Impact Of Corporate Social Responsibility On Firms’ Financial Performance: A Case Of Zantel And Tanfoam Arusha

ABSTRACT

The idea that corporations have social responsibility (CSR) to the society is as old as commerce that started almost 2000 years ago. This study focused on the impact of corporate social responsibility on firm‟s financial performance. The aim was to analyze the consequences of corporate social responsibility on 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 Zantel and Tanfoam Ltd located at Arusha were selected. Data were collected through questionnaire and documentary source such as journals, books and various organizations reports for secondary information. A total of 42 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) version 16.0. 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. Eventually, 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.