EFFECT OF CORPORATE SOCIAL RESPONSIBILITY

STRATEGY ON PERFORMANCE: A CASE STUDY OF

EQUITY BANK OF KENYA

BY

KARIMI, BERNICE WACHUKA

UNITED STATES INTERNATIONAL UNIVERSITY-

AFRICA

FALL 2016
 EFFECT OF CORPORATE SOCIAL RESPONSIBILITY
STRATEGY ON PERFORMANCE: A CASE STUDY OF
EQUITY BANK OF KENYA

BY

KARIMI, BERNICE WACHUKA

A Research Project Report Submitted to the Chandaria School

of Business in Partial Fulfillment of the Requirement for the
Degree of Master of Business Administration (MBA)

UNITED STATES INTERNATIONAL UNIVERSITY-

AFRICA

FALL 2016
 STUDENT DECLARATION

I, the undersigned declare that this is my original work and that it has not been submitted
to any other College, Institution or University other than the United States International
University for academic purposes.

Signed: ________________________ Date: _______________________________

Karimi, Bernice Wachuka (628040)

This project has been presented for examination with my approval as the appointed
supervisor.

Signed: ________________________ Date: _______________________________

Dr. Juliana Namada

Signed: ________________________ Date: _______________________________

Dean, Chandaria School of Business

ii
 COPYRIGHT

Copyright © Bernice Wachuka USIU-Nairobi 2016.

All rights reserved.

No part of this project may be translated, reprinted, reproduced or utilised in any form or
by any means, electronic, mechanical, including photocopying, recording or any
information storage without prior written permission of the author.

iii
 ABSTRACT

The purpose of the study was to find out the influence of Corporate Social Responsibility
initiatives on organizational performance of Equity Bank in Kenya. The study was guided
by the following specific objectives: To determine the influence of education strategy on
the performance of Equity Bank, to examine the influence of health strategy on the
performance of Equity Bank and to identify the influence of sports strategy on the
performance of Equity Bank.

This study adopted a descriptive research design. The population was about 1,300
individuals. Random sampling technique was used to collect more information from the
survey. The sample size of 110 was included in the study. The data collection method
adopted in the study was primary data collection method. The researcher used descriptive
methods such as mean, mode, median, percentages, tables and frequency distribution to
compute data analysis. To ensure easy analysis, the questionnaire was coded according to
each variable of the study. This study used descriptive statistics. Correlation analysis was
used to establish the relationship between Corporate Social Responsibility and
performance.

The findings on the influence of Education Corporate Social Responsibility strategy in the
organization performance revealed that the education program results in lifetime benefit
in the education for needy students. Undertaking corporate social responsibility provides
a clear perspective to the insiders and outsiders that the company strives to become a
good corporate citizen. Education empowers families who in turn remain loyal to the
firm. This leads to enhanced market share, sales and profitability for the firm. The
findings on the influence of health Corporate Social Responsibility strategy in the
organization performance revealed that the program addresses certain social needs,
focuses on alleviating social problems and allows employees to be part of a solution to a
greater problem above the normal issues of profit maximization. Health Strategy gives
people a sense of pride in the organization, engenders teamwork and is a source of
inspiration. The findings on the influence of Sports Corporate Social Responsibility
strategy in the organization performance revealed that companies have rationalized
investments in sports strategy enhance brand reputation and boosts corporate image.

iv
The study concludes that CSR strategies results in lifetime benefit in the education for
needy students. For any kind of organizations to run successfully individual evaluation
and development elements are essential. The organization should try to addresses certain
social needs and improves the welfare of socially-excluded population leads to
empowerment and reduced inequality to meet their basic human needs. Companies have
rationalized investments in sports strategy enhance brand reputation. The company should
also create a sense of satisfaction among employees.

In recommendations the researcher calls for the bank to educate more needy students to
create a sense of purpose. The study recommends that the CSR Health Strategy should
address certain social needs that are essential for everyone. The study also recommends
that the investments in sports strategy should enhance brand reputation of the company.

v
 ACKNOWLEDGEMENTS

I would like to acknowledge my project supervisor, Dr. Juliana M. Namada without

whose intellectual support I would not have completed this study. I would also like to
acknowledge my parents and my family in general for their moral and financial support in
this study.

vi
 DEDICATION

With immense humbleness, I devote this work to my parents without whose assistance I
would not have made it this far in my academic endeavors.

vii
 TABLE OF CONTENTS
STUDENT DECLARATION............................................................................................ ii
COPYRIGHT .................................................................................................................... iii
ABSTRACT ....................................................................................................................... iv
ACKNOWLEDGEMENTS ............................................................................................. vi
DEDICATION.................................................................................................................. vii
LIST OF TABLES ............................................................................................................. x
LIST OF FIGURES .......................................................................................................... xi
LIST OF ABBREVIATIONS ......................................................................................... xii

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

1.0 INTRODUCTION........................................................................................................ 1
1.1 Background of the Problem ........................................................................................... 1
1.2 Statement of the Problem ............................................................................................... 4
1.3 Purpose of the Study ...................................................................................................... 5
1.4 Research Questions ........................................................................................................ 6
1.5 Significance of the Study ............................................................................................... 6
1.6 Scope of the Study ......................................................................................................... 7
1.7 Definition of Terms........................................................................................................ 7
1.8 Chapter Summary .......................................................................................................... 8

CHAPTER TWO ............................................................................................................... 9

2.0 LITERATURE REVIEW ........................................................................................... 9
2.1 Introduction .................................................................................................................... 9
2.2 Influence of CSR Education Strategy on Organizational Performance ......................... 9
2.3 Influence of CSR Health Strategy on Organizational Performance ............................ 13
2.4 The Influence of Sports Strategy in the Performance .................................................. 17
2.5 Chapter Summary ........................................................................................................ 23

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CHAPTER THREE ......................................................................................................... 24
3.0 RESEARCH METHODOLOGY ............................................................................. 24
3.1 Introduction .................................................................................................................. 24
3.2 Research Design........................................................................................................... 24
3.3 Population and Sampling Design ................................................................................. 24
3.4 Data Collection Methods ............................................................................................. 26
3.5 Research Procedures .................................................................................................... 27
3.6 Data Analysis Methods ................................................................................................ 28
3.7 Chapter Summary ........................................................................................................ 28

CHAPTER FOUR ............................................................................................................ 29

4.0 RESULTS AND FINDINGS ..................................................................................... 29
4.1 Introduction .................................................................................................................. 29
4.2 General Information ..................................................................................................... 29
4.3 Social Responsibilities Practices ...............................................................................................32
4.4 Descriptive of Health CSR Strategy in Organization Performance ............................. 36
Health CSR Strategy................................................................................................................36
4.5 Descriptive of Sports CSR Strategy............................................................................. 39
4.6 Chapter Summary ........................................................................................................ 42

CHAPTER FIVE ............................................................................................................. 43

5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS .......................... 43
5.1 Introduction .................................................................................................................. 43
5.2 Summary ...................................................................................................................... 43
5.3 Discussion .................................................................................................................... 44
5.4 Conclusion ................................................................................................................... 50
5.5 Recommendations ........................................................................................................ 51

REFERENCES ................................................................................................................. 53
APPENDICES .................................................................................................................. 57
APPENDIX I: INTRODUCTORY LETTER ............................................................... 57
APPENDIX II: QUESTIONNAIRE .............................................................................. 58

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 LIST OF TABLES
Table 3.1: Sample Size ..................................................................................................... 26
Table 4.1: Response Rate .................................................................................................. 29
Table 4.2: Descriptives of Education CSR Strategy:Number Mean and S.D ................... 33
Table 4.3: Correlation between Education Strategy and Organization Performance ....... 34
Table 4.4: Descriptive of CSR Health .............................................................................. 36
Table 4.5: Correlation between Health Strategy and Organization Performance ............. 37
Table 4.6: Descriptive Statistics on the Sports CSR Strategy .......................................... 39
Table 4.7: Correlation between Sports Strategy and Organization Performance ............. 40

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 LIST OF FIGURES
Figure 4.1: Gender of the Respondents............................................................................. 30

Figure 4.2: Age of the Respondents .................................................................................. 31

Figure 4.3: Highest Level of Education Attained ............................................................. 32

Figure 4.4: Social Responsibilities Practices .................................................................... 32

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 LIST OF ABBREVIATIONS

CA: Competitive Advantage

CBK: Commercial Bank of Kenya

CSR: Corporate Social Responsibility

HIV/AIDS: Human Immunodeficiency Virus/Acquired Immunodeficiency

Syndrome

IAAF: The International Association of Athletics Federation

IT: Information Technology

KBA: Kenya Bankers Association

MNC: Multi National Corporations

UBA: United Bank for Africa

UBM: Universal Banking Model

USD: United States Dollar

SME’s: Small and Medium-Sized Enterprises

SPSS: Statistical Package for Social Science

TB: Tuberculosis

xii
 CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Problem

Corporate social responsibility (CSR) has become a fundamental concept in the

contemporary business world. Today’s business executives are faced with complex
strategic resource allocation decisions which are not only based on their financial
outcomes, but also have to measure up to a set of societal and emerging stakeholder
expectations. Environmental and social concerns are becoming increasingly important
influences on corporate strategy (Ebrahimi, 2011). The main idea behind the call for
corporate social responsibility is that companies should become aware to their
responsibility, extend the social, ecological and economic engagement and arrange them
according to the processes in the company (Harvard Business Review, 2011). This is
needful as it helps in giving back to the society in which the company operates. It also
definitely helps in the creation of the company name in a manner that allows for the
development of a practicable company strategy that enables a company to sustain
profitability in a multimarket and competitive business, milieu that the world is today
(Webber, 2008).

Werther and Chandler (2010), say that the present-day CSR (also called corporate
responsibility, corporate citizenship, responsible business and corporate social
opportunity) covers the relationship between the corporations and the society within
which they interact. It is a concept whereby business organizations consider the interest of
society by taking responsibility for the impact of their activities on customers, suppliers,
employees, shareholders, communities and other stakeholders as well as their
environment. In the recent years the concept of Corporate Social Responsibility (CSR) is
spreading very rapidly in the whole world and all the sectors including banking. This
prevalence is because the fast pace of globalization and social development appeals to all
corporations, big or small, local orientation, to take their CSR into account by improving
the social and environmental performance (Wafula, 2012).

According to Kevan and Scholes (2010), CSR is concerned with ways in which an
organization exceeds its minimum obligations to stakeholders which is specified through
1
regulation. How much a company engages in Corporate Social Responsible activities is
determined a lot by ethical stance that the organization has embraced and how this is
aligned with the organizations strategy. The direction that corporate social responsibility
takes has several dimensions thus corporate philosophy, corporate responsibility and
corporate policy. Previous studies suggest that effective CSR initiatives have a direct
impact on the overall financial and marketing performance of an organization (shin et al.
2000). Indeed CSR practices is expected to increase an organizations market share, return
on investment and improve overall competitive positions. For instance, tan et al., (2010)
asserted that customer relations and CSR initiatives have an impact on the effectiveness
of a CSR strategy and leads to financial and marketing performance. On the other hand,
companies with broader CSR relationships with society or community showed the largest
achievements (Wets brook, 2009).

Thomson et al. (2007) notes that using financial measures alone overlooks the fact that
what enables a company to achieve or deliver better financial results from its operations is
the achievement of strategic objectives that improves its competitiveness and market
strength. Performance is measured by both financial and non-financial measures. Non-
financial measures include innovativeness, and market standing. The financial measures
used to measure the overall organizational performance include, Accounting measures,
Profitability measures, Growth measures, Leverage, Liquidity and Cash flow measures.
Others includes Operational performance, Market share, Changes in Intangible assets
such as parents or human resources, customer satisfaction and stakeholder performance
market based measures (Returns on shareholder performance), Market Value Added,
Holding period returns) survival measured (takes time horizon of five years less),
Economics Values Added and Cash flow.

Commercial banks are profit making financial institutions that play a significant role in
the financial system. Commercial banks offer a wide range of corporate financial services
that address the specific needs of enterprises. They provide deposits, loans and trading
facilities in financial markets Magutu,et al (2009). The CBK, which falls under the
minister for finances docket is responsible for formulating the liquidity, slovenly and
proper functioning of the financial system. The Kenya banking sector comprises of 43
commercial banks, mortgage finance company and six deposit taking micro-finance
2
institutions of local and international origin. Regional integration is taking hold within
Kenya’s banking sector with increase entry of regional banks such as Nigeria’s, United
Bank for Africa (UBA) also Eco - bank and the gulf region banks such as Gulf African
bank and First community bank. There are approximately 8.3 million bank accounts in
Kenya with a total population of more than thirty six million people; there is a clear scope
for further penetration of the market. The need for creation of lasting competitive
advantage has lead to revision of both long term and short- term goals. The CSR
initiatives are some of the earmarked strategies utilized by some commercial banks.
Deliberate efforts have been undertaken by some banks to set aside annual budgets to run
selected thematic CSR initiatives (CBK, 2014).

The CBK publishes information on Kenya’s Commercial banks and non- banking
financial institutions, interest rates and other guidelines. The banks have come together
under the Kenya Bankers Association (KBA) which serves as a lobby for the bank’s
interest and addresses issues affecting its members Kenya bankers association annual
report (2014). The commercial banks in Kenya play a number of roles in the financial
stability and cash flow of the country’s private sector. They process payments through a
variety of means including telegraphic transfer, internet banking and electronic funds
transfers. They also issue bank cheques and drafts, as well accept money on term
deposits. They act as a money lender, by way of installment loans and overdrafts loan
options include secured loans, unsecured loans and mortgage loans (CBK, 2014).

Equity Bank was started in 1984, as a building society in Muranga with focus on the
mortgage sector. Its expansion necessitated the conversion to a bank in December 2004.
Equity bank is one of the biggest indigenous local banks, a status it has managed to
achieve in just a space of 25years. Its initial target market was Muranga tea- zone. The
bank has now moved to other segments like corporate banking, mortgages and investment
banking. The bank has continued to consolidate its position in Kenya as at the end of
February the bank had three million customers and 106 branches, empirical evidence has
been provided that building a branch network enables a firm to favorably compete due to
increase in proximity and resulting convenience. Equity branch expansion has been
duplicated by raising its stakes at housing finance and acquiring the government 23%
stake in National Bank. The bank has seven broad committees that guide and govern its
3
management. These committees are Audit, Credit, Risk, Management, Strategy,
Investment, Tendering, Procurement, Governance, Board Nomination, Staff
Remuneration, and Board executive (Chiou, 2009).

Equity Group Foundation was established by Equity Bank to create the financial and
operational infrastructure for social programs aimed at low- income population. Equity
bank provides infrastructure of delivery and reduce operational cost by actively
participating in social investment in key areas such as, education and leadership
development, financial literacy, innovation and entrepreneurship, agriculture and health.
For instance, in education, implementation of a program known as Wings to Fly is a
comprehensive secondary scholarship support program for top performing yet needy
(orphan) students in the sub-counties across Kenya. This opportunity has encouraged
children who may have otherwise gone unnoticed. The scholars under this program
receive support for all their needs (tuition, accommodation, books, uniform and transport
to and from school, shopping and pocket money) while attending secondary school for the
4 years (Equity Bank, 2016).

1.2 Statement of the Problem

Corporate responsibility is the basis for survival of modern corporate organization. Indeed
industrial leaders are careless about social issues and its effect on the operational
environment. Porter (2010) argues that CSR programs focus mostly on reputation and
have only limited connection to the business, making them hard to justify and maintain
over the long run. Sustainable competitive advantage can be achieved when the firm
implements a value creating strategy that is not simultaneously being implemented by
potential competitors. This translates to the view that sustained competitive advantage
results from strategic assets. Dessler (2006) argues that many people have vested interests
in the status quo.

While a study by Serafeim (2010) on the impact of Corporate Social Responsibility on

investment recommendations found that some CSR initiatives are costly and may affect
the profit margins of the organization. Another study by Bhattacharya and Sen (2001)
cited that costly CSR activities may actually be beneficial to organization’s as they can
have a positive effect on the decisions of socially or environmentally-minded individuals
4
consuming products of the organization, investing in it or working for it. Wanjala (2011)
studied factors that influence of corporate social responsibility in commercial banks in
Kenya and found that profitability was one of the factors that influence CSR practice in
banks. Mutuku (2005) established that there is no relationship between CSR and financial
performance.

According to Caroll (2011), the contextual knowledge on the study of Equity CSR
strategies includes philanthropic responsibility. He indicates that these roles of CSR are
purely voluntary and the decision to assume them is guided only by a business`s desire to
engage in social roles not mandated, not required by law and not even generally expected
of businesses ethical sense. Other scholars relate marketing approach to CSR as a way to
utilize CSR activities to create customer satisfaction, increase market value Luo and
Bhattacharya (2006) and build up corporate brand dominance Barens et al (2005). Other
concerns include customers’ response to organizational CSR behavior Ellen, et al, (2006).
Sen, et al, (2006); Waldman, et al, (2006) examines the relationship between CEO
leadership style with organizational CSR values and finds out that the CEO`s vision of
CSR may impact their subordinate manager`s view of CSR in their decision- making
process.

Therefore, whereas many studies have been done on CSR, none of the studies has focused
on the sole influence of CSR on organization performance. Hence, this study will
endeavor to assess the influence of corporate social responsibility initiatives on
organization performance in the banking industry. It seeks to conceptualize how various
strategies undertaken by Equity Bank in its CSR activities such as education, health,
environmental and sports strategies have influenced the firm’s performance. In so doing
the study aims at contributing literature to the study of the association between CSR and
corporate performance.

1.3 Purpose of the Study

The purpose of the study was to find out the influence of CSR initiatives on
organizational performance of Equity Bank in Kenya.

5
1.4 Research Questions

1.4.1 What is the influence of education strategy on the performance of Equity Bank?
1.4.2 How does health strategy influence performance of Equity Bank?
1.4.3 What is the influence of sports strategy on performance of Equity Bank?

1.5 Significance of the Study

In examining the connection between CSR and competitive advantage, the study will
unearth important information to the following groups of stakeholders.

1.5.1 Academicians

Academicians and future researchers stand to benefit from the study in various ways. The
study provides a rich source of literature, which assists academicians and future
researchers when conducting literature review. Furthermore, the study contributes to the
existing body of knowledge on CSR to academicians and make recommendations arising
from its findings for further research on this or other related areas of study. Hence, future
research provides a research opportunity in which they can confirm or disconfirm the
findings of the current study.

1.5.2 Equity Bank

Equity Bank stands to be the primary beneficiary of the research. CSR is a very important
aspect of the organization in establishing a human face that the society can relate to. In
assessing Equity Bank’s CSR strategies, the study allows the bank`s management to
benchmark and assess the effectiveness of CSR towards the establishment of a positive
image for the firm. Moreover, the study is valuable to the Equity Bank`s management in
that they understand the effects of CSR towards brand management in their operations
bearing in mind that the bank reviewed their CSR pillars last year after the acquisition of
the Universal Banking Model (UBM).

6
1.5.3 The Government of Kenya

The government of Kenya benefits from the study by gaining information on the extent to
which Equity Bank has complied with its responsibility to give back to the society.
Furthermore, the study helps the government of Kenya, through the relevant officials
know the areas of focus of CSR activities and the impact of those activities on the general
public. In this way, the officials may be in a position to improve or come up with new
policies that guide them towards effective operations of stakeholders in the banking
sector. In addition, the study results may assist government officials formulate and
implement certain CSR-centered policies and regulations that may help improve the
programs. The findings of this study may also benefit the government and other policy
makers concerning the role they play towards the operations in the banking sector.

1.6 Scope of the Study

The study focuses on Equity Bank particularly on the impact of CSR on performance of
the organization. The data is to be collected through primary sources among the banks
staff members, through a structured questionnaire schedule at Equity Bank, Nairobi,
Kenya. The data collection is to be conducted over a period not exceeding one week.
However, the study involves collection of secondary information for the background
information and literature review. The secondary sources of information to be reviewed
will comprise of books, periodicals, press releases by Equity Bank.

1.7 Definition of Terms

1.7.1 Corporate Social Responsibility

Corporate Social Responsibility is the idea that a business has a duty to serve society in
general as well as the financial interests of its stakeholders (Pearce & Robinson, 2011).

1.7.2 Performance Management

Performance management refers to the greatest opportunity for a human resource system
in analyzing the contribution of employees in boosting performance (Jamil, 2012).

7
1.7.3 Organizational Performance
Organizational performance refers to the assessment or evaluation of corporate
performance with respect to its goals and objectives (Siddiq & Javed, 2014).

1.7.4 Strategy
Strategy is a compelling statement about where an organization is going that succinctly
conveys a sense of what the organization wants to achieve long-term (Porter, 2011).

1.8 Chapter Summary

Chapter one presents the background of Equity and CSR in Kenya. The chapter also
outlined the specific objectives of this research, the importance of the study, the scope of
the study as well as the working definitions of specific terms used in the project. Chapter
two is on the literature review and it provides insight into what other researchers have
done on CSR. Chapter three is on research methodology and it highlights the various
methods and procedures that will be used by the researcher in conducting the research.
Chapter four is on the results and findings of the study. Chapter five is on the summary,
discussion, conclusion and recommendations.

8
 CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

This chapter assesses literature relating to the research questions. Hence, the literature
reviewed relate to; the influence of CSR education strategy on organizational
performance, influence of CSR health strategy on organizational performance and the
influence of sports strategy in the performance.

2.2 Influence of CSR Education Strategy on Organizational Performance

2.2.1 Corporate Responsibility and Performance

As a concept, there is no universal definition of corporate social responsibility (CSR)

Lichtenstein, et al.(2010). The lack of definition of CSR attribute to its inherent intricacy
and the jurisdictional influence that makes it to be defined differently across countries and
business people. Mallin (2009) argues that socially responsible companies are expected to
integrate economic, social and environmental concerns into their business strategies and
activities beyond their compliance with the law. Social responsibility is not a corporate
philanthropy. A company can choose to participate in a number of different socially
responsible endeavours and it is this then that coins its strategy for CSR. A CSR strategy
has five components thus it should observe ethical principles in operating the business.
Ideally an unethical conduct would go against the company’s quest of being ethical.
Secondly, it could entail organization making charitable contributions, supporting the
community service and reaching out to making a difference in the lives of individuals
(Thompson, 2012).

Common conceptions of CSR denote that CSR is as emanating from the organizational
move towards the fulfillment with the responsibility which is given to the organization by
its ownership, legislation or control (Luo & Bhattacharya, 2012). According to Moon
(2011), self-centeredness or egotism, which can be altruistic or commercial, motivates or
inspires organizations’ CSR engagements. This is because even though it is contended
that CSR investments have no monetary value be it in the in the interim or in the long-

9
run, there are some tangible returns that CSR accords the organization. Crowth and Aras
(2008), contend that these are the grounds upon which CSR has been legitimized.

According to Palmer (2012), CSR education strategies do not only result only in a
onetime benefit for the firm. Studies have established that by engaging in community-
empowering initiatives such as education, the company establishes or pursues a long-term
growth strategy. The children and the youth that are educated and empowered today
become the firm`s future customers. Certainly, a good deed performed by the firms such
as taking needy children to school creates a feeling or sense of purpose for the employees.
In fact, studies have established that the beneficiaries of such programs are developing a
sense that they owe the corporation and a lot and as such become unwavering customers
of the firm. Hence, it is perceptible that CSR is an important way in which firms market
themselves by establishing public presence (Lichtenstein et al., 2010).

For instance, Palmer (2012) argues that providing education to bright needy students or
children from humble backgrounds increases the future potential of the children not only
to become loyal customers of the firm but to empower their families who in turn remain
loyal to the firm. Both the beneficiaries and their relations attribute their economic status
and prosperity to the firm. This further leads to increase in market share, sales and
profitability for the firm (Webber, 2008).

2.2.2 Management- Employee Relationship

McWilliams et al. (2009) contends that the value of management-employee relationship

as well as that between the company and other stakeholders is fundamental to the
organization’s success. These stakeholders include the following among others, the
Public, the Creditors, the Shareholders, the Customers, as well as the community groups,
which interact with and are affected by the organizations activities in one way or another.
The changes in the environment require the organizations to adopt to the changes in a
manner that permits sustainable development and in this sense the organizational
leadership as well as the activities of the individual employees is imperative (Lichtenstein
et al., 2010).

Initiatives that are deemed as compromising to CSR, are those which integrate social
elements into manufacturing processes and adopt progressive management of

10
organizational human resources Ritson (2013). Such elements involve the enhancement
of employee gratification, empowerment and ascertain of ensuring higher levels of
environmental performance pollution avoidance and recycling. Furthermore, the
enhancement of the objectives of community groups is also an imperative aspect of CSR
programs (Luo & Battacharya, 2012). The establishment a positive reputation is one of
the indicators of a firm’s performance. Bad performing firms seldom have a positive
image while firms that have a positive image are also those that perform well
(McWilliams & Siegel, 2011). However, the establishment of a positive reputation can
also be pursued as a strategy for growth by a firm. It has been established that generally
through CSR strategies, firms can establish and maintain positive image for themselves.

2.2.3 Stakeholders Performance

Using Stakeholders approach the organization provides a clear perspective that outsiders
demand insiders claims be subordinated to the greater good of the society. Essentially a
company should balance the need to carry out actions that are profitable to shareholders
whilst being good corporate citizens. Management therefore should consider how their
actions and strategies would affect the well being of employees, local communities, the
environment and society (Pierce & Robinson, 2011).

There are two basic relationship models may help to explain how leaders can best interact
with multiple and diverse stakeholders. The inside-out approach suggests that leaders
can manage their CSR activities and achieve favorable reputations with their stakeholders
by building CSR activities across boundaries and in a framework where the decision-
making point resides inside the organization and where communication with stakeholders
is a means to deliver information already developed and perhaps even implemented
(Thompson, 2010).

The CSR programs are aimed at satisfying the joint and several needs of the various
stakeholders of the organization. The stakeholders range from employees, customers,
suppliers, investors, regulators and the surrounding communities. The CSR programs
ought to be conducted in a manner that delivers the unique and specific needs of the
stakeholders within the financial constraints of the organization (Pierce and Robinson,
2011). Leadership efforts to deal rationally with stakeholders, with uncertainty, and with
constraints lead to greater potential for sustainability in terms of culture, structure, and
11
output. Corporations need to engage with stakeholders to develop valuable CSR-related
actions. Stakeholders that face challenges and threats are more likely to partner with
corporations on CSR-related issues and corporations and stakeholders are more likely to
succeed when a long-term vision is embraced (Thompson, 2010).

According to Mazurkiewicz (2014), CSR education strategy facilitates the acquisition of a

positive image for firms as corporations identify and sponsor needy children from humble
backgrounds. The sponsorship of such needy and vulnerable people in the populations
sends a message to the general population that the corporation is not abstract from the
firm in which it operates but it is an integral part of it sharing in its social woes (Webber,
2008). Therefore, both the internal and external stakeholders of the firm are able to hold
the firm in high regard and positively (Revert, 2009). Such perceptions allow the firm to
obtain and sustain customers and to realize an increase in its customer base as everyone
wants to associate with it.

In a study conducted by Aupperle, Carroll, and Hatfield (2015), it was determined that the
establishment of a strong positive image was one of the major gains that a corporation
obtained by engaging in the education and sponsorship of young people from very
humble backgrounds. Empirical evidence suggests an association between corporate
performance and good stakeholder relationship Webber (2008). It is suggested that
through CSR, corporations establish good relations with the key stakeholders especially
the customers.

In a recent study, McGuire, Sundgren and Schneeweis (2008) established that CSR
activities especially those related and associated with education are important in
facilitating the relationship between the rural stakeholders and the firm especially the
manner in which the rural people who are also poor hold or perceive the firm.
Gamerschlag, Möller and Verbeeten (2011) contend that CSR can result in the reduction
of information asymmetry between the firm and its various stakeholders. It has been
established that customers develop an intricate patronage relationship with the firm when
they perceive the firm as taking the education of their children as very important (Kariuki
& Rotich, 2013).

In a 2010 study, McWilliams and Siegel (2011) documented a positive association

between education-centered CSR strategies and financial performance as a selected
12
number of banking firms. However, some scholars have contended that there is no
positive association between CSR education strategy and Organizational performance. In
a study conducted among several firms in Kenya providing mobile services, it was
established that whether a company engaged in social responsibilities was not a
precipitating factor for the establishment of positive stakeholder relationship (Kariuki &
Rotich, 2013). This suggests that other factors may be at play as far as the link between
CSR education strategy as well as other such strategies is concerned and that not a single
factor can help account for the establishment of good stakeholder relationship.

2.3 Influence of CSR Health Strategy on Organizational Performance

2.3.1 Employee Motivation

According to Wentzel and Wigfield (2009), the relationship between employee
motivation and productivity is not definitely established. The consensus, however, is that
in the long-run motivation leads to increased productivity. The strongest implication of
much of the research is that the two variables, motivation and performance, are relatively
independent of each other. There seems to be at least two possible reasons for this. The
first is that in many jobs variations in motivation cannot lead to variations in productivity.
Secondly, even when correlations do appear, the associations may be spurious, since both
may be associated with other factors. In other words, motivation and productivity may
have largely separate casual paths: one set of factors, for example, Investment in
technology, determines productivity, another set, for instance is perceived equity of
rewards that produces job-satisfaction (Westover, 2010).

Employee motivation implies the drive held by the organization’s staff members to
realize task objectives for the firm Peloza (2015). It is the inspiration that employees have
to perform a task to the best of their ability because they feel that their effort`s not only
helps the firm to grow and realize increased profits but that the tasks that they perform
helps address a certain social need. Health is one of the things that most people,
universally value, as key in their lives (Kiko, 2008).

Certainly, chronic and communicable diseases has caused alot of anxiety and suffering
among people all over the world and addressing these health issues is of fundamental
importance not only to the national governments but to every able person or entity such as
13
corporations Qu (2010). HIV/AIDs, Cancer, Tuberculosis (TB) and Malaria among other
diseases are of great worry to the all stakeholders in the society. Therefore, by taking a
health strategy focusing on the alleviation of these problems, firms allow employees to be
part of a solution to a greater problem above the normal issues of profit maximization.
Indeed, according to Peloza (2015), research has established that employees whose firms
engage in health strategies often record greater levels of job satisfaction and motivation as
compared to those firms that avoid health strategy.

Palmer (2012) observes that the through CSR strategies the firm facilitates the motivation
of its employees. The employees feel that their duties and tasks in the firm are transcends
to the fulfillment of a profit objective as it helps alleviate social problems within the
society. According to Webber (2008), motivated employees also develop a sense of
satisfaction with the firm and with their tasks and duties within the firm and increase their
productivity. Increased productivity is associated with increased financial performance of
the firms in terms of return on assets, increased profit margins among others (Aupperle, et
al, 2015; Brunsel 2009).

According to Palmer (2012), in 2011 the DM Bicycle Company initiated a CSR strategy
in city schools in US dubbed “Ride for Life”. It was determined that the programs
boosted the morale of the employees of the firm and contributed to greater public-firm
relations. The Ride for Life initiative was aimed at raising funds for battling the
devastating Batten Disease among children (Qu, 2010). While the strategy should have
been potentially disastrous for the firm since it involved the diversion of bonuses and
rewards to employees, it however resulted in the employee full support for the programs,
employee motivation as well as increased sales and production for the firm. This was a
typical incident in which CSR strategy, in this case a health strategy resulted in increased
organizational performance (Crowth & Aras, 2008).

2.3.2 Corporate Performance

Organizations endeavour to excel on the three measures of a company’s performance thus
Economic, Social and Environment. In light of the above many companies have started
blowing their own trumpet to what benefits their CSR strategies have through ads,
websites in order that they can highlight their actions. In creating a corporate image of
being socially responsible then the company has to create perception to the consumer that

14
it contributes to community development, it supports artistic and social activities and that
its generally trying to improve the welfare of society as a whole. Likewise, human
resource integration would entail the building of capacity among the people through
reward systems in a bid to increase productivity levels and attain the business strategy.
Lastly, integration of corporate and individual objectives would involve mechanisms that
create a sense of pride in the individuals as they seek to deliver the business strategy
(Nordberg, 2011).

Strategic intent is how an organization can attain superior performance and is usually a
factor of the combination of strategic factors that enhance the attainment of the business
strategy. In most cases, firms would be able to record high performing levels due to the
unique insights and abilities they controlled when their strategies were selected and
executed. This could be misconstrued to mean that organizations that attain high
performance levels are simply lucky. However, corporate performance is the deliberate
strategic and integrated approach to delivering sustained success to the organization by
improving the contribution of the people who work in it and developing the capabilities of
teams and individuals. The strategic part of corporate performance is concerned with
broader issues facing the business and achievement of short term and long-term goals
while the integrated approach to delivering sustained success would entail vertical
integration, functional integration, vertical integration, human resource integration and
integration of corporate and individual objectives. Vertical integration entails alignment
of the business, team and individual objectives with the business strategy while functional
integration involves linking functional strategies and activities with the business strategy
(Thompson, 2010).

2.3.3 Competitive Advantage

Competitive advantage is how an organization will achieve its objectives in the face of
competition from other organizations (Carroll & Shabana, 2010). In achieving this goal,
an organization must perform better than other players in its industry must. In so doing,
this could boil down to meeting the needs of the consumers more effectively and this
could enable the service provider to command a higher price which can lead to increased
revenues (Crowth & Aras, 2008). In achieving this goal an organization must perform
better than other players in its industry. If the company is cost effective, it can then be
able to command a lower price in its offering to the consumers and this can lead to
15
increased revenues (Thompson, 2010). However, a review of approaches for building
competitive advantage illustrates that marketing plays a central role. A number of
popular approaches include, strong market positions with products and services which are
not easily substituted, entry barriers, strong bargaining position, mobility barriers,
balanced portfolio`s, core competences, innovation and speed or time based competition.
Multinational Companies (MNC`s) can promote the adoption of CSR practices as part of
their strategy so as to increase their competitiveness within the economy and industry.

In competitive advantage, the current globalized world, competition has become a

buzzword with regard to organizational performance and survival (Porter & Kramer,
2012). Research has established that firms, which are unable to attain or sustain greater
organizational performance often, collapse (Palmer, 2012). Thompson (2010) this gives
the customer a reason that lasts to prefer the company products to competitors. An
organization derives its competitive advantage from either managing their costs or
providing a unique offering to their market (Crowth & Aras, 2008).

According to Reverte (2009), he contends that to attain and sustain a competitive

advantage, firms have to explore several alternatives including engagement in CSR
strategies. According to Weber (2008), health strategy is a fundamentally effective means
of attaining a competitive advantage in a competitive business milieu as individual
beneficiaries of the health assistance and their relatives, friends and acquaintances
develop a feeling that they owe the firm a lot. As such, it is perceptible that a health
strategy is a potentially effective way of attaining a competitive advantage.

Schwenker and Wulf (2013) have argued that increased involvement in certain CSR
strategies result in the enhancement of organizational performance and competitive
advantage (CA). Firms have also undertaken to increase their assistance to the health
sector and the people in need of certain medical attention but lack proper resources and
funds to realize such needs (Kariuki & Rotich, 2013). Hamori (2013) points out that
sports strategy in CSR serves to establish a good corporation reputation, which in turn
guarantees high performance by the employees. This give the firm a competitive
advantage relative to its key competitors thereby allowing the firm to retain its exceed its
business performance (Harvard Business Review, 2011).

16
According to Westover (2010) CSR influences the rates of employee retention or
employee turnover rates. Turnover is process in which employees leave the organization
and have to be replaced. Turnover is related to employee motivation. Excessive turnover
can be a very costly problem, one with a major impact on productivity. But cost is not the
only reason turnover is important. Lengthy training times, interrupted schedules,
additional overtime, mistakes and not having knowledgeable employees in place are some
of the frustrations associated with excessive turnover (Westover, 2010). It has been
observed that a health strategy facilitates employee motivation in fulfilling their tasks to
the firm and therefore facilitate organizational performance.

According to Waweru and Kalani (2009) observe that the local commercial banks have
also used CSR as an effective competitive tool with respect to customer retention. In this
regard, customers have found it easier and logical to conduct business with firms that they
perceive as having concern for the socio-economic issues that they face. As such, the
banks have engaged in CSR not only because of the legal demands but because of more
so because of the potential of the process to help them attain a competitive advantage
(Okiro & Ndung’u, 2013). These programs give people a sense of pride in the
organization, engender teamwork and are a source of inspiration and connectedness.
Building a Positive Workplace Environment is one of the greatest benefits of promoting
social responsibility in the workplace.
CSR for that reason is not just a benevolent gesture by corporations intending to look
good to the community to enhance their profits Brunsel (2009). It is a precondition for
good governance and corporate leadership as well as unrelenting profitability and
operation. According to Brunsel (2009), CSR is in fact a business competitive marketing
strategy that guarantees high organizational and product awareness thereby branding the
firm as a corporation that cares about its consumers, the society it operates within as well
as other stakeholders.

2.4 The Influence of Sports Strategy in the Performance

2.4.1 Creation of Value

CSR presents an opportunity to create shared value and a meaningful benefit for society that is
also valuable to the business (Porter and Kraer, 2006). The mutual dependence of corporations
and society implies that both business decisions and social policies must follow the principle of
17
shared value. To put these broad principles into practice, a company must integrate a social
perspective into the core framework it uses to understand competition. Porter (2011) observes
that businesses recognize the imperative for the private sector to ensure long-term
markets for their services and products hence presents the business community the right
vehicle for promoting its commercial interests, while at the same time giving back to the
community. He confirms that CSR is a rapidly growing field, and corporations,
organizations, stakeholders, and advocates are engaging in CSR activities in increasing
numbers. Porter concludes that there is tremendous variety and innovation in CSR
activities, and new approaches and alliances are continually evolving but each CSR
adherent’s approach is guided by its own mission, vision, or position in the marketplace
hence the general consensus is that CSR adds strategic business value and enables
companies to integrate with society and maintain their integrity while pursuing profits.

Porter (2011) recommends a new approach to CSR that he terms Creating Shared Value
(CSV). The shared value model is based on the idea that corporate success and social
welfare are interdependent. He suggests that a business needs a healthy, educated
workforce, sustainable resources and adept government to compete effectively. He also
holds that for society to thrive, profitable and competitive businesses must be developed
and supported to create income, wealth, tax revenues, and opportunities for philanthropy.

Research has confirmed leadership’s pivotal role in initiating and developing CSR
programs and initiatives within and across organizations. Leaders in world business are
the first true planetary citizens, they have worldwide capability and responsibility, and
their decisions affect economies as well as societies. Leadership styles and leadership
capabilities are prevalent among successful organization. Leaders of socially responsible
organizations have been associated with the charismatic leadership style; the connection
between top managers and firm outcomes depends to a large extent on the managers’
charismatic leadership under conditions of perceived environmental uncertainty.
Companies face challenges and limitations as they implement CSR. These usually relate
either to political issues or to organizational-level concerns and are often embedded in
culture. The complexity of operating in a global society places new demands on
organizations and their leadership (Johnson 2011).

According to Panayiotou (2009), there are three dimensions to CSR. There is the
economic dimension of which profit should be the ultimate result of CSR programs by the
18
organization. Secondly, there is the environmental dimension, which is concerned with
the processes. Lastly, there is the social dimension whose focus is on the safety and health
matters, including human rights and employee relations and working conditions (Crowth
and Aras, 2008).

Several organizations have corporate identities such as brand names which have become
pivotal in their competitiveness and success McWilliams, et al., (2009). According to
Moon (2011), it is hard to determine whether organizational ethical behavior is inspired
by a deep sense of altruism among its owners or is an act of self-preservation.
Nonetheless, it is irrefutable that the association between ethical behavior, egotism and
altruism is an intricate affair Lichtenstein, et al., (2010). Economic responsibilities are at
the apex of an organization’s CSR concerns. Other concerns including ethical, legal and
discretionary responsibilities only come after the economic responsibilities Crowth and
Aras (2008). Nonetheless, the ethical and the discretionary in the model provided by
Carroll, is important in the contemporary times. This is simply because the environmental
transformations influencing the business environment are complimentary on the legal and
economic accountability, which form the basis of business’ success (McWilliams, et al.,
2009).

2.4.2 Managing and Embracing Social Values

CRS offers a formidable means of bridging the gap between the companies operations
and the social values that are up-held by the society. In this, it was irrefutable as Crowth
and Aras (2008) contend that ethical behavior on the part of the organization is pre-
determiner for an effective organizational strategy. The level of appreciation of ethical
standards is a function of the positive reputation that is portrayed by the organization. The
levels of acknowledgement of the importance of ethics in its operations are a
manifestation of the organizations values and core principles (Moon, 2011).

A company’s track record in terms of CSR accounting will be effective when appropriate
CSR measures are included in its internal as well as its supply-chain activities
McWilliams, et al., (2009). Furthermore, the literature reflects a growing need for
dissemination of good practice in CSR accountability and a need for more pressure to be
exerted on NGOs to prove themselves as ethical, transparent, and accountable as those
they seek to influence. CSR requires accountability by all leaders, individuals,
19
organizations, stakeholders, customers, and community members, and yet accountability
is complex. The factors which influence the effectiveness of corporate accountability are
multiple and tightly interconnected (Crowth & Aras, 2008).

2.4.3 Increasing Market Share

Market share loosely defined refers to the proportion of the population that the company
has as its customers. Several factors influence the company’s market share including
company’s competitive advantage in terms of services and products that it offers as well
organizational performance and corporate reputation Webber (2008). Research has
established that CSR enables firms to increase its markets shares especially in the
instance of a well-managed CSR strategy.

Palmer (2012) argues that a sports-centered CSR strategy allows the corporation to access
potential market that it would otherwise not reached. Through sporting activities,
sponsored by the corporation, especially in the informal settlements and slum areas, the
corporation is able to access such populations and create awareness of its products
(Carroll &Shabana, 2010).

Research has established that firms such as Nike, Addidas, Fly Emirates and Qatar
Airways employ sports strategy as a way of attaining greater market shares Luo&
Bhattacharya (2012). Hence, firms employ sports strategy both as a marketing technique
and as a way of attaining greater market share especially by engaging in sports
sponsorship in hitherto unexploited markets such as in the developing world. However,
other empirical studies have established that CSR only facilitates increase in market share
if its products and services are affordable to the financially challenged groups. Otherwise,
CSR has no effect on market share and ultimately on organizational performance.
Sporting events like the Standard Chartered Nairobi Marathon is one of the CSR
programs practiced by the bank. The Standard Chartered Nairobi Marathon is the only
athletics event in Kenya featuring on the International Association of Athletics
Federations’ (IAAF) calendar alongside other great marathons like Boston, New York,
London, and Beijing among others.

According to Clark (2007), upcoming Kenyan runners have found a platform to launch
their athletics careers in an international marathon on their home soil this strengthening

20
the CSR social pillar at Kenyan home front. Others have found the marathon a perfect
opportunity to showcase their potential and move on to participate in International meets.
Standard Chartered Nairobi Marathon, is part of nine marathons sponsored by Standard
Chartered Bank across the world- Mumbai, Dubai, Bangkok, Singapore, Hongkong,
Jersey, Falkland Islands and Kuala Lumpur. These combined is over 300,000 passionate
runners, each with a unique story and experience (Clark. 2007).

2.4.4 Creating a Good Reputational Image

According to McGuire, et al, (2008), possession or espousal of a positive corporate image
has been determined to be positively associated with growth. In fact, studies have
established that modern corporations that engage in sports CSR strategies often
experience increased financial performance and increased market share Schwenker&Wulf
(2013). The sportsmen themselves and their families often purchase the firm’s products
and services as they feel more attached to it (Crowth&Aras, 2008). Developing programs
gives people a sense of pride in the organization, engender teamwork and are a source of
inspiration and connectedness. Building a Positive Workplace Environment Finally, one
of the greatest benefits of promoting social responsibility in the workplace is the positive
environment you build for your employees. When employees and management feel they
are working for a company that has a true conscience, they will likely be more
enthusiastic and engaged in their jobs. This can build a sense of community and
teamwork which brings everyone together and leads to happier, more productive
employees (Johnson 2011).

In developing countries public relations is a potent tool for shaping consumer perception
and building a company’s image. Corporations like that equity bank actively promote
their social responsibility activities taking steps to publicize these efforts through the
media. Getting the word out about corporate donations, employee volunteer programs, or
other CSR initiatives is a powerful branding tool that the bank uses to build publicity for
you in both online and print media. The seeing believes Initiative has become a popular
tool for the bank to not only communicate but also build good rapport with the existing
and potential banking clientele (Pierce & Robinson, 2011).

21
CSR strategies can create a value in the minds of both external and internal stakeholders
Panayiotou (2009). This positive image can be conceived as reputational capital which
can generally imply that the stakeholders perceive the firm in a positive light because they
feel connected to the firm in one way or another. According to Peloza (2015) conducted
a study among selected firms and while focusing on sports strategy alone found CSR
influenced customers purchase intentions and determined whether a customer was willing
to purchase or not purchase the firm’s products. According to Schwenker and Wulf
(2013) CSR influenced not only the corporations reputation but allowed the corporation
to retain employees especially those that took part in such strategies especially sports.

According to Klein and Dawar (2004), Business corporations do utilize corporate social
responsibility (CSR) to enhance their image among a diversity of stakeholders. The CSR
activities are used to establish a positive or reputational image among the minds of the
customers of the advantages of the corporation. As such, CRS acts as an effective
marketing tool by which corporations create legitimacy for their existence and
communicate the business products and services to potential clients (Caroll & Shabana
2005). The marathon’s contribution to the economy cannot be overlooked due to athletics
being one of the biggest foreign exchange earners for Kenya. Many a Kenyan athletes
have dominated the athletics scene in the world bringing home billions of shilling in
foreign exchange. Since 2003, winners of the Nairobi marathon have walked away with
over USD1, 200,000 in prize money, which has significantly changed the participants’
lives. Kenyan runners have dominated the event, which also attracts participants from
over 50 nations in the world.

CSR does not hold important implications for the shareholders of the firm but to the
stakeholders as well Crowth& Aras (2008). The stakeholders are the individuals that can
effect and be affected by the firms operations and can be employees, financiers and
customers (Revert, 2009). These groups of people contribute to the corporation’s wealth
capacity and are therefore integral component of performance. Indeed, studies have found
that because the issue of the sports is gaining traction among many people and societies
who are also the stakeholders in firms, corporation’s engagement and teamwork in the
promotion of sports and the sponsorship of young sportsmen especially in informal
settlements is fundamental in boosting their corporate image (Qu, 2010).

22
2.5 Chapter Summary
Chapter two has reviewed existing literature relating to the influence of various aspects of
CRS strategies on organizational performance. The chapter has determined that the
various CSR strategies including sports, health, environment and education has some
impact on the performance of a given corporation that partakes in such activities. It has
been noted however, that scholars are divided especially with respect to the nature of the
relationships among the various CSR strategies on organizational performance. The next
chapter presents the research design or the methodology which the researcher uses to
conduct the study.

23
 CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

This chapter has described the research methodology, research design, the population and
the sampling technique or design. The chapter also highlighted the data collection and
analysis procedures used in the study.

3.2 Research Design

Methodology refers to the principles, procedures and practices that govern the research
(Mugenda & Mugenda, 2005).According to Mugenda and Mugenda (2005) research
design specifies the methods and procedures for collecting and analyzing the needed
information. It indicates a framework or blueprint for the research as well as the research
methods chosen to determine the information needed. It defines the sampling method,
sample size, measurement and data analysis processes. In this study, a descriptive
research design was utilized to carry out the research (Schindler & Cooper, 2003). A
descriptive design is crucial in investigating the influence of CSR initiatives on
organizational performance of commercial banks. This is principally because a
descriptive study permitted a vivid examination of both the problem under investigation.

3.3 Population and Sampling Design

3.3.1 Population
A Population can be defined as the set of individuals, objects, or data from where a
statistical sample can be drawn (Saunders, et al., 2009). Population is the entire group of
individuals, events or objects having a common observable characteristic (Copper &
Schindler, 2000). Cooper and Schindler (2003) further add that a population is the total
sum of collected units from which the researcher draws conclusions of the study. The
population for the study incorporates all the individuals currently working with the firm
within the various branches located within Nairobi’s Central Business District (CBD).
According to Equity Bank (2016) the population is about 1,300 individuals. These
individuals are deemed to posses the necessary information concerning the various
strategies adopted by the bank, which are fundamental for the current study.
24
3.3.2 Sampling Design

A research sampling design is that part of the research plan that indicates how cases are
selected for observation. The design therefore maps out the procedure followed to draw
the study’s sample. According to Cooper and Schindler (2011), a good sample should be
a representative of the population. This study used sampling for compelling reasons of
lower cost, greater accuracy of results, greater speed of data collection, and availability of
population elements.

3.3.2.1 Sampling Frame

A sampling frame is the list of individuals or events, source material or device from
which a sample is drawn (Mugenda & Mugenda, 2005). It comprises a list of all those
within a population who can be sampled, and may include individuals, households,
organizations or institutions (Saunders et al., 2009). The list of the staff members were
obtained from Equity Bank Human Resources database.

3.3.2.2 Sampling Technique

Sampling technique explains that this method was deemed relevant where the researcher
wants to investigate whether the characteristics of a certain phenomenon cut across the
units of observation with maximum variation (Mugenda & Mugenda, 2005). The
sampling technique used was simple random sampling to collect more information from
the survey. The methods used in drawing samples from a population was driven by the
objectives of a given research activity. The sampling process was regulated by the
parameters in the population in line with specific objectives of the study (Cooper &
Schindler, 2011). The study assumed a simple random sampling approach to give
everyone an equal chance of participating in the study since it is an opinionated survey.

3.3.2.3 Sample Size

A sample size is typically one that bears some proportional relationship to the size of the
population from which it is drawn. In order for the researcher to get a representative
sampling size, then, the sampling size must be large (Cooper et.al, 2001). Ligthelm and
Van Wyk (2005) describe the sample size as a smaller set of the larger population. With a
25
population of 1,300 at 90% confidence level and a 10% (+10/ -10) margin of error, the
sample size is 110 respondents. The sample size was sufficient and representative of the
entire population. The formula is as follows:

n= N
1 + N(e)2

Where n is the sample size, N is the population size and e is the margin of error.
n= 1,300

1 + 1,300 (0.10)2

n= 110

The sample size distribution was as presented on Table 3.2. Besides, the sample size of
110 was included in the study.

Table 3.1: Sample Size

Type Population Percentage Sample Size

Employees 1000 8.46 85

Manager 300 8.46 25

Total 1,300 8.46 110

3.4 Data Collection Methods

Data collection is defined as a procedure that eliminates editing and coding, reduces
errors, saves time and produces all the required statistics (Kottler & Lane, 2009).The data
collection method adopted in the study was primary data collection method.
Questionnaires refer to collection of information about the population (Mugenda &
Mugenda, 2003). In this study, structured questionnaires were used to collect the required
data from the respondents. Structured questionnaires are an inexpensive way to gather
data from respondents who might have tight schedules. The steps the study took to

26
develop the structured questionnaires include defining the objectives of the survey;
determining the sampling group; constructing the instrument and administering the
instrument to respondents.

The structured questionnaires detailed five key components, namely: the background
information; the influence of education strategy on the performance of Equity Bank; How
health strategy has influenced Equity Bank’s organizational performance; ways in which
Equity Bank’s environmental strategy has influenced the firm’s corporate performance;
and the influence of Equity Bank’s sports strategy in the performance of the bank. A
likert scale structured questionnaires made it possible to collect views and opinions that
can be analyzed using descriptive statistics.

3.5 Research Procedures

The researcher provides a complete account of the research process including pilot
testing, scheduling of the subjects or participants distribution and collection of the data
collection instruments, the questionnaires (Saunders et al., 2009). The researcher first
developed the questionnaire and distributed it to 5% of the respondents in a pilot test to
ascertain the instruments suitability and eliminate any typological errors as well as other
problems that may be inherent in the tool. The researcher made sure that the questionnaire
were short as possible, precise and to the point. The purpose of this is to avert certain
common challenges including interviewee fatigue and the subsequent refusals as well as
collecting redundant data.

The results of the pilot phase were used to improve the questionnaire and assess the
feasibility of the study. After the pilot test and the assessment of the feasibility of the
study and the suitability of the instrument, the research process then proceeds to conduct
the study. Screening forms were randomly distributed to determine eligible respondents
for the survey. The data was collected within a period not exceeding three weeks. In the
course of the survey, the researcher randomly approached and administered the
questionnaires to potential predetermined respondents within the selected Equity Bank
branches.

27
3.6 Data Analysis Methods
Data analysis is the process of editing and reducing accumulated data to a manageable
size, developing summaries, seeking for patterns using statistical methods. All completed
research materials were assembled and information organized (Cooper & Schindler,
2003). The researcher used descriptive methods such as mean, mode, median,
percentages, tables and frequency distribution to compute data analysis. To ensure easy
analysis, the questionnaire was coded according to each variable of the study. This study
used descriptive statistics. According to McDanile and Gates (2001), descriptive analysis
involves a process of transforming a mass of raw data into tables, charts, with frequency
distribution and percentages, which are a vital part of making sense of the data. In this
study, the descriptive statistics such as percentages and frequency distribution were used
to analyze the demographic profile of the participants. Correlation analysis was used to
establish the relationship between CSR and performance.

3.7 Chapter Summary

Chapter three presents on the research methodology applied in the study. The chapter
discussed about the research design, the population, the sampling design and the data
collection methods for the study. The chapter has further highlighted the researcher’s
research procedures for the study as well as the data presentation and analysis methods.
The next chapter is on the results and findings.

28
 CHAPTER FOUR

4.0 RESULTS AND FINDINGS

4.1 Introduction
This chapter presents the results and findings of the study on the effect of corporate social
responsibility strategy on performance: A case of Equity Bank. Data collected from the
employees of the bank in Nairobi`s branches is analyzed and interpretations. The chapter
was organized in four subsections. The response rate is reflected in a table for easy
clarification and understanding. The research was guided by the following questions:
What is the influence of education strategy on the performance of Equity Bank? How
does health strategy influence performance of Equity Bank? What is the influence of
sports strategy on performance of Equity Bank?

4.1.1 Response Rate

The response rate was a strong representation of the entire population to answer the
research questions appropriately. One hundred and ten questionnaires were distributed
and 98 questionnaires were collected which indicated a response rate of 98%. The
information was collected using a five-point Likert scale questionnaire and the data
analyzed using means, standard deviation and coefficient of variation. A mean value of
between 3 to 4; represented slightly agree, more than 5 ‘quite agree’, 3 ‘neutral’, 2
‘slightly disagree’ and lastly less than 1 ‘quite disagree’.

Table 4.1: Response Rate

Respondents Target Population Response Percentage

Employees 100 90 90
Managers 10 8 80
Total 110 98 89

4.2 General Information

This section presents on the general information of the respondents by looking at the
gender of the respondents, age of the respondents, highest level of education attained,
social responsibilities practices, type of corporate social responsibility activity and
participation in the corporate social responsibility activities.

29
4.2.1 Gender of the Respondents
The researcher sought to find out the gender of the participants in the study. The findings
in Figure 4.1 shows that 62% of the respondents were female and the rest 38% were male.
Females represented a majority of respondents in the survey. Because female were
hardworking, consensual, they spend more time taking care of their children, unbiased,
flexible at their workplace, focus on quality of life and are relationship- oriented. Thus,
this indicates females were more ethical upright than males.

Male
38%

Female
62%

Figure 4.1: Gender of the Respondents

4.2.2 Age of the Respondents

The researcher sought to determine the age of the participants in the study. The findings
in Figure 4.2 indicated that 26% of the respondents were aged between 20 to 30 years,
66% aged between 31 to 40 years and 8% were 41 years and above. The majority of the
respondents were above 31-40 years of age, because they were expressive, highly
energetic, opportunistic, conservative, independent, rigid and attend many social
conventions through various networks. This implies that the respondents had a high level
of awareness of and positive attitude towards CSR compared to the respondents less than
30 years.

30
 Age of the Respondents
41and above years
8%

20-30 years
26%

31-40 years
66%

Figure 4.2: Age of the Respondents

4.2.3 Highest Level of Education Attained

The researcher sought to determine the highest level of education attained of the
participants in the study. The findings in Figure 4.3 indicated that majority (49%) of the
respondents had degrees, this was followed by 23% having diplomas, 22% had masters
and 6% had certificate. The majority of the respondents were relatively educated with the
highest holding degree programs because of being more inclined to open-ended learning
innovative, focus on advancement in technological changes, adapt to environmental
changes and be able to make decisions in the workplace. Experience has shown that CSR
solutions are based on education through the transfer of skills and responsibilities on
community development.

31
 Certificate
6%

Masters
22%
Diploma
23%

Degree
49%

Figure 4.3: Highest Level of Education Attained

4.3 Social Responsibilities Practices

The table above shows findings on which specific corporate social responsibility the
employees of equity bank engaged in. The study sought to establish the corporate social
responsibilities that the respondents participated in frequently. It was realized that 63%
participated in Education CSR activities accounting for a larger percentage of the
participants, 24% participated in health programs and 13% in sports programs. Most of
the participants may have found the education program relevant to their practice as Equity
bank employees, because of one being future oriented, goal oriented, opportunistic and
hardworking as compared to health and sports CSR activities. Findings are reflected in
the Figure 4.4.

70

60 63%
50

40

30

20 23%
10 14%
0
Education Programme Health Programme Sports Programme
Figure 4.4: Social Responsibilities Practices

32
4.4.1 Descriptive of Education CSR Strategy
Table 4.2: Descriptive of Education CSR Strategy: Number Mean and S.D
Education CSR Strategy N Mean S.D
The company educates needy students to
97 4.43 0.623
create a sense of purpose.
The company education initiative leads to
98 4.31 0.592
unwavering customer support.
The company education initiative
97 4.29 0.696
establishes a public presence.
The company endeavors to increases the
97 4.23 0.716
future potential of the children education.
Education empowers families who in turn
98 4.26 0.727
remain loyal to the firm.
CSR education leads to enhanced
98 4.27 0.632
employee gratification.
CSR education leads to positive
97 4.40 0.615
organization image.
The company balances the need to adding
shareholders value and good corporate 98 4.30 0.790
citizens.
The company enhances growth through
98 4.25 0.648
partnership with master- card.
CSR leads to good relations with the key
98 4.28 0.674
stakeholders especially the customers.

The study aimed to investigate the influence of education strategy on the performance of
the organization. The study established that most of the respondents agreed that the
company education initiative leads to unwavering customer support with a mean of 4.43.
Second a number of the respondents agreed that CSR education leads to positive
organization image with a mean of 4.31. Thirdly, a number of the respondents agreed that
the company educates needy students to create a sense of purpose with a mean of 4.29.
Fourth, a proportion of the respondents agreed that CSR education leads to enhanced
employee gratification with a mean of 4.23 and the CSR leads to good relations with the
key stakeholders especially the customers with a mean of 4.26. On the other hand, a few
respondents agreed that education empowers families who in turn remain loyal to the firm
with a mean of 4.27 and a small proportion of the respondents agreed that the company
balances the need to adding shareholders value with a mean of 4.40 and good corporate
citizens with a mean of 4.30.

33
Standard deviation was used to measure of the degree to which individual observations in
a dataset deviate from the mean value. The coefficient of variation indicated the average
deviation from the mean across all observations. A smaller value of the coefficient
indicated a general consensus while a large value indicated the lack of consensus on the
statement. The study established that most of the respondents agreed that the company
balances the need to adding shareholders value and good corporate citizens. Second a
number of the respondents agreed that education empowers families who in turn remain
loyal to the firm. Thirdly, a number of the respondents agreed that the company
endeavors to increases the future potential of the children education. Fourth, a proportion
of the respondents agreed that the company education initiative establishes a public
presence and the CSR leads to good relations with the key stakeholders especially the
customers. On the other hand, a few respondents agreed that CSR education leads to
positive organization image and a small proportion of the respondents agreed that the
company education initiative leads to unwavering customer support.

4.3.1 Correlation between Education Strategy and Organization Performance

Table 4.3: Correlation between Education Strategy and Organization Performance

1 2 3 4 5 6 7 8 9 10 11
1 1
2 .123 1
3 .112 .062 1
4 .182 .166 .221 1
5 .116 .109 .144 .414** 1

6 .223 .122 .128 .178 .173 1

7 .110 .326 -.188 -.045 -.154 .051 1

8 .047 .001 .205* .082 .021 .139 -.106 1
9 .032 .205* .078 .220* .133 .221 .237 .165 1
10 .223* .190 .080 .430* .319** .172 -.036 .067 .136 1
11 .196 .242* .260 .451** .548** .297** -.143 .163 .217* .497** 1

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

34
Key Indicators:
1= The company educates needy students to create a sense of purpose.
2= The company education initiative leads to unwavering customer support.
3= The company education initiative establishes a public presence
4= The company endeavors to increases the future potential of the children education
5= Education empowers families who in turn remain loyal to the firm.
6= CSR education leads to enhanced employee gratification
7= CSR education leads to positive organization image.
8= The company balances the need to adding shareholders value and good corporate
citizens.
9= The company enhances growth through partnership with Master-Card.
10= CSR leads to good relations with the key stakeholders especially the customers.

11=Organization Performance

This section intended to measure the correlation between education strategy and the
organization performance. The findings suggested that there was a significant correlation
between the company endeavoring to increase the future potential of the children
education and empowerment of families who in turn remain loyal to the firm at (r=0.414,
p>0.05). There was also a significant correlation between the company endeavoring to
increase the future potential of the children education and good relations with the key
stakeholders especially the customers at (r=.430, p>0.05). The relationship was extended
to enhanced organization performance at (r=.451, p>0.05).

There was significant correlation between the education empowering families who in turn
remain loyal to the firm and good relations with the key stakeholders especially the
customers at (r=0.319, p>0.05). The relationship was extended to enhanced organization
performance at (r=.548, p>0.05). There was a significant correlation of the CSR
education leading to enhanced employee gratification and enhanced organization
performance at (r=0.297, p>0.05). There was also a significant relationship between CSR
leading to good relations with the key stakeholders especially the customers and
improved performance of the organization at (r=0.497, p>0.05). The findings are
indicated in Table 4.4.

35
4.4 Descriptive of Health CSR Strategy in Organization Performance

Table 4.4: Descriptive of CSR Health

Health CSR Strategy N Mean SD
CSR Health Strategy addresses certain social needs. 98 4.26 0.544
CSR Health Strategy leads to perceived social equity. 98 4.13 0.732
A health strategy focusing alleviates social problems. 97 4.19 0.600
CSR Health Strategy creates a sense of satisfaction among
96 4.05 0.703
employees.
CSR Health Strategy improves employee productivity. 97 4.15 0.565
CSR serves to establish a good corporation reputation. 97 4.07 0.569
CSR Health Strategy gives people a sense of pride in the
96 4.14 0.664
organization.
CSR Health Strategy is a source of inspiration and team
98 4.12 0.723
work.
CSR Health Strategy attracts customers through social
96 4.08 0.642
events.
CSR Health Strategy builds a positive workplace
93 4.00 0.702
environment.

The study aimed to investigate the influence of health strategy on the performance of the
organization. The information was collected using a five-point Likert scale questionnaire
and the data analyzed using means, standard deviation and coefficient of variation. A
mean value of between 3 to 4 represented slightly agree, more than 5 ‘quite agree’, 3
‘neutral’, 2 ‘slightly disagree’ and lastly less than 1 ‘quite disagree’. The study
established that most of the respondents agreed that CSR Health Strategy addresses
certain social needs. Second, a number of the respondents agreed that CSR Health
Strategy improves employee productivity. Third, a number of the respondents agreed that
the CSR serves to establish a good corporation reputation and a proportion of the
respondents agreed that a health strategy focusing alleviates social problems. On the other
hand, a few respondents agreed that CSR Health Strategy is a source of inspiration and
team work; fewer respondents agreed that the CSR Health Strategy builds a positive
workplace environment. A small proportion of the respondents agreed that CSR Health
Strategy leads to perceived social equity.

Standard deviation was used to measure of the degree to which individual observations in
a dataset deviate from the mean value. The coefficient of variation indicated the average
deviation from the mean across all observations. A smaller value of the coefficient
indicated a general consensus while a large value indicated the lack of consensus on the
36
statement. The study established that most of the respondents agreed that the CSR Health
Strategy leads to perceived social equity. Second a number of the respondents agreed that
CSR Health Strategy is a source of inspiration and team work. Thirdly, a number of the
respondents agreed that CSR Health Strategy creates a sense of satisfaction among
employees. Fourth, a proportion of the respondents agreed that CSR Health Strategy
builds a positive workplace environment and CSR Health Strategy gives people a sense of
pride in the organization. On the other hand, a few respondents agreed CSR Health
Strategy improves employee productivity and a small proportion of the respondents
agreed that CSR Health Strategy addresses certain social needs. The findings are
indicated in Table 4.4.

4.4.1 Correlation between Health Strategy and Organization Performance

Table 4.5: Correlation between Health Strategy and Organization Performance

1 2 3 4 5 6 7 8 9 10 11
1 1
2 .178 1

3 .377* .359** 1

4 .426* .494* .388** 1

5 .443* .145 .262* .080 1

6 .127 .572* .481** .544* .228** 1

7 .379** .488** .505* .470* .078 .681* 1
8 .358** .355** .206* .352** .277** .342* .327 1
9 .364 .103 .168 .259* .183 .199* .192 .080 1

10 .303** -.075 -.056 -.098 -.212* -.032 .222* .066 .498** 1

11 -.061 .140 .496** .348** .078 .698* -.023 .004 -.054 .206* 1

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).
Key Indicators:

1= CSR Health Strategy addresses certain social needs.

2= CSR Health Strategy leads to perceived social equity.
3= A health strategy focusing alleviates social problems.
4= CSR Health Strategy creates a sense of satisfaction among employees.
5= CSR Health Strategy improves employee productivity.

37
6= CSR serves to establish a good corporation reputation.
7= CSR Health Strategy gives people a sense of pride in the organization
8= CSR Health Strategy is a source of inspiration and team work.
9= CSR Health Strategy builds a positive workplace environment
10= CSR unit has clear programs that enhance the profits of the organization.
11= Organization Performance

This section intended to measure the correlation between health strategy and the
organization performance. The findings suggested that there was a significant correlation
between CSR Health Strategy addressing certain social needs and the strategy giving
people a sense of pride in the organization at (r=0.379, p>0.05). The relationship was
extended to CSR Health Strategy being a source of inspiration and team work at (r=0.358,
p>0.05) and the CSR unit having clear programs that enhance the profits of the
organization at (r=0.303, p>0.01).

There was also a significant relationship between CSR leading to perceived social equity
and alleviating social problems at (r=0. 359, p>0.05). The relationship was also extended
to CSR giving people a sense of pride in the organization at (r=0.488, p>0.05). There was
also a significant relationship between CSR focus on alleviating social problems and
creating a sense of satisfaction among employees at (r=0.388, p>0.05) and the
relationship was extended to CSR establishing a good corporation reputation at (r=0.481,
p>0.05) as well as enhanced organization performance at (r=0.496, p>0.05).

There was a significant relationship between CSR creating a sense of satisfaction among
employees and being a source of inspiration and team work at (r=0.352, p>0.05). The
relationship was extended to improved organization performance at (r=0.3487, p>0.05).
In addition, there was a strong relationship between CSR Strategy improving employee
productivity and establishing good corporate reputation at (r=0.228, p>0.05). The
relationship was extended to CSR Health Strategy being a source of inspiration and team
work at (r=0.277, p>0.01). There was also a strong correlation between CSR health
strategy building a positive workplace environment and enhanced organization
performance at (r=0.498, p>0.05). The findings are indicated in Table 4.5.

38
4.5 Descriptive of Sports CSR Strategy

Table 4.6: Descriptive Statistics on the Sports CSR Strategy

The Influence of Sports Strategy in the Performance N Mean SD
CSR sports present an opportunity to create shared
96 3.97 0.696
value and a meaningful benefit for society.
CSR in sports promotes accountability by the
98 4.28 0.555
stakeholders.
CSR sports strategy allows the corporation to access
97 4.10 0.881
potential market that it would otherwise not reached.
CSR sports strategy empowers financially challenged
98 4.16 0.760
groups.
CSR sports strategy presents a perfect opportunity to
98 4.15 0.821
show case their potential.
CSR sports strategy influence customers purchase
98 4.09 0.773
intentions.
CSR sports strategy enhance corporate image among a
97 4.08 0.758
diversity of stakeholders.
CSR sports strategy boost corporate image. 96 4.17 0.544
CSR sports strategy builds a sense of community and
95 4.07 0.732
teamwork.
CSR sports strategy builds a good rapport with the
96 4.02 0.703
existing and potential banking clientele.

The study aimed to investigate the influence of sports strategy on the performance of the
organization. Standard deviation was used to measure of the degree to which individual
observations in a dataset deviate from the mean value. The coefficient of variation
indicated the average deviation from the mean across all observations. A smaller value of
the coefficient indicated a general consensus while a large value indicated the lack of
consensus on the statement. CSR sports present an opportunity to create shared value and
a meaningful benefit for society at a mean of 3.97. CSR in sports promotes accountability
by the stakeholders at a mean of 4.28. CSR sports strategy allows the corporation to
access potential market that it would otherwise not reached at a mean of 4.10. CSR sports
strategy presents a perfect opportunity to show case their potential at a mean of 4.16,
meaning corporations like equity bank actively promote their social responsibility
activities taking steps to publicize these efforts through the media and the people who are
not easily reached. Getting the word out about corporate donations, employee volunteer
programs, or other CSR initiatives is a powerful branding tool that the bank uses to build
publicity.

39
Standard deviation was used to measure of the degree to which individual observations in
a dataset deviate from the mean value. The coefficient of variation indicated the average
deviation from the mean across all observations. A smaller value of the coefficient
indicated a general consensus while a large value indicated the lack of consensus on the
statement. The study established that most of the respondents agreed that the CSR sports
strategy allows the corporation to access potential market that it would otherwise not
reached. Second a number of the respondents agreed that CSR sports strategy presents a
perfect opportunity to show case their potential. Thirdly, a number of the respondents
agreed that CSR sports strategy influence customers purchase intentions. Fourth, a
proportion of the respondents agreed that CSR sports strategy empowers financially
challenged groups and CSR sports strategy enhance corporate image among a diversity of
stakeholders. On the other hand, a few respondents agreed CSR in sports promotes
accountability by the stakeholders and a small proportion of the respondents agreed that
CSR sports strategy boost corporate image. The findings are indicated in Table 4.6.

4.5.1 Correlation between Sports Strategy and Organization Performance

Table 4.7: Correlation between Sports Strategy and Organization Performance

1 2 3 4 5 6 7 8 9 10 11
1 1
2 .124 1
3 .215* .386** 1
4 .225* .595** .504 1
5 .199 .555 .536* .522 1
6 .333 **
.409 *
.411 *
.518 **
.283 1
7 .176 .585* .526** .575* .676* .396** 1
8 .119 .549* .501* .568 .491** .418* .596 1
9
.055 .233* .273* .208* .243 .147 .252* .361* 1
10 .276** .476** .370* .492 .357 .453* .485* .412** .236* 1
11 .197 .229* .252* .226* .147 .285* .216* .244* .423** .239* 1

*. Correlation is significant at the 0.05 level (2-tailed).

**. Correlation is significant at the 0.01 level (2-tailed).

Key Indicators:

40
1= CSR sports presents an opportunity to create shared value and a meaningful benefit for
society.
2= CSR in sports promotes accountability by the stakeholders.
3= CSR sports strategy allows the corporation to access potential market that it would
otherwise not reached.
4= CSR sports strategy empowers financially challenged groups.
5= CSR sports strategy presents a perfect opportunity to show case their potential
6= CSR sports strategy influence customers purchase intentions
7= CSR sports strategy enhance corporate image among a diversity of stakeholders.
8= CSR sports strategy boost corporate image
9= CSR sports strategy builds a good rapport with the existing and potential banking
clientele.
10=CSR sports strategy builds a sense of community and teamwork.
11= Organization Performance

This section intended to measure the correlation between sports strategy and the
organization performance. The findings suggested that there was a significant correlation
between the CSR sports presenting an opportunity to create shared value and a
meaningful benefit for society and the strategy influence customers purchase intentions at
(r=0.333, p>0.05). The relationship was extended to the strategy building a sense of
community and teamwork at (r=0.276, p>0.05).

There was also a significant relationship between sports promoting accountability by the
stakeholders and allowing the corporation to access potential market that it would
otherwise not reached at (r=0. .386, p>0.05). The relationship was extended to CSR sports
strategy empowering financially challenged groups at (r=0. .595, p>0.05). In addition,
there was a significant relationship between the strategy empowering financially
challenged groups and sports strategy influencing customers purchase intentions at
(r=0.518, p>0.05).

There was also a significant relationship between CSR sports strategy presenting a perfect
opportunity to show case their potential and boosting corporate image at (r=0.491,
p>0.01). In addition, there was a significant relationship between sports strategy influence
41
customers purchase intentions and enhanced corporate image among a diversity of
stakeholders at (r=0. .396, p>0.05). There was also a significant relation between
corporate image and building a sense of community and teamwork at (r=0.412, p>0.05).
Finally, there was a significant relationship between CSR sports strategy building a good
rapport with the existing and potential banking clientele and improved organization
performance at (r=0.423, p>0.05). The findings are indicated in table 4.7.

4.6 Chapter Summary

This chapter presented the results and findings on the effect of corporate social
responsibility on the performance of the bank; a case of equity bank. This chapter
provided an analysis of the respondents` demographic information as well as the analysis
for each research objectives using mean standard deviation and correlation. To establish
the extent to which the organization performance have an effect on the education
corporate social responsibilities strategies, the findings indicated a clear performance
management can generate positive influence on the organizational performance. To
establish the extent to which the organization performance have an effect on the health
corporate social responsibilities strategies the findings indicated that the Health Strategy
gives people a sense of pride in the organization, engenders teamwork and is a source of
inspiration and connectedness. Building a positive workplace environment is one of the
greatest benefits of promoting social responsibility in the workplace is the positive
environment for employees. To establish the extent to which sports corporate social
responsibilities strategies have on the organization performance, the findings established
that they create a sense of satisfaction among employees and creates value in the minds of
both external and internal shareholders. The next chapter will provide a discussion on the
findings as compared to the findings of previous studies in the literature review. It will
also give the conclusions drawn from the research objectives as well as recommendations
and for further studies.

42
 CHAPTER FIVE

5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction
In this section, the researcher provides a discussion on the findings of the research as
compared to the findings in the literature review, the summary of the study and
recommendations for further improvement on identifying the measures to be taken on the
influence of CSR initiatives on organizational performance of Equity Bank in Kenya. The
research is concluded on the basis of the conclusions drawn from the research objectives.

5.2 Summary

The purpose of the study was to find out the influence of CSR initiatives on
organizational performance of Equity Bank in Kenya. The study was guided by the
following specific objectives: To determine the influence of education strategy on the
performance of Equity Bank, to examine the influence of health strategy on the
performance of Equity Bank and to identify the influence of sports strategy on the
performance of Equity Bank.

This study adopted a descriptive research design. According to Equity Bank (2016) the
population is about 1,300 individuals. These individuals are deemed to posses the
necessary information concerning the various strategies adopted by the bank, which are
fundamental for the current study. The list of the staff members were obtained from
Equity Bank Human Resources database. Random sampling technique was used to collect
more information from the survey. The sample size of 110 was included in the study. The
data collection method adopted in the study was primary data collection method. The
researcher used descriptive methods such as mean, mode, median, percentages, tables and
frequency distribution to compute data analysis. To ensure easy analysis, the
questionnaire was coded according to each variable of the study. This study used
descriptive statistics. Correlation analysis was used to establish the relationship between
CSR and organization performance.

The findings on the influence of Education CSR Strategy in the organization performance
revealed that the education program results in lifetime benefit in the education for needy
43
students. Engaging in community-empowering initiatives such as education, the company
establishes or pursues a long-term growth strategy for the community. Educated and
empowered students today become the firm`s future customers. CSR education leads to
positive organization image. Undertaking corporate social responsibility provides a clear
perspective to the insiders and outsiders that the company strives to become a good
corporate citizen. Through CSR the company enjoys unwavering customer support.
Education empowers families who in turn remain loyal to the firm. This leads to
enhanced market share, sales and profitability for the firm.

The findings on the influence of health CSR Strategy in the organization performance
revealed that the program addresses certain social needs and improves the welfare of
socially-excluded population which leads to empowerment and reduced inequality to
meet their basic human needs. Health strategy focuses on alleviating social problems and
allows employees to be part of a solution to a greater problem above the normal issues of
profit maximization. Health Strategy gives people a sense of pride in the organization,
engenders teamwork and is a source of inspiration and connectedness. Building a positive
workplace environment is one of the greatest benefits of promoting social responsibility
in the workplace is the positive environment for employees.

The findings on the influence of sports CSR Strategy in the organization performance
revealed that companies have rationalized investments in sports strategy enhance brand
reputation. CSR sports strategy creates a sense of satisfaction among employees. CSR
Sports Strategy builds a positive workplace environment. CSR in sports promotes
accountability by the stakeholders. CSR strategies can create a value in the minds of both
external and internal stakeholders. CSR sports strategy boost corporate image. This
positive image can be conceived as reputational capital which can generally imply that
the stakeholders perceive the firm in a positive light because they feel connected to the
firm in one way or another. CSR sports strategy empowers financially challenged groups.

5.3 Discussion

5.3.1 Education CSR Strategy

Most of the respondents agreed that the company educates needy students to create a
sense of purpose. CSR education strategies results in lifetime benefit in the education for
44
needy students. A good deed performed by the firms such as taking needy children to
school creates a feeling or sense of purpose for the employees. Similarly, Lichtenstein et
al. (2010) argues that by engaging in community-empowering initiatives such as
education, the company establishes or pursues a long-term growth strategy for the
community. Educated and empowered students today become the firm`s future customers.
The beneficiaries of such programs are developing a sense that they owe the corporation
and a lot and as such become unwavering customers of the firm. Lichtenstein et al.,
(2010) adds that it is perceptible that CSR is an important way in which firms market
themselves by establishing public presence.

A large number of the respondents agreed that CSR education leads to positive
organization image. The establishment of a positive reputation is one of the indicators of
a firm’s performance. On the other hand, McWilliams and Siegel (2011) warns that bad
performing firms seldom have a positive image while firms that have a positive image are
also those that perform well. However, the establishment of a positive reputation can also
be pursued as a strategy for growth by a firm. It has been established that generally
through CSR strategies, firms can establish and maintain positive image for themselves.
At the same time, the company education initiative establishes a public presence.

A proportion of the respondents agreed that the company balances the need to adding
shareholders value and good corporate citizens. Undertaking corporate social
responsibility provides a clear perspective to the insiders and outsiders that the company
strives to become a good corporate citizen. Using the stakeholders approach the
organization is subordinated to the greater good of the society. Essentially, Pierce and
Robinson (2011) explain that a company should balance the need to carry out actions that
are profitable to shareholders whilst being good corporate citizens. Also, a number of the
respondents agreed that through CSR the company enjoys unwavering customer support.
Management therefore should consider how their actions and strategies would affect the
well-being of employees, local communities, the environment and society.

On the other hand, a few respondents agreed that the education empowers families who in
turn remain loyal to the firm. On the contrary, Palmer (2012) insists that providing
education to bright needy students or children from humble backgrounds increases the
45
future potential of the children not only to become loyal customers of the firm but to
empower their families who in turn remain loyal to the firm. Both the beneficiaries and
their relations attribute their economic status and prosperity to the firm. A small
proportion of the respondents agreed that the company endeavors to increases the future
potential of the children education. Similarly, Webber (2008) agrees that this further leads
to increase in market share, sales and profitability for the firm. In addition, Luo and
Battacharya (2012) suggest that the enhancement of the objectives of community groups
is also an imperative aspect of CSR programs.

5.3.2 Health CSR Strategy

The results established that most of the respondents agreed that CSR Health Strategy
addresses certain social needs. Similarly, Qu (2010) argue that this has helped the
community address certain social needs that such as chronic and communicable diseases
has caused a lot of anxiety and suffering among people all over the world and addressing
these health issues is of fundamental importance not only to the national governments but
to every able person or entity such as corporations. Palmer (2012) adds that HIV/AIDs,
Cancer, Tuberculosis (TB) and Malaria among other diseases are of great worry to the all
stakeholders in the society. Qu (2010) explicitly explains that improving the health and
welfare of socially-excluded populations leads to empowerment and reduced inequality to
meet their basic human needs.

A number of the respondents agreed that a health strategy focus on alleviating social
problems. Similarly, Johnson (2011) argues that a health strategy alleviates social
problems and the firm allows employees to be part of a solution to a greater problem
above the normal issues of profit maximization. Similarly, Palmer (2012) confirms that
equity occurs among the few companies that have extended health initiatives across their
entire value chains to include suppliers, local communities and the general public. This
leads to the realization of the full potential in population health beyond the core base of
the company employees, and to some extent include the general public.

A number of the respondents agreed that the CSR Health Strategy improves employee
productivity. Similarly, Kiko (2008) explains that it is the inspiration that employees
have to perform a task to the best of their ability because they feel that their effort`s not
46
only helps the firm to grow and realize increased profits but that the tasks that they
perform helps address a certain social need. Health is one of the things that most people,
universally value, as key in their lives. The sense of pride leads to motivated employees
who are more likely to perform well. Employers and employees also benefit through
improved morale, reduced absenteeism, increased retention and improved productivity.

A proportion of the respondents agreed that the CSR health strategy gives people a sense
of pride in the organization. Many employees get fulfillment and take pride in a company
that engages in charity. These programs give people a sense of pride in the organization,
engender teamwork and are a source of inspiration and connectedness. Also, Johnson
(2011) explains that building a positive workplace environment is one of the greatest
benefits of promoting social responsibility in the workplace is the positive environment
for employees. When employees and management feel they are working for a company
that has a true conscience, they will likely be more enthusiastic and engaged in their jobs.
This can build a sense of community and teamwork that brings everyone together and
leads to happier, more productive employees.

The effect of the health strategy has proved to be more powerful than the financial
contribution. Similarly, Westover (2010) argue that CSR give the staff a sense of purpose
with the knowledge that the company’s revenue fund good things that truly help people.
The sense of pride comes in by making other peoples’ lives better through the company’s
success. The employees want a sense of pride and fulfillment from their work, a purpose
and importantly a company’s whose values match their own.

5.3.3 Sports CSR Strategy

Companies have rationalized investments in sports strategy enhance brand reputation. A
few respondents agreed that the CSR serves to establish a good corporation reputation.
Similarly, McWilliams et al. (2009) suggest that several organizations have corporate
identities such as brand names that have become pivotal in their competitiveness and
success. As consumers become more concerned with where products come from,
employees now want more from their employer than a paycheck. However, fewer
respondents agreed that the CSR Health Strategy creates a sense of satisfaction among
employees.

47
A small proportion of the respondents agreed that CSR Health Strategy builds a positive
workplace environment. Similarly, Crowth and Aras (2008) explain that the
organizational CSR consists of the attitudes, values and beliefs that are demonstrated in
the workplace on a daily basis that affect the mental and physical well-being of
employees. Personal health resources are the resources, opportunities and flexibility the
organization provides to support employees’ efforts to improve or maintain their personal
health practices or have a positive work environment. Porter and Kraer (2006) add that
many employers recognize that they have a direct interest in creating a positive work
environment that helps employees to make healthy choices through corporate social
responsibility.

Most of the respondents agreed that CSR in sports promotes accountability by the
stakeholders. CSR strategies can create a value in the minds of both external and internal
stakeholders. Similarly, Panayiotou (2009) suggests that that CSR requires accountability
by all leaders, individuals, organizations, stakeholders, customers, and community
members, and yet accountability is complex. The factors which influence the
effectiveness of corporate accountability are multiple and tightly interconnected (Crowth
and Aras, 2008). Klein and Dawar (2004) add that business corporations do utilize
corporate social responsibility (CSR) to enhance their image among a diversity of
stakeholders. The CSR activities are used to establish a positive or reputational image
among the minds of the stakeholders of the advantages of the corporation.

A proportion of the respondents agreed that CSR sports strategy boost corporate image.
This positive image can be conceived as reputational capital which can generally imply
that the stakeholders perceive the firm in a positive light because they feel connected to
the firm in one way or another. Similarly, Schwenker and Wulf (2013) suggest that
modern corporations that engage in sports CSR strategies often experience increased
financial performance and increased market share. The sportsmen themselves and their
families often purchase the firm’s products and services, as they feel more attached to it
(Crowth & Aras, 2008). On the other hand, Schwenker and Wulf (2013) adds that CSR
influenced not only the corporations reputation but allowed the corporation to retain
employees especially those that took part in such strategies especially sports.

48
A significant proportion of the respondents agreed that CSR sports strategy empowers
financially challenged groups. Economic responsibilities are at the apex of an
organization’s CSR concerns. CSR transforms the business environment for economic
accountability, which form the basis of business’ success (McWilliams et al., 2009).
According to Klein and Dawar (2004), business corporations do utilize corporate social
responsibility (CSR) to establish a positive or reputational image among the minds of the
customers of the advantages of the corporation. As such, CRS acts as an effective
marketing tool by which corporations create legitimacy for their existence and
communicate the business products and services to potential clients (Caroll & Shabana,
2005).

A significant proportion of the respondents agreed that the CSR sports strategy presents a
perfect opportunity for sports personnel to show case their potential. According to Clark
(2007), upcoming Kenyan runners have found a platform to launch their athletics careers
in an international marathon on their home soil this strengthening the CSR social pillar at
Kenyan home front. Others have found the marathon a perfect opportunity to show case
their potential and move on to participate in International meets (Clark, 2007). Similarly,
Palmer (2012) argues that a sports-centered CSR strategy allows the corporation to access
potential market that it would otherwise not reached. Through sporting activities,
sponsored by the corporation, especially in the informal settlements and slum areas, the
corporation is able to access such populations and create awareness of its products
(Carroll & Shabana, 2010).

CSR sports strategy allows the corporation to access potential market that it would
otherwise not reached. Clark (2007) argues that CSR facilitate increase in market share.
Similarly, Peloza (2015) conducted a study among selected firms and while focusing on
sports strategy alone found CSR influenced customers purchase intentions and
determined whether a customer was willing to purchase or not purchase the firm’s
products. According to Schwenker and Wulf (2013) CSR influenced not only the
corporations reputation but allowed the corporation to retain employees especially those
that took part in such strategies especially sports.

49
A small proportion of the respondents agreed that CSR sports strategy builds a good
rapport with the existing and potential banking clientele. In developing countries CSR is a
potent tool for shaping consumer perception and building a company’s image.
Corporations like that equity bank actively promote their social responsibility activities
taking steps to publicize these efforts through the media. Similarly, Pierce and Robinson
(2011) argue that getting the word out about corporate donations, employee volunteer
programs, or other CSR initiatives is a powerful branding tool that the bank uses to build
publicity for you in both online and print media. The seeing believes initiative has
become a popular tool for the bank to not only communicate but also build good rapport
with the existing and potential banking clientele (Porter & Kraer, 2006).

A small proportion of the respondents agreed that CSR sports present an opportunity to
create shared value and a meaningful benefit for society. Similarly, Porter and Kraer
(2006) argue that CSR presents an opportunity to create shared value and a meaningful
benefit for society that is also valuable to the business. The mutual dependence of
corporations and society implies that both business decisions and social policies must
follow the principle of shared value. To put these broad principles into practice, a
company must integrate a social perspective into the core framework it uses to understand
competition. As such, CRS acts as an effective marketing tool by which corporations
create legitimacy for their existence and communicate the business products and services
to potential clients (Caroll & Shabana, 2005).

5.4 Conclusion

5.4.1 Education CSR Strategy

CSR education strategies results in lifetime benefit in the education for needy students.
Engaging in community-empowering initiatives such as education, the company
establishes or pursues a long-term growth strategy for the community. Educated and
empowered students today become the firm`s future customers. CSR education leads to
positive organization image. The company education initiative establishes a public
presence. Undertaking corporate social responsibility provides a clear perspective to the
insiders and outsiders that the company strives to become a good corporate citizen.
Through CSR the company enjoys unwavering customer support. Education empowers

50
families who in turn remain loyal to the firm. This leads to enhanced market share, sales
and profitability for the firm.

5.4.2 Health CSR Strategy

CSR Health Strategy addresses certain social needs and improves the welfare of socially-
excluded population leads to empowerment and reduced inequality to meet their basic
human needs. Health strategy focuses on alleviating social problems and allows
employees to be part of a solution to a greater problem above the normal issues of profit
maximization. Health Strategy gives people a sense of pride in the organization,
engenders teamwork and is a source of inspiration and connectedness. Building a positive
workplace environment is one of the greatest benefits of promoting social responsibility
in the workplace is the positive environment for employees.

5.4.3 Sports CSR Strategy

Companies have rationalized investments in sports strategy enhance brand reputation.
CSR Health Strategy creates a sense of satisfaction among employees. CSR Health
Strategy builds a positive workplace environment. CSR in sports promotes accountability
by the stakeholders. CSR strategies can create a value in the minds of both external and
internal stakeholders. CSR requires accountability by all leaders, individuals,
organizations, stakeholders, customers, and community members, and yet accountability
is complex. Business corporations do utilize corporate social responsibility (CSR) to
enhance their image among a diversity of stakeholders. CSR sports strategy boost
corporate image. This positive image can be conceived as reputational capital which can
generally imply that the stakeholders perceive the firm in a positive light because they
feel connected to the firm in one way or another. CSR sports strategy empowers
financially challenged groups.

5.5 Recommendations
5.5.1 Recommendation for Improvement
5.5.1.1 Education CSR Strategy
The study recommends that equity should educate needy students to create a sense of
purpose. This is because providing education to bright needy students or children from
51
humble backgrounds increases the future potential of the children. The programs enable
the company to pursue a long-term growth strategy for the community. It also establishes
a positive reputation as one of the indicators of a firm’s performance. The company
education initiative should establish a public presence while being good corporate
citizens.

5.5.1.2 Health CSR Strategy

The study recommends that the CSR Health Strategy should address certain social needs
that are essential for everyone. A health strategy should be able to alleviate social
problems and allow employees to be part of a solution to a greater problem above the
normal issues of profit maximization. CSR Health Strategy should inspire the employees
to improve their productivity, morale, reduced absenteeism, increased retention and
improved productivity. This can build a sense of community and teamwork that brings
everyone together and leads to happier, more productive employees.

5.5.1.3 Sports CSR Strategy

The study recommends that the investments in sports strategy should enhance brand
reputation of the company. CSR Health Strategy should create a sense of satisfaction
among employees. CSR in sports should promote accountability to the stakeholders and
create value in the minds of both external and internal stakeholders. CSR should create
accountability among the company leaders, individuals, organizations, stakeholders,
customers and community members. CSR should be used as an effective marketing tool
by which corporations create legitimacy for their existence and communicate the business
products and services to potential clients.

52
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 APPENDICES

APPENDIX I: INTRODUCTORY LETTER

Dear Sir/ Madam,

RE: RESEARCH STUDY

I am pleased to inform you that I am a student at United States International University

pursuing a degree of Masters in Business Administration (M.B.A). I am conducting
research on the impact of corporate social responsibility strategy on the performance
commercial banks in Kenya: a case study of Equity bank of Kenya.
Please note that any information you give will be treated with confidentiality and at no
instance will it be used for any other purpose other than for this project. Your assistance
will be highly appreciated. I look forward to your prompt response.

Yours faithfully,

Bernice Wachuka Karimi

57
 APPENDIX II: QUESTIONNAIRE

Section A: DEMOGRAPHIC PROFILE

Please answer the following demographical questions below

1. Gender
I. Male [ ]
II. Female [ ]

2. Age
I. 20-30 years [ ]

II. 31-40 years [ ]

III. 41and above years [ ]

3. What is the highest level of education you have received?

Certificate [ ] Diploma [ ] Degree [ ] Masters [ ]

Section B: SOCIAL RESPONSIBILITIES PRACTICES

Please fill in the questionnaire and tick one which best applies to you.

4. What is your corporate social responsibility activity?

I. Education Programs [ ]

II. Health Programs [ ]

III. Sports Programs [ ]

IV. Others [ ]

5. How often do you participate in the corporate social responsibility activities?

I. Monthly [ ]
II. Annually [ ]
III. Twice a year [ ]

58
SECTION C: EDUCATION CSR STRATEGY

For each of the following statements indicate your level of agreement

Disagree

Disagree
Slightly

Slightly
Neutral

Agree

Agree
Quite

Quite
Statements

1 2 3 4 5
6. The company educates needy students to
create a sense of purpose.

7. The company education initiative leads to

unwavering customer support.

8. The company education initiative

establishes a public presence.

9. The company endeavors to increase the

future potential of the children education

10. Education empowers families who in turn

remain loyal to the firm.

11. CSR education leads to enhanced

employee gratification.

12. CSR education leads to positive

organization image.

13. The company enhances growth though

Master- Card.

14. The company balances the need to

adding shareholders value and good
corporate citizens.

15. CSR leads to good relations with the key

stakeholders especially the customers.

59
SECTION D: HEALTH CSR STRATEGY

For each of the following statements indicate your level of agreement

eSlightly

Slightly
Disagre

Disagre
eNeutral

Agree

Agree
Quite

Quite
Statements

1 2 3 4 5
16. CSR Health Strategy addresses certain
social needs.

17. CSR Health Strategy leads to perceived

social equity.

18. A health strategy focusing alleviates

social problems.

19. CSR Health Strategy creates a sense of

satisfaction among employees.

20. CSR Health Strategy improves employee

productivity.

21. CSR serves to establish a good

corporation reputation.

22. CSR Health Strategy gives people a sense

of pride in the organization.

23. CSR Health Strategy is a source of

inspiration and team work.

24. CSR Health Strategy builds a positive

workplace environment.

25. CSR Health Strategy attracts customers

through social events.

60
SECTION E: SPORTS CSR STRATEGY

For each of the following statements indicate your level of agreement

Disagree

Disagree
Slightly

Slightly
Neutral

Agree

Agree
Quite

Quite
Statements 1 2 3 4 5
26. CSR sports present an opportunity to
create shared value and a meaningful
benefit for society.
27. CSR in sports promotes accountability by
the stakeholders.
28. CSR sports strategy allows the
corporation to access potential market that
it would otherwise not reached.
29. CSR sports strategy empowers financially
challenged groups.
30. CSR sports strategy presents a perfect
opportunity to show case their potential.

31. CSR sports strategy influence customers

purchase intentions.
32. CSR sports strategy enhance corporate
image among a diversity of stakeholders.
33. CSR sports strategy boost corporate
image.
34. CSR sports strategy builds a sense of
community and teamwork.
35. CSR sports strategy builds a good rapport
with the existing and potential banking
clientele.

61
SECTION F: ORGANIZATIONAL PERFORMANCE

For each of the following statements indicate your level of agreement

Disagree

Disagree
Slightly

Slightly
Normal
Statements

Agree

Agree
Quite

Quite
1 2 3 4 5

34. CSR plays an important role in the

organizations strategy in creating stakeholder
value.
35. CSR unit has clear programs that
enhance the profits of the organization.
36. CSR has led to growth of customers in
the company.
37. CSR improves market share in the
organization.
38. CSR leads to good corporate citizenship.

39. CSR creates a positive organization

image.
40. CSR influences employee retention.

41. CSR leads to employee satisfaction.

THANK YOU

62