Effects of Corporate Social Responsibility on Profitability of the Telecommunication Firms in Kenya

Abstract

The concept of corporate social responsibility has prevailed since time immemorial and has for a long time paved way for organizations’ to have moral, ethical, and philanthropic responsibilities in addition to their responsibilities to earn a fair return for investors and comply with the law. Business analysts have documented that CSR benefits the organization by pushing the business to the next level while at the same time benefiting the society. CSR has been associated with financial performance for organizations but this area has not been well researched. The main objective of this study was to assess the effects of corporate social responsibility programs on organizations’ financial performance in Kenya. The study will help both private and public companies to realize the need of establishing CSR for achievement of the competitive advantage and improved performance. The study was carried out at Kenyan Telecommunication Firms. The research instrument was an interview guide and data was collected through a drop and pick later method of the questionnaire. The data was then analyzed and the findings recorded by use of tables and figures. The process involved tallying up responses, computing percentages of variations in response as well as describing and interpreting the data in line with the study objectives through use of SPSS. The results are based on a response rate of 90% (n=10). The study concludes that CSR has a positive impact on an organizations financial performance and recommends that the organisations should have a well-planned and effective CSR approaches in order to enhance brand and company reputation as well as improve efficiency, reduce the risk of business disruptions, and open up new opportunities driving innovation.