Factors influencing the practice of corporate social responsibility by commercial banks in Kenya
Corporate Social Responsibility (CSR) is basically what an organization does to positively influence the society in which it exists. It could take the form of community relations, volunteer assistance programs, healthcare initiatives, special education / training programs and scholarships, preservation of cultural heritage and beautification of cities/towns. The main purpose of this study was to determine the forces driving commercial banks in Kenya towards CSR. A descriptive survey was used in this study. It enabled the researcher to describe the findings in terms of their means and modes across the commercial banks under study. The population focused on the 43 commercial banks in Kenya. A questionnaire with open ended and closed ended question was developed by the researcher and used in data collection. Company’s reports on CSR issues and journals were used to gather secondary data. Data analysis tools used in the research were Excel and SPSS and data was presented in form of tables and graphs. The study revealed that forces driving commercial banks towards the CSR activities included the shifting paradigms and criticality of stakeholder’s relationships, shrinking role of government, increased customer interest and changes in their preferences and also not forgetting the growing investor pressure. The benefits that accrue to banks practicing CSR are the improvement corporate image and reputation in the market through public relations marketing, direct acquisition of new customers and enhancing good governance relations. Out of the 43 institutions on which the questionnaires were administered, only 29 responded. This gave a response rate of 68 percent. This limited the study as it targeted all the licensed commercial banks in Kenya. The second limitation of the study was that it focused mainly on the banking industry. The study was based on descriptive survey as the research design which is generalized in nature. Another study could be done using a case study as it is more specific. Further research could be a similar study to be carried out on other companies that are not in the category of commercial banks to find out forces motivating other companies to practice CSR.A research project can also be done on public institutions to see the factors and benefits they will get from engaging in CSR activities. In conclusion it was noted that banks should channel more resources to CSR activities, set-up specific departments comprising specialized personnel with the sole mandate of initiating and implementing CSR activities as well as measuring the impact of this activities on the intended targets and on the banks financial performance.