Do corporate sustainable management activities improve customer satisfaction, word of mouth intention and repurchase intention? Empirical evidence from the shipping industry

• Pages: 555-570
• Published date: 08 May 2017
• Date: 08 May 2017
• DOI: https://doi.org/10.1108/IJLM-11-2015-0220
• Author: Youngran Shin,Vinh Van Thai,Devinder Grewal,Yulseong Kim
• Subject Matter: Management science & operations,Logistics

Do corporate sustainable

management activities improve

customer satisfaction, word of

mouth intention and repurchase

intention? Empirical evidence

from the shipping industry

Youngran Shin

Graduate School of Maritime Industry, Korea Maritime and Ocean University,

Busan, Republic of Korea

Vinh Van Thai

School of Business IT and Logistics, RMIT University, Melbourne, Australia

Devinder Grewal

World Maritime University, Malmoe, Sweden, and

Yulseong Kim

Department of Logistics System Engineering,

Korea Maritime and Ocean University, Busan, Republic of Korea

Abstract

Purpose –As the concept of corporate sustainable management activities (CSMA) has become an

increasingly important element of corporate management, much attention has been paid to its impact on

customer relationship. Although there exists many studies concentrating mainly on the environment aspect

of CSMA, only a few address the three dimensions of CSMA (environmental, social and economic) and

examine their comprehensive impact on relationship marketing. In an attempt to fill this gap, the purpose of

this paper is to empirically investigate the influence of CSMA on customer satisfaction (CS), word of mouth

intention (WOMI) and repurchase intention (RI).

Design/methodology/approach –The data come from 214 shipping industry practitioners (shippers,

freight forwarders and third party logistics service providers in South Korea). Structural equation modeling

(SEM) is employed to test the impact of CSMA on CS, WOMI and RI.

Findings –Based on a survey conducted in South Korea, the findings indicate that environmental and

economic aspects of CSMA play a significant role in enhancing CS and the enhanced CS positively affects

WOMI and RI.

Research limitations/implications –As the field data were obtained from only one industry, future

replication of the findings to other industries should consider industry-specific factors, if applicable.

Practical implications –The results highlight several implications for shipping industry practitioners to

consider when establishing the strategy for effective corporate sustainable management to enhance CS.

Originality/value –This study is one of the first empirical attempts to explore how CSMA affects CS in the

shipping industry. In addition, this paper empirically investigates the influence of CS on WOMI and RI.

Keywords Relationship marketing, Customer satisfaction, Repurchase intention,

Corporate sustainable management activities, Shipping industry, Word of mouth intention

Paper type Research paper

1. Introduction

Sustainable management has emerged as an important business concept in the past few

decades (Corbett and Klassen, 2006; Kolk and Pinkse, 2008; Steurer et al., 2005). Schaltegger

and Synnestvedt (2002) and Wagner (2009) indicated that the social and environmental

The International Journal of

Logistics Management

Vol. 28 No. 2, 2017

pp. 555-570

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-11-2015-0220

Received 10 July 2014

Revised 19 November 2014

12 October 2015

26 November 2015

10 April 2016

25 June 2016

27 June 2016

Accepted 27 June 2016

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

555

Corporate

sustainable

management

activities

aspects of sustainable management will allow companies not only to differentiate and

reposition themselves but also create the best market opportunities, gain competitive

advantage and enhance their economic returns.

While sustainable management has many interpretations, one of the most widely

accepted concepts is corporate sustainable management activities (CSMA) in terms of

three main areas (economic, social and environment) presented by World Business Council

for Sustainable Development (Elkington, 1997; Carter and Rogers, 2008; Balkyte and

Tvaronaviciene, 2010). CSMA reflects that a company should play an important role in

encouraging sustainable development and should work toward not only its own profits,

but also social and environment responsibilities. In this sense, CSMA can be defined in

terms of a management technique that seeks sustainable development by social and

environment-friendly management.

As the importanceof sustainable developmenthas increased, there have been a numberof

studies whichdemonstrate the positiveimpact of such activities,both in terms of environment

and social dimensions, on the long-term economic benefits of the firm in the supply chain

context. Subsequent coverage of CSMA research has expanded to include a combination of

social, economic and environmental dimensions and balance-controlling among these three

dimensions for an organization’s long-term competitiveness (Carter and Rogers, 2008;

Balkyte and Tvaronaviciene, 2010). Walker et al. (2010) indicated that a comprehensive

understanding of these academic concepts leads to the practical definition of CSMA and the

pursuit of sustainable development objectives through the purchasing and supply process.

This paper encompasses these three dimensions (economic, social and environmental)

of sustainable management and examines its impact on customer relationship.

Specifically, it investigates empirically the influence of CSMA on customer satisfaction (CS),

word of mouthintention (WOMI) and repurchaseintention (RI). This researchhelps to provide

indications to practitioners in selecting appropriate CSMAs so as to positively influence CS,

WOMI and RI.

In the following sections, a review of the related literature in CSMA is conducted to

ground the proposed model linking CSMA with CS, WOMI and RI. Then, the empirical

validation of the proposed theoretical model using the structural equation modeling (SEM)

approach is presented. The paper concludes with a discussion of the results, managerial

implications, limitations of the study and suggestions for further research.

2. Theoretical background

2.1 Characteristics of customers in the shipping industry

The shipping industry refers to the sector in which shipping companies provide logistics

services to theircustomers, who may be cargo-owners or theirrepresentatives such as freight

forwarders or third party logistics service providers. Shipping logistics services have the

distinct features of service, and customers who buy these services are either consumers or

industrialbuyers. An industrial buyeris defined as a consumer who buys goodsor services to

re-sell to otherfirms. The purchase of internationalshipping logistics servicesis conducted by

a contract between a shipping firm, also known as shipping line (carrier) that provides

shipping logistics services and a customer whodemands for such services, i.e. a shipper or a

freight forwarder. In this respect,cargo-owners (or shippers) wholiaise directly with shipping

lines to transporttheir own cargo can be seen as consumers. Meanwhile,freight forwarders or

logistics service providers whobuy shipping logistics servicesfrom shipping lines are viewed

as industrialbuyers since they re-sell theseservices to small- and medium-sizedfirms, who are

actual cargo-owners.

As such, the sales of shipping logistics services is conducted by a contract between a

shipping line that provides these services and a shipper that has a need for those services,

or between the shipper and a freight forwarder or logistics firm who in turn buys those

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