Abstract:
Numerous studies and literature with varied results have been conducted
in the subject of CSR. Several questions about CSR still remain, for
example there is no evident answer if CSR activities affect the financial
performance, why companies engage in CSR and how they apply to it.
There are several different definition of CSR and companies choose to
apply it in different ways therefore it is a rather complex subject. A
peculiar paradox of Kenyan economic history is that the large firms
listed at the NSE have been the symbol of economic progress and yet a
clear relation between the progress and involvement in community
outreach programs has never been clear. This study therefore sought to
investigate the relationship between CSR and performance of firms listed
in the Nairobi Securities Exchange. The study specifically sought to
examine the relationship between ethical CSR, environmental CSR and
philanthropic CSR on the performance of firms listed in the NSE. The
study focused on the CSR activities done and documented by the firms
listed in the NSE. Moreover, the study focused on the CSR activities for
the five year period 2010-2014 because the trading at the NSE before
then was affected by the post-election violence that occurred in 2007 in
Kenya. The study was anchored on the open systems theory. The nature
of this study was document analysis. The population for the purpose of
this study was the NSE listed firms in Nairobi County. The total
population of firms listed in the NSE stands at 61. The study was a
census because of the small population size. The study adopted a data
collection form to gather data which was analysed using both content
analysis and SPSS. Frequency tables, percentages and means were used
to present the findings. Out of the sixty one (61) firms targeted with the
data collection forms, only fifty four (54) data forms were fully filled
with relevant information that could be entered and analysed. The result
reveals that ethical CSR, environmental CSR and philanthropic CSR
can be held responsible for the fluctuations in EBIT of firms listed at the
NSE, Kenya. From the findings, it can be concluded that ethical CSR,
philanthropic CSR and environmental CSR indeed affect the
performance (EBIT) of firms listed at the NSE. Environmental CSR
had the major influence on performance of firms listed at the NSE while
philanthropic CSR had the least influence on performance of firms listed
at the NSE. Moreover, the study findings show that ethical CSR has a
positive relationship with performance; environmental CSR has a
positive effect on performance and philanthropic CSR has a positive
influence on performance of firms listed at the NSE. The study
recommends that the firms listed at the NSE should come up with
strategies to strengthen and align their CSR activities to fast track and
build the CSR programs so as to improve performance.