What are the Factors that Affect the Practice and Benefits of CSR in Kenya?
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This study examines the notion of CSR in particular the factors that affect its practice and benefits within the Kenyan community. The study will also look at the development and implementation of CSR in developing countries, particularly Kenya.
Corporate Social Responsibility refers to the general beliefs held by citizens that modern businesses have social responsibilities beyond their duty to investors and stockholders (Visser et al 2010). Over the years, the business community has developed an interest in CSR mostly because of what it means to them in practice. CSR is not only about taking responsibility but being held accountable for the economic, environmental, and social impacts of the organization and communicating this to all company stakeholders. One way to achieve this is by providing plausible information to stakeholders on how the organization manages these impacts and performs over time.
It is the voluntary integration of social and environmental concerns into business operations. CSR can have positive impacts on society, the environment, and the business itself. However, the practice and benefits of CSR in Kenya are influenced by various factors, such as:
The level of awareness and commitment of the business leaders and managers to CSR principles and practices.
The availability and accessibility of resources, such as financial, human, and technical, to implement CSR initiatives and projects.
The legal and regulatory framework that supports or hinders CSR activities and reporting.
The expectations and demands of the stakeholders, such as customers, employees, suppliers, investors, government, media, and civil society, regarding the social and environmental performance of the business.
The cultural and ethical values shape the attitudes and behaviors of the business and its stakeholders towards CSR issues.
These factors can either facilitate or constrain the adoption and implementation of CSR in Kenya, as well as affect the outcomes and benefits of CSR for the business and its stakeholders which is to be discussed in detail in the following sections of this study.
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What are the factors that affect the practice and benefits of CSR in Kenya? A Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Evaluate the importance of Corporate Social Responsibility (CSR) on the performance of organizations
- Understand and discuss the various factors that affect the practice and benefits of CSR in Kenya
- Apply the concept to real-life scenarios
1.0 INTRODUCTION
Corporate social responsibility is the voluntary integration of social and environmental concerns into business operations and interactions with stakeholders. CSR can bring various benefits to businesses, such as enhancing their reputation, attracting and retaining talent, improving customer loyalty, reducing costs and risks, and fostering innovation. However, the practice and benefits of CSR may vary depending on the context and factors that influence the decision-making and implementation of CSR activities.
In this report, we will explore some of the factors that affect the practice and benefits of CSR in Kenya, a developing country in East Africa with a population of about 57 million people and a GDP of about $110.3 billion. Kenya faces many social and environmental challenges, such as poverty, inequality, corruption, insecurity, climate change, water scarcity, deforestation, and wildlife conservation. These challenges create both opportunities and barriers for businesses to engage in CSR and contribute to sustainable development.
Some of the factors that affect the practice and benefits of CSR in Kenya are:
Legal and regulatory framework:
Kenya has a relatively supportive legal and regulatory framework for CSR, with various laws and policies that encourage or require businesses to address social and environmental issues, such as the Constitution of Kenya 2010, the Companies Act 2015, the Environmental Management and Coordination Act 1999, the Occupational Safety and Health Act 2007, the Employment Act 2007, the Public Procurement and Asset Disposal Act 2015, and the Bribery Act 2016. However, there are also gaps and challenges in the enforcement and compliance of these laws and policies, as well as inconsistencies and overlaps among them. Moreover, some sectors or industries may have more specific or stringent regulations than others, which may affect their CSR practices and benefits.
Stakeholder expectations and pressures:
Businesses in Kenya face various expectations and pressures from different stakeholders regarding their CSR performance, such as customers, employees, investors, suppliers, communities, civil society organizations, media, government agencies, and international organizations. These stakeholders may have different or conflicting interests, values, norms, standards, and demands for businesses to address social and environmental issues.
For example, customers may demand high-quality products or services at low prices, while also expecting businesses to respect human rights, protect the environment, and support social causes.
Employees may seek fair wages and working conditions, while also wanting to work for a company that has a positive impact on society.
Investors may look for financial returns and risk management, while also requiring businesses to disclose their environmental, social, and governance (ESG) performance.
Suppliers may offer low-cost inputs or services, while also complying with ethical sourcing or sustainability criteria.
Communities may benefit from business activities or investments in infrastructure or social programs, while also suffering from negative externalities or conflicts over resources or land rights.
Civil society organizations may monitor or advocate for business accountability or responsibility, while also collaborating or partnering with businesses on common goals or projects.
Media may expose or criticize business malpractices or scandals, while also promoting or recognizing business achievements or initiatives.
Government agencies may regulate or tax business operations or activities, while also facilitating or incentivizing business contributions to national development plans or priorities.
International organizations may set or influence global norms or standards for CSR, while also providing guidance or support for business alignment with international frameworks or agreements.
Business culture and leadership:
The culture and leadership of a business can have a significant influence on its CSR practice and benefits. Culture refers to the shared values, beliefs, attitudes, and behaviors that shape how a business operates and interacts with its stakeholders. Leadership refers to the vision, strategy commitment, and role modeling of the top management and board of directors of a business regarding its CSR objectives and actions. Positive and proactive business culture and leadership can foster a sense of purpose, mission, and responsibility among all levels and functions of a business to integrate CSR into its core values and operations. Negative or reactive business culture and leadership can hinder or undermine the adoption or implementation of CSR practices or initiatives.
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