Does Good CSR Prevent Bad Service? A Study of Customer and Employee-Focused Corporate Social Responsibility’s Direct Effects on Service Sabotage

Abstract

The investigation of this study was the intricate relationship between customer-focused CSR and employee-focused CSR, with the mediating role of service sabotage on customer participation behaviors and customer citizenship behaviors, while examining the moderating roles of locus of control and guilt. The data was collected from banking employees in Oman. The cross-sectional survey used involved 322 banking employees in data collection. The data was analyzed using the Smart-PLS technique. The result shows that customer-focused CSR and employee-focused CSR have a significant impact on service sabotage (H1-H2). Furthermore, service sabotage mediates the significant relationship of customer-focused CSR and employee-focused CSR between customer participation behaviors and customer citizenship behaviors (H3-H6). However, locus of control moderates a significant relationship between service sabotage and customer participation behaviors and customer citizenship behaviors (H7-H8). Lastly, guilt moderates a significant relationship between service sabotage and customer participation behaviors and customer citizenship behaviors (H9-H10). This study contributes to theorization by discussing service sabotage as the main, harmful effect of engaging in CSR, thereby explaining why ”good CSR” is unable to avert ”bad service”. It also contributes to service failure literature by integrating LOC and Guilt; this provides a sophisticated, psychological lens on customer resilience. From a practical standpoint, we suggest banking executives working in emerging economies should prioritize internal equity and authenticity in substantive CSR actions to avoid employee blowback, as well as use psychologically designed service recovery protocols based on customer personality characteristics.