Corporate Social Responsibility as a Marketing Strategy for Kenyan Firms

Corporate social responsibility is one of the emerging issues in the modern corporate world. It refers to the initiative taken by a firm to take care of the environment in which it operates. CSR emanates from the realization that corporations do not operate as islands. The major motivating factor is the desire for firms to take social responsibility of their actions and mitigate against any harm they might cause to the environment in the course of their operations. However, the trend is slowly changing towards making CSR a marketing tool, instead of just a voluntary environmental consciousness.

One of the most important aspects of CSR is the production of quality products. Firms emphasize on the superiority of their products during advertisement campaigns and this becomes a marketing battleground among competitors. It should be noted that each firm has an obligation to produce and sell quality products. When firms depend on the quality of their products to attract more customers, this strategy becomes more of a marketing tool than corporate social responsibility. By insisting on quality, therefore, they do not do a favor to the society as they claim in their advertisement campaigns.

CSR builds a positive image of firms in the society. This helps retain customers and also attract new clients. In the modern world, the consumer is enlightened and highly selective. This is enhanced further by the availability of a wide range of products. A consumer would rather go for a product from a firm that is environmentally friendly since some of the money he spends on the product will be used to improve his environment. Firms have realized this and therefore publicize their CSR initiative heavily. In Kenya nowadays, it is common to see adverts on both print and broadcast media that emphasize more on what the firm does to the society than how superior their product is.

Kenyan firms have started tagging the level of their CSR initiatives with their level of sales. This is done through contributing a certain percentage of the price of a product to CSR initiatives. For example, a firm may decide to contribute Kshs. 1 to a humanitarian project for every bar of soap purchased. This strategy is then publicized to ensure consumers are aware of it. The incremental profit on the increased level of sales from such strategies is normally higher than the total cost of involvement in the CSR project. To that extent, this strategy becomes a marketing strategy and not purely for CSR.

In conclusion, it is worth noting that whatever the motive behind Corporate Social Responsibility, the society is a major beneficiary. When firms compete through implementation of CSR initiatives, the society reaps the benefits from all of them. However beneficial CSR might be to both the society and the firm, it remains a voluntary initiative, since Kenya has no laws to enforce it. Much more remains to be seen in terms of the direction Corporate Social Responsibility takes in the coming years.

THE CONCEPT OF KEY PERFORMANCE INDICATORS (KPI) IN HUMANITARIAN CONTEXTS

1.      Introduction

One of the major functions of management is performance evaluation and control. It helps in identifying the extent to which organizational objectives have been achieved. If an organization is to be effective in the whole exercise of evaluation and control, there is need to come up with a predetermined criteria of measuring performance. Such criteria which are measurable and agreed upon in advance are commonly referred to as Key Performance Indicators (KPI).

2.      Meaning

Key Performance Indicators are measures of an essential performance outcome of a particular organizational performance activity or an important indicator of a precise health condition of an organization. They are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization.

3.      Why focus on humanitarian context

The humanitarian context presents a number of unique organizational challenges that necessitate a deeper focus into its management. First, the profit motive which largely informs the summative evaluation of most corporations is not applicable in this context. Humanitarian organizations have a wide range of benchmarks against which their performance is evaluated which are different from profit making organizations. Stakeholders interested in this evaluation include donors, target population, host community (if different from target population), government etc. Effective evaluation therefore calls for a streamlined approach, hence the need for KPI.

  

4.      Role of KPI in organizational development

The concept of Key Performance Indicators is one that cannot be overlooked in the process of ensuring organizational development. Organizations that have well defined and popularized Key Performance Indicators enjoy a wide range of benefits in the effectiveness, efficiency and economy in their operations. Major benefits of using KPI in performance management include but not limited to the following (by Stephen Lynch):

Directs people’s behavior.

Most employees behave in consistency with how their work will be measured.  They are therefore “evaluation minded” in their actions.

Makes performance visible.

By keeping the scores visible where everyone can see them, stakeholders (especially staff) are able to see what is expected of them, and you are able to know who is performing and who is not.

Focuses attention

 When employees know the 1 or 2 numbers that their performance will be measured on, it keeps them focused on doing the right things – particularly when it is linked to reward / consequence systems.

Clarifies expectation

Prioritizing a small handful of Numerical Targets (goals) and Key Performance Indicators (KPI’s) enables managers to communicate their expectations to employees in a clear and unambiguous manner.

Provides objectivity

Data enables you to “manage by fact.”  Evaluating employee performance is not about whether people are working hard or being busy.  What did they actually achieve?

Improves execution

Larry Bossidy, co-author of the book "Execution" remarked, “When I see companies that don’t execute, the chances are that they don’t measure.”

Promotes consistency

Activities and outcomes that are not measured properly - tend to be fluctuate – with negative implications for the quality of your results.

Clear feedback

Holding people accountable for achieving their target level of performance every week / month is vital to ensure the organization (and individual) is on the right track.

Improves decision-making

One of the major causes of failure in decision-making is poor use of data. One accurate measure can be worth a thousand opinions.

Promotes understanding

Quality guru W. Edwards Deming said that systematic process measurement led to the “profound knowledge” that was essential to top quality outcomes.

5.      Developing KPI for different departments

Developing Key Performance Indicators is an important step in the evaluation planning of every organization. How well these indicators are developed will to a large extent determine the success and the credibility of the evaluation results.

A key aspect in the development of KPIs is the focus on major organizational goals. In developing Key Performance Indicators (KPIs) for humanitarian organizations, one needs to ask the following questions: 

a)      What measures will our stakeholders (donors, target population, host community, employees etc) use to determine whether we are being successful?

b)      What are the most important outcomes of performance that will demonstrate our success?

c)      What are the institutional factors of which we must be continually be aware of and attempt to control (e.g., allocations, grants, public relations, retention, and recruitment)?

To be of legitimate use in strategic planning, KPIs:

• Must be clearly defined
• Must be measurable
• Must have an identifiable and consistent method of measuring over time
• Must clearly articulate and connect to a specific goal that the organization wishes to achieve or a direction it wishes to head

It is advisable to limit the number of KPIs. This creates focus, which is essential for the success of every organization.

 Example (for an educational institution):

1. Title of KPI: Performance in National Examinations

• Defined: The total of the number of learners, both male and female, who attain the pass mark in national examination divided by the total number of candidates multiplied by 100.
• Measured: the students’ record database contains the number of students who attain the pass mark in National examinations. This information is available at request and performance graphs over the years are posted on the notice boards in the staffroom and on the organizations intranet. 
• Target: increase the number of students who pass the national examinations by 5% per year.

2. Title of KPI: Dropout rate for girls

·         Defined: The total number of girls who drop out of school every year, for whatever reason, divided by the number of girls in school at the beginning of the year, multiplied by 100. The number of girls expelled due to indiscipline will not be considered in this calculation.

·         Measured: The students’ records database records the details of girls who drop out of school every year and the reasons thereof. This information is available at request and the dropout rates graphs are posted on the notice boards in the staffroom and on the organizations intranet.

·         Target: reduce dropout rates for girls by 10% every year.

The above KPIs would be sufficient for an educational institution if they address its major goals. Having too many KPIs may not aid in streamlining the efforts of all stakeholders.

6.     Implementing KPIs

Once you have good Key Performance Indicators defined, ones that reflect your organization's goals, one that you can measure, what do you do with them? You use Key Performance Indicators as a performance management tool, but also as a carrot. KPIs give everyone in the organization a clear picture of what is important, of what they need to make happen. You use that to manage performance. You make sure that everything the people in your organization do is focused on meeting or exceeding those Key Performance Indicators. You also use the KPIs as a carrot. Post the KPIs everywhere: in the lunch room, on the walls of every conference room, on the organizations intranet, even on the organizations web site for some of them. Show what the target for each KPI is and show the progress toward that target for each of them. People will be motivated to reach those KPI targets. (By F. John Reh)

7.      Conclusion

Key Performance Indicators are undeniably some of the most important evaluation tools management in a humanitarian context can use. There is need for organizations to evaluate the applicability of these tools in their organizations, due to their immense benefits. It is however worth noting that organizations are different and therefore the level of applicability and type of KPIs used will definitely differ.