Impact of CSR on Consumer Behaviour 1

Impact of CSR on Consumer Behaviour

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City and State

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CHAPTER ONE: INTRODUCTION

This chapter sets out the background of the study and introduces the topic area that the

dissertation will cover, which is the impact of CSR on consumer behavior. Further, the problem

statement and rationale of the study is provided to underscore the urgent necessity of a study of

this nature. Further, the section sets out the research questions, objectives of the study as well as

the scope and limitations of the research.

1.1. Background

In the welfare of people lies the king's welfare and in their happiness his happiness.

Quote by Kautilya Artshastra

Simply put, the prosperity of businesses today depends on their ability to advance societal

interests rather than merely focusing on maximizing returns for the shareholders. This feat is

achievable through corporate social responsibility (CSR), a term that encompasses the ongoing

commitment by firms to observe ethical conduct and contribute to the betterment of the

communities in which they operate. CSR is concept that captures the need for businesses to

operate in a sustainable way, fulfill the needs of multiple stakeholders, and maximize economic,

environmental, and social value (Matten, Crane, and Chapple, 2003; Waddock, 2004). The

incremental attention and importance of corporate social responsibility, rising environmental and

consumer concern, and strict legal regimes contribute the pressure exerted on businesses to be

socially responsible.

Its adoption in the corporate landscape heralded a paradigm shift from Friedman’s (1970)

postulation that “there is one and only one responsibility of business-to use its resources and

engage in activities designed to increase its profits.” In articulating this position, Friedman failed

to see the utility in pursuing CSR or juggling parallel demands placed on organisations by
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different stakeholders, which diverted resources and efforts away from profit-making, the

ultimate purpose that businesses must pursue. Notably, the basis of his opposition to CSR was

the ignorance of the stark reality that good corporate citizenship can help drive profitability.

What is more, Friedman and his adherents failed to consider that societal welfare is paramount to

the existence of businesses, which rationalizes their engagement in CSR activities that promote

communal well-being.

It is interesting to note that CSR whose beginnings faced severe opposition by dissidents

is now an integral corporate strategy that enables firm to achieve sustainable profitability by

influencing consumer behavior. CSR is no longer perceived as the strategy that inclined firms to

divert their efforts and resources from profit-making and instead direct them to altruistic causes

that had nothing to with their raison d’etre in the first place. The concept has since gained

traction globally with most firms, especially large corporations, considering it an indispensable

part of their business culture. Today, CSR is recognized as an integral part of core business

activities that are tied closely to marketing strategies; firms no longer see it as merely pertaining

to philanthropic initiatives (Bhattacharya, Smith, and Vogel, 2004) as was purported by its

original opponents.

Scholarly debate on CSR reveals that its benefits do not merely accrue to the society, but

businesses as well. There are multiple benefits that firms derive from CSR activities. According

to Kurucz et al. (2008), these benefits can be categorized into four groups including reduction of

cost and risk, gaining and maintaining a competitive advantage, building a positive reputation

and legitimacy, and eliciting win-win outcomes via synergistic value generation. In affirming this

position, Kotler and Lee (2005) note that firms CSR strategies to defend or protect their

reputation, validate the benefits gained over costs and to integrate key stakeholders into their
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initiative. More often than not, CSR enables corporations to realize these goals along with the

noble aspiration to impact society by promoting its welfare.

A more precise thread of literature examines the impact of CSR on purchasing behavior

and establishes that a positive nexus exists between the two variables (Abrantes Ferreira et al.,

2010; Lee and Shin, 2010; Rahim et al., 2011; Chung et al. 2011). In essence, CSR strengthens a

company’s reputation and goodwill within a community or country, which in turn fosters

favorable consumer perceptions and responses that ultimately yield more sales. What this means

is that it is becoming increasingly vital for firms to engage in CSR practices in order to achieve

and maintain optimal profitability in the contemporary marketplace. CSR has gained traction and

transformed consumer expectations, which makes it necessary for businesses to respond to the

emergent expectations accordingly.

1.1.Problem Statement and Significance of the Study

Corporate social responsibility (CSR) practices in impacting consumer behavior by

enabling firms to establish more value and goodwill. Even so, there is a huge literature that

researchers can work upon in most developing countries. Despite of the approval of a context-

specific applicability to social responsibility (Matten and Moon, 2008 as cited in Muthuri and

Gilbert, 2011), there is still an advance research of western-centric studies that largely

concentrate of developed (Europe and North America) and progressively transitional (China,

India, Brazil) economies (Visser, 2008; Dobers and Halme, 2009 as cited in Muthuri and Gilbert,

2011).

Research that proves CSR such as improved consumer perception in developing countries

is very rare. Also, the few studies that examine CSR in under developing economies want more

research and study. This research enables us to narrow down Corporate social responsibility
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(CSR) variables, let alone their interactions in industries as well as organisations. Developing

nations can especially concentrating on CSR studies as compared to developing countries who

does not adequately relate or respond to the unique circumstances and settings (Hamann, 2006 as

cited in Muthuri and Gilbert, 2011).

There are billions of people who purchase goods and services online. There is fastest

technologies which people use online. Consumer behavior in online shopping is very different

(Na Wang 1, 2008, p. 4).

The problem is that the retailers does not know the Pakistan culture or values and Pakistani

consumer behavior. Therefore in this research, we will provide solution to online sellers in

Pakistan to promote their goods and services to consumers according to their needs and wants.

1.2.Purpose of the Study & Research Questions

Research questions Research objectives

1 Do the CSR activities of Safaricom 1 To find out whether CSR activities of

influence purchasing decisions of customers? Safaricom play a role in consumer purchasing

decisions of their customers.

2 What are the perceptions of consumers 2 To establish the perceptions consumers have

about the CSR activities of Safaricom? on the CSR activities of Safaricom.

3 What are the major CSR activities of 3 To determine the major CSR activities of

Safaricom? Safaricom.

4 Are consumers aware of the CSR activities 4 To find out whether consumers are aware of

of other telecommunication companies in the CSR activities of the other players in the

Kenya? telecommunication industry in Kenya.

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5 Were the customers of Safaricom aware of 5 To establish whether the consumers were

the telecommunication company’s CSR aware of Safaricom’s CSR activities when

activities when they were making their initial they were making initial purchasing

purchasing decisions of the company’s decisions.

products or services?

1.3. Scope and Limitations

The studies conducted on CSR within the Kenyan context demonstrate a generalized

focus by, for instance, examining the CSR activities businesses pursued by businesses. This

research departs from this direction by tackling the impact that socially responsible behavior has

on consumer behavior in the country. A narrow focus is employed whereby the scrutiny merely

covers Safaricom’s application of this approach and whether it yields beneficial outcomes for the

business. No other businesses in the same or different sectors will be examined. The firm

operates in the telecommunications sector and while the outcomes may give invaluable insight

into consumer behavioral patterns in the given setting, it is highly likely that other sectors may

register peculiar outcomes due to the disparate nature of CSR engagement across different

sectors in the country.

The study will not delve into how separate CSR initiatives pursued by Safaricom elicit

favorable consumer responses within the Kenyan market. Rather, a collective outlook of the CSR

practices is adopted even though their nature and scope will be discussed. The dominant concern

here is how the cumulative CSR efforts ultimately impact consumer purchase and repurchase

intentions, rather than weighing which practices or mix of socially responsible undertakings

elicit the best responses. Certainly, consumers in developing nations esteem CSR practices
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differently than the ones in developed economies, but the scope of the paper is limited to

examining them collectively rather than on an individual basis.

CHAPTER TWO: LITERATURE REVIEW

Consumers around the world are more conscious that corporations, in pursuing their

organisational objectives, now have an obligation to ensure the betterment of society and the
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environment. On their part, businesses now acknowledge that the level of their involvement in

CSR practices can influence consumers’ purchasing behavior. There is an increasing body of

work that examines how consumers perceive CSR activities by companies in different regions,

and whether this has an impact on their purchase or repurchase intentions. In Kenya, Safaricom

Ltd pursues far-reaching CSR initiatives particularly through The Safaricom Foundation in a bid

to impact society positively as well as create a favorable image of the business that could

translate into sales. Therefore, Safaricom presents a feasible and appealing context to examine

the interplay of CSR and consumer perceptions as well as purchase intentions in the Kenyan

context.

In spite of the robust CSR program at Safaricom, there is a dearth of studies that examine

the firm’s social responsibility, let alone how the initiatives affect consumer behavior. This

literature review aims to examine pertinent literature review on the impact that a corporation’s

CSR initiatives have on purchase decisions and consumer perceptions. First, the analysis covers

the conceptual framework of CSR and applies a pragmatic model in examining Safaricom’s CSR

initiatives. Afterward, the discussion examines germane literature that affirms the existence of

linkages between good corporate citizenship and consumer behavior. Finally, the discourse

moves to context-specific studies to discover whether there is a gap in scholarly work that

rationalizes and underscores the need for the present study. It is established that there is a dearth

of Kenyan-centric research that examines how CSR pursuits ultimately affect consumer behavior

and perceptions.

2.1.Conceptual Framework of Corporate Social Responsibility

There is yet to be a consensus on a precise definition of CSR because of the broad nature

of the concept. Some good attempts to capture the essence of CSR, however, exist in scholarly
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work. For instance, Kotler and Lee (2005, p.3) define CSR as a corporation’s commitment to

advance societal welfare “through discretionary business practices and contributions of corporate

resources.” This summative definition of the concept calls for an explanation in order to map out

its scope. In essence, CSR is an active obligation that stems from an organisation’s goals,

activities, and values. It is a concept whose precepts are largely informed by the stakeholder

theory, and for this reason, CSR entails taking into considerations the expectations that principal

stakeholders have of the company along with the duties that enable companies to fulfill those

duties.

CSR is founded on social, environmental as well as economic principles and the main

reason for its deployment is to achieve sustainable development within corporations voluntarily.

What this means is that CSR is a concept whereby firms incorporate social and environmental

considerations in their organisational operations and their dealings with different stakeholders on

a voluntary business. This extensive description of the scope of CSR is far more beneficial for

the purposes of this review than Kotler and Lee’s curt explanation as it paints a holistic picture of

what the concept entails by detailing that it covers social, environmental, and economic factors.

One notable aspect is that most CSR definitions prescribe it as voluntary. However, the voluntary

or discretionary nature of CSR is currently relative. In large corporations, for instance, CSR

initiatives no longer complement business operations. Rather, CSR has become an integral and

indispensable part of organisational operations. Today, businesses have an obligation to

maximize their positive impact and minimize their adverse impact as contributing citizens of the

greater society in which they operate in order to preserve long-term societal needs.

The most acclaimed definition and conceptual model of CSR were articulated by Carroll

who conceptualized it as a pyramid. Carroll (1991) proposed that CSR is a concept that
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encompasses four types of social responsibilities including legal, economic, philanthropic, and

ethical. In explaining the pyramid model, Carroll first explains that businesses are established as

economic entities designed to offer goods and services to the society (Carroll, 1991). In this

light, the primary drive of entrepreneurship is profitability (Caroll, 1991). As such, the other

responsibilities depend on the company’s economic obligations (Caroll, 1991). Businesses

typically operate within the scope of an entire suite of legal frameworks, which impose different

legal responsibilities that the firms must adhere to in order to avoid run-ins with the authorities or

regulatory bodies. Laws impose the overriding imperative that companies, in their pursuit of

profitability, must avoid illegal activities and operate within the rules stipulated by relevant laws

(Carroll, 1991). The legal component, therefore, is the second layer after profitability which is

the foremost priority that businesses have.

Ethical obligations pertain to the practices that the society either approves or disapproves

of, but are not expressly mandated in pertinent laws. Ethics refers to the need for businesses to

do what is right and avoid injurious actions. Whether an action is ethical or not varies from one

society or culture to another. As a result, it is necessary for organisations to tailor their ethical

practices and principles around the requirements of their respective communities. Carroll (1991)

confirms this statement by noting that unlike legal rules ethical principles are ambiguous and,

therefore, more challenging for businesses to anticipate and comply with. They are unwritten

rules that have not been legally promulgated by governments but are material to CSR all the

same. Ethical responsibilities fall under the third layer in Carroll’s pyramid, but the scholar

asserts that there an innate connection between legal obligations and ethical expectations because

ethical principles can morph into laws if they gain sufficient traction (Carroll, 1991). One

example that illustrates this connection is the need to hire minorities, which began as a voluntary
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practice by firms but has since escalated into an indispensable requirement, especially in big

corporations. As this ideal practice becomes entrenched and widely accepted in society,

politicians may opt to promulgate it by making it a mandatory legal requirement.

At the lowest layer of the CSR pyramid is philanthropy. Philanthropic obligations entail

the range of activities pursued by businesses in response to societal expectations that firms, as

good corporate citizens, must advance human well-being (Carroll, 1991). Philanthropic practices

may include volunteer work or making donations to non-profits that serve the needs of society.

Now, companies may pursue philanthropic activities singlehandedly or in partnership with other

entities. The type of philanthropic programs that corporations can fund or participate in through

volunteering or simply commit funding to include rehabilitation initiatives, homeless centers,

and veteran assistance projects. Philanthropic programs also include the wide scope of initiatives

meant to foster access to indispensable public utilities such as proper health care, clean water,

quality education, and so forth. Such humanitarian causes enable businesses to tackle concerns

that are material to their existing and prospective customers.

Philathropic
Be a Good Corporate Citizen
Contribute Resources to the CommunityEconomic

Be Ethical
Obligation to do what is rights and avoid harmLegal

Legal
Obey the Law
Follow society's codification of wrong and right Ethical

Be Profitable
The foundation upon which all others rest
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Figure 1: CSR pyramid as proposed by Carroll (1991).

While Carroll’s pyramid offers a pragmatic framework within which one can examine the

interplay of different CSR aspects, it is lacking. As the author notes, “no metaphor is perfect and,

the CSR pyramid is no exception” (Carroll, 1991, p. 42). Carroll drew this pyramid when CSR

was still a nascent concept and scholars and businesses alike were yet to identify the importance

of environmental concerns. It sufficed that a corporation advanced societal welfare by being

philanthropic achieved lasting profitability, and observed germane laws as well as social norms.

Today, environmental considerations are an integral part of CSR. There is, however, room in

Carroll’s framework that permits the integration of environmental and sustainability concerns

into the pyramid within the ethical responsibilities layer or as an entirely different layer of the

conceptual model.

Carroll’s pyramid serves as a blueprint for more recent models that take into account the

developments that have taken place in CSR over the years. One model that builds on Carroll’s

pyramid is a simplified framework proposed by Chung’ et al. in their 2015 study that examines

the relationship between CSR activities and customer satisfaction. The model put forward by the

scholars builds on the essence of Carroll’s pyramid and introduces additional layers that reflect

what CSR entails in the contemporary corporate landscape. In addition to the four layers

prescribed by Carroll in the 1991 model, Chung et al. (2015) also integrate environmental

contributions and consumer obligations to their CSR framework. Now, the study does not delve

into explanations to rationalize the inclusion of these factors into the earlier model; neither is

there a discussion that associates it to Carroll’s model. It simply suffices that there is now a

consensus that environmental and consumer concerns now form part of the wider CSR concept.
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Notably, unlike Carroll, Chung et al. make no proposition as to how the factors rank

under this model. For the purposes of this paper, the hierarchy will be as follows: economic,

consumer, legal, ethical, environmental, and philanthropic. Following Carroll’s train of thought,

the fulfillment of consumer responsibilities takes precedence over the rest because it goes to the

heart of the raison d’etre of organisations. Companies cannot become profitable or exist without

meeting certain identifiable needs or demands by their consumers. Failure to fulfill consumer

needs would render corporations defunct. The inclusion of environmental factors in a layer that

precedes philanthropic is justifiable in the sense that, unlike charitable responsibilities which

pertain to voluntary benevolence, environmental sustainability is now a central legal and ethical

concern. For the purposes of this paper, the applicable CSR pyramid is as follows:

Philanthropic Obligations

Environmental Obligations

Ethical Obligations

Legal Obligations

Consumer Obligations

Economic Obligations

Figure 2: Proposed CSR model

Unlike the Carroll’s pyramid, the stakeholder theory is not a model that stems from CSR,

but it is considered as being among the earliest and commonly applied CSR theories (Claydon,

2011). The essence of the model is to foster a paradigm shift where corporations become

increasingly “integrated in, rather than separated from, the rest of society” (Pedersen, 2006, p.
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139). The stakeholder theory is attributable to Freeman (1984 as cited in Freeman, 2004) who

rejected the perspective that businesses should only serve the interests of shareholders. Rather,

Freeman (1984 as cited in Freeman, 2004) articulated that companies have fiduciary duties to

stakeholders. The principal proposition of the theory is that firms should not “treat stakeholders

merely as a means to an end”; rather, the stakeholders should be engaged in determining the

direction that of the corporation (Claydon, 2011, p. 408).

This position naturally invites the question, “Who are stakeholders?” The term

stakeholders refers to groups or individuals who may be harmed or may benefit from an

organisations activities or whose rights a business has to acknowledge and respect to avoid

violating them (Trevino & Nelson, 2011; Hosmer, 2011; Jensen, 2001). This theory postulates

that other than the shareholders, there are other agents who have an interest or stake in a

company’s decisions and actions. Corporations typically have internal and external stakeholders.

The internal stakeholders are shareholders, employees, managerial staff, and the board of

directors, while extrinsic stakeholders are customers, supply chain partners, governments, rivals,

communities as well as the environment (Sagebein and Whellams, 2010). The stakeholders have

different stakes in the organisation as summed up in the following table.

Stakeholders Primary Expectations

Shareholders Financial, added value,

Employees Pay, work satisfaction, training, workplace health and safety, skills

development, and social equity.

Customers Delivery of goods and services, quality, consumer protection, transparency

of product information.

Creditors Credit worthiness, security

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Suppliers Payment, long-term relations, and selection and evaluation of supply chain

systems.

Community Safety and security, contribution to community, and environmental safety

and production.

Government Compliance and improved competitiveness.

Table 1: Stakeholder expectations (Cannon, 1994; Longo et al., 2005).

In essence, the stakeholder theory is taken as a CSR theory due to the fact that it offers a

normative structure for accountable business towards the community (Mele, 2008). It embodies

the need for companies to satisfy the demands of all stakeholders rather than merely maximize

shareholder value. Material to the CSR context is the inclusion of the community within the

model coupled with the recognition that corporations should meet communal expectations by

making a contribution to society and ensuring environmental safety. Even though the tenet of this

model is that every stakeholder matters and that firms have the duty to integrate their interests,

achieving an equilibrium between competing demands can be problematic (Vos and Achterkamp,

2006; Galbreath, 2006). Corporations characteristically get caught up in a debacle where they

need to pursue parallel stakeholder interests that force them to prioritize their obligations in

accordance with normative and instrumental considerations (Jamali, 2008). In this way, the

theory brought to the forefront a new set of insights that previous CSR models omitted. It

underscored the necessity to view firms as operating at the core of a web of interconnected

“stakeholders that create, sustain, and enhance value creating capacity” (Post et al., 2002).

2.1.1. Safaricom CSR Analysis

Safaricom fulfills most of its philanthropic CSR commitments through The Safaricom

Foundation, which is among the largest corporate foundations in the country. The Safaricom
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Foundation was established in August 2003 and has since invested an excess of US $ 21 million

in economic empowerment, health, education, environmental protection, music, arts and culture,

and sports (Safaricom, n.d.). Other than that, the firm also offers assistance during humanitarian

emergencies and disasters across the country. This analysis, however, does not examine the

philanthropic responsibilities that the organisation fulfills as it is informed by a variant of

Carroll’s CSR pyramid, which integrates six factors under the wider concept of CSR. These

include economic, consumer, legal, ethical, environmental, and philanthropic contributions made

by Safaricom in the Kenyan context. The objective of leveraging this pyramid is to paint a

realistic, holistic, and theoretically sound picture of the responsibilities that firms typically fulfill.

i. Economic responsibilities

Economic responsibilities pertain to Safaricom’s duty to achieve lasting profitability,

which is the overriding reason for its existence. The organisation fulfills these obligations in a

variety of ways. First of all, the firm has over the years managed to maintain an unbreakable

market leadership in Kenya. Safaricom has the most subscribers Kenya and the firm’s

telecommunications services that go so far as mobile money transfers are yet to be trumped by its

key competitors Airtel Kenya and Orange Kenya. Closely associated with this layer also, is the

incremental profits that the firm registers on a yearly basis as well as its strong performance in

the Nairobi Stock Exchange vis-à-vis its key rivals and other companies outside the

telecommunications industry.

ii. Consumer responsibilities

Safaricom has unparalleled service coverage and is renowned for offering top-notch

telecommunications services even in remote areas. Unparalleled service provision is the main

reason why Safaricom enjoys the largest share of subscriptions in the Kenyan market. Its M-Pesa
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services also have the greatest geographical reach and provide customers with an opportunity to

transfer, receive, and save money with great convenience. The only area that the company is yet

to address is the security of this money transfer service, as stories abound of customers being

defrauded while using M-Pesa. In the meantime, Safaricom disseminates warnings to subscribers

concerning fraudulent activities and has recently installed a functionality that permits users to

reject erroneous transaction within a 20-second window. The firm’s Customer Care also offers

assistance to clients with addressable grievances.

iii. Legal responsibilities

As is typical for all businesses, Safaricom operates within a legal context and has the

mandate to comply with multiple laws regarding the standard quality of its services, workplace

safety and well-being, consumer protection, competition, certification, privacy, taxation,

securities exchange, and so forth. Safaricom strives to operate within these regulations. The only

notable aspect of this layer concerns the organisation’s market dominance as it enjoys a market

share that contravenes Kenya’s limits under regulations that are meant to curtail unfair

competition practices.

iv. Ethical responsibilities

The company also observes uncodified ethical principles in keeping with the expectations

of the Kenyan society. For instance, Safaricom sources employees from different communities in

Kenya as opposed to merely focusing on leading tribes.

v. Environmental responsibilities

At the heart of Safaricom’s CSR agenda is the commitment to promoting environmental

as well as wildlife protection in Kenya (Safaricom, 2010). The Safaricom Foundation achieves

this through participatory conservation initiatives, conducting public awareness, and engaging in
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the preservation of the country’s natural resources (Safaricom, 2010). Besides participatory

activities, the firm also funds projects meant to safeguard the environment. For instance, in 2010,

the foundation bought e-waste grinders to help computer schools to mitigate the escalation of e-

waste in the country (Safaricom, 2010). Internally, Safaricom executes an array of strategies

meant to lessen the impact that the organisation has on the environment including recycling and

energy efficiency. These strategies help in reducing the ecological footprint of the business,

albeit on a limited basis because Safaricom, like most businesses in Kenya, does not formulate

its operations around achieving reduced greenhouse gas emissions. Closely associated to this is

the absence of an organisational imperative to achieve ethical input sourcing. Consequently, the

most significant strides in environmental protection achieved by Safaricom are in terms of

participatory activities and funding initiatives that are material to the preservation of the

environment. In this way, the firm prioritizes what matters most to the Kenyan public as regards

the environment.

vi. Philanthropic responsibilities

Safaricom aspires to advance the welfare of the Kenyan society and have a positive

impact. The Safaricom Foundation deals with multiple social concerns including:

a. Economic empowerment

In essence, empowerment is a material concern in developing economies that are typified

by exponential unemployment rates, high wealth and income disparities, inflation, and poverty.

These factors underscore the importance of empowerment initiatives such as funding or

vocational training, which go a long way into transforming lives and enabling people to gain

lasting economic independence. The Safaricom Foundation supports a myriad of economic

empowerment programs across the nation ranging from small scale community-level projects to
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expansive nationwide initiatives (Safaricom, 2010). Each year, the Foundation issues grants to

support organisations as well as communities to execute programs in food security, income

generation, the creation of employment, and skills transfers via vocational training.

b. Education

Access to education is another area of concern in Kenya, where illiteracy levels are

disconcerting. Most schools across the country are also ill-equipped to deliver proper education

with other students in remote areas having to learn under trees. In recognition of this situation,

The Safaricom Foundation invests in the construction of laboratories and libraries in schools

(Safaricom, 2010). The Foundation also directs its funds towards infrastructural advancement

and the acquisition and dissemination of specialized learning equipment for special schools and

offers material support to schools in severely marginalized areas in the country (Safaricom,

2010).

c. Health

Many Kenyans cannot access proper healthcare, which is a serious issue that fuels high

mortality rates across the country. The Safaricom Foundation responds to this problem by

supporting initiatives that are meant to facilitate access to affordable and specialized care that is

typically out of reach in the Kenyan setting (Safaricom, 2010). The Foundation partners with

care providers as well as communities in building and equipping many health facilities, offering

critical health information and care via medical camps, and fostering the provision of specialized

care (Safaricom, 2010). For instance, in 2010, the company reports that it ran multiple medical

camps in Mwatate, Mogotio, Kitui West, Karachuonyo, Gichugu, Sabatia, Runyenjes, Mt. Elgon,

and Turkana South (Safaricom, 2010). In these camps, an aggregate of 3,000 Kenyans gained

access to free curative and preventative services (Safaricom, 2010).

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d. Water

Like the preceding utilities, access to clean water in the country is problematic in

severely marginalized regions, remote areas, and areas that face prolonged drought spells on an

annual basis. In response to this need, The Safaricom Foundation partners with key non-profits

that service these areas such as the Kenya Red Cross Society as well as Action Aid Internation to

execute large-scale community-based water projects (Safaricom, 2010). The three organisations

achieve this under the Maji na Uhai program. In 2010, the foundation committed substantial

funding for expansive water projects in arid and semi-arid regions like Gachoka, Katalwa,

Makueni, and Garbatulla.

e. Arts, Music, and Culture

The Safaricom Foundation partners with key Kenyan organisations as well as

community-based groups to advance and preserve the country’s rich natural heritage in music,

culture, and arts (Safaricom, 2010). One good example is the renovation of the Louis Leakey

Auditorium situated in Nairobi, which is a project that the organisation partnered with the Kenya

Museum Society and the National Museums of Kenya (Safaricom, 2010). The Auditorium

houses fossils collected by Dr. Leakey in Kenya.

f. Sports

Concerning Sports, the organisation supports sports initiatives that offer opportunities for

the integration of life skills, health, and education. The premise of this initiative is the

recognition that sports play a crucial part in promoting health and wellbeing, while also fostering

development and cohesion programs among communities (Safaricom, 2010).

g. Voluntary work
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Volunteering is an integral part of CSR in Safaricom. Here, the firm’s staff members

participate in a myriad of voluntary work such as tree planting, visiting charities, and cleaning

(Safaricom, 2010). The firm has set aside four CSR leave days annually for every employee to

participate in communal activities (Safaricom, 2010).

Evidently, Safaricom engages in a wide array of CSR activities in order to realize its

aspiration to have a positive impact in the Kenyan society. By supporting multiple community-

centric causes, the firm fosters the betterment of many Kenyans. The organisation pursues these

activities throughout the country as opposed to merely focusing on one area. What this does is

that it contributes to the visibility of Safaricom’s CSR initiatives throughout the country. As

more consumers or potential customers come into contact with the company’s CSR projects,

their perceptions change thereby yielding favorable outcomes for the business.

2.2.Toward a Holistic Conceptual Model of the CSR Process and its Outcomes

The first prototype of a conceptual model that considered CSR outcomes was put forward

by Wood. In 1991, Wood built on the CSP framework and introduced critical refinements to its

original form as formulated by Carroll in 1979, which merely identified the varying types of

obligations. Wood revisited the model by evaluating different issues that motivate socially

responsible behavior, the course of responsiveness as well as the outcomes of CSR initiatives

(Wood, 1991). In this way, the author’s refined proposed CSR framework marked a radical shift

from perceiving the concept using a stand-alone definition and placed it in a wider and realistic

context. Wood’s refinement postulated CSP as the outcome of a corporation’s specific

configuration of the multiple CSR principles, the course of social responsiveness, and observable

results as they pertain to corporation’s social relations.

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CSR 1 Principles CSR 2 Processes Corporate Behavior

Outcomes

 Institutional  Environmental  Social impacts

principle: assessment  Social programs

legitimacy  Stakeholder  Social policies

 Organisational management

principle: public  Issues management

responsibility

 Individual

principle:

managerial

discretion

Table 2: The CSP theoretic model (Wood, 1991).

This prototype marked a significant turn in CSR research by importing considerations

about the principles (individual, organisational, and institutional) that motivate the deployment

of CSR strategies. The framework demonstrated that organisations may pursue CSR in a bid to

achieve legitimacy or credibility or as a means of fulfilling their public responsibility to be good

corporate citizens. Further, it may very well be the case that the managerial staff are the ones

who feel inclined to pursue CSR activities.

Corporate responsiveness under this model entails the CSR processes that are

conceptualized in three different domains including environmental evaluation, stakeholder

management, and issues management. At the heart of responsiveness is the recognition of the

value in analyzing the extrinsic environment, leveraging stakeholder management approaches,

 23

and discovering optimal approaches to developing and monitoring the company’s responses to

different social issues (Wood, 1991). Wood theorized that CSP elicits three-fold outcomes

including social impacts, social programs, and social policies. The theorist failed to consider that

the intrinsic factors that motivated the pursuit of CSR in the first place could also be outcomes of

the process and instead listed the external effects only.

More recent models have gone beyond this point toward examining CSR internal impacts

as well. Even so, there is yet to be a consensus on which model best illustrates the nexus between

CSR and consumer behavior. One basic framework that tackles the impact in this way was

provided by Kim and Kim (2016). The authors build on Carroll’s pyramid model and portray the

concept as follows:

Legal Ethical
Responsibility Responsibility

Economic Philanthropic
Responsibility Responsibility
Consumer
Behaviour

Figure 3: Conceptual framework proposed by Kim and Kim (2016, p. 127).

The dangers of applying Carroll’s pyramid framework in the contemporary context have

already been set out in the previous section. To be precise, the model omits pertinent

considerations that form part of modern CSR practices. Kim and Kim’s application of the

pyramid as it was, therefore, imports the same weaknesses that inhere Carroll’s model into their
 24

prototype of how CSR affects consumer behavior. The framework is also devoid of substantive

details to explain the proposed relationships. Their study, however, helps to demonstrate that

there is a positive correlation between CSR components and buying behavior (Kim and Kim,

2016).

Keen on avoiding the pitfalls associated with Carroll’s pyramid framework, Chung’ et al.

(2015) expand Carroll’s pyramid factors into six components (including philanthropic, ethical,

legal, economic, environmental, and consumer protection responsibilities) and apply the

modified version in examining CSR influence on consumer behavior. The author’s proposed a

relatively developed conceptual framework that demonstrates how the fulfilment of CSR

obligations improve the company’s image, which in turn augments customer satisfaction and

customer loyalty.

Figure 4: Conceptual framework proposed by Chung’ et al. (2015, p. 542).

The best conceptual model, however, was proposed by O’Riordan and Fairbrass in 2008

and later refined in 2013. O’Riordan and Fairbrass (2008) propose a three-pronged stakeholder-

centric model founded on the following key assumptions:

i. The environment in which firms operate comprises of four interconnected yet

logically distinct domains: dialogue practices, stakeholders, events, and contexts

ii. Each domain can be evaluated using different levels of perspective

iii. The CSR process entails two stages and five different steps within them
 25

iv. Gaining credibility is the factor that fuels CSR activities

The authors propose a series of three different models and provide theoretical bases for

all of them. The first model in the framework concerns the domains of the landscape or context

that decision-makers face when choosing to engage in CSR. The essence is to offer a checklist

that helps clarify the key factors and actors who wield an influence of CSR stakeholder practices.

O’Riordan and Fairbrass (2008) analogize the first model as a representation of the chessboard

and chessmen including the stakeholders, context, managerial response, and event.

Stakeholders Context
CSR Dialogue
Stakeholder
Practices
Management
Event
Response
Figure 5: Overview of circumstantial domains (O’Riordan and Fairbrass, 2008, p. 17).

With reference to the chess analogy, the second model in O’Riordan and Faibrass’

framework represents the skill or systematic method used in gauging which moves one should

make or avoid. Here, it is critical to take into account key elements such as the country in

question, industry in which the business operates, the type of company along with its

organisational culture, and the individual decision-makers. The incorporation of these context-

specific is instrumental since it is anchored on the recognition that contextual factors wield a

significant influence on CSR practices. Simply put, the factors are lenses through which

companies view and consider multiple CSR pathways. It is worth noting here that the elements

are not hierarchical even though the authors use a pyramid to illustrate their proposition.
 26

Country
(Kenya)
Industry
(Telecommunications)
Company
(Safaricom)
Individual
(Managers)

Figure 6: Levels of perspective for analysing the circumstantial domains (O’Riordan and

Fairbass, 2008, p. 17).

The contextual factors that influence CSR are best demonstrated in the table below.

Identification of and Nexus between the Factors

Factors that a. Opinion of the decision-makers regarding:

influence CSR  Obligation/ Responsibility

practices  Image/Risk

 Stakeholders’ expectations
 27

targeting b. Stakeholder expectations on the basis of:

stakeholders  Internal organisational factors including:

i. Size e.g. value, sales, and employees

ii. Level of success e.g. profitability

iii. Type of industry/business

iv. Status of extrinsic listing

v. Activity undertaken by the company

vi. Business division

vii. Product lines

viii. Processes

ix. Issue involved

x. Region e.g. third world

xi. Aspect such as health or environment

xii. Affected persons such as the poor or children

xiii. Interaction with the stakeholders

xiv. Business culture or posture toward

stakeholders

xv. Governance practices

xvi. CSR practices

xvii. Etc.
 28

c. Conditional/contingent/external issues

 PEST climate

 Influence of the media

 Effectiveness of stakeholder pressure

 Competitor activity

 Etc.

Table 3: Detailed issues concerning context-specific CSR (O’Riordan and Fairbrass, 2008, p.

21).

The third part in the framework also fits within the chess analogy. It demonstrates the

prospective moves that companies take when executing CSR initiatives (Oriordan and Fairbrass,

2008). This part of the conceptual model entails two separate phases. The first one pertains to

CSR strategy development phase, which comprises of values, alternatives, and strategies. The

values are the vision, objectives, and scope of the organisation in question that are material in the

formulation of the CSR strategy. Once the values of the corporation are consistent with the

pursuit of good corporate citizenship, the next rung involves weighing the available alternatives

by establishing stakeholder priorities, the causes that the firm needs to support, the nature of the

support, and the requisite policies or practices. Afterward, the company can choose strategy

options on the basis of their value and suitability. Phase two pertains to the implementation of

selected strategies as well as desirable advantages that accrue to the organisation after execution

such as goodwill, reputation, and image.

 29

Figure 6: Phases and steps of the CSR process (O’Riordan and Fairbrass, 2008, p. 18).

It is evident that O’Riordan and Fairbrass’ initial model offers a pragmatic and holistic

framework within which one can examine and gain an understanding of how the CSR process

ultimately yields desirable outcomes such as goodwill, reputation, and image. The importance of

these CSR outputs in influencing consumer purchase behavior cannot be overemphasized. The

model, however, may invite criticism on account of its fragmented nature. Even so, the three-part

format is permissible as well as highly beneficial, because its basis is on the recognition that

context-specific factors wield a significant influence on CSR processes, practices, and outcomes.

In 2014, the scholars revisited their conceptual framework and sought to offer a

condensed model that built upon the previous propositions. The refined framework essentially

offers a refined portrayal of CSR and captures its essence as a cyclical and contextual process.

O’Riordan and Fairbrass (2014) integrate the propositions in the three-step framework proposed

in 2008 into a single model, but revert to their initial approach where they use a separate

prototype to explain the ultimate framework in detail. In the first place, the authors depict the

connectedness of context, choice, calculation, and communication factors in CSR stakeholder

management as demonstrated in the figure below.

 30

Figure 7: Refined framework (O’Riordan and Fairbrass, 2014, p. 5).

To elaborate, the inclusion of the context component in the framework underscores the

fact that CSR practices differ according to the industry, company, or geographic location in

question, as well as the point that the activities typically change with the passage of time

(O’Riordan and Fairbrass, 2014). Choice, essentially, incorporates the components found in the

alternatives rung of the final phase within the initial three-part model. Here, firms evaluate how

to balance conflicting stakeholder interests and determine which practices to pursue. Choice is

affected by each organisation’s governance system. The calculation element entails a triple

bottom-line perspective where companies consider the value of the CSR practices in terms of the

resources invested as well as the sustainability of their benefits to the company and the

community (O’Riordan and Fairbass, 2014). Finally, communication is undertaken “after the

three other aspects have first been systematically and thoroughly examined, planned and

implemented” (O’Riordan and Fairbass, 2014, p. 17). The figure below demonstrates the depth

of each of the four components.

 31

Figure 8: Revised and refined framework in detail (O’Riordan and Fairbrass, 2014, p. 5).

The final model incorporates the four elements to CSR management into a wider

framework that identifies the interconnectedness of the stakeholder relationships that businesses

deal with in deploying CSR initiatives. The framework underscores the importance of sustainable

relations between the firm and stakeholders and demonstrates that equitable reciprocation is the

heart of building and maintaining these relationships. As the firm executes the CSR practices

selected through the four-part CSR stakeholder management process discussed in the preceding

paragraph, the benefits of the CSR practices accrue to the society and the business as well. As

regards the community, the gains include balance, progress, and development. As for the

business, the beneficial outcomes include brand loyalty, appealing image, and innovation.

Ultimately, this fosters the credibility of the organisation, which is instrumental in gaining a
 32

competitive advantage and achieving sustainable profitability. This process is cyclical in nature

and the same outputs are elicited for as long as the company continues to pursue CSR initiatives.

Figure 9: Revised and refined framework in detail. (O’Riordan and Fairbrass, 2014, p. 9).

2.3. Impact of CSR on Consumer Perceptions and Purchase Intentions

Many studies on CSR establish that good corporate citizenship is a prerequisite for

contemporary companies (Udokmit, 2013). For this reason, it is imperative for businesses to

achieve lasting profitability as well survival is now achievable by pursuing the betterment of the

societies in which they operate, and the community members will be more than eager to return

the favor (Du Plessis and Gobler, 2013). In essence, sustainability and profitability are the key

motivators of CSR practices (Ofari, Nyuur, and Daako, 2014). Through CSR, organisations can
 33

boost their business in the long-run because social responsibility can help build as well as rebuild

communal trust in the focal firms, and fulfill customers’ sustainable expectations and needs

(Doan, 2012). Understanding the relationship between social responsibility and customer

behavior is the best way of justifying the significant company expenses incurred in the pursuit of

CSR activities (Poolthong and Mandhacritara, 2009).

There is a positive nexus between social responsibility and a customer’s valuation of a

company’s offerings, which indicates that good corporate citizenship produces commercial

returns for an organisation (Garcia et al., 2005). Hildebrand et al. affirm this statement by noting

that the positive valuation that a firm receives for being socially responsible also helps to foster

consumer loyalty and devotion (2011). At the same time, firms that conduct their business

irresponsibly, face the risk of boycotts that can hurt their sales and ultimately, profitability (Abd-

Rahim, Jalaludin, and Tajuddin, 2011; Udomkit, 2013). Since social responsibility has morphed

into a standard operational element, companies currently try to leverage it in establishing lasting

relations with customers. McElhaney notes that firms today are keen on fostering relationships

with consumers instead of focusing on generating mere transactions, and CSR is an effective

avenue for building relationships in ways that offerings cannot on their own (2009).

According to Melikyan, CSR has great potential as a powerful marketing mechanism as it

enables businesses to position their offerings and marketing material to customers as the firm

interacts with societal members at the grounds level (2010). Also, CSR approaches are useful in

targeting and penetrating novel consumer segments by introducing offerings that match the

interests of the targeted market (McElhaney, 2009). A good example of this is when a firm seeks

to target a niche of consumers who value environmental responsibility. In order to tap into this

segment, an organisation can use fully recyclable packaging, which will improve the consumers’
 34

perception of its products. As key stakeholders, customers nowadays expect firms to behave

responsibly (Van den Berg and Lindfors, 2012). In highly developed markets, this evaluation

even goes as far as comparing a firm’s CSR practices against key rivals (Gao, 2009). The level of

awareness of and interest in CSR activities, however, varies from varies from one country to

another (Veersalu, 2011). What this means is that the interest, as well as awareness levels

registered in the West, are not the same ones in developing countries. The concept of CSR is yet

to catch on among many consumers in Third World countries.

Another thread of literature on CSR ties it to customer retention or repurchase intention.

Johnson et al. define customer retention as consumers intending to purchase from the same

business, as long as the most recent purchase experience was satisfactory (2001). The essence of

customer retention is enlisting the customer’s commitment and loyalty toward the business.

Extant scholarly work establishes that since the advent of social responsibility, customer

retention is achievable through avenues that are beyond tailoring the perfect purchase

experience. Tong et al. (2012) conducted a study of the execution of CSR among Hong-Kong

retail banks and found that it contributes to desirable consumer behavior as it has a positive

effect on repurchase intentions as well as positive word-of-mouth.

A similar conclusion was drawn by Lee and Shin (2010) whose research involved Korean

consumers. The study revealed that social responsibility practices by businesses have influence

purchase intentions (Lee and Shin, 2010). Jose et al. (2015) also affirm the conclusion that there

is a positive relationship between CSR practices and repurchase intentions. The importance of

customer retention to a business cannot be overemphasized as it contributes to sustainable

profitability and market leadership. Having a loyal customer base enables a firm to withstand

competition or the rapidly changing conditions that characterize contemporary markets. As brand
 35

loyalty is recognized as an important objective for a corporation’s growth and survival, building

a loyal consumer base has not only come to be a fundamental goal in marketing, but it is also

critical for fostering a sustainable competitive edge.

2.4. How CSR Influences Consumer Perception and Behavior

CSR influences consumer behavior by, first of all, building a positive image of the

company in the minds of both extant and prospective consumers. Perceptual concerns are

especially material to discussions surrounding brand identities. Kitchen and Schulz (2001) define

the term brand image as a “collection of perceptions in the mind of the consumer.” In essence, a

brand is not something tangible like the benefits that accrue to the consumer when using a

company’s products. It represents the customer’s expectation as regards performance that is

typically built on the reputation of an organisation. The collection of perceptions that customers

hold about a company as well as its products can lead to an affection for the business, and

ultimately influence repurchase intentions and customer loyalty.

Nguyen (2006) elucidates the concept of corporate image in a way that is useful in

understanding how CSR affects customer perceptions. The author defines the term corporate

image as a customer’s response to the aggregate offerings and is connected to the name of the

business, its architecture, the range of products or services, ideology, tradition, and to the

perception of quality communicated by those who interact with the organisation (Nguyen, 2006).

Previous research demonstrates that a favorable corporate reputation and image can offer a

business a unique and reliable appeal, as well as be a source of highly effective differentiation

and a competitive edge (Chung et al. 2011). Positive perceptions of a business are a salient

resource for achieving and maintaining a competitive edge, which is an intrinsic motivation of

implementing CSR.
 36

Corporate
Social
Responsibil
ity

Consumer
Perception

Purchase or
Reparchase
Intention

Figure 10: Proposed model of how CSR influences perception, which in turn affects purchase or

repurchase intention.

CSR typically elicits a favorable image of a business in the mind of a consumer, which in

turn affects their purchase intention. Engaging in CSR enables companies to interact with

customers in areas that matter most to them by helping to resolve confounding problems within

the society. The interactions between businesses and consumers afforded by engaging one

another at the community level have a great influence on their attitude towards and relationship

with the business. The positive attitude that the customers develop about the company generates

and perpetuates and intent to deal with the organisations. CSR fosters an emotional attachment to

the business, builds relationships, and enhances customer endorsement of the company. It

enables “corporations to gain better recognition as responsible corporate citizens” (Rahim et al.,

2011). The basis for this argument is inherent in the fact that positive consumer perceptions of a

company are not inherent in its offerings alone as espoused correctly by Nguyen. Rather,

perceptions comprise of the beliefs that the customers have concerning the attributes of the
 37

business including its involvement in CSR. As a result, customers will express varying behaviors

to the same service encounter or experience.

Abrantes Ferreira et al. (2010) conduct a review that offers invaluable insight into the

factors that customers take into account when making purchase intentions with regards to CSR

from the lens of an offering’s perceived value to the customer. One of the elements concerns the

proposition that CSR makes customers feel good about contributing to altruistic actions (Mohr

and Webb, 2005 and Smith, 1996 as cited in Abrantes Ferreira et al., 2010). This emotional

benefit that consumers derive from buying products or services from CSR-oriented firms stems

from the intrinsic desire for moral satisfaction by doing good. In this light consumers, feel that

their continued association with the corporation through purchases entails, by extension,

engaging in the benevolent activities pursued by the firm. Fundamentally, favorable perceptions

about a business formed around its CSR exploits makes customers desirous of having contact or

a relationship with the respective organisation. Such an aspiration often translates into decisions

to purchase the company’s products or services either through a single transaction or repeat

purchases. In essence, this highlights the importance of CSR eliciting outcomes that are

favorable to the penultimate organisational objective to achieve sustainable profitability.

2.5. Gaps in Literature: Case for a Contextual and Industry-Specific Study

The reality is that developing nations do not have the same social values, priorities, and

norms as well as cultural practices that underlie western-centric CSR (Jamali and Mirshak, 2007

as cited in Muthuri and Gilbert, 2011). As a result, there is mounting concern that CSR, as it is

today, only serves to reproduce as well as legitimize perspectives or values that do not take into

account the interests and priorities of developing states or the marginalized and the poor
 38

(Blowfield and Frynas, 2005 as cited in Muthuri and Gilbert, 2011). This situation creates a

challenge for corporations regarding achieving an equilibrium between the need to achieve

global CSR standards and the necessity to realize register consumer responsiveness locally.

Consequently, in order to understand any outcomes with regards to the responsiveness of the

Kenyan market to Safaricom’s CSR, it is material to take into account the fact that the cultural

environment and context-specific determinants influence consumer behavior in this area. One

pivotal step associated with this acknowledgment is conducting germane research that generates

outcomes that can then form the basis for assumptions regarding CSR in the specific contexts.

One of the extant contextual studies that examine CSR in Safaricom was conducted by

Kwalanda in 2007. The purpose of the research was to map out the scope of CSR activities

pursued by the company in Kenya at the time. Another key objective was to establish the firm’s

posture toward CSR, which is whether Safaricom deems CSR beneficial to its success. The

researcher found that Safaricom is indeed “involved in CSR as they view issues affecting the

society as part of the issues affecting them as a business, they believe an empowered society is

good for business” (Kwalanda, 2007). Kwalanda offers a positive appraisal of Safaricom’s CSR

initiatives even though a more recent study situates the conceptualization and operationalization

of CSR in Kenya at its infancy where it is largely misunderstood and misused (Cheruiyot and

Tarus, 2012). The veracity of these conflicting positions is one of the key concerns in this paper,

which establishes that the firm pursues a wide array of CSR activities in Kenya that satisfy the

components of leading CSR frameworks. In any case, Kwalanda’s study predates much of the

existing literature on CSR within the Kenyan context. Many changes have taken place in the

country’s corporate scene, which makes it fundamental to be cautious in projecting the outcome

onto the current Kenyan context.

 39

A more recent study that tackles CSR within Safaricom was authored by Cheruiyot and

Tarus. The researchers set out to examine the implications of CSR and Kenya as well as propose

key reflections on this area. The study examines the evolution of CSR and its principal variants

such as benevolence, philanthropy, and corporate citizenship in the Kenyan setting. The authors

opined that the “operationalization and conceptualization of CSR in the country is still in its

infancy, and CSR, therefore, remains largely a misunderstood, misused, and abused concept”

(Cheruiyot and Tarus, 2012). This position is not entirely unfounded as it was derived from the

array of CSR definitions as well as applications that situate the concept’s contextual

understanding in the country’s socio-cultural and political-legal nexus (Cheruiyot and Tarus,

2012). The assessment drew from domestic cases Safaricom and Delmonte to establish the

perceived hindrances to effective social responsibility in Kenya (Cheruiyot and Tarus, 2012). The

key challenge, as the study established, is situated in the erroneous understanding of what the

concept entails among Kenyan businesses.

Closely associated with this thread of literature is a 2011 study conducted by Muthuri and

Gilbert whose objective was to examine the institutionalization of CSR in Kenya. The

researchers hypothesized that while CSR is now a prominent feature in business, its practice

varies across different countries. The study applies the institutional theory to assess the “focus

and form of CSR practice of companies in Kenya” (Muthuri and Gilbert, 2011). The study

revealed that the CSR orientation differs across organisations that are only operational in Kenya

and those that either have overseas headquarters or global operations (Muthuri and Gilbert,

2011). Other than that, firm-level drivers such as performance and public relations as well as

international pressures explain the variations in the form and focus of CSR across Kenyan

companies (Muthuri and Gilbert, 2011). In tackling the challenges that stifle proper CSR
 40

implementation, the authors take an entirely different stance from the one taken by Cheruiyot and

Tarus. Cheruiyot and Tarus (2012) established that the key driver of improper CSR

operationalization lies in the erroneous conceptualizations that are situated in Kenyan

descriptions of the concept. It is possible, however, to reconcile these two positions as Muthuri

and Gilbert find that firms that have international affiliations or origins practice CSR differently

from their domestic counterparts, which points to differential understanding and

conceptualization of CSR.

The key take-home from these three studies, however, is that they do not cover the

material concerns that inform the present study. Kwalanda (2007), for instance, only dwells on

mapping out specific CSR activities pursued by Safaricom. The objective of the study, it seems,

is to conduct a quick assessment of whether Safaricom prioritizes CSR or not, and if it does,

what is the firm’s perception of the concept and how is it operationalized. Kwalanda, therefore,

is a rather descriptive study of what Safaricom does without any substantive analysis of the

subject. It is also too generalized. Cheruiyot and Tarus take up the challenge to conduct an in-

depth assessment of the firm’s conceptualization and operationalization of the concept based on

the preemptive hypothesis that what Safaricom, along with other Kenyan companies, practices in

the name of CSR is but a shadow of what it entails. Since Kenyan firms, with Safaricom

included, have an incorrect perception of what CSR entails and what its deployment requires,

their activities amount to a misapplication of the concept. On their part, Gilbert and Muthuri also

examine the institutionalization and draw a conclusion pertaining to the differential execution of

CSR across Kenyan companies. Their findings are that the origin, international presence, and

form of a firm is a key determinant of its CSR orientation.

 41

None of the preceding studies scrutinize specific metrics that pertain to consumer

responses to CSR activities in Kenya. The Kenyan study that comes close to studying the

examinable metrics in this research was conducted by Cheruiyot who sought to examine the

paradox of community responses to CSR responsibility and irresponsibility in Kenyan hotels. In

essence, the study examined CSR initiatives and their corresponding outcomes from resident

communities of 20 different classified hotels in the country. The target population in the research

were members of the respective communities within proximity to the hotels. The outcomes

elicited in the study were puzzling. In the first place, corporate irresponsibility was rife among

the sampled hotels as established by the respondents (the sample size was 650). Even so, most of

the participants were not contemptuous of the social irresponsibility that was portrayed by the

hotels, but ‘remained cautiously optimistic’ (Cheruiyot, 2012, p. 5). Following this unexpected

outcome, the researcher detailed five paradoxes that typified the community’s state of perceived

responsibility as well as irresponsibility (Cheruiyot, 2012). The paradoxes include “paradox of

Stakeholder Asymmetry (PSA), the paradox of reciprocity (POR), the paradox of corporate

image (PCI), the paradox of corporate goodwill (PCG) and the paradox of public resource use

(PPRU)” (Cheruiyot, 2012, p. 5). Consequently, Cheruiyot (2012) arrived at the conclusion that

CSR initiatives “systemic, paradoxical, and remain unmitigated.” What this means is that even

though CSR activities are universal, the outcomes are contradictory in different geographical

contexts.

It would be impossible to replicate this paradoxical outcome in the west where consumers

are largely informed about the importance of CSR and the responsibility that businesses have to

ensure societal welfare as they conduct their operations. The enigmatic outcome derived by

Cheruiyot while studying reactions to perceived social responsibility and irresponsibility

 42

underscores the necessity for context-specific studies, and this research, in particular. It does not

suffice to simply peruse scholarly work from other areas and assume that the hypothesis that

there is a positive nexus between perceived social responsibility and irresponsibility holds true

for Kenya. Extrapolating outcomes from foreign studies and projecting them onto the developing

nation is absurd, as those studies were conducted in countries or regions characterized by

disparate consumer priorities. It is, therefore, timely to examine how Safaricom’s far-reaching

CSR initiatives impact on consumers’ perception of the company and whether it has an impact on

purchasing behavior. Given the conclusion arrived at by Cheruiyot, the possibility of an equally

paradoxical outcome, in this case, is not entirely unexpected.

Cheruiyot’s study offers invaluable insight into how consumer perceptions or responses

to CSR activities within the Kenyan context are peculiar to the nature of the market base, but

there are material concerns about projecting this outcome onto Safaricom. It is worth noting here

that Cheruiyot target population was not drawn from actual customers who frequent the selected

hotels or who were likely to go to the hotels. The only criteria were whether the participants

lived near the hotels. An examination of the stakeholder theory would be beneficial in

establishing the implications of the research outcomes in the current study. The concept of CSR

draws some of its fundamental precepts of the stakeholder theory, which identifies primary and

secondary stakeholders to business. The identifiable stakeholders in any firm include

shareholders, employees, customers, the government, suppliers, and the society. Evidently,

Cheruiyot’s study involves the community and not the existing or potential consumers. The focus

is largely on how the respective communities respond to social responsibility and irresponsibility

in Kenya as indicated in the title of the study. While it is true that community-level perceptions
 43

are a reflection of the consumers’ perception, there is nothing in the study that intimates that any

of the respondents would typically frequent the selected five-star hotels.

Further, while the study concerns the wider Kenyan service industry in which Safaricom

also operates, it is entirely different in the sense that it tackles the hospitality sector, whereas

Safaricom operates in the communications sector. This aspect also has material implications that

make it necessary to exercise caution when applying the outcomes. The characteristics of the

hospitality industry in Kenya are different from the country’s telecommunication services

segment especially in terms of their geographical reach, popularity, and market or consumer

base. A hotel in Kenya typically has a geographical reach that is limited to its physical outlets,

and its popularity is relative and may not translate into actual sales (particularly the five-star

hotels studied by Cheruiyot). Hotels are also characterized by compact market or consumer

bases. On the other hand, Safaricom services the entire country and the virtual nature of

telecommunication services makes it impossible to limit the firm’s reach to its local outlets.

What is more, Safaricom is currently a household name in the country, which means that its

popularity is unmatched within the hospitality sector. This popularity does translate into

incremental user subscriptions and purchases, unlike a five-star hotel. Finally, Safaricom serves

the masses and not a compact market size that is typical in the case of hotels.

These differences underscore the importance of using outcomes from industry-specific

studies. They also demonstrate that the high stakes that Safaricom has in building up positive

perceptions within the market are a key driver of its CSR. It is no wonder, therefore, that

Safaricom has been keen on pursuing CSR ever since its entry into the Kenyan market. Small-

sized institutions with compact-sized markets can afford to dispense with their CSR

commitments, but the largesse, popularity and wide geographical reach of conglomerates make it
 44

difficult to ignore CSR. A negative report concerning social irresponsibility by Safaricom is

bound to attract significant attention and public outcry because the company dominates the

Kenyan telecommunications market. Media outlets are more likely to pick up such a study and

trade stories that can taint the organisation’s image. Of course, the prejudicial effect of such

developments on consumer behavior is highly dependent on the gravity of the misconduct and

the sensitivity of the consumers vis-a-vis their ability to migrate to a rival provider. On the

positive side, publications that depict Safaricom in the positive light, pursuing benevolent

initiatives as well as safeguarding the environment would have a favorable impact on the

business. As with the initial case, the same can be retold by the media and elicit favorable

perceptions of the brand that influence both purchase and repurchase intentions.

2.6. Conclusion

To summarize, CSR is a key antecedent to favorable consumer perceptions and behavior.

It enables firms to leverage opportunities to build a positive image in the consumers’ minds,

which goes a long way into influencing their purchase or repurchase intentions. In recognition, of

the importance of CSR in driving business success, Safaricom undertakes an array of socially

responsible actions. Safaricom’s CSR falls under six specific factors within a model proposed by

Chung et al. whose research covers metrics that are reminiscent of the primary concerns of the

present study. The elements include philanthropic, ethical, legal, economic, environmental, and

consumer responsibilities. In fulfillment of the commitments embodied by these headings,

Safaricom observes the law, accomplishes its overriding obligation to achieve sustainable profits,

and observes societal norms. Further, the organisation pursues philanthropic activities by making

donations to non-profits that service Kenyan communities, requiring its employees to spend CSR

leave days on volunteer work and maintaining strategic partnerships that foster opportunities to
 45

advance charitable causes. The firm addresses an entire suite of social concerns in Kenya

including water shortage, lack of access to proper healthcare or education, and so forth.

Safaricom promotes environmental protection, albeit in the manner satisfies the requirements of

the Kenyan public without expending its efforts towards achieving international standards. Also,

the organisation fulfills its obligations to consumers by offering unparalleled telecommunication

services. There is a scholarly gap in examining whether the favorable outcomes associated with

CSR in other areas in the world also accrue to Kenyan businesses, let alone individual companies

that register notable exploits in social responsibility. The preceding discussion underscores the

need for a context-specific study by demonstrating that scholarly discourse on CSR in Kenya is

first, scarce and second, does not examine the variables that are examinable under this study.

This research seeks to fill this gap by examining the interaction between Safaricom’s CSR and

consumer behavior.

CHAPTER THREE: METHODOLOGY

3.1. Research Philosophy

Fundamental to research process is the need to position the study within a paradigmatic

model, because it enables researchers to “reflect upon the wider epistemological and

philosophical outcomes of their perspective” (Perren and Ram, 2004, p. 95). In essence, each

paradigm has unique assumptions, methodologies, strategies as well as limitations. The nature
 46

and objectives of this study make it best suited for an interpretive qualitative method that will

foster a nuanced understanding of the research area. This study adopts the interpretivist research

philosophy. Interpretivism is premised on an ontology that holds that all observation is based on

value and theory and that an examination of society cannot in itself be the quest of an isolated

objective truth (Leitch, Hill, and Harrison, 2010). This philosophy is based on the assumption

that reality is constructed socially rather than being determined by objective means.

Interpretivism encompasses the position that placing people in a societal setting augments

the ability to gain an understanding of the beliefs they hold of their activities. The intrinsic nature

of interpretivism facilitates the retrieval of qualitative data. Its main concern is with the

peculiarity of a specific situation, which contributes substantively to the quest for contextual

depth, a vital concern in this study. In affirming this, Kelliher (2011) asserts that “interpretive

research is recognized for its value in providing contextual depth.” Interpretivists opine that since

people’s behaviors are affected by the meanings and interpretations they attach to social

situations, the task of a researcher is to understand these interpretations and meanings, and how

people understand and see the world. For this reason, the adherents of this philosophy have the

conviction that a researcher needs to engage the people personally rather than merely collecting

numerical data, which makes it instrumental in retrieving qualitative data and conducting

exploratory research.

3.2.Scientific Approach

The present study will apply inductive reasoning as its scientific approach. Inductive

reasoning is commonly referred to as a “bottom up” approach because of it stems from specific

observations rather than formulated theories as is the case with the deductive methodology.

Inductive researchers “work from the bottom-up, using the participants’ views to build broader

themes and generate a theory interconnecting the themes” (Creswell and Clark, 2007).
 47

In deploying inductive strategies, a researcher typically starts with specific observations

that help in detecting the existence of regularities and patterns. If patterns are discovered, then

the researcher formulates tentative hypotheses to explain the observable phenomenon, and

ultimately develop general theories about the occurrence. Induction, therefore, entails moving

from a precise outcome towards a general conclusion.

Tentative
Observation Pattern
Hypothesis

Theory

Figure 11: Inductive reasoning process.

Arguments founded on observation or experience are best suited for inductive expression as

is the case in this research project. Further, the approach is highly beneficial in a case where little is

known about a research area. As established in the literature review little is known about how CSR

impacts purchase decisions in the African continent, let alone individual nations and specific

industry. Consequently, the inductive approach will be valuable in gaining an understanding of this

particular research area.

3.3. Research Design

Before setting out the research design, it is necessary to revisit the objectives of this

thesis. This study sought to:

i. …find out whether CSR activities of Safaricom play a role in consumer

purchasing decisions of their customers

ii. …establish the perceptions consumers have on the CSR activities of Safaricom
 48

iii. … determine the major CSR activities of Safaricom

iv. … find out whether consumers are aware of the CSR activities of the other

players in the telecommunication industry in Kenya

v. …establish whether the consumers were aware of Safaricom’s CSR activities

when they were making initial purchasing decisions.

3.3.1. Research Purpose

As mentioned, this study seeks to examine a purely uncharted scientific area, which is the

impact of CSR activities pursued by Safaricom on Kenyan consumers. As a result, this study will

apply an exploratory methodology to discover what is going on, especially in situations where

there is little understanding or little knowledge (Robson, 2002). It enables researchers to search

for fresh insights into phenomena, ask questions, weigh the occurrence from a new perspective

as well as formulate hypotheses and ideas that could be used in future research (Robson, 2002;

Saunders et al., 2009). An exploratory research is typically conducted when there is a need for

familiarization or orientation in a field, particularly with regards to newly emergent issues in a

society (Yin, 2008). This approach is applied when there is a need to examine differences as well

as relationships (Bickman and Rog, 2009), where “how”, “why,” and “what” queries are

answered, but the main focus is on the “what” questions (Yin, 2008).

3.3.2. Research Strategy

This thesis will apply the case study method as its research strategy. A case study is “an

empirical inquiry that investigates a contemporary phenomenon within its real-life context,

especially when the boundaries between phenomenon and context are not clearly evident” (Yin,

2008, p. 13). The utilization of this method is pragmatic means to explore as well as challenge

extant theories, drawing the conclusion of whether additional research is needed, or if the
 49

existing propositions should be accepted (Saunders et al., 2009). This research strategy is

preferable when examining the perspectives held by the individuals engaged or involved in the

situation in question (Gillman, 2000). As this study aspires to examine the perspectives of

Kenyan consumers regarding Safaricom’s CSR activities, a case study approach will be

instrumental. This research will use case study as the research strategy. Case study has

particularly been used where researchers were concerned about the ability of quantitative

strategies to give in depth and holistic explanations about social and behavioral issues. Case

study has been chosen as a research strategy because it goes beyond quantitative and statistical

results, and enables researchers to understand behavioral situations through the respondent’s

perspectives.
 50

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