EFFECT OF STRATEGIC MANAGEMENT PRACTICES ON THE PERFORMANCE OF CORPORATE SOCIAL RESPONSIBILITY OF PARASTATALS IN KENYA

Performance of Corporate Social Responsibility is heralded by some strategy academics and practitioners as the new paradigm of management. Recent massive corporate failures and scandals have aroused attention to re-looking at the significant effect of strategic management practices on the performance of Corporate Social Responsibility of parastatals in Kenya. There is little theoretical and empirical attention paid to understanding the reasons why or why not parastatals engaged in performance of Corporate Social Responsibility. Much emphasis has been on establishing the effect of Corporate Social Responsibility on financial performance instead of examining the effect of strategic management practices on the performance of Corporate Social Responsibility. To this effect, scholars have called for more rigorous studies to determine the usefulness of strategic management practices as strategic orientation for performance of Corporate Social Responsibility. Four specific objectives formed the basis of study and these are to examine: the effect of strategic competitive practice, strategic Corporate Governance practice, strategic planning practice and strategic total quality management practice on the performance of Corporate Social Responsibility of parastatals in Kenya. The findings of the study show that the independent variables SCP, SCGP, SPP and STQMP had a significant effect on the performance of Corporate Social Responsibility. Further, variables SCP and STQMP had a positive significant effect on the performance of Corporate Social Responsibility while variables SCGP and SPP had a negative effect on the dependent variable but all of them were significant. The regression coefficient for SCP was both positive and significantly different from International Journal of Arts and Commerce ISSN 1929-7106 www.ijac.org.uk 70 zero (t =5.416, p-value =0.045). The regression coefficient for SCGP was negative (Beta = -0.149) and thus was significantly different from zero (t = -2.011, p-value =0.046). The coefficient for SPP was both negative and moderate but the standard t-test was significant (t = -3.296, p-value =0.001). STQMP was positive as hypothesized and the coefficient was significantly different from zero (t= 9.407, p-value = 0.000). Therefore, the hypotheses for the two of the theoretical variables (SCP and STQMP) were supported by the data while the effect of SCGP and SPP was negative. As much as STQMP had the highest effect, the other practices had moderate effect whose effect cannot be ignored. Research findings indicate that strategic management practices in the parastatals remained a critical challenge to performance of Corporate Social Responsibility. The findings also indicate disconnect between resource allocation by the government and performance of Corporate Social Responsibility. Therefore, from the findings the study concludes that the greater the usage of strategic management practices in the parastatals, the greater would their performance of Corporate Social Responsibility be. The study recommends that parastatals in Kenya should adopt strategic management practices to facilitate improvement in their corporate image and reputation and ultimately general performance in the global arena. From the study, it comes out clearly that all the practices had an effect on performance of Corporate Social Responsibility. The study provides assistance to policy makers on coming up with clear policies on improving performance of Corporate Social Responsibility of Parastatals.

[1]  Saravanan Krishnaswamy.  Strategic Management – Formulation, Implementation and Control* , 2017 .

[2]  Staffan Brege,et al.  Customer involvement in service production, delivery and quality: the challenges and opportunities , 2013 .

[3]  Houn-Gee Chen,et al.  The impact of financial services quality and fairness on customer satisfaction , 2012 .

[4]  P. Gazzola,et al.  Corporate Performance and Corporate Social Responsibility (CSR). A necessary choice , 2012 .

[5]  S. Yapa.  Total quality management in Sri Lankan service organizations , 2012 .

[6]  M. Binks,et al.  A study on the use of mixed method approach via sequential procedure to investigate corporate governance in corporate entrepreneurship among the 100 U.K financial times stock exchange (FTSE) companies , 2012 .

[7]  James Kahiri,et al.  Relationship between Strategic Human Resource Management and Firm Performance of Kenya’s Corporate Organizations , 2012 .

[8]  J. Moon,et al.  An Institution of Corporate Social Responsibility (CSR) in Multi-National Corporations (MNCs): Form and Implications , 2012 .

[9]  Donald S. Siegel,et al.  Creating and Capturing Value , 2011 .

[10]  Dirk Michael Boehe,et al.  Corporate Social Responsibility, Product Differentiation Strategy and Export Performance , 2010 .

[11]  Fahri Karakaş,et al.  Spirituality and Performance in Organizations: A Literature Review , 2010 .

[12]  P. Ellis.  Is Market Orientation Affected by the Size and Diversity of Customer Networks? , 2010 .

[13]  Son K. Lam,et al.  The Diffusion of Market Orientation Throughout the Organization: A Social Learning Theory Perspective , 2010 .

[14]  J. Harrison,et al.  Managing for Stakeholders, Stakeholder Utility Functions, and Competitive Advantage. , 2010 .

[15]  Semra F. Ascigil,et al.  Toward Socially Responsible SMEs? Quality Award Model as a Tool , 2010 .

[16]  Reza Barkhi,et al.  The strategic management of information technology in UAE hotels: An exploratory study of TQM, SCM, and CRM implementations , 2009 .

[17]  Jeremy Galbreath,et al.  Drivers of Corporate Social Responsibility: The Role of Formal Strategic Planning and Firm Culture , 2009 .

[18]  K. Glaister,et al.  A comparison of strategic planning practices in companies from the UK and Turkey , 2009 .

[19]  Susan Meyers.  Cultivating trust: the board-medical staff relationship. , 2008, Trustee : the journal for hospital governing boards.

[20]  M. Toffel,et al.  Organizational Responses to Environmental Demands: Opening the Black Box , 2008 .

[21]  Dima Jamali,et al.  Corporate Governance and Corporate Social Responsibility Synergies and Interrelationships , 2008 .

[22]  Thomas Maak.  Undivided Corporate Responsibility: Towards a Theory of Corporate Integrity , 2008 .

[23]  Hale Kaynak,et al.  A replication and extension of quality management into the supply chain , 2008 .

[24]  L. L. Rodrigues,et al.  Social responsibility disclosure: A study of proxies for the public visibility of Portuguese banks , 2008 .

[25]  J. Solomon,et al.  Corporate Governance and Accountability , 2008 .

[26]  Terry B. Porter.  Managerial applications of corporate social responsibility and systems thinking for achieving sustainability outcomes , 2008 .

[27]  Klaus J. Zink,et al.  From total quality management to corporate sustainability based on a stakeholder management , 2007 .

[28]  D. Hambrick,et al.  What is strategic management, really? Inductive derivation of a consensus definition of the field , 2007 .

[29]  Robert F. Lusch,et al.  Marketing's Evolving Identity: Defining Our Future , 2007 .

[30]  Graham Beaver,et al.  The strategy payoff for smaller enterprises , 2007 .

[31]  Eric M. Olson,et al.  The moderating influence of strategic orientation on the strategy formation capability–performance relationship , 2006 .

[32]  Linda S. Munilla,et al.  The Role of Strategic Conversations with Stakeholders in the Formation of Corporate Social Responsibility Strategy , 2006 .

[33]  B. Husted,et al.  Taking Friedman Seriously: Maximizing Profits and Social Performance* , 2006 .

[34]  P. Hyland,et al.  Continuous innovation in a complex and dynamic environment: The case of the Australian health service , 2006 .

[35]  Amir Rubin,et al.  Corporate Social Responsibility as a Conflict Between Shareholders , 2006 .

[36]  S. Schmidheiny.  Turning Point: A View of Corporate Citizenship in Latin America , 2006 .

[37]  Abagail McWilliams,et al.  Corporate Social Responsibility: Strategic Implications , 2006 .

[38]  Timothy Smith.  Institutional and Social Investors Find Common Ground , 2005 .

[39]  Chwen Sheu,et al.  Integrating six sigma and theory of constraints for continuous improvement: a case study , 2005 .

[40]  Thomas P. Lyon,et al.  Corporate Environmentalism and Public Policy: Deflecting enforcement of existing regulations , 2004 .

[41]  Mihir A. Desai,et al.  Theft and Taxes , 2004 .

[42]  S. Waddock,et al.  Managing Responsibility: What Can Be Learned from the Quality Movement? , 2004 .

[43]  Linda S. Munilla,et al.  Innovation, Ethics, and Entrepreneurship , 2004 .

[44]  Giovanni Cespa,et al.  Corporate Social Responsibility and Managerial Entrenchment , 2004 .

[45]  S. Hart,et al.  Engaging fringe stakeholders for competitive imagination , 2004, IEEE Engineering Management Review.

[46]  Rodney McAdam,et al.  Corporate social responsibility in a total quality management context: opportunities for sustainable growth , 2003 .

[47]  Jeffrey H. Dyer,et al.  The Role of Trustworthiness in Reducing Transaction Costs and Improving Performance: Empirical Evidence from the United States, Japan, and Korea , 2003 .

[48]  D. Payne,et al.  Evolution and Implementation: A Study of Values, Business Ethics and Corporate Social Responsibility , 2002 .

[49]  Chris Barker,et al.  Research Methods in Clinical Psychology: An Introduction for Students and Practitioners , 2002 .

[50]  Sarah Rothstein,et al.  Strategic Management Formulation Implementation And Control , 2016 .

[51]  A. Ijaz,et al.  INTERNAL CUSTOMER JOB SATISFACTION AND ROLE OF TQM PRACTICES , 2012 .

[52]  K. Kristensen,et al.  The TQM Journal Emerald Article: The impact of the recent banking crisis on customer loyalty in the banking sector: Developing versus developed countries , 2012 .

[53]  Jeffrey K. Liker,et al.  Human Resource development in Toyota culture , 2010 .

[54]  D. Gadenne,et al.  An Empirical Study of Environmental Awareness and Practices in SMEs , 2009 .

[55]  Peter Ulrich,et al.  Integrative Economic Ethics: Foundations of a Civilized Market Economy , 2008 .

[56]  D. Whittaker,et al.  Re‐embedding the Corporation? Comparative perspectives on corporate governance, employment relations and corporate social responsibility , 2007 .

[57]  T. Powers,et al.  Critical competitive methods, generic strategies, and firm performance , 2004 .

[58]  G. Nicholson,et al.  Real world governance: Driving business success through effective corporate governance , 2002 .

[59]  Cheng-Hua Wang,et al.  Total quality management, market orientation and hotel performance: The moderating effects of external environmental factors , 2012 .