| Abstract: | Corporate social responsibility is becoming a tool for competitive positioning. It is the basis
for profitability among other advantages and therefore, it described as a strategic tool in
marketing. In-spite of these observations, there appears to be a rareness of studies, linking
corporate social responsibility to profitability. Therefore, the purpose of this study was to
examine the effect of corporate social responsibility on profitability in the context of Abay
Bank S.C. Specifically the study examined how company’s corporate social responsibility
activities (economic, legal, ethical and philanthropic) related to profitability (the bank’s
management and employees awareness and which CSR practice applied more). A conceptual
framework developed based on a review of extant literature to depict the relationships among
the study variables. This study employed descriptive and explanatory research design to
answer the research questions and to know the current conditions of the bank with regard to
corporate social responsibility and employees’ perception towards it. The questionnaire
administered to 320 samples of respondents using stratified random sampling technique. The
data were analyzed using descriptive statistics, correlation and regressions model. The
findings of the study showed that the overall corporate social responsibility practice of the
company’s makes a significant contribution to the company’s profitability. All, economic,
philanthropic, legal and ethical corporate social responsibility practice of the company has
positive significant effect on profitability. Therefore, it knows that the practice valued by the
employees of Abay Bank and has a significant effect on the company’s profitability. The bank
should consider working on making awareness to its employees and the public about the
practice of corporate social responsibility activities by using different mechanisms in more
organized way, in order to get the return from its good deeds. |
