The role of corporate social responsibility in the profitability of selected companies in Nairobi

Abstract

Corporate social responsibility (CSR) is a rapidly emerging issue in the world of business. World over, companies are adopting corporate social responsibility practices in a bid to improve the visibility, image and the long term profitability. This has been found necessary due to changes in the world brought about by globalization and increased societal expectations on aspects such as human rights and environmental awareness. This awareness has led to boycotts of companies products perceived to be undermining such values.

This has been exemplified in the case of Nestle, Nike and Shell among others in the international arena, and Del- Monte and flower farms among others in Kenya. This study focused on the CSR practices and its role in the profimbi1ity of selected organizations namely Barclays Bank. National Bank, Kenya Commercial Bank, British American Tobacco and African Wildlife Foundation. These organizations were purposively selected because they are amongst the few organizations that have adopted CSR in the recent past, and management was willing to divulge information on their CSR programs.

Data was collected by use of questionnaires, which were administered to the managerial personnel in the organizations under study and analysed using descriptive statistics. Findings from the study indicated that CSR is a major contributor to the profitability of organizations through enhanced image and reputation. Further the quality performance vital in improving reputation with customers. The research also found out that these organizations had strategic partners in their CSR agenda. However, the greatest impediments to CSR practices were finances and poor public perception.