Corporate Social Responsibilities and Performance of Commercial Banks in Nairobi City County, Kenya
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Date
2024-11
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Publisher
Kenyatta University
Abstract
Most commercial banks in Kenya have struggled to maintain high organizational performance because of the country's increasingly unstable and competitive economic environment. Reduced profitability among commercial banks could be attributed to decreased market share due to increased number of other financial institutions including micro finance institutions and savings and credit co-operatives. In order to survive and enhance its performance, commercial banks need to be flexible and position themselves strategically. Corporate social responsibility is among the strategies that the commercial banks have adopted to address the problem of poor performance. Therefore, the main objective was to examine how corporate social responsibilities affects performance of chosen Kenyan commercial banks in Nairobi City County. Specifically, the study intended to examine how environmental, community, employee, and customer-based corporate social responsibility initiatives affected performance of chosen Kenyan commercial banks in Nairobi City County. The research was based on stakeholder theory, resource-based view theory, institutional theory, and agency theory. The study used an explanatory research design. The targeted population was 152 management staff drawn from human resource department and department of strategy and operations. The study sampled 91 participants. The questionnaire was used for collecting the primary data. The questionnaires were distributed using drop and pick later approach. Analysis of the data was through descriptives such as frequencies, percentage, mean and standard deviation. The inferential statistics like regression analysis was used for establish how corporate social responsibility influenced organizational performances of commercial banks. The research results were highlighted in Tables. The study established environmental based corporate social responsibility (β=0.698; p= 0.019), community-based corporate social responsibility (β=0.764; p=0.001), employee-based CSRs (β=0.846; p=0.000), customer-based corporate social responsibility results into (β=0.793; p=0.004) had substantial effects on performances of commercial banks. The study concluded that environmental based corporate social responsibility, community-based corporate social responsibility, employee-based corporate social responsibility and customer-based corporate social responsibility substantially affected the performances of commercial banks in Nairobi City County. Based on first objective, The study recommends that commercial banks in Nairobi City County should develop and implement an efficient waste management system. The study recommends that the bank needs to adopt a comprehensive strategy for managing its carbon emissions and reporting its carbon footprint. Based on second objective, the research recommended that commercial bank's management need to maintain and intensify investments in corporate social responsibility programs aimed at enhancing beneficiaries’ lives particularly in education, health and other humanitarian efforts. Based on third objective, the study recommends that commercial banks should come with strategies to ensure provision of learning and development opportunities for its employees which would foster a skilled and capable workforce. Regarding the fourth objective, the study recommends that commercial banks should implement personalized services and communication strategies that focus on understanding each client's unique needs.
Description
A Research Project Submitted to the School of Business, Economics and Tourism In Partial Fulfillment of the Requirement for the Award of the Degree of Master of Business Administration (Strategic Management Option) of Kenyatta University, November 2024.
Supervisor
Samuel Maina