Influence of Corporate Social Responsibility on Corporate Financial Performance: A Case of KenGen Company
Abstract
The aim of the study was to establish the relationship between corporate social responsibility and corporate financial performance of KenGen Company. The specific objectives were to examine effect of the economic corporate social responsibility on financial performance of KenGen Company, to determine effect of philanthropic corporate social responsibility on financial performance of KenGen Company and to establish the effect of environmental corporate social responsibility on financial performance of KenGen Company. The research design was a case study. The method was quite appropriate for the study because it assisted the researcher to establish the relationship between corporate social responsibility and corporate financial performance of KenGen Company. The population for this study was all levels of management and the employees at KenGen. This made a total target population of 586 respondents. Furthermore, the study adopted stratified sampling technique. The study divided the population into four strata; record managers, information technologists, clerical officers and the head of administration. The study used simple random sampling technique to select 30% of the respondents from each stratum. Thus, from the targeted population of 586, a sample of 176 was obtained, which was 30% of the total population. The study used a questionnaire as a data collection instrument. The questionnaire consisted of both open and closed-ended questions. The close-ended questions were used in an effort to conserve time; while the open-ended questions were used to encourage the respondent to give more in-depth details without feeling reluctant to disclose any information. The data collected was coded, quantified and analyzed quantitatively. By using descriptive statistics from SPSS, quantitative data was analyzed and presented in percentages, means, standard deviations and frequencies. The data was subsequently presented in tables, graphs and pie charts. This provided for an easier analysis and interpretation of the data inputted. The study found that economic social responsibility influence performance of the organization. The study also established that firm choices about investing in socially responsible activities have an overall effect on firm value thus increasing the performance. The study further found that philanthropic corporate social responsibility has enhanced performance of the organization. The study also established that investments in philanthropic CSR help firms develop new competencies, resources and capabilities that are manifested in firm culture, technology, structure and human resources. The study concluded that environmental corporate social responsibility has influenced performance of the firm. Finally, the study concluded that good environmental management generates reputational advantage for a firm that leads to improved marketing and financial performance. From the findings and conclusion, the study recommended that the organization can influence its corporate organization performance by engaging in various Corporate Social responsibility activities and this will help it build a good reputation and thus, gain competitive advantage hence higher productivity.
Keywords: Economic corporate social responsibility, philanthropic corporate social responsibility, environmental corporate social responsibility, corporate Financial Performance, KenGen Company.
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