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THE RELATIONSIDP BETWEEN CSR INITIATIVES AND NON-FINANCIAL 

PERFORMANCE OF LISTED COMPANIES IN KENYA 

RADIDO TREVOR OTIENO (093620) 

A research project submitted to the school of Business in partial fulfilment of the 

requirements for the award of Degree in Bachelors of Commerce of Strathmore 

University 

JULY, 2019 



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DECLARATION 

I hereby declare that this research paper is my actual and original work. Any reference to work 

done by any other person or institution or any material obtained from other sources have been duly 

cited and referenced. I further certify that the research paper has not been published or submitted 

before for any other degree or published in any other university for the award of a degree apat1 

from Strathmore University. 

Signed~ 
Student name: .. j{ ~;A-Ju 
Student number: D r g G 9 u 

Date 

This research proposal has been submitted for examination with my approval as the University 

Supervisor 

Signed _~ Date 

Supervisor: 1>~. w ~\3) 

University: Strathmore University 

School: Strathmore University Business School (SUBS) 



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DEDICATION 

This research is dedicated to the Almighty God for His provision, grace and protection that saw 

me through my study successfully. I also dedicate this research to my loving parents for their 

commitment, support and unfailing love that have enabled me come this far in my academics. l 

also dedicate this research to my supervisor; Dr. Mumbi Maria Wachira who took her time to make 

sure the research was a success. God bless them. 

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ACKNOWLEDGEMENT 

I would like to thank Almighty God for the provision of good health, strength and endurance 

through my entire thesis writing. I also express my gratitude to all my family members for their 

unconditional support and encouragement. A special thanks to my supervisor Dr. Mumbi Maria 

Wachira of Strathmore University for continued advice and guidance throughout the process. 

I also thank my classmates for their support without which the process could have been difficult 

and void. 

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ABSTRACT 

The role of business in the present day has significantly changed from being profit focused to being 

socially responsible. According to Rouf (20 II) this has been as a result of the continuous 

interaction between the business and the community. This is perceived in terms ofthe impact the 

business has on the environment they operate in. Corporate Social Responsibility means initiatives 

to assess and take responsibility for the company's effect on the environment and the social welfare 

of the surrounding community (Porter & Kramer, 2006). Corporate social responsibility plays a 
,_ 

pivotal role to help firms balance their economic, social and environmental imperatives. 

The fundamental idea of CSR is that businesses corporations have an obligation to work towards 

meeting the needs of a wide array of stakeholders. In addition, CSR is a set of management 

practices that ensures the company maximizes the positive impact of its operations on society or 

operating in a manner that meets or exceeds the legal, ethical , commercial and public expectation 

that society has for business c. The current debate is that corporations should transition from a 

state of mere compliance to an engagement; from harm minimization to value creation(Jamali & 

Mirshak, 2007). 

It is worth noting that developing countries do not share the same cultural and societal values, 

norms and priorities that underpin CSR in western nations. There is some anxiety that CSR 

continues to legitimize and reproduce values and perspectives that are not in the interest of 

developing economies. This is in terms of companies confronted with the challenge of how to 

balance the desire for global integration with the need for local responsiveness. 

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Table of Contents 

DECLARATION .... ...... ... ...... .. .... ..... .... ..... .. ..... ...... ...... .. ..... ........... .... ..... ............. ....... ................ ... . i 

DEDICATION .. ... .. ..... .... .... ... .. .......... .. ... ........ ............ .... ...... .... ...... .... .... ... .. .. ...... ........ .... ....... .. ...... ii 

ACKNOWLEDGEMENT .... .......... .. .... .. ..... ..... ........ ...... .... ............ .. .. ............... .. ... ... .. ... ....... .... .. .. iii 

ABSTRACT .... ....... .... ....... ..... ... ... ...... ..... ...... .... ............... .. ... ... ... ... .... .... ... .. .......... .... ... ... ....... ... ... .. iv 

LIST OF FIGURES .......... .. .. ..... ........... ...... ....... ....... ....... ............... ..... ....... ............. .. .. .......... ...... viii 

LIST OF TABLES ......................................... ............ .................... ....... .. ...................... .. ... ..... ..... .. ix 

LIST OF ABBREVIATIONS AND ACRONYMS ... ........ ... .. .... ...... .................. ........ .. ... ........ ... .. . x 

CHAPTER ONE ............. .... .................. ...................... .. ............ ............. .. ....................................... 1 

INTRODUCTION ...... ... .. ...... .. ..... ...... ... ... ...... .. ........... ....... .. .. .. .. .... ......... ................... ..... .. .... .... ..... I 

1. 1 Background of study ........ ... .. ......... ...... ... ... ... ....... .. .. ....... .......... .......... ........ ... .... ...... ....... ...... 1 

1. 1.1 CSR and Non-Financial performance .......... .......... ... ........ ... .... ........... ... ................ ....... ... .. 3 

1. 1.2 Corporate social Responsibility in Kenya ....... ... .... ............... ... .... ... .......... .... ... ........... .... .. . 4 

I .2 Problem statement .......... .... .......... ....... ........ .... ... .... ..... .. ........ ....... ...... .... ........ ... ................. ... 5 

1.3 Research Objectives ..... .... .. ... ...... ......... .. ....... ... ......... ... ...... ...... .... .. ... .... ... .......... ....... .. .... .. ... . 6 

1.4 Research Questions ... ..... .... .... ... .. ... ....... ..... ...... ..... ... ....... .. .. ....... ................... .. .. .............. .. ... . 6 

1.5 Scope of the study .... ........... ..... .. ... ......... .......... ... ... .... .. ............. ......... ... ....... ................. ........ 6 

1.6 Significance of the study ....... ....... .. ...... .... ..... ... ...... ....... ........... ...... ......... ...... ... ... .. .......... .. .. .. 6 

CHAPTER TWO .................. .. ............................... ....... .. ...... ............... ....... ...... ...... ... .................. ... 7 

LITERATURE REVIEW ... ... ... ....... .. ......... ... .. .. ... ... .... .......... ......... ... .... .. ...... ... ... ... .. ..... .... ... ....... ... 7 

2.1 Introduction ..... ... ............. ...... ...................... .. .... .................. .. ... ....... ............ ..... ...... .... ........... 7 

2.2 Theoretical framework ........... ... .... ...... ..... ..... .... ....... .. .... ............. ...... ...... ...... ..... ............... ... . 7 

2.2.1 Stakeholder Theory ... .... ... ........... .. ............... ... ... .... .... .... .... ...... .................. .... .... ........ ... .. 7 

2 .2.2 Added Value Model ..... ............. ........ .. ........... ...... ......... ..... ... ................. .... .. .... ..... ..... .... 8 

2 .2.3 Multiple Goals Model ...... .. .. ....... ...... .......... ........... .. .... ......... ... ............ ... ....... .. .... ... ........ 9 

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2.3 Empirical review ... .................... ................... ............... .......................... ... .. ........................... 9 

2.3.1 Corporate social responsibility .. .......... .......... ... .................... ............. ......... .................. .. 9 

2.3.2 Non-financial performance ...... .. .. ............... ..... ... .. ....... .. ...... ....... .. ........ .. .. ..... .. .... ........ . II 

2.3.3 Corporate social responsibility and non-financial performance ........... .... ...... ........ ...... 12 

2.4 Research gap .... ... .... .. ... ..... ........... ..... .... ......... .............. ....... ........................ .......... ......... ..... 13 

2.5 Conceptual framework .................. ................... ........... ....... ...... ..... ................ .................. .... 13 

2.6 Operationalization ............... .. .... ..... ............. .... ......... ............ ................... .. ......... .. ....... ..... ... 14 

CHAPTER THREE .............. ........... ...... ................ .... ..... ......... ......... .. ..... .. ............... .................... 18 

RESEARCH METHODOLOGY ....... .. .. ... .... ..... ....... .......... .. ..... .. .... ...... .. ....... ............................. 18 

3.0 Introduction ... .. .... ... ...................... ......... .. ... .... ...... .... .... ........... ................... ... ... ..... .......... .. .. 18 

3.1 Research design .......... .................. ... .... ........ ..... ... .. .. .......... .. ..... ... .... ........... ......................... 18 

3.2.1 Target Population .... .............. ... .. .. ........... ........ .... .... ... ... ... ......... ... ....... ..... ............. .. ..... 18 

3.2.2 Sample Frame ......... ................. ... ........................... .. .... .. ........ ............. .... ......... .... ........ . 18 

3.2.3 Sampling technique ....... ............................. ...... .......... ... .. ..... ........ ........ .. ........... ... .... .. .. 19 

3.3 Data collection ... ..... .. ....... ..... ... .. ..... .. ... .. .............. .... .. ........... ..... ....... ...... .. .......................... 19 

3.3.1 Data collection instruments .............................. .. ..................................... ........... ......... . 19 

3.3 .2 Data collection procedures .......... ................. ... ......... ........... ........ ... ..... ... .. .... .. ... ..... .... .. 19 

3.4 Research quality ......................... .... ............... .. .... ... ............. ..... .... ................... .. ............... ... 20 

3.5 Data analysis and presentation ......... .................... ......... ........... ... ....... .... ....... ... ....... ............ 20 

3.6 Ethical consideration .. .. ... .. ..... ........ ... ... ............. ... ........ ... .. ..... .......................... ..... .. ..... .... ... 20 

CHARPTER FOUR ................... ........................................ ........ ............ ......... ......... ...... .. ... ... .. ..... 22 

DATA ANALYSIS AND PRESENT A TfON ................. ... .... .. ......... ....... ...... ........ ...... .... .. .......... 22 

4.0 Introduction ......... ...... ... .......... ..... .. .. ..... .. ........ ..... .... ........ ........ ....... ......... ... .................... .... . 22 

4.1 Background Infonnation .. .. ............... ... ...... ... ... ... ....... ............. .. ... ........................... ............ 22 

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4.1.1 Demographic Information of Respondents .. ..... ..... ... ... .. .... ....... ....... ....... .. .............. ...... 22 

4.2 CSR Initiatives ........................... .... ... ... ... ... ... ..... ......... ........ .. ... .... ... ...... ........ ...... .. ...... .... ... . 28 

4.2.1 Local community partnership ............ ................ .. .......... .... .. ...... .. ....... .... .... ..... .. .. ......... 28 

4.2.2 Employees and customer relationship ... .... ......... ..... ........ .. ....... .. .. .... ..... ... .... .... ..... ... .... 29 

4.2.3 Environmental sustainability .... .. .......... .. ........ ............... .... ..... ..... .... ...... .. .. .... .............. . 30 

4.2.4 Socially responsible .. ... ..... .. ... ............. ...... ...... ............ .... .. ........... ............. .............. ...... 32 

. 4.3 Non-financial performance .... .... ........... ... ..... .. .. ..... ... ... .. ..... .. ... ... ........ .... .. .... ... .............. .... . 34 

4.3.1 Company reputation ....................................................... .. ............................................ 34 

4.3.2 Competitiveness .... .. ... ... .... .. ............... .... .. ....... .... ........ ...... ......... .... ........... .. ............. ... . 36 

4.4.1 Innovation .......... .... ....................................................................................... ................ 40 

4.4.2 Customer influence and value propositions ...... .. .......................................................... 42 

CHAPTER FIVE ..... .... .... ... ...... .......... ....... ... .. .. .. ...... ... .... ... .. ... .... .... ...... ....... ... ....... .. .... ... ............ . 51 

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS .... .. .. .... ........... 51 

5.0 Introduction .... .. ...... ........ ..... ...... .. ... .. ...................... ... ............... ... ........ .... ....... .. .. .... ............. 51 

5.1 Research Purpose and Methodology .. ........ .. ................................................... ................. .. . 51 

5.2 Summary of Findings .... ...... .............. .. .................................... .. ........ ....... ........... .. .......... .. .. 51 

5.3 Conclusion ..... ... ... .. ...... ....... .... .......... ...... ... ... ..... .. ... .. ...... ... .. .. ......... ... ..... .... ........ .... .. .... .. ..... 53 

5.4 Recommendations .. ... ....... .. .......... .......................... ................................. ... ........ .... ... ... .... ... 53 

5.5 Limitations of the Study .... ... ... .... .. ....... ......... ... .. .... .... .. ...... .. ..... .. .. ...... ..... .... ...... .......... ... ... . 53 

5.6 Suggestions for Further Studies ............................................. .. .. .. .. .. .... .. .... .............. ........... 54 

References ... .... ........ .... .... .. .... ...... .......... ................................ .............. .. ......... .. .... .. .... ... ... .. ........... 55 

Appendix I : Questionnaire ... .... ... ... ......... .... ..... .. ................ .. .... .. .... .. ...... ... .. ...... .. .............. .... .. ... .. 58 

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LIST OF FIGURES 

Figure 2. I: Conceptual framework ... .. . ....... .... ...... .. ............ .. .. . ............. . ............... . 12 

Figure 4. I: Position of employment. .... . ... ... ... .. ............................ ..... ...... . . .. . . ... ... 2 I 

Figure 4.2: Extent to CSR activities ... . .......... .. ......... . .. .. ......... . ... . ............... . ..... . .. 2 I 

Figure 4.3: Responsibilities of firms . .. .... . ........ . . . ... . . . . . ...... ........ ... ..... . . ........ .... . . .. 23 

Figure 4.4: Attention to CSR policies .. .................... . ... . . ......... . .. . .. . . .. ... . . ... .. ... ... ... 23 

Figure 4.5: Reasons for involvement into CSR . .. . ...... .. . . ... ... ... .. ..... . ....... . .. ... . . . .. ... .. . 24 

Figure 4.6: CSR programs v/s business objectives . .. .. . . ... ...... . .. .. ....... . ......... . ... ... ...... 25 

Figure 4.7: CSR programs with Local community partnership ...... . .... ... . .... .. ... .. . .. . .... .. . 26 

Figure 4.8: CSR programs with engagement with employees and customers ...... . ........... ... 27 

Figure 4.9: CSR programs with level of knowledge ... ..... . .... ... . . ... .... . . . ..... . .. ..... . . . .. ... . 28 

Figure 5.0: CSR initiatives and environmental sustainability .......... . ........ .. . . ... .. . . .... . .... . 29 

Figure 5.1: Ethical and moral requirements ........ . ...... . ... ... .. . . ...... . .. . ...... . . ... . . . . ......... 30 

Figure 5.2: Socially responsible activities . ..... . . .. . . . .. . ... ..... .. .. . .......... .. ... . ... .. ... ..... .... 3 I 

Figure 5.3: Acknowledgement and accountability ....... . . .. . .. .. . . .... . . ... . . ... . .. .... . . .. .. .. .. . .. 32 

Figure 5.4: CSR practices and company's image .. ... .. ... . . . .. . ... . ... ... ... ....... .. .. . ... .. ....... . 33 

Figure 5.6: Brand differentiation . ...... ..... .. . ..... ....... ... . .... . . ... .. . ...... .. . . ..... ........ .. ... .33 

Figure 5.7: Assessment of results and past actions . . ..... . . .. . . ..... ..... . . . . . ... ......... . ... . ..... .. 34 

Figure 5.8: Competitiveness and CSR activities ...... . ...... . ....... . . .... .... . . . ..... . .. ... ........ ... 35 

Figure 5.9: Responsible business behaviors .......... .. .. . .. . .... . ..... ..... ........................... 36 

Figure 6.0: CSR programs and loyalty .. . . . ... . ...... ... ..... . . . .. . .... ... . .. . . . . ......... . . .. .. .. ... . .. 36 

Figure 6. 1: CSR programs and brand growth ......... .. ..... . . .. .. ... . . ........ . ............ .. ... . ... .. 3 7 

Figure 6.2: CSR programs with Business objectives ... ... . .. . . .. .. .. ......... ....... .... ... .. ....... .. 37 

Figure 6.3: Programs evolvement and adaptation ........... . ... . ... .... ..... . ............. . ........... 38 

Figure 6.4: Innovation and profitability .... .. .. . .. . .. ...... ............... .. ........ ...... ... . .. ..... .... 39 

Figure 6.5: competitiveness in innovation .. ... . . .. . .. ... ... .. .... ..................... . .... . ... .. ..... .. 39 

Figure 6.6: CSR initiatives and number of customers ......... .. .. . . ..... .... . . ... ...... ... ....... .. .. .40 

Figure 6.7: CSR programs and quality . . .. . .......... .. .. . . . . ... ......... . ......... .... .... ... . ... . . .... 41 

Figure 6.8: Customer engagement and inspiration .... . ...... . .. . . . .. ..... ... ...... . . .. .. ...... . .... .. .41 

Figure 6.9: Customer attitude and retention ........ . ...... . ............ ..... . . . ... . . ........ .... .. . ... . .42 

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LIST OFT ABLES 

Table 2.1 : Operational ization of the study .. . . . . . .. . ........ . .......... .. ...... .. .... . .......... . .......... 13 

Table 4. I: Summary of knowledge regarding CSR initiatives ... . ..... . .... . . ... . .. .. .. . . .. ... . .. . .. ... 22 

Table 4.2: Summary ofCSR programs with respect to nonfinancial performance . . . . . ......... ..... 25 

Table 4.3: CSR [nitiatives with environmental sustainability .... . . . .. .. ...... . . .... . . ....... .. ... ... .... .29 

Table 4.4: Correlation analysis summary ...... . ........... . .. . ... . .... . ... . ....... .. ... .. .. . ...... ...... .. 43 

Table 4.5: ANOVA analysis ...... . ..... .. ....... . .. . ........ . . . ...... . . . . ..... . .... ... ... . . . .. ..... ........ . .45 

Table 4.6: Summary ofmuiltcollinearity .. ...... .. ........ .... ......... ......... . ..... . . . .. ... . . . .... .. ... 47 

Table 4.7: Goodness of fit test. . . . . . .... . ........... . . . .. . ... . . ... ..... . ... .... . . .... .. ... . ... . ... ........ ... .47 

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LIST OF ABBREVIATIONS AND ACRONYMS 

CSR-Corporate Social Responsibility 

SR-Social Responsibility 

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CHAPTER ONE 

INTRODUCTION 

1.1 Background ofstudy 

The present day role of business has significantly changed from being profit focused to being 

socially responsible. According to Rouf (20 II) this has been achieved as a result of the continuous 

interaction between the business and the community. This is perceived in terms ofthe impact the 

business has on the environment they operate in. Corporate Social Responsibility means initiatives 

to assess responsibility for the company's effect on the environment and the social welfare (Porter 

& Kramer, 2006).Corporate social responsibility plays an important role to help firms strike a 

balance between their economic, social and environmental aspects. Transparency in disclosures of 

CSR policies and programs is a pertinent aspect if firms have to fully benefit(Kumar & Kidwai, 

20 17). lt should be noted that however in Kenya, the businesses are not subjected to disclose this 

act. 

Research in the past focused on whether CSR should be there or not. It very well may be followed 

as ahead of schedule as the seventeenth century, despite the fact that the manner by which 

individuals see and characterize the connection among business and society has developed. 

Friedman (1970) posited that business should focus on making profit provided it does not engage 

in fraudulent activities while observing fair and equitable competition. Freeman on the other hand 

further stated that business could only succeed if it created value for its stakeholders. This made 

firms to be primarily driven on how to accumulate a lot of wealth at the expense of their 

surroundings. The harms included environmental degradation which had detrimental effect even 

after they had left. 

Attempts have been made to define the boundaries and the kind of responsibilities it is concerned 

with. In the early writings of CSR, it was refereed to more often as a Social Responsibility(SR) 

than CSR(Carroll, l999).There already exists regulations by the governments that limits 

environmental pollution. Organizations can't tooth their very own horn on the off chance that they 

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For the purpose of this research, CSR can be viewed as steps that seeks to enhance fairness beyond 

the firm's interest and the requirements of the law and regulations. CSR concerns itself with wider 

policies set, varied practices adopted aside from the programs put in place that are incorporated in 

the operations of the business, the process of making decisions and the suppliers chain of business 

entity. 

According to Carroll, corporate social responsibility footprints throughout the world and societal 

views were far ranging. The growth of public awareness on has been attributed to 

environmentalism and social movements that has made most societies and communities demand 

organisations located among them take account to the support they provide. He further stated that 

CSR incorporates four columns specifically legalistic, economic, moral and optional desires that 

a general public has at a given time. The four arrangement of duties makes establishment that 

depicts in some detail the idea of business obligations to the general public. 

Monetary obligation expresses that organizations have a financial duty to the general public that 

allowed them to be made and continued. Benefits are important to remunerate the financial 

specialists and proprietors and furthermore for reinvesting to improve the business development 

in the general public through making of work which is a piece of CSR activities. he legitimate 

column expresses that the general public has built up some guidelines under which the 

organizations are relied upon to work and capacity. This incorporates laws and guidelines which 

mirrors the general public's perspectives which articulate the major ideas of reasonable strategic 

policies. Moral obligations expresses that the standardizing desires for most social orders are that 

laws are basic yet not adequate. This implies most associations will grasp those exercises, 

standards, models and practices that however not composed, are relied upon to be clung to. Such 

incorporates the business leading its issues in a reasonable and target route even in situations when 

the law doesn't give rules or game-plan. The altruistic obligation involves every one of the types 

of business giving's in type of willful or optional exercises. This may not be an immediate duty, 

however today is normal by the business and is a piece of ordinary desires for the general 

population. 

The fundamental idea of CSR is that businesses corporations have an obligation to work towards 

meeting the needs of a wide array of stakeholders. In addition, CSR is a set of management 

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practices that ensures the company maximizes the positive impact of its operations on society or 

operating in a manner that meets or exceeds the legal, ethical, commercial and public expectation 

that society has for business(Carroll , 20 16). The current debate is that corporations should 

transition from a state of mere compliance to an engagement; from harm minimization to value 

creation(Jamali & Mirshak, 2007). 

It is worth noting that developing countries do not share the same cultural and societal values, 

norms and priorities that underpin CSR in western nations. There is some anxiety that CSR 

continues to legitimize and reproduce values and perspectives that are not in the interest of 

developing economies. This is in terms of companies confronted with the challenge of how to 

balance the desire for global integration with the need for local responsiveness 

1.1.1 CSR and Non-Financial performance 

A lot of studies conducted have put more weight on the relationship between CSR and financial 

performance in their role towards enhancing the company's profitability. However, non-financial 

performance indicators play an important role in enhancing the overall goal of the business 

(Muthuri, 20 13). Non-financial performance indicators include aspects such as intangible assets, 

companies reputation, employees satisfaction and easy access to financial services(Ittner & 

Larcker, 1998). 

According to institutional theory (Campbell, 2007), it expresses that association are significantly 

affected by the institutional setting in which they work in. This suggests monetary execution 

clarifications, for example, money related execution and finishing are adequate to completely 

represent hierarchical CSR practices. The hypothesis further expresses that institutional condition 

considers establishments, for example, culture, guidelines and social standards which impact and 

are affected by entertainers' cooperations in an administration framework. 

Levy ( 1999) in his book, Give and Take, underpins the similarity that corporate altruism and social 

activities are the center of business. He further puts accentuation that social undertakings must be 

steady with business goals for procuring benefits. Considered as a functioning wellspring of upper 

hand ,CSR can be a proactive business system and a successful advertising device that can make 

and continue aggressive edge(Maignan & Ferrell, 200 I). Corporations have gone a step further 

from "doing good" to "doing better" and this is the road to "doing best" by building added 

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societal value(Wartick & Cochran, 1985). In some cases, however, company ' s management have 

resisted arguing that additional CSR investment is in consistent with profit maximization analogy. 

Measures of financial performance are categorised into two. (Cochran & Wood, 1984 ). This 

incorporates financial specialist returns and bookkeeping returns. The fundamental thought basic 

financial specialist returns is that profits ought to be estimated from the point of view of the 

investors. Then again, the fundamental thought of utilizing bookkeeping returns as a proportion of 

money related execution is to concentrate on how company's profit reacts to various administrative 

arrangements. 

According to (Windsor, 2006) ,proposed a concept of the link between CSR and financial 

performance through the visual of the four different four scenarios. The scenarios are as follows; 

If financial performance increases at the same time as CSR, this results to a win-win situation 

regardless of the governments or ethical input. 

If both CSR and financial performance fall at the same time, this results to a lose-lose situation. 

Therefore, the government input is likely to occur in order to counter the unwanted situation. 

If financial performance increases when CSR decreases, public aversion toward companies can 

occur since environmental or social harm leads to profit for the companies. 

If financial performance decreases while CSR increases, it creates a conflict in contrast to the 

previous example where companies become unwillingly to invest in CSR activities. 

1.1.2 Corporate social Responsibility in Kenya 

CSR in Kenya is still a work in progress with great strides being made. This is because of lack of 

a very comprehensive law that captures all sectors. Muthuri & Victoria (20 II), in the article titled 

"An institutional analysis of corporate social responsibility in Kenya" discusses in totality how 

CSR has been manifested in Kenya. He stated that CSR has three determinants. First, we have 

regulative also known as legal systems. This entails rules, sanctions and regulations that are used 

to codify socially acceptable behaviour. Second, we have normative elements. This refers to the 

values and social norms that define the rules of engagement. Lastly, we have the cognitive element. 

Also known as cultural element, encompasses the shared beliefs that constitute responsible 

corporate behaviour. 
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He goes further to state that the government has been reluctant to enforce standards and regulations 

for fear of discouraging domestic investments. This has made the enforcement difficult hence 

many entities often take advantage to avert compliance He goes ahead to state that the absence of 

a regulatory framework has made companies to seek to be responsible to the stakeholders needs. 

In turn, the stakeholders offer socio-political and cognitive legitimacy. 

1.2 Problem statement 

Albeit hypothetical and observational research regularly on the connection among CSR and 

budgetary execution frequently give various ends, for example, positive, negative, blended and no 

connection among CSR and organization's competiveness, ways to deal with measure the 

organization's particular business effect ofCSR are absent in the ebb and flow writing. In any case, 

such methodologies could reinforce the general CSR inclusion and bolster discerning choice­

making. 

The argument for a negative relationship of CSR initiatives is mainly based on the thinking of 

Milton Friedman. He argues that companies should have no social responsibility to the public or 

society since its main concern is to increase profits for itself and that of the shareholders. He further 

argues that it is the responsibility of the shareholders in their own private capacity to engage in 

social responsibility. Cheng et al (2014) argues that CSR can strengthen the relationship with a 

company's stakeholders. He further states that companies undertaking CSR initiatives often lowers 

its capital constraints through better access to bank loans which makes it easier to undertake 

strategic investments .McWilliams & Siegel(2000) expressed that despite the fact that it had been 

inferred that organizations may get monetary benefits from CSR activities ,earlier examinations 

into the relations among CSR and CFP had been uncertain in showing the relations among CSR 

and CFP.A recent study conducted of the firms listed in the Korean exchange showed a partial 

positive relationship with the profitability and firms value in comparison to the CSR effort 

put(Cho, Chung, & Young, 20 19). 

Past studies have mainly been focusing on the main companies such as Safaricom which is a 

leading telecommunication company in the country with huge profits yearly which have gone 

broadly to disclose their CSR initiatives in their financial statements. This accounts to a smaller 

percentage of the total listed companies hence making the blanket conclusion be wrong. However, 

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the non-financial performance aspects such as easy access to finances have been forgotten whereas 

this play a very integral part in improving the company's bottom line. 

1.3 Research Objectives 

l. To establish the relationship between corporate social responsibility and non-financial 

performance of listed companies in Kenya. 

2. To establish the various CSR initiatives used among listed companies Kenya 

1.4 Research Questions 

I. What is the relationship between corporate social responsibility and non-financial 

performance of listed companies in in Kenya? 

2. What are some of the CSR initiatives implemented by companies used to enhance non-

financial performance of listed companies in Kenya? 

1.5 Scope of the study 

This study is only focusing on the relationship between corporate social responsibility and non­

financial performance of listed companies at Nairobi Security Exchange, whose main role is to 

provide mechanism through which companies can raise capital for expansion. There are a total of 

64 listed companies which includes also companies in the NSE20 

1.6 Significance of the study 

This study is cross sectional study focusing on the relationship between corporate social 

responsibility and non-financial performance of companies at the NSE in Kenya for the financial 

year 2018-2019. 

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CHAPTER TWO 

LITERATURE REVIEW 

2.1 Introduction 

This chapter presents the theoretical framework, conceptual framework, and operationalization of 

variables. Specifically, the chapter discusses the stakeholder theory, the added value model and 

the multiple goal model. 

2.2 Theoretical framework 

2.2.1 Stakeholder Theory 

According to Guay & Doh, (2006), a stakeholder can be practically defined as, an entity that is 

majorly outside the company that the firm is focused to influence and mainly impact the 

organization. The mostly commonly mentioned stakeholders of a company includes; government, 

company's employees, customers, regulatory agencies, political groups and activist, and 

competitors, in which are majorly recognised has having an influence or are affected by the 

organization operation and also determines the viability of a firm (Wu & Issa, 20 13) ~ There exists 

norms and values of a company' s stakeholders which concerns issues that extends or are applied 

to individuals or organizations which generally have no direct influence on their own wellbeing. 

Bommer & Ell strand, (I 996) argues that the operations and marketing of a company has extend 

from the narrow customer orientation to relationships and benefits of different stakeholders ' 

interests. 

Until recent years, the core objective of a firms has been deemed as to generate profits by 

individuals and is obliged to the demand of its shareholders (Abdullah, 2004). This notion is slowly 

changing and generation of profits can no longer be deemed as the only objective of a company, 

as success of a company is seen as increasingly affected by the stakeholders' relationships, which 

has an arsenal of interests, in which the most vital being how companies faces the issues of social 

and environment (Adjaoud, Zeghal , & Andaleeb, 2007). This approach of stakeholders towards 

CSR pinpoints that, the interests of shareholders are not easily met without establishing and 

understanding the needs of other stakeholders. In that way, the organization ' s attention and interest 

has shift away from only focusing on profit maximisation (Bali & Dixit, 2016). By understanding 

this approach, the main challenge of the organisation lies in determining who they are solely 

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responsible towards and how the extend of the scope of responsibility is far (Eisenberg, Sundgren, 

& Wells, 1998). 

According to Guay & Doh, (2006), how the firms are evaluated and viewed by its stakeholders 

determines all the other subsequent reactions towards the company's success. As such, it is of 

interest to the management to value the perception of the firm in terms of being socially responsible 

and ethically as CSR represents a vital blend and cooperation between the firm and its stakeholders 

(Guay & Doh, 2006). 

For any organization to realise value, they have to consider the interest of all stakeholders. For the 

companies operating in the NSE market, all stakeholders interest can be met when nonfinancial 

performance measures are considered. The scope of the responsibility of management towards 

firm's CSR within the underling regulation and corporate mission can add value when nonfinancial 

performance measures are in consideration. 

2.2.2 Added Value Model 

Bhagat & Black, ( 1999) suggests that, added value model conceptualizes CSR to assess if 

environmental and social endeavours are avenues in realising increased profit. Proponents of 

Bhagat & Black model will in general recognize that contentions rise in business choices and they 

additionally accept that there are capacities to create new incomes in CSR ventures. This model 

will in general focus on issues like CSR values which helps in finding socially cognizant workers, 

overseeing negative dangers press and drawing in socially cognizant shoppers. 

It is generally consented that, competitive advantage requires a fit between strategic actions and 

external environment in addition to superior firm ' s capabilities and resources in accordance to 

Mittal. It is argued that, strategic actions are driven by top management values in which it includes, 

social responsibility and commitment to profit (Bhagat & Black, 1999). However, it does not mean 

that increasing social responsibility is the easiest or best route for realising or creating value and 

profit. fn finding this route, there has to be steps beyond the simplistic approach that CSR is 

inherently profitable. The key to success is found when competitive advantage is created with 

results in value creation, skilfully managed as per the strategic management theory. When 

consumers are willing to pay a premium for a company's product/service, value is created based 

on the firm's position in and involvement with specific respect to social issues. Worth creation 

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significantly happens when there is blend of company's assets in various new manners in order to 

build the potential profitability ofthe assets. Hence, value creation is majorly how the company is 

innovative. There is opportunity for innovation when CSR is put in consideration as outlined by 

Strategic management researchers. 

The environmental and social endeavours undertaken by the firm which considerable contributes 

to the existing of the firm has no-monetary value that a firm can derive if clear nonfinancial 

performance metrics are conceptualized. 

2.2.3 Multiple Goals Model 

Finally, Redman, (20 19) model for CSR imposes a role in corporate decision making for social 

values that is not necessarily aligned with the economic values. In this model, organizations have 

objectives past the acknowledged investor esteem in which it incorporates, the fortification of the 

network without acknowledging or regard to the money related addition. As indicated by Redman, 

the above model is believed to be by one way or another radical, albeit some corporate people have 

communicated support for it. Major aspects of Redman's model put more emphasis on the quality 

of life as the base-line of economic activity. 

It is not necessary for the decision of the management to make an impactful economic gain if the 

decision does not utilise the concept of CSR. If CSR becomes the centre of the decision making, 

then there is a positive impact in the value ofthe firm. Without realising the monetary value of the 

CSR initiatives, there is ideas that non-monetary value can be achieved if the decision is grounded 

on the metrics of nonfinancial performance of existing listed firms in the NSE. 

2.3 Empirical review 

2.3.1 Corporate social responsibility 

Studies have been formulated in regards to CSR for quite period of time, but still there is missing 

consensus on its definition and its principles, constructs and constituent dimensions (Guay & Doh, 

2006). 

There is great CSR perceptions and definition in a comprehensive literature review. For example, 

Cheah, Jamali, Johnson, & Sung, (20 11) pinpoints that the core social responsibility of a business 

is to maximise on its profit. Also, Hamann, (2003) argues that 'the only social responsibility of a 

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company is to increase its profits ' whilst staying ' within the confinement ofthe game'. objectively 

to that, Kilian & Hennigs, (2014) defers that CSR needs 'consideration of elements beyond the 

mere notion of economic, technical, and legal requirements of the company.' These two 

propositions are opposing. Different suggestions have been put across with some proposing that a 

company is responsible solely to its shareholders, while the others argues it is not only the interest 

of the shareholders that needs consideration but also the stakeholders. 

To note, EU commission is the highest legislative body and defines CSR as ' actions by firms above 

and over their legal requirement towards the support of the society and environment' (Barako, 

Hancock, & Izan, 2006). 

Perceptions of CSR vary considerably among compantes, managers and individuals due to 

incoherent definitions of CSR (Garcia-Benau, Sierra-Garcia, & Zorio, 2013). Is there any 

possibility of teaching ethical decision making? There has been some consensus emerging from 

CSR reviews. One of the outstanding CSR publications is that managers are supposed to focus 

majorly on multi-stakeholders' welfare instead of concentrating more on shareholders' wealth 

maximization (Abeysekera, 20 I 0). By definition, stakeholders are individuals or groups who either 

benefits or are harmed due to company's activities (Dias, Rodrigues, & Craig, 20 I 6). For this 

instance, the shareholders group is lesser than the stakeholders group in which the stakeholders 

are not for some case the providers of equity or investors in the company. In this case, the major 

key areas of CSR include but not limited to economic, environmental and societal (Marsing & 

Schultz, 2006). 

There are several reasons that companies engage in CSR activities. These may range from being 

pure philanthropic to conformity to external institutional pressure in the environment and explicit 

positive returns such as stronger reputation and financial gains (Ogolla, 20 13). The linkage 

established between purchase intention and increased awareness is the consumer's response to 

CSR activities. The following summarises the benefits accrued by being socially responsible from 

the Strategic management journal Strategic Management Journal ; (I) Important source of 

competitive advantage, (2) ease in marketing of products or services, (3) quality employees, (4) 

utilisation of unforeseen opportunities, and (5) ease in attraction of resources. Rao & Tilt, 

(20 16) also identified five potential benefits of CSR for companies: (I) Reduction of related risks 

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in CSR, (2) higher sales and market with an increase in revenue, (3) a positive impact on the 

employees' recruitment, retention and motivation (4) reduced cost and (5) a good image of the 

company's reputation. 

CSR also has micro level effects apart from the realised above mentioned benefits at the firm level 

(Dalton, 1998). Klapper & Bauer, ( 1965) found that higher economic growth is a resultant effect 

of the bigger share of the socially responsible firms in the economy. Thus, corporate CSR assumes 

a critical job in the development of the economy. 

2.3.2 Non-financial performance 

One ofthe recent most important development in management accounting is the establishment of 

nonfinancial performance measures. The development and evolution of the measures have created 

criticism focused at the irrelevancy and obsolescence of the practices of management accounting 

in today's competitive environment (Klapper & Bauer, 1965). To overcome the inappropriateness 

of orthodox financial performance measures, the utilisation of nonfinancial performance measures 

has been advanced as a solution (Baysinger & Hoskisson, 2011). However, the employment ofthe 

nonfinancial performance measures is unlikely to succeed unless these measures are tied to the 

organizational goals and strategy (Hafsi & Turgut, 20 13). The management, as agents of the 

organisation, are likely to direct their attention and efforts to only those performance measures 

which are tied to the company' s vision. The value realisation effect will be lost if an organisation 

adopts one set of measure for its strategies while using a different set to measure organisational 

performance in the NSE market. Klapper & Bauer, ( 1965) note that 'if a company wants to 

succeed, it has to pursue objectives that will help them being socially responsible and at the same 

time gain maximum return on investment.' Hence, nonfinancial performance measures that are not 

directly aligned to the organizational objectives is likely to negatively affect the company in its 

performance in the NSE market. If the use of nonfinancial performance measures should be 

ultimately tied to company evaluation and rating, it is imperative that the company should be aware 

of consequences and changes of employing such measures. 

It is not only time consuming and costly exercise in the implementation of new performance 

evaluation measures but may also lead to company repercussions which may be detrimental to its 

success and interests. Hence, the implementation should be undertaken when the resultant 

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consequences are well understood (Graham, Graziano, & Kelly, 2006). This study attempts to 

address this gap in the literature. 

2.3.3 CSR and non-financial performance 

The influence of CSR on firms ' performance ts a core Issues 111 management and corporate 

governance, especially looking at nonfinancial performance measures. Rachael , (20 15) upholds 

that being socially responsible attracts additional expenses hence being costly. Rachael, (20 15) 

maintains that the additional expenses incurred by being socially responsible reduces firm ' s profits 

hence a company may seize from having competitive advantage (Rai , 20 12). 

Freeman in 1984 had an opposite view and introduced the stakeholder theory. In this theory, and 

other literature, it suggests that, the dissatisfaction of any stakeholder can deter firm's success by 

affecting its economic rents and compromising its future (Khan, 201 0). CSR is prerequisite for 

securing the firm income profit. According to this theory, managers should take into account the 

interest of both individuals and groups who have great holding in the company (Kilis;, Kuzey, & 

Uyar, 20 15) not necessarily just the shareholders (Barakat & Perez, 2008) but also all the 

stakeholders that are involved. Ifthis accounts and interests are taken into consideration, CSR will 

not only improve the satisfaction of this stakeholders but lead to improve nonfinancial performance 

of listed companies in Kenya (Keluarga, 20 16). 

As is evident, Barakat & Perez, (2008) suggests both extreme relationship between CSR and 

nonfinancial performance. To which effects prevails? Is the question that arises . An empirical 

literature can be driven to answers these questions that arises. Brown, (1394) study pinpoints to an 

agreed connection among CSR and nonfinancial execution, proposing that, being socially mindful 

has an immediate positive effect in the organization's productivity. On the off chance that truly 

there is a constructive outcome among CSR and nonfinancial execution, at that point socially 

dependable ventures have an immediate positive connect to the investors' worth (Dias et al., 20 16), 

being that CSR is favourable to the returns on the shareholders ' investment. 

Some studies point out that, there is a negative relationship between CSR and nonfinancial 

performance. Barakat & Perez, (2008) study found out that, social responsibility incurs costs and 

negatively affects the profitability of the company. In Friedman's view, the sole responsibility of 

a firm is to generate profit and being socially responsible is an irresponsible behaviour. 

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Whatsoever, the negative link between CSR and nonfinancial performance does not have to 

necessarily mean that the firm has to abandon the social responsibility of the corporate action . The 

management believes that even if it is expensive to be socially responsible, the action of it makes 

the company to be good corporate citizens (Dias et al., 20 16). 

Another relationship established is that there is no relationship between CSR initiatives and 

nonfinancial performance. Dias et al., (20 16) found out that within the search of being socially 

responsible, the profitability ofthe company does not improve and on the other hand, it does not 

either deteriorate. The negative and the positive effects of the CSR and nonfinancial performance 

apparently cancel out. This study is therefore aimed at operationalisation and measurement issues 

of the CSR initiatives and nonfinancial performance. 

2.4 Research gap 

This study draws a relationship between CSR initiatives and non-financial performance of listed 

companies in Kenya. Most studies (Baysinger & Hoskisson, 20 II; Kilian & Hennigs, 20 14; 

Abeysekera, 20 I 0) concentrate on the relationship between CSR initiatives and financial 

performance putting more emphasis on financial performance hence creating a gap for the 

nonfinancial performance measures for the listed companies in NSE. This study has looked into 

one theory and two models which includes; stakeholder theory, added value model and multiple 

goal model respectively. There are many other factors affecting CSR initiatives and non-financial 

performance but this study will concentrate on metrics and measures such as; Local community 

partnership, employees and customer relationship, environmental sustainability and Socially 

responsible investment for the CSR activities and friends notoriety, client impact and worth, 

intensity, and advancement for non-money related execution. 

2.5 Conceptual framework 

As Beckman & Cook, (2007) definition: The conceptual framework "it is the one that lays the 

stage" for the organization of the research questions and propels the researcher towards 

examination of the problem statement. 

There is increasing concern on firms' CSR initiative and the need for non-financial performance. 

The main problem that arises is how can we draw a relationship between CSR initiatives and non­

financial performance of listed companies in Kenya. Hence, this research claims that the 

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relationship between CSR initiatives and non-financial performance is vital for the success of listed 

companies in Kenya. CSR initiatives can be viewed as firms' carrying out its business ethically, 

in which it includes taking account of; environment, social and economic impact with the 

consideration of human rights while non-financial performance are quantitative measures metrics 

that cannot be expressed in terms of monetary values but those metrics that lead to achievement of 

goals i.e. Innovation, firm ' s reputation, customer influence and value and competitiveness. 

Notice that the variables of the study are two: I) CSR initiative and 2) non-financial performance. 

The first is an independent variable while the latter is the dependent variable. Both of these 

variables are not easy to measure. It takes a deeper analysis to quantify the data that is collected 

from observing the variables. 

Supposing other things that can influence the variables are held constant, it will be feasible to 

connect on these two variables and assert that actually, there is a relationship between CSR 

initiatives and non-financial performance oflisted companies in Kenya. To understand more about 

these case, a correlation analysis will be dealt with to exhibit whether the interrelationship is 

notable or not. 

Figure 2.1: Conceptual framework 

(CSR initiative) 
Local community partnership Non-financial performance 

Employees and customer metrics 
Company reputation 

relationship Customer influence and value 

Environmental sustainability Competitiveness 
Innovation 

Socially responsible 

investment 

Source I. I: Author (20 19) 

2.6 Operationalization 

Therefore, in this research "CSR initiative" is operationally defined in terms of listed companies 

in Kenya as firms taking account of their environment, social and economic impact and 

consideration of human rights. While "Non-financial performance" is operationally defined as the 

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quantitative measures metrics that cannot be expressed in terms of monetary values but those 

metrics that lead to achievement of goals. 

Table 2.1: Operationalization of the study 

Variables Constructs Operation Definition Measurement Indicator 

Independent Local Collaborative Five point Likert scale 

Variable (CSR Community relationship between !-Strongly Disagree 

initiatives) partnership organization and 2-Disagree 

community 3-Somewhat agree 

4-Agree 

5-Strongly agree 

Employees and Interactions and Five point Likert scale 

customer relations of creating !-Strongly Disagree 

relationship value for the company 2-Disagree 

3-Somewhat agree 

4-Agree 

5-Strongly agree 

Environmental The maintenance of Five point Likert scale 

sustainability the factors and !-Strongly Disagree 

practices that 2-Disagree 

contribute to the 3-Somewhat agree 

quality of the 4-Agree 

environment in the 5-Strongly agree 

long run 

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Dependent Variable 

(Non-financial 

performance) 

Socially 

responsible 

Company 

reputation 

Customer 

influence and 

value 

Competitiveness 

fnnovation 

Acknowledging and 

remaining accountable 

for the impact of one's 

choices on the larger 

world 

The collective 

assessment of a 

corporate's past 

actions and the ability 

ofthe company to 

deliver improving 

results. 

Customer monetary 

contribution to the 

firm 

Being good or better 

than others of a 

comparable nature 

The introduction of 

something new 

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Five point Likert scale 

I -Strongly Disagree 

2-Disagree 

3-Somewhat agree 

4-Agree 

5-Strongly agree 

Five point Likert scale 

I -Strongly Disagree 

2-Disagree 

3-Somewhat agree 

4-Agree 

5-Strongly agree 

Five point Likert scale 

I -Strongly Disagree 

2-Disagree 

3-Somewhat agree 

4-Agree 

5-Strongly agree 

Five point Likert scale 

I -Strongly Disagree 

2-Disagree 

3-Somewhat agree 

4-Agree 

5-Strongly agree 

Five point Likert scale 

!-Strongly Disagree 



2-Disagree l 
3-Somewhat agree 

4-Agree 

5-Strongly agree 

Source: Author (20 19) 

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CHAPTER THREE 

RESEARCH METHODOLOGY 

3.0 Introduction 

This section talks about the examination philosophy that is utilized to do the study and what 

educated the determination regarding; the exploration plan, the objective populace, the example 

size, the testing system, and information assortment technique, the exploration instruments for 

information assortment, the moral contemplations and the information investigation strategies. 

3.1 Research design 

Descriptive cross-sectional research designs is adapted to achieve the object of the research. 

Descriptive research design is employed since it is evidential that the research is quantitative in 

nature and can use numerical values. To describe phenomena associated with a certain population, 

descriptive research study is used to estimate proportions of the population that had certain 

characteristics (Kothari, 2004 ). The adoption of explanatory research design is employed because 

there is an implication that when there is a change in one variable it causes a change in the other 

variable 

3.2 Target population and sampling Technique 

3.2.1 Target Population 

The population under study consists of firms that are listed in the NSE by 2019. The target 

population which were considered were 64 firms operating in various industries of the Kenyan 

market. 

3.2.2 Sample Frame 

This is an index, a list or a directory in which a sample size can be drawn from (Kothari, 2004). A 

sampling frame is an index of all items in which a representative sample is drawn from for the 

purpose of the study. In this study, the sample frame is 64 firms listed in the NSE Kenya. This 

firm's sample study will include the marketing department who are directly involved with the 

implementation of marketing CSR strategies. The showcasing office, popularly known as the 

marketing additionally fills in as the essence of the organization, planning and delivering all 

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materials speaking to the organization and furthermore make an all-encompassing picture that 

speaks to the organization in a positive light. 

3.2.3 Sampling technique 

A sample is a proportion of the population of study. The aun of sampling is to grasp an 

understanding of some of the characteristics or attributes of the entire population based on the 

features of the sample of interest. The study employees a census design because it provides a true 

measure ofthe population under study with zero sampling errors. 

3.3 Data collection 

3.3.1 Data collection instruments 

According to Kothari, (2004) questionnaires are very economical in terms of energy, finance and 

time and also it yields a quantitative data which is easy in collection. In this research, 

questionnaires were employed to capture the different variables under the study. As a research 

instrument, a questionnaire helps in gathering data over a large sample with a view of translating 

research objectives into specific research questions. Since confidentiality is upheld in the data 

collection using questionnaire, there is reduction of biasness, since the questions are presented in 

a paper form as compared to the other forms of data collection. An additional of secondary sources 

were used to collect pertinent data for the study. These secondary data include but not limited to; 

The NSE Handbooks (20 13-20 19), NSE annual publications, and Firms annual reports. 

3.3.2 Data collection procedures 

There will be self-administration of the questionnaire, meanmg that the respondents filled 

questionnaire by themselves. To facilitate the operations of collection of data, a letter from 

Strathmore University will be used for introduction, the questionnaires will be delivered both 

through the email and walk-ins. The.organization marketing department will be contacted and at 

least the respondents will be given a week to fill the delivered questionnaires. Then the researcher 

will collect the questionnaire after at least a week through follow-up calls or even walk-ins as for 

the purpose of analysis. The questionnaire that is used for the purpose of collecting data will be 

structured in the following three ways; (I) Section I; containing questions in regards to the 

respondent demographic, (2) Section 2; covers objective one (types CSR initiatives) and lastly (3) 

Section 3; covers objective 2 (non-financial performance measures. 

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3.4 Research quality 

There are two aspects that are used to determine research quality; the reliability and validity of the 

findings and of the research techniques used. According to Kothari , (2004), reliability is the 

magnitude to which consistency exists in the study result over time. Therefore, this study embraces 

descriptive and explanatory as a research design and uses techniques like questionnaire and 

secondary data collection methods that aids in yielding sound result to be reliable and able to be 

generalized for future reference. Also, this research will preserve credibility to assess whether or 

not the representation of data fits the opinions of the participants studied, whether the findings 

hold true. 

As Kothari, (2004) elaborated, validity explains whether the research measures what it aimed to 

measure. Therefore, evaluation techniques will be used. 

3.5 Data analysis and presentation 

The data in this study will be collected using questionnaires. The data will consist of both 

qualitative and quantitative. The qualitative data analysis was involved in explaining different 

information obtained through the empirical literature, this includes explanation of the findings 

while quantitative data analysis was done through the data obtained from the field of study. The 

analysis was done by the help of Microsoft excel. The data from the questionnaire was coded into 

common compositions to facilitate analysis. The data then was entered into Microsoft excel to 

generate statistical output. Descriptive and inferential technique was employed to analyse data 

collected where statistical measure of central tendency like mean, standard deviation was utilized 

to analyse objective one and two of the study. A factor analysis will be conducted to determine 

how CSR initiatives and nonfinancial performance of listed companies in NSE are related. A 

regression model will be used. Charts, graphs and tables was used to represent the information. 

3.6 Ethical consideration 

According to Kenya data protection act, the following will be considered during the collection of 

data; the researcher would not be subjected to any harm, there will be dignity for the participants, 

full consents will be obtained from the participant before the data collection, there is protection of 

the privacy of the participant and also confidentiality. The research also has no deception of the 

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research objective and questions. The research avoids biasness of the primary data presentation 

and findings . 

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CHARPTER FOUR 

DATA ANALYSIS AND PRESENTATION 

4.0 Introduction 

The general objective of the research was to examine the relationship between CSR initiatives and 

non-financial performance of listed companies in Kenya. This chapter presents the findings ofthe 

study and the analysis. The findings were presented using the frequency tables, pie charts and 

graphs and the data summarized into percentages, frequencies, mean standard deviation and 

correlation. These discusses the background information, CSR initiatives and nonfinancial 

performance analysis. 

4.1 Background Information 

The aim of the study was to obtain CSR performance information on the respondents; Marketing 

managers, marketing assistants and others within the companies. The findings are presented in the 

subsequent sub-sections. 

4.1.1 Demographic Information of Respondents 

The demographic information collected by the researcher entailed position held within the 

organization and other background information and summarized below. 

4.1.1.1 Employment Position 

Figure 4.1 reveals that 39(81 %) of the respondents were marketing assistants, 5( II%) of the 

respondents were marketing managers, 4(8%) of the respondents representing were considered as 

others. This depicts that most of the organization in NSE prefers Marketing assistants to come up 

with ideas for CSR initiatives while Marketing managers are involved with decision making and 

strategizing in regards to what initiative should be undertaken while other members "others" 

closely related to the department helps in strengthening and implementation of the ideas. 

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Figure 4.1: Position of employment 

• Marketing Manager • Marketing Assistant • Other 

Source: Researcher (2019) 

4.1.1.2 Corporate CSR activities 

Figure 4.2 shows the extent to which CSR activities are prioritized in the NSE companies. this 

depicts that 29(60%) consider CSR activities very important, 17(35%) extremely important, 2(4%) 

somewhat important, 0(0%) not so important and 0(0%), not at all important. this shows that data 

CSR activities are very important for firms' non-financial performance. 

Figure 4.2: Extent to CSR activities 

11 Extremely Important • Very Important • Sornewhatlmportar\t • Not So Important Not at all Important 

Source: Researcher (2019) 

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4.1.1.3 Knowledge regarding CSR initiatives 

Table 4.1 shows that most of the NSE firms level of knowledge regarding CSR initiatives is as 

follows; well versed with CSR concept 33(69%), Familiar with CSR topics II (23%), basic 

understanding about this concept 4(8%), heard the name but don ' t know exactly what it is 0(0%), 

don't know what it is 0(0%). This shows that many NSE firms are more well versed with the 

knowledge in regards to CSR initiatives with an unders~anding of the CSR concepts. 

Table 4.1: Summary of knowledge regarding CSR initiatives 

Frequency Percentage 

I don't know what it is 0 0% 

I have heard the name but I don't know exactly what it is 0 0% 

I have basic understanding about this concept 4 8% 

I am familiar with CSR topic ll 23% 

I am well versed in CSR concept 33 69% 

Source: Researcher (2019) 

4.1.1.4 Companies Responsibilities 

Figure 4.3 shows that NSE firms' responsibilities m following legal requirements 43(15%), 

offering good quality products 48(17%), being environmentally friendly 47(16%), getting 

involved in social campaigns 56( 19% ), treating employees with respect 60(21% ), and employing 

people with disabilities 36(12%) respectively. This shows that most of the NSE companies show 

corporate responsibility by treating employees with respect. 

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Figure 4.3: Responsibilities of firms 

il Se rie sl Series2 

70 

60 

50 

40 

30 

20 

10 

0 

Following lega l Offering good Being 
requirements quality products environmenta lly 

friendly 

Source: Researcher (2019) 

4.1.1.5 Attention to CSR policies 

Getting 
involved in 

social 
campa1gns 

Treating 
employees \Vi th 

respect 

Employing 
peo ple with 
d isabi I ities 

Figure 4.4 shows that most employees of the NSE firms put more attention to work for a company 

that adapts CSR behavior 9( l 9%), as an asset for them if a company undertakes CSR activities 

39(81%), and not important to them 0(0%). This shows that most employees will consider CSR 

activities as an asset to them if a company undertakes it. 

Figure 4.4: Attention to CSR policies 

I would only work for company that adopts 

CSR behaviour 

It is an asset for me if company undertakes 
CSR activities 

9 19% 

It is not important for me ll% 

0 5 10 15 20 25 30 35 40 45 

11 Series! • Series2 

Source: Researcher (2019) 

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4.1.1.6 Reasons for Involvement into CSR 

Figure 4.5 shows that NSE firms get involved into CSR to improve image of the company 

54(25%), to attract employees 40(1 9%), to help the society and environment 59(28%), to increase 

income I 3(6%), and to attract customers ' attention 46(22%). This shows that the major reasons 

for NSE firms to be involved into CSR (1) is to help the society and environment and (2) to 

improve the image of the company. 

Figure 4.5: Reasons for involvement into CSR 

70 

60 

so 

40 

30 

20 

10 

0 

54 

19% 

To improve image of a To attract employees 

company 

Source: Researcher (2019) 

Iii Series 1 = Serie s2 

59 

help society and 
environment 

4.1.1.7 CSR programs with Business objectives 

46 

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6% 22% 

To increase income To attract custom ers' 

attention 

Figure 4.6 shows that 96% of the respondents consider that CSR programs undertaken by their 

companies are in line with their business objectives while 4% of the respondents do not agree with 

that. This shows that a high number of the NSE companies are actual operating CSR programs in 

alignment with their business objectives. 

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Figure 4.6: CSR programs v/s business objectives 

• Yes • No 

Source: Researcher (2019) 

4.1.1.8 CSR programs with respect to nonfinancial performance 

The respondents were also requested to express their opinion concerning CSR programs on various 

aspects of nonfinancial performance. 

The responses were as show in table 4.2 the average CSR programs with mutual trust and respect 

is 9.6 while the Standard deviation of the same is 16.1 0, the average CSR programs with respect 

to interaction of employees and customers is 9.6 with a standard deviation of 9 .63, on average the 

CSR programs agreement is 9.6 while its standard deviation is 3.36, the average CSR programs 

with respect to employees offering time for the CSR initiatives is 9.6 with a standard deviation of 

6.47. The standard deviation was used to depict the variance in responses received. 

Table 4.2: Summary of CSR programs with respect to nonfinancial performance 

Mean Standard deviation 

CSR programs mutual trust and respect 9.6 16.10 

CSR programs with interaction of employees and 

customers 9.6 9.63 

CSR programs agreement 9.6 3.36 

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CSR programs with employees offering time 6.47 

Source: Researcher (2019) 

4.2 CSR Initiatives 

4.2.1 Local community partnership 

4.2.1.1 CSR programs with Local community partnership 

Table 4. 7 shows that most of the NSE firms CSR programs m relation to local community 

partnership is as follows; Scholarship and bursaries (8%), sponsoring education related projects 

(16%), sponsoring charity events at the community level (33%), construction of water points (6%), 

organizing clean-up activities (19%), training and developments on various issues affecting the 

community (4%), part-time employment of students and disable (1%), and other special 

community related projects (II%). This shows that most of NSE firms are sponsoring charity 

events at the community level in line with their business objectives. 

Figure 4.7: CSR programs with Local community partnership 

a Series l Serie s2 

so 47 

45 

40 

35 

30 27 

25 23 

20 16 

15 12 

10 
9 

6 

===a ·------ -= ----
~ 19% 

5 2 
8% 

0 -~-- - - -=~---
6% 4% 1% 11% 

Scholarship Sponsoring Sponsoring Construction Organise 
clean-up 
activities 

Training and Part time Other special 

and bursaries education charity events of water developments employment community 

related at the points on various of students related 

projects community issues and the projects 
level affecting the disabled 

community 

Source: Researcher (2019) 

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4.2.2 Employees and customer relationship 

4.2.2.1 CSR programs with engagement with employees and customers 

Table 4.8 shows that most of the NSE firms level of engagement with employees and customers 

as a form of CSR initiative is as follows; provision of assistance or guidance to employees who 

are in the process of retiring and have been made redundant (8%), provision ofhealth care services 

for employees and their families (39%), provision of recreational activities and facilities (4%), 

employees and customer' s trainings (6%), offering services for free ( 15%), and customer week 

(28%). This shows that most of NSE firms are provide health care services for their employees 

and their families. 

Figure 4.8: CSR programs with engagement with employees and customers 

Provision of assistance or guidance to employees 
who are in the process of retiring and have been 

made redundant 

Provision of health care services for employees and 
their families 

Provision of recreational activities and facilities 

Employees and customer's trainings 

Offering services for free 

Customer week 

6 4 0 

22 1 % 

0 10 20 

Series1 • Series2 • Series3 

Source: Researcher (2019) 

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57 

30 40 so 60 70 



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4.2.2.2 CSR programs with level of knowledge 

Table 4.9 shows that most of the NSE firms level of knowledge regarding CSR initiatives is as 

follows; social issues (8%), environmental management and sustainability (30%), health and safety 

(34%), industrial relation ( 16%)s, and employee development ( 12%). This shows that most ofNSE 

firms are involved in environmental management and sustainability. 

Figure 4.9: CSR programs with level of knowledge 

60 

50 

40 

30 

20 

10 

0 

Social issues Environmental Health and safety 
management and 

sustainability 

- Series2 - Series3 

Source: Researcher (2019) 

4.2.3 Environmental sustainability 

4.2.3.1 CSR Initiatives with environmental sustainability 

Industrial 

relations 
Employee 

development 

40% 

35% 

30% 

25% 

20% 

15% 

10% 

5% 

0% 

The respondents were also requested to express their opinion concerning CSR programs on various 

aspects of nonfinancial performance. 

The responses were as show in table 4.3 the average of Environmental policies and legal 

compliance is 9.6 while the Standard deviation ofthe same is 15.55, the average of Environmental 

educational programs is 9.6 with a standard deviation of 13.09, on average the Quality of the 

environment is 9.6 while its standard deviation is 16.67. The standard deviation was used to depict 

the variance in responses received. 

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Table 4.3: CSR Initiatives with environmental sustainability 

Mean Standard deviation 

Environmental policies and legal compliance 9.6 15.55 

Environmental educational programs 9.6 13.09 

Quality of the environment 9.6 16.67 

Source: Researcher (2019) 

4.2.3.2 CSR initiatives and environmental sustainability 

Table 5.0 shows that most of the NSE firms forms of environmental sustainability that they engage 

in as a form of CSR initiatives is as follows; wildlife conservation programs (6%), encouraging 

the use of renewable items (17%), sponsoring sustainability projects and innovations (27%), clean­

up activities (14%), production of recycled, reusable products (24%) and tree planting (13%). This 

shows that most ofNSE firms are sponsoring sustainable projects and innovation as they produce 

recycled and reusable products. 

Figure 5.0: CSR initiatives and environmental sustainability 

Wildlife conservation programs 

Encouraging the use of renewable items 

Sponsoring sustainability projects and innovations 

Clean up activities 

Production of recycled, reusable products 

Tree planting 

6_% 

0 10 

Series! • Series2 • Series3 

Source: Researcher (2019) 

31 

17% 

56 

14% 

24% 

13% 

20 30 40 50 60 



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4.2.4 Socially responsible 

4.2.4.1 Ethical and moral requirements 

Table 5.1 shows that most of the NSE firms level of agreement on undertaking CSR to meet the 

ethical and moral requirements is as follows; strongly agree (88%), agree (I 0%), somewhat agree 

(2%), disagree (0%) and strongly disagree (0%). This shows that most of NSE firms are 

undertaking CSR to meet the ethical and moral requirements. 

Figure 5.1: Ethical and moral requirements 

• Strongly Disagree • Disagree • Somewhat agree • Agree Strongly agree 

Source: Researcher (2019) 

4.2.4.2 Socially responsible activities 

Table 5.2 shows that NSE firms level of agreement to engage in socially responsible activities is 

as follows; strongly agree (94%), agree (4%), somewhat agree (2%), disagree (0%) and strongly 

disagree (0%). This shows that most of NSE firms strongly agrees in engaging in socially 

responsible activities. 

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Figure 5.2: Socially responsible activities 

5000% 

4500% 

4000% 

3500% 

3000% 

2500% 

2000% 

1500% 

1000% 

500% 

0% 0 0% 0 2% 1 

0% -1 2 3 

• Series! • Series2 

Source: Researcher (2019) 

4.2.4.3 Acknowledgement and accountability 

2 
4% -

4 

45 

5 

Table 5.3 shows that most of the NSE firms ' agreement on acknowledgement and remaining 

accountable for the impact of the company' s choices on the larger world is as follows; strongly 

agree (73%), agree (19%), somewhat agree (6%), disagree (2%) and strongly disagree (0%). This 

shows that most NSE firms strongly agrees to acknowledge and remaining account on their choices 

on the larger world. 

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Figure 5.3: Acknowledgement and accountability 

Strongly Disagree • Disagree • Somewhat agree 

Source: Researcher (2019) 

4.3 Non-financial performance 

4.3.1 Company reputation 

4.3.1.1 CSR practices and company's image 

Agree Strongly agree 

Table 5.4 shows that most of the NSE firms level of agreement on CSR practices to influence 

company's image is as follows; strongly agree (79%), agree ( 15%), somewhat agree (6%), disagree 

(0%) and strongly disagree (0%). This shows that most of NSE firms strongly agrees to CSR 

practices to influence their company's image. 

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Figure 5.4: CSR practices and company's image 

Agree • 7 · 15% 

Somewhat agree 3 6% 

Disagree a% 

Strongly Disagree a% 

0 5 10 15 20 25 30 35 40 45 

11 Seriesl 11 Series2 

Source: Researcher (2019) 

4.3.1.2 Brand differentiation 

Table 5.6 shows that NSE firms level of agreement on the programs that help them to differentiate 

between their brand against the rest of the brand is as follows; strongly agree (44%), agree (54%), 

somewhat agree (2%), disagree (0%) and strongly disagree (0%). This shows that most of NSE 

firms agrees that the CSR programs help them to differentiate their brand. 

Figure 5.6: Brand differentiation 

30 

25 

20 

15 

10 

5 

0 a% 

Strongly Disagree 

Source: Researcher (2019) 

a% 

Disagree Somew hat agree Agree Strongly agree 

• Serie sl Seri es2 

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4.3.1.3 Assessment of results and past actions 

Table 5. 7 shows that NSE firms level of agreement on collectively assessing their past actions and 

the ability to deliver improving results is as follows; strongly agree (29%), agree (54%), somewhat 

agree (15%), disagree (2%) and strongly disagree (0%). This shows that most of the NSE firms 

agrees to collectively assessing their past actions and the ability deliver improving results. 

Figure 5. 7: Assessment of results and past actions 

Strongly agree 

Agree 

Somewhat agree 7 1 % 

Disagree J2Po 

Strongly Disagree Cl% 

0 5 10 15 20 25 30 

11 Seriesl a Series2 

Source: Researcher (2019) 

4.3.2 Competitiveness 

4.3.2.1 Competitiveness and CSR activities 

Table 5.8 shows NSE firms' competitiveness as a result of engagement in CSR activities is as 

follows; strongly agree (35%), agree (48%), somewhat agree (13%), disagree (4%) and strongly 

disagree (0% ). This shows that most of NSE firms agree to firms' competitiveness as a result of 

engagement in CSR activities. 

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Figure 5.8: Competitiveness and CSR activities 

!l! Se ri es l 2! Se ries2 

25 

20 

15 

10 

5 

0 0% ~ 4% 13% 35% 
0 ---

= 
--~-----

Strongly Disagree Disagree Somewhat agree Agree Strongly agree 

Source: Researcher (2019) 

4.3.2.2 Responsible business behaviors 

Table 5.9 shows that most of the NSE firms level of agreement on consideration of responsible 

business behavior to reduce cost of running the business is as follows ; strongly agree (77%), agree 

(19%), somewhat agree (4%), disagree (0%) and strongly disagree (0%). This shows that most of 

NSE firms consider responsible business behavior to reduce cost of running the business. 

Figure 5.9: Responsible business behaviors 

a Strongly Disagree e Disagre e a Som ewhat agre e • Agree " Strongly agree 

Source: Researcher (2019) 
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4.3.2.3 CSR programs and loyalty 

Table 6.0 shows that most of the NSE firms level agreement to customer loyalty as a result ofCSR 

programs to the society is as follows; strongly agree ( 48%), agree (13%), somewhat agree (35%), 

disagree (4%) and strongly disagree (0%). This shows that most of NSE firms strongly agree to 

customer loyalty as a result of CSR programs to the society. 

Figure 6.0: CSR programs and loyalty 

,. Strongly Disagree • Disagree n Somewhat agree . Agree • Strongly agree 

Source: Researcher (2019) 

4.3.2.4 CSR programs and brand growth 

Table 6.1 shows that most of the NSE firms level of agreement to attribute company's brand 

growth as a result of CSR programs and initiatives is as follows; strongly agree (71 %), agree 

(27%), somewhat agree (2%), disagree (0%) and strongly disagree (0%). This shows that most of 

attribute their brand growth as a result ofCSR programs and initiatives. 

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Figure 6.1: CSR programs and brand growth 

Strongly agree 

Agree 13 .2"A% 

Som ewhat agree ~ 

Disagree 0% 

Strongly Disagree 0% 

0 5 10 15 20 25 30 35 40 

• Seriesl • Se ries2 

Source: Researcher (2019) 

4.3.2.5 CSR programs with Business ob_jectives 

Table 6.2 shows that most of the NSE firms level of agreement on engaging employees in 

formulating CSR programs and effective new changes to the already existing programs is as 

follows; strongly agree (77%), agree (19%), somewhat agree (4%), disagree (0%) and strongly 

disagree (0%). This shows that most NSE firms strongly agrees on engaging employees 111 

formulating CSR programs and effective new changes to the already existing programs. 

Figure 6.2: CSR programs with Business objectives 

40 

35 

30 

25 

20 

15 

10 

5 
0 0% 0 0% 

0 ----
Strongly Di sagree Disagree 

Source: Researcher (2019) 

li Series l 11 Series2 

2 
~ 

4% 

Somewha t agree 

39 

77% .._ __ _ 
Agree Strongly agree 



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4.4.1 Innovation 

4.4.1.1 Programs evolvement and adaptation 

Table 6.3 shows that most of the NSE firms' evolvement and adaptation of innovation programs 

on a continuous basis is as follows; strongly agree (77%), agree (15%), somewhat agree (6%), 

disagree (2%) and strongly disagree (0%). This shows that most ofNSE firms are evolving and 

adapting innovation programs on a continuous basis. 

Figure 6.3: Programs evolvement and adaptation 

" Strongly Disagree • Disagree " Somewhat agree " Agree • Strongly agree 

Source: Researcher (2019) 

4.4.1.2 Innovation and profitability 

Table 6.4 shows that most of the NSE firms are in quest for an introduction of something new that 

does not directly translate to profits but rather an act of CSR as follows; strongly agree (23%), 

agree (4%), somewhat agree (17%), disagree (52%) and strongly disagree (4%). This shows that 

most ofNSE firms are not in a quest for introduction of something new does not directly translate 

to profits but rather an act of CSR. 

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Figure 6.4: Innovation and profitability 

30 

25 

20 

15 

23% 
10 

17% 

5 11 
8 

0 

Strongly Disagree Disagree Somewhat agree Agree Strongly agree 

• Series1 • Series2 

Source: Researcher (2019) 

4.4.1.3 competitiveness in innovation 

Table 6.5 shows NSE firms level of competitiveness m innovation as follows; strongly agree 

(81 %), agree (15%), somewhat agree ( 4%), disagree (0%) and strongly disagree (0%). This shows 

that most ofNSE firms competitiveness is as a result of innovation. 



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4.4.2 Customer influence and value propositions 

4.4.2.1 CSR initiatives and number of customers 

Table 6.6 shows that most of the NSE firms CSR initiatives increasing the number of customers 

towards the organization as compared to the previous period as follows; strongly agree (79%), 

agree ( 13%), somewhat agree (6%), disagree (2%) and strongly disagree (0%). This shows that 

most ofNSE firms CSR initiatives increases the number of customers in an organization. 

Figure 6.6: CSR initiatives and number of customers 

• Strongly Disagree • Disagree • Somewhat agree Agree a Strongly agree 

Source: Researcher (2019) 

4.4.2.2 CSR programs and quality 

Table 6. 7 shows that most of the NSE firms consider CSR programs to have affected the quality 

of products being offered to the customers as follows; strongly agree (I 0%), agree (4%), somewhat 

agree (15%), disagree (23%) and strongly disagree (48%). This shows that most ofNSE firms do 

not consider CSR programs to affect the quality of products being offered to the customers. 

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Figure 6.7: CSR programs and quality 

1!1 Series 1. !!! Se ri es2 

25 23 

20 

15 

11 

10 
7 

5 
5 

2 
23% 15% 4% 10% 

0 

Strongly Disagree Disagree Somewhat agree Agree Strongly agree 

Source: Researcher (2019) 

4.4.2.3 Customer engagement and inspiration 

Table 6.8 shows that most of the NSE firms' CSR programs engages and aspires customers to 

involve themselves with the company as follows; strongly agree (65%), agree (29%), somewhat 

agree (4%), disagree (2%) and strongly disagree (0%). This shows that most of NSE firms have 

programs that engages and inspires their customers to involve themselves with the company. 

Figure 6.8: Customer engagement and inspiration 

\ 

65% 

0 Strongly Disag ree 0 Disagree 0 Somewhat agree 'l Agree 0 Strongly agree 

Source: Researcher (2019) 
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4.4.2.4 Customer attitude and retention 

Table 6.9 shows that most of the NSE firms consider CSR in their company to affect customer 

attitude and retention as follows; strongly agree (50%), agree (40%), somewhat agree (8%), 

disagree (2%) and strongly disagree (0%). This shows that most ofNSE firms are considers CSR 

to affect their customer attitude and retention. 

Figure 6.9: Customer attitude and retention 

Strongly agree 

Agree 40% 

Somewhat agree ·. ~ . 8~ 

Disagree 12fo 

Strongly Disagree 0% 

0 5 10 15 20 25 30 

11 Series! • Se ries2 

Source: Researcher (2019) 

4.5 Inferential Analysis 

The research conducted inferential analysis that sought to describe nature of relationship between 

the study's explanatory variables and the dependent variables. The researcher however also 

determined the validity of the research model applied. Tests including the goodness of fit, and 

muiltcollinearity were carried out on the research model. 

4.5.1 Correlation Analysis 

Correlation analysis was conducted to establish the relation between social media platforms and 

talent acquisition process. The results are summarized in table 4.4 

From the results, the value of P=0.2l79 implying that employee and customer relationship has a 

weak positive correlation with local community partnership, a P=0.2884 of environmental 

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sustainability has a weak positive correlation with local community partnership and a weak 

positive correlation with employees and customer relationship (P=0.3499). social responsibility 

had a value P=0.2752 implying that social responsibility has a weak positive correlation with local 

community partnership and values of P=0.7036 and P=0.3429 implying that social responsibility 

has a strong positive correlation with employees and customer relationship and a weak positive 

correlation with environmental sustainability respectively. Company reputation have P=O.II61 

which implies that company reputation has a weak positive correlation with local community 

partnership while values of P=O.I185, 0.6705 and 0.5673 weak positive correlations with 

employees and customer relationship but a strong positive correlation with environmental 

sustainability and social responsibility respectively. A value of P=O. 7304, 0.5068, 0.3565, 0.8152 

and 0.5173 shows that competitiveness has a strong positive correlation with local community 

partnership, employees and customer relationship, and a weak positive correlation with 

environmental sustainability with a stronger positive correlation with social responsibility and 

company reputation respectively. A value ofP=0.2892, 0.7238, 0.3018, 0.9976, 0.5105 and 0.8163 

shows that Innovation has a weak positive correlation with local community partnership, a strong 

positive correlation with employees and customer relationship, and a weak positive correlation 

with environmental sustainability with a stronger positive correlation with social responsibility, 

company reputation and competiveness respectively and a value of P=0.2952, 0. 7319, 0.2824, 

0.9950, 0.4834, 0.8155 and 0.9995 indicating that customer influence and value propositions to 

customers has a weak positive correlation with local community partnership, a strong positive 

correlation with employees and customer relationship, and a weak positive correlation with 

environmental sustainability with a stronger positive correlation with social responsibility, a weak 

positive correlation with company reputation and a strong positive correlation with competiveness 

and innovation respectively. This further shows that, the higher the CSR initiatives the higher the 

non-financial performance. CSR initiatives and non-financial performance moves in a tandem. 

Table 4.4: Correlation analysis summary 

Local Emplo Custom 
commu yees Environ Social! Comp er 

nity and mental y any influenc 
partner custom sustainab respon rep uta Competiti Inn ova e and 

ship er ility sible tion veness tion value 

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relation proposit 
ship ions to 

custom 
ers 

Local 
communit 
y 
partnershi 
p I 
Employee 
sand 
customer 
relationshi 
p 0.2179 1 
Environm 
ental 
sustainabil 0.2884 0.3499 
ity 37 44 1 
Socially 
responsibl 0.2751 0.7035 
e 89 77 0.342913 l 
Company 0.1161 0.1184 0.5673 
reputation 14 79 0.69052 15 I 
Competiti 0.7303 0.5067 0.8151 0.517 
veness 82 57 0.356478 75 343 1 

0.2891 0.7237 0.9976 0.510 
Innovation 55 53 0.301832 42 496 0.816274 1 
Customer 
influence 
and value 
propositio 
nsto 0.2951 0.7319 0.9949 0.483 0.9994 
customers 51 29 0.282356 62 41 0.815481 96 1 

Source: Researcher (2019) 

4.5.2 Regression Analysis 

A multivariate regression analysis was carried out to show the importance of each of the 

independent variables with respect to the level of adoption of automated supply chain 

management. The regression model applied was as given below; 

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Where; Y- Non-financial performance 

Co - Constant 

X1- Local community partnership 

X2- Employees and customer relationship 

X3- Environmental sustainability 

X4- Socially responsible 

e - Error term 

The ANOV A findings (p value of 0.8117) in Table 4.5 Reveals that there is correlation between 

the predictor variables (Local community partnership, employees and customer relationship, 

environmental sustainability and socially responsible) and response variable (Non-financial 

performance). 

Table 4.5: ANOV A analysis 

ANOVA 

Significance 

df ss MS F F 
Regression 4 673.2019 168.3005 70.38824 0.002689 

Residual 3 7.173094 2.391031 

Total 7 680.375 

Standard 

Coefficients Error t Stat P-value 

Intercept 0.2867 l.l 02982 -0.25996 0.811716 

Local 

community 

partnership 0.0734 0.04299 1.706639 0.186429 

Employees 

and customer 

relationship -0.0765 0.040613 -1.8835 0.156155 

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Environmental 

sustainabi I ity 

Socially 

0.0546 0.031179 1.750813 0.178279 

responsible 0.8298 0.069354 11.9648 0.001256 

Source: Researcher (2019) 

From table 4.4, the established regression equation of the study is ; 

Y = 0.2867 + 0.0734XI - 0.0765Xz + 0.0546XJ + 0.8298X4 + e 

The constant = 0.2867, reveals that if Local community partnership, employees and customer 

relationship, environmental sustainability and socially responsible were all rated zero, then the 

Non-financial performance would be 0.2867. similarly, X1 = 0.0734, showing that one unit change 

in local community partnership would result in an increase of Non-financial performance by 

0.0734, X2 = -0.0765, showing that one unit change in employees and customer relationship 

would result in a decrease of Non-financial performance by 0.0765, X3 = 0.0546, showing that 

one unit change in environmental sustainability would result in an increase of Non-financial 

performance by 0.0546, X4 = 0.8298, showing that one unit change in socially responsible would 

result in an increase ofNon-financial performance by 0.8298. 

4.5.3 Muiltcollinearity Test 

A muiltcollinearity was effected to measure the existence of association between the explanatory 

variables. Gujarati argues that when VIF values exceeds 10, there exists a problem with 

muiltcollinearity. Table 4.6 shows that there was muiltcollinearity among the variables measured 

in the study except for socially responsible. This is depicted by the VIF values that are less and 

greater than l 0 ( 1.1759, 1.6309. 1.2397 and 21.9005), Local community partnership, employees 

and customer relationship, environmental sustainability and socially responsible respectively. This 

shows that socially responsible has a high correlation with non-financial performance hence a 

problem with multicollinearity. 

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Table 4.6: Summary of muiltcollinearity 

Variable Variance Inflation Factor (VIF) 

Local community partnership 1.1759 

Employees and customer relationship 1.6309 

Environmental sustainability 1.2397 

Social responsibility 21.9005 

Source: Researcher (2019) 

4.5.5 Goodness of Fit Statistics 

The study sought to determine the strength between the dependent and independent variables . 

The findings in table 4.7 Depicts that the coefficient of determination (R = 0.9754) which refers 

to the proportionate change in the dependent variable that is explained by the changes in the 

independent variables: Local community partnership, employees and customer relationship, 

environmental sustainability and socially responsible of up to 9.754% of the relationship between 

CSR initiatives and non-financial performance while the un-researched aspects explain up to 

90.246% of the variations in successful examine the relationship between CSR initiatives and non­

financial performance for the listed companies in NSE. The P- value of0.8 1 17 (greater than 0.05) 

signifies that the level of adoption of CSR initiative on non-financial performance of NSE 

companies is still lower at a significant level of95% confidence level. From the results, the study 

accepts the alternative hypothesis and concludes that there is an autocorrelation problem in the 

study model adapted. 

Table 4.7: Goodness of fit test 

Model R Adjusted R Std. Error of the Sig. F Change P Value 

Squared Square Estimate 

1 0.9895 0.9754 1.5463 0.0027 0.8117 

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Dependent variable: Non-financial performance 

Independent variables: Local community partnership, employees and customer 

relationship, environmental sustainability and socially responsible 

Source: Researcher (2019) 

4.6 Summary of Chapter 

The study general objective was to examine the relationship between CSR initiatives and non­

financial performance of listed companies in Kenya. The study obtained data from two variables 

namely CSR initiative and non-financial performance. The data was collected and analyzed from 

48 NSE firms in Kenya. The findings reveal that CSR initiatives have positive impact on non­

financial performance of listed companies in Kenya. Generally, the measured variables explain up 

to 9.754% ofCSR initiatives is adapted in NSE firms in Kenya. 

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CHAPTER FIVE 

SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 

5.0 Introduction 

The section generally summarizes the finding and discussions derived from the data analyzed 

in the previous chapter. This chapter is therefore presents research purpose and methodology, 

summary findings, conclusions, recommendations, limitations of the study, suggestions for 

further studies and summary. 

5.1 Research Purpose and Methodology 

The study was carried out to examine the relationship between CSR initiatives and non­

financial performance of listed companies in Kenya. The research used descriptive research 

approach in analyzing the results from 48 NSE companies in Kenya. Correlational and 

regression analysis methods were also applied in establishing the relationship between the 

variables under study. The reliability of the study model was conducted using muiltcollinearity 

and goodness of fit statistics test. 

5.2 Summary of Findings 

The findings indicate that most of the NSE firms in Kenya have not implemented the use of CSR 

initiatives in achieving non-financial performance. The conducted analysis identified the benefits 

of using CSR initiatives for organizational non-financial performance. The research further 

indicates that most of the NSE firms have programs that engages and inspires their customers to 

involve themselves with the company.- Practically, the research lacks proper guidelines on the 

formation of an effective framework in implementing social media platforms in talent acquisition 

process (Muthuri, 20 13). (Carroll, 20 16) provided empirical evidence to show y the benefits of 

using CSR initiatives. Their research approach was based on qualitative methodology and provided 

clear social benefits ofCSR programs implementation. However, they questioned ifCSR programs 

do affect the quality of products or services being offered to the customers. Therefore, this research 

has outlined the benefits of CSR initiatives when viewed from the nonfinancial performance of 

listed companies in NSE. From the analysis we can see that; NSE firms are sponsoring sustainable 

projects and innovation as they produce recycled and reusable products. (Cho, Chung, & Young, 

20 19) analyzed the experience of employees in the implementation of CSR initiatives in 

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nonfinancial performance of a company. Their research showed the importance of CSR programs 

and identified that there is a lack of proper practices, which could be implemented for sustainable 

nonfinancial performance. 

This paper contributes to CSR theory by providing strategies of how to use CSR programs to 

achieve effective nonfinancial performance. Currently NSE firms are sponsoring charity 

events at the community level in line with their business objectives, however the magnitude 

ofthe involvement is still lower. By implementing CSR programs in business operations, there 

will be increased level of mutual trust and respect between the firm and 6he community as 

they engage in a collaborative in achieving shared community goals. The proposed framework 

describes vital components, which must be taken into consideration to successfully impacting 

the nonfinancial performance ofNSE firms. From a more practical perspective, the framework 

provides guidelines of how to integrate CSR dimension with nonfinancial performance. 

However, in the future effective utilization of CSR concepts for nonfinancial performance 

could be implemented to achieve long term competitive advantage . 

The NSE firms recorded low performance in increase of income for the reasons of NSE 

involvement in CSR initiatives. This therefore depicts that, there is low practices that 

efficiently utilizes CSR initiatives in nonfinancial performance. The data collected from the 

respondents is deemed reliable. Majority of the firms operates within Kenya with some having 

head offices outside the country. These findings enhance the reliability of the data obtained 

from the sample of 48 NSE firms in Kenya, since most the firms have at least implemented 

the CSR programs in their business operations. The findings indicate that most of the 

underutilization of CSR initiatives in nonfinancial performance of listed companies is as a 

result of inability of CSR