Assessment of the Impact of Corporate Social Responsibility Practices on the Performance of Commercial Banks in Lindi Municipality, Tanzania.

Lormuje, Richard (2025) Assessment of the Impact of Corporate Social Responsibility Practices on the Performance of Commercial Banks in Lindi Municipality, Tanzania. Masters thesis, The Open University of Tanzania.

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Abstract

This study assessed the impact of CSR practices on the performance of commercial banks in Lindi Municipality. Guided by the Legitimacy Theory and Carroll’s CSR model, the study examined five CSR dimensions: environmental practices, social responsibility, ethical business practices, employee welfare programs, and philanthropic activities. Using an explanatory design, data were collected from 48 bank employees through simple random sampling and analyzed using multiple linear regression with SPSS version 20. The findings revealed that CSR practices collectively had a significant positive effect on bank performance, explaining 58.8% of the variance (R² = 0.588, p = 0.000). Philanthropic activities (β = 0.619, p < 0.01) had the strongest positive, statistically significant effect, while employee welfare (β = 0.179, p > 0.05) showed a positive but insignificant effect. Environmental (β = 0.224, p > 0.05) and ethical practices (β = 0.168, p > 0.05) demonstrated moderate but statistically insignificant effects, whereas social responsibility (β = –0.094, p > 0.05) exhibited a weak negative influence. The study concludes that comprehensive CSR implementation, particularly through philanthropic and employee welfare initiatives, enhances bank performance, whereas environmental and ethical practices require stronger strategic integration to achieve measurable outcomes. The study recommends that banks adopt integrated CSR strategies emphasizing philanthropy, employee welfare, and ecological sustainability. Policymakers should standardize CSR reporting for transparency, while future studies expand geographically and use qualitative methods for deeper insights. Keywords: CSR, bank performance, multiple linear regression, legitimacy theory

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