Impact of corporate citizenship behaviour on customer-based reputation: a case study of Volkswagen, Durban, South Africa.

Abstract

ABSTRACT Studies on corporate citizenship in South Africa have mainly focused on mining companies whose reputational damage or good public image in the eyes of local communities does not directly affect local mining companies’ sales and profits. This makes it difficult to link the relationship between corporate citizenship behaviour of local mining companies and corporate reputation at customer level within South Africa as these mining companies sell their mining extracts to foreign customers. Focusing on the customer level, this study explores the impact of Volkswagen (VW) corporate citizenship behaviour on customer-based reputation from the perspectives of individual VW car owners in the wake of the 2015 VW emissions scandal. This research employed a qualitative research methodology that utilised in-depth, one on one semi-structured interviews with VW car owners in Durban, South Africa. Non-probability sampling through snowball sampling was used. Data saturation was reached after 8 one on one in-depth semi-structured interviews with individuals were conducted. Data was then analysed using thematic analysis. The main finding of this study was that customers care about corporate citizenship behaviour that impacts them directly. Therefore, the 2015 VW global emissions corporate scandal did not affect the VW car reputation amongst owners in Durban. The affordability of VW and its fuel efficiency are the major reasons why customer-based reputation remained unchanged even in the wake of the 2015 VW emissions scandal. As such, customer-based reputation is a function or an outcome of the product features and not the behaviour of the company exemplified by a corporate scandal. In this regard, VW can be advised to spend more of its resources in creating innovative and fuel efficient cars as these factors build customer level reputation. The current study looked at a homogeneous sample as the majority of respondents were students, who all have similar level of education and income. A truly representative sample would look at a heterogeneous sample comprising of early career professionals, mid-career professionals, those near retirement, retired people and those that are self-employed. The study of people with higher income may generate different patterns since those groups can easily afford to change their cars compared to students. There are a number of focus areas that this research was unable to examine. However, future studies could consider exploring the relationship v between product quality, customer-based reputation and corporate citizenship in the wake of a scandal which directly impacts customers. Keywords: Customer-based reputation; corporate citizenship; corporate citizenship behaviour; corporate scandal; corporate social responsibility.