ABSTRACT
While the creation of a strong reputation and image has been recognized as an important factor in the success or failure of virtually all major organizations for some time, CSR has only recently been acknowledged as one of the most important factors in determining corporate reputation. The study examined the effects of corporate social responsibility on corporate identity of small and medium telecommunication firms in Kenya. The study was guided by four objectives: To examine the effect of economic aspect of corporate social responsibility on corporate identity of telecommunication firms in Kenya, to find out effect of legal aspect of corporate social responsibility on corporate identity of telecommunication firms in Kenya, to examine effect of philanthropic aspect of corporate social responsibility on corporate identity of telecommunication firms in Kenya and to examine the effect of ethical aspect of corporate social responsibility on corporate identity of telecommunication firms in Kenya. Various stakeholders will benefit from the findings: SMEs, practitioners, policy- makers and academics. The study adopted a descriptive research design. Proportionate Stratified sampling technique was used to select a sample of 203 both employees and customers. Structured questionnaire was used containing both open and close-ended questions. Data was analyzed using SPSS and findings presented using descriptive tools such as means and standard deviations. The entire alternative hypotheses were accepted, generally showing that CSR has a significant positive relationship with corporate identity of telecommunication firms in Kenya. The study found that organizations in certain settings engage more actively in CSR and ethical programs to ensure effectiveness of their corporate identity efforts. It also showed that larger, service based firms should keep in mind that CSR will help them to increase their image attractiveness, and as such are able to endorse image- building marketing activities.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
In an age of reputation, corporate social responsibility (CSR) has been debated vigorously by scholars and managers across business functions such as communications, marketing, finance, and human resource across the world (Lindgreen, Swaen, & Maon, 2009). Managing CSR is always a vital issue in the boardroom. Most multinational corporations invest millions to manage CSR programs to meet corporate social performance in their origin country and other countries in which they operate. Managing CSR programs is important to companies because it influences underlying intangible assets such as corporate reputation, identity, and image.
According to World Business Council for Sustainable Development (1998), corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large.
Flavián, Guinaliu and Torres, (2005); Chattananon, et al. (2007), states that corporate identity is the understanding about the company by any stakeholder. Corporate identity is determined by the elements provided by controllable and uncontrollable sources of information. Worcester (2009) notes that CI consists of product image, brand image and brand consumer image. Yeo, Youssef (2010) state that CI is a source of competitive advantage: due to the fact that CI can only be formed over a long time, it becomes difficult to imitate. Besides CI creates consumer trust and deters competitors from entering the market.
A sizable body of research, including research and publications from the field of visual/graphic design, organizational studies, and marketing addresses the topic of corporate identity, image, and branding of business organizations (Brown, Dacin, Pratt, & Whetten, 2006). In his study, Balmer (2008) discusses five principal schools of thought relating to identity and identification which are characterized as corporate identity, communicated corporate identification, stakeholder corporate identification, stakeholder cultural identification, and envisioned identities and identifications. Corporate identity deals with the impressions, image, and personality that an organization presents to its stakeholders (Schmitt & Pan, 1994), in order to differentiate itself and create a unique position in the environment in which it operates (Simoes & Dibb, 2008). The objective of corporate identity management (CIM) is to establish a favorable reputation with an organization‟s stakeholders, which the stakeholders then translate into a propensity to buy the organization‟s product or services, to work for the organization or to invest in it (Balmer, 1995).
CSR is driven by the philosophy that businesses are part of the society and as such ought to contribute positively to social goals and aspirations (Jones, 2005). In this regard, some CSR proponents argue that businesses should be held accountable (Maignan et al. 2005) not only for their economic responsibilities to shareholders, but also for the non-economic consequences of their activities on the society and the natural environment (Robins, 2005). As a result, businesses have begun to accord high value and importance to responsible behaviour (Assadourian, 2006). There is mounting evidence indicating that firms now invest heavily and ceaselessly on CSR for instance, in year 2005 alone, over $US3.6 billion was committed voluntarily by business organizations to CSR activities and yet the amount of charitable and philanthropic contributions made by businesses to society continues to rise (Renz & Lawrence, 2005).
Without any doubt, the vast Resources committed to corporate identity and CSR practices are reflective of the relevance, growth and importance of these two disciplines (Grayson and Hodges, 2004). More importantly, the surge in the number of corporate scandals such as nuclear power disaster in Russia; dismantling of oil rigs in the North Sea; escape of poisonous gas from a chemical plant in India; sudden and untimely collapse of big businesses and increased pressure from stakeholders, which have profound effects on business and corporate reputation have undoubtedly positioned corporate identity and CSR as a legitimate business practice in the contemporary world of work (Perrini, 2006). The increased drive towards corporate identity and CSR is made more evident by the rising volume of corporate identity literatures (i.e. social reports), which has continued to generate the interest among big multinational businesses (Kolk, 2005; Gond & Herrbach, 2006).
European Commission (July 2001) with the Green Paper “Promoting a European framework for Corporate Social Responsibility” defined the concept of CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.
Studies have shown that corporate identity attributes can be detected by observing a company‟s strategy, behavior, its rules, and structure (Melewar & Karaosmanoglu, 2006). Corporate identity is characterized by high quality mentality, supreme products, financial stability, an excellent working environment, as well as sensitivity for CSR aspects (Einwiller & Will, 2002). Elsewhere, He and Balmer (2013) connect an effective corporate identity management with an improved corporate image in the short term and a better corporate reputation in the long term. Corporate image relates to the perception of expressed corporate identity (Margulies, 1977).
According to Baumgarth and Binckebanck (2011) the establishment of a CSR-oriented corporate identity and culture are preconditions to achieve a reliable and trustworthy image and reputation. Both are highly affected by CSR disclosure (Guidry & Patten 2012). Consequently, the integration of CSR into the corporate identity is crucial for a successful CSR concept. Therefore, managers should utilize corporate identity to give organizational members some sense of purpose that motivates them to achieve common goals (Cornelissen 2002, p. 266). Corporate identity management enables the ability to express individuality, to manifest differentiating attributes, to set and express strategy as well as to communicate effectively (Balmer, 2001). In most cases the alignment of corporate identity towards CSR requires the adoption of new values and beliefs as well as the definition of a new strategy and vision (Heikkurinen & Ketola 2012). Additionally, the adoption of CSR principles requires most firms to revise or establish processes and structures. Accordingly, Lozano et al. (2016) found a strong reciprocal relationship for organizational change management and CSR disclosure.
1.1.1: Small and Medium Enterprises in Kenya
The concept of SMEs varies from one country to another depending on the indicators used (Ong‟olo & Awino, 2013). The first criteria based on the number of employees, states that SMEs are those enterprises below a certain number of workers (can range from less than 10 to less than 50 employees). The second criterion states SMEs as the degree of legal formality, and has been used to distinguish between the formal and informal sectors. Small and medium enterprises (SMEs) are considered as enterprises which are not registered and do not comply with the legal obligations concerning safety, taxes and labour laws. The third criterion states SMEs are based on the limited amounts of capital and skills per worker.
Even though the definition varies from one country to another (depending on the economic structure), the regulatory and institutional framework for the Kenya‟s SMEs has been based on the number of employees and the company‟s annual turnover (MSMEs Act, 2012). For instance, the micro enterprises have been defined as those employing less than 10 workers
with annual turnovers of less than KES 500,000 and capital formation of less than KES 5 million for services or less than KES 10 million for enterprises doing manufacturing. Small enterprises are defined as those that employ between 10 and 50 workers with annual turnovers between KES 500,000 and KES 5 million and capital formation between KES 5 million and KES 20 million for services or between KES 5 million and KES 50 million for enterprises doing manufacturing (see table 1.1).
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Item Type: Kenyan Topic | Size: 77 pages | Chapters: 1-5
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