The impact of corporate social responsibility (CSR) and customer trust on the restoration of loyalty after service failure and recovery

Abstract

Purpose – This study seeks to examine perceived corporate social responsibility (CSR) with a focus on ethical and legal questions, related to the constructs such as recovery satisfaction, customer trust, and loyalty after a service failure. Design/methodology/approach – An empirical test was conducted on this relationship in the context of service failure and recovery. A structural equation model was employed to test the hypotheses. Findings – Results indicate that perceived CSR has a significant impact on customer trust and loyalty and that customer trust serves as a key mediating variable in service recovery. Research limitations/implications – This study provides a theoretical implication for the relationship between perceived CSR and the relationship constructs such as service recovery satisfaction, customer trust, and loyalty. Practical implications – The results suggest that managers may need to be aware of perceived CSR as a key variable in restoring customer loyalty. The results further suggest that perceived CSR has a direct and indirect positive effect on loyalty; perceived CSR has a direct impact on loyalty, but it also has an indirect influence on loyalty through customer trust. Originality/value – In an attempt to deepen the understanding of how customer perceptions of firm CSR are connected with other customer-related outcomes during service recovery, the present research proposes a comprehensive model which encompasses CSR and other key relationship constructs after a service failure and recovery.