Relationship between Strategic Corporate Social Responsibility Practices and the Performance of Companies listed in Nairobi Securities Exchange in Kenya

Abstract

The general objective of this study was to assess the relationship between strategic corporate social responsibility practices and performance of organizations listed at the NSE in Kenya. Specifically the study sought to establish the influence of strategic employee relations, community relations, customer relations and environmental relations practices on performance of NSE listed companies. The study also sought to determine the moderating effect of organization size on the relationship between corporate social responsibility practices and performance of the organizations. The study utilized a descriptive survey research design that incorporated quantitative and qualitative approaches. The target population for this study consisted all the 62 companies listed at the Nairobi Securities Exchange as at December 2014 from which primary data was collected using questionnaires administered to human resource and finance managers alongside secondary data on performance collected using a data collection sheet. A sample size of 50% was picked which translated to 31 companies. These companies were then stratified into 10 strata, followed by random sampling of 62 respondents from 31 companies. The collected data was coded and analyzed using both quantitative and qualitatively methods with the help of descriptive and inferential statistics. From the study findings, there are identified average positive relationships between employee relations practices and organization performance, environmental relations practices and organization performance, community relations practices and organizational performance and customer relations practices and organizational performance. The study also identifies high organizational performance when corporate social responsibility practices are moderate by organization size. The findings therefore concludes that employee relations practices, customer relations practices, community relations practices, employees’ relations and environmental relations practices influence organizational performance positively. The study therefore recommends policy makers should streamline environmental CSR initiatives to ensure their sustainability and enhanced future firm performance. Also, the study recommends that organizational managers should initiate and reinforce various employee relations and environmental relations practices to enhance their performance and value. They should also ensure that the community relations practices and customer relations practices are aligned to firm objectives so that organisations can be more successful by developing relationships with customers, employees, communities and government which will differentiate their products or service. Also, philanthropy and competitive advantage become mutually reinforcing and thus improves the organisation’s performance.