Öz

Dünyada kurumsal sosyal sorumluluğa olan büyük ilgi göz önüne alındığında, çeşitli paydaşların baskıları nedeniyle şirketler kurumsal sosyal sorumluluk faaliyetlerine katılmaktadır. Gelişmiş ve gelişmekte olan ekonomiler arasındaki kültürel, düzenleyici ve etik farklılıklar olduğu için, gelişmekte olan ekonomilerde kurumsal sosyal sorumluluğu analiz etmek oldukça önemli hale gelmiştir. Bu çalışma gelişmekte olan bir ekonomi bağlamında kurumsal sosyal sorumluluk faaliyetlerini, hükümetin kurumsal sosyal sorumluluk faaliyetleri üzerindeki etkisini ve kurumsal sosyal sorumluluk motivasyonlarını analiz etmiştir. Bu çalışma, Kenya’daki çimento üretim firmalarının kurumsal sosyal sorumluluğunun analizini gerçekleştirmiştir. Analizimiz için anketler, görüşmeler ve firmaların belgeleri, raporları ve Kenya hükümetinin farklı departmanlarının web sitelerini kullandık. Analiz, Kenya’daki çimento üretim firmalarının sağlık hizmetlerinden gençlere yönelik programlarına kadar çeşitli kurumsal sosyal sorumluluk programlarına katıldığını göstermiştir. Bu çalışma hükümetin rolünün firmaların kurumsal sosyal sorumluluk faaliyetlerini etkilemede orta düzeyde olduğu bulunmuştur. Ayrıca, kurumsal sosyal sorumluluk faaliyetlerine katılmanın en önemli motivasyonu firmanın finansal performansını artırmaktır. Sonuçlar, Kenya’da kurumsal sosyal sorumluluk faaliyetlerinin, kurumsal sosyal sorumluluk motivasyonlarının ve hükümetin kurumsal sosyal sorumluluk faaliyetleri üzerindeki etkisinin gelişmiş ekonomilerden farklı olduğunu ortaya koymaktadır.

Anahtar Kelimeler

Kurumsal Sosyal Sorumluk, Çimento Üretim Firmalar, Gelişmekte Olan Ekonomi, Kenya

Corporate Social Responsibility In The Context of An Emerging Economy: An Analysis of Cement Manufacturing Firms In Kenya

Extended Abstract

Given the great interest in corporate social responsibility (CSR) firms across the globe are involved in CSR activities due to pressures from various stakeholders. Corporate social responsibility (CSR) refers to the obligations and response of a firm to the stakeholders’ expectations, which are affected by corporate strategies, practices and policies (Aguinis, 2011; Dong et al., 2024; Smith, 2003). Putting it differently, CSR considers the effect of acts and policies of the firm on its stakeholders in terms of economic, social and environmental performance – the triple bottom line of sustainable development (Kıymalıoğlu and Özbük, 2024).

CSR offers the firms a number of benefits and different ways to gain competitive adavantage through enhanced brand reputation, increased customer satisfaction, long-term shareholder and stakeholder value as performance outcomes of CSR. Additionally, CSR being a significant corporate practice has a number of determinants. Factors such as revenue generation, level of use of debt, the nature of the business, firm location and the type of the firm, percentage of state ownership of the firm and size of the firm significantly determine CSR practices. In a similar vein, governments also influence CSR activities of the firms through regulations, by providing legal framwork for the use of natural and human resources, and by giving financial and non-financial incentives to the firms in order to encourage them to involve in CSR activities for the benefit of local communities and the nation at large.

It has been observed that in light of the cultural and regulation differences and ethical reasoning between developed and emerging economies, analysing CSR in emerging economies has become highly essential. In view of this, it is argued that the CSR research will be more beneficial to the firms in emerging economies when research is conducted in the context of emerging economies. However, due to a dearth of research in emerging economies there is a lack of understanding of issues in emerging economies in the CSR literature (Ali, Frynas, and Mahmood,  2017).

This study aims to close the research gap about the CSR practices in the context of an emerging economy. We conducted an analysis of CSR of the cement manufacturing firms in Kenya. More specifically, we studied what are the different CSR activities undertaken by cement manufacturing firms in Kenya and what are the government policies about CSR that influence the CSR activities of cement producers in Kenya. Moreover, we also investigate management motives for CSR activities.

The six major cement producers of Kenya that are analysed for the purpose of this research are: Bamburi Cement Limited; Cement Mombasa; East African Portland Cement Firm; Savannah cement; ARM, Africa Ltd and National Cement. We used questionnaires, interviews, and firms’ documents, reports and the website of the firms and the website of the different departments of Kenyan government for our analysis. In total 30 interviews were conducted. 19 interviewees were top managers, while 11 interviewees were middle-level managers.

Analysis showed that cement manufacturing firms in Kenya are involved in various CSR programs ranging from healthcare to youth empowerment programs. The results exhibit that the most common CSR activity undertook by the firms are related to health and occupational safety that are beneficial to their internal and external stakeholders. Firms are also involved in the activities that enhance the firms’ capability to deliver goods and services in a sustainable way. Another important CSR activity in which firms involved is the implementation of strict occupational safety policies for employees and subcontractors by providing necessary training and skills to their employees. Moreover, firms provide education and training to the local communities to develop the skills of local people for different job opportunities. For the educational purposes firms provide the grants and scholarships for the needy and finance the youth education and development programs.

The results also show that government policy has a modest impact on cement industry’s CSR initiatives. The influence of the government regulations for commercial activities has highest impact on CSR activities, followed by the enforcement of standards to improve the disclosure and transparency of firms. Government also influences the CSR acts of the firms by the government awareness programs about CSR and provides help to the firms for CSR acts. The study also found that the government facilitates socially responsible investment by the firms and facilitates the process of firm participation  in CSR initiatives.

Moreover, the study found that the motives for the firms to engage in CSR activities are diverse. However, the major motive to involve in CSR activities is to increase the financial performance of the firm which is followed by the motive to improve the firm’s reputation and brand loyalty. Another motive for the firms to undertake CSR initiatives is to comply with laws and regulations. The motive to increase market value ia also an important driver for CSR acts. The motive which ranked last among the motives for CSR activities is ecological consideration.

In a nutshell, the results of the study highlight that CSR activities, motives for CSR, and the influence of government on CSR activities is different in Kenya than developed economies. From the policy perspective, the study recommends that governments in emerging economies should make it obligatory for the cement manufacturing firms to disclose their CSR information to public at specific time periods. This can be achieved if governments formulate and implement strict rules and regulations and assert their authority.

Introduction

Corporate social responsibility (CSR) refers to the obligations and response of a firm to the stakeholders’ expectations, which are affected by corporate strategies, practices, and policies (Aguinis, 2011; Dong et al., 2024; Smith, 2003). Putting it differently, CSR considers the effect of acts and policies of the firm on its stakeholders in terms of economic, social, and environmental performance – the triple bottom line of sustainable development (Kıymalıoğlu and Özbük, 2024). A firm’s stakeholders include individuals, society, and the environment. CSR emphasizes that the firm must not only strive to maximize profits, but also contribute positively to the society and environment. It means that the firms must have a sustainable way of being good members of society and avoids any negative impact on the firms’ internal and external stakeholders (Kallio, 2006). Being a responsible good member of society firms enjoy improved corporate image, capital adequacy and become legitimate and acceptable in the community (Shabana, Buchholtz, and Carroll, 2017).

Various studies concluded that it is in the firms’ interest to act in socially responsible behaviors to develop closer relationship with internal and external stakeholders (Camilleri, 2022; Velte, 2022). This relationship allows the firms to gain the goodwill of the stakeholders that may be significantly rewarded by a higher level of financial efficiency and performance (Abdi, Li, and Càmara-Turull, 2022; Barauskaite and Streimikiene, 2021). Moreover, CSR offers the firms a number of benefits and different ways to gain competitive advantage through enhanced brand reputation, increased customer satisfaction, long-term shareholder and stakeholder value as performance outcomes of CSR (Avery and Bergsteiner, 2011; Kıymalıoğlu and Özbük, 2024; Zhao et al., 2023). The implication is that CSR enables firms to remain competitive through sustainability leadership. The benefits of sustainability leadership are classified on the basis of benefits within the firm and those outside the firm. The benefits that arise outside the firm include the firm’s reputation, reduction in business risk, good relationship with customers, and reduced costs (Carroll, 191). Internal benefits include learning, attracting better employees, improved job attitudes, and employee attitudes (Smith, 2003).

CSR being a significant corporate practice has a number of determinants. Factors such as revenue generation, level of use of debt, the nature of the business, firm location and type of the firm, percentage of state ownership of the firm, and size of the firm significantly determines CSR practices (Ali et al., 2024). Firms that are profitable involve in a number of CSR activities and they disclose more information than unprofitable firms. Whereas the firms that are not making enough profits do not have adequate financial capability to participate in social responsibility as compared to firms making more profits (Waddock, Bodwell, and Graves, 2002). Equally the amount or percentage of debt used by a firm determines their capability to participate in CSR activites. The reason is that the firms which use a higher percentage of debts will be required to make more disclosures because financial institutions will only commit to lend on the basis of the available information and the level of reputation (Gelb and Strawser, 2001).

CSR holds significant importance for the manufacturing firms. The process of manufacturing involves the consumption of natural resources that put constrains on the supply of these resources causing significant natural degradation, therefore, it is highly possible that their activities and operations are may be unfriendly to the stakeholders along their value chain activities (Abbas, 2020; Shahzad et al.,2020). Equally, the firms involved in manufacturing make heavy capital investment in equipment and machinery that might have negative impact on environment. The high possibility of negative externalities of the manufacturing firms makes it critical for these firms to incorporate CSR practices for improving environmental, economic, and social sustainability (Raimi, 2017).

It has been noted that particularly the firms such as cement manufacturing firms in manufacturing industries, which have high negative impact on environment, health-related issues, and the physical safety-related issues, must exhibit high-level of CSR (Dunay, Ayalew, and Abdissa, 2021). Firms involved in the manufacturing of cement needs to exercise high social responsibility to help improve the well-being of the local community where the firm operates (Ighalo and Adeniyi, 2020). The basis is that cement manufacturing firms’ operations have a lot of negative effects on the environment. Particularly, the mining of raw materials such as limestone and clay and the manufacturing process such as the heating process have serious negative effects on the internal and external stakeholders of the cement manufacturing firms.

Perusal of the literature shows that most of the research regarding CSR activities of the manufacturing firms have been conducted in the context of developed economies (Dartey-Baah and Amoako, 2021). It has been argued that because of the differences of culture, laws, regulations, and business practices between developed and emerging economies, CSR practices used in developed economies face serious constrains when utilized in emerging economies (Dong et al., 2024). In view of this, it is argued that the CSR research will be more beneficial to the firms in emerging economies when research is conducted in the context of emerging economies. However, due to a dearth of research in emerging economies there is a lack of understanding of issues in emerging economies in the CSR literature (Ali, Frynas, and Mahmood, 2017).

This study aims to close the research gap about the CSR practices in the context of an emerging economy. We conducted an analysis of CSR of the cement manufacturing firms in Kenya. More specifically, we studied what are the different CSR activities undertaken by cement manufacturing firms in Kenya and what are the government policies about CSR that impact the CSR activities of cement producers in Kenya. Moreover, we also investigate management motives for CSR activities. Before we introduce the literature review section, it is essential to first highlight the key features of Kenya and cement industry in Kenya that provides the research context.

The Kenyan Context

Kenya has unique economic, political, social and cultural conditions that influence corporate practices. The country occupies a total area of 580,367 square kilometers with a population of 52.43 million people. Kenya’s gross domestic product (GDP) in 2023 was worth US $107.44 billion with an annual growth of 5.6% in 2023, exceeding the previous year’s growth of 4.9%  (World Bank, 2024). Kenya has one of the largest and most advanced economies in the East Africa. The growth is primarily lead by healthy growths in Agriculture, Forestry and Fishing activities (6.1%), Real Estate (6.6%), Financial and Insurance (7.0%), Information and Communication (7.8%) and Accommodation and Food Services (28.0%) (African Development Bank, 2024). Tea and horticulture are the leading exports, and tourism is a leading foreign exchange earner. The Kenya construction market size was $15.6 billion in 2023. The construction market is expected an average growth of more than 5% during 2025-2028 (Kenya National Bureau of Statistics, 2024).

Due to strong growth in construction industry the Kenyan cement manufacturing firms exhibit strong financial performance (African Development Bank, 2024). However, these firms have difficulties in incorporating sustainability in their operations and lacks socially responsible behavior. The firms are involved in the extraction of limestone and this activity has a serious degrading effect on the physical environment and releases pollutants both to air, soil and water. Moreover, the releasing pollutants are also harmful to human health. Similarly, the cement manufacturing process could have hazardous impact on the workers who work in cement factories as they are exposed to risks such as dust, noise, and vibrations, and they have to be protected against these health hazards. Therefore, there is a growing pressure on the cement manufacturing firms in Kenya to be socially responsible and involve in CSR activities (Osano, and de Waal, 2020).

CSR is a relatively recent phenomenon in Kenya and many organizations are yet to figure out how to incorporate it in business. It is one of the reasons that there is a lack of research about CSR in cement industry of Kenya. Murila (2013) conducted a research about the CSR practices of cement manufacturers in Kenya. This particular study focused on the operations of the East African Portland Cement Firm Kenya Limited. The study found that the firm tend to perform better than its rivals. The argument is that when firms are socially responsible, they are in position to develop strong ties with the different stakeholders and become more competitive in the market.

CSR Theory

CSR theory posits that firms have economic, legal, ethical, and philanthropic responsibility. They are not just entities that pursue economic interests, but should also bear responsibilities in complying with laws, practicing ethical standards, and participating in social welfare activities (Carroll, 1991; Deng, Ong, and Senik, 2024). They have to be ethically obliged to maximize the welfare of the members of the community where they operate (Smith, 2003). According to the CSR theory, firms are expected to make decisions that maximize their economic interest as well as the interest of the society.

Friedman (2007) argued that being socially responsible raises the expectation of generating profits minus jeopardizing society’s well being. Emphasis is placed on CSR being a tool by which firms can earn profits and also contribute positively to the society (Ahmad et al., 2024). CSR assumes that the firm balances societal, environmental and profit-related issues, considering the interests of internal and external stakeholders. The bottom-line is that firms must involve in CSR activities and adopt ethical behavior that can benefit all the stakeholders (Barauskaite and Streimikiene, 2021).

It has been emphasized in CSR literature that the need to maximize the good of all the stakeholders that have direct and indirect relationship with the firm should be a major agenda in the boardroom discussions to avoid extreme focus only on the wealth of the firms’ owners (Friedman, 2007). With this consideration, firms would be viewed as ethical and socially responsible entities. Socially responsible firms employ the available resources in such a way that they do not compromise the safety of people, enviroment, and planet (Muthuri and Gilbert, 2011). Such firms give priority to long-term stakeholder relationships over short-term profit maximization and pursue sustainable development and long-term performance (Ehsan et al., 2020). The implication is that socially responsible firms generate profits while being socially and environmentally acceptable and relevant (Muthuri and Gilbert, 2011).

In his seminal work about CSR, Carroll (1991) argued that CSR include the economic, legal, ethical, and philanthropic expectations that the society has from the firms. Based on these four areas of CSR Carroll created a graphic depiction of CSR in the form of a pyramid. The set of four responsibilities creates a foundation that helps firms to understand the expectations of the society and to assess their social responsibility engagements. (Edmondson and Carroll, 1999). Carroll (2016) further outlined that economic responsibility requires organizations to make profits to facilitate the reward to investor/owners and also for business growth when profits are reinvested back into the business. The requirement is that CEOs, managers, and entrepreneurs should be aware of the significance of their businesses making profits especially from sustainability point of view. Being legally responsible means that organizations are expected and required to comply with the laws and regulations as a condition of operating. On ethical basis, the implication is that organizations will embrace the CSR activities due to norms, standards and practices that are not codified into law but are expected from the firms (Schwartz and Carroll, 2003). Finally, regarding philanthropic responsibilities, firms should be able to undertake voluntary activities that are not legally sanctioned. For example, this can be achieved through distribution of food to the needy and operating free medical camps at the firm’s expense.

Another important aspect about CSR is context. Visser (2006) noted that social responsibility in the African context is based on human values rooted in the philosophy of African humanism (Ubuntu). The argument here is that being socially responsible is seen to be a fulfillment of a true African and the promotion of African values. In South Africa, increased involvement in social responsibility by firms has been due to improved democratic processes and the desire to avoid social injustices of the Apartheid years. This has made the firms to embrace the socially responsible approach to business. This approach is supported by the government’s commitment to social justice. As a result firms in South Africa focus heavily on how they can socially benefit the communities as they pursue financial profits (Hinson and Ndhlovu, 2011).

CSR Activities

Quite a number of arguments exist to justify the fact that firms need to be involved in CSR activities at local and global level (Halkos and Skouloudis, 2017). The basis of these arguments is based on the fact that firms are members of society and therefore they are obliged to coexist with the members of the community through social and ethical involvement (Zhao et al., 2023).

Firms involvement in CSR activities about social, ethical, and environmental problems are conducted in areas where firms and society benefit greatly from them (Jamali and Karam, 2018). Firms  for the purpose of CSR activities get involved in the areas of health and family care programs, community infrastructure development projects, and social development (Derakhshan, 2022). Additionally, firms may engage in religious and social programs (van Aaken and Buchner, 2020), promotion of cultural heritage, management of natural resources, program to strengthen the role of women, educational program, public interest activities and agricultural development (Nasreen, Baker, and Rezania, 2023).

In their study Jamali and Karam (2018) noted that the activities of being socially responsible is varied across the globe. They claim that in developing countries there are important distinctions of CSR activities both at formulation and at the stage of implementation of the social responsibility activities. Corporate executives in emerging economies are knowledgeable of the expected societal response when they try to make their organizations socially responsible.

The study by Amaeshi et al. (2006) found that the social and economic factors in Nigeria determines CSR activites of the firms. However, there is a lack of CSR initiatives by the African firms due to different reasons. According to Bello, Banda and Kamanga (2017) participation in CSR activities in Africa has been affected by lack of financial capability, inadequate commitment by high level managers, and insufficient communication of information regarding CSR.

Adewuyi and Olowookere (2010) in their study about CSR and sustainable community development in Nigeria investigated the involvement of a firm that manufactures cement. The findings of the research showed that the firm involved in the community development CSR activities for the sustainable development in the host communities. However, the position of firm seems not to be clear in the area of social and environmental reporting, and codes of conduct on bribery and corruption.

In their research Zheng, Luo, and Maksimov (2015) argued that the firms in emerging economies involve themselves in social responsibility activities through a number of activities including delivery of good and services in a sustainable way, creation of a favourable working conditions, providing help on health-related matters, and ensuring sustainable development. The CSR studies of emerging economies indicates that CSR activies in developing economies are different than CSR activities in developed economies (Dong et al., 2024). In developed economies the focus is on protecting consumers, improving good trade practices, focus on the environment through green technology and the use of other environmentally-friendly technologies by firms. However, the focus of CSR activities in emerging economies is on health, basic education, and employment etc (Derakhshan, 2022).

According to Dartey-Baah and Amoako (2021) since the macroeconomic environments of developing and developed countries are widely different therefore emerging economies should not import techniques and methods of CSR. The reason is that most of the methods that have their origins in developed countries should not normally be included in the social responsibilities of firms in developing countries unless very relevant and sustainable. The social responsibility activities of the firms should be aligned with the country’s social and economic needs. The need is to foster a good social and economic environment within the developing countries through relevant CSR activities (Abugre, 2014; Hinson and Ndhlovu, 2011).

In the light of above discussion we posit the following research question:

RQ1: What are the different CSR activities undertaken by Kenyan cement manufacturing firms?

Government Policies and Social Responsibility of Firms

In terms of CSR, the governments must facilitate CSR activities through laws and regulation,  by providing legal framwork for the use of natural and human resources, and by giving financial and non-financial incentives to the firms in order to encourage them to involve in CSR activities for the benefit of local communities and the nation at large (Steurer, 2010). In extant literature it is emphasized that there is a need for the governments to regulate and facilitate the economic activity taking into consideration the need for firms to be socially responsible (Nidasio, 2004). The business environment should be such that firms can easily comply to CSR laws and regulations at a reasonable cost and in a sustainable way. The argument is that firms would only thrive in an environment where the government is very supportive to create a mutually beneficial relationship for all stakeholders (Gond, Kang, and Moon, 2011).

A study in the context of Brazil, Russia, India and China (BRIC) investigated how firms used CSR activities in a very instrumental fashion to enter different countries and gain legitimacy (Fiaschi, Giuliani, and Nieri, 2015). The study found that the factors that relate to BRIC firms adoption of different types of CSR initiatives– i.e. social policies (philanthropic projects favoring different stakeholders), publication of CSR reports, adoption of standards, to provide social services to their employees and their family members (e.g. employee protection, education, health services, etc.) were provided under the governments directives, guidelines, and policies. Moreover, study find the support for the idea that different kinds of CSR initiatives may be subject to different pressures and may serve different legitimization strategies. The reasoning is that firms would operate in a sustainable manner socially, economically, and environmentally when the government is business-friendly and there are adequate institutional frameworks in place to facilitate CSR operations.

Arguments for the role of government in CSR highlight that governments shall regulate the firms activites that are detrimental to the well-being of society. Further governments shall facilitate the firms to grow economically, environmentally, and socially in a sustainable manner by providing an amenable legal, governance, and business environment (Rasche, Waddock, and McIntosh, 2013). In such an environment socially responsible businesses are in a position to utilize the resources responsibly and innovatively. The government must formulate guidelines on CSR while supporting the private sector with regard to enterprise development programs (Wirba, 2023).

Even though the CSR is voluntary the role of governments in promoting and developing CSR through legislation and incentives is vital to ensure well-being for the society as a whole. It is imperative that firms should be held accountable by the governments for their operations within the community to the extent that environmental and societal benefits are not compromised (Wirba, 2023). Firms shall help the governments to help solve problems in the communities through proper use of resources. For the fair, clean, and equitable use of resources governments need to support the firms that observe social responsibility through friendly business regulations (Chang, Li, and Lu, 2015).

In the light of above discussion we posit the following research question:

RQ2: What impact does government polices and regulations have on the CSR activities of Kenyan cement manufacturing firms?

Motives for CSR

Several reasons exist to explain the rationale for involvement in CSR activities. The motives for CSR activities depend on the nature of businesse and the business values of a firm. A major motive for the CSR activities is that the firms are morally, ethically, and legally obliged to the direct and indirect stakeholders of the firm (Ali, Wilson, and Husnain, 2022).

In literature it has been widely observed that the firms have financial benefits when they are involved in CSR activities (Ahsan, 2024). A positive and significant relationship exists between CSR performance and financial performance, which underscore the strategic importance of integrating CSR initiatives into core business practices. The argument is that when firms are engaged in CSR activities, they gain financial and non-financial benefits (Ahsan, 2024).

Motives to involve in CSR activities in emerging economies are different than the motives of firms in developed economies (Dartey-Baah and Amoako, 2021). Political, social, and cultural factors greatly influence the CSR activities of a firm. These factors lead to the important differences between the motives of CSR activities in emerging and developing economies. In developed economies, firms are involved in CSR activities due to the concerns of specific stakeholders, for example, regulators, shareholders, creditors, investors, environmentalists and the media are considered important pressures to behave socially responsible and involve in CSR activities. Whereas, in emerging economies, CSR activities are more heavily influenced by the external forces/powerful stakeholders such as international buyers, foreign investors, international media, and international regulatory bodies (Ali, Fryans, and Mahmood, 2017).

In the light of above discussion we posit the following research question:

RQ3: What are the motives for Kenyan cement manufacturing firms to involve in CSR activities?

Methodology

The study analyzed data from the cement manufaturing firms in Kenya collected from the firms top and middle-level managers through questionnaire based surveys and interviews. Moreover, secondary data is also analysed that is collected from sector-based documents, reports, and websites. Since research questions of the study are about “what”, we used descriptive survey research design to analyze the data. This research design includes qualitative research methods and analysis of questionnaires collected from the respondents after interviews.

Population

The research is aimed at the cement manufacturing firms in Kenya. The cement industry is thriving in Kenya. The graph below depicts the trend of cement production in Kenya (Graph 1).

Graph 1: Rolling annual cement production in Kenya, 2019 - October 2022. 

Source: Kenya National Bureau of Statistics (KNBS).

More recently data shows that cement production in Kenya increased to 736131 tons in April from 706871 tons in March of 2024. Cement Production in Kenya averaged 459949 tons from 2005 until 2024, reaching an all time high of 911250 tons in March of 2022 and a record low of 154781 tons in January of 2005 (Kenya National Bureau of Statistics, 2024).

The six major cement producers that are analysed for the purpose of this research are: Bamburi Cement Limited; Cement Mombasa; East African Portland Cement Firm; Savannah cement; ARM, Africa Ltd and National Cement. The history of the cement industry in Kenya dates back to 1930s when in 1933 East Africa Portland Cement (EAPC) started importing cement. In 2017 it holds 15.1% of the market share. Bamburi Cement Limited was founded in 1951. Lafarge, is the major investor in Bamburi Cement Limited. Athi River Mining Limited (ARM) was started in 1974. It was started as a mineral extraction and handling firm. Mombasa Cement is a subsidiary of Toronto Cement limited in Uganda and is headquartered in Nairobi with operations in Athi River region. The National Cement produces the Simba brand of cement. The company controls about 8% of the cement market. Savannah Cement is exclusively focused on export markets to Tanzania, Uganda, Burundi, Rwanda, Somalia, DRC and South Sudan (Herbling, 2017). Market share of the firms is given below (Table 1).

Table 1. Market share of Kenya’s cement manufacturing firms

Source: Herbling,D.(2017)

Since CSR policies and activities are decided by top level and middle level managers therefore the interviews were conducted with top managers and middle level managers. In total 30 interviews were conducted. 19 interviewees were top managers, while 11 interviewees were middle-level managers. Along with interviews questionnaires were also distributed and collected from the interviewees.

Table 2. Kenyan cement manufacturing firms.

Data Collection

Both primary and secondary data collection methods were used. For primary data collection semi-structured interviews were conducted with top and middle managers of cement manufacturing firms. Semi-structured interviews allow the researcher to get an in-depth understanding of the interviewee’s thoughts and beliefs on specific topics (Yin, 2009). Before interviews researcher briefed the interviewees about the research objectives and its purpose. Additionally, before conducting interviews the interview protocol was prepared. The protocol provided the guide for the interviews. Before interviews permission was granted by the interviewees to record the interview. Each interview lasted approximately for 40 minutes. Moreover, the secondary data was gathered from different sources such as firms’ documents, reports, and the website of the firms and from the different departments of Kenyan government.

In addition to interviews, questionnaire was also distributed and gathered from the interviewees to gather information from interviewees. It took 15-20 minutes to answer the questionnaire by the interviewees after interviews. The questionnaire was structured in such a way that part A of the questionnaire was comprised of background information, part B was comprised of questions on CSR activities, part C was comprised of questions on government policies and their affect on CSR and part was D comprised of questions on motives for CSR. Respondents were asked to give their answers on the Likert scale where 1 = very low, 2 = low, 3 = moderate, 4 = high, 5 = extremely high.

The questions were adapted and developed from past studies based on the objectives of the study. The questions for CSR activities were adapted from Ajide and Aderemi (2014). The questions for CSR activities were adapted from Nketiah et al. (2022). The questions for motives for CSR activities were adapted from Muthuri and Gilbert (2011).

Data Analysis and Findings

Reliability

Cronbach’s alpha coefficient was used to establish the internal consistency reliability of the measures. 6 items measure the CSR activities. 9 items measure government policies and regulations. 6 items measure motives for CSR activities. Internal consistency reliability of the measures was supported by Cronbach’s alphas (Table 2).

                  Table 3. Cronbach’s Alpha for the measures.

Construct Validity

The questionnaire satisfies face and content validity since it was developed through a review of literature in consultation with academic experts. A pre-test of the questionnaire through a pilot study was carried out to ascertain the clarity of the research instrument. The pretest included 5 respondents including plant managers and safety managers that were not included in the study. They were deemed knowledgeable on issues regarding CSR. It was found after pilot study that questionnaire is well understood by the respondents and minor adjustments were done on the pretest recommendations.

The information about the gender and years of experience of the respondents are given in the tables below.

                                                    Table 4. Gender of respondents.

                                   Table 5. Respondents’ years of experience.

Qualitative Data Analysis

All the interviews were conducted in English. Interviews were recorded after getting permission from the interviewees. Interviews produced rich data from which key themes relating to the concepts of CSR activities, government policies about CSR, and motives for CSR were identified. For the analysis of data, interviews were first transcribed and open coding approach was used to relate segments of text in each interview by focusing on keywords (Strauss and Corbin, 2014).

Findings

The data collected by questionnaires was analyzed statistically and data collected through interviews was analyzed by using open coding method.

CSR Activities

Statistical Findings

The respondents were asked to use a scale of 1 to 5 to indicate how firms have taken CSR initiatives, where 1 = very low, 2 = low, 3 = moderate, 4 = high, 5 = extremely high. The answers are summarized in Table below.

Table 6. CSR activities.

The results showed that cement manufacturers are involved in different CSR activities. The most common activity with an average of 3.9667 are CSR activities that have health and safety aspects and are beneficial for internal and external stakeholders, while the delivery of sustainable quality goods and services ranks second with average of 3.9. The implementation of strict safety policies for employees and subcontractors are other CSR activities undertook by the firms with an average of 3.8, these are followed by staff skills development programs with an average of 3.7667 and the creation of job opportunities for the local people with an average of 3.7333. The least popular activity was the grants and scholarship program for the needy and the financing of youth development programs with an average of 3.5333.

Qualitative Findings

Below are the qualitative findings for the study’s research question about the firms’ CSR activities.

The manager of Mombasa Cement said the following about their firm’s CSR activities:

“At Mombasa Cement Limited, we recognize our social responsibilities as a corporate citizen. In this regard we provide financial and material support to projects within the areas we operate. We are also determined to contribute to the development of manpower needs. We manage a number of projects in relation to youth development and children of early age by involving them in games and tournaments that foster their mental development and embark on generous donations for education of children by assisting their school fees which keep them away from drugs and other mischief.”

General manager at National Cement stated that:

“Health and safety are absolute priorities for the firm, as our employees and subcontractors have strict safety guidelines. National Cement Limited prides itself in being the safest firm in its sector and has achieved significant reduction in both the frequency and the gravity of work–related accidents due to its strong Health and Safety Management System which defines the minimum safety levels required for all employees. All National Cement Limited employees are committed to respecting certain rules to ensure the greatest levels of health and safety within the firm.”

The findings exhibit that the firms attach importance to develop society and maximize its well-being. The major focus of the firms is on health-care, youth, and the protection of the environment. The study found that cement manufacturers carry out a number of CSR programs under sustainable business programs. These include focusing on quarries to make them less damaging or recovering, improving the wellbeing of the local population, and achieving good corporate citizenship through community engagement.

Further to this, the production manager of Bamburi Cement stated:

“We have an unwavering commitment to our social responsibility program; it’s good for business and we know it’s the right thing to do.”

In a similar vein the managing director at Bamburi Cement said:

“We conduct our business in a manner that leads to creating a healthy and safe environment for all stakeholders, built on a true safety culture. Health and safety is our core value”

To ensure the achievement of sustainable development, interviewees staed that firms are focusing on climate, reusable energy, good water use, and the well-being of society. In terms of climate, the firms continue to monitor the emission of hazardous gases, waste management, adequate management of water resources, and maintaining sanitary conditions. Managers also indicated that plans are in place to ensure that there are affordable homes for the less fortunate and others in need of housing.

Moreover, the interviews and analyses of the firms’ websites, reports, and documents revealed that the cement manufacturers are involved in various CSR activities. Babburi cement is a major sponsor of Baobab trust. The Baobab trust operates the Nguuni nature sanctuary, Mtopanga organic farm, environmental conservation as well as health and education institutions. Regarding environmental conservation, the firm has continued to collaborate with Kenya Wildlife Service, local fishers and other local turtle conservation groups. The Bamburi hatchery for example houses secured nests along Bamburi, Shanzu and Jumba Beach. In health and education sectors, Bamburi Cement supports the library and health clinic.

Mombasa Cement Limited is also aware of its social responsibility as a corporate citizen. Mombasa Cement has significantly reduced the frequency and severity of work-related accidents through its strong occupational safety management system. Mombasa Cement is also involved in CSR projects that support communities in various ways. One of the projects is the Relief Water Supply that helped residents of Banghala and Ganahola area in Mikindani. Another project that has created an impact on Mombasa community is the feeding program for the homeless and poor people on Mombasa Island. Food is supplied daily during lunch and evening.

East Africa Portland Cement provides support measure to the communities where the Company mines its crucial raw materials. The firm continues to honor its obligation by providing water to communities within the Kibini Hill area. They maintains six boreholes for providing fuel, paid bills for those connected with power and undertook repairs. In its commitment to improving health among local communicates the East Africa Portland Cement runs a health facility at Oleleshua Community in Bissil, where limestone is extracted.

Summarily, study found that the firms are involved in various CSR activities. All of the firms acknowledge that CSR activities are essential for the economically, socially, and environmentally sustainable development.

Influence of Government Policies on CSR

Below are the findings about the influence and role of the government to regulate and promote CSR activities.

Statistical Findings

The respondents were asked to indicate whether or not they agree that the following government policies and requirements affect the firm’s CSR activities on the Likert scale of 1 to 5, where 1 = very low affect, 2 = low affect, 3 = moderate affect, 4 = high affect, 5 = extremely high affect. The answers are summarized in the following Table 6.

Table 7. Influence of government policies on CSR.

The results show that government policy, with a mean of 2.8630, has a modest impact on cement industry CSR initiatives. The influence of the government regulations for commercial activities have highest impact on CSR activities with an average of 3.9333, followed by the enforcement of standards to improve the disclosure and transparency of firms with a mean of 3.8667 and the government efforts to raise awareness and provides help for CSR activites with a mean of 3.6667. The study also found that the government facilitates socially responsible investment through regulations with a mean of 2.9333 and government facilitates how the firm participates in CSR initiatives and influence the priorities of the firm’s business with a mean of 2.4667 identified. The government also provides incentives and support to mobilize resources for businesses, providing technical support for CSR where needed. Government’s least influence is on capacity building with an average of 1.9667.

Qualitative Findings

From the interviews and the review of published reports and information collated from the websites of different government departments, it has been observed that the influence of government on CSR activities is based on regulations and political issues. The fundamental driver for CSR activities is emanated from the Constitution of Kenya. Article 46 of the Constitution outlines the rights of consumers, which include the right to goods and services of reasonable quality, the information needed to gain full understanding of products and services, compensation for loss or injury arising from defects in goods and services, and fair and honest advertising (Parliament of Kenya, www.parliament.go.ke).

Similarly, regulatory provisions such as the Companies Act of Kenya, describes what directors and shareholders should do in relation to their obligations (Odari, 2015). More importantly Section 3 of The Environmental Management and Coordination Act (EMCA, 1999) Chapter 387 of the Laws of Kenya provides for the need to protect the environment through legislative and other measures where the practice of CSR can be considered as one of the other measures particularly those contemplated under Article 69 which include sustainable exploitation, utilization management and conservation of the environment and natural resources, encourage public participation in conservation of the environment and establish systems of environmental audit and monitoring, eliminate processes and activities that are likely to endanger the environment and ensure that every person has a duty to cooperate with state organs and other persons to protect and conserve the environment and ensure ecologically sustainable development and use of natural resources (Mbeda, 2014; vii).  

There are also environmental supervisors to ensure that firms comply with their CSR mandate, as well as bodies that ensure proper management of public resources and compliance with workers’ rights. Environmental legislation in the form of EMCA (1999) sets standards and procedures for handling different types of waste to reduce pollution. The study found that environmental protection is paramount due to the nature of cement manufacturers. EMCA establishes the National Environment Management Authority (NEMA) as the lead agency in coordination of the conservation and protection measures (Muigua, 2023). The agency has set up a sophisticated mechanism to enforce environmental legislation and in cooperation with the relevant government agencies where necessary initiates the prosecution of environmental criminals.

To ensure environmental responsibility, government through the ministry of environment has established environmental policies which broadly aimed to persuade the firms to embrace environmental stewardship measures while avoiding or rejecting those that contribute to the environment’s destruction. For this purpose EMCA provides tax incentives, fiscal incentives, customs and excise waivers and tax rebates (Muigua, 2023). The purpose is to ensure that environmental issues are integrated with economic matters to attain sustainable development (Muthuri and Gilbert, 2011).

Interviews revealed that government laws, regulations, and policies have moderate influence on the CSR activities of the firms. In answering questions about legal factors that influence a firm to commit to CSR, the ARM managing director said that there is a government law that make it mandatory to plant trees around limestone mines therefore they are involved in CSR activities by planting trees around limestone mines. Moreover, government laws and regulations are focused on the use of clean technology for manufacturing. Following statement by the ARM managing director is exemplary about the role of government that influence the firms decision to behave socially responsible:

“Our firm has invested in technology that ensures it uses energy efficiently, our clean cement production plants are benchmarked to global standards. The firm is audited or inspected by EMCA licensed experts and inspectors and has always been in compliance of the environmental regulatory framework of the country.”

Motives for CSR

CSR activites of a firm are driven by different motives and factors. The push and pulll factors include economic, moral, and compliance-related aspects. From an economic point of view, CSR engagement is expected to result in improved profitability as firms are able to foster sustainable relationship with stakeholders (Ahsan, 2024). Another motive for commitment to CSR is that it enhances corporate acceptance and helped to gain the legitimacy from different stakeholders (Zheng, Luo, and Maksimov, 2015). Below are the findings of our study about the motives for CSR for Kenyan cement manufacturing firms.

Statistical Findings

Using the questionnaire, the respondents were asked to indicate their agreement with CSR motives on a Likert scale of 1 to 5, where 1 = very low, 2 = low, 3 = moderate, 4 = high, 5 = extremely high.

Table 8. Motives for CSR.

From the results it can be deduced that firms have strong motivations and reasons to get involved in CSR. Overall, there is a strong exposure to CSR with a mean of 3.9111. The study found that the need for improved financial performance was the biggest motive with a mean of 5.5333, followed by an improvement in the firm’s reputation and brand loyalty with a mean of 4.0667. Another motive for the firms to undertake CSR activities is to comply to the laws and regulations with a mean of 3.9667, while the motive to increase market value has a mean of 3.8333. The motive which ranked last among the motives for CSR activities is ecological consideration.

Qualitative Findings

The analysis of the data collected through the interviews and analysis of the published CSR reports indicate a number of CSR motives that drives the firms to undertake CSR activities. The belief of managers is that social responsibility is motivated economically, morally and legally. Economically, firms get to enjoy expanded market base and wide investment connections. This help firms to recoup every money spent on CSR through improved and loyal customer relationships that result in increased revenue generation.

The major finding is that cement manufacturing firms’ major motive for CSR activites is financial gains. Firms make direct financial gains by minimizing negative impact on environment. This arise from environmentally friendly technologies that provide them competitive advatage to compete against their rivals. The managers also said that the government subsidizes the operations in terms of cleanliness and environmental safety which improve profitability.

To get investment from outside investors is an important motive for the firms for CSR activities. In terms of investors, research has found that personal investment decisions depends on how firms act on their ethical and environmental responsibilities. Therefore, cement producers can use CSR as a tool to attract more investors (Moskowitz, 1972). The managing director of East Africa Portland Cement stated that:

“We are socially responsible corporate citizen. Our firm provides monetary support to environmental and social projects. We know that investors in today’s world give importance to a firm’s social activities. Being a responsible corporate citizen we disclose our financial and sustainability reports to public for transparency purposes. These and other such CSR activities increase our market value”

The above statement indicates that CSR activites may result into increased price of stocks which is an important motive for the firms to involve in CSR activities. He further stated that:

“We are fully committed to our social responsibility program. It’s good for growth of our business and we know it’s right.”

The study also found that a mjor motive for cement manufacturers for CSR is to attract talented and skilled employees. CSR engagement in employee related activities means that employee well-being, flexible work programs, and proper care of the medical and physical work environment are not compromised. For example, human resource manager of  Savannah Cement said that:

“Our involvement in providing social services and funding of environment protection programs attracts the young people to work with us. We know that Generation Z gives high importance to social and environmental problems.”

Socially responsible businesses typically offer wellness programs that attract and retain high-level employees. The study also found that there is an increasing number of highly qualified people whose attractiveness to a firm depends on how well a firm complies with CSR in terms of welfare maximization of its internal stakeholders.

Moreover, interviews and analysis of the firms’ annual reports showed that CSR is used as a tool to manage corporate reputation. This helps to attract customers and retain existing customers. The study also found that one of the firms’ motive to involve in CSR activities is  to avoid government fines and penalities.

Discussion and Conclusion

Findings of the study suggest that Kenyan cement manufacturers are involved in various CSR programs. The firms formulate and implement health and safety policies that benefit their internal and external stakeholders. Firms also provide employee-training programs about occupational safety and health. These programs significantly reduce the hazardous impacts of the cement manufacturing on employees health. The study also found that firms provide financial and non-financial support for sports and youth development programs. The results of this study are similar to the work of Adewuyi and Olowookere (2010), which found that the cement manufacturers in Nigeria are regularly observing their CSR efforts in areas such as youth empowerment programs. On the other hand, the cement manufacturers in Kenya comply with several CSR obligations through health-related CSR programs for the local communities. For example, health care services such as Kaloleni hospitals by ARM Cement in Mombasa County. Firms also support education programs through funding. Such projects provide scholarships on the basis of needy cases for secondary school and university students.

In protecting the environment, cement manufacturers are involved in CSR activities to preserve the environment. This includes planting trees and preserving trees, for example the case of Bamburi Cement, which maintains several conservation centers, notably the self-supporting Haller Park. These findings are consistent with the work of Dartey-Baah and Amoako (2021) which stated that CSR activities in emerging economies are carried out to be more relevant to the firm’s CSR target audience e.g. environment protection, health and family welfare programs, community infrastructure development projects, the contribution to the religious and social program, the promotion of cultural heritage, the use of natural resources, the program to empower women, the education program, the activities of the public interest, and the development of agriculture.

Regarding the impact of government policy, the study found that government policy has a moderate impact on the CSR activities of cement manufacturers. The government’s influence is mainly due to regulations and government actions to enforce standards to improve corporate disclosure and transparency (Steurer, 2010). The government also through its agencies helps the facilitation of socially responsible investments. At the same time, government provides incentives and support mechanisms for responsible resource mobilization by the firms. This result is in line with the work of Muthuri and Gilbert (2011), who found that CSR initiatives could be easily carried out by firms in Kenya if there are adequate institutional frameworks at local and national level.

The investigation also revealed that the firms have varied motives for CSR. The study found that the need for improved financial performance is the main motive (Ahsan, 2024), followed by improving the reputation, and employee hiring and retention. Firms are also motivated to CSR initiatives due to compliance to different government laws and regulations that may result into strong ties with different stakeholders (Barauskaite and Streimikiene, 2021). The study also found that environmental considerations and pressure also drive CSR initiatives (Rahman Belal, and Momin, 2009). It is noted that since the cement production process leaves a strong negative environmental footprint therefore there are strong social, legal, and environmental motives for the firms to involve in CSR activities.

Based on the research results, it can be recommended that cement manufacturing firms must work with local communities to ensure that their policies and acts shall maximize the social well-being of different stakeholders. The firms that produce cement can participate in activities which could strengthen the vulnerable members of society through the initiation of socially sustainable projects that may result into inclusive growth. Moreover, the study also suggests that cement manufacturers in an emerging economy shall adopt the CSR policies and practices that are specific to the local context in which they are operating.

From the policy perspective, the study recommends that governments in emerging economies should make it obligatory for the cement manufacturing firms to disclose their CSR information to public at specific time periods. This can be achieved if governments formulate and implement strict rules and regulations and assert their authority.

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