ST. AUGUSTINE UNIVERSITY OF TANZANIA

FACULTY OF BUSINESS ADMINISTRATION

DEPARTMENT OF ACCOUNTING AND FINANCE

IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON COMPANY'S

ECONOMIC SUSTAINABILITY : A CASE OF NYANZA BOTTLING

COMPANY LIMITED

A Dissertation in partial fulfillment of the requirements for the award of Master Degree

in Business Administration Submitted to the Faculty of Business Administration

JACKSON. Zacharia

(MBA 58778)

AUGUST, 2018

ii

DECLARATION

I declare that this research report has been a result of my effort. The contribution of the scholars

whose works have been integrated in this work does not extend any ownership right.

Jackson Zacharia MBA 58778 ....................................................

Date .....................................................

iii

CERTIFICATION

The undersigned certify that they have read and hereby recommend for acceptance by the

University of SAUT, a dissertation entitled: Impact of corporate social responsibility on

company's economic sustainability, in partial fulfillment of the requirements of Masters Degree

of Business Administration-Accounting of the University of SAUT.

Dr. Kaihula, Bishagazi

(SUPERVISOR)

.....................................................................................

Date..................................................

iv

COPYRIGHT

This work is protected by copyrights. No part of this dissertation/thesis may be reproduced,

stored in any retrieval system, or transmitted in any form or by any means, electronic,

mechanical photocopying, recording, or otherwise, without prior written permission of the author

or the St. Augustine university of Tanzania. Whoever infringes this right commits an offense and

will be subject to legal proceedings that attract significant consequences

© Jackson, Zacharia 2018

All rights reserved

v

DEDICATION

This dissertation is dedicated to my lovely wife, Mrs. Harrieth Zacharia Jackson and my son

Kendrick for their support and encouragement during the whole period of my study.

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ACKNOWLEDGEMENTS

This dissertation is a result of the support I received from many individuals and institutions.

Indeed, I wish I could mention all of them here but space is the limit. I express my heartfelt

thanks and appreciation to all individuals and institutions for their cooperation, assistance,

criticisms and encouragement that contributed to the accomplishment of this report. Allow me to

mention a few I could mention in this limited space.

First and foremost, I thank the Almighty God for bestowing me the power, strength and

knowledge that made me reach this important success in life.

My greatest debt is to my supervisors, Dr. Henry Ogoi and Dr. Kaihula Bishagazi who devoted

their time to read and comment on my work from the research proposal to the final report. Their

constructive and meaningful comments and suggestions made a significant contribution to the

quality of this dissertation. On the same line, I would also like to extend my gratitude to all MBA

lecturers for their directives during course of this study.

I would like to additionally register my appreciations to my family for their financial support that

enabled me to undergo my studies. On the same line, I feel the pleasure to express my sincere

appreciation to the respondents of this study, from NBCL-Mwanza staffs and customers. I thank

them for their mutual support in providing me with valuable data that contributed to the

accomplishment of this study.

Further, special thanks should also be extended to MBA classmates for their assistance in one

way or another, their guidance and moral support really encouraged me to reach at this high

level.

vii

I am extremely grateful to my family especially my beloved parents, Mr. Jackson Jeremiah and

Mrs. Marry Jackson. My lovely wife Harrieth Zacharia Jackson, my sibling, Marco Jackson

Jeremiah and my lovely sister Ruth Jackson Jeremiah disserve special thanks for their patience,

love and prayers that empowered me to reach this inspiring level of education.

Finally, I thank all friends who have always been with me in this journey and all the well wishers

who took their time to pray for my success and wish me well. I am also bound to acknowledge

the role played by my enemies whom I don't know. Their challenges have made me who I am.

However, it should be noted that, any shortcomings in this research entirely belong to me

viii

Table of Contents

DECLARATION ............................................................................................................................ ii

CERTIFICATION ......................................................................................................................... iii

COPYRIGHT ................................................................................................................................. iv

DEDICATION ................................................................................................................................ v

ACKNOWLEDGEMENTS ........................................................................................................... vi

ORGANISATION OF THE REPORT ......................................................................................... xii

LIST OF TABLES ....................................................................................................................... xiii

LIST OF FIGURES ..................................................................................................................... xiv

LIST OF ABBREVIATIONS ....................................................................................................... xv

ABSTRACT ................................................................................................................................. xvi

CHAPTER ONE ........................................................................................................................... 1

1.0 Introduction ........................................................................................................................... 1

1.1 Background to the study ........................................................................................................ 1

1.1.1 Historical Background of the Study ............................................................................... 1

1.1.2 Global trend .................................................................................................................. 10

1.1.3 Sub- Saharan Africa trend ............................................................................................ 11

1.1.4 Tanzania trend .............................................................................................................. 13

1.2 Significance of the study ..................................................................................................... 15

1.3 Statement of the Problem .................................................................................................... 15

1.4 Objective of the Study ......................................................................................................... 17

1.4.1 General Research Objective ......................................................................................... 17

1.4.2 Specific Objectives. ...................................................................................................... 17

1.5 Research Questions ............................................................................................................. 18

1.6 Variable of the study ........................................................................................................... 18

1.7 Scope of the study ............................................................................................................... 18

1.8 Definitions of key Terms..................................................................................................... 19

1.9 Conceptual framework ........................................................................................................ 21

CHAPTER TWO ........................................................................................................................ 24

LITERATURE REVIEW .......................................................................................................... 24

2.0 Introduction ......................................................................................................................... 24

ix

2.1 Theories of Corporate social responsibility on Company's economic sustainability .......... 24

2.1.1 Stakeholder Theory ....................................................................................................... 24

2.1.2 Social Contracts Theory ............................................................................................... 28

2.1.3 Legitimacy Theory ....................................................................................................... 30

2.2 Empirical literature Review ................................................................................................ 32

2.3 Knowledge Gap ................................................................................................................... 40

CHAPTER THREE .................................................................................................................... 43

RESEARCH METHODOLOGY .............................................................................................. 43

3.0. Introduction ........................................................................................................................ 43

3.1. Type of Research ................................................................................................................ 43

3.2 Research Design .................................................................................................................. 44

3.3 Area of Study ...................................................................................................................... 44

3.4 Population of the Study ....................................................................................................... 46

3.5 Sample Size ......................................................................................................................... 47

3.5 Sampling Frame .................................................................................................................. 48

3.6 Sampling technique. ............................................................................................................ 49

3.6 Nature of Data ..................................................................................................................... 49

3.6.1 Primary source .............................................................................................................. 49

3.6.2 Secondary Source ......................................................................................................... 50

3.7 Methods of Data collection ................................................................................................. 50

3.7.1 Questionnaire ................................................................................................................ 50

3.7.2 Interview Guide ............................................................................................................ 51

3.7.3 Documentary Review ................................................................................................... 51

3.7.4 Pilot Testing .................................................................................................................. 51

3.8 Data Analysis ...................................................................................................................... 52

3.9 Validity and Reliability ....................................................................................................... 52

3.9.1 Validity ......................................................................................................................... 53

3.9.2 Reliability ..................................................................................................................... 54

3.10 Ethical Concerns ............................................................................................................... 54

3.11 Study Funding ................................................................................................................... 55

x

CHAPTER FOUR ....................................................................................................................... 56

FINDINGS AND DATA ANALYSIS ........................................................................................ 56

4.0 Introduction ......................................................................................................................... 56

4.1. Descriptive results .............................................................................................................. 56

4.1.1 Questionnaire response rate .......................................................................................... 57

4.2. Response to Research objectives........................................................................................ 60

4.2.1 To examine the relationship between transparency and NBCL economic sustainability

in Tanzania. ........................................................................................................................... 60

4.2.2 To assess the relationship between accountability and NBCL economic sustainability

in Tanzania. ........................................................................................................................... 62

4.2.3 To find out the relationship between company's compliance and company's economic

sustainability at NBCL in Tanzania. ...................................................................................... 63

4.2.4 To examine resource management on company's economic sustainability at NBCL in

Tanzania. ................................................................................................................................ 64

4.2.5 To assess the economic sustainability of NBCL in Tanzania. ..................................... 65

CHAPTER FIVE ........................................................................................................................ 66

SUMMARY, CONCLUSION AND RECOMMENDATIONS .............................................. 66

5.0 Introduction ......................................................................................................................... 66

5.1 Summary of key Findings ................................................................................................... 66

5.1.1. To examine transparency on company's economic sustainability at NBCL in Tanzania.

............................................................................................................................................... 66

5.1.2. To assess accountability on company's economic sustainability at NBCL in Tanzania.

............................................................................................................................................... 67

5.1.3. To find out the relationship between company's compliance and company's economic

sustainability at NBCL in Tanzania. ...................................................................................... 69

5.1.4. To examine resource management on company's economic sustainability at NBCL in

Tanzania. ................................................................................................................................ 70

5.1.5. To assess the economic sustainability of NBCL in Tanzania ..................................... 71

5.2 Conclusion ........................................................................................................................... 72

5.2.1. To examine the relationship between transparency and company's economic

sustainability at NBCL in Tanzania ....................................................................................... 72

5.1.2. To assess accountability on company's economic sustainability at NBCL in Tanzania

............................................................................................................................................... 72

xi

5.1.3. To find out the relationship between company's compliance and company's economic

sustainability at NBCL in Tanzania ....................................................................................... 72

5.1.4. To examine resource management on company's economic sustainability at NBCL in

Tanzania ................................................................................................................................. 73

5.1.5. To assess the economic sustainability of NBCL in Tanzania ..................................... 73

5.3. Recommendations .............................................................................................................. 73

5.3.1. Recommendation to the organization .......................................................................... 73

5.3.2. Recommendation to Government ................................................................................ 74

5.4 Area of further research ................................................................................................... 74

REFERENCES ............................................................................................................................ 75

APPENDICES ............................................................................................................................. 80

Appendix I: Questionnaire for employees of Nyanza Bottling Company Limited (NBCL) .... 80

Appendix II: Questionnaire for customers of Nyanza Bottling Company Limited (NBCL) .... 84

Appendix III: A guide to customers of NBCL-Mwanza products around the Plant- Nyamagana

District ....................................................................................................................................... 87

xii

ORGANISATION OF THE REPORT

This report has been organized into five chapters. The first chapter presents the background of

the study, states the problem and identifies the objectives of the study from which the research

questions are drawn and finally presents the operational definition and conceptual framework.

The second chapter of this report presents the literature review covering theoretical and empirical

literature reviews. Research methodology has been discussed in chapter three. this chapter

mainly contains the design of the study and the test of validity and reliability. The fourth chapter

of this report contains findings and data analysis. This part involves data obtained and the way

that set of data is analyzed. The fifth chapter includes conclusion and recommendations

xiii

LIST OF TABLES

Table 3.1 Target Population .......................................................................................................... 46

Table 3.2 Sample size from target population .............................................................................. 48

Table 4.1.: Questionnaire response rate ........................................................................................ 57

Table 4.2: Profile of Respondents ................................................................................................. 57

Table 4.3: Description of the relationship between transparency and NBCL economic

sustainability ................................................................................................................................. 60

Table 4.4: Description of how Elements of transparency impact NBCL-Mwanza economic

sustainability ................................................................................................................................. 61

Table 4.5: Description of the relationship between Accountability and NBCL economic

sustainability ................................................................................................................................. 62

xiv

LIST OF FIGURES

Figure 1.1: Triple Bottom line and Company Sustainability .......................................................... 9

Figure 1.2: Types of Corporate Responsibilities .......................................................................... 20

Figure 1.3: Company Sustainability and Corporate Social Responsibility................................... 20

Figure 1.4: Conceptual framework ............................................................................................... 23

Figure 4.1: Description of the relationship between company's compliance and NBCL economic

sustainability ................................................................................................................................. 63

Figure 4.2: Description of how management of resource has brought about NBCL economic

sustainability ................................................................................................................................. 64

xv

LIST OF ABBREVIATIONS

CSDs Carbonated Soft Drinks

CSR Corporate Social Responsibility

CPCT Cleaner Production Centre of Tanzania

DNA Deoxyribonucleic Acid

EU European Union

FDI Foreign Direct Investment

MNCs Multi-National Companies

NGOs Non- Government Organizations

NBCL Nyanza Bottling Company Limited

PAYE Pay As You Earn

PET Plastic Bottles

RBV Resource Based View

RGB Refillable Glass Bottles

RECP Resource Efficient And Cleaner Production

SAUT St. Augustine University of Tanzania

SSA Sub- Saharan African

SDL Service Development Levy

TBL Triple Bottom Line

TNIP The National Investment Policy

TCCMs The Coca-Cola Management Systems

UK United Kingdom

VAT Value Added Tax

xvi

ABSTRACT

This study was about the impact of corporate social responsibility on company's economic

sustainability. References for this study were drawn from NBCL-Mwanza staffs and its

customers. The study sought to meet five objectives, namely; to examine the relationship

between and company's economic sustainability in Tanzania, to assess the relationship between

accountability and company's economic sustainability in Tanzania, is there a relationship

between company's compliance and company's economic sustainability in Tanzania, resource

management has anything to do with company's economic sustainability, What is the economic

sustainability of NBCL in Tanzania. The study employed mixed method approach where

quantitative and qualitative was both used descriptive cross-sectional research design. Data were

collected from participants who were NBCL-Mwanza staffs and its customers. Data and

information was gathered using questionnaire, interview guides and documentary review. The

analysis of the data obtained from the respondents revealed that corporate social responsibility

has contributed to the economic sustainability of NBCL-Mwanza. However, the test results

revealed that NBCL-Mwanza economic sustainability is influenced by corporate reporting but

the company has inadequate knowledge on corporate social responsibility reporting while the

government has shown inadequate support on promoting and supporting companies that engages

in corporate social responsibilities practices . This failure is said to be the result of transition

period that every part concerning with corporate social responsibility should adopt and learn to

integrate corporate social responsibility practices as an economic sustainability strategy of their

own. In addition, the results revealed that corporate social responsibility is a new strategy to

company‟s staffs and managers, they should be taught in how to make the best use of corporate

social responsibility in enhancing company's economic sustainability.

1

CHAPTER ONE

1.0 Introduction

This chapter presents the background of corporate social responsibility CSR from the global

perspective coming down to the country level, especially Tanzania. In addition, this chapter

identifies the significance of the study as well as stating the problem while pointing out the

objective of the study and research questions. Finally, the scope of the study is also identified

along with conceptual framework.

1.1 Background to the study

This section presents the historical background of corporate social responsibility CSR trend from

the global perspective coming down to the country level. The section extends its discussion to

include the awareness and implementation of CSR in Tanzania. Issues relating to the main

variables of the study were explored in details.

1.1.1 Historical Background of the Study

EU Commission (2002) defines CSR as the concepts whereby companies integrate social and

environmental concerns into their business operation and in their interaction with their

stakeholders in a voluntary basis. It was then seen as a voluntary actions that companies have an

option either to practice it or not. The growing number of researchers and scholars has argued

that, company operation do not only impact the insiders but also the outsiders likewise.

Aras & Crowther (2008), Company operation have an impact on the external environment since

business does not operates in isolation, that is to say company operation largely affect both

2

environment and society. Practicing corporate social responsibility shouldn't have been an

optional or voluntary deeds rather than conditional for the corporate existence and compliance.

In the 1950s the primary focus was on businesses' responsibilities to society and doing good

deeds for society. In the 1960s key events, people and ideas were instrumental in characterizing

the social changes ushered in during this decade.

In the 1970s business managers applied the traditional management functions when dealing with

CSR issues. Hetherington (1973) stated that, there is no reason to think that shareholders are

willing to tolerate an amount of corporate nonprofit activity which reduces either dividends or

the market performance of the stock. Dahl (1972) argued that every large corporations should be

thought of as a social enterprise; that is an entity whose existence and decisions can be justified

in so far as they serve public or social purposes, the desirability of considering the social

performance of the a business has not always however been accepted and has been the subject of

the extensive debate, Crowther & Aras G ( 2008). Also Philips and Lyall (1998), in the modern

commercial area companies and their managers are subjected to well publicized pressure to play

an increasingly role in the welfare of the society.

While, in the 1980s, business and social interest came closer and firms became more responsive

to their stakeholders. During the 1990s the idea of CSR became almost universally approved,

also CSR was coupled with strategy literature and finally, in the 2000s, CSR became definitively

an important strategic issue.

Tony Blair, former UK Prime Minister, May 2000 reckoned that;" We are more than ever aware

of the potentially negative impact of the business on the environment , whatever the nature or

size of the business there can only be positive results from developing sustainability from

3

benefiting your own bottom line to benefiting tomorrow industry to benefiting the environment

in which we all live.

Corporate social responsibility (CSR) is a concept that has acquired a new character in the

global economy. “With the advent of globalization, managers in different contexts have been

exposed to the notion of CSR and are being pressured to adopt CSR initiatives” (Jamali and

Sidani, 2008; 330).

Friedman (1970) stated that, there is one and only one social responsibility of business, to use its

resources and engage in activities designed to increase its profits so long as it stays within the

rules of the game, which is to say, engages in open and free competition without deception or

fraud. Drucker (1984) revealed that, business turns a social problem into economic opportunity

and economic benefit into productive capacity, into human competence into well paid jobs and

into wealth. Doane & MacGillivra (2001), in fact economic sustainability is the paradoxical

golden child of sustainability: if organizations or countries understood perfectly well what it

meant to be economically sustainable, there would be full employment, less poverty and no

bankruptcies. Unfortunately, that is not the case: economic sustainability is a complex picture,

the nature of which cannot be fully understood without looking at both the internal and external

environment in which organizations are operating. Existence of sustainable business is the most

prior concern of every business practitioners, doing good by doing well is the utmost faith of

corporate social responsibility. Ensuring that, the company gets enough profit at the same time

share the profit with the society. While it was widely held in previous decades that companies

should only focus on their bottom lines, the past decade has seen a change in this thinking.

4

Doane & MacGillivra (2001),most companies are concerned not only with their immediate

financial performance, but with their ability to continue long into the future being a player able

to make positive contributions to their local community, broader society and planet as a whole

Nielsen survey (2015) revealed that, 66 percent of online consumers said they would pay more

for products or services from companies that are socially and environmentally responsible, the

same survey also found that consumer-goods‟ brands with a commitment to sustainability

outperform those that don‟t. It's by protecting the environment the business is operating in,

supporting construction of infrastructure system, providing social service, sponsoring sports and

games, providing scholarship and providing financial support to orphanage centre. "Maintaining

high and stable levels of economic growth is one of the key objectives of sustainable

development. Abandoning economic growth is not an option. But sustainable development is

more than just economic growth. The quality of growth matters as well as the quantity." UK

Government Annual Report 2000, January 2001. Corporate social responsibility (CSR) initiates

social benefits. However, in the modern world of business today, CSR is a contested topic and its

is by no means certain that everybody thinks it is important or relevant to modern business,

Crowther and Aras (2008). An understanding of what makes companies survive will help

sustainability managers embed their programmes more effectively. If they are not concerned

with whether or not their company can stay in business, all the good green and community work

could disappear at the whim of the market Doane & MacGillivra (2001). A certain amount of

rhetoric may be inevitable in the area of social responsibility. Managers may even believe that

making statement about social responsibility insulates the firm from the necessity of taking

socially responsible action.

5

Also Moir (2001) whether or not business should undertake CSR and the forms that

responsibility should take, depends upon the economic perspective of the firm that is adopted.

Practicing corporate social responsibility shouldn't have been an optional or voluntary deeds

rather than conditional for the corporate existence and compliance, Aras & Crowther ( 2008).

These initiatives fall into three categories, often called the triple bottom line, which are social,

environment, and economic. At first, many businesses didn‟t take corporate social responsibility

seriously, however, as consumers have become more aware and educated on social issues like

global warming and unethical labor practices, they have begun demanding businesses institute

policies that benefit all of society rather than just the business‟ bottom line. Companies that don‟t

practice effective corporate social responsibility simply do experience situation like, customer

taking their money to a company that practice effective corporate social responsibility. Recently

it has found to be crucial to integrate corporate social responsibility as codes of ethics or codes of

conducts of company sustainability strategies, companies who initially practice corporate social

responsibility eventually enjoys good business reputation and at the same time enjoy customer

loyalty.

Hetherington (1973) stated that, there is no reason to think that shareholders are willing to

tolerate an amount of corporate nonprofit activity which reduces either dividends or the market

performance of the stock. Despite, the reasonable importance of corporate social responsibility,

companies do claim that, the cost of practicing corporate social responsibility is a non-

recoverable in the long run and they should be shared by both stakeholders of business from

global to national level. Governments at national level do claim that, companies should take

enough initiatives to incorporate corporate social responsibility at the best level of it, in order to

offset the consideration of practicing it with the return expected in the long run.

6

Corporate Social Responsibility (CSR) is a recent entry in the economy of modern enterprise

both at global level and international level. Corporate social responsibility contribute to the

sustainable development of economic entities. Corporations around the world are struggling on

how to meet the needs of the present generation without compromising the ability of the next

generations to meet their own needs. Organizations are being called upon to take responsibility

for the ways their operations impact societies and the natural environment. They are also being

asked to apply sustainability principles to the ways in which they conduct their business.

Sustainability refers to an organization‟s activities, typically considered voluntary, that

demonstrate the inclusion of social and environmental concerns in business operations and in

interactions with stakeholders (van Marrewijk & Verre, 2003). It is no longer acceptable for a

corporation to experience economic prosperity in isolation from those agents impacted by its

actions. A firm must now focus its attention on both increasing its bottom line and being a good

corporate citizen. Keeping abreast of global trends and remaining committed to financial

obligations to deliver both private and public benefits have forced organizations to reshape their

frameworks, rules, and business models. To understand and enhance current efforts, the most

socially responsible organizations continue to revise their short- and long-term agendas, to stay

ahead of rapidly changing challenges. Gray & Bebbington (2001) Social and environmental

issues are brought together - and made even more demanding - within the concept of

sustainability. Sustainability is a difficult concept to apply to any single corporation. It is

primarily a global concept. But that doesn't mean it has no application to corporation, It should

come as no surprise that the recent developments in social, environmental and sustainability have

not placed formal accountability at their heart. The accountability that the stakeholders

themselves wish to see. Ernst &Young (2010), companies are facing growing pressure to explain

7

and improve their sustainability performance. Key financial stakeholders, like investors and

equity analysts, are building sustainability factors into their analysis and investment decisions.

Stakeholders like consumers and non-government organizations (NGOs) are demanding more

data regarding companies‟ environmental and social performance. Regulators and standards

setters are piling on the pressure, too. Sustainability has made its way to the boardroom.” Now,

sustainability may be on the cusp of more active audit committee involvement, particularly given

the need to embed it firmly into risk and compliance processes and to improve sustainability

reporting.

However, an enormous shift has occurred in how organizations must understand themselves in

relation to a wide variety of both local and global stakeholders. The quality of relationships that a

company has with its employees and other key stakeholders such as customers, investors,

suppliers, public and governmental officials, activists, and communities is crucial to its success,

as is its ability to respond to competitive conditions and corporate social responsibility (CSR).

These major transformations require national and global companies to approach their business in

terms of sustainable development, and both individual and organizational leadership plays a

major role in this change. Organizations have developed a variety of strategies for dealing with

this intersection of societal needs, the natural environment, and corresponding business

imperatives. Organizations can also be considered on how they develop and integrate social

responsibility approaches into both strategy and daily operations world- wide. At one end of the

development continuum are organizations that do not acknowledge any responsibility to society

and the environment. And on the other end of the development continuum are those

organizations that view their operations as having a significant impact as well as reliance on

society at the economic, social, and ecological levels, thus resulting in a sense of responsibility

8

beyond the traditional boundaries of the organization. Most organizations can be placed

somewhere in between. Corporate responsibility or sustainability is therefore a prominent feature

of the business and society literature, addressing topics of business ethics, corporate social

performance, global corporate citizenship, and stakeholder management. Management education

can be an important source of new ideas about shifting toward an integrated rather than fractured

knowledge economy, but this means also that the role and meaning of socially responsible

leadership needs to be updated.

Much further research is needed, since some current developments on this topic draw attention to

similarities and differences in the three angles of the triple bottom line (TBL) the environmental,

societal, and business arenas. Elkington (1997) ,the triple bottom line is a form of corporate

social responsibility dictating that corporate leaders tabulate bottom-line results not only in

economic terms (costs versus revenue) but also in terms of company effects in the social realm,

and with respect to the environment. There are two keys to this idea. First, the three columns of

responsibility must be kept separate, with results reported independently for each. Second, in all

three of these areas, the company should obtain sustainable results. The notion of sustainability is

very specific. At the intersection of ethics and economics, sustainability means the long-term

maintenance of balance. As elaborated by theorists including John Elkington, here‟s how the

balance is defined and achieved economically, socially, and environmentally.

9

Figure 1.1: Triple Bottom line and Company Sustainability

Source; Researcher.(2018)

The field addresses complex and critical issues, such as human rights, environmental protection,

equal opportunities for all, fair competition, and the interdependencies that occur between

organizations and society (Quinn, 2008). Ongoing research reveals that a variety of strategies,

alliances and partnerships, and approaches are being used around the globe. The literature also

reveals that although the aspiration of many corporations to contribute to a better world is great,

translating that aspiration into reality proves to be somewhat of a challenge. Corporate social

responsibility (CSR) is now viewed as “one of, if not the most important issue of our time”

Hopkins (2007). Its concept is dynamic, multifaceted and global; but it has proved to be a

contentious matter across the world. It is a plethora of concepts that have emerged to express the

role and responsibilities of business in society Judy (2012), which has developed a vast body of

literature that supports and critiques its principle of the triple bottom line that has left a lot of un-

attempted questions from practitioners and academia in most developing countries and, in

particular, Tanzania. These questions, among others include what role do politicians, government

10

regulation, legislation, and voluntary standards play in the adoption of CSR strategies? Which

CSR theory is currently adopted? What are the benefits of CSR practices taking into

consideration its cost to implement?, what are the challenges and opportunities faced by both

public sector and private companies seeking to engage in CSR programmes in global context?, is

there a strong relationship between CSR and company's economic sustainability?.

1.1.2 Global trend

Georg kell (2014), regardless of whether you call it CSR, corporate responsibility,

environmental, social and corporate governance (ESG) or sustainability, a common

understanding is emerging around the world: a company's long-term financial success goes hand

in hand with its record on social responsibility, environmental stewardship and corporate ethics.

Corporate social responsibility is the global concept that, most companies have now and then

tried to integrate in their business. The discussion on whether it is worth to enhance CSR in

business, has been a ground of discussion from back in days up to now. Corporate Social

Responsibility (CSR) is a recent entry in the economy of modern enterprise both at global level

and international level. Corporate social responsibility contributes to the sustainable

development of economic entities. Corporations around the world are struggling on how to meet

the needs of the present generation without compromising the ability of the next generations to

meet their own needs. Organizations are being called upon to take responsibility for the ways

their operations impact societies and the natural environment. They are also being asked to apply

sustainability principles to the ways in which they conduct their business. Georg Kell(2014),the

costs to business and society of getting it wrong and the benefits of getting it right are

increasingly apparent. However, the question remains whether this is a passing trend or one that

11

will continue to reshape the profile of business. Several big trends indicate that corporate

sustainability is here to stay.

1.1.3 Sub- Saharan Africa trend

R,Kilonzo & T, Kontinen (2015) ascertained that, the Sub- Saharan Africa (SSA) has not been

left out in corporate social responsibility growing debates. Sub- Saharan Africa still stand as a

potential investment zone, where a number of industries have been established in recent years.

This region has been blessed with resources which the host countries have not been efficient in

their exploitation at the same time the society surrounding the industries have been experiencing

a number of side effects, either positive or negative. Slight advantage has been observed in term

of social service and infrastructure system, construction of roads and railways and provision of

social service such as school ,hospital ,market water and electricity supply plus provision of

scholarship and sponsorship are the most observable positive advantages. Today, corporate

social responsibility (CSR) “debates are not just occurring in developed economies…Countries

around the world are engaging in rich and nuanced debates and undertaking significant reforms

in the corporate governance and CSR arenas” (Afsharipour, 2011, p. 996). Mickels (2009) adds

that “directors all over the world are questioning whether corporations should exist solely to

maximize shareholder profit” (p. 271). The Society of Human Resource Management (SHRM)

(Workplace Visions, 2007) found that a majority of Human Resource professionals (United

States, Australia, India, China, Canada, Mexico, and Brazil) reported that their organizations had

corporate social responsibility practices in place. SHRM put forth a number of reasons for the

extent of corporate social responsibility (Cavico and Mujtaba, 2012a/b).

12

Blowfield, M., & Frynas, J. G. (2005), set the tone for a new direction in CSR research to

determine what CSR does and could mean for the poor and marginalized in developing

countries. They assert that claims about CSR contributions to alleviate poverty and achieve other

developmental goals.

D,popp (2012).However, the society is complaining of suffering due to the existence of these

industries, a number of problems are said to be influenced by their operations. Eruption of

diseases caused by contamination of water has caused a number of death and suffering to human

being and livestock as many cases has been reported recently. These industries are entirely

claimed to prioritize maximization of profit and have a slightly concern of the surroundings.

R,Kilonzo & T, Kontinen (2015). The society and human rights agencies have now and then

vowed to have a campaign on discussing on how to rectify these challenges, henceforth they

have established campaigns on protecting both the environment and the society, this has come

with positive answers, increased awareness of CSR, formulation of polices and laws guiding

CSR as the recommended code of conducts for company compliance to laws and regulations of

the state. Companies that involves in effective corporate social responsibility are likely to attract

more customers in a long run compared companies do not, this is contention that customer value

higher, the companies that values higher society values, society wellbeing and environment at a

large. The sustainability of company depends on the existence of customer they serve, thus the

increase in number of market share suggest the existence of the company in the long run and vice

versa.

13

The establishment and implementation of CSR as code of ethics and code of conducts cannot be

left out in the contention of policy making and regulating in the world of economy today, most of

which are Sub- Saharan countries.

1.1.4 Tanzania trend

Tanzania like other developing countries in the world which champion the establishment and

effective implementation of CSR as a code of ethics and code of conducts for company

compliance. The National investment policy (1996) and its subsequent changes have been useful

in creating a favorable investment environment in the country.

D,popp (2012). The CSR dialogue and agenda has gained momentum with an increase in multi-

national companies investing in the country, and is therefore driven by the business sector in

Tanzania. As this concept is a rapidly evolving and expanding field in Tanzania, opportunities

arising from working with the private sector are diverse and increasing. There is tremendous

breadth and diversity in the types of corporate social responsibility activities, as well as the

partnerships that are oftentimes needed to effectively implement them. The successes and lessons

learned from the existing CSR initiatives and supporting programs in Tanzania could be used to

a greater advantage in building blocks for expanding support towards attaining sustainable

partnerships. However, it is important to note that as partnerships are strategic for business,

relationships between the public and private sectors in many countries in Africa, including

Tanzania, are marked by suspicion and mistrust.

R,Kilonzo & T, Kontinen (2015). Argued that, the lack of positive business environment is

attributed by the private sector to weak state regulatory frameworks and procedures, while public

agencies and civil society organizations are often concerned about the failure of business to

14

promote Corporate Social Responsibility (CSR), adopt pro-poor business models and more

deeply support development goals. In light of this, more efforts need to be invested in designing

strategic and integrated perspectives that will help eliminating negative perceptions towards each

partner. International support and expertise will be helpful to facilitate this transition as it is

important to empower the people of Tanzania to build a sustainable nation.

Flavianus B. Ng‟eni et al (2015). Whether the company`s Corporate Social Responsibility (CSR)

programs influence positively the community`s development and enhance peoples‟ wellbeing is

irrefutable reality. S, Mbirigenda (2015), The only remaining truth to unveil is to what extent and

how with emphasis to specific country experience such as Tanzania for which this section is

dedicated. In this stance the section presents the results regarding CSR and community

development.

Moreover, Dr Karin Mader (2012), conducted an Overview of Corporate social responsibility in

Tanzania. He argued that, traditionally, in Tanzania, Corporate Social Responsibility (CSR) is

widely under- stood as philanthropy (“doing good with part of the profit”) and thus refers to

charitable community support projects in most cases. While In the contemporary global business

environment, CSR generally refers to sustain- able business performance, i.e. the principle to

generate profit itself in a socially and environmentally responsible way. He concluded that,

Awareness and interest related to CSR are growing in Tanzania. On the basis of the context and

stakeholder. Over the last years in Tanzania, mostly foreign firms in the banking,

telecommunications and mining sectors have been active in CSR. Particularly their charitable

activities are covered by the media on a regular basis.

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However, still some challenges are observed to be fatal to the development of corporate social

responsibility in Tanzania; lack of enough knowledge on CSR, lack of curriculum involving

corporate social responsibility in Tanzania and lack of effective policy on corporate social

responsibility. Tanzanian scene based on the existing literature and through analysis of results

from selected companies.

1.2 Significance of the study

This study shows the impact of CSR on company's economic sustainability. The study therefore

enhanced awareness to practitioners, researchers academicians, politician‟s, investors and the

nation at large on the best use of CSR as the strategy that should be adopted by companies for

the benefit of both companies and community at large. In addition the study points out the way

CSR can be used to enhance company's economic sustainability while benefiting the society

welfare. Finally the study serves as a basis for further researches in Corporate Social

Responsibility to other scholars by suggesting research as well as serving as a point of reference

on Corporate Social Responsibility in the country. This in turn will help to improve the country‟s

competitiveness in attracting CSR practices, as well as encouraging both foreign and local

entrepreneurs to comply with CSR standards.

1.3 Statement of the Problem

The increasing debate on how companies should operate and thrive under industrial competition,

has taken into consideration the need of maximizing both shareholders profit and stakeholders

worth, while at same time, complying with government rules and regulations where the need to

take full initiatives in incorporating corporate social responsibility is now and ever legally

recommended. It's no longer an option but it‟s enforceable by law from global level to

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international level. Company's economic sustainability largely depends on business reputation

and customer retention which are highly influenced by effective corporate social responsibility.

The idea of corporate social responsibility is foremost crucial and largely influences Company's

economic sustainability with the help of good CSR reporting. Thus, it's said that, there is a close

relationship between corporate social responsibility and business sustainability.

However, corporate social responsibility is experiencing a complex transfusion and shift in terms

of awareness, transparency, implementation and evaluation. Epstein (2009), states that,

companies knows that it is critical to formulate a sustainability strategy, but how to formulate

and execute it remains a challenge. There is a lot of argument on who should take full

consideration of practicing CSR, is it the responsibility of company, government or stakeholders

of the company or the responsibility of both?. How does companies effectively practice CSR in

terms of transparency, implementation and evaluation?. Corporations are increasing conscience

about the importance of matching their own interests and the interests of society by taking

responsibility for the impact of their activities on employees, suppliers, customers, communities

and other stakeholders as well as the environment. Epstein (2009), competitive pressures that

question whether global standards are too costly or unsafe for the operations in many countries.

Deciding whether to follow a global standard or to follow common country practices or locally

adapted standards is just one of the many challenges that multinational corporations encounter

when trying to set a sustainability strategy. All of these unrealistic expectations arise from the

failure of company to know the strength of the relationship between CSR and company's

economic sustainability. This study aimed at exploring in details the impact of CSR on

company's economic sustainability being practiced in Tanzania. The study sought to establish the

relationship between corporate social responsibility and company's economic sustainability,

17

exploring in details at what extent does CSR contribute to the company's economic

sustainability. A number of factors influencing and promoting CSR practices, including CSR

opportunities in Tanzania, were both explored in details.

1.4 Objective of the Study

The objectives of this study have been split into general to specific objectives. Specific

objectives flow from the general objective which is the main focus of the study. On the other

hand, the specific objectives are breakdowns of the general objective so as to ensure that the

study tools are designed to achieve the general objective.

1.4.1 General Research Objective

The main objective of the study was to show the impact of corporate social responsibility on

company's economic sustainability in Tanzania, NBCL-Mwanza being a case study.

1.4.2 Specific Objectives.

i. To examine transparency on company's economic sustainability at NBCL in Tanzania.

ii. To assess accountability on company's economic sustainability at NBCL in Tanzania.

iii. To find out the relationship between company's compliance and company's economic

sustainability at NBCL in Tanzania.

iv. To examine resource management on company's economic sustainability at NBCL in

Tanzania.

v. To assess the economic sustainability of NBCL in Tanzania.

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1.5 Research Questions

i. Does transparency impact company's economic sustainability in Tanzania?.

ii. Does accountability impact company's economic sustainability in Tanzania?.

iii. Is there a relationship between company's compliance and company's economic

sustainability in Tanzania?.

iv. Resource management has anything to do with company's economic

sustainability?

v. What is the economic sustainability of NBCL in Tanzania?.

1.6 Variable of the study

Corporate social responsibility is the independent variable while company's economic

sustainability is the dependent variable. The study therefore intended to show the way dependent

variable above is influenced by independent variable which is Corporate Social Responsibility.

This implied a cause to effect relationship that was measured by mixed method approach.

1.7 Scope of the study

The study was expected to establish the extent to which corporate social responsibility has

influenced company's economic sustainability. The study analyzed the extent to which corporate

social responsibility has brought about company's economic sustainability, the exact relationship

between corporate social responsibility and company's economic sustainability. Since the impact

is usually measured from the beneficiaries perspectives as it is difficult to ascertain that the

sustainability of NBCL is due to CSR and not due to other factors, this stand to be a limitation

19

of this study. Therefore future research is proposed to be done, that will track impacts to

beneficiaries CSR.

1.8 Definitions of key Terms

Definitions of key terms are categorized into two parties namely, theoretical definition and

operational definition.

Corporate social responsibility (CSR)

CSR is an excellent tool to market the firm and should therefore be led by marketers (Lantos,

2001) or be used to enhance the company's brand. (Lewis, 2003).It is a corporation's initiatives

to assess and take responsibility for the company's effects on environmental and social

wellbeing. Corporate social responsibility (CSR) is a business approach that contributes to

sustainable development by delivering economic, social and environmental benefits for all

stakeholders. Whatever the definition is, the purpose of CSR is to drive change towards

sustainability, Economic sustainability being an embolic of the company existence. Financial

Times (2015).As a specific theory of the way corporations interact with the surrounding

community and larger world, corporate social responsibility (CSR) is composed of four

obligations as illustrated in fig 2 below,

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Figure 1.2: Types of Corporate Responsibilities

Company’s sustainability

Thwink org(,2014),is an approach that creates long-term stakeholder value by implementing a

business strategy that considers every dimension of how a business operates in the ethical, social,

environmental, cultural, and economic spheres as long as it stay within the rules of the games of

business in unforeseeable future. As illustrated in fig 3 below,

Figure 1.3: Company Sustainability and Corporate Social Responsibility

Source; Thwink org (,2014).

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Economic sustainability

Thwink org(,2014),is the ability of an economy to support a defined level of economic

production indefinitely. Corporate Social Responsibility (CSR) is a recent entry in

the economy of modern enterprise both at global level and for international level. CSR adds a

new dimension to the enterprise's performance in the social fields, contributing to

the sustainable development of economic entities Danubianu ( 2017). Is the degree to which a

company actively and constructively uses its resources to support the social and economic

development of communities, through direct investments of cash, in-kind support or staff time,

or through company policies that generate community capital, such as local sourcing, hiring,

partnerships and education Buried Treasure, Sustain Ability,(2001). Thus company's economic

sustainability is of more concern when dealing with corporate social responsibility, since

economic sustainability is integrally linked to the environmental and social outcomes an

organization achieves, Doane & MacGillivra (2001).

1.9 Conceptual framework

This part presents the pattern of relationship measured so as to have a thorough comprehension

of the study. A conceptual framework is a collection of concepts or models which inform a

research study. It relates a study to the existing ideas or principle. The conceptual framework

(refer Fig.4) developed by the researcher shows that the impact of CSR on company's economic

sustainability will be determined by the interaction of three different variables. Company's

economic sustainability (dependent variable) on the level of attained resource management

(intervening variables) to influence positively or negatively the corporate social responsibility

(independent variable) and its implementation.

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Independent variable is the corporate social responsibility training. The assessment of the

independent variables is directed to show how it impact company's economic sustainability.

Intervening Variables they are the variables that provide a causal link between other variables

(independent and dependent variables). Intervening variables are expected to influence the

independent variable positively or negatively on the process of attaining objectives of the study.

The intervening variable of this study is the effectiveness of resource management of the

company. This intervening variable is expected to determine the outcome of the study. This

means that if influential factors have positively interacted with the independent variable, there

will be achieved pre-determined objectives of the study, if variables have negatively interacted,

the opposite is true.

Dependent variables are the outcomes of the interaction between the independent variable(s)

and the intervening variables. If independent variables will positively be linked with intervening

variables, the desirable economic sustainability of the company is expected. On other hand, if the

same factor is negatively interacted or mistreated result into undesirable economic sustainability,

which will also be reflected by its impacts in its operation. The arrows have been used to show

the direction of influence.

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Figure 1.4: Conceptual framework

Independent Variable Dependent Variable

Corporate social responsibility Company's Economic sustainability

Transparency

Accountability

Compliance

Intervening Variable

Resource Management

Source: Researcher, (2018).

Increasing Profit

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CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter presents the discussion on corporate social responsibility and company's economic

sustainability. It point out the theories of corporate social responsibility, by presenting the

discussion among Authors of corporate social responsibility from global to the Tanzanian

context. It then continues showing the theoretical framework of corporate social responsibility

(CSR) by discussing the theories. In addition, the chapter presents studies conducted at global

level, Europe, Asia, Africa specifically the Sub Saharan region in which Tanzania belongs as

well as specific Tanzanian studies. This chapter comes to an end by presenting the knowledge

gap and the way it will be covered.

2.1 Theories of Corporate social responsibility on Company's economic sustainability

The theories of Corporate social responsibility have be discussed and grouped differently by

different authors, The study will confine itself to theories of CSR on both global and

international levels as well as the development of theories and the implementation of CSR at

country level specifically Tanzania. The study intended to take consideration of three basic

theories namely; stakeholder‟s theory, social contract theory and legitimacy theory, of which the

clue of the discussion of the study relied on stakeholder‟s theory.

2.1.1 Stakeholder Theory

This theory analyses those groups to whom the company should be responsible for, the

stakeholders (Moir, 2001). The stakeholder theory is a theory of organizational management and

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business ethics that addresses morals and values in managing an organization. Stakeholder

theory, which has been described by Edward Freeman and others, is the mirror image of

corporate social responsibility. Instead of starting with a business and looking out into the world

to see what ethical obligations are there, stakeholder theory starts in the world.

Freeman's (1984; 46 cited by Moir, 2001; 19) definition of a stakeholder is “any group or

individual who can affect or is affected by the achievement of the organization's objectives.

Strength and Weakness of stakeholder’s theory

Stakeholder theory describes the actual way business works, it maps the way business actually

works today. It might be opinion research showing that most management believes a sole focus

on shareholder interests is unethical. Or it might be studies showing that a growing number of

court cases and governmental regulations now give managers greater leeway in taking factors

aside shareholder interests into account in their management decisions.

Stakeholder‟s theory is essentially framed as a means to increase efficiency, better business

performance and ultimately higher profits. It show the means of how business can have high

profits and sustainable economically.

Stakeholder‟s theory is seen to be moral or ethical issue. This frame usually rests on the idea

that each stakeholder group has intrinsic value, and that no group‟s interests are more or less

important than any other. Thus, stakeholder theory is of important because it is fair.

Despite its seeming rise in popularity, many smart scholars have problems with a stakeholder

theory of the corporation. Some (e.g. Key 1999) argue that stakeholder theory lacks specificity

and, thus, cannot be operationalized in a way that allows scientific inspection. Others, like a

26

commenter to" his first post at Conglomerate", feel that stakeholder theory offers no decision-

making criteria that would adequately guide corporate governance. Most critics, like Teppo, feel

that stakeholder theory is vacuous and offers an unrealistic view of how organizations operate.

It‟s true that some stakeholder theories do each of these things, but the real problem is that there

are so many versions of stakeholder theory that it‟s difficult to offer critique. The following

perspectives offers the in depth critique regarding stakeholders theory;

The organization is a shell that can be written upon freely by the various groups that lay claim to

the corporation. The firm has very few innate interests. Its interests, in fact, are almost entirely

determined by its relations to primary and secondary stakeholders. Change those relations, and

the interests of the firm change accordingly. Interests aren‟t innate at all; rather, they are merely

reflective of the meaningful ties that one has.

The firm has its own economic interests, and so do the stakeholders. The firm‟s primary purpose

is to be a profit-making machine. The stakeholders‟ interests are to redistribute the wealth

created by the firm to other constituencies, possibly to themselves. The struggle, then, involves a

set of negotiations between the parties, as they try to define who deserves more or less of the

firm‟s resources, Coff (1999). David Baron argues that stakeholders use the threat of state

intervention to convince firms that it is in their best interest to redistribute resources voluntarily.

These two arguments represent extremes, of course. In between are those touting a resource

dependence perspective (like Frooman or Clarkson). They postulate that stakeholders‟ influence

over firm decision-making is a function of the firm‟s dependence on them for critical resources.

In this intermediate view, the firm may be constituted by stakeholder interests, but only in as

much as they help it achieve its own predetermined ends.

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However neither of the two arguments represents a realistic view of what goes on in the firm.

The first perspective seems to ignore the institutional requirements of the modern corporation.

The corporation as a legal fiction created to maximize market value is absent. Managerial

incentive is nowhere to be seen. And discretion, forget about it! In short, this argument tends to

reduce the firm to a social construction that can easily change its interests to meet the demands

of crying stakeholders.

The second view, however, moves too much in the other direction. Firms are always seen as

value maximizing and they have sufficient information to weigh the costs and benefits of

negotiating with secondary stakeholders. In this view, there is no room for a firm that might

actually prefer to forego some profit for the benefit of a collective good. The corporation's (and

the stakeholders) are one-dimensional actors. Another problem results when these scholars try to

build altruism into their model. It‟s never apparent why a firm should act altruistically in the first

place.

What‟s to be done with stakeholder theory? What is needed is a way to think about the firm as a

social actor that allows for heterogeneity of interests without simply seeing the firm as a blank-

slate willing to be written upon, a mediating mechanism is needed as an alternative

organizational identity perspective. In this perspective, each organization has its own unique

identity that distinguishes it from its competitors while at the same time establishing it in a

particular legitimacy-lending social category. The identity fills the organization‟s needs for

inclusion and distinctiveness. Identity also conditions the firm‟s interaction with potential

stakeholders. It is the DNA that produces the firm‟s disposition and interests. When the firm‟s

identity matches up with that of a particular stakeholder group (as Timberland‟s identity matched

28

with the environmental movement), the firm tries to perform in a way that benefits both its

survival and the stakeholder‟s interests.

There are two key underlying assumptions about this alternative view make it work. The first is

recognizing that there is heterogeneity in corporate interests and that the interests are not

necessarily mutually exclusive. The shareholder value maximization interest is not always

incompatible with the goal to promote environment-friendly policies.

The second key assumption is that the identity is established in the formative years of the

company and tends to be stable over time. The second assumption is based in the ideas of

structural inertia. Thus, the founding effects of a firm on its identity largely determine how

willing it will be to engage in conversation with certain stakeholder groups in the future.

The discussion of this study was largely encompassed with this theory, because of the need to

integrate the thought of all stakeholders whose existence affect directly the implementation of

CSR practices as the strategy to brought company's economic sustainability.

2.1.2 Social Contracts Theory

Social contract theory is an ancient philosophical idea that states that an individual's ethical and

political obligations relate to an agreement he has with every other individual within a society.

The agreement can be written, as in the form of laws, or it can be a tacit agreement, an unspoken

or unwritten agreement of social norms and customs. In business, social contract theory includes

the obligations that businesses of all sizes owe to the communities in which they operate and to

the world as a whole. This involves corporate philanthropy, corporate social responsibility and

corporate governance.

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Gray et al (1996 cited by Moir, 2001 ;) „Describes society as a series of social contracts between

members of society and society itself‟. This theory relates the activities of an organization as part

of the expectations of the society as a whole and not only its commercial interests (Moir, 2001;

Gyves and O‟Higgins, 2008).

Strength and Weakness Social of contract theory

More positive benefits of meeting social responsibility expectations from the public can include

stronger customer relationships and better long-term profit potential. Though the question is

posed on the direct business benefits of social responsibility, a main purpose is to build deeper

relationships with customers and the community. Over time, this deeper connection undoubtedly

produces more sales and better profits. This is especially true of small businesses. Some

customers in local markets make it a point to support local businesses that set the standard in

meeting social responsibility contracts.

Meeting social contract expectations costs money. Committing to fair treatment of employees

means that your company invests in training to build a culture of tolerance and acceptance. It

also means that you give back to the communities you earn profits from by giving to charitable

organizations and community programs. On the environmental responsibility front, it costs

money to manage recycling programs and to use environmental-friendly materials and business

processes.

Another common argument against social responsibility in business is that it distracts companies

from a core business pursuit of profits. The money spent focusing on social responsibility is the

time and money not spent on product development, marketing or other profit-generating

30

activities. Additionally, shareholders sometimes have concerns about companies they invest in

spending money to meet social expectations of the public.

Meeting informal social responsibility guidelines gives businesses significant protection against

possible legal and reputation risks that come with walking an ethical line in business. In the

information age, consumer and environmental watch groups do a good job calling attention to

businesses that either stand out as social responsibility leaders or fail to deliver on expectations.

Failures to participate in your communities, to treat customers and employees fairly, and to

preserve the environment can all attract negative attention from government regulatory bodies.

2.1.3 Legitimacy Theory

Belal (2008; 14) explains that, “Broadly, legitimacy theory indicates that organizations may try

to legitimize their activities by engaging in CSR reporting in order to get approval from society

in support of their consistent existence and „license to operate‟”.

Apart from the theories cited above, many others were created to explain Corporate Social

Responsibility, profitability and its impacts in the society; however, those are the most common

ones. Deegan and Unerman (2011) assert that the legitimacy theory relies upon the notion that

there is a “social contract” between an organization and the society in which it operates.

Therefore, corporation try to legitimize their corporate actions by engaging in CSR reporting to

get the approval from society (societal approach) and thus, ensuring their continuing existence.

The social contract as explained by Deegan (2002), represents myriad of expectations that

society has about how an organization should conduct its operations. O'Donovan (2002) argues

that the legitimacy theory stems from the idea that for corporations to continue operating

successfully, it must act within the bounds and norms of what society identifies as socially

31

responsible behavior. Maignan and Ralston (2002) provide that legitimacy of a firm is dependent

on the maintenance of reciprocal relationship with its stakeholders, given that the firm has

obligations including moral obligations to a broad range of stakeholders in to their shareholders

(Adams et al., 1998). Kytle et al. (2005), CSR reporting practices have become a key

management tool to the growing complexity to multinational business management. They further

argue that CSR reporting helps to integrate CSR activities into companies‟ strategic risk

management so that the impact of CSR activities can be maximized. Waddock et al. (2002) argue

that employee's perceptions about how a corporation accepts and manages its responsibilities are

often part of the employee's decision about where to work. Therefore, publication of

sustainability related information can play a role of positioning a firm as an „employer of

choice‟ and as such, this status can enhance loyalty, reduce staff turnover and increase a firm's

ability to attract and retain high quality employees. Margolis and Walsh (2003) claim that

corporation‟s engagement in CSR activities and its disclosure can foster corporate performance

and as such their research conclude a positive relationship between CSR performance and

financial performance (shareholder approach). Roberts (1992) asserts that one way that firms

consider CSR disclosure is to increase access to capital and shareholder value by satisfying

stakeholder‟s expectation. Investors are choosing to invest in organizations that are

demonstrating a high level of CSR. Branco & Rodrigues (2008) argue that CSR disclosures play

an important mechanism to enhance the effect of CSR on corporate reputation as well as

representing a signal of improved social and environmental conduct. Bayoud et al. (2012)

confirm that a high level of CSR disclosures is strongly associated with corporate reputation for

stakeholder group (stakeholder approach). Stakeholder theory Consistent with stakeholder

approach.

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Strength and Weakness of legitimacy theory

Deegan & Unerman's (2006), argued that legitimacy theory does offer a powerful mechanism for

understanding voluntary social and environmental disclosures made by corporations, and that

this understanding would provide a vehicle for engaging in critical public debate. The problem

for legitimacy theory in contributing to our understanding of accounting disclosure specifically,

and as a theory in general, is that the term has on occasion been used fairly loosely. This is not a

problem of the theory itself, and the observation could be equally applied to a range of theories

in a range of disciplines.

2.2 Empirical literature Review

This part presents the related studies conducted worldwide coming down to America, Asia,

Europe, Africa, Sub Saharan Africa, East Africa and Tanzania. The studies analyzed have been

conducted from now and then. The emphasis in analyzing these studies has been placed on what

they sought to be establishing the results and the methodology applied so as to clearly show the

research gap to be filled by this study. In addition, the findings in these studies are expected to

serve as inputs in this study especially on conceptualizing CSR.

Studies in America

Tran (2015), conducted a study on Corporate social Responsibility and Profits: A tradeoff or

balance. He argued that, Corporate social responsibility has been on everyone‟s mind lately

corporate executives, consumers, investors and many are curious to understand in what manner a

for profit organization‟s pursuit of philanthropic initiatives impacts the traditional firm‟s singular

object: profits. Although CEOs proudly proclaim that engaging in CSR (corporate social

responsibility) is the “golden ticket” to future growth and consumers are eager to support

33

products and companies deemed ethically and socially conscious, is CSR actually profitable? In

addition, he continues arguing that there is little flexibility for a firm to engage in social impact

projects if these programs do not provide an adequate financial return for the company. After

having a thorough analysis, he found that determinants of the success of a CSR campaign are

varied but key factors at play, especially in consumer facing industries, include the relevance of

the social initiative to the company itself, the ownership structure of the firm, and the criteria by

which consumers screen products for potential purchase.

He concluded by saying that, only time will tell if corporate social responsibility will eventually

become a profitable undertaking for the majority of firms. Today, it appears that neither

corporate executives nor consumers completely understand this venture into CSR: executives are

still working to understand how CSR can and should be applied to appease all involved parties

and consumers need to make clear how they truly feel about CSR and signal their preferences

more consistently with their dollars. Through repeated interactions in the marketplace, both sides

will come to an agreement as to the most effective and efficient way to tackle the profits-altruism

debate. What is clear, though, is that corporate executives have a growing concern with

appearing more socially conscious and consumers have a growing demand for companies to

more closely align themselves with the public good. Whether or not these goals will ever meet in

the middle and result in profitable and socially invested firms and satisfied consumers has yet to

be discovered.

Studies in Asia

Prakash J. Singh, et al (2017) conducted a study on the Impact of Corporate Social

Responsibility Dimensions on Firm Value: Some Evidence from Hong Kong and China. There

34

has been a significant interest and debate on the impact that a firms investments in corporate

social responsibility (CSR) practices and initiatives have on its market value .The study found

that , a temporal, inverted U-shaped effect has been found between time and the impact of CSR

investments on firms value.

The results indicate that it takes some time for the CSR initiatives to make an impact on firms

value, an impact that dissipates in subsequent years. As has been suggested by some researchers,

firms should be patient and take a longer-term perspective when implementing their CSR

initiatives as opposed to a myopic short-term focus. Also, as the benefits of CSR initiatives are

likely to fade away over time, firms need to ensure that their CSR practices are reinforced and

further cultivated so that the benefits are sustained. The results of study reveal that of the six core

CSR dimensions considered, CSR practices and initiatives focusing on community engagement,

and to a slightly lesser extent, those focusing on workplace quality, are found to both directly and

positively impact firms value. Different industries implement varying suites of CSR practices,

due to varying legal regulations and expectations of stakeholders. Industry- specific studies

would, to this end, provide a more comprehensive understanding of the benefits of CSR practices

to firms spanning different industries.

Kumar (2015) conducted a study on Corporate social responsibility: Mission possible, he

ascertained the role of corporate social responsibility on social development and its significant

impacts. He therefore strive to list the best case scenario of CSR as per the new law and try to

find out what could be achieved by giving a right direction to CSR of these companies. As CSR

activities of the companies are guided by the Schedule VII of the Companies Act 2013 that

includes the noble causes of eradication of extreme hunger and poverty, promotion of education,

promoting gender equality and women empowerment, reducing child mortality, combating HIV,

35

ensuring environment sustainability, developing employability skills. He suggested that,

companies that engage more in CSR spending will have better the reputation of the company and

better will be the profits, and CSR activities of Indian companies can help improve our social

progress index as most of the parameters included in calculation are covered under the activities

to be covered under CSR in Schedule VII of the Companies Act, 2013. Same parameters will

have positive impact on Human Development Index of the country; as social sector spending has

greater impact in societal development than government spending.

Studies in Europe

Danubianu & Teodorescu (2017), conducted a study on the impacts of corporate social

responsibility on sustainable enterprise development. He intended to establish the relationship

between corporate social responsibility and sustainable enterprise development, by asserting the

real cause effects of corporate social responsibility on sustainable enterprise development.

He concluded that, adopting the dimension of CSR to the company business horizon is not an

activity that takes several months. It is a continuous process, and its dynamics is comparable to

that of environmental awareness of technical best practices. During the implementation of CSR

at company level, the first set of results to be completed by further developments in the coming

years includes; the Company has acquired the expertise in a new domain CSR and there are

many company‟s employees that has got the knowhow for future CSR actions, the company and

its stakeholders constitute a team which members have learnt to work together, understand each

other and share the same CSR values. Again, the set of stakeholders is in a continual adaptation,

depending of the company evolution and of the business environment realities. Putting CSR at

work should be a process very similar to many other similar processes already experienced by

36

the company (devise Action Plans, allocate resources, nominate responsible, monitor progress,

take corrective actions, etc.) and this constitutes a big advantage for company‟s managers. They

are not faced to completely new procedures and tools, devising a Project Advisory Board should

help and ease the CSR implementation. The formal set of documents issued during CSR

implementation is very similar to the set of formal documents and procedures issued for the

Quality and Environmental Management System, CSR actions should be carried out by a large

cooperation among all stakeholders and Every organization should endures the CSR values as

CSR should not be applied to business units.

Marzanna Katarzyna, etal (2016), conducted a study on the impacts of business models to

corporate social responsibilities involvements. The study explored the links between types of

business models used by companies and their involvement in CSR. The study provided a

measure of reassurance to those consumers who are keen to support ethical companies but are

uncertain about the sincerity of their CSR claims. According to a recent segmentation study of

Polish households, those who are sensitive to cause-related marketing and are willing to pay

more for products of firms that contribute to solving relevant social problems make up almost

30% of the adult population. It seems that CSR in most active companies (market players and

integrators) is not “skin deep” but tends to be implemented quite thoroughly and

comprehensively. Therefore, it is believable that many of the CSR claims used as promotional

devices are genuine projections of strategic orientation and organizational culture values in firms

with the two most “sustainability-friendly” business models.

Studies in Africa

Omran (2015) conducted a study on Theoretical Perspectives on Corporate Social Responsibility

Disclosure. Social and environmental disclosures has flourished over the past years with

37

reporting on corporate social responsibility (CSR) information now considered to be an

important component, complementing financial reporting to reduce information asymmetry. A

significant body of evidence across business research disciplines examines questions such as

which types of firms engage in CSR, and how CSR shapes firm decisions and outcomes ,(Huang

& Watson,2015).

Oginni& Omojow (2016), conducted a study on Sustainable Development and Corporate Social

Responsibility in Sub-Saharan Africa: Evidence from Industries in Cameroon. Human activities

have increasingly short-lived sustainable natural endowments, to the extent that, the multiplier

effects have ripples beyond the traditional benefits of economic production and consumption.

The study addressed practical concerns on how industries in Sub-Saharan Africa promote

sustainable development in their corporate social responsibility models, using industries in

Cameroon as a case study; it examined economic, social, and environmental components of

sustainable development and corporate social responsibility (CSR). It is found that there is no

concrete evidence that industries promote sustainable development via CSR in Cameroon.

However, there is a growing awareness on the environmental risks and social costs of

unsustainable business practices among industries in the country because many of them have

environment friendly installations to mitigate environmental risks. Therefore, state laws and

policies should promote a sustainable business model; there is a need to reform policies on

business activities to promote sustainable development from small and medium enterprises to

large enterprises.

38

Studies in Tanzania

John (2016), conducted a study on the impacts of Corporate social responsibility on image

building a case study of Nyanza Bottling Company Limited. The study intended to establish the

relationship between corporate social responsibility and company image identifying CSR

activities done by Nyanza bottling company toward the image building of an organization,

assessing the effectiveness of CSR activities on image building of an organization and finally

find out the challenges an organization is facing in conducting CSR activities. He concluded by

saying that, community or customers are significant part of the organization development due to

the reason that the organization depend much on customers‟ acceptance on what the

organization produce. Due to this the organization should pay attention to the society by

conducting Corporate Social Responsibility in order to build the image of the organization which

in a long run enhances company sustainability.

Isanzu & Xu- Fengju (2016), conducted a study on Impact of Corporate Social Responsibility on

Firm‟s Financial Performance: The Tanzanian Perspective. Its revealed that, In Tanzania social

responsibility came about with increasing competition as many companies flooded the country

from various countries it gained momentum because now consumers have many options to

choose from (Mushi, 2007). Now days CSR is used as a marketing tool for creating competitive

advantage, ever since the number of firms doing CSR in the country has been on the rise.

Recently a CSR award has been introduced which seeks to reward firms that make a greater

contribution in the community through their CSR practices and also encourage other firms that

are yet to incorporate CSR in their strategies to do so.

39

Recently Tigo has partnered with a Swedish NGO on a pro child reach for change initiative that

is aimed at improving the welfare of children (Daily News, 2012). This is a very interesting

move because some of the challenges seen on CSR implementation were proper identification of

the community needs and pooling of resources which will be correctly addressed by entering into

joint partnerships like this. Mushi further stated that the Tanzanian community is characterized

by problems of unemployment, diseases, poor infrastructure and the businesses depend on these

people to support their operations by buying their products and services. This means the

prosperity of the firm solely depends on the community, then what ever can be done to alleviate

the community problems will be rewarded by the loyalty and reciprocity of the community. The

aim of the study was to test if there is a significant difference in financial performance of

companies that engage in CSR relative to those that do not.

The results showed that there is a significant difference in performance supporting the existing

body of knowledge for the positive impact of CSR on financial performance. Corporate social

responsibility increases the firm‟s brand awareness, leads to tax relief because of the

deductibility of CSR expenditures before taxes are charged. Corporate social responsibility

builds a good relationship with the stakeholders through full optimization of the supply chain

that leads to efficient use of resources and increased operational efficiency.

Corporate Social Responsibility improves customer loyalty, leads to reduced risks that normally

stem from expensive lawsuits and compensations and also lowers the firms cost of capital.

Corporations have become more powerful since the largest global economies are dominated by

them; therefore it‟s only sensible for them to have an increased role in addressing social

problems. If you look at the issues of environmental degradation, employees‟ welfare and

poverty state of the communities around them, they are best positioned to address and alleviate

40

these challenges faced by the communities. Policy implications also arise from practicing CSR; it

is recommended that companies should be ranked in terms of Social Responsible performance

and publishes even a list of those not qualifying as socially responsible to make consumers aware

of the firms they deal with. The practice will revolutionize and the efforts will transform the

community that is guaranteed. Underdeveloped countries have been offering less stringent

regulations, investment incentives, subsidies to increase FDI and growth of MNCs but this has

added adverse effects on the states‟ ability to enforce laws and regulations which protect

employees, environment and communities as a result developing countries have failed to

encourage responsible business practices. Furthermore the government lacks the financial, legal

and administrative resources to enforce strong regulations and their actions are further diluted by

the lobbying and sponsorship of prominent politicians and trade associations by the corporations.

2.3 Knowledge Gap

Scholars and researcher have done a lot on studying corporate social responsibility as a corporate

strategy in enhancing company's economic sustainability, of which the emphasis has been

employed to make a clear understanding on how does corporate social responsibility enhances

company‟s economic sustainability. Thus one reason to why corporate understanding of CSR is

crucial and more significant contributors to company's economic sustainability. Despite the

efforts of the practitioners in implementing CSR as the company strategy towards company's

economic sustainability, an enormous shift has occurred in how organizations must understand

themselves in relation to a wide variety of both local and global stakeholders. Major

transformations require national and global companies to approach their business in terms of

sustainable development, and both individual and organizational leadership should play a major

role in this change; managers are reluctant to use CSR as a sustainable strategy because they

41

believe that the budget of financing these activities are nowhere to be recovered. Also CSR is a

new strategy that managers are struggling on how to integrate in their operation, at the same time

the pressure is growing very tremendously to companies to engage in CSR practices from

government and other stakeholders believing that companies that engages in CSR practices has

seen to capture competitive edge compared to companies that do not perform CSR practices.

However, the world of business today has call upon more studies on corporate social

responsibility as the crucial and significant strategy to enhance company's economic

sustainability. Because it is observed that, there is lack of awareness and effective enhancement

of corporate social responsibility, as the reason to why corporate social responsibility has not

directly produces company's economic sustainability and that is the reason to why owners of

business are complaining that, CSR is a bit cost fully compared to the return it bring to the

company's economic sustainability. Company's owners do claim that involving in CSR requires

more of giving back to the society and expect gain in a long run, of which a bit difficult to most

of business is established to serve short run needs in developing countries like Tanzania.

Thus, the need for a company to invest in a long run business requires more emphasis on

implementing effective corporate social responsibility, which is rarely emphasized in developing

countries .These are more challenging circumstance that researchers and scholars they have yet

done a lot on it particularly in Tanzania, that is why corporate social responsibility has faced a

complex shift in term of awareness and implementation on both developed and developing

countries. The study addressed what should be done to make sure that, corporate social

responsibility influences the achievement of company's economic sustainability particularly in

Tanzania, Nyanza Bottling Company Limited being a case study.

42

Therefore, this study intends to establish how strong CSR impacts company's economic

sustainability in Tanzania, an aspect that has not given enough weight by the Authors, Theorists

and researchers over a long period of time especially in Tanzania where CSR is seen as a cost

fully strategy to implement.

43

CHAPTER THREE

RESEARCH METHODOLOGY

3.0. Introduction

This chapter identifies the approach and the population of the study, Together with that; the data

collection techniques used are presented with keen emphasis on the techniques that enabled the

study achieve its objectives. The chapter also covers data collection techniques and tools. In

addition, the chapter discusses the way validity and reliability of the tools was ensured while

stating the way data was analyzed. Finally, this chapter puts forward the way ethical matters

have been addressed and the resource requirement. Kothari (2004) defined research methodology

as a way to systematically solve a problem. It is a science of how research is done scientifically.

With respect to this definition, this study followed a scientific methodology. For that reason, its

methodology was channeled in a way that produces an objective and reliable knowledge.

3.1. Type of Research

This was an applied research aimed at finding the impact of corporate social responsibility on

company's economic sustainability. Applied research is carried on to find a solution to real life

problem requiring an action or policy decision. It is a problem oriented and action directed. It

seeks immediate and practical result. The purpose of applied research is to find solution to a

practical problem; it is a very incidentally contribute to the development of theoretical

knowledge by discovery of new facts (Krishnaswami,2003).

44

3.2 Research Design

Krishnaswami (2003) defines research design as a logical and systematic plan prepared for

directing a specific study. There are generally three types of research designs that a researcher

can adopt namely; exploratory, descriptive and casual research design ( Burns and Grove

2003,p.237).

This study adopts a descriptive research design which finds out what, where and how of a

phenomenon. Further this design enables the researcher to generalize findings from a sample to a

larger population. Descriptive data also allows the researcher to collect quantitative data which

can be analyzed an quantitatively using descriptive and inferential statistics ( Easwaran and

Singh 2010,p. 83). The great need of having systematic data where logic understanding of the

study was addressed. Necessity the need of having quantitative research design that carried at

Nyanza Bottling Company Limited (NBCL) in Mwanza region as a case study. Also the need of

clarity information necessity the need of qualitative research design, thus the research design

used mixed approach method whereby both quantitative and qualitative research approach were

efficiently deployed. The results of the findings were interpreted and concluded. For

comprehension of the study, a qualitative approach was used to supplement the interpretation of

the findings.

3.3 Area of Study

The study was carried out at Nyanza Bottling Company Ltd, (NBCL), incorporated in 1984, a

joint venture between SUMARIA and CMG group, is one of the largest Coca-Cola Franchises in

East Africa. Nyanza Bottling Company Limited (NBCL) is a subsidiary company of The

Sumaria Group of Companies, located at Nyakato industrial area along Nyerere road in Mwanza

45

City. The company was set up in 1987 and currently employs over 1000 people directly and

provides indirect employment to more than 4,000 people. The Company produces and distributes

carbonated soft drinks (CSDs) and noncarbonated beverages packaged in refillable glass bottles

(RGB) and plastic bottles (PET). The company has over 13000 outlets and serves over 12 million

consumers in six regions. NBCL being a participant of the training workshop conducted by

Cleaner Production Centre of Tanzania (CPCT) regarding Resource Efficient and Cleaner

Production (RECP) for enterprises and stakeholders in Lake Victoria Basin adopted the RECP

concept. To protect “The Coca-Cola Company Trade Mark” NBCL has put in place The Coca-

Cola Management System (TCCMS), which integrates quality, environment and occupational

health and safety. NBCL is engaged in bottling & distributing Coca-Cola products in the Lake

Zone of Tanzania, comprising Mwanza, Shinyanga, Mara, Kagera, Tabora Kigoma Geita &

Kahama regions. Parent companies, Sumaria and CMG Group are well known names in East

Africa having significant business presence in many industrial verticals.

NBCL- Corporate Social Responsibility

NBCL conducts its business activities with social responsibility by engaging in various

employees & social welfare measures and complying with Government regulations. NBCL also

significantly contributes to the economic growth of Lake Zone by employing people in the

bottling & Transport set-up and indirect business community. NBCL is one of the largest

contributors to the exchequer by way of VAT, Corporate Tax, Excise, PAYE, SDL, import duty

and other Government regulations related payments.

46

3.4 Population of the Study

Population is the targeted group to be studied; it is the total collection of elements about which

researcher wishes to make inference (Krishnaswami 2003). Since the study aimed to look on the

impact of corporate social responsibility on company's economic sustainability at NBCL in

Mwanza Region, the targeted population of the study included permanent employees of NBCL

in Mwanza Region and people outside the company ( customers), as the stakeholders relating to

CSR practices, where the practice of corporate social responsibility is executed effectively. The

number of the population was 550 people, management inclusive.

Table 3.1 Target Population

S/N Population category Population size

1 Managerial 275

2 Non- managerial 150

3 Customers

carbonated soft drinks customers

75

noncarbonated beverages customers

50

Total 550

Source: Researcher, 20018

47

3.5 Sample Size

Sample size is the number of items to be selected from the universe constitutes a sample. The

size of the sample should be neither excessively large nor too small, it should be optimal. An

optimum sample is the one, which fulfills the requirements of efficiency, representativeness,

reliability and flexibility (Kothari 2004). Sanders et al (2007), no survey can be deemed to be

free from error or provide 100% surety and error limits of less than 5% and confidence levels of

higher than 95% is regarded as acceptance. It is therefore important for researchers to select a

sample that is fairly representative. There are several ways of determining a sample size and so

which method to use depends on various factors such as time constraints, diversity of population,

population size and researcher's preference. Mugenda and Mugenda ( 2003) suggests that a

sample size of between 10%-30% is representative enough for the population if objectively

selected and elements are more than 30 in each identifiable group. In addition Sekara (2003) and

Bartleft et al (2001) recommend 100% rule in case of the population that is less than 100

participants. This research applied Mugenda and Mugenda (2003) of 27.3% ( within the range of

10-30%) of the population and sample size for the study are shown in table 3.2. From the

population, which stated to be 550 people from different level of strata was selected randomly

and being interviewed.

48

Table 3.2 Sample size from target population

S/N Population category Population size Sample size

1 Managerial Personnel 275 75

2 Non-managerial

Personnel

150 25

3 Customers:

carbonated soft

drinks customers

75

50

noncarbonated

beverages

customers

50

Total 550 150

Source: Researcher, 20018

3.5 Sampling Frame

Cooper and Schindler (2006), sampling frame is a list of elements from which the sample is

actually drawn and closely related to the population. In this particular study, the sampling frame

was drawn from various categories within existing CSR practioners and other stakeholders of

49

NBCL-Mwanza region. This sampling frame (2017), was used to ensure completeness and

relevance for the attainment of the study objectives.

3.6 Sampling technique.

In order to come up with an appropriate study sample, this study utilized stratified sampling

techniques whereby customers of NBCL products was classified into different category

including carbonated soft drinks (CSDs) and noncarbonated beverages packaged customers. The

rationale behind this selection of stratified sampling is because the customer of NBCL products

are diversely distributed in trading centers across central business of the region. Stratification

ensured collection of unbiased data. This approach helped to enhance the chances of greater

participation of potential respondents (Kothari 2008).

3.6 Nature of Data

This study employed both primary data and secondary data.

3.6.1 Primary source

The researcher directly collect data that have not been previously collected (Krishnaswami 2003)

from these original sources.

Primary data was collected from respondents at society surrounding NBCL in Mwanza Region

specifically in Nyamagana district, also other stakeholders of corporate social responsibility were

called upon to give assistance where necessary, (both environmental and human right agencies).

The researcher used questionnaires, which were prepared by the researcher and interview was

used to customers of NBCL and other stakeholders in a process of acquiring primary data,

50

whereby, environmental and human right agencies were categorized under customer of NBCL

products.

3.6.2 Secondary Source

These are source containing data, which have been collected and compiled for another purpose

(Krishnaswami, 2003). The documentary method largely used as the means of collecting data

that shows trends and performance of company in practicing corporate social responsibility.

Thus, company reports, prospectus and internal control system were used as the secondary

source of data.

3.7 Methods of Data collection

Primary data was collected using questionnaires and sometimes interview guides or schedules

where necessary. Secondary data was collected using specifically documentary review.

3.7.1 Questionnaire

Kothari (2004) defined a questionnaire as a set of questions printed or typed in a definite order or

a form or set of forms also Krishnaswami (2003) defined questionnaire as set of questionnaire

that will be given to the respondents who can read and fill the answers. In this study,

questionnaire was the main instrument for data collection where self administered questionnaire

was used to collect data in order to create rapport with the respondents to respond in accordance

with the questions asked and thus achieve noble responses. The researcher used questionnaire to

obtain information from the respondents. The questionnaires were distributed to different

respondents accordingly in order to obtain or extract information on the impact of corporate

social responsibility on company's economic sustainability.

51

3.7.2 Interview Guide

Researcher used this tool to collect data from individuals through face to face interaction. The

questionnaire guided interviewing some personnel and others CSR pioneers from different

category involved in CSR practices. Kothari (2004) this tool gives flexibility in questioning

process hence give a room for clarification where necessary. This study used this tool effectively

in accordance with the nature of the respondents especially when customers were called upon to

provide in-depth information of how they see CSR as the strategy towards company's economic

sustainability.

3.7.3 Documentary Review

Researcher used documentary review to collect data, which are relevant to the study. Secondary

data was collected using this tool of data collection. This has been presented by Kothari (2004)

as a method of obtaining information from documents such as reports, literatures and other

publication that contain relevant information for the study.

3.7.4 Pilot Testing

A pilot pre-test according to Robinson (2002) is the testing of one's instruments' with participants

who match the participants to be involved in the actual study. This is important in ensuring that

respondents understand the questions and making that the tools are measuring what they ought to

measure. Thus after development of draft questionnaire, a pilot test( pre- test ) was carried out at

NBCL-Mwanza whereby 25 managerial staffs, 15 non-managerial staffs and 25 customers of

NBCL products were involved to test any inconsistence, ambiguity, and incomprehension.

52

The pre-test participants did not participate in the actual survey in order to avoid pre-emption of

the study at the actual study area. In the process of piloting, the study aimed at ensuring the

rectification of any errors of ambiguity and repetitions existing in the research instrument.

Suggestions and corrections were incorporated in the final version as the amended final

questionnaire for distribution to participants.

3.8 Data Analysis

Once data are collected, the researcher described the techniques intended to analyze data

(Mugenda, 2003). Data analysis refers to examining what has been collected in a survey or

experiment and making deduction and inference. It involves uncovering underlying structures,

extracting important variables, detecting any anomalies and testing any underlying assumptions

(Kombo and Tromp, 2006). Data obtained from respondents during field study will be analyzed

using percentages, mean and range. Data was presented using charts, which include bar charts

and pie charts. In addition, graphs were used for presentation where necessary. Statistical

Packages for social science (SPSS) is the computer package, a tool that the researcher used to

analyze data and data presented descriptively through frequency tables and percentage. On other

hand, for qualitative data which is essentially text information collected in form of written notes

and scripts from interview was analyzed based on content analysis which involve looking at

patterns, themes and meanings.

3.9 Validity and Reliability

A pre study was conducted in order to guarantee validity and reliability. This pre study rendered

sufficient proof that the attributes of validity and reliability was achieved in manner that tools of

data collection that were selected, are compatible and flexible. Patton(2001) states that validity

53

and reliability are two factors which any researchers should be concerned about while designing,

analyzing and judging the quality of study.

3.9.1 Validity

Means the effectiveness or success of instrument in measuring the specific property, which

intends to measure. Measurement of abstract properly as attitude, morale and motivation are

indirect may give rise to the problem of the validity. It becomes necessary to gather some sort of

evidence to show that the concerned measuring instrument measure what is suppose to measure

(Krishnaswami, 2003). The researcher ensured that the instrument used are appropriate as so he

can exactly obtain what he need to obtain through the selection of appropriate methods of data

collection. Validity is concerned with the idea that the research design fully address the research

question and objectives that the research is trying to answer and achieve (Neumann). In all cases,

the researcher ought to be concerned with construct, external and internal validity (Yin 1994).

Construct validity is the degree to which scores on a test can be accounted for by construct of

sound theory ( Kothari 2008). In course of this study the criterion was satisfied by pre-testing the

questionnaires in pilot study in order to validate the questions and to correct ambiguities and

inconsistencies.

External validity relates to the generalizability of research findings from survey research to

entire population (Thomas & Nelson 2001,p.30). Since this research is not entirely statistical

study and the aim was to sample widely, external validity was attained by comparing current

research outcome with the previous studies that includes journals, thesis and term paper on the

same topic.

54

Internal validity addresses the extent to which the differences that have been found for the

dependent variable directly relate to the independent variables (Mackey and Gass 2005). In case

of this study, internal validity was achieved through specifying the units of analysis and

developing the conceptual framework that depicts the relationship between independent variables

and dependent variables.

3.9.2 Reliability

Means the ability of measuring instrument to give accurate and consistence result. An instrument

is stable if it gives consistence result with repeated measurement of the same object. The degree

of stability is determined by comparing the result of repeated measurement with the instrument

(Krishnaswami,2003). The researcher ensured reliability through having the better tools and

methodology for data collection. To satisfy this criterion in this study, the researcher pre-tested

questionnaire and interview guides whereby 25 managerial staffs, 15 non-managerial staffs and

25 customers of NBCL products were involved, and suggestions were incorporated in final

version of the questionnaire to ensure reliability of the instrument.

3.10 Ethical Concerns

The study addressed ethical issues by full disclosure of material facts of the study to the offices

in custody of the data. As a result: the study minimizes resistance from the stakeholders by

putting forward the benefit of the stakeholder.

Ethical concerns were addressed by creating an elaborate schedule that provide sufficient time

for each activity. As a result, sufficient data was gathered and compiled on time hence allowing

thorough review and verification of data that eliminates the danger of data fabrication leading to

objective and reliable results. This research incorporates and applied in advance the following

55

strategies to address critical ethical matters commonly encountered in empirical studies such as

this.

The researcher first obtained the go ahead approval from the research supervisor about matters

concerning research proposal including data collections before field work. Secondly, the

researcher secure a letter from sponsoring university ( St. Augustine University of Tanzania) to

introduce himself to various respondents at NBCL-Mwanza region.

Thirdly. every respondent to be involved in this study was informed of the purpose of the

research and be given assurance his/her names and personal identifying being gathered would be

for academic purposes only and that furnished data would be reported as aggregate rather than

individual analysis.

Furthermore, the respondents were informed that their participation in the research is voluntary

and they are free to withdraw anytime during the course of data collection. Also the researcher

respects the right of St. Augustine university of Tanzania and protects it from potential harm by

conducting research ethically, objectively and professionally. Finally, the researcher

acknowledges all sources of data and ideas presented in final version of the dissertation

according to APA reference style.

3.11 Study Funding

The study will be entirely funded by the researcher. This includes proposal writing, pre-data

collection up to report completion expenses. Due to this fact, the resource is limited and thus

dictate the entire study. To enable the study achieve its objectives despite of resource limitation ,

the scope and its methodology are set in respect to such limitation but without affecting the

quality of the study so as to arrive at results which are objective and reliable.

56

CHAPTER FOUR

FINDINGS AND DATA ANALYSIS

4.0 Introduction

In this chapter, the researcher presents analyses and interprets the findings of the study. The

findings are based on the data collected using open and closed questionnaires and interview, for

purposes of easier understanding, interpretation and analysis, the findings are presented analyzed

and interpreted in relation to five objectives that was set to answer. These were;

i. To examine the relationship between transparency and NBCL economic sustainability in

Tanzania.

ii. To assess the relationship between accountability and NBCL economic sustainability in

Tanzania.

iii. To find out the relationship between company's compliance and company's economic

sustainability at NBCL in Tanzania.

iv. To examine resource management on company's economic sustainability at NBCL in

Tanzania.

v. To assess the economic sustainability of NBCL in Tanzania.

Descriptive means of data analysis are mainly used backed by simple tables and

percentages. The results of the study are presented, analyzed and interpreted according to

the study.

4.1. Descriptive results

This section presents the results of the study findings based on the demographic characteristics

of the respondents and background information of the respondents.

57

4.1.1 Questionnaire response rate

In the course of this study, 150 questionnaires were administered. All of them were completed

and returned, this was because of the persistence follow-up that the researcher employed in the

course of data collection. This represents a 100% response rate which is regarded as very

excellent response. Table 4.1. Shows questionnaire response rate.

Table 4.1.: Questionnaire response rate

RESPONSE FREQUENCY Percentage

Returned 150 100

Total 100

Source: Research field Data, 2018

Table 4.2: Profile of Respondents

Education Particular

Level Number of respondents Percentage

Secondary certificate 35 23.3

Diploma/certificate 55 36.6

Bachelor Degree/Advanced

Diploma

60 40

Total 150 100

Age Particulars

Age interval Number of Respondents Percentage

20yrs-29yrs 45 30

30yrs-39yrs 50 33.6

40yrs-49yrs 35 23.3

50yrs-Above 20 13.3

58

Total 150 100

Working Experience

Number of years Number of Respondents Percentage

0yrs-3yrs 15 10

4yrs-6yrs 25 16.6

7yrs-9yrs 45 30

10yrs and above 65 43.3

Total 150 100

Status of Respondents Number of Respondents Percentage

Category

Managerial level 75 50

Non-Managerial level 25 16.6

Customer 50 33.3

Total 150 100

Gender

Male 90 60

Female 60 40

Total 150 100

Source: Primary Data, 2018

Gender

Table 4.2 shows respondents according to gender, the finding revealed that, 90(60%) of the

respondents were male while 60 (40%) were female. This implies that most of the employees at

NBCL-Mwanza are male. This is due to the fact, that men have been identified as a major power

of the company through which the main operations are done by them. They have been identified

a very responsible personnel whose efficiency, consistency, endurance, hard working and ability

59

to face difficulties are prominent features from which the company economic sustainability is

achieved.

Age

Table 4.2 shows respondents according to age, the finding revealed that, 45(30%) of the

respondents were between 20 to 29 years, 50 (33.6%) were between 30 to 39 years, 35 (23.3)

were between 40 to 49 years, while 20 (13.3%) of respondents were between 50 years and above.

It implies that, the company has a large number of teenagers and young people whose endurance

and hard working have been identified to be crucial in delivering their job competence. But also

the company has a reasonable number of adults whose knowledge and experience helps in

solving problem arises in day to day operation.

Working Experience

Table 4.2 shows respondents according to working experience, the finding revealed that,

15(10%) of the respondents were between 0 to 3 years, 25 (16.6%) were between 4 to 6 years, 45

(30%) were between 7 to 9 years, while 65 (43.3%) of respondents were between 10 years and

above. It implies that, the company has a large number of experienced workers whose

experience is 10 years and above, the company has managed to retain workers for a couple of

years which indicates that, the company has sustainable corporate strategy as far as corporate

social responsibility is concerned.

Respondents Status

Table 4.2 shows respondents status, the finding revealed that, 25(16.6%) of the respondents were

non managerial, 50 (33.6%) were between customers of NBCL-Mwanza, 75 (50%) were

60

between managerial. It implies that, the company has a large number of managerial personnel

due to fact that, the company has large number of department whose operation requires effective

management.

4.2. Response to Research objectives

4.2.1 To examine the relationship between transparency and NBCL economic sustainability

in Tanzania.

Table 4.3: Description of the relationship between transparency and NBCL economic

sustainability

Elements of Transparency Frequency Percentage

Corporate disclosure 65 43.3

Corporate Financial reporting 85 56.6

Total 150 100

Source: Primary Data, 2018

Table 4.3: Shows that 65 (43.3%) of the respondents indicated that NBCL - Mwanza has a wide

corporate disclosure, while 85(56.6%) of respondents indicates that the company has well

organized corporate financial reporting, of which these elements has embraced transparency of

the NBCL-Mwanza. From these findings, it is believed that transparency plays a vital role

towards company's economic sustainability, whereby Table 4.4 below indicates that transparency

increased market share and sales, help in building good image of NBCL-Mwanza, and

encourages investors to invest in NBCL-Mwanza. All of these happens as far as corporate social

responsibility practices are concerned.

61

Table 4.4: Description of how Elements of transparency impact NBCL-Mwanza economic

sustainability

Effects of Transparency Frequency Percentage

Increases Sales 82 54

Increases Market Share 37 25

Building Good Image 9 6

Encourages Investors 22 15

Total 150 100

Source: Primary Data, 2018

Table 4.4: Shows that 82 (54%) of the respondents indicated that transparency has help NBCL -

Mwanza increases sales, 37(25%) of respondents indicates that transparency plays a vital role in

increasing market share, 9(6%) of respondents indicates that, transparency has an impact on

building good image of NBCL-Mwanza, 22(15%) of respondents indicates that, transparency

encourages investors to invest in NBCL-Mwanza. All of these happens as far as corporate social

responsibility practices are concerned.

62

4.2.2 To assess the relationship between accountability and NBCL economic sustainability

in Tanzania.

Table 4.5: Description of the relationship between Accountability and NBCL economic

sustainability

Source: Primary Data, 2018

Table 4.4: Shows that, NBCL - Mwanza has managed to increase market accountability by

67(45%), 37(25%) of respondents indicates that accountability plays a vital role in increasing

both environmental and social accountability, 7(5%) of respondents indicates that, accountability

has an impact on political accountability of NBCL-Mwanza. All of these happen as far as

corporate social responsibility practices are concerned.

Elements of Accountability Frequency Percentage

Political accountability 7 5

Environmental accountability 37 25

Social accountability 37 25

Market accountability 67 45

Total 150 100

63

4.2.3 To find out the relationship between company's compliance and company's economic

sustainability at NBCL in Tanzania.

Figure 4.1: Description of the relationship between company's compliance and NBCL

economic sustainability

Source: Primary Data, 2018

Figure 4.1: Shows that, NBCL - Mwanza has managed to comply with government requirement

by 52( 35%) of the total respondents, investors requirement by 67(45%) , 22 (15%) of

respondents indicates that, compliance plays a vital role in complying with social requirement,

while 7(5%) of respondents indicates that, compliance has been adhered by the company as the

code of conduct of NBCL-Mwanza. All of these happen as far as corporate social responsibility

practices are concerned.

45%

35%

15%

5%

Compliance

Investors requirement

Government requirement

Social requirement

Code of conduct

64

4.2.4 To examine resource management on company's economic sustainability at NBCL in

Tanzania.

Figure 4.2: Description of how management of resource has brought about NBCL

economic sustainability

Source: Primary Data, 2018

Figure 4.2: Shows that, 67(45%) of the respondents indicated that utilization of resource has help

NBCL - Mwanza in attaining economic sustainability, 52(35%) of respondents indicates that,

internal control plays a vital role in managing resource of the company, 7(5%) of respondents

indicates that, resource management has been influenced by reporting, 22(15%) of respondents

indicates that, resource management has been influenced by resource planning of NBCL-

Mwanza. All of these happen as far as corporate social responsibility practices are concerned.

35%

45%

15% 5%

Strong effect

Internal conttrol

Utilization of resource

Planning for resource

Reporting for resource

65

4.2.5 To assess the economic sustainability of NBCL in Tanzania.

Table 4.6: Description of NBCL economic sustainability

Source: Primary Data, 2018

Table 4.5: Shows that 52(35%) of the respondents indicated that transparency has help NBCL -

Mwanza attain economic sustainability, 45(30%) of respondents indicates that accountability

plays a vital role in influencing NBCL-Mwanza economic sustainability, 37(25%) of respondents

indicates that, compliance has an impact on NBCL-Mwanza economic sustainability, 15(10%) of

respondents indicates that, reporting influences NBCL-Mwanza economic sustainability. All of

these happen as far as corporate social responsibility practices are concerned.

Elements of Economic sustainability Frequency Percentage

Transparency 52 35

Accountability 45 30

Compliance 37 25

Reporting 15 10

Total 150 100

66

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction

This is the last chapter of the study. It presents the discussion of the findings in line with the

study objectives, and the researcher derives conclusion and makes recommendations.

5.1 Summary of key Findings

5.1.1. To examine transparency on company's economic sustainability at NBCL in

Tanzania.

The findings revealed that, respondents of NBCL-Mwanza had appreciated transparency as one

of the corporate responsibilities practices that increases company's economic sustainability,

Table 4.3: Shows that 65 (43.3%) of the respondents indicated that NBCL - Mwanza has a wide

corporate disclosure, while 85(56.6%) of respondents indicates that the company has a well

organized corporate financial reporting, of which these elements has embraced transparency of

the NBCL-Mwanza. This has influenced company's economic sustainability whereby the results

in table 4.4 show that 82 out of 150, (54%) of the respondents felt that transparency increases

sales of the company of which it contributes to the economic sustainability of the company by

35%. They felt that it is important to prepare a good corporate disclosure reporting and well

organized corporate financial reporting, indicating how important is corporate social

responsibility in strengthening company's economic sustainability. In the course of this study,

company's stakeholders felt that, it's important for the company to be more transparent in their

operations as they felt that being transparent has a direct impact on the company's economic

sustainability.

67

In addition to that, these findings appear to agree with what John (2016) found in her study on

the impacts of Corporate social responsibility on image building a case of Nyanza Bottling

Company Limited. The study intended to establish the relationship between corporate social

responsibility and image building. He found that 9 (56.3%) respondents out of 16 said that

NBCL-Mwanza is sponsoring events that have an impact to both (company and society). In that

study, she concluded by saying that community or customers are significant part of the

organization development due to the reason that the organization depend much on customers‟

acceptance on what the organization produce. Due to this the organization should pay attention

to the society by conducting Corporate Social Responsibility in order to build the image of the

organization which in a long run enhance company's economic sustainability.

Furthermore, Omran (2015) conducted a study on Theoretical Perspectives on Corporate Social

Responsibility Disclosure. He found that social and environmental disclosures has flourished

over the past years with reporting on corporate social responsibility (CSR) information now

considered to be an important component, complementing financial reporting to reduce

information asymmetry. Whereby customers and investors are willing to engage with companies

that essentially practice CSR.

5.1.2. To assess accountability on company's economic sustainability at NBCL in

Tanzania.

The results indicates that, respondents of NBCL-Mwanza had appreciated accountability as one

of the corporate responsibilities practices that has an impact on company's economic

sustainability whereby 67 out of 150,(45%) of the total respondents indicated that, accountability

of the company influences the market in the company do operate, it's from this fact the company

68

is able to increase both sales (54%) and market share (25%) which are crucial for the existence

and economic sustainability of the company in a long run. Company's stakeholders felt that when

the company is able to increase both sales and market share, economic sustainability of the

company is inevitably achieved. Most the respondents indicated that the company should be

responsible for their actions as they tends to affect both society and environment at large. It is

through creating a good relationship between the company and society in which the company do

operate, stakeholders felt that the company has an opportunity to increase both sales and market

share.

In addition to that, these findings appear to agree with what Juliana Isanzu & Xu- Fengju (2016)

found in their study on Impact of Corporate Social Responsibility on Firm‟s Financial

Performance. The study intended to establish the relationship between corporate social

responsibility and Firm's Financial Performance. They found that CSR Return on Equity is 0.226

greater than that of Non CSR 0.017. This means that CSR firm‟s perform better than Non CSR

firms .In that study, they concluded by saying that in Tanzania social responsibility came about

with increasing competition as many companies flooded the country from various countries it

gained momentum because now consumers have many options to choose from (Mushi, 2007).

Now days CSR is used as a marketing tool for creating competitive advantage, ever since the

number of firms doing CSR in the country has been on the rise. Recently a CSR award has been

introduced which seeks to reward firms that make a greater contribution in the community

through their CSR practices and also encourage other firms that are yet to incorporate CSR in

their strategies to do so.

69

5.1.3. To find out the relationship between company's compliance and company's economic

sustainability at NBCL in Tanzania.

From now, there is no way a company may operate without abiding to the rules and regulations

of the society or an environment in which the company do operate. Compliance has became

more demanding in the world of business today, it is not an option rather the rule of the game.

The findings revealed that, NBCL-Mwanza respondents had appreciated compliance as one of

the corporate responsibility practices that Increases Company‟s appreciation from investors by

45%, investors are attracted to invest in a company that do comply with the rules and regulations

of the society they operate within. Stakeholders felt that, it's the government requirement(35%),

to comply with rules and regulations that abide business operations. From these finding,

economic sustainability of the company largely depends on the company's compliance. Although

some of the challenges are raised by the company's stakeholders whereby conducting corporate

social responsibility practices is seen as a burden to them because of the low budget that is

allowable to finance these activities, that is where government support is called upon to rescue

the situation. Most of the respondents believed that the burden of financing these activities

should be shared by both ( government and company), because these activities has an impact on

both.

In addition to that, these findings appear to agree with what Kumar (2016) found in his study on

Corporate social responsibility: Mission possible, in India. He ascertained the role of corporate

social responsibility on social development and its significant impacts. Whereby several studies

have established that more the CSR spending better the reputation of the company and better will

be the profits. So, Companies will tend to spend more than the minimum stipulated 2% of

70

average profits in the years to come. He therefore strive to list the best case scenario of CSR as

per the new law and try to find out what could be achieved by giving a right direction to CSR of

these companies. He suggested that, companies that engage more in CSR spending will have

better the reputation of the company and better will be the profits. Thus , companies should

comply with the new law that requires companies to take full initiatives in enhancing and

implementing CSR practices.

5.1.4. To examine resource management on company's economic sustainability at NBCL in

Tanzania.

Company's efficiency and effectiveness largely depends on how does the company manage its

resource, management of resource is felt to be crucial if the company is to sustainable especially

economically. 67 out of 150, ( 45%) of the total respondents indicated that utilization of resource

is key resource management this is to show that, NBCL-Mwanza respondents appreciated that,

resource management as one of the corporate responsibilities practices that increases company's

economic sustainability. There is no way a company can be economically sustainable if there are

no proper utilization of resource, strong internal controls system, good resources planning and

resources management reporting, all of these are very crucial and of more important for business

long survival especially economic sustainability.

In addition to that, these findings appear to agree with what Ready & Thomson (2015) found in

their study on Environmental, social and Economic Sustainability: Implications for Actuaries

Science, in Sydney, Australia. Sustainability concerns will have a material effect on actuarial

assumptions and future liabilities and on the advice provided to clients. Despite these material

effects, the actuarial literature on this subject is limited to resource constraints and climate

71

change. Actuaries advise or are employed by institutional investors. As the need for institutional

investors to promote sustainability grows, actuaries need to provide solutions to how institutional

investors can incorporate sustainability issues in their investment decisions. This requires

measuring the sustainability of the entities our clients invest in, measuring the sustainability of

our client„s activities and measuring the effect of sustainability on economic returns.

5.1.5. To assess the economic sustainability of NBCL in Tanzania

The findings indicates that, NBCL-Mwanza respondents had appreciated that, corporate social

responsibilities practices has contributed to the economic sustainability of the company whereby

transparency contributed by 35%, accountability by 30%, compliance by 25% and finally

reporting by 10%. In the course of this study, respondents pinpointed some thoughts on how

they see corporate social responsibility practices, most of them indicated that corporate social

responsibility is the new economic strategy to the companies staffs, there should be a transition

period that left the company reluctant in coupling with these practices namely transparency,

accountability, compliances, and reporting.

The following studies agree with John (2016) on her study; the impacts of Corporate social

responsibility on image building a case of Nyanza Bottling Company Limited, Juliana Isanzu &

Xu- Fengju (2016) on their study; Impact of Corporate Social Responsibility on Firm‟s Financial

Performance and Kumar (2016) on his study; Corporate social responsibility: Mission possible,

in India. All of these studies signify the role of transparency, reporting, accountability and

compliance in enhancing company's economic sustainability as far corporate social responsibility

is concerned.

72

5.2 Conclusion

5.2.1. To examine the relationship between transparency and company's economic

sustainability at NBCL in Tanzania

Based on the findings in chapter four, it can be concluded that, transparency is key practice, as

far as corporate social responsibilities is concerned in attaining economic sustainability of

NBCL-Mwanza. Since, Transparency enabled the company to increase sales at the same time

increases market share, of which all these have an impact on company's economic sustainability.

5.1.2. To assess accountability on company's economic sustainability at NBCL in Tanzania

Based on the findings in chapter four, it can be concluded that, there is no way a company may

be economically sustainable unless accountability is among of the key practices, as far as

corporate social responsibilities is concerned in achieving economic sustainability of NBCL-

Mwanza. Since, accountability enabled the company to acquire great acceptance from the

market, social, environment and political responses, of which all these have an impact on

company's economic sustainability.

5.1.3. To find out the relationship between company's compliance and company's economic

sustainability at NBCL in Tanzania

Based on the findings in chapter four, it can be concluded that, company's compliance is among

of the key practices, as far as corporate social responsibilities is concerned in influencing

economic sustainability of NBCL-Mwanza. Since, company's compliance enabled the company

to acquire great acceptance from investors, large number of investor are willing to invest in a

company that do comply with rules and regulations of the country. Also gaining acceptance

73

from social, environment and political responses, of which all these have an impact on

company's economic sustainability.

5.1.4. To examine resource management on company's economic sustainability at NBCL in

Tanzania

Based on the findings in chapter four, it can be concluded that, company's resource management

is among of the key practices, as far as corporate social responsibilities is concerned in economic

sustainability of NBCL-Mwanza. Since, company's resource management enabled the company

to attain effective resources utilization and effective internal control system, of which all these

have an impact on company's economic sustainability of the company.

5.1.5. To assess the economic sustainability of NBCL in Tanzania

Based on the findings in chapter four, it can be concluded that, the economic sustainability of

NBCL-Mwanza is largely influenced by transparency, accountability, compliance and reporting,

as far as corporate social responsibility is concerned, of which all these ( transparency,

accountability, compliance and reporting), have an impact on company's economic sustainability.

5.3. Recommendations

5.3.1. Recommendation to the organization

The study recommends on the need of having effective corporate social responsibility as the

strategy towards company's economic sustainability, whereby NBCL-Mwanza should put more

emphasize on enhancing sustainable corporate social responsibilities. This is because sustainable

corporate social responsibilities have been identified as a major factor that enhances economic

sustainability of NBCL-Mwanza.

74

5.3.2. Recommendation to Government

The study recommends on the role that Government should play in supporting and promoting

companies that do engages in CSR practices. Whereby Government is advised to provide

incentives and subsidies to companies that effectively practice sustainable corporate social

responsibility. Because in doing so, the government influences more companies to engage in

corporate social responsibility practices of which these practices are beneficial to government,

society and companies.

5.4 Area of further research

This research was conducted at NBCL-Mwanza, which uses corporate social responsibility as a

sustainable strategy to economic sustainability of NBCL-Mwanza. Whereby the findings show

that there is a great and positive relationship between corporate social responsibility and

company's economic sustainability. Thus, it is suggested that, similar study should be conducted

to other organization in Tanzania to see if corporate social responsibility has an influence on

company's economic sustainability.

75

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APPENDICES

Appendix I: Questionnaire for employees of Nyanza Bottling Company Limited (NBCL)

A. Introductory letter

Dear Respondent,

I am JACKSON, Zacharia a student pursuing Master in Business Administration- Accounting

(MBA) at St. Augustine University of Tanzania conducting a research on the Impact of

Corporate Social Responsibility on Company's economic Sustainability. A case of Nyanza

bottling company in Mwanza city.

This study is pure for academic purpose and to be awarded a Master of Business Administration

in Accounting. Your information will remain confidential, also the success of the study will

depend on your response with high cooperation by giving out the correct

answer.

B. Preliminary Information

Tick (√ ) where appropriate

1. Age

a) 20-29 ( )

b) 30-39 ( )

c) 40-49 ( )

d) 50-59 ( )

81

2. Gender

a) Male ( )

b) Female ( )

3. Educational level

a) University ( )

b) Secondary ( )

c) Primary ( )

C. Basic Information

4. Before conducting CSR activities what things do you consider?

a) Request from the society ( )

b) Policy of an organization ( )

c) All of the above ( )

Add if there others

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

82

5. What are the CSR activities do you conduct towards company's economic sustainability?

a) Sponsoring various events ( )

b) Contribution on different social services ( )

c) All of the above ( )

Mention if there others

6. How does transparency impact company's economic sustainability at NBCL in Tanzania?

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

7.Does accountability impact company's economic sustainability at NBCL in Tanzania?.

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

8. Is there a relationship between company's compliance and company's economic sustainability

in Tanzania?.

………………………………………………………………………………………………………

………………………………………………………………………………………………………

……………………………………………………………………………………………………..

9. Resource management has anything to do with company's economic sustainability?.

83

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

10. What is the status of economic sustainability of NBCL in Tanzania?.

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

10. What is the economic sustainability of NBCL in Tanzania?

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

11. How does CSR contribute to economic sustainability of NBCL in Tanzania?

………………………………………………………………………………………………………

………………………………………………………………………………………………………

……………………………………………………………………………………………………..

THANK YOU

84

Appendix II: Questionnaire for customers of Nyanza Bottling Company Limited (NBCL)

A. Introductory letter.

Dear Respondent,

I am JACKSON, Zacharia a student pursuing Master in Business Administration- Accounting

(MBA) at St. Augustine University of Tanzania conducting a research on the Impact of

Corporate Social Responsibility on Company's economic Sustainability. A case of Nyanza

bottling company in Mwanza city.

This study is pure for academic purpose and to be awarded a Master of Business Administration

in Accounting. Your information will remain confidential; also the success of the study will

depend on your response with high cooperation by giving out the correct answer.

B. Preliminary Information

Tick (√) where appropriate

1. Age

a) 20-29 ( )

b) 30-39 ( )

c) 40-49 ( )

d) 50-59 ( )

2. Gender

a) Male ( )

85

b) Female ( )

3. Education level

a) University ( )

b) Secondary ( )

c) Primary ( )

C. Basic Information

4. Does Nyanza bottling company participate effectively in improving social

development?

If YES how, If NO why.

………………………………………………………………………………………………………

………………………………………………………………………………………………………

……………………………………………………………………………………………………...

5. In which ways do Nyanza bottling company offer support to the society surrounding the

organization?

a) Education support ( )

b) Health support ( )

c) Environment control ( )

d) Providing Aids to orphans ( )

86

e) All of the above ( )

If there others, mention

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

6. What are the effects you get from Nyanza bottling company being around your society?

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

7. What are your suggestions towards Nyanza bottling company towards company's economic

sustainability?

………………………………………………………………………………………………………

………………………………………………………………………………………………………

………………………………………………………………………………………………………

THANK YOU

87

Appendix III: A guide to customers of NBCL-Mwanza products around the Plant-

Nyamagana District

1. Please tell me what do you understand the term Corporate social Responsibility?

2. What does NBCL-Mwanza perform as far Corporate social Responsibility is concern?

3. In your opinion. are these activities of more important to your society?

4. Does the following components helps the company achieve better sales and increase market

shares;

(i) Transparency

(ii) Accountability

(iii) Compliance

(iv) Corporate reporting

5. What do you think are the reason for NBCL-products acceptance in Mwanza region

particularly at Nyamagana District?.

6. Is CSR has anything to do with NBCL-Mwanza economic sustainability?.

7. What advice would you give to companies that do engage in CSR practices?.

8. What advice would you give to policy makers and other CSR stakeholders to encourage more

companies to engage in CSR practices?.