The Effect of Corporate Social Responsibility on Organizational Performance: In the Case of Derba Midroc Cement Factory in Addis Ababa, Ethiopia
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Date
2023-03
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Addis Ababa University
Abstract
Corporate Social Responsibility (CSR) is generally being used to drive organizations to build up a great affiliation with external and internal stakeholders to enhance organizational performance. Ethiopia is one of the developing countries where the attitude of corporate social responsibility is not well developed, and the governance system is not having a well-developed process and procedures to guide and support the activity. The study has aimed to determine the effect of corporate social responsibility on the organization performance of Derba cement factory in Addis Ababa, Ethiopia. The study collected through primary data by distributing questionnaires to a sample of Derba Midroc cement factory employees. Out of the 206 questionnaires, 187 (97%) respondents completed and returned the questionnaire while other stakeholders were excluded for the target respondents due to various limitations. Data was collected through five points Likert scales of the close-ended questionnaire. The quantitative data was coded and analyzed using SPSS 23 statistical tools, and the study's findings are explained in this study using descriptive and inferential (correlation and regression) analysis. The mean value of philanthropic, Ethical, Legal and Economic CRS were 3.59, 3.58, 3.68, 3.45 and 3.53, respectively. This study produced a correlation result for each independent variable with respect to dependent variables and the study found significant relationships between all mentioned dimensions of CSR with organizational performance at the 5% level of P value (i.e., 0.000). At the end of the regression analysis of coefficients presented, the values of philanthropic, ethical, legal and economic responsibility are 0.141, 0.151, 0.198, and 0.453, respectively; this shows that the values of all independent variables are positive, implying that independent variables have a significant effect on Organizational performance, and the hypothesis result of this study shows that all independent variables accepted as the significant value less than 0.05. In general, the researcher discovered issues with specific variables that is recommended. As a result, cement factory’s should improve their existing CSR practice/activities for better organizational performance, and it is recommended that they continue to be on the strength side against those elements of CSR and take actions (recommended) as improvement areas
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Corporate social responsibility