економіки, чи діють певного господарюючого суб'єкта з урахуванням специфіки своєї діяльності підприємства в умовах турбулентності бізнессередовища [6][7]. ...
... Якщо покупці захочуть зробити повторну купівлю, це вже можна оцінити як показник високої якості товарів чи послуг. Зважаючи на ці аргументи, фірмам, які продають товари та послуги, що оцінюються за критеріями досвіду та довіри, слід інвестувати більш значні кошти у розробку корпоративного іміджу та репутації, ніж компаніям, які продають те, на що існує попит [6][7][8]. ...
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Aim: The study aims to examine the relationships between organizational justice, corporate social responsibility, and job satisfaction among nurses in Jordan. Methods: A quantitative, cross-sectional design was utilized the study utilized a descriptive cross-sectional research design. The study was performed in a single hospital site in Jordan. A total of 178 nurses participated in the study. The Organizational Justice Scale, Corporate Social Responsibility Scale, and the Minnesota Satisfaction Questionnaire were used to measure the primary variables. Ethical approval was given by relevant ethical review boards. Results: Nurses had moderate levels of organizational justice, corporate social responsibility, and job satisfaction. Female nurses were found to have significantly higher levels of ethical corporate social responsibility than male nurses (P<0.05). No other significant differences or relationships were found on the levels of organizational justice, corporate social responsibility, and job satisfaction based on sociodemographic characteristics (P>0.05). Organizational justice had a significant, positive relationship with corporate social responsibility (r = 0.50, p = 0.000). Both organizational justice and corporate social responsibility had significant, positive relationships with job satisfaction (r = 0.60, r = 0.74, p < 0.001) consecutively. Conclusion: Healthcare organizations with high levels of organizational justice and corporate social responsibility reflect work environments that are fair, honest, objective, and morally and socially responsible not only to patients who are direct recipients of care but also to the public and wider society. Implementing policies and guidelines that espouse organizational justice and corporate social responsibility can help embed and institutionalize these concepts within healthcare organizations. Future research should be directed towards exploring factors that mediate the levels of job satisfaction, and in turn, how these factors might affect organizational justice and corporate social responsibility.
This chapter examines the corporate social responsibility (CSR) activities in the healthcare institutions in Nigeria, before and during the COVID-19 era. The extent to which the healthcare institutions are seen to be socially responsible and the CSR from profit-oriented companies to hospitals were examined. The paper reviewed annual reports of 20 listed companies from 2017 to 2020 and websites of 46 healthcare institutions. The results show that before the COVID-19 era, there was poor CSR from profit-oriented companies to healthcare institutions, but there was a huge change during the COVID-19 era, and most of the CSR activities reported by these business organisations were committed to the healthcare institutions. Majority of the healthcare institutions reported employee-related issues in the workplace. The level of ethical behaviour of healthcare institutions and their relationships with the community were also reported in the websites of the institutions but, not by the majority. Reports on management of toxic wastes and relationships with patients were scarcely found. The study concludes that CSR has not penetrated the healthcare institutions in Nigeria and proposes increased resource allocations to the healthcare system from both government and private companies. The study also encourages healthcare institutions to willingly report their socially responsible activities.
Corporate social responsibility has become a necessary part of each company in the 21st century. Almost all businesses either observe or attempt to incorporate corporate social responsibility (CSR) activities into their operations (Lubis, 2018). Since hospitals are also a type of economic institution and the only place that works to preserve human life, it is imperative to comply with the elements of CSR in order to improve performance and maintain the well-being of society and the environment. The role of Corporate Social Responsibility (CSR) has not been clear so far in Afghanistan's companies and organizations' context. In addition to that, research under this title has not been conducted yet. The present study aims to evaluate the role of corporate social responsibility (CSR) in Afghanistan's states and private hospitals. From the total of 667 state and private hospitals, a sample of 146 hospitals has been selected for analyzing and testing the research hypothesis. The primary and secondary data have been used to show the role of CSR in Afghanistan hospitals. Furthermore, the multiple regression and correlation tests helped us estimate the role of CSR in Afghan hospitals. The result of the study shows that the level of CSR in Afghanistan hospitals, both public and private, is appropriate in all economic, legal, humanitarian, and ethical aspects, and the level of difference in central hospitals in ethical and humanitarian dimensions is higher than in non-central hospitals, while the level of difference in non-central hospitals in economic and legal dimensions is higher than in central hospitals.
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Sağlık hizmetlerinde örgütün, üretimin ve çalışanların güvenliğinin sağlanması için iyi tasarlanmış bir güvenlik kültürüne ihtiyaç duyulmaktadır. Güvenlik kültürü oluşturulurken bütün çalışanların ve hastaların işbirliği halinde olması beklenir. Bu işbirliği kurulurken üst yönetimin rolü, çalışanlar ve hastalar arasındaki iletişimin sağlanması oldukça önemlidir.. Hastalar, sıhhat bulmak için geldikleri sağlık kurumlarında sağlık düzeylerinin iyileştirilmesini beklerler. Bu yüzden hem hastaların güvenliğinin sağlanması hem de sağlık hizmeti sunumunun her aşamasında hasta ile iletişim halinde olunması gerekmektedir. Bu bölümde sağlıkta güvenlik kültürü ve hasta hakları bağlamında iletişim konuları işlenecektir.
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Exploring the concept of Corporate Social Responsibility (CSR) implies a must for holistic and regulatory approaches to business ethics. Professionals, executives and employees must demonstrate ethical-based behavior in healthcare. So, the first commitment of the nurse must be caring patients, as without caring them, nurses lose their professional identity. As a result, universities should support the teaching of ethics, while stimulating CSR and values derived from practical training. Experience shows that the methodology of “service learning” seeks to promote the committed participation of students in the teaching-learning process, while delivering a quality service to the community. Correctly inserted into an experience-based pedagogical frame, ethics strengthens critical thinking, problem solving, and encourages solidarity. Full Text Preview Introduction Delving into the concept of corporate social responsibility currently involves a step required by the regulatory and holistic approaches of business ethics. It is true that the speech of the Corporate Social Responsibility (CSR) has been addressed since the 1990s and has been emphasized by different disciplines, including business economics, business management and administration, sociology of labor relations, and communications and advertising, to mention some of the most active in the subject (Gonzalez, 2007). But all of them end up resorting to business ethics to resolve questions relating to the nature of the business, the reasons to manage with responsibility guidelines about what their company should be and why it must adopt rigorous approaches of responsibility in their business relations and the main core of their business (core business) (Gonzalez, 2007). Understanding nursing as a social practice means to surpass its technical-operational dimensions proceeding from the direct application of biotechnology-related knowledge and to consider it as one of the many practices of society, with which it shares the responsibility for health (Campos, 2007). The aim focus of the chapter is development through of concept corporate social responsibility in nursing education, therefore show the methodology of service-learning apply in an institution of higher education in nursing of Chile. Continue Reading
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Manufacturing industry contributes to environmental pollution and social cost. Hence, corporate social responsibility (CSR) functions as a way to reduce the effects of corporate activities, to increase long-term performance and stakeholder trust. To increase its effectiveness, this study analyses the mediating role of green-oriented innovation and community participation in implementing the CSR. The study uses simple random sampling to collect 173 respondents from large scale manufacturing firms in Central Java, Indonesia. By using structural equation modeling, the findings showed the significant influence of CSR to the firm performance. The originality of this study concerns the need to involve social and environmental dimensions in applying the ethical program of CSR.
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Corporate social responsibility (CSR) highlights the reaction to social pressures, respectively the reply to the needs and expectations of stakeholders, concerns towards the environment, and social needs that depict its dimensions. Our paper aims at providing evidence on the links between CSR and firm value on the example of listed companies in Romania. The importance of this research emerges by the goal of strengthening a high level of consumer’s trust in business and the noteworthy impact of companies to societal well-being. Based on a multidimensional CSR policies questionnaire, we developed a global index of CSR, as well as four subindices on social involvement, employees, products and services, environmental protection, both equal-weighted (EW) and stakeholder-weighted (SW). Firm value was proxied by Tobin’s Q ratio adjusted according to activity sector. Based on the EW approach, we found a positive impact of the CSR global index and CSR subindices, with the exception of the CSR subindex related to environmental protection, on firm value. The SW approach reinforces only the positive impact of the CSR global index and CSR subindex on the quality, safety, and effectiveness related to products and services, on firm value. Besides, several CSR aggregate measures are significantly different for listed companies on the first tier and listed companies on the second tier.
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Abstract—In the face of growing worldwide interest in corporate social responsibility (CSR), this paper explores how CSR factors influence customer satisfaction and loyalty and whether the moderating effects of corporate image in the relationships between CSR and customer satisfaction and customer loyalty are or not. There may be the difference of perceptions of CSR between consumers of developing and developed countries. This study used structural equation modeling (SEM) to test the hypotheses. The findings show that CSR positively affects customer satisfaction and loyalty, and customer satisfaction positively affects customer loyalty. The importance order of CSR factors is as follows: consumer protection, philanthropic responsibility, legal responsibility, ethical responsibility, economic responsibility, and environmental contribution. The moderating effect of corporate image in the relationship between CSR and customer satisfaction is identified. Thus, managers should put CSR factors into action in the perspective of consumers, which will encourage customers to perceive the firms more favorably. The conclusion draws implications for marketing practice and future research.
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Model framework by dividing them into ethical and operational work values. By scrutinizing the work values of the organisation, a leadership work values model was developed based on the principles of Pareto's analysis. Abstract Trust at work comes from living values that one sermonizes on a daily basis and defines the character of an individual or group. To echo one value and act another will obviously dent the trust of all the stakeholders involved. Work values are those guiding principles that steer the behavior of individuals at work and helps create and sustain trust and become normative codes to follow when it permeates down from the top management.
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The history of the social responsibility of CSR corporation and their companies lays in over one hundred fifty years. The word “company” derives by the two Latin words “cum” and “pains” , that mean “to share the food together”. Despite the negative sides and distortions, this term lately , is translated by the result of a widely usage as an instrument for the public relations (PR). CSR represents the idea of an ethical organization, that has social obligations and that can take responsibilities as the individuals can do. The high rhythm of the technological advances,services and new products that change in a constantly way the needs and desires, the innovative ideas, the similarities and the business requests to exceed and the consumer’s expectations. All these factors that contribute for the crossing of a society oriented in goods into a society oriented in persons. The lack or the absence of realization and the sense of the cause, the weak role of society in relations take and give to the CSR’s business and the legal frame in equation to support the increase of community’s commitment are the factors which contribute in the concentration of the CSR on the business side. In developed countries the business should take the direction and involve operations with social commitment and manners. Meanwhile the governments should behave like a “laissez faire”to encourage the civil orientation and the consumption interests groups.
Actions of firms that contribute to social welfare, beyond what is required for profit maximization, are classified as Corporate Social Responsibility (CSR). The acceptance of CSR by business scholars and practitioners has a spotted history. While scholars debated the legitimacy of CSR, consumers and investors developed clear preferences for socially responsible firms. Big corporations, in large part, responded positively, making CSR an important element of strategic management. The development of CSR from its controversial beginning to its current acceptance as a legitimate business function is outlined along with a discussion of the role of corporate social performance, socially responsible investing, and global corporate citizenship.