The Effect of Customer Related CSR on Performance of Manufacturing Firms in Kenya

Abstract

Due to intense competition for industrial products, markets are faced with social contestability based on environmental and health related externalities attributed to products and processes, and economic contestation from competitors. Manufacturing sector is characterized by many concerns which affect various stakeholders, who have become adept in holding companies to account for the consequences of their activities. Corporate Social Responsibility (CSR) has evolved to a managerial tool used to build a company’s reputation and enhance its competitive advantage hence currently an integral part of business strategy to enhance firm performance. This article sought to determine the effect of customer relations on performance of manufacturing firms in Kenya. Descriptive survey research design was used in this study. The study population consisted of 854 manufacturing firms registered with Kenya Association of Manufacturers (KAM). The sample constituted of 202 firms selected by purposive sampling, where 112 respondents were responsive. Primary data was obtained by use of a self administered questionnaire and secondary data obtained from organizations’ reports, newsletters, books, research articles and company websites. Pilot test constituted of 20 respondents, where the research instrument was tested for validity and reliability. Regression analysis was used to test the relationship between customer relations and firm performance by use of SPSS, where data was presented in descriptive and inferential statistics. The findings of the study revealed that customer relations had a positive and significant effect on performance of manufacturing firms in Kenya. The study recommends the promotion of customer relations through product information, quality assurance and customer feedback to enhance customer loyalty and firm’s reputation to survive in the highly competitive market place.

Keywords: Corporate Social Responsibility (CSR), Customer Relations, Firm Performance, Manufacturing Firms, Competitive Advantage