CAN THE GOOD CORPORATE ETHICS STATEMENTS AND CORPORATE SOCIAL RESPONSIBILITY CREATEPOSITIVE CONSUMER RESPONSESON THE COMPANY AND ITS PRODUCTS? AN EMPIRICAL FINDING IN THE CASE OF CONTROVERSIAL COMPANY

Abstract: This research explores the basic issue about whether the good corporate ethics statements and  corporate  social  responsibility  (CSR) can  create  positive  consumer  responses  on  the company  and  its  products. We  examined  the  proposed  model  that  links  corporate  ethics, CSR,  corporate  reputation,  and  perceived  risk  in  the  case  of  controversial  products  that offers  by  company,  especially  on  cigarette  products.  As  one  of  the  doers  in  Indonesian tobacco  industry,  PT.  Djarum  implemented  many  CSR  programs including educational initiatives.  This  research  was  conducted  in  the  Faculty  of  Economics  and  Business Diponegoro  University  as  a  recipient  of  PT.  Djarum,  that implemented  CSR  educational initiative  through  “Bakti  Pada  Negeri”  program.Research  was conducted using  a  survey method  through  distributing  questionnaires to209  university  students  of Faculty  of Economics  and  Business  Diponegoro  University.  The  sampling  method  which  was  used for this research was a non-probability sampling with convenience sampling technique. By using the structural equations model with AMOS software to examine the proposed model, this  research  indicated  that the  more  well-defined  of  corporate  ethics  statements  lead  to better  evaluation  of  CSR  activities;the  better  evaluation  of  CSR  activities  lead  to  good corporate reputation, but did not lead to lower perceived risk; the good corporate reputation lead to lower perceived risk; and the more well-defined of corporate ethics statements did not  lead  to  lower  perceived  risk.  Based  on  Sobel  test  results,  this  research  indicated  thatperceived  CSR  has  a  significant  role  in  enhancing  corporate  reputation  which  in  turn reducing perceived risk.

Keywords: corporate ethics, corporate social responsibility, corporate reputation, perceived risk

Author: Ari Setiyaningrum

Journal Code: jpmanajemengg130085

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