Corporate Social Responsibility: Practices and Its Socio Economic Benefits in Bishoftu City

Abstract

Corporate Social Responsibility (CSR) has become a very important topic in developmental activities. It involves integration of the social, economic and environmental concerns in organizations business activities. Overstressing the financial aspect of CSR activities benefit to business organizations, studies conducted so far paid less attention to the social and economic aspects of CSR practices. The study addressed the CSR practices of large scale industries in Bishoftu city and surrounding rural communities as well as the socio-economic impact of CSR engagements of the industries towards employees and the local communities. It employed a descriptive cross-sectional research design with mixed method research methods consisting of both quantitative and qualitative approaches. Survey respondents, interviewees and key informants were selected by using simple random and purposive sampling techniques respectively to collect data from 126 members of the local communities, managers of five large scale industries and key informant at different layers of the government office. Questionnaires, in-depth and key informant interview guides were used to collect primary data from the study participants. While the quantitative data were analyzed using simple descriptive statistics such as frequency and percentage, qualitative data were analyzed through thematic analysis. The finding of the study indicated that business organizations engage in diverse CSR activities despite the variations in their nature of participation and level of commitment while education, health, income generation and infrastructure service being major areas of engagement. The study further revealed that the construction of schools which enabled children of employees and local communities to attend education, the construction of health facilities and roads which have created the access to basic healthcare and market places, the provision of electricity and water services that eased the day to day activities of the community , the provision of initial capital and trainings for self-employment and the plantation of trees which afforested the degraded areas have all positively contributed to the improvements in socio-economic status of employees and the local communities. Therefore, considering the growing importance of CSR services in developmental activities, the study recommends that business organizations better increase their commitments by allocating proportional budgets for social responsibility programs; and the government should also develop a working national policy which binds CSR engagement