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Article

Digital Social Responsibility towards Corporate Social Responsibility and Strategic Performance of Hi-Tech SMEs: Customer Engagement as a Mediator

by
Amira Khattak
1,* and
Zahid Yousaf
2,*
1
Marketing Department, College of Business Administration, Prince Sultan University, P.O. Box 53073, Riyadh 11586, Saudi Arabia
2
Higher Education Department, Government College of Management Sciences, Mansehra 21300, Pakistan
*
Authors to whom correspondence should be addressed.
Sustainability 2022, 14(1), 131; https://doi.org/10.3390/su14010131
Submission received: 2 November 2021 / Revised: 21 December 2021 / Accepted: 21 December 2021 / Published: 23 December 2021
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Abstract

:
Digitalization has opened up new methods to promote socialization in all types of organizations, generally, and businesses specifically. Stakeholders now prefer those businesses which are inclined towards social norms and virtues. In the era of digitalization, digital social responsibility (DSR) has become the strategic decision for all kinds of business organizations. Therefore, the aim of the current study was to highlight the achievement of corporate social responsibility (CSR) and strategic performance (SP) through customer engagement with digital social responsibility (DSR). Customer engagement with DSR is also tested as a mediator between DSR and CSR performance, and DSR and SP. Data were collected from the owners/managers of hi-tech Small and Medium Enterprises (SMEs). For the purpose of data analysis, various statistical procedures were applied. Results proved that DSR plays an essential role in explaining customer engagement with DSR, SP and CSR performance. Customer engagement with DSR directly affects SP and CSR performance, and also acts as a mediator. This study contributes to both theory and practical management by investigating how DSR helps to achieve SP and CSR performance. This is a unique study of the mechanism to achieve SP and CSR performance through DSR and customer engagement with DSR.

1. Introduction

The best CSR portrayal of business organizations has become a recurrent theme in scientific research in the current era of digitalization [1,2]. It has also been part of the social agenda of business organizations [3]. Bouwman et al. [4] documented that the exponential progression of digitalization, humanity and social responsibilities have called for the development of digital CSR agendas of all kinds of business organizations. Digital social responsibility (DSR) is embedded in multidirectional programs of social media such as Twitter, Instagram and Facebook [5,6]. These social media programs allow organizations to communicate their DSR initiatives with stakeholders [7]. The current study was based on stakeholder theory that postulated the interconnected relationships among businesses and stakeholders [8]. Stakeholder theory holds that business organization has given importance to all kinds of stakeholders for mutual benefit. This theory also argues that a business is bound to create value for all stakeholders. Organizations can achieve a higher level of CSR performance when they involve customers and value their suggestions and feedback in their strategic decisions. In line with the assumptions of stakeholder theory, the aim of this study was to highlight that business organizations serve customers as one of the most relevant categories of stakeholders by interacting with them through the adoption of DSR programs (e.g., social media applications), which, in turn, enhance the CSR and strategic performances.
It is self-evident that CSR is an evergreen topic for business researchers, and it has been observed that socially responsible business organizations gain competitive advantages in the long run [9]. In the emerging digitalized business environment, CSR performance becomes a challenge for the business organization [7]. The same is the case with Small and Medium Enterprises (SMEs), as these small and medium enterprises already face the problem of constrained resources (i.e., physical capital, financial capital, human capital) [4].
SMEs are the major drivers for the development of all kinds of economies [6]. The roles of SMEs have gained strategic importance for the sustainable development of emerging and developing economies [4]. Although these organizations execute their advertising campaign using various social media applications [8], deliberation on the role of social media in DSR has been ignored [4]. In the era of digitalization, the multidirectional mechanisms of social media offer opportunities to the stakeholders, such as customers, to collaborate and participate to respond to the societal-related activities of an organization [10]. In the recent scenario of the digitalized business environment, organizations put efforts into the procedures of social media programs and make a declaration of the social responsibility attached to these multidirectional programs of social media in their strategic planning [8]. DSR has gained wider attention as it has been considered a valuable strategic movement of business organizations [11]. Therefore, the focus of the current study is to explore the role of DSR for the improvement of CSR performance and the SP of SMEs via customer engagement.
Organizations think strategically about the continuous changes that occur due to digitalization and respond through social media to cope with these changes and serve to meet the obligations of various stakeholders [12]. In this regard, an organization utilizes social media to respond to various stakeholders and includes DSR as a primary feature in its strategic planning [13]. Few studies have explored how DSRs are influenced by customer’s engagement regarding DSR, e.g., [14] when communicating corporate social obligations [8]; however, some researchers have pointed out the need for empirical work in this area [1]. The study intends to focus on the complex relationship existing between the DSR and the opportunities it brings with relation to the improvement and accomplishment of CSR performance and strategic performance (SP) of business organizations through customer engagement through DSR. By adopting a cross-sectional approach, we investigated a sample of virtual SMEs and their attitudes towards a DSR influenced by customer engagement with DSR, which is the foundation for the improvement of CSR performance and SP.
This paper is arranged in the following way. The next section is composed of a literature review discussing the variables of the research. Next is the methodology and analysis section, in which different statistical techniques are applied to the data. The results of the data have also been elaborated in this section. Finally, in the discussion section, a comprehensive discussion has been made along with theoretical implications, practical implications, future recommendations and limitations of research.
Figure 1 shows the relationship between study constructs. In the current study, four variables were used, i.e., DSR (independent), customer engagement with DSR (mediator) and SP and CSR performance (dependent).

2. Theoretical Background and Hypotheses Development

2.1. Digital Social Responsibility and CSR Performance

Businesses have recognized the strategic importance of CSR [15]. Although there is universally no definition that is accepted, CSR is generally described as the organizational processes and activities and its status with perceived stakeholder obligations or societal relations [16]. Nowadays, digital transformation has altered people’s behaviors and lives, and businesses have realized that digital platforms are important for firms to undertake the DSR. There is limited discussion on the mechanism of DSR of business organizations, and CSR activities are presented which are still based upon the evidence of the effects of offline CSR. Unlike offline CSR, DSR permits the customer to collaborate and participate with DSR activities formulated by businesses [3]. Social media offers multidirectional programs such as Twitter, Instagram or Facebook, allowing communication with low cost and high speed and facilitating consumers to create dialog among themselves, with firm’s digital social responsibility program (DSR) or with firms. Social media allows businesses to build digital platforms for the customer to create DSR programs that are relevant or noticeable to the consumers [2].
CSR is concerned with the formulation of corporate culture or corporate business/trade activities which are sustainable from social, ecological or economic aspects [17]. On the other hand, CSR of the firm is related to the standard configuration of social responsibility, social responsiveness processes and observable outcomes related to the societal relationships of the firm [18].CSR performance has a significant impact on the firmlife cycle. Positive perceptions of various stakeholders towards a firm’s CSR activities increase the company’s mature life cycle [19]. CSR activities help SMEs to pay attention to vital areas such as economic responsibility, environmental responsibility and well-being of the employees, customers and society as a whole [15]. This paper concludes that SMEs should pay attention to CSR activities to enhance their goodwill, and to communicate CSR programs to stakeholders [20].
DSR emphasizes business organizations dedication towards benefiting and protecting stakeholders, more specifically customers who have made online economic dealings with the firm [11]. Stakeholders who are indulged in online buying and selling with organizations that are involved in digitalized operational mechanisms are more enthusiastic to respond to the demand of stakeholders’ digitalized social responsibility. Digitalized business activities enable customers and other stakeholders to interact 24/7 with firms regarding their queries; hence, this study extends stakeholder theory to DSR aspect of businesses [14]. Digitalized SR can motivate stakeholders and, more specifically, other customers to become involved in digitalized CSR programs that create a positive perception towards CSR initiatives to enhance CSR performance. Existing studies empirically found that CSR activities affect the behavior or attitudes of customers [21]. Digitalization and e-commerce mechanism forced businesses to respond accordingly via social media which is one of the important mechanisms for undertaking initiatives and implementing activities of DSR [22]. When organizations successfully implement their DSR programs and gain the trust of customers regarding online economic transactions, they are more likely to enhance overall CSR performance [21]. Therefore, in the current study, we formulated the following hypothesis.
Hypothesis 1 (H1).
Digital social responsibility has a positive relationship with CSR performance.

2.2. DSR and Strategic Performance

SP is defined as the firm’s performance relating to its competitive situation/position associated with its competitors in significant areas such as increasing the awareness of firms, enhancing grip in industry and giving responses to the competitive challenges or pressure formed by key competitors [23]. SP represents the achievement of firms in diverse strategies such as distribution, customer service, financial, merchandising, supplier network and marketing or promotional strategies [24]. Business organizations, through SP, achieved their targets by agreement on the definition or allocation of the resource precedence, performance goals, informing the managers to maintain the current strategy or reviewing the plans to meet the goals strategically [25]. Due to the emergence of advanced technologies, SMEs also need a strong digitalized network and up to date knowledge in contrast to big enterprises, due to lack of experience and shortness of operational lives, for the improvement of performance [26]. SP can be enhanced when organizations take initiative towards the well-being of the stakeholders regarding digitalized social responsibility.
The notion of SP has gained wider attention from the researcher as the emergence of digitalization has changed the operational mechanism of business organizations [27]. SP is a broader concept and includes all types of performances such as financial performance, firms’ achievement of strategic goals, competitive advantages over rivals and foothold in the operational industry [28]. Recently, digitalization in terms of social media has become an integral part of today’s business world, and the combination of web technology, technological advances and cyberspace has become an ordinary practice in numerous industries such as educational institutions, businesses, service firms, organizations and stakeholders [29]. Business organizations and firms are allowed to interact or communicate with suppliers, customers, retailers and stakeholders from everywhere using social media by internet services at any time [30]. The previous literature has proved that the positive impact of digitalized social media via the internet supports businesses or firms in numerous ways, and many organizations have employed technological tools for improving or enhancing DSR practices [5]. Digitization applications help organization to enhance its DSR [7].
In the era of digitalization, the DSR mechanism of an organization can also contribute to the promotion of SP [31]. However, there is hardly any study available in the literature which shows the impact of DSR of an organization towards SP. The current study has been conducted to fill this research gap by investigating the role of DSR of an organization to achieve SP. Organizations with DSR programs give their maximum potentials to satisfy customers and other stakeholders which crop up SP [32].
Hypothesis 2 (H2).
Digital social responsibility has a positive relationship with SP.

2.3. DSR and Customer Engagement with DSR

For conceptualization of the notion of customer engagement, researchers applied two diverse approaches, i.e., behavioral and psychological [33]. Using the behavioral approach for the view of customer engagement, researchers conceptualized it as a set of behaviors and mostly used the term “customer engagement behaviors” [33,34,35]. According to Van Doom et al. [34], customer engagement behaviors can be described as behavioral manifestations for the firm or its brand focus, beyond the mere economic dealings. According to Oviedo-Garcia et al. [36], customer engagement refers to any possible combination among stakeholders that goes beyond the traditional economic dealings.On the other hand, most of the researchers have taken a psychological approach for the conceptualization of customer engagement, which is embedded in emotional, cognitive and behavioral dimensions [30]. So and King [37] suggested that customer engagement is a psychological state that is developed by co-creative and interactive experiences of the customer regarding their relationship with business organizations. Vivek et al. [38], stated that social media plays an important role and offers new opportunities for customers to willingly engross and make extensive interactions with business firms.
Due to digitalization, business organizations offer various economic and non-economic activities through social media, e.g., advertisement campaigns, online buying and selling of products and services and undertaking activities for the well-being of stakeholders [39]. Changing business circumstances offer a strategic movement for business organizations to interact with customers via Instagram, Facebook and Twitter [5]. However, at the same time, DSR has become an important mechanism for these organizations to help the community in unprecedented situations [4]. Social media provides a multidirectional mechanism that enables stakeholders, particularly customers, to interact and engage in dialogs among themselves, businesses and their DSR initiatives [22]. DSR programs created by business organizations have become more customer-centric due to their contribution and engagement in these social responsibilities programs [14]. DSR programs of an organization attract their customers in various ways. When customers have the opportunity to observe DSR initiatives undertaken by the firm, they are able to participate in DSR activities through dialogs using social media [40]. Given easy access and participation in the DSR programs, customers feel that the business organization is performing according to their perceptions, and they are more likely to become attached to these firms [11]. Such a perception of customers towards the DSR of a business organization creates confidence that the concerned business will not exploit their interests and rights [41]. Thus, organizations have carefully developed DSR programs through social media mechanisms which make the possibility for the customer’s engagement, and for creating feelings of trustworthiness, affection and oneness among customers. Therefore, in the current study, we formulated that:
Hypothesis 3 (H3).
Digital social responsibilities have a positive relationship with customer engagement with digital social responsibilities.

2.4. Customer Engagement with DSR and CSR performance

The existing studies documented that business organizations make efforts to develop those CSR practices and programs that are customer-centric [42]. Customers have limited access to the CSR initiatives of an organization based on traditional offline CSR practices [43]. However, digitalization has changed this phenomenon because of the interaction between firms and their customers via social media [38]. Through social media, customers easily approach the businesses stance towards DSR programs and give their suggestions for the development of organizational DSR [8]. Customer engagement with DSR also provides an opportunity for the firm to develop those programs that are associated with the demands of relevant customers [41]. Customer engagement with DSR has attained valuable attention of researchers in the current decade, being considered as the most important and critical factor for the improvement of the overall CSR performance of an organization [40]. In the current study, we argued that, when organizations develop their social responsibilities initiatives according to the demands of stakeholders, these CSR initiatives boost the trust and confidence of stakeholders, which enhances the CSR performance of these organizations. In line with these arguments, we have formulated the following hypothesis for the current study.
Hypothesis 4 (H4).
Customer engagement with DSR has a positive relationship with CSR performance.

2.5. Customer Engagement with DSR and SP

SP is mainly based on the multiple tasks carried out by an organization simultaneously, reciprocally or consecutively, which could be achieved through various strategies planned for stakeholders [27]. Digitalization has changed business operations, and business organizations serve stakeholders, especially their customers, using various social media applications [5]. Through online interactions with stakeholders, organizations can cope with the demands of stakeholders and incorporate their suggestions for the improvement of performance. Existing studies documented that customer engagement with the DSR programs of an organization provides valuable information for the development of strategies regarding social responsibility [44]. Organizations carefully formulate strategies for achieving performance and consider customer engagement with DSR [38]. Customer engagement with DSR has attained valuable attention in the current decade of digitalization, being considered as the most important and critical factor for the improvement of the overall performance of an organization [40].
Hypothesis 5 (H5).
Customer engagement with DSR has a positive relationship with SP.

2.6. Mediating role of Customer Engagement between DSR and CSR Performance

CSR performance has become a growing concern for all kinds of business organizations [45]. The most important reason behind this concern is the emergence of DSR due to digitalized operational activities of business activities [10]. The business organization makes it possible to develop and deliver these DSR programs with interaction with customers known as customer engagement with DSR. Customer engagements with DSR programs initiated by businesses have become a valuable source that further leads to better CSR performance [44], and customer engagement with DSR acts as a bridge between the association between DSR and CSR performance. The reasons for the mediating role of customer engagement with DSR in the association between firms DSR and CSR performance are based on two logics. The first reason is that customers and other stakeholders easily engaged themselves in DSR activities via social media and obtain satisfaction about DSR that is the basic element for better CSR performance [44]. Second, digitalized business activities are only successfully operated when the organization ensures the protection of customers by considering their engagement and feedback regarding the DSR program, thus improving the CSR performance. In line with these arguments, we formulated the following hypothesis:
Hypothesis 6 (H6).
Customer engagement with DSR positively mediates the relationship between DSR and CSR performance

2.7. Mediating role of Customer Engagement between DSR and SP

Customer engagement with DSR is considered a valuable source for the business organization that provides input for the development of DSR programs that are the primary demands of customers and other stakeholders. DSR programs that are customer-centric are mostly accepted and provide a foundation for the improvement of customer attachment towards organizations products and services that are important for higher performance [44]. Customer engagement with DSR also improves the internal processes, customer dealing and other practices, therefore bringing improvement in the overall performance and productivity of the firm [10,37]. DSR programs are the key mechanism for an organization in the digitalized business operation which is aligned with the demands of various stakeholders, thereby enhancing the performance of the business [46,47]. The current research hypothesized that customer engagement with DSR plays a vital role in gaining business performance and DSR programs establish the engagement of customers in these programs. The socially responsible initiatives of an organization related to digitalized business operation using social media provide an opportunity to the customers for their positive contribution that enhances the performance [21]. In the current study, we formulated that:
Hypothesis 7 (H7).
Customer engagement with DSR positively mediates the relationship between DSR and SP.

3. Methodology

3.1. Data Collection and Participants

The current study applied a cross-sectional design for the empirical findings of the hypothesized model. In the present study, an online survey method was used for data collection from owners/managers of hi-tech SMEs. A random sample of 609 was selected for data collection, and 567 expressed their formal agreement as part of this conducted survey. Those participants who formally agreed to participate in this survey were given an information sheet that carried a promise of confidentiality, a statement describing the aim of this research and information about the key constructs of the present study.
Data were collected in 2 rounds with 1 months’ lag. Information about the exogenous variables and demographic factors, such as age, education, gender and work experience, were gathered first. Data about the mediator and the outcome variable were gathered in the second round of data collection [48,49]. We received 513 and 478 filled replies in each phase of data collection, respectively. Information was investigated using SPSS 25.0 and structural equation modeling (SEM) in AMOS 25.0.
In terms of gender, 91.3% of respondents represented males and 8.7% represented females. The respondents’ average age was 37 years, while their average work experience was 11.54 years. As far as the respondents’ education is concerned, 2% respondents had a matriculation certificate (10 years of schooling), 30.9% had a secondary school certificate (12 school years), 42.7% graduated bachelor studies and the remaining 24.4% had a master’s degree.

3.2. Measurement

The respondents were requested to give data about the DSR, customer engagement with DSR, CSR performance and SP. Their responses were estimated through a 5-Point Likert scale i.e., 1 = SD (Strongly Disagree) and 5 = SA (Strongly Agree).

3.2.1. Digital Social Responsibility

DSR scale was adapted from the work of Kang and Hustvedt [50]. DSR was measured through 5-item scale and these items generated 0.84 Cronbach alpha values which were greater than the threshold level of 0.70.

3.2.2. Customer Engagement with DSR

The measurement of customer engagement with DSR was comprised of a 10-item scale adapted and modified from Chu et al. [51]. These items generated Cronbach’s α value of 0.81.

3.2.3. CSR Performance

CSR performance was used as a dependent variable in the current study and measured with a 27-item scale developed and validated by De Zoysa and Takaoka [52]. These items generated a Cronbach’s α value of 0.85. Table 1 contains the information about the adapted measurement scale used for the current study.

3.2.4. Strategic Performance

SP was used as a dependent variable in the current study and measured with a 4-item scale developed and validated by Chung [23]. These items generated a Cronbach’s α value of 0.85. Table 1 contained the information about the adapted measurement scale used for the current study.
Please refer Appendix A for items’ descriptions for each variable.

4. Results

We used descriptive statistics and a correlation matrix to check the association among variables. Furthermore, we used CFA to check the reliability and validity variables used. Study hypotheses were tested with the help of SEM (Structural Equation Modelling), which shows the association among independent and dependent variables. The SEM statistical technique was used to analyze and measure the relationship of variables. It is a set of statistical procedures and is more powerful than regression analyses. It is utilized to check linear causal relationships among observed and latent variables. At the same time, it accounts for measurement errors. Hence, SEM is a more suitable analytical technique to analyze our hypotheses.

4.1. Descriptive Statistics

With the help of descriptive statistics, we found the central tendency statistics of collected data and correlation statistics of the study constructs. The results quantified the average value of 3.9, 3.8, 3.6 and 3.5 reported by respondents for CSR performance, DSR, SP and customer engagement with DSR, respectively.
The results of descriptive statistics also produce the coefficients of correlations for study constricts. Table 2 depicted the coefficients of correlations between DSR, customer engagement with DSR, SP and CSR performance. Based on correlation coefficients, DSR showed a positive association with SP, i.e., (r = 0.21).
The correlation coefficients also confirmed the positive correlation between DSR and CSR performance, i.e., (r = 0.26). Moreover, the correlation coefficient of DSR and customer engagement with DSR, i.e., (r = 0.34), also confirmed the positive association. Finally, the correlation coefficients, i.e., (r = 0.24) and (r = 0.30), confirmed the significant connection of customer engagement with DSR for SP and CSR performance, respectively.

4.2. Estimation Model and Confirmatory Factor Analysis

The estimation model of the current study consisted of DSR, customer engagement with DSR, SP and CSR performance. We assessed the measurement model using confirmatory factor analysis (CFA). CFA, one of the mechanisms used in SEM, was applied for the confirmation of the constructs’ discriminant validity. For discriminant validity, four separate models were run and verified with diverse configurations. According to the findings generated with the help of CFA analysis, we confirmed the good fit of the model with four separate factors, i.e., (χ²=338.21; df = 742 p <0.001; CFI=0.94; GFI=0.96; SRMR = 0.058).
The scales of the variables were also examined for internal steadiness and convergent and discriminant validities. Cronbach’s alpha (α), average variance extracted (AVE), average shared variance (ASV, maximum shared variance (MSV) and the square values of AVE were determined for all the factors that we used in the analysis (Table 3). The scales proved an adequate level of internal consistency (α > 0.70). The scales also showed some adequate values of the discriminant and convergent validities (AVE = 0.70, ASV < MSV, ASV and MSV < AVE, and the square root values of AVE < inter-construct correlations). Table 3 presents the outcomes of reliability statistics for the study constructs.

4.3. Structural Model—Direct and Mediation Results

To assess the structural construct, the direct impact of the DSR on the customer engagement with DSR, SP and CSR performance were firstly investigated (See Table 4). The results showed a relevant positive effect of DSR on SP (β = 0.23, p < 0.001). Therefore, hypothesis 1 was validated. Furthermore, the results also showed that DSR also positively associated with CSR performance (β = 0.25, p < 0.001). Therefore, hypothesis 2 was validated. Moreover, DSR also showed a positive relationship with customer engagement with DSR (β = 0.33, p < 0.001). Therefore, hypothesis 3 was accepted. The findings also revealed that customer engagement with DSR significantly and positively associated with SP and CSR performance, (β = 0.22, p < 0.001) and (β = 0.28, p < 0.001), respectively. Therefore, study hypotheses 4 and 5 are accepted.
To test the mediating effect in the current study, we employed the procedure of Baron and Kenny using four steps suggested for testing the mediation. The outcomes of the mediating effect of the customer engagement with DSR for the DSR, SP and CSR performance link are shown in Table 5. The suitable ratios proved an adequate fit of the structural model 2 with the data. Finally, we examined the significance of the mediating role of the customer engagement with DSR for the DSR and SP; DSR and CSR performance links, using the bootstrap technique in AMOS 24.0. The values are shown in Table 5 and Figure 2.
The results in Table 5 displayed a relevant positive relation for DSR and customer engagement with DSR (β = 0.42, 95% confidence interim did not overcome zero). Likewise, the results also revealed a relevant positive correlation between customer engagement with DSR and SP (β = 0.31, 95% confidence interim didn’t overcome zero). The results also proved a relevant indirect link between the DSR and SP via customer engagement with DSR (β = 0.18, 95% confidence interim did not overcome zero). Therefore, hypothesis 5 was validated. The results also proved a relevant indirect link between the DSR and CSR performance via customer engagement with DSR (β = 0.21 *, 95% confidence interim did not overcome zero).
Results revealed that the direct link between DSR and CSR performance become insignificant when we added customer engagement with DSR in the model, which shows full mediation of customer engagement with DSR between DSR and CSR performance. Therefore, hypothesis 6 was also accepted. Furthermore, the results also proved a relevant indirect link between the DSR and SP via customer engagement with DSR (β = 0.18 *, 95% confidence interim did not overcome zero). Results revealed that the direct link between DSR and SP became insignificant when we added customer engagement with DSR in the model, which shows full mediation of customer engagement with DSR between DSR and SP. Therefore, hypothesis 7 was also accepted.

5. Discussion

The study aimed to examine the effect of DSR on customer engagement with DSR, SP and CSR performance. The findings also proved the mediating role of customer engagement with DSR for the DSR and SP, DSR and CSR performance links, respectively. Our research model consists of seven hypotheses and these hypotheses were proved and supported by the results. First, the direct link between DSR and CSR performance was tested. H1 proposed that DSR and CSR performance have a significant relationship. These findings support the work of previous researchers who argued that CSR performance is developed with the help of DSR where organizations follow ethical standards, practices, laws and codes for the social well-being of the stakeholders [32,53,54]. Furthermore, digitalization has changed the business operational mechanism which demands the execution of DSR platforms for the satisfaction of customers who made online transactions [44]. The current study proposed that DSR initiatives of an organization play an important role in the improvement of SP. The findings revealed that study H2 is supported. These findings are consistent with [2,41].
The study results of H3 proved that DSR and customer engagement with DSR have a significant positive relationship. These results support the work of previous researchers in the light of stakeholder theory that DSR, in term of interactions between firms and customers through social media applications, develops customer engagement with DSR and represents customers as part of the organization and provide suggestions for socially responsible activities [8,38,43]. Organizations being socially responsible observe a high level of engagement of customers with DSR programs [36]. DSR activities of organizations assume moral and ethical rules for online economic dealings [14].
Findings related to H4 and H5 proved that customer engagement significantly influences SP and CSR performance. SP researchers need to pay more attention to incorporating the digitalized social responsibility aspect of business organizations. Few studies on this specific topic were elaborated and confirmed this relationship. Puriwat and Tripopsakul [14] observed that customer engagement with the DSR of an organization developed a positive perception regarding the digitalized well-being of the society in a moral way, which in turn increases the CSR performance and SP [45].
Finally, this study proved that customer engagement with DSR work as a mediator for the DSR and CSR performance; DSR and SP links, i.e., our study hypotheses 6 and 7. Results indicated that the indirect effect of DSR on CSR performance and SP is significant. The mediating effect of customer engagement with DSR could beset as a mediator for the DSR and CSR performance link as a consequence of the findings of a few previous studies that analyzed the direct relation between those three variables and suggested a strong positive association between them in the organization frame. Customer engagement with DSR increases the trust and satisfaction of customers with CSR initiatives of the business organization and they feel that the organization performed on behalf of their best interest [52]. These positive perceptions that are developed through active participation and interaction of customers with DSR programs improve the CSR performance of the organization. Hence, all the study hypotheses were proved, and the results supported our developed theory.

5.1. Theoretical Implications

The current study theoretically contributes to the existing literature on DSR and customer engagement that play a dominant role in the improvement of DSR strategies. Moreover, the current study focuses on the DSR stance of the organizations based on ustomer engagement with DSR. In this regard, the study contributes to the stakeholder theory in a significant way as this theory assumes that business organization has given importance to all kinds of stakeholders for their involvement [8]. Furthermore, stakeholder theory proposed relationships between business organizations and stakeholders that allow stakeholders to be involved in organizational decisions. In the current study, we proposed that organizations give value to the stakeholders through their involvement in the CSR decisions, which is an important contribution to the stakeholder theory.
The current study also contributes by providing emerging antecedents, i.e., DSR and customer engagement with DSR that are necessary for the improvement of CSR performance and SP due to digital transformation. To achieve the objectives of the current study, we formulated a comprehensive research model for hi-tech SMEs testing both the direct and indirect impact of DSR on SP and CSR performance. Secondly, we investigated how DSR stimulate customers to engage with DSR through social media. There is not even a single piece of research that presents or tests such relationships.
Third, the importance of this research denotes the review of the DSR mechanism of business organizations in bringing customer engagement with DSR through various social media applications. Customer engagement with DSR is an important customer-related activity that forces organizations to develop the best CSR strategies representing the well-being of society and relevant customers [10]. Up until now, limited deliberation has been made to highlight the role of customer engagement with DSR regarding its determinant and outcomes. Therefore, this study is a step to fill this research gap and focuses on DSR as potential determinants of customer engagement with DSR, and SP and CSR performance as an outcome of customer engagement with DSR to extend the scarce existing literature on this specific topic.

5.2. Practical Implications

Besides contribution toward theory, this study also entails remarkable contributions to management in practice. This study recommends that the owner/managers of hi-tech SMEs must concentrate on DSR and carefully develop digitalized CSR strategies that provide consistent information, build public interest and satisfy the expectations of stakeholders. First, the current study suggested that organizations can enhance CSR performance and SP with the help of customer engagement with DSR via DSR programs. By doing so, CSR performance and SP can only be achieved when customers are engaged and provide input for the development of DSR strategies of organizations. Furthermore, for the best practices of CSR performance and SP, DSR regarding the well-being of society can be considered for a better response to the society [39,44].
It is self-evident that organizations’ strategic movement towards DSR will set a strong foundation for developing customer engagement with DSR, SP and CSR performance. CSR performance and SP have a significant impact on the firm life cycle. Higher CSR and strategic performance of an organization reduces the firm financial distress and increases the company mature life cycle [1,2]. Hence, CSR performance is achieved with DSR activities through which the organization incorporates the right suggestions of customers. Similarly, this study also guides practical management about the benefits of DSR for establishing customer engagement with DSR. When organizations include ethical and social standards in their digitalized practices, then the stakeholders of that organization are more attached and satisfied with the strategic plans of these organizations.
The study also faces a few limitations that might be future research directions. The current study has been conducted on hi-tech SMEs; however, future research may include some larger companies to generalize the findings of this research. We took data from hi-tech SMEs only about study variables; however, some other industries may be taken for future research [55,56]. We only investigated the relational impact of DSR on customer engagement with DSR, SP and CSR performance through quantitative analysis; however, data may be taken and analyzed through qualitative techniques for more insights into study variables. The current study applied a cross-sectional design for testing the hypothesized model; however, longitudinal design can be used for understanding the impact of DSR on CSR performance and SP.

Author Contributions

Conceptualization, supervision, and project administration, Z.Y.; resources, formal analysis, investigation, methodology, software etc. by A.K. All authors have read and agreed to the published version of the manuscript.

Funding

The authors would like to thank Prince Sultan University for their support.

Institutional Review Board Statement

Letter No. GCMS/2021/ADM-674).

Informed Consent Statement

Respondents sent their approvals.

Data Availability Statement

Participants were ensured to keep data confidential.

Acknowledgments

The authors would like to acknowledge the support of Prince Sultan University for paying the Article Processing Charges (APC) of this publication.

Conflicts of Interest

The authors declare no conflict of interest.

Appendix A

Digital Social Responsibility
  • DSR1 Our firm is committed to using a portion of its profits to help the communities and societies via social media platforms.
  • DSR2 Our firm gives back to the communities in which it does business via social media platforms.
  • DSR3 The communities and societies benefit from contributions through social media platforms.
  • DSR4 Our firm integrates digital charitable contributions into its business activities. DSR5 Our firm is interested in corporate giving through social media platforms
Customer Engagement with DSR
  • CE1 Posting personal experiences related to DSR activities
  • CE2 Friending, liking or following DSR activities
  • CE3 Posting or sharing thoughts about DSR activities
  • CE4 Posting or sharing photos, videos, memes or gifs created by others that relate to DSR activities
  • CE5 Posting or sharing photos, videos, memes or gifs created by you that relate to DSR activities
  • CE6 Receiving messages or informationregarding its DSR activities
  • CE7 Forwarding someone else’s discussion on DSR activities to other people
  • CE8 Joining groups dedicated to DSR activities
  • CE9 Creating a group dedicated to DSR activities
  • CE10 Attending a gathering regarding DSR activities that you learned about through social media.
Strategic Performance
Our Firm…
Gaining a foothold in the industry,
Increasing awareness of the firm and brand,
Responding to challenges created by competitors,
Achieve financial performance.
CSR Performance
  • Our company has a director, a committee and a department or unit responsible for CSR.
  • Our company has a policy or code of conduct defining the responsibility and the role of the firm to society.
  • Our company has conducted employee training on corporate ethics, prevention of corporate misconduct and corporate compliance.
  • Our company has consulted with our stakeholders (interested parties).
  • Our company has a designated person responsible for occupational health and safety in accordance with related laws.
  • Our company has procurement guidelines based on CSR for selecting and contracting suppliers.
  • Our company ensures that our suppliers comply with relevant domestic and international laws and regulations or requests that our suppliers are compliant.
  • Our company has internal rules and policies to prevent and limit the transactions with firms suspected of violating laws or engaging in anti-social behavior.
  • Our company provides our employees with holidays and leave (including prenatal and childcare leave) according to related laws.
  • Our company provides our employees with insurance (including industrial accident insurance, health insurance and pensions) according to related laws.
  • Our company discloses information on CSR activities, including public relations and outreach activities.
  • Our company allows in-house tours to local residents or other applicants who seek to visit our company.
  • Our company discloses information about the safety and production methods of the ingredients/parts/components of our products.
  • Our company has guidance/regulations to control the access to customer information and the release of such information to outside parties.
  • Our company has obtained ISO14000 certification.
  • Our company has its own environmental policy to more efficiently use resources in addition to complying with relevant laws and regulations.
  • Our company takes into account the impact of components/manufacturing methods on the environment as a primary decision criterion when selecting materials, parts, et cetera.
  • Our company has taken initiatives such as recycling and reducing emissions from wastes and pollutants. Fair operating practice
  • Our company has a code of ethics to prevent fraud and illegal behaviour of employees.
  • Our company collects and holds information on the safety and fairness of our suppliers’ products and production methods.
  • Our company makes regular donations to political parties and political organizations and regularly subscribes to their publications.
  • Our company makes regular donations or gifts to local events such as festivals and cultural events.
  • Our company has a system to support the voluntary activities of our employees or to promote such activities.
  • During the last five years, our company has established a good record of conducting activities in corporation with industry, government, academic institutions, local public organizations and not-for-profit organizations.
  • During the last five years, our company has accepted interns and trainees.
  • During the last five years, our company has received financial assistance, grants and subsidies for the employment of the elderly, persons with disabilities, women, and unemployed graduates.
  • As much as possible, our company secures management resources such as capital and labour locally.

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Sustainability 14 00131 g001 550
Figure 1. Conceptual framework.
Figure 1. Conceptual framework.
Sustainability 14 00131 g001
Sustainability 14 00131 g002 550
Figure 2. Coefficients of direct and indirect effect.
Figure 2. Coefficients of direct and indirect effect.
Sustainability 14 00131 g002
Table
Table 1. Measurement Scale.
Table 1. Measurement Scale.
VariableAdapted/Adopted/Self-MadeCitationNo. of Items
Digital Social ResponsibilityAdaptedKang and Hustvedt (2014).5 items
Customer Engagement with DSRAdaptedadapted and modified from Chu et al., (2020)10 items
Strategic PerformanceAdaptedDeveloped by Chung (2011)4 items
CSR PerformanceAdaptedDeveloped and validated by De Zoysa and Takaoka (2019).27 items
Table
Table 2. Correlation.
Table 2. Correlation.
ConstructsMeanSD12345678
Gender0.90.811
Age36---0.091
Work experience2.90.840.080.031
Education level2.40.910.060.050.041
Digital social responsibility3.80.930.090.12 *0.080.071
CE with DSR3.50.910.050.090.040.050.34 **1
Strategic performance3.60.890.020.050.070.030.21 **0.24 **1
CSR performance3.90.950.030.070.060.090.26 *0.30 **0.19 **1
* = 0.005 & ** = 0.000.
Table
Table 3. Soundness and convergent viability and discriminant.
Table 3. Soundness and convergent viability and discriminant.
Model1234αCRAVEMSVASV
1. Digital social responsibility0.84 0.840.960.660.190.13
2. Customer engagement with DSR0.430.77 0.810.930.560.180.17
3. Strategic performance0.410.360.79 0.810.930.570.170.16
4. CSR performance0.280.390.310.850.850.960.770.160.11
Notes: MSV = maximum shared variance; ASV = average shared variance; bolded values on the diagonals of columns 2 to 4 are the square root values of AVE; CR = composite reliability.
Table
Table 4. Results of Path Analysis using Structural Equation Modeling.
Table 4. Results of Path Analysis using Structural Equation Modeling.
SpecificationEstimateLLUP
Standardized direct impact
DSR → SP0.23 *0.110.16
DSR → CSR performance0.25 *0.130.18
DSR → Customer engagement with DSR0.33 *0.200.32
Customer engagement with DSR → SP0.22 *0.240.39
Customer engagement with DSR → CSR performance0.28 *0.180.34
* = 0.005.
Table
Table 5. Results for the indirect effect of DSR.
Table 5. Results for the indirect effect of DSR.
SpecificationEstimateLLUP
Standardized direct impact
DSR → SP0.11−0.040.25
DSR → Customer engagement with DSR0.42 *0.370.59
Customer engagement with DSR → SP0.31 *0.210.53
DSR → CSR performance0.130.070.19
Customer engagement with DSR → CSR performance0.41 *0.230.60
Standardized indirect effects
DSR → Customer engagement with DSR → SP0.18 *0.090.28
DSR → Customer engagement with DSR → CSR performance0.21 *0.110.30
* = 0.005.
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Khattak, A.; Yousaf, Z. Digital Social Responsibility towards Corporate Social Responsibility and Strategic Performance of Hi-Tech SMEs: Customer Engagement as a Mediator. Sustainability 2022, 14, 131. https://doi.org/10.3390/su14010131

AMA Style

Khattak A, Yousaf Z. Digital Social Responsibility towards Corporate Social Responsibility and Strategic Performance of Hi-Tech SMEs: Customer Engagement as a Mediator. Sustainability. 2022; 14(1):131. https://doi.org/10.3390/su14010131

Chicago/Turabian Style

Khattak, Amira, and Zahid Yousaf. 2022. "Digital Social Responsibility towards Corporate Social Responsibility and Strategic Performance of Hi-Tech SMEs: Customer Engagement as a Mediator" Sustainability 14, no. 1: 131. https://doi.org/10.3390/su14010131

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