Corporate social responsibility and competitive advantage of Commercial Banks in Kenya
The role of any business is to not only make profits today but also sustain continuous growth into the future. Sustainable growth can only be manifested if a business identifies and develop competitive advantage strategies. As competition in the banking sector intensifies not only amongst themselves but from non-traditional competitors such as telcos, Micro Finance Institutions, Saccos etc. commercial banks have increasingly adopted Corporate Social Responsibility initiatives as a strategy to ensure goodwill from the community in order to not only operate with ease but also grow and sustain business into the future. Such initiatives are aimed at improving the living and working standards for the members of community in which the banks operate in. The objective of the study was to establish whether their existed a relationship between Corporate Social Responsibility and competitive advantage amongst commercial banks in Kenya. The research methodology used for this study was a cross sectional survey and focused on all the 43 commercial banks in Kenya. The study collected primary data by use of a self-administered questionnaire. Qualitative data was analyzed using a descriptive statistics and presented through percentages, means, standard deviations and frequencies. The information was displayed by use of bar charts, graphs and pie charts and in prose-form. The study concluded that banks use CSR as a strategy in order to drive overall goodwill in the society, to onboard new clients and investors and to motivate employees. These critical components were key in driving business growth. The study also indicated the existence of relationships between CSR initiatives and business growth indicators. The study recommended sustained participation in CSR initiatives in order to drive brand appeal and sustenance into the future. Involvement of stakeholders of the banks is also a recommended approach to drive individual ownership and overall in-depth brand penetration to the existing parties. This paper seeks to enrich the discussion on the strategic management of social responsibility and contribute to literature on Corporate Social Responsibility as well as strategy and competitive advantage. As the broadening of studies in the field and the dissemination of theories are important undertakings, the discussion of such issues serves as a motivation and help generate new ways of thinking and paradigms. The key limitation to the study was lack of participation by all recipients, however 31 banks responded back amidst numerous visits. The bureaucracy in the different banks also proved to be a challenge with the need for continuous follow up by the researcher.