dc.description.abstract | During the past decade, the relentless pace of liberalization and privatization along
with advances in communications and computer technologies have spawned an
enormous transformation of contemporary society. This transformation has created
tremendous opportunities for business while presenting numerous challenges as well.
One of the most fundamental challenges a business faces in coming years involves
understanding and responding to society's rising expectations. In addition to the
competitive pressure they face from globalization, businesses today face pressure
from many diverse constituents - shareholders, employees, customers, consumers,
and civil society - to do more than just fulfill their legal obligations by contributing
towards the resolutions of larger societal problems.
In this paper, 32 companies listed at the Nairobi stock exchange were examined using
a questionnaire for their levels of corporate social responsibility in areas of corporate
governance, employee engagement, community service, customer service and
environmental conservation as well as reporting of corporate social activities in their -. annual reports. The purpose of this study was to establish whether there was any
relationship between corporate social responsibility and financial performance and
determine the effects of industry sector, firm size and ownership structure on
corporate social responsibility.
All the firms that were interviewed indicated that they use corporate social
responsibility either as a competitive strategy or a marketing tool and none admitted
as engaging in corporate social responsibility due to their healthy cash flOWS!Also
using information from the questionnaire and publicly available financial data, a
correlation analysis was done to determine whether there is any linkage between
corporate social responsibility and firm performance. The results indicated that there
was no relationship between corporate responsibility and financial performance.
On the effects of the industry sector, all finns showed a level of engagement in CSR
but to a varying degree with firms in the Industrial and Allied having the highest
mean score of 0.66 and those in the Finance and investments sector with the lowest
score of 0.54. All firms whether foreign or local owned had the same mean CSR score
of 0.61 and therefore there was no effect on ownership structure.
On the effects of firm size, there was a relationship between the firm size and the
level of corporate social responsibility, which was significant and positive supporting
the view that the bigger the firm, the more visible it is. | en |