Corporate Social Responsibility and Financial Performance of Selected SMEs In Burundi
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Date
2024
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Daystar University, School of Business and Economics
Abstract
In today’s world of business environment, Small and Medium Enterprises (SMEs) are struggling to enhance their financial performance such as increasing sales, growing and gaining profit due to competitiveness with large companies who have gained the market share due to alignment with society through the act of Corporate Social Responsibility. In this SMEs are pressured to incorporate CSR as part of their strategy to win market share. The study aimed to find out the effect of corporate social responsibility on the financial performance of specific small and medium-sized enterprises (SMEs) in Burundi. The objectives of this study were: to identify the corporate social responsibility strategies used by selected SMES in Burundi, to assess financial performance metrics of selected SMES in Burundi, to examine the relationship between corporate social responsibility and financial performance of selected SMES in Burundi. Three theories were used as the basis for this study which were the slack resource theory, good management theory and relational theory. The main anchor theory was the relational theory. The target population consisted of the top 149 Small and Medium Enterprises (SMEs) located in Burundi. The study adopted correlation research design and utilized primary data that was gathered through the distribution of self-administered questionnaires. The participants of the survey consisted of business owners or managers of the SMES. A pretest was done on 15 SMEs which are not included in top 149 in ranking. Descriptive statistics was used to summarize the data collected, including percentages, means, and standard deviations. Correlation and regression analysis were utilized to identify the relationships between variables. The analysis was conducted using SPSS version 27. The findings reveal that SMEs used social initiatives, economic initiatives, customers’ protections and employee’s welfare initiatives. The study found that the financial performance had increased due to increase in customers, and there was significant positive relationship between CSR initiatives and financial performance of SMES. The study concluded that SMEs used social initiatives, economic initiatives, customers’ protections and employee’s welfare initiatives this was revealed using correlation and regression equations. The study also concluded that the increase in customer base due to CSR initiatives lead to the SMEs earning positive brand image hence increasing in customer based who later lead to increase in cashflow. Further, the study conclude that corporate social responsibility initiatives affected financial performance of selected SMES in Burundi. The study recommended that SMEs should improve the allocation of cash for CSR initiatives and that SMEs should endeavor to offer good services that will make customers retention.
Description
MASTER OF BUSINESS ADMINISTRATION in Finance
Keywords
Small and Medium Enterprises (SMEs), financial performance, Corporate Social Responsibility
Citation
Crépin, B. B. (2024). Corporate Social Responsibility and Financial Performance of Selected SMEs In Burundi. Daystar University, School of Business and Economics.