An invetigation into the corporate social responsibility practcies at Vietabank

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<b>AN INVESTIGATION INTO THE CORPORATE SOCIAL RESPONSIBILITY PRACTICES AT VIETABANK </b>

Word count: 11,695 words. Student name: Nguyen Nhat Phu

Intake: Vietnam Cohort 16 Student ID: NNP2OCD Supervisor: Mathew Shafaghi. Date of submission: 1 May 2023.

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<b>Abstract </b>

<b>Purpose - The aim of this dissertation is to provide insights into the state of CSR at </b>

VietABank: how it is conducted and its benefit in enhancing the brand. Through which, we may be able to extrapolate the state of CSR of the wider banking industry in Vietnam. In addition, the link between consumer perception of CSR and the brand equity will also be reviewed.

<b>Research methodology - This dissertation uses mixed-methods research approach, </b>

which comprises of the usage of both qualitative and quantitative methods in a study. The data collections and analyzation process will involve It involves interviewing VietABank‟s personnel on the CSR initiatives and strategy of the firm. Then the author will conduct a survey on both customers and non-customers of VietABank to measure whether CSR improves brand equity in the context of Vietnam or not.

<b>Findings – From interviewing the personnels and management of VietA bank, it is </b>

clear that the bank does engage in socially responsible activities. However, it does not have a clear CSR strategy with concrete goals. Most of the repsonsibilties were done informally and intuitively, fitting with previous researches on SMEs‟ CSR involvement. Despite its lack of a formal CSR strategy, as the link between consumer perception of CSR and brand equity suggested, consumers does seem to be aware of and take the bank‟s efforts in high regard.

<b>Practical Implications – A practical look into the CSR practices of a Vietnamese </b>

bank. The dissertation was also able to confirm the link between consumer perception of CSR and brand equity in the context of Vietnam.

<b>Originality/value – This dissertation provides a detailed look into the CSR practices </b>

of a mid-sized Vietnamese bank, providing a baseline for the wider CSR environment of Vietnam.

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Rationale for the dissertation ... 9

The state of CSR in the banking industry in Vietnam ... 9

Chapter Two: Literature Review ... 13

Corporate Social Responsibility: ... 13

Resources-based view of CSR: ... 14

CSR‟s dimensions: ... 15

Consumer perception of CSR ... 18

Brand equity ... 19

Brand equity dimensions: ... 20

Brand equity measures: ... 21

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CSR and brand equity ... 22

Reliability and validity ... 33

Data collection techniques ... 34

Interview ... 34

Questionnaires ... 34

Chapter Four: Findings ... 36

VietABank‟s CSR initiatives and strategy: ... 36

CSR components: ... 36

CSR strategy: ... 40

Consumer perception of CSR on brand equity: ... 41

Measurement model ... 41

Structural model assessment ... 42

Chapter Five: Conclusions and Recommendations ... 44

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Conclusions ... 44

Recommendations ... 44

Bibliography ... 46

Appendix ... 55

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<b>Chapter One: Introduction </b>

<b>Introduction </b>

Over the past decades, there has been a shift in perspective on the role of corporations in society. While the economic and financial duties of firms toward their stakeholders are still relevant, firms are now ascribed non-economic responsibilities that were previously outside of their purview (Moon, 2014). They are expected to contribute toward solving some of society‟s most urgent challenges such as global warming and labor rights. In some countries, CSR has extended from a voluntary activity into a legal mandate, with efforts by governmental bodies to establish guidelines on CSR and sustainable business practices (European Parliament, 2021; Steurer, 2010). From multinational famous corporations such as Nike to smaller local enterprises, every firm engages in socially responsible activities in some form. Facing increasing pressure to adopt corporate social responsibility (CSR) activities, managers and researchers are paying increasing attention to CSR and its impact on the organizational level.

Aside from supporting society, firms engage in CSR for their own benefit. Numerous studies have found that CSR has direct and indirect impacts on firm performance through obtaining consumer awareness and building up a favorable brand image and reputation (Orlitzky et al., 2003; Kotler and Lee, 2005; Du et al., 2010). Consumers are increasingly conscious of the ethic of businesses and their impact on society (Mohr et al., 2005; Singh et al., 2012). They now take CSR into account when evaluating which products to buy (Foreign Agricultural Service, 2020; Tian et al., 2011). According to a 2016 CSR survey sponsored by Aflac, a leader in voluntary insurance sales at the worksite, socially irresponsible firms can lose up to 39% of their customer base as consumers avoid them on principle (Aflac, 2016). Consumers are likely to take negative actions toward these firms, from posting negative social media to boycotting. It is clear that consumer perception of CSR initiatives has a notable effect on firm performance. By engaging in CSR initiatives, a firm can develop a favorable brand image, which protects them from negative attention and may aid in

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differentiating the firm‟s goods or services (Hsu, 2012). Firms can benefit both themselves and society by engaging in CSR initiatives, proving “doing good” can lead to “doing better”. As a result of its importance both to society and the continued performance of businesses, CSR become a key dimension of business strategy.

Through improving consumers‟ attitude toward the firm, CSR also help firms in improving their intangible assets such as brand equity (Melo and Ignacio, 2011). Banking is an incredibly competitive industry (Bravo et al., 2009). Due to the highly intangible nature of the financial services they provide, banks tend to have a hard time differentiating their products for consumers (McDonald and Rundle-Thiele, 2008). For this reason, intangible assets can prove to be a decisive competitive advantage for banks. Brand equity is defined as “the differential effect of brand image on consumer response to the marketing of the brand” (Keller, 1993). It is one of the most important intangible assets of a firm. While financial and physical assets can be emulated by competitors, brand equity can prove to be a much more sustainable and semi-inimitable source of competitive advantage (Aaker, 1991).

Over the years, there have been numerous studies on the link between CSR and brand equity (Hsu, 2012; Hur et al., 2014; Hoeffler and Keller, 2002; Fatma et al., 2015; Wang et al., 2015; Torres, et al., 2012; Lai et al, 2010). A majority of the studies agree that there exists a positive relationship between consumer perception of CSR initiatives and consumer-based brand equity. Consumer perception of CSR both directly and indirectly affects the brand equity of firms. By committing to CSR initiatives in their business strategy, managers and marketers will be able to improve on the consumer-based brand equity of their firm and produce a sustainable competitive advantage. However, consumers tend to have an inaccurate perception of the CSR of a firm regardless of the firm‟s actual CSR communication (Peloza et al., 2012). Positive (or negative) sentiment toward the firm will positively (or negatively) impact the link between CSR and brand equity. So, it is important to test between consumer‟s perception of CSR and actual CSR engagement.

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<b>Rationale for the dissertation </b>

<b>The state of CSR in the banking industry in Vietnam </b>

While CSR has spread globally, a majority of the theories and models are developed from research conducted in developed countries (Lindgreen and Swaen, 2010). How CSR is perceived and conducted in emerging economies is still relatively less understood. Developing countries have multiple distinctive contextual factors that differ from developed economies (Jamali and Karam, 2016). CSR and the way people perceive it are highly context-sensitive and can be deeply affected by the contextual factors of the country (Perry, 2012; Wang et al., 2016). Applying CSR research from developed economies to emerging economies wholesale can prove ill-advised due to these countries‟ distinctive socio-political institutional contexts. As such, more studies need to be done in developing countries to make clear whether the relationship between CSR and brand equity is ubiquitous.

Vietnam has a distinct socio-cultural, politico-economical, and environmental context that influences the way CSR is perceived differently than in the West (Nguyen et al., 2018). While contributions to local communities are nothing new to the Vietnamese public, the concept of CSR is still relatively new and less understood. In addition, while local firms engage in philanthropies, charities, and other social responsibilities, they still struggle in developing a concrete CSR strategy following international standards (Tran and Jeppesen, 2016). Most firms‟ CSR strategy is still relatively informal and intuitive. This is also applicable to the banking industry in Vietnam. This dissertation intends to fill in the relative dearth of studies in Vietnam by seeking to confirm the relationship between CSR and brand equity in the context of a developing country by investigating the CSR strategy of VietABank.

<b>About VietABank </b>

Vietnam Asia Commercial Joint Stock Bank (VietABank) is a Vietnamese commercial bank. It operates in both retail and corporate banking. In corporate banking, it has a focus on investing in finance, oil, energy, consumer manufacturing industries and other focused sector as directed by the Vietnamese government. Their

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investment in the oil and energy industries have considerable effect on the environment. Over 20 years of growth, the bank has achieved numerous successes and was awarded several awards such as Best bank for sustainable development and ASEAN brand awards (VietABank, 2023). However, despite its successes, the bank has not managed to penetrate into the international market like some of Vietnam‟s more well-known banks like Vietcombank or VPBank. In comparison to the wider banking industry in Vietnam, VietABank is situated in the middle rankings, at least in regard to banks listed in the VNR500. Over the years, it has engaged in sustainable business initiatives and philanthropical efforts in local communities, gaining several related awards.

<b>Research aims </b>

The aim of this dissertation is to provide insights into the state of CSR at VietABank: how it is conducted and its benefit in enhancing the brand. Through which, we may be able to extrapolate the state of CSR of the wider banking industry in Vietnam. In addition, the link between consumer perception of CSR and the brand equity will also be reviewed.

<b>Research questions </b>

With the above-mentioned research aims, the research questions of this dissertation are:

 What kind of CSR responsibilities and strategy does VietABank have?

 What is the effect of consumer perception of VietABank‟s present CSR initiatives on its brand equity?

 How can VietABank improve on its CSR strategy and engagement?

<b>Research objectives </b>

There are three objectives in this study. First, to determine the CSR components at VietABank in addition its CSR strategy. From interviewing VietA‟s personnel and managers, the author intends to what CSR responsibilities the bank engage in and find out more about its CSR strategy. The second objective is to determine the influence of

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consumer perception of VietA Bank‟s CSR initiatives on its brand equity. The author intends to find out whether the current CSR initiatives at the bank have any impact on its brand equity and how strong the link between the two is. Additionally, it also determines how VietABank‟s customers react to its CSR efforts and whether it benefits the bank‟s performance at all. Finally, based on the results from the previous objectives, the author will make recommendations on how to improve the CSR strategy of the bank with the goal of enhancing the link between consumer perception of CSR and brand equity.

<b>Research methodology </b>

This dissertation uses mixed-methods research approach, which comprises of the usage of both qualitative and quantitative methods in a study. The data collections and analyzation process will involve It involves interviewing VietABank‟s personnel on the CSR initiatives and strategy of the firm. Then the author will conduct a survey on both customers and non-customers of VietABank to measure whether CSR improves

<b>brand equity in the context of Vietnam or not. Research contribution </b>

This dissertation investigated the state of VietABank‟s CSR engagement and determine whether it possesses a CSR strategy or not. From interviewing VietABank‟s management and personnel, it was able to determine that while VietABank does engage in CSR, the bank does not have a formal CSR strategy. This result could prove to be a good presentation for the bank industry as a whole and of other small-and-medium-enterprises in Vietnam. In addition, the dissertation was also able to confirm the link between consumer perception of CSR and brand equity. This result confirm previous studies on the relationship between the two concepts are also applicable in the context of Vietnam.

<b>Research ethic </b>

This dissertation follows the ethical standard as put forward by the University Code of Practice for Ethical Standards in Research involving Human. Participants involving in

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the data collection process, interviews and survey, have provided their consent. The confidentiality of the participants and information will be protected and won‟t be used for other purposes,

<b>Dissertation structure </b>

This dissertation is comprised of four chapters: the literature review, research methodology, findings and the conclusions. Initially, the author will conduct a literature review of CSR, brand equity, and the link between the two. It will go into previous relevant theories on CSR, brand equity and establish a link between CSR and brand equity. Next, the dissertation will go into the research methodology of the dissertation. It will go over the After this, the dissertation will discuss the findings of the survey, mainly the results of interviews and the data gained from surveying. Finally, recommendations on how to improve the communications of CSR to improve the brand equity of VietABank will be made and elaborated upon in the conclusion chapter.

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<b>Chapter Two: Literature Review </b>

This chapter will provide a critical review of the existing literature on relevant concepts to this dissertation. A critical literature review provides the foundation from which your research can be built (Saunders et al., 2009). It helps researchers to develop insights into relevant established theories and the trends that have emerged. Only by understanding what has been learned can research contribute to the existing knowledge base. A literature review will also assist in refining research objectives and provide insights into the appropriate research strategy. The author will conduct a literature review on CSR, consumer perception, brand equity, and the relationship between CSR and brand equity. In the end, the theoretical framework of the dissertation will be expanded on.

<b>Corporate Social Responsibility: </b>

There is no universally accepted definition of CSR (Carrol and Brown, 2018). Multiple conceptualizations and definitions of CSR have been proposed and put forth throughout the decades. Because of the multi-faceted nature of CSR and its overlap with other concepts such as sustainability and corporate citizenship, it has proven difficult for scholars to pin down one definition that all could agree to (Moon, 2014). However, thanks to the congruent nature of CSR definitions, the lack of a consensus on the meaning of CSR is not as problematic as expected. Despite its lack of a universal definition, common points between its various definitions can be identified. Through the analysis of CSR‟s many definitions, Dahlrud (2008) and Sarkar and Searcy (2016) were able to find six frequently recurring and common dimensions that underpin the CSR concept: stakeholder dimension, social dimension, economic dimension, voluntariness dimension, sustainability dimension, and environmental dimension. This study will focus on CSR as the economic, legal, ethical, and philanthropic responsibility that society expects of businesses at any point in time (Carrol, 1979). It is a well-established definition and has been used successfully in researching since its conception. In addition, it also fit with many dimensions found by Dahlrud (2008) and Sarkar and Searcy (2016).

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<b>Resources-based view of CSR: </b>

Most literature on CSR has changed focus from its macro social effects to the analysis of CSR on an organizational level and its impact on firm performance (Lee, 2008; Carrol and Shabana, 2010). The purpose of the research direction is to investigate whether CSR could “pay for itself” by providing firms with advantages in any way. Firms and managers are now under extreme pressure to engage in CSR activities and commit to the good of society. So, there is a need to justify the costs and whether CSR brings any benefits to the firm on its own. To explain the reasons for firms engaging in CSR and understand better the benefits that CSR brings, we could see CSR initiatives through the resource-based view.

Resources-based perspectives provide a helpful framework for understanding why businesses participate in CSR initiatives by showing the connection between internal company characteristics and firm performance (Branco and Rodrigues, 2006; McWilliams and Siegel, 2001). It suggested that sustainable competitive advantage can be reached if a firm leverage its internal resources (Barney, 1991). However, these resources must be valuable, rare, inimitable, and non-substitutable to stay sustainable. When deciding on CSR activities, managers tend to have possible benefits that CSR could bring as underlined by the resources-based view in mind. CSR as a resource and attribute can influence the performance of a firm. It is valuable and hard to imitate and substitute by other firms. By controlling and manipulating these resources, companies will be able to generate a sustainable competitive advantage (Branco and Rodrigues, 2006). CSR strategy can be a valuable resource to aid in the differentiation strategy and help in enhancing the firm reputation and the value of the brand.

While business engagement in socially responsible activities contributes to society, enlightened self-interest is a valid explanation for a firm‟s engagement in CSR (Orlitzky et al., 2003). By engaging in CSR initiatives and disclosure, firms can procure both internal and external benefits (Branco and Rodrigues, 2006; Kim et al., 2015). External benefits come about from improvement in the relationship with external stakeholders such as customers and suppliers. Companies engage in CSR initiatives in large part because executives believe that it will elicit a positive response

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from stakeholders. As Roberts and Dowling (2002) noted, firms with good reputations were able to reap superior performance over time. Engagement in CSR makes a positive impression on stakeholders, thereby making them remember and support the brand in the future (Orlitzky et al., 2003). A positive image with stakeholders can also improve employees‟ morale as well as their commitment to the firm, thereby potentially improving financial performance. Internal benefits come about from improvement in management competencies, resources, and corporate culture (Branco and Rodrigues, 2006). As companies preemptively enforce CSR measures necessities significant investment in employees, coordination, and a forward-thinking management style. These changes will help companies in reacting better to external stimuli and crises, thereby, leading to more efficient resource utilization and company culture.

<b>CSR’s dimensions: </b>

CSR is a multi-dimensional concept (Dahlrud, 2008). It is comprised of multiple responsibilities concerning different aspects of businesses. To understand and measure CSR, we must understand what categories of social responsibilities are businesses expected to engage in. Carrol‟s CSR pyramid is one of the first study to distinguish different organizational responsibilities in CSR. Carrol‟s four-dimensional conceptual model measures a company‟s economic, legal, ethical, and philanthropic contributions to society (Carrol, 1979). Carrol (1991) later further expands the model into a pyramid construct to illustrate the building block nature of CSR (Figure 1). While the economic responsibility is the foundation of the CSR pyramid and considered to be the most important, the ethical dimension has an influence on the entire pyramid. To be socially responsible, businesses are expected to achieve economic, legal, ethical, and philanthropic responsibilities simultaneously.

However, the hierarchy of these four dimensions may not be entirely applicable in the context of developing countries. Developing countries have multiple distinctive contextual factors that differ from developed economies (Jamali and Karam, 2016). CSR and the way people perceive it are highly context-sensitive and can be deeply affected by the contextual factors of the country (Perry, 2012). For this reason, there

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have been calls to reordered the pyramid to suit with the different contexts of other countries or businesses (Visser, 2008; Lu et al., 2020). Visser (2008) in particular reorganized the order of the CSR pyramid in developing countries. In Visser‟s model, economic responsibility remain the foundation of the CSR pyramid. However, philanthropy is given the second-highest priority, then legal obligations, and finally ethical obligations.

<i><b><small>Figure 1: CSR pyramid of developing countries. </small></b></i>

<i><b><small>Source: Visser, W. (2008). </small></b></i>

 Economic dimension

The economic dimension refers to the economic responsibility of the business, the most important core interest of the business as argued by Friedman (1962). The basic role of businesses is to provide products/services and create jobs. This role creates the most value for society and is seen as the core responsibility of businesses. Economic responsibilities entail providing profits to shareholders, creating jobs and paying workers, producing and selling products and services, and discovering new resources (Carrol, 2016). These dimensions are often concerned with shareholders and employees the most as financial issues will affect this group negatively. In developing countries, the economic contributions of businesses are strongly valued by both the government and communities (Visser, 2008). This is also applicable in the case of

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Vietnam, with the public seeing economic responsibility as an important role of business.

 Philanthropic dimension

Finally, the philanthropic dimension is businesses‟ voluntary and charitable activities (Carrol, 2016). It involves giving back to society through volunteerism by employees and management, gift of monetary resources, providing assistance to social services, and other contributions to the community. Philanthropic actions are discretionary and voluntary. Businesses are not expected by law or ethics to engage in these kinds of activities. However, while philanthropy or corporate giving may not be a responsibility in the strictest sense, it is still a norm in business today and a part of what the public expects. This dimension concern with the community, non-profit organizations, and employees. Visser (2008) notes that a country‟s cultural and indigenous traditions can have an influence on the expectation of philanthropy activities in developing countries. In the case of Vietnam, Nguyen et al. (2018) identify the country‟s tradition and religion as significant factors driving philanthropic activities and community involvement.

 Legal dimension

The legal dimension involves meeting laws and regulations, fulfilling legal obligations to stakeholders, and providing goods and services that meet legal requirements (Carrol, 2016). To follow legal responsibility, a business must abide by the laws and integrate legal concerns into its business strategy and operational management. This dimension closely connects with other dimensions such as economy, environment, and employees‟ rights all having been codified into legal requirements. This dimensions concern employees and consumers the most. Legal responsibilities have a lower priority in developing countries due to the lack of independence, resources, and administrative efficiency of the legal infrastructure (Visser, 2008). Similarly, Duc et al. (2018) note the lack of legal requirements for CSR standards in Vietnam.

 Ethic dimension

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Beyond following the laws, CSR also includes following the normative expectations outside those codified into laws that societies have (Carrol, 1999). It means that organizations will engage in voluntary activities, norms, standards, and practices as if it is expected. The ethical responsibility includes preventing ethical norms from being compromised to achieve a company‟s goal and strategy and recognizing that business integrity and ethical behavior go beyond just law compliance. With the recent surge in environmental awareness, ethics here also include being environmentally conscious in the firm‟s dealing (Attfield, 2014). Ethical issues often involve employees, customers, and the environment.

<b>Consumer perception of CSR </b>

One key point to the potential benefits that CSR could bring the firm, however, is its dependence on consumers‟ awareness of the firm initiatives. When one considers the impact of CSR on a firm, the consumer perception of CSR needs to be taken into account as the actual CSR engagement of the firm and what the consumers think about it may not be in alignment (Peloza et al. 2012). Similarly, Öberseder et al. (2014) also claimed that while consumer perception of CSR initiatives does not correspond to actual CSR efforts, it is particularly important when determining the CSR initiatives of a firm due to its strong influence on behavioral outcomes. A firm will only benefit from CSR if the community is aware of and consider it important (Branco and Rodrigue, 2006). Regardless of how well a firm conduct its CSR initiatives, if its current or potential customers are not aware of or disbelieve its claim then any potential benefits from CSR will not be materialized. Stakeholders‟ awareness of CSR affects whether CSR will result in financial gains (Rhou et al., 2016). Bhattacharya and Sen (2004) noted that the limiting factor to consumers‟ ability to react to socially responsible actions is a lack of awareness. This lack of awareness is the key deficiency in most CSR strategies (Du et al., 2007). It is a good idea for firms to communicate their CSR efforts on their marketing channels and media presence. However, spreading CSR awareness without consideration for the message intended can prove to be a detriment to the firm efforts.

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Another indicator to consider is how firms communicate their CSR initiatives. Most consumers nowadays are particularly cynical about socially responsible actions, seeing such efforts as attempting to profit from them (Rim and Kim, 2016). Skepticism toward the company‟s altruism and messages have a strong negative effect on the public response toward the firm‟s CSR efforts (Skarmeas and Leonidou, 2013). Similarly, Du et al. (2007) noted that when consumers associate the firm‟s CSR engagement with extrinsic goals (such as profitability), then it will also reduce the benefits coming from behavior outcomes. In contrast, showing that the reason coming from benevolent intention improve consumer perception of the firm‟s CSR actions. As such, the role of communicating CSR attributes or processes is particularly important. Having an effective CSR communication strategy help firms in leveraging their reputation to improve firm performance. Aside from investing in CSR communication, Yuan et al. (2011) suggested internal fit between CSR practices and core business routines can increase its potential to improve business performance. Similarly, Du et al. (2007) also indicated that the integration of socially responsible practices with core business activities is the best CSR strategy from a consumer‟s standpoint. Alignment between the two factors helps improving both consumer awareness of and attitude toward the firm‟s social initiatives.

<b>Brand equity </b>

There are three perspectives in researching brand equity: consumer, company, and financial (Baalbaki and Guzman, 2016). As the relationship between CSR and brand equity is based on the consumer perspective, this paper will focus on consumer-based brand equity. Consumer-based brand equity is the total incremental utility or value added to a product by virtue of its brand (Yoo and Donth, 2001). For the vast majority of firms, a brand is an extremely valuable asset capable of differentiating the relationship between firms and their stakeholders and bringing about long-term growth. Due to the importance of brands to most firms, most marketing strategies attempt to, successfully or not, build up brand equity (Myers, 2003). Brand equity brings value to both the firm and consumers (Aaker, 1991). It helps customers process and interpret information, thereby, increasing their confidence in the purchase

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decision and use satisfaction. By providing value to consumers, brand equity indirectly brings value to firms by enhancing the effectiveness of marketing programs, brand loyalty, prices/margins, brand extensions, trade leverage, and competitive advantage (Aaker, 1991; Keller, 2016). Because of its many benefits, knowing how to manage and grow brand equity is a key objective for many firms. To effectively manage and grow brand equity, the sources of brand equity must be understood and adequately measured.

<b>Brand equity dimensions: </b>

Brand equity is a multi-dimensional concept (Aaker, 1996). While there have been various different conceptualizations of brand equity over the years, the most common point in all models is that most of them end up using one or more dimensions of Aaker‟s model (Keller, 1993; Hsu et al., 2011; Kim et al., 2003). As proposed by Aaker (1991, 1996), brand equity is the value that consumers associate with a brand as reflected by five dimensions: brand loyalty, brand awareness, perceived quality of the product, brand association, and other propriety assets such as patents and channel relationships. The four initial dimensions constitute the consumer‟s reaction, while other propriety assets dimensions come about from market-based information. As such, other propriety assets won‟t be used as a factor in further analysis.

Brand loyalty is the positive attitude that consumers have toward the brand that results in repeat same-brand purchasing (Aaker, 1991). Brand awareness is the ability of consumers to recall or recognize the brand (Keller, 1993). It consists of brand recall and brand recognition. Awareness is the cornerstone of brand equity. Only when consumers can recall or recognize the brand does other actions can be taken. Perceived quality is the consumer‟s judgment of the product‟s overall quality and superiority (Aaker, 1991). It is based on the subjective opinion of the consumers. It does not only deal with the material quality but also distinctive factors that make the products different than others. Brand association (or brand image) is defined as concepts that consumers link with the brand. The more consumers experience and are exposed to the brand, the stronger the link is. These dimensions are then further classified as perceptual components (i.e., brand awareness, brand associations, and

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perceived quality) and behavioral components (i.e., brand loyalty and market behavior). Aaker (1996) notes that the combination of perceptual and behavioral components comprehensively measures the incremental value of the brand. Myers (2003) also agrees with this stance, noting the importance of the roles of both consumers‟ cognitive and behavioral in conceptualizing brand equity.

In contrast to Aaker‟s model, another prominent conceptualization put forward by Keller focuses more on perceptual measures. Keller (1993) made the case that brand equity is the differential effect that consumer brand knowledge, which consists of brand awareness and brand association, has on the focal brand‟s marketing activity. However, while CSR has a positive impact on brand awareness and brand association, the link between CSR and behavioral components is tentative and much more complex (Bhattacharya and Sen, 2004). Perceptual measures can be achieved easier, while most behavioral links require several conditions such as firm-cause fit to be actualized. This result also applies to business-to-business (B2B) markets and industries (Lai et al., 2010). In addition, Hsu (2011) notes that perceptual components of brand equity may be more suited for intangible services providers, which is particularly suitable for banks. As the link between CSR and behavioral components is weak, the author focuses on the perceptual components of brand equity in this paper, following Keller‟s conceptualization.

<b>Brand equity measures: </b>

There are two main approaches to measuring brand equity: direct and indirect (Keller, 1993, Baalbaki and Guzman, 2016). The direct approach focuses on the actual impact of brand knowledge on the link between consumers' reactions and elements of marketing activities. The indirect approach assesses the sources of brand equity by identifying and tracking consumers‟ knowledge of the brand structure. While the two approaches are complementary, a majority of brand equity measuring methods utilized now are indirect methods due to their usefulness in management as a diagnostic tool (Christodoulides and Chernatony, 2010). The motivation for this approach comes from a strategic management lens, as measuring consumer behavior is a basis for improving marketing productivity and the wider business strategy (Keller, 1993).

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Most indirect measuring methods of brand equity can be split into either outcome variables-based or dimensions-based. The first approach uses outcome variables of a brand such as a price premium (Ailawadi et al., 2003) and future earnings (Aaker, 1991) to measure the brand equity. However, this approach does not provide much insight into the sources of brand equity (Christodoulides and Chernatony, 2010). On the other hand, tapping into the dimensions of brand equity help in determining the cognitive and behavioral brand equity (Baalbaki and Guzman, 2016; Yoo and Donth, 2001). For the purpose of studying the relationship between CSR and brand equity, analyzing brand equity from its manifest dimensions will be more relevant. As such, this paper will utilize a consumer-based approach to measure brand equity, specifically, Yoo and Donth (2001)‟s measuring scale. It is a well-established scale based on the conceptualizations of brand equity from Aaker (1991, 1996) and Keller (1993). While the scale still possesses limitations in its theoretical conception (Washburn and Plank, 2002), it is well-established in brand equity research, reasonably consistent, and is adequate to confirm the relationship between CSR and brand equity.

<b>CSR and brand equity </b>

According to Jones (2005), brand equity is co-created through the interaction between the brand and its strategic stakeholders. Similarly, Merz et al. (2009) also acknowledged that consumers are active participants along with the brand in the brand equity creation process. Value is created when stakeholders‟ expectations are fulfilled. In addition, for brand equity to be created, consumers need to be able to meaningfully differentiate between products and services (Aaker, 1996). Being socially responsible is one of the actions that firms could undertake to satisfy stakeholders‟ expectations and differentiate themselves, thereby improving brand equity. Multiple studies on the relationship between CSR and brand equity have been conducted in different contexts. Baalbaki and Guzman (2016) identify sustainability and CSR to be integral components of brand equity. As these concepts influence consumer perception of the brand and thus, its equity. Hur et al. (2014) also indicated CSR initiatives as an important driver of brand equity. They found that socially responsible actions are able

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to enhance brand equity or its components. Lai et al. (2010) investigated the impact of CSR on industry brand equity in B2B markets. They found that buyers‟ perception of a firm‟s CSR activities induces positive brand awareness and association with the brand. Weber (2008) found that CSR has a positive effect on a firm‟s corporate image and reputation. In addition, Vlachos et al. (2009) also indicate consumer perception of CSR engagement can increase positive brand associations.

Inversely, committing socially irresponsible actions can also damage brand equity. Consumers are more sensitive to corporate social irresponsibility, or negative CSR information than positive ones (Bhattacharya and Sen, 2004; Carrol and Brown, 2018). Sweetin et al. (2013) found that consumers are more willing to punish companies that commit socially irresponsible activities than reward them. They may dramatically damage the corporate brand strategy efforts and reduce positive brand identity, which decreases brand equity. In addition, aside from damaging the reputation of consumers, it also negatively affects other stakeholders‟ reactions toward the brand. Doh et al. (2010) noted that the stock market reacts negatively when a firm engages in socially irresponsible acts. Many firms are also found to conduct a “defensive” CSR strategy as they face pressure to close the expectation gap from consumers (Shabana et al., 2017). However, while a defensive CSR strategy helps abate consumer expectations, it does not procure as many benefits as a proactive CSR strategy.

In conclusion, from previous studies on the link between consumer perception of CSR and brand equity, it is clear there exists a positive relationship between the two concepts. Thus, the study will come to the hypothesis that consumer perception of VietABank‟s CSR initiatives impacts its brand equity.

<b>Theoretical framework </b>

The theoretical framework proposed for the dissertation is shown in Figure 1. In light of the definition and four-dimension conceptualizations by Carrol‟s CSR pyramid, a socially responsible business must integrate economic, legal, ethical, and philanthropic dimensions in all its actions (Carrol, 1991). So, to measure the state of VietABank‟s CSR engagement, these responsibilities must be investigated. Consumer

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perception of CSR will have an effect on external outcomes such as brand equity. However, the link between actual CSR engagement and consumer perception of CSR is affected by the awareness and skepticism toward CSR. The first objective of this dissertation is to investigate the actual CSR engagement of VietABank. Then, using survey and quantitative analysis, the dissertation seeks to test whether the bank‟s current CSR efforts have an impact on consumer-based brand equity or not.

<i><b><small>Figure 2: Theoretical framework. </small></b></i>

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<b>Chapter Three: Research methodology </b>

This section will go over the research methodology used in this dissertation and the rationalization for selecting them. Research methodology includes relevant theories, issues and research status that affect the research problem (Saunders et al., 2009). The author‟s belief, values and judgement also significantly influence the research methodology. By expanding on the methodology used, this section will help in clarifying the research objectives as well as giving a better understanding of the research process and findings. This section includes research philosophy, research approach, research design, research methodologies and data collection technique. To ensure reliability and validity of the methodology, Saunders et al.‟s (2009) research “onion” framework will be used (Figure 1).

<i><b><small>Figure 3: The research "onion". </small></b></i>

<i><b><small>Source: Saunders et al. (2008). </small></b></i>

<b>Philosophy perspectives: </b>

Research philosophy is related to the process of developing knowledge and the nature of that knowledge (Saunders et al., 2009). It represents the important values and worldview of the author, how they interpret the world around them, knowledge and

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information. These assumptions serve as the foundation for the data collection methods and how those data are interpreted. Johnson and Clark (2006) note the importance of understanding the philosophical position in research strategy due to its influence on what researchers study and how they understand it. Only by fully understand our own philosophical position can we examine these assumptions, challenge them if needed and behave differently (Saunders et al., 2009). In this study, four research philosophical approaches will be expanded upon: positivism, interpretivism, realism and pragmatism. Each approach will have different effect on the assumptions, research approach and methods of the study.

<b>Positivism </b>

Positivism focusses on working with the observable social reality, which mean gaining knowledge through real-world observations and measurements (Remenyi et al., 1998). This approach focuses on an objective, law-like generalization of phenomenon similar to those employed in physical and natural science. The end results are credible and replicable data based on facts rather than impression. A component of the positivist approach is its focus on value-free, which mean no personal interference in the data collection process (Saunders et al., 2009). The researcher is independent of and does not affect nor be affected by the subjects. Crossan (2013) notes that speculations and assumptions that are not based on examination and observation are beyond the scope of positivism. Although, for most researchers, a complete separation from their own values is hard to achieve, if not impossible. Positivism lend itself well to highly-structured methodology such as quantitative analysis. However, qualitative methods can also be used.

<b>Interpretivism </b>

The social world of business and management is very complex and unique (Saunders et al., 2009). An organization is comprised of people from many different roles and backgrounds. These factors create differences in how people perceived and experience that organization. Researchers argue that if this complexity is seen through the lens of definite laws that can be generalized to everyone, accurate insights into the business world can be lost (Saunders et al., 2009). In contrast to positivism, interpretivism

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focus on the important role of people‟s thought and ideas. It emphasizes the importance of considering the differences effects that language, social and cultural factors can have on an individual‟s interpretations and experience of organizational and social worlds (Crotty, 1998). By doing so, interpretivism allow researcher to have a rich understanding of the details of situation and the motivations behind those details. In interpretivism, the researcher involves themselves into the researching process. Researchers have to be empathetic and understand their subjects‟ social world from their point of view. In the process, the researcher‟s own values also inevitably affect their interpretation of the information. The interpretivism approach is often used in fields such as organizational behavior, marketing and human resource management (Saunders et al., 2009). This philosophy lend itself to qualitative analysis as it helps gaining in-depth insights into the lives of the respondents.

<b>Realism </b>

Realism is a philosophy that point to the existence of a reality external and independent of the human mind (Saunders et al., 2009). Similar to positivism, realism assume a scientific approach to the development of knowledge. The collection of data and its interpretation are predicated on this assumption. The meaning and relevance of realism in business research become clearer when its two forms, direct realism and critical realism, are contrasted with each other (Bryman, 2016). Direct realism say that what researchers experience though their sense represent the world accurately. In contrast, proponents of critical realism argue that rather than directly experiencing objects, what we actually experience are sensations, or images of the things in the real world. We can‟t directly access reality through observation and knowledge as our senses are all too easily deceived. So, there need to be a mental processing phase to find out the underlying structures that shape the observable events. Another difference is the view toward the state of the world and whether it change or not (Saunders et al., 2009). Direct realism suggest that the social world is relatively unchanging and operate only at one level. It is in contrast to critical realism, which claims that the world is constantly changing and recognize the importance of multi-level studies. Between the two forms of realism, business researchers tend to lean toward critical

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realism due to its appropriateness with the purpose of business and management research (Bhaskar, 1989; Saunders et al., 2012). Realism used quantitative and qualitative data collection methods as long it fit the subject matter.

<b>Pragmatism </b>

Different from previous philosophy stance points, pragmatism does not assume a particular view of the social world or the developing of knowledge. It argues that these concepts are only relevant when they support action (Kelemen and Rumens, 2008). True to its name, pragmatism is more interested in practical outcomes than abstract distinction. The research problem and questions will be the most important determinant for choosing research design and strategy. In a pragmatist‟s perspective, both positivism and interpretivism have their own benefits. Either can be more appropriate than the other in answering particular research questions. They are seen as more of a continuum rather than than polar opposites. Pragmatism often uses different types of methods as appropriate to the goals of the research (Saunders et al., 2009). All research methodologies are crucial in the study of business and management. Depending on the kind of research questions that researchers might select and methods used to answer, each approach bring a different set of benefits and drawbacks to the table. Therefore, in order to select the best research methods, it is crucial that we have a thorough understanding of each research philosophy, including how it functions and its advantages. The realism philosophy is selected and applied in this study to clarify the goals of the study using both quantitative and qualitative methods. This philosophy will not only allow for better integration of mixed-methods research but also provide insights and strategies to understand the process (Maxwell and Mittapalli, 2010).

<b>Research approach </b>

Theories play an important role in sociological research. It informs the usage of research structure and research design. It is important to understand research approaches because it can help researchers make more informed decision about the research design (Saunders et al., 2009). Identifying the appropriate evidences to gather,

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