The Relationship Between Financial Performance and Corporate Social Responsibility for Oil Marketers in Kenya

Abstract

This project attempts to establish the relationship between CSR and financial performance of Oil Marketers in Kenya. The study was conducted in Nairobi in September 2013, and data was collected through Financial Statements obtained from the various oil Marketers in Nairobi as well as from the ERC. The researcher used secondary data in conducting the research. Data was analyzed using regression analysis. The findings showed that CSR activities are correlated to profitability of Oil Marketers in Kenya. The results of regression analysis showed that there is a significant positive relationship between CSR and financial performance of the Oil Marketers of Kenya as shown by P value of 0%, adjusted R Squared (R-Sq (adj)) figure. Financial performance of Oil Marketers depends on social responsible behaviors of the Firms. In addition, socially responsible companies have an enhanced brand image and a positive reputation among consumers; they also have the ability to attract more accomplished employees and business partners. High financial performance is attributed to the benefits of being socially responsible. Further the study carried out the hypothesis testing between CSR variable and financial performance. A Pearson coefficient measure showed a strong, significant, positive relationship between CSR and financial performance of Oil companies in Kenya. Therefore basing on these findings the study rejected the null hypothesis that there is no relationship between CSR and financial performance of companies and accepted the alternative hypothesis that there exists a relationship between Corporate Social Responsibility and financial performance of Oil companies in Kenya. Corporate social responsibility is recommended for all organizations whether profit or non-profit organization. From this research conducted there are several benefits to a company engaging in social responsibility. An organization is able to improve the image of the firm, improve share prices if quoted in stock exchange and it is profitable in the long run. Also it is ethical to be socially responsible and it aims at improving the community at large. Also the market share is improved and also customer satisfaction can be met.