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).
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.