Effect of corporate social responsibility on organizational performance: a case of media houses in Nairobi, Kenya

Abstract

Past studies have found that a firm which is socially responsible acknowledges that it exists and operates in a shared environment. This is characterised by a mutual impact of a firm’s relationships on a broad variety of stakeholders, who are affected by and can eventually affect the achievement of an organisation’s objectives. This study sought to investigate the effect of corporate social responsibility (CSR) practices on the performance of organizations in the media industry. The study used a correlational census survey design. The study was cross sectional. The target population of the study was 37 media firms operating in Nairobi, Kenya. Primary data was collected from each of the firms’ top and mid-level management using a questionnaire as the main data collection instrument. Data was then analyzed using descriptive statistics: percentages, means and standard deviations. Pearson’s correlation analysis was used to examine the relationship between corporate social responsibility and organizational performance. Multiple regression analysis was used to determine the joint effect of the dimensions of corporate social responsibility (CSR): philanthropic responsibility, economic responsibility, environmental responsibility, ethical responsibility and legal responsibility on organizational performance. The analysis found that all the five dimensions of CSR jointly have a positive and significant effect on organizational performance of the media houses. This study recommends that media houses should perform philanthropic activities that impact society enabling them to substantially improve their corporate image, increase their visibility and reach a broad social recognition as responsible corporate citizens. Managers should also ensure that firms achieve a successful position on the market, maintain a high level of operating efficiency and put in place economic measures that favour their various stakeholders. Additionally, policies that ensure conservation of the environment should be crafted to include but not be limited to: energy conservation, waste reduction, use of renewable generated energy and resources and use of recycled or eco-friendly office supply. Further, that ethical responsibility should be embraced in terms of providing value to customers, ensuring the firms have policies that guarantee equal compensation regardless of gender and prevent ethical norms from being compromised in order to achieve corporate goals. Lastly, managers should ensure that firms are compliant with the law and take responsibility for illegal behaviour. Integrating all the dimensions of CSR into daily operations will lead to enhanced good relations between the firms and their numerous groups of stakeholders such as the employees, suppliers, government and members of the surrounding community. This will ultimately lead to increased market share, augmented sales growth and more customer satisfaction in addition to giving a superior competitive edge to one media firm that does this over another that does not.