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SP532019JBEpaperonCSRAndCustomerValueCo-creation.pdf

O R I G I N A L P A P E R

CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership and Relationship Marketing Orientation

Trong Tuan Luu1

Received: 28 September 2015 / Accepted: 27 February 2017 / Published online: 9 March 2017

� Springer Science+Business Media Dordrecht 2017

Abstract Corporate social responsibility (CSR) is a force

to ‘‘pull’’ customers to the organizational mission and

values, and influence them to contribute to the organiza-

tion. The primary purpose of the research is to assess how

CSR contributes to customer value co-creation. The

research also seeks evidence on the moderation mecha-

nisms of servant leadership and relationship marketing

orientation for the effect of CSR on customer value co-

creation behavior. The data were collected from 873

employees and 873 customers in software industry in

Vietnam context. The data analysis supported the positive

effect of CSR on customer value co-creation behavior.

Servant leadership and relationship marketing orientation

were also found to play moderating roles for the CSR–

customer value co-creation linkage.

Keywords Corporate social responsibility � Customer value co-creation behavior � Servant leadership � Relationship marketing orientation � Vietnam

Introduction

Organizations have been facing stronger and stronger for-

ces from the market, especially customer forces such as the

increasing fragmentation of consumer markets; rapidly

changing customer buying patterns and life styles; more

sophisticated and demanding customers; and their higher

expectations in terms of customization, newness, quality,

and price (Ernst et al. 2011). Customer forces can be

challenges for passive organizations, but may be assets or

resources for organizations with sustainable strategic pos-

ture, which can transform customer forces into values for

themselves. Service-dominant logic perspective—the

foundation for the study of value creation within service

systems (Vargo et al. 2008)—unveils the value co-creating

role of customers (Vargo and Lusch 2004) in addition to

their traditional role as carriers of needs. Co-creation

entails a unique, strategic partnership between the organi-

zation and the customer (Zhang et al. 2015). In Vargo and

Lusch’s (2004) words, customers are partners and co-pro-

ducers of value, services, and products. Co-creation blurs

the boundaries of the organization by ‘‘outsourcing’’

innovation and value creation to customers. As such, cus-

tomer forces are not merely demanding but contributive by

nature as well.

In light of service-dominant logic (Vargo and Lusch

2004), customer is also operant resource (i.e., source of

knowledge and skills, Vargo and Lusch 2008; Gohary and

Hamzelu 2016) for value co-creation. Yet, the conversion

of this operant resource into value co-creation behavior

may not occur without customers’ social identification

with the organization in light of social identity theory

(Ashforth and Mael 1989). Identification alludes to the

extent to which organizational members perceive them-

selves and the focal organization as sharing the same

defining attributes (Dutton et al. 1994). Identified cus-

tomers not only display loyalty, but also enthusiastically

promote the organization and its products or services to

others (Bhattacharya and Sen 2003) and may co-create

value with the organization.

A notion of value based on ethics such as corporate

social responsibility (CSR) is already emerging within a

range of cutting-edge economic practices involving aspects

& Trong Tuan Luu [email protected]

1 Swinburne Business School, Swinburne University of

Technology, Melbourne, Australia

123

J Bus Ethics (2019) 155:379–398

DOI 10.1007/s10551-017-3493-7

of customer co-creation (Arvidsson 2011; Cova et al.

2011). CSR is viewed as instances where an organization

transcends its interests and legal compliance to engage in

activities that advance social good (McWilliams and Siegel

2001). CSR, which reflects an organization’s orientation

toward its stakeholders (Abugre and Nyuur 2015), has been

reported to make the organization an attractive target for

customers to identify with (Piercy and Lane 2011). In

addition, service-dominant logic was extended for some

societal and ethical dimensions (Laczniak 2006) using

business cases where CSR is a vital part of value creation

and value-in-use (Enquist et al. 2006, 2008). Thus, pre-

mised on service-dominant logic (Vargo and Lusch 2004)

and social identity theory (Ashforth and Mael 1989), CSR

may serve as an organizational catalyst for customers’

engagement in value co-creation with the organization.

Yet, the value of CSR to customers may have a stronger

influence on customers’ value co-creation behavior if this

value is role-modeled by the leader of the organization.

Due to ‘‘his or her moral responsibility not only to the

success of the organization but also to his or her subordi-

nates, the organization’s customers, and other organiza-

tional stakeholders’’ (Ehrhart 2004, p. 68), a servant leader

has a commitment to stakeholder interests and role-models

stakeholder-oriented value of CSR (Abugre and Nyuur

2015). A spirit of servanthood from a servant leader (Liden

et al. 2008) can be infused into employees’ interaction with

and services to customers, thereby increasing customer

trust in the organization’s enactment of CSR values and

identification with these values as well as with the orga-

nization. The interactive effect of CSR and servant lead-

ership may hence make the organization a more intriguing

target for social identification.

Furthermore, a mechanism that reflects the considera-

tion of customers as an important operant resource (Gohary

and Hamzelu 2016) such as relationship marketing orien-

tation (RMO) can further enhance customers’ identification

with the organization. Relationship marketing orientation is

viewed as ‘‘the extent to which a company engages in

developing a long-term relationship with its customers’’

(Tse et al. 2004, p. 1162). Relationship marketing orien-

tation consists of marketing activities oriented toward

customer interests (Morgan and Hunt 1994, p. 22) to

increase perceived membership in customers and activate

reciprocal contributions from customers (Gruen 1995;

Gruen et al. 2000). Consequently, activities of RMO bring

CSR values closer to customers and further increase

reciprocity from customers such as in form of value co-

creation. In other words, RMO can contribute another

moderation mechanism to the relationship between CSR

and customer value co-creation behavior.

Following the above logic, this research makes a four-

fold contribution to managerial knowledge. The first aim

and contribution of the research is to assess the extent to

which CSR contributes to customer value co-creation

behavior. With this first aim, the current research adds to

the growing scholarly attention to the impact of CSR on the

attitudes and behaviors of core organizational stakeholders

including customers (He and Li 2011; Karaosmanoglu

et al. 2016). Prior CSR research reported the bridge

between CSR and customer outcomes such as customer

satisfaction, trust, identification, and loyalty (Martı́nez and

del Bosque 2013), but has not paid adequate academic

attention to the role of CSR in activating customer value

co-creation. This first aim of our research also comple-

ments the deficit in scholarship on the antecedents of

customer co-creation (Morosan and DeFranco 2016).

Moreover, using service-dominant logic as a premise for

the link between CSR and customer value co-creation, our

research responds to Laczniak and Murphy’s (2006) sug-

gestion for the extension of the thinking of service-domi-

nant logic by connecting it with such concepts as CSR. The

second research aim is to seek an insight into the moder-

ation mechanism of servant leadership for the CSR-cus-

tomer value co-creation linkage. Besides, most research on

relationship marketing has just focused on the role of

relationship marketing efforts in enhancing customer rela-

tionships such as customer loyalty (Palmatier et al. 2006),

thereby increasing seller performance outcomes such as

sales growth and profits (Morgan and Hunt 1994).

Nonetheless, its role in interacting with CSR to enhance

customer value co-creation behavior has not been tested.

The third research aim thus entails investigating the mod-

eration effect of relationship marketing orientation on the

interconnection between CSR and customer value co-cre-

ation behavior. The last contribution of the research is to

test the research model, which is grounded on Western

management theories, in Vietnam context. Vietnam is an

Asian emerging market in the process of transitioning from

a centrally planned economy to a market economy (Ngo

et al. 2016); therefore, customers have been increasing

their awareness of their role as active partners in the value

co-creation process in addition to their traditional role as

passive recipients of products or services that the past

centrally planned economy shaped. As a result, Vietnam

market with this transition in customer awareness of their

role may serve as an interesting context to test research

models of customer value co-creation. Besides, Vietnam is

a collectivist culture, which mirrors a relatively high level

of orientation toward others (Tran et al. 2016). Conse-

quently, the impact of CSR on customer behavior may be

more pronounced than that in an individualistic culture

since socially responsible organizations, which address

collective interests (Abugre and Nyuur 2015), may have

more likelihood of value congruence with customers in

collectivistic culture of Vietnam.

380 T. T. Luu

123

Following this introduction, the literature review section

discusses the relationships among the constructs in the

research model. How the data were collected and analyzed

is then presented. The section on theoretical and manage-

rial implications eventually wraps up the paper.

Literature Review and Hypotheses Development

CSR and Customer Value Co-creation Behavior

Corporate Social Responsibility (CSR)

Corporate social responsibility (CSR) alludes to values and

infiltrating values into practice (Grant and O’Connor

2013). CSR is integrated with a corporate ethical and moral

environment and corporate value system (Jin et al. 2013).

From Carroll’s (1979) perspective, CSR covers an orga-

nization’s obligations to pursue profits, accept social obli-

gations, grow its business, and embed ethical values, which

are mapped to instrumental, political, integrative, and

ethical theories (Garriga and Melé 2004). Carroll’s (1991)

perspective on CSR is also expressed in CSR pyramid

which is composed of four tiers in the upward direction

including economic CSR, legal CSR, ethical CSR, and

discretionary CSR. This research pursues McWilliams and

Siegel’s (2001) view of CSR as instances where an orga-

nization transcends its interests and legal compliance to

engage in activities that advance social good. This defini-

tion is adopted in this study since it mirrors both the ethical

facet (i.e., doing what is right, just, and fair) and the phi-

lanthropic facet (i.e., enhancing quality of life by con-

tributing to the community) of CSR (Carroll 1979).

Customer Value Co-creation Behavior

In light of service-dominant logic (Vargo and Lusch 2004),

customers are always co-creators of value. As active par-

ticipants and cooperative partners in relational exchanges,

customers co-create value with the organization through

their engagement in the entire service value chain (Yi and

Gong 2013). Customers play an active role in the provision

of service and in the realization of its benefit (co-creation

of value) (Vargo and Lusch 2004). Some customers might

be engaged in activities that have traditionally been

deemed to be ‘‘organizational’’ activities such as self-ser-

vice (Mills and Morris 1986), generating ideas for service

improvement (Bettencourt 1997), and even co-designing,

and can therefore be viewed as ‘‘part-time employees’’ of

the organization (McColl-Kennedy et al. 2012).

In service-dominant logic (Vargo and Lusch 2004),

value co-creation is implemented through resource inte-

gration. Customer value co-creation is defined as ‘‘benefit

realized from integration of resources through activities

and interactions with collaborators in the customer’s ser-

vice network’’ (McColl-Kennedy et al. 2012, p. 1). Such

activities and interactions are wrapped under the term

‘‘customer value co-creation behavior,’’ which comprises

two higher-order factors: customer participation behavior

and customer citizenship behavior (Yi and Gong 2013).

Customer participation behavior, which is viewed as

required (in-role) behavior vital for successful value co-

creation (Yi et al. 2011), comprises information seeking,

information sharing, responsible behavior, and personal

interaction. Customers seek information on the way to

perform their tasks as value co-creators (Yi and Gong

2013). Customers should also share resources such as

information for use in value co-creation processes (Leng-

nick-Hall 1996). Additionally, for successful value co-

creation between themselves and employees, customers

must be responsible (Ennew and Binks 1999), cooperative,

abiding by rules and policies, and accepting directions from

employees (Bettencourt 1997). Effective value co-creation

also necessitates personal interaction between customers

and employees (Ennew and Binks 1999).

On the contrary, customer citizenship behavior is vol-

untary (extra-role) behavior that yields extraordinary value

to the organization but is not necessarily required for value

co-creation (Yi et al. 2011). This type of behavior is

composed of feedback, advocacy, helping, and tolerance.

Feedback embraces solicited and unsolicited information

that customers provide for employees, which helps

employees and the organization to sustainably improve the

service creation process (Groth et al. 2004). Advocacy

indicates allegiance to the organization and promotion of

the organization’s interests beyond the individual cus-

tomer’s interests (Bettencourt 1997). In the context of

value co-creation, helping alludes to customer behavior

aimed at aiding other customers (Yi and Gong 2013).

Lastly, tolerance entails customer patience in case of

inadequate service delivery, which does not meet the cus-

tomer’s expectations (Lengnick-Hall et al. 2000).

CSR and Customer Value Co-creation Behavior: From

Service-Dominant Logic and Social Identity Perspectives

The relationship between CSR and customer value co-

creation behavior can be analyzed through service-domi-

nant logic and social identity approach. Service-dominant

logic is a predominant concept in the services industry,

providing a crucial marketing theory in which intangible

resources, co-creation of value, and relationships are the

keys to determining marketing exchanges (Navarro et al.

2014). In service-dominant logic, the aim is to enhance an

organization’s value including the value of its relationships

with customers, suppliers, and the entire society, leading to

CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership… 381

123

a closer alignment between the organization and its mul-

tiple stakeholder interests (Abela and Murphy 2008). Ser-

vice-dominant logic encompasses concepts of the value-in-

use and co-creation of value rather than the value-in-ex-

change and embedded-value concepts of goods-dominant

logic. Hence, in lieu of organizations being informed to

market to customers, they are encouraged to market with

customers, as well as other value creation partners in the

organization’s value network (De Chiara 2012). CSR,

which addresses the interests of stakeholders including

customers (Martı́nez and del Bosque 2013), may tighten

the relationship between customers and the organization as

well as influence customers to market with and co-create

value with the organization in light of service-dominant

logic (De Chiara 2012).

In addition, service-dominant logic highlights the mag-

nitude of operant, not operand, resources. Operant resour-

ces focus on actors proactively shaping the use of resources

rather than the more passive approach of operand resources

(e.g., land and raw materials) being acted on (Laczniak and

Santos 2011). The pivotal concept in service-dominant

logic is that service—the application of resources for the

benefit of another party—is exchanged for service (Vargo

and Lusch 2004, foundational premise 1 (FP1)). ‘‘We have

interaction in society—service-for-service exchange—and

its corollary, value (i.e., benefit) (co)creation, is the glue

that holds social units and society in general together’’

(Vargo and Lusch 2011, p.4). Since a socially responsible

organization integrates social concerns in its business

operations and in its interaction with its stakeholders on a

voluntary basis (De Chiara 2012), CSR may produce such

an interaction in society for value co-creation.

Service-dominant logic, by offering a stronger rela-

tionship focus, endeavors to surmount the depersonalizing

effects of specialization by acknowledging that human

beings ‘‘are at the center and are active participants in the

exchange process’’ (Vargo and Lusch 2004, p. 12). Since

the focus of major ethical systems such as socially

responsible organizations is on how human beings should

behave and to relate to one another (Laczniak and Murphy

2006), CSR can serve as an ethical base for value co-cre-

ation in service-dominant logic. Moreover, since it is ‘‘in-

herently both consumer-centric and relational’’ (Vargo and

Lusch 2004, p. 12), service-dominant logic provides a

better foundation for marketing ethics and an explanation

for how ethical values in CSR can foster value co-creation

in customers. For instance, the collaborative nature of co-

creation (FP6) presupposes a requisite level of trust and

identification by both parties that CSR can foster (Pérez

and Rodrı́guez del Bosque 2015). Besides, customer-ori-

ented relational view (FP8) in service-dominant logic

indicates that when organizations view interactions with

customers as being sustainable rather than transactional

under CSR strategy (Esper and Boies 2013), they are prone

to market with customers (De Chiara 2012) and engage

them in value co-creation. Service-dominant logic was also

expanded for some societal and ethical dimensions (Lacz-

niak 2006) through business cases where CSR is an

important part of value creation and value-in-use (Enquist

et al. 2006, 2008).

Furthermore, social identity theory (Ashforth and Mael

1989) has been utilized to shed light on the effect of CSR

on customer behavior (Karaosmanoglu et al. 2016). The

main elements of the social identity approach are self-

categorization theory (e.g., Turner et al. 1987) and social

identity theory (e.g., Tajfel and Turner 1986). Self-cate-

gorization theory indicates that human beings have a need

to simplify the social world by categorizing individuals

into groups (e.g., occupation, nationality, clubs, social

groups). Individuals perceive themselves as belonging to a

particular category. According to social identity theory,

individuals strive for positive self-esteem by enhancing

their social identity.

Bhattacharya and Sen (2003) transferred the social

identity approach into the customer domain and built a

conceptual framework for customer–company identifica-

tion. Since this group identification can even occur in the

absence of formal membership (Reed 2002), customers

who are not formal members of an organization could

identify with the organization if they find it attractive and

capable of enriching their social identity (Ahearne et al.

2005). In other words, customers’ self-definitional needs

can be partially fulfilled by the organizations they patron-

ize. As Bhatthacharya and Sen (2003, p. 77) note, ‘‘in

today’s era of unprecedented corporate influence and

consumerism, certain companies represent and offer

attractive, meaningful social identities to consumers that

help them satisfy important self-definitional needs.’’

The role of CSR in engendering attractive, meaningful

social identities for customers has been analyzed in light of

social identity theory (Pérez and Rodrı́guez del Bosque

2015). When customers perceive the values reflected by the

organization’s activities to be congruent with their own

values, identification with the organization increases. From

social identity theory perspective (Ashforth and Mael

1989), individuals need to distinguish themselves from

others in social contexts (Tajfel and Turner 1986) and thus

tend to seek out groups for affiliation that are distinctive on

dimensions they value. Therefore, when customers believe

that the organization has a configuration of distinctive

characteristics such as CSR that they value, they will find

that organization an attractive target for identification

(Pérez and Rodrı́guez del Bosque 2015). When customers

perceive that the organization conducts business over and

above the legal requirements on a layer of moral and ethics,

they are likely to feel esteemed and highly identify with the

382 T. T. Luu

123

organization by performing positive behaviors, leading to a

positive link between customers’ perceived CSR and their

pro-organizational behaviors such as value co-creation

behavior. This line of discussion based on service-domi-

nant logic and social identity approach leads to the

expected positive relationship between CSR and customer

value co-creation behavior:

H1 CSR is positively related to customer value co-cre-

ation behavior.

Servant leadership as a Moderator

Leadership that is rooted in ethical and caring behavior,

such as servant leadership, is vital (Van Dierendonck

2011). Leaders who lead with a motivation to serve others

display servant leadership (Van Dierendonck 2011). The

former chairman of the Greenleaf Center for Servant

Leadership, Larry Spears, has deemed servant leadership

‘‘a model that identifies serving others—including

employees, customers, and community—as the number-

one priority’’ (Spears 2002, p. 4). Echoing this sentiment,

Hale and Fields (2007) defined servant leadership as ‘‘an

understanding and practice of leadership that places the

good of those led over the self-interest of the leader,’’

emphasizing leader behaviors that focus on development of

others, and de-emphasizing glorification of the leader (p.

397). Servant leadership is leadership that highlights

cooperation and care for stakeholders over power and

short-term gains (van Dierendonck 2011). Servant leaders

hence demonstrate their moral responsibility to the success

of the organization as well as to the success of its stake-

holders, including its employees, customers, and other

organizational stakeholders (Ehrhart 2004, p. 68).

Servant leadership is characterized by providing direc-

tion, empowering and developing people, and demon-

strating humility, authenticity, interpersonal acceptance,

and stewardship (Van Dierendonck 2011). This is in line

with Laub’s (1999) six elements of a servant-led organi-

zation: valuing people, developing people, building com-

munity, exhibiting authenticity, providing leadership, and

sharing leadership. Servant leadership thus fosters organi-

zational justice, organizational trust, organizational citi-

zenship behavior, and collaboration (Parris and Peachey

2013).

Servant leadership nurtures a service climate where

priority is placed on serving the customer (Jaramillo et al.

2015). When customers perceive customer orientation that

the servant leader shapes in the organization’s services to

customers (Schwepker 2016), they tend to have a stronger

perception of the organization’s CSR actions toward

stakeholders, thereby further identifying with it (Pérez

and Rodrı́guez del Bosque 2015). Justice to stakeholders

including customers that the servant leader builds (Sch-

wepker 2016) also enhances this customer-company

identification. If customers find that the organizational

leader demonstrates a low commitment to serve stake-

holders, they may not trust that the leader will translate

CSR strategy into actions. As a result, customers may

have low identification with CSR values of the organi-

zation, leading to low motivation to become ‘‘partial

members’’ of the organization (Mills and Morris 1986;

McColl-Kennedy et al. 2012). With low perceived

membership, customers may not behave as dynamic

operant resources for value co-creation as reflected in

service-dominant logic (Gohary and Hamzelu 2016).

Tung et al. (2014) also found that servant leadership

fosters service orientation in the organization, which adds

to customer–company identification. Thus, servant lead-

ership may enhance the effect of CSR on customer-

company identification, thereby further leveraging cus-

tomers’ co-creation of value with the organization. In a

nutshell, servant leadership adds more stakeholder-di-

rected force (Ehrhart 2004) to CSR actions, which also

reflect stakeholder orientation (Abugre and Nyuur 2015),

in cultivating customer value co-creation behavior.

Moreover, underscoring personal integrity and serving

others, including employees, customers, and communities

(Liden et al. 2008), servant leadership extends beyond the

workplace to foster within employees a spirit of ser-

vanthood, or working to create value for the community.

Employees are thus motivated to emulate serving behav-

ior of their leader by serving their stakeholders including

customers (Liden et al. 2008). In other words, besides the

motivation to serve stakeholders which is cultivated in

CSR context, servant leadership adds more motivation of

servanthood to employees. Perceiving the servant leader’s

investment in their relationships with and the growth of

stakeholders (Ehrhart 2004; Liden et al. 2008) including

customers, employees have higher trust in CSR values

and further engage in sharing and enacting CSR values

with customers, thereby further inspiring customers to co-

create value with the organization. In addition, according

to Chen et al. (2015), servant leadership fosters customer-

focused citizenship behavior and customer-oriented

prosocial behavior among frontline employees, which

further increases customer identification with prosocial

values of CSR and further engages in value co-creation

behavior. Servant leadership can thus be posited to play a

moderating role for the positive impact of CSR on cus-

tomer value co-creation behavior as in the following

hypothesis:

H2 Servant leadership positively moderates the positive

relationship between CSR and customer value co-creation

behavior.

CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership… 383

123

Relationship Marketing Orientation as a Moderator

The concept ‘‘relationship marketing’’ can be deemed to be

a philosophy of doing business effectively, or as a distinct

organizational culture/value that places the buyer–seller

relationship at the center of the organization’s strategic or

operational thinking (Sin et al. 2005). Relationship mar-

keting alludes to a set of marketing activities oriented to

establishing, developing, and sustaining successful rela-

tional exchanges (Morgan and Hunt 1994, p. 22). Rela-

tionship marketing orientation (RMO) is viewed as ‘‘the

extent to which a company engages in developing a long-

term relationship with its customers’’ (Tse et al. 2004,

p. 1162). An organization with RMO proactively builds

and enhances customer relationships (Berry 1983). From

Sin et al.’s (2005) view, RMO consists of six components:

trust, bonding, communication, shared value, empathy, and

reciprocity. Trust, the first component, is the willingness to

rely on an exchange partner in whom one has confidence

and reliability (Morgan and Hunt 1994). The second

component is bonding, which refers to the development of

an emotional relationship between the two partners acting

in a unified manner toward a desired goal (Sin et al. 2005).

The third component—communication—indicates formal

and informal exchanging and sharing of meaningful and

timely information between buyers and sellers (Sin et al.

2005). Fourth, shared value denotes the degree to which

partners have beliefs in common about the appropriateness,

rightness, and magnitude of policies, goals, and behaviors

(Morgan and Hunt 1994). Fifth, empathy enables a partner

to look at the situation from the other partner’s stance

(Wang 2007). The last component is reciprocity, which

indicates ‘‘the processes that enable customers to interact

and share information with the firm and that enable the firm

to respond to customers’’ (Jayachandran et al. 2005,

p. 178).

The link between CSR and customer value co-creation

behavior may be strengthened by the organization’s

activities to deepen relationship with customers. Relation-

ship marketing orientation can serve as such an enhancer.

Viewed as strategic marketing actions designed to build

‘‘partial organizational member’’ mindset in customers and

the organization’s sustainable relationship with customers

(McColl-Kennedy et al. 2012; Tse et al. 2004), relationship

marketing orientation may drive customers to further

identify with the organization and its CSR values, and

become active participants in the value co-creation process.

With the relationship marketing strategy, a socially

responsible organization further invests resources in

building a strong relationship with its customers. Receiving

increased value through such a relationship with the

organization, customers find the relationship crucial and

invest effort in reinforcing and sustaining it (Lagace et al.

1991) such as through co-creating value with the organi-

zation. Customer value co-creation behavior is also a form

of reciprocity from customers that relationship marketing

strategy cultivates (Tse et al. 2004).

The above logic also indicates the role of service-

dominant logic and social identity theory in illuminating

how RMO intensifies the effect of CSR on customer value

co-creating behavior. Service-dominant logic (Vargo and

Lusch 2004) holds that customer is a crucial operant

resource (Gohary and Hamzelu 2016) for value co-cre-

ation. According to Vargo and Lusch (2011, p.4) and De

Chiara (2012), interaction and marketing with customers

can transform them into dynamic operant resources for the

organization. Consequently, such strategic orientations as

RMO, which build sustainable relational exchanges with

customers (Morgan and Hunt 1994, p. 22), may strengthen

the relationship that socially responsible organizations

build with customers, leading to stronger effect of CSR on

customers’ contributions as dynamic operant resources

(Gohary and Hamzelu 2016) for co-creation of value with

the organization.

Furthermore, due to its capability to foster sustainable

relationship with customers (McColl-Kennedy et al. 2012;

Tse et al. 2004), RMO may reinforce customers’ identifi-

cation with the organization and its CSR values. Specifi-

cally, with marketing activities in RMO which reflect trust

in customers as well as respect and care for the bonding

with them (Tse et al. 2004), a socially responsible orga-

nization augments customers’ positive assessment of the

organizational status and image, their identification with

the organization, as well as their motivation to engage in

pro-organizational behaviors such as value co-creation.

Besides, when both partners communicate and share goals

and values, customers may further understand and appre-

ciate the care which the organization provides for its

stakeholders including customers through CSR activities

(Abugre and Nyuur 2015). This drives customers to further

identify with the organization (Pérez and Rodrı́guez del

Bosque 2015) and co-produce values with it. Empathy in

RMO (Tse et al. 2004) even further differentiates the

organization from other organizations in the eyes of cus-

tomers. When the organization empathizes with customers’

situation from their stance (Wang 2007), they will be

grateful to the organization (Mishra 2016) and find it even

worthier to affiliate with and reciprocate through value co-

creation. Reciprocity of relationship marketing activities

(Tse et al. 2004) can further enhance customers’ self-

concept and self-esteem in the social identification process

since this ‘‘reciprocity’’ component renders the organiza-

tion open and responsive to customers’ interaction and

feedback (Jayachandran et al. 2005, p. 178). Put differ-

ently, six components of RMO further increase customers’

positive evaluation of a socially responsible organization’s

384 T. T. Luu

123

status and values, thereby leveraging their social identifi-

cation as well as reciprocal contributions to the organiza-

tion in the form of value co-creation. Relationship

marketing orientation may thus intensify the effect of CSR

on customer value co-creation behavior, leading to the

ensuing hypothesis:

H3 Relationship marketing orientation positively mod-

erates the positive relationship between CSR and customer

value co-creation behavior.

Figure 1 depicts the relationships among the constructs

in the research model.

Research Methodology

Sample and Procedure

The company sample included 146 software companies in

Vietnam context. The participants in this study encom-

passed sales employees from these software companies,

and purchase managers of their customer companies. Two

waves of data collection were conducted so as to mitigate

the potential common method variance (CMV) bias (Pod-

sakoff et al. 2003). In the first-wave survey (T1), demo-

graphic data and responses on CSR and servant leadership

were collected from sales employees of software compa-

nies. In the second-wave survey (T2), conducted 1 month

after T1, responses on relationship marketing orientation

were also collated from these sales employees. Also in T2

survey, demographic data and responses on customer value

co-creation behavior were harvested from purchase man-

agers of customer companies.

Based on Dillman’s (2000) Tailored Design Method,

the self-administered questionnaire and its cover letter

were emailed to each respondent. A reminder email was

sent to the non-respondents after 10 days. Prior to the

questionnaire distribution, the questionnaires were code-

numbered to match responses from sales employees (T1

and T2) with those from purchase managers of customer

companies (T2). The questionnaire to be delivered to a

sales employee (T1 and T2) and that to his/her purchase

manager (T2) was coded with the same code number.

Despite this code numbering, the respondents remained

unidentified since all questionnaires were answered

anonymously. In the T1 survey, sales employees who had

been working with the software company at least 5 years

were invited as participants (Alkhater et al. 2014). From

the responses collected, we excluded responses from

software companies which had under five sales employees

participating in the survey (Bryson et al. 2013), leading to

1124 sales employees (64.60%) as participants in the first-

wave survey. In the T2 survey, questionnaires were sent to

these sales employees in the T1 survey, and 918 complete

responses (52.76%) were returned. The T2 survey also

collected responses from purchase managers of customer

companies whom these sales employees had served. We

recruited customer companies which had had at least

3-year business relationship with the software company

(Jia et al. 2016). Eliminating responses with missing data

engendered the final sample of 873 sales employee–cus-

tomer dyads: 873 employees (50.17%) and 873 customers.

Among the sales employees, 324 sales employees

(37.11%) were female, their average age was 31.64 years

(SD = 9.07), and they had an average job tenure of

8.73 years (SD = 3.91).

Measures

Respondents indicated their perceptions on scale items on a

five-point Likert scale of 1 = ‘‘strongly disagree’’ to

5 = ‘‘strongly agree.’’ The scales were translated into

Fig. 1 Research model

CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership… 385

123

Vietnamese, following the back translation approach

(Schaffer and Riordan 2003).

Corporate Social Responsibility (CSR)

A nine-item scale adapted from Turker (2009) was utilized

to estimate corporate social responsibility, including CSR

to social and non-social stakeholders (e.g., ‘‘Our company

contributes to the campaigns and projects that promote the

well-being of the society’’; ‘‘Our company participates in

the activities which aim to protect and improve the quality

of the natural environment’’), CSR to customers (e.g., ‘‘Our

company respects consumer rights beyond the legal

requirements’’), and CSR to employees (e.g., ‘‘The man-

agerial decisions related to the employees are usually

fair’’).

Customer Value Co-creation Behavior

A 19-item scale from Yi and Gong (2013) was employed to

gauge customer participation behavior and customer citi-

zenship behavior in their value co-creation. Customer

participation behavior comprises four dimensions: infor-

mation seeking (e.g., ‘‘We have asked others for informa-

tion on what this service offers’’), information sharing (e.g.,

‘‘We provided necessary information so that the employee

could perform his or her duties’’), responsible behavior

(e.g., ‘‘We fulfilled responsibilities to the business’’), and

personal interaction (e.g., ‘‘We were kind to the

employee’’). Customer citizenship behavior, on the other

hand, comprises feedback (e.g., ‘‘If we have a useful idea

on how to improve service, we let the employee know’’),

advocacy (e.g., ‘‘We said positive things about the com-

pany and the employee to others’’), helping (e.g., ‘‘We

assist other customers if they need our help’’), and toler-

ance (e.g., ‘‘If the employee makes a mistake during ser-

vice delivery, we would be willing to be patient’’).

Servant Leadership

This construct was measured through Ehrhart’s (2004)

14-item servant leadership scale. Sample items encompass

‘‘My supervisor creates a sense of community among

department employees’’ and ‘‘My supervisor makes the

personal development of department employees a

priority.’’

Ehrhart’s (2004) scale was utilized in our study since,

while other servant leadership scales focus more on

‘‘serving employees,’’ and Ehrhart’s (2004) scale demon-

strates a balance between items reflecting ‘‘serving

employees’’ and those reflecting ‘‘serving other

stakeholders’’ and contributing to their sustainable growth.

Ehrhart’s (2004) scale has recently been used in empirical

inquiries on servant leadership and employee service ori-

entation behavior such as Hunter et al. (2013), Ling et al.

(2016), and Miao et al. (2014) as well as on servant lead-

ership and customer value co-creation such as Hsiao et al.

(2015).

Relationship Marketing Orientation (RMO)

This construct was assessed via a 22-item scale developed

by Sin et al. (2005), which comprises six dimensions: trust

(e.g., ‘‘They are trustworthy on important things’’), bond-

ing (e.g., ‘‘We both try very hard to establish a long-term

relationship’’), communication (e.g., ‘‘We can show our

discontent toward each other through communication’’),

shared value (e.g., ‘‘We share the same values’’), empathy

(e.g., ‘‘We understand each other’s values and goals’’), and

reciprocity (e.g., ‘‘If our customers gave assistance when

my company had difficulties, then I would repay their

kindness’’).

Control Variables

Organizational size was included as a control variable

since, according to Bhattacharya and Sen (2004), cus-

tomers hold more positive attributions toward smaller

organizations’ CSR activities than they do for CSR activ-

ities implemented by larger organizations. Customers have

propensity to recognize the magnitude of small organiza-

tions engaging in CSR activities and seem ready to reward

this engagement such as through value co-creation (Green

and Peloza 2014). In addition, large organizations may

have high levels of complexity, bureaucracy, and rigidity,

which may hamper relationship marketing efforts (Samaha

et al. 2014), therefore likely to reduce customer motivation

to engage in value co-creation. Organizational size was

estimated by the number of full-time employees (Brettel

et al. 2011).

Due to the link between relationship length and rela-

tionship quality (Palmatier et al. 2007) as well as cus-

tomer citizenship behavior (Nguyen et al. 2014),

relationship length was controlled. Customers were asked

to report the number of years for which they have dealt

with the organization and have known the sales

employee (Palmatier et al. 2007). The question on cus-

tomer–organization relationship length is ‘‘How long

have you had business dealings with this organization? (#

years)’’ and the question on customer–sales employee

relationship length is ‘‘How long have you known this

sales employee? (# years).’’

386 T. T. Luu

123

Validity and Reliability of the Measures

Confirmatory factor analyses (CFAs) through Lisrel 8.80

(Jöreskog and Sörbom 2006) were conducted to ensure

convergent and discriminant validity among all constructs.

The results denoted a good fit between the hypothesized

four-factor model and the data (Table 1). Fit indices such

as Tucker–Lewis coefficient (TLI), incremental fit index

(IFI), comparative fit index (CFI), standardized root mean

square residual (SRMR), and root mean square error of

approximation (RMSEA) were used to estimate the model.

The fit indices: TLI = .96; IFI = .96; CFI = .95 exceeded

the .90 benchmark (Tabachnick and Fidell 2001). The

degree of misfit was also tolerable, with SRMR = .043 and

RMSEA = .048, under the relevant benchmark of .08 (Hu

and Bentler 1999). Besides, the model fit was further

strengthened through v2/df = 459.62/247 = 1.86 (p \ .01), which is under 2 (Carmines and McIver 1981). Convergent validity was attained since the items loaded

significantly on their target construct, exceeding the rec-

ommended level of .60 (t value [ 1.96) (Gefen and Straub 2005) (see Table 2).

As displayed in Table 2, the loadings were larger than

the cross-loadings with no substantial cross-loadings,

which confirmed discriminant validity. The discriminant

validity of the four constructs was also tested by con-

trasting the four-factor model against alternative models.

Following Williams and Anderson (1994), some of the

factors were collapsed to form alternative models. The

findings in Table 1 indicated that the four-factor model

fitted the data notably better than any of the alternative

models, providing clue for the construct distinctiveness. In

addition, discriminant validity was achieved since the

square root of the average variance extracted (AVE) of

each construct surpassed its correlations with the other

constructs (Fornell and Larcker 1981) (Table 3).

The reliabilities of the scales were assessed through the

composite construct reliability coefficients and AVE

(Table 3). Composite reliabilities ranged from .78 (for

CSR) to .87 (for servant leadership), above the .70 cutoff

value (Bagozzi and Yi 1988). AVE, which ranged from .62

(for customer value co-creation behavior) to .74 (for rela-

tionship marketing orientation), also surpassed the recom-

mended benchmark of .50 (Fornell and Larcker 1981).

Furthermore, multicollinearity was not a threat in the

current research since the condition of discriminant validity

was satisfied (Fornell and Larcker 1981). Moreover,

according to Grewal et al. (2004), multicollinearity can

occur if a correlation higher than .80 is found between any

two pairs of constructs. Yet, in examining correlations

among constructs in our study (Table 3), no correlations

above .80 were detected. The highest score was observed

between CSR and customer value co-creation behavior

(r = .51).

Common Method Issues

Common method variance (CMV) bias was tested through

the marker variable approach (Lindell and Whitney 2001).

A marker variable (i.e., attitude toward social media usage

on a 5-point scale (1 = strongly disagree; 5 = strongly

agree)), which was theoretically unrelated to other vari-

ables, was included into the survey. CMV has a propensity

to occur if the significant zero-order correlations for the

Table 1 Comparison of measurement models for variables studied

Models v2 df Dv2 TLI IFI CFI SRMR RMSEA

Hypothesized four-factor model 459.62 247 .96 .96 .95 .043 .048

Reversed four-factor model

Customer value co-creation behavior ? CSR

631.48 247 171.86** .77 .79 .78 .095 .101

Three-factor model 1:

CSR and servant leadership combined

615.71 254 156.09** .89 .88 .91 .099 .103

Three-factor model 2:

CSR and relationship marketing orientation combined

638.24 254 178.62** .87 .87 .86 .102 .106

Three-factor model 3:

Servant leadership and relationship marketing orientation combined

647.93 254 188.31** .85 .86 .84 .104 .101

Two-factor model:

CSR, servant leadership, and relationship marketing orientation combined

783.16 261 323.54** .77 .77 .79 .121 .126

One-factor model:

All variables combined

826.72 268 367.10** .68 .71 .67 .147 .151

� p \ .10; * p \ .05; ** p \ .01; *** p \ .001

CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership… 387

123

Table 2 Matrix of factor loadings (bolded) and cross-loadings

CSR Customer value

co-creation

behavior

Servant

leadership

Relationship

marketing

orientation (RMO)

Corporate social responsibility (CSR)

CSR to social and non-social stakeholders

Our company contributes to campaigns and projects that promote the well-

being of the society

.76 .17 .27 .21

Our company participates in activities which aim to protect and improve the

quality of the natural environment

.79 .31 .34 .18

Our company implements special programs to minimize its negative impact on

the natural environment

.84 .28 .37 .39

CSR to customers

Our company respects consumer rights beyond the legal requirements .81 .24 .31 .36

Our company provides full and accurate information about its products/

services to its customers

.77 .26 .17 .29

Customer satisfaction is highly important for our company .79 .29 .22 .34

CSR to employees

The management of our company is primarily concerned with employees’

needs and wants

.74 .16 .19 .27

The managerial decisions related to the employees are usually fair .78 .21 .32 .16

Our company policies encourage the employees to develop their skills and

careers

.72 .18 .21 .25

Customer value co-creation behavior

Information seeking

We have asked others for information on what this service offers .32 .83 .28 .21

We have searched for information on where this service is located .27 .79 .23 .19

We have paid attention to how others behave to use this service well .22 .81 .37 .24

Information sharing

We provided necessary information so that the employee could perform his or

her duties

.19 .78 .26 .17

We answered all the employee’s service-related questions .14 .82 .32 .22

Responsible behavior

We performed all the tasks that are required .26 .86 .38 .31

We fulfilled responsibilities to the business .23 .83 .34 .29

Personal interaction

We were friendly to the employee .25 .79 .33 .18

We were kind to the employee .34 .76 .29 .23

We didn’t act rudely to the employee .32 .80 .31 .26

Feedback

If we have a useful idea on how to improve service, we let the employee know .27 .77 .30 .21

When we receive good service from the employee, we comment about it .22 .83 .37 .25

When we experience a problem, we let the employee know about it .24 .81 .32 .17

Advocacy

We said positive things about the company and the employee to others .26 .78 .27 .15

We recommended the company and the employee to others .29 .75 .23 .19

Helping

We assist other customers if they need our help .33 .82 .29 .24

We give advice to other customers .38 .84 .31 .27

388 T. T. Luu

123

Table 2 continued

CSR Customer value

co-creation

behavior

Servant

leadership

Relationship

marketing

orientation (RMO)

Tolerance

If the employee makes a mistake during service delivery, we would be willing

to be patient

.36 .77 .34 .22

If we have to wait longer than we normally expected to receive the service, we

would be willing to adapt

.31 .79 .26 .19

Servant leadership

My supervisor spends the time to form quality relationships with others. .34 .26 .84 .22

My supervisor creates a sense of community among department employees .32 .28 .86 .29

My supervisor’s decisions are influenced by input from department employee

and others

.37 .33 .88 .31

My supervisor tries to reach consensus among department employees on

important decisions

.39 .34 .90 .36

My supervisor is sensitive to department employee’s responsibilities outside

the work place

.31 .21 .83 .23

My supervisor makes the personal development of department employees a

priority

.33 .25 .87 .27

My supervisor holds department employees to high ethical standards. .29 .32 .85 .24

My supervisor does what he or she promises to do .34 .37 .89 .32

My supervisor balances concern for day-to-day details with projections for the

future

.28 .21 .84 .24

My supervisor displays a wide-ranging knowledge and interests in finding

solutions to work problems

.31 .23 .86 .26

My supervisor makes me feel like I work with him/her, not for him/her .26 .18 .83 .21

My supervisor works hard at finding ways to help others be the best they can

be

.22 .16 .81 .19

My supervisor encourages department employees to be involved in community

service and volunteer activities outside of work

.29 .23 .87 .25

My supervisor emphasizes the importance of giving back to the community .36 .31 .89 .27

Relationship marketing orientation (RMO)

Trust

We trust each other .27 .18 .21 .81

They are trustworthy on important things .35 .24 .31 .86

According to our past business relationship, my company thinks that they are

trustworthy persons

.26 .22 .25 .84

My company trusts them .24 .16 .19 .82

Bonding

We rely on each other .22 .14 .17 .80

We both try very hard to establish a long-term relationship .39 .21 .23 .89

We work in close cooperation .27 .16 .19 .82

We keep in touch constantly .34 .23 .28 .87

Communication

We communicate and express our opinions to each other frequently .33 .21 .32 .83

We can show our discontent toward each other through communication .37 .27 .38 .87

We can communicate honestly .29 .18 .22 .81

Shared value

We share the same worldview .37 .24 .31 .84

We share the same opinion about most things .41 .28 .36 .90

We share the same feeling about most things around us .25 .14 .27 .83

We share the same values .39 .19 .34 .86

CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership… 389

123

variables in the research alleviate their significance levels

when partialling out the marker variable from the corre-

lation matrix. Nonetheless, in the current research, all

significant zero-order correlations remained significant

after the marker variable was partialled out, indicating the

low CMV risk in the dataset. Moreover, since two of the

research model’s predictions are interaction hypotheses,

such interaction effects cannot be artifacts of CMV but

rather can solely be deflated by CMV (Siemsen et al.

2010).

Descriptive Statistics

Table 3 displays the means, standard deviations, composite

construct reliability, average variance extracted, the square

root of the average variance extracted, and zero-order

Pearson correlations of all key variables. CSR was found to

have positive association with customer value co-creation

behavior (r = .51, p \ .001).

Hypothesis Tests

Moderated multiple regression was used to estimate the

moderation effects (Cohen et al. 2003). Control variables

were entered in the first step. The independent variable

‘‘CSR’’ was entered in the second step, and the moderators

‘‘servant leadership’’ and ‘‘RMO’’ were entered in the third

step. Lastly, we entered the interaction variables

(CSR 9 servant leadership; CSR 9 relationship marketing

orientation) in the fourth step. From Cohen et al.’s (2003)

standpoint, the statistical significance of the moderator

effect may be established if the interaction variable influ-

ences the relationship between CSR and customer value

co-creation behavior. Prior to computing the product terms

(CSR 9 servant leadership; CSR 9 relationship marketing

orientation), standard skewness and kurtosis tests were

conducted to ensure the normality for each variable. Then

the variables (predictor and moderator) were mean-cen-

tered to reduce multicollinearity (Cohen et al. 2003).

Table 2 continued

CSR Customer value

co-creation

behavior

Servant

leadership

Relationship

marketing

orientation (RMO)

Empathy

We always see things from each other’s view .34 .22 .26 .82

We know how each other feels .37 .25 .32 .85

We understand each other’s values and goals .42 .27 .34 .88

We care about each other’s feelings .33 .21 .27 .84

Reciprocity

My company regards ‘‘never forget a good turn’’ as our business motto .31 .24 .36 .86

We keep our promises to each other in any situation .29 .19 .23 .83

If our customers gave assistance when my company had difficulties, then I

would repay their kindness

.22 .15 .18 .79

Table 3 Correlation matrix

Variables Mean SD 1 2 3 4 5 6 7 CCR AVE

1 Organizational size a

5.13 .87 –

2 Customer–sales employee relationship length b

3.62 1.24 .11 –

3 Customer–organization relationship length b

2.47 1.19 .16* .11* –

4 CSR 3.42 .38 .07 .14* .18* (.84) .78 .71

5 Customer value co-creation behavior 3.39 .41 .11 .19* .17* .51*** (.79) .82 .62

6 Servant leadership 3.44 .47 .02 .13* .12* .29** .23** (.82) .87 .67

7 Relationship marketing orientation 3.67 .56 .09 .16* .21* .44*** .38** .26** (.86) .84 .74

Values in parentheses display the square root of the average variance extracted

CCR Composite construct reliability, AVE Average variance extracted

Standardized correlations reported �

p \ .10; * p \ .05; ** p \ .01; *** p \ .001 a

Value is the natural logarithm b

Square root transformation

390 T. T. Luu

123

Among the control variables, customer–sales employee

relationship length and customer–organization relationship

length demonstrated positive correlations with customer

value co-creation behavior through positive significant

coefficients b = .18 (p \ . 05) and b = .16 (p \ .05), respectively. Organizational size, on the contrary, was

found to have no significant correlation with customer

value co-creation behavior (b = .09, p [ .10) as well as no significant interaction effect with CSR (b = .06, p [ .10).

As displayed in Table 4 and Fig. 2, CSR was positively

related to customer value co-creation behavior (b = .46, p \ .001), lending support for hypothesis H1. Additionally, to strengthen the causal direction of our hypothesized

model, a test was also conducted on the model in the

reverse direction (Customer value co-creation behavior ? CSR). As Table 1 demonstrates, the fit of the reversed

model was worse than the fit of the hypothesized four-

factor model: v2 = 631.48, df = 247, p \ .01, TLI = .77, IFI = .79, CFI = .78, SRMR = .095, RMSEA = .101,

and the divergence between the two models was signifi-

cant: Dv2 = 171.86, p \ .01. Furthermore, as Table 4 and Fig. 2 exhibit, the inter-

action term of the predictor ‘‘CSR’’ 9 the moderator

‘‘servant leadership’’ was significantly positive (b = .28, p \ .01), which corroborated hypothesis H2. The interac- tion pattern between CSR and a moderator in this research

was also estimated by testing the relationship between CSR

and customer value co-creation behavior at high (one SD

above the mean) and low (one SD below the mean) values

of the moderator (Aiken and West 1991). The simple slope

test was conducted based on Preacher et al.’s (2006) pro-

cedure. The plotted interaction in Fig. 3 revealed that CSR

enhanced customer value co-creation behavior when ser-

vant leadership was high (simple slope = .48, p \ .01) versus low (simple slope = .10, p \ .01).

Likewise, as shown in Table 4 and Fig. 2, the interac-

tion term of the predictor ‘‘CSR’’ 9 the moderator RMO

was significantly positive (b = .41, p \ .01), providing evidence for hypothesis H3. The plotted interaction in

Fig. 4 revealed that CSR augmented customer value co-

creation behavior when RMO was high (simple

slope = 1.04, p \ .01) versus low (simple slope = .15, p \ .01).

Discussion

Theoretical Implications

Multiple theoretical contributions are reflected in our

research results. First, our research extends the application

spectrum of service-dominant logic and social identity

theory through their role in explaining the relationships

among the research constructs. Prior studies have found the

element ‘‘ethics’’ underlying some foundational premises

(FPs) in service-dominant logic such as ‘‘the customer is

always a co-creator of value’’ (FP6) reflecting stakeholder-

oriented force from customers (Abela and Murphy 2008).

Yet, the current research can be deemed to be among the

first that empirically investigated the role of CSR as a

Table 4 Testing results Step Variable(s) entered Customer value co-creation behavior

Model 1 Model 2 Model 3 Model 4

1 Control variables

Organizational size .06 .06 .08 .09

Customer–sales employee relationship length .14 .15 .16* .18*

Customer–organization relationship length .11 .13 .14 �

. 16*

2 Independent variable

CSR .43*** .44*** .46***

3 Moderators

Servant leadership .19* .21*

Relationship marketing orientation .34** .37**

4 Two-way interactions

CSR 9 Servant leadership .28**

CSR 9 Relationship marketing orientation .41**

CSR 9 Organizational size .06

R 2

.07 .16 .24 .39

DR2 .00 .09 .08 .15

CSR corporate social responsibility �

p \ .10; * p \ .05; ** p \ .01; *** p \ .001 (two-tailed)

CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership… 391

123

stakeholder-oriented lever to activate stakeholder orienta-

tion among customers and the role of customers as value co-

creators in light of service-dominant logic (Vargo and

Lusch 2004). Besides, this role of CSR in the present

research also further advocates the ethical underpinning of

marketing that service-dominant logic reflects (Abela and

Murphy 2008). In addition to referring to the role of ethical

premise in service-dominant logic (Abela and Murphy

2008) as an underpinning for the predictive role of CSR for

customer value co-creation behavior, the current research

also looks at CSR as a strategy to orient toward and inte-

grate customers as operant resources (Gohary and Hamzelu

2016) into the organization’s value creation process. In this

logic, organizational factors that can consider and enhance

the role of customers as operant resources such as rela-

tionship marketing orientation can strengthen the effect of

CSR on customer value co-creation.

Furthermore, the current research indicates a new

application of social identity theory in explaining the role

of CSR in catalyzing customers’ value co-creation. Social

identity theory (Ashforth and Mael 1989) has been used to

elucidate the predictive role of CSR for customer behaviors

(Karaosmanoglu et al. 2016). Social identity theory has

tended to be utilized as an underpinning theory for illu-

minating how CSR influences customers’ purchase intent

(Pérez 2009) and purchase repeat (Martı́nez and del Bos-

que 2013). Yet, the current research bases on social identity

theory to shed light on the predictive role of CSR for both

in-role and extra-role behaviors of customer value co-cre-

ation. CSR values that categorize the organization as a

right target for customer identification (Piercy and Lane

2011) enhance customers’ self-concept and self-esteem,

driving them to go beyond their in-role behaviors with the

organization. Social identity theory also adds to the power

Fig. 2 Model estimation findings

Fig. 3 Moderating effect of servant leadership Fig. 4 Moderating effect of relationship marketing orientation

392 T. T. Luu

123

of service-dominant logic in explaining the relationship

between CSR and customer value co-creation in that cus-

tomer identification with the organization leverages ‘‘col-

laborative nature’’ of value co-creation in service-dominant

logic (Abela and Murphy 2008). Moreover, identifying

with the organization, customers are more prone to per-

ceive the oneness with the organization (Hong and Yang

2009), share values, and become dynamic operant resour-

ces for co-creation of new values for the organization.

The second theoretical contribution of this research is

the extension of servant leadership literature through the

moderation mechanism of servant leadership for the effect

of CSR on customer value co-creation behavior. Our

research thus also marks the convergence between CSR,

servant leadership, and marketing research streams. While

prior research has revolved around individual or organi-

zational outcomes of servant leadership such as organiza-

tional citizenship behavior or organizational justice (Parris

and Peachey 2013), the current study examined the inter-

action pattern of CSR and servant leadership in cultivating

a marketing outcome (i.e., customer value co-creation).

This interaction pattern indicates that the synergy of the

two stakeholder-directed forces from leadership (i.e., ser-

vant leadership) (Ehrhart 2004) and from an organizational

mechanism (i.e., CSR mechanism) (Abugre and Nyuur

2015) has a stronger and more far-reaching effect on cus-

tomer behaviors. This far-reaching effect may drive cus-

tomers to engage in co-creation of value with the

organization. This point further indicates that the synergy

of stakeholder-directed forces can mobilize resources from

inside and outside the organization, especially customers as

dynamic operant resources (Gohary and Hamzelu 2016;

Vargo and Lusch 2004), for the organizational

sustainability.

Third, through its investigation into the moderation

mechanism of relationship marketing orientation for the

linkage between CSR and customer value co-creation

behavior, the present study not merely increases the

breadth of relationship marketing literature, but also con-

nects the research streams of RMO, CSR, and customer

value co-creation in particular and service-dominant logic

in general (Vargo and Lusch 2004). Additionally, the

interactive effect of RMO and CSR in catalyzing customer

value co-creation behavior distinguishes the current

research from the research trends on relationship marketing

and customer satisfaction (Le and Ngo 2012) or loyalty

(Hennig-Thurau et al. 2002). Relationship marketing ori-

entation engenders customers’ embedded relationships

with organizations, which make them further perceive their

membership (Rao et al. 2000) that CSR shapes (McColl-

Kennedy et al. 2012), thereby enhancing the likelihood that

the organization is going to be designated as a viable social

category, capable of shaping their social identity. As a

result of building psychological attachment to the organi-

zation, this identification motivates customers to further

commit to the attainment of the organization’s goals

(Ahearne et al. 2005), leading to value co-creation with the

organization. Consequently, the use of social identity the-

ory (Ashforth and Mael 1989) to illuminate the moderation

role of RMO in this study indicates the rendezvous

between RMO and social identity theory as well as further

strengthens the position of social identity theory in mar-

keting literature.

The last theoretical contribution of the current research

entails the use of a sample from Vietnam context to derive

evidence for the relationships in the research model,

which are theoretically grounded on Western management

theories including service-dominant logic (Vargo and

Lusch 2004) and social identity theory (Ashforth and

Mael 1989). In most western countries, customers have

had an awareness of their role as dynamic value co-cre-

ators to contribute to the sustainable growth of the focal

organization as well as the community. Yet, Vietnam is an

emerging economy transitioning from a centrally planned

economy to a market economy (Ngo et al. 2016), in which

customers still have been in transition in their awareness

from their traditional role as recipients of products or

services to value co-creators. Our research findings, which

identified organizational predictive factor (i.e., CSR) and

moderating factors (i.e., servant leadership and relation-

ship marketing orientation) for customer value co-cre-

ation, will help organizations with a compass to guide

customers into their new roles as dynamic value co-cre-

ators and operant resources (Gohary and Hamzelu 2016)

for the growth of both organizations and customers.

Moreover, since Vietnam is a collectivistic culture with

orientation toward others (Tran et al. 2016), leaders can

base on these collectivistic values of the culture to

leverage CSR values or relationship marketing orientation

through the organization as well as extra-role contribu-

tions from customers. Besides, in comparison with

Swierczek and Ha’s (2003) findings on high uncertainty

avoidance in Vietnam, Vietnam culture now scores lower

in uncertainty avoidance and higher in proactiveness

(Duong 2013), which may encourage customers to engage

in such a dynamic role as value co-creator. Consequently,

this study grounded in Vietnam context suggests a future

comparative analysis of the current research model in

collectivist versus individualistic cultures as well as in

low uncertainty avoidance versus high uncertainty

avoidance cultures.

Managerial Implications

The current research model, which reflects the transfor-

mation of organizational values (here, CSR values) into

CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership… 393

123

values from customer value co-creation actions, produces

numerous managerial implications.

First, customer perceived value of co-creation and their

value co-creation behavior should be built through CSR

initiatives. With the orientation toward stakeholders

(Abugre and Nyuur 2015) including customers, CSR

strategy will cultivate customer identification with the

organization in light of social identity theory (Ashforth and

Mael 1989), thereby activating customer value co-creation

behavior. CSR strategy should be translated into actions

oriented toward sustainable growth of employees, cus-

tomers, and community, which customers can observe.

Customers observe and assess not only the organization’s

CSR actions toward themselves, but also its treatments

toward other stakeholders. Customers should have chances

to ‘‘see’’ high intrinsic motivation in employees’ services,

which come from the accurate appraisal and reward for

employee contributions, both financial and non-financial,

to the organization. The organization should let customers

‘‘see’’ its CSR actions through employees’ pride in their

organization’s contributions to the community, in which

they have participated, rather than only letting customers

‘‘feel’’ about CSR activities in advertisements or on the

packaging of products. CSR values and actions should be

measured and reinforced or ‘‘refreezed’’ (Lewin 1951)

through performance indicators at individual level and

team level under the internal process dimension as well as

at the organizational level under the learning and growth

dimension of the performance appraisal system (Kaplan

and Norton 2006).

Second, CSR strategy should be implemented in col-

laboration with HR managers as strategic partners of the

organization (Ulrich and Brockbank 2005), who design

training and coaching to build the image of customers as

value co-creators in the mindsets of employees, especially

frontline employees who have direct exchange with and

influence on customers. Employees’ awareness of cus-

tomers’ role as value co-producers, rather than merely

recipients of values from the organization, will shape their

behaviors toward customers. Employees are then cognizant

that they build relationships with customers, through rela-

tionship marketing activities, not merely to satisfy and

retain customers, but also to augment the infusion of CSR

values into customers and transform them into ‘‘partial

members’’ of the organization (Mills and Morris 1986;

McColl-Kennedy et al. 2012) who have commitment to the

organizational vision (Gruen et al. 2000) and reciprocate

through value co-creation behavior. Moreover, through

relationship marketing activities, the organization can

enhance customer role clarity and perceived value of co-

creation, which drive customers to further engage in value

co-creation behavior (Dong et al. 2008).

Last, due to the interactive effect of servant leadership

with CSR in fostering customer value co-creation behavior,

servant leadership should be built through leadership

training for current managers and succession planning for a

new generation of servant leaders (Dessler 2010). Leaders

with high competence to build strategic marketing plan

may not nurture customer value co-creation behavior if

they lack servant leadership to infuse CSR values into the

interactions with and services to customers. Leadership

training program should underscore and cultivate service

orientation in leaders. Leaders should then bring this ser-

vice orientation into practice by prioritizing interests of

others, especially of employees and customers in every

action. Leaders should place customers’ sustainable growth

above profitability as well as give away some of the

organizational gains to customers if they are in a hard time,

thereby further embedding stakeholder-oriented values of

the organization’s CSR initiatives in customers. Besides,

leaders should also build a next generation of servant

leaders through cultivating servant leadership at all tiers of

the organizational pyramid as a part of succession planning

of servant leaders.

Limitations and Future Research Paths

Some limitations should be surmounted in the replication

of the current research model. One of the limitations

resides in the use of self-report scales for all research

variables. Data on CSR can be harvested from strategy

implementation reports of organizations. Likewise, cus-

tomer value co-creation behavior can be gauged through a

performance indicator under the customer dimension of the

performance appraisal system if such a performance indi-

cator exists in the researched case. Besides, the self-report

data exposed the research results to CMV risk (Podsakoff

et al. 2003). Nonetheless, this risk was proved to be

insignificant through the marker variable test (Lindell and

Whitney 2001) as well as through the data collection from

different sources (employees and customers) and at dif-

ferent survey waves (Podsakoff et al. 2012).

In addition, the current research model should be gen-

eralized with caution to industries other than software

industry. Customers of software suppliers tend to work

along with programmers on the designs of the softwares.

They also tend to recommend the effective softwares to

other organizations within their industry. For instance,

when a school has successfully applied an academic

management software in its operations, it tends to recom-

mend the software to other schools. Hence, customer value

co-creation behavior may be high in software industry. The

research model should thus be retested in other manufac-

turing industries and service industries as well.

394 T. T. Luu

123

The positive effect of CSR on customer value co-

creation behavior indicates that other stakeholder-di-

rected forces such as corporate governance (Luu 2013;

Rahim and Alam 2014) or clinical governance in

healthcare services (Luu 2016) can be included as an

antecedent in a new research model. Customer percep-

tions of distributive justice, procedural justice, and

interactional justice, which were found to foster cus-

tomer positive affect (Yi and Gong 2008), may also

shape value co-creation behavior among customers.

Besides the moderation role of RMO, the close rela-

tionship between frontline employees and customers,

deemed ‘‘employee–customer identification’’ (Korschun

et al. 2014), can also serve as a moderator for the

interconnection between CSR and customer value co-

creation behavior. Moreover, service orientation inside

individual employees such as organizational citizenship

behavior (OCB) (Hogan et al. 1984) or emotional intel-

ligence (Goleman et al. 2013) may also produce an

interactive effect with CSR in inspiring customers to co-

create value with the organization. The moderation roles

of OCB or emotional intelligence for this effect may thus

attract scholarly attention.

Furthermore, future research should consider other

control variables that may also influence customer value

co-creation behavior. Organizational reputation should be

controlled since customers have propensity to identify

with and go beyond their in-role behaviors for reputed

organizations (Hong and Yang 2009). Customer extra-role

behaviors may be influenced by the perceived perfor-

mance of the organization’s offerings. Therefore, a con-

trol for product performance is vital to comprehend the

true effects of CSR on customer value co-creation

behavior (Ahearne et al. 2005). Variables to be controlled

should incorporate employee citizenship behavior, which

may catalyze customer contributions beyond their roles

(Yi et al. 2013) such as value co-creation. The more

customers identify with the community, the more they

identify with and contribute to the organization (Ho

2015); as a result, the effect of customer-community

identification on customer value co-creation behavior

should be controlled in the replication of the current

research model.

Conclusion

The findings supported the current research model, in

which CSR has a positive effect on customer value co-

creation behavior. The evidence was also found for the

moderation mechanisms of servant leadership and rela-

tionship marketing orientation for the linkage between

CSR and customer value co-creation behavior.

Acknowledgement The author thanks Professor Michael R. Hyman, New Mexico State University, and two anonymous reviewers of

Journal of Business Ethics for their helpful comments and

suggestions.

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  • CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership and Relationship Marketing Orientation
    • Abstract
    • Introduction
    • Literature Review and Hypotheses Development
      • CSR and Customer Value Co-creation Behavior
        • Corporate Social Responsibility (CSR)
        • Customer Value Co-creation Behavior
        • CSR and Customer Value Co-creation Behavior: From Service-Dominant Logic and Social Identity Perspectives
      • Servant leadership as a Moderator
      • Relationship Marketing Orientation as a Moderator
    • Research Methodology
      • Sample and Procedure
      • Measures
        • Corporate Social Responsibility (CSR)
        • Customer Value Co-creation Behavior
        • Servant Leadership
        • Relationship Marketing Orientation (RMO)
        • Control Variables
      • Validity and Reliability of the Measures
      • Common Method Issues
      • Descriptive Statistics
      • Hypothesis Tests
    • Discussion
      • Theoretical Implications
      • Managerial Implications
      • Limitations and Future Research Paths
    • Conclusion
    • Acknowledgement
    • References