Effect of Strategic Management Practices on the Performance of Corporate Social Responsibility of State Parastatals in Kenya

Abstract

The purpose of this study was to investigate the effect of strategic management practices on the performance of Corporate Social Responsibility of State Parastatals in Kenya. Four specific objectives formed the basis of study and these were: to examine the effect of strategic competitive practice, strategic corporate governance practice, strategic planning practice and strategic total quality management practice on the performance of corporate social responsibility of State Parastatals in Kenya. The theories included: theory of competitive advantage, strategic fit theory, resource dependency theory and stakeholder theory. The target population was 187 State Parastatals operating in Kenya as at 9th October, 2013.However, the respondents were randomly selected through multi-stage sampling technique from amongst the 109 State Parastatals in Kenya and the sample size was 85 State Parastatals. Quantitative research design was adopted for the study. The questionnaire was used as the data collection instrument. Hence the distribution of questionnaires to two top managers produced 170 respondents. Data analysis and interpretation was based on descriptive statistics and measures of dispersion as well as inferential statistics mainly regression analysis, Pearson correlation, factor analysis, and Analysis of Variance. The findings of the study show that Strategic Competitive Practice, Strategic Corporate Governance Practice, Strategic Planning Practice and Strategic Total Quality Management Practice have a significant effect on performance of corporate social responsibility. The regression coefficients for Strategic Competitive Practice was positively and significantly different from zero (t =5.416, p-value =0.045 and t= 1.975, p-value = 0.050). The regression coefficients for Strategic Corporate Governance Practice were negative (Beta = -0.149 and Beta = -0.367) and thus were significantly different from zero (t = -2.011, p-value =0.046 and t= -3.918, p-value =0.000). The coefficients for Strategic Planning Practice was both negative and moderate but the standard t-tests were significant (t = -3.296, p-value =0.001 and t = -2.564, p-value = 0.011). Strategic Total Quality Management Practice was positive as hypothesized and the coefficients were significantly different from zero (t= 9.407, p-value = 0.000 and t=6.871, p-value= 0.000). Therefore, the hypotheses for the two of the theoretical variables (Strategic Competitive Practice and Strategic Total Quality Management Practice) are supported by the data while the effect of Strategic Corporate Governance Practice and Strategic Planning Practice was negative. The study concludes that to enhance performance of corporate social responsibility, these strategic management practices need to be adopted. Therefore, from the findings the study concludes that the greater the adoption of strategic management practices in the parastatals, the greater would their effect on performance of Corporate Social Responsibility be. The study recommends that State Parastatals in Kenya should consider performance of corporate social responsibility as a new governance approach. Additionally, the study recommends that performance of corporate social responsibility should be formally and informally planned for in parastatals. The study provides assistance to policy makers on coming up with clear policies on improving performance of Corporate Social Responsibility of parastatals.