Corporate Social Responsibility and Company's Profitability an Equity Bank Kenya Case Study

ABSTRACT

Corporate social responsibility (CSR) is an issue that is receiving top attention in most

organizations in Kenya today. Many organizations have taken CSR as a competitive tool

and they are using their social responsibility repo1is to market themselves and gain more

market share. In contrast some organizations today still believe that the only corporate

social responsibility and that is to maximize profits within the law. They argue that CSR

costs money and is not good business. This study was undertaken to determine impacts of CSR on a company's profitability. The study covered the employees, managers and share holders of EQUITY BANK

KENYA. A sample of respondents (employees' managers and share holders) was selected through random sampling method and used in this study. The employees andmanagers came from different departments such as finance and accounts, marketing,customer relations, human resource, and other departments in the bank and questionnaires were distributed. When returned these questionnaires were analyzed andlater a report was compiled. After analysis the data was presented in tables and charts. It was found out that most respondents (employee's managers and share holders) believed that CSR improved acompany's profits in the long run. The majority of the respondents suppo1ied corporate social programs conducted by the company and had actually taken part in corporate social responsibility programs. The major challenge that was facing the implementation of corporate social programs was cost factor and also lack of qualified personnel to perform some of the social programs that required specialized expertise. The study revealed that CSR improves profitability.

1.0 INTRODUCTION

This chapter entailed the brief background of the topic which was under study, a brief background of the case study, a statement of the problem, objective of the study, scope of study, significance of study as well as limitations of study. It also justified the significance of corporate social responsibility (CSR) and its impacts on a company's profits. 1.1 Background of the study Corporate social responsibility is a concept with decades old roots. In the 19th and early 20th centuries, the prevailing view among many industries was that business had only one responsibility: to make profits, "the public be damned" said railroad tycoon William Vanderbilt "I am working for the share holders." Canveat emptor was the rule of the day_ "let the buyer beware." If you bought a product you paid the price and faced the consequences. No consumer group or government agencies could help you if the product caused any harm or was defective. Mescom, Thill and Boove (200 I: 49