A survey of the relationship between corporate Social responsibility activities and competitive advantage in the oil industry in Kenya

Abstract

This research project is a census survey to determine the relationship between corporate social responsibility activities and competitive advantage in the oil industry. Over the last 10 years, there have been many changes in the Kenyan economy. These changes have had a considerable impact on all industries and the oil industry is no exception having been liberalized in October, 1994. The study has explored various CSR activities and the relationship with competitiveness. In order to achieve its objective, a questionnaire was dropped and picked to all oil companies in Kenya as per Appendix 1. The study established that the industry has encountered challenges ranging from financial challenges, that is the high cost involved in undertaking the CSR activities, cut throat competition in terms of pricing of the products in the market, uncertainty of product availability, brand confidence and dumping of substandard products in the market. Different companies have responded differently to these challenges through such strategies such as keeping low overhead costs so as to maintain competitive prices, ensuring product availability, use of exclusive distribution channels, investment in human resource development to ensure good customer care, extension of credit to ratable customers and implementation of CSR activities as a strategy to remain competitive. The study established that the number of.,organizations in the oil industry in Kenya were twenty three (23) as per appendix 1. Further it established that a number of these companies have been dealing in oil business for a number of years, with the majority of them having been in the business for periods of time ranging from 30 years and above, though there are also new entrants in this business such as Mogas International Limited which has been in this business for 8 years now, Bakri International Energy for a period of 6 years, Riva Oils Company Limited and Addax Kenya Limited have been in the business of 5 years, while Jade petroleum has been in this business for the past 1 year while Kenya shell limited has been in the business for over 100 years having started business in Kenya in 1900 and Chevron has been in business for 73 years having started operations in Kenya in 1936. Xlll Based on the study, a number of companies in the oil industry in Kenya stated they are involved in a number of CSR activities being studied. Sixteen (16) of the twenty three (23) companies responded. This study has not been able to exhaustively investigate all the aspects that explain all the issues in play in respect to corporate social responsibility activities an organisation would undertake and the respective benefits. The following areas are therefore recommended to be carried out for further investigations or study. An area the researcher finds has not been given consideration in respect to corporate social responsibility is the existence of regulations directly or indirectly affecting the ability of an organisation to enhance its social performance, for instance by the amount of resources an organisation allocates, or by setting up standards that can be appropriately monitored. However, the roles that legislation and public institutions play or should play in CSR development would need to studied further. The other area of study in which further research in CSR is needed is on the conflicts between organizations upholding interests of conventional stakeholder groups and the extended stakeholders and how to reconcile them.