Abstract:
Corporate social responsibility (CSR) is the way organizations integrate social, environmental
and economic concerns legally and ethically. The aim of the study was to explore the effect of
CSR on business profitability. The study applied a qualitative approach using primary and
secondary data collection technique. The targeted population was BGI Ethiopia management
team & (internal & external stakeholders) similarly; FGD respondents and key informants
were selected by non-probability sampling method using convenience sampling technique,
since not every member of the population have a chance of being selected and purposive
sampling techniques were selected respectively because the ROA taken was the most recent
data which is 6 years of data(2013-2018). While the qualitative data were analysed using
ATLAS software through narrative analysis since thematic analysis is a good approach to find
out knowledge & experiences from a set of qualitative data. And then the quantitative data
were analysed using ratio analysis (ROA) by applying year to year comparison (trend -
analysis). The results indicated that it is hard to figure out whether the direct or indirect plays
a more pivotal role in influencing the firm’s profitability. Because, of the complexity of
tangible and intangible factors, those intangible factors that related to the CSR were not
measured in this study. The study recommended that it is not adequate to choose only the
accounting-based approach to measure the CSR effect in profitability; the regular CSR profitability relationship may be influenced by the financial crisis; It is hard to define the
timescale for the financial return of CSR due to the ambiguous word ‘‘long-term’’. Finally,
companies need to constantly make a promise of applying the CSR. Also, the study will,
benefits policymakers to gain insight into CSR practices in the alcoholic beverage sector and
helps to establish a code of conduct & resolve problems that discourage the implementation of
CSR in Ethiopia.
