An Assessment of strategic Corporate Social Responsibility (CSR) as a competitive tool in Zimbabwe’s mining sector for the period 2008- 2012

Abstract

Corporate Social Responsibility (CSR) has been a contentious or controversial issue in the business sectors because of its relationship to cost and profitability, which is normally perceived to impact negatively on corporate financial performance (CFP). The corporate has pressure to balance its profitability and CSR activities. Because of this situation where CSR is a necessary demand on the business by various stakeholders a new approach to CSR has evolved which is called strategic CSR. The approach taken by this study is to ascertain the nature of CSR practices in the mining sector and to what extent strategic CSR is being practised, or can been practised as a business model that generates profits. The mining sector in Zimbabwe has been chosen because it generates 65 per cent of the country’s export revenue and in the process extracts non-renewable resources. This makes it incumbent upon players in the sector to develop strategic CSR business models in consideration of a future without the resources mentioned, that is, sustainability issues need to be considered. Objectives addressed were CSR stakeholder identification, CSR activities, relationship between CSR and CFP and challenges in implementing strategic CSR. Quantitative (hypotheses testing) were employed and a total of 65 responses to the questionnaire were received from the 92 sent out giving a response rate of 70.6 per cent. The population size was 400 from 24 mining houses. Findings largely indicate that strategic CSR was not being practised as profitability of was not planned for in the strategic CSR programmes. However hypotheses tests proved that CSR has a positive impact on financial performance. Lack of strategic CSR as a strategic tool was suggested to be a result of lack of managerial skill in developing CSR as a strategic tool as managers largely had autonomy from shareholders to implement CSR with investors being keen on the subject. Models were suggested to assist managers to craft CSR as a strategic business model in the mining sector.