Impact of corporate social responsibility on firms’ financial performance: The case of CRDB Bank PLC and NMB Bank PLC Tanzania
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Date
2015-07-28
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St John's University of Tanzania
Abstract
This study focused on the impact of corporate social responsibility on firm’s financial performance. Specifically the study aimed to determine grounds for the companies to engage in corporate social responsibility, to determine types of corporate social responsibility which are mostly practiced by the firms and lastly to examine relationship between corporate social responsibility practices and firm’s financial performance. This study adopted a case study research design where by CRDB BANK PLC and NMB BANK PLC located at Dodoma was selected. Data were collected through questionnaire, interview and documentary source such as journals, books and various organizations reports for secondary information for the year 2011-2014. A total of 44 respondents were selected and data collected were analyzed both qualitatively and quantitatively with the help of computer software programme called Statistical Package for Social Sciences (SPSS). The outcome of the study revealed that, the companies’ motives to engage in CSR include preserving or improving reputation and give profit back to community. The main type of CSR practiced by companies is philanthropic. The relationship between CSR and financial performance reveals that companies practicing CSR increase financial performance at moderate level. Above all, the analysis revealed that there is a significant relationship between CSR and profitability and the hypothesis that was formulated was tested and the result shows that there is positive significant relationship between corporate social responsibility and firm’s financial performance in case of CRDB BANK PLC AND NMB BANK PLC. vii Finally the study recommended companies may promote sales, expand the branches in the region which will result into increase on the amount of profit hence uplift the amount of percentage to CSR for the social, economic and environmental benefits to the beneficiaries.