Corporate Social Responsibility and Performance of Large Motor Vehicle Companies in Nairobi, Kenya

Abstract

In the present day business set up, the idea of corporate social responsibility (CSR) has come to be accepted as a major corporate component of business growth and sustainability. In the past, CSR was only focused on businesses’ responsibilities to society and doing good deeds for society but it has now become an important strategic issue. The study sought to establish the relationship between corporate social responsibility and the performance of large motor vehicle companies in Nairobi, Kenya. The population of study was all the 15 large motor vehicle companies in Nairobi as provided by the Kenya Motor Industry Association. A questionnaire was used to collect data, with respondents being CSR Managers, HR Managers, Finance Managers and Sales Managers. The data was analyzed using descriptive statistics and regression models. The results revealed that there was a positive relationship between CSR and the performance of motor vehicle companies. Results show that with the practice of various social responsibility activities, there is better asset utilization, improved internal processes and customer satisfaction as well as improved revenues. The study focused on CSR activities such as community activities, employment diversity, employee welfare programs, environmental preservation programs and safer product production. The study recommended that motor vehicle companies continually apply CSR practices by engaging the stakeholders in order to remain competitive. It also recommended that the government should provide incentives to organisations to enable them practice more CSR activities. The study’s implication to motor vehicle companies will entail improved reputation in the market place as well as gain competitive advantage since the stakeholders will be satisfied and this will result to increased business and improved company revenues. The communities living around the firms will align themselves and support the firms in their daily businesses for being socially responsible. The government will also benefit from the environmental preservation programs which will help reduce depletion of the ozone layer. This will make the country a better place to live making it attractive to foreign investors. Further research should be done to identify other variables that may influence the performance of a firm such as government policy on taxation and regulations existing in a country. The study was supported by the Stakeholder theory which looks at the ethical behavior of organisations to society which in the end will affect the organisation’s performance. Based on the findings of the study, all motor vehicle companies should embrace CSR unlike current practice where some of the companies are yet to consider CSR as a strategic issue. This will help them remain competitive in the present dynamic market.