THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON PROFITABILITY OF FIRM’S (THE CASE OF SELECTED MANUFACTURING COMPANIES IN NORTH SHEWA ZONE)

Abstract

The main objective of this study was impact of corporate social responsibility (CSR) on profitability in selected manufacturing firms in north shewa zone; the study shows and suggest possible solution that contribute to increase profitability of the company. The qualitative Approach and descriptive research design has employed, where the respondents selected through purposive sampling method. To achieve this objective, the researcher used questionnaire to collected primary data. The collected data analyzed through descriptive statistical methods such as mean, standard deviation and inferential statistics such as correlation and regression with the aid of SPSS software version 20. The study used one dependent variable profitability (P), four independent variables that are economic responsibilities (ER), legal responsibilities (LR), corporate ethical business practice (CEBP) and philanthropic responsibilities (PR).The finding of the research show that corporate social responsibility has positive and significant impact on the profitability of firms. This indicate that in order to maximizing profit the company must plan and strongly implement corporate social responsibility polices with the company on going plan and strategy. The study recommends that manufacturing firms take a thorough interest in the corporate social responsibilities of their firms and try to match them with the reputation, competitive advantage they have over others whom they offer similar product. and also its important to refocus, re-plan, re-affirm to the needs of the manufacturing client, motivate the workforce, monitor and evaluate the manufacturing product output for business continuity. The study reveals that researcher encourages and motivates the prospective researchers to conduct further research corporate social responsibility with emphasis on the following areas; corporate social responsibility in improving the welfare of the community member’s north Shewa as well as Ethiopian, role of government in promoting corporate social responsibility among small scale manufacturing firms, influence of ethical business values and practices on capital investment and business returns.