Factors influencing involvement of insurance companies in Corporate Social Responsibilty (CSR). A case of insurance companies in Nairobi Kenya
The concept of cooperate social responsibility (CSR) dates back to the 50th century when companies began to recognize the importance of an efficient workforce. Insufficiencies in food, housing and healthcare sectors had a negative effect on the workforce's productivity and, as a result, companies began investing in medical facilities, housing and subsidized food for their employees as a means of enhancing their organizational productivity (Clarkson, 1995) through enlightened self-interest (Brown, 2005). CSR developed as a mix between the desire to do good to the community and organizations' self interest, or the interest of business companies and to satisfy the interests of its stakeholders rather than shareholders only (Brown, 2005). The scenario created a need to place priority on solving social. However, the involvement of insurance companies in Kenya on corporate social activities has been rather weak or poor as compared to insurance industry in other countries. The only areas covered by the insurance companies in Kenya are community development, sports and environment while areas of health, education, research and art among others, have been largely ignored. Further, insurance companies in Kenya spent less than 1% of their profits on CSR, yet the make profits of over 27.4 billion each year (Kimura, 2002). This scenario suggested that there are factors that hinder their full involvement in CSR, but these factors have not been established through a scientific procedure. It was therefore necessary to determine the factors that hinder the involvement of insurance companies in Kenya in CSR, with a view of improving their direct contribution to the well-being of the society. The specific objectives were to determine the influence of environmental, employee, organization and community factors on the involvement of insurance companies in CSR. The study was conducted using deceptive survey on a sample of 124 respondents selected from 40 insurance companies in Nairobi through questionnaire and interviews and analysed through percentages and ANOV A techniques and presented in tables and figures. The study established that, environmental factors, organizational factors and community factors affected the involvement of insurance companies in CSR. But it was organizational factors that registered the highest negative frequency of 54.6% as compared to 53.0010 of environmental factors and 47.4% of community factors. The study therefore concludes that organizational factors are the single most important factor that hinders the involvement of insurance companies in CSR. The study recommends that insurance companies initiate education support fund to be used by the relevant institutions to educate the public on how to conserve the environment and how to promote and improve security through participative community practices. The study also recommends that the insurance sector takes a proactive roil) in influencing community related factors through sponsoring programs that promote social responsiveness, general awareness on CSR and positive beliefs and attitudes among the community on CSR. The study also recommends that that the management and board of directors of insurance companies organize refresher courses for their management staff on methods and techniques of modem management, participatory decision making and inclusive leadership styles. Lastly the study recommends that a study be done to determine the actual effects of each of these factors identified by this study on the involvement of insurance companies in CSR.