Understanding Corporate Social Responsibility as Implemented by SMEs in Tanzania: The Case of the Hotel Industry

Abstract

Since Tanzania embarked on private sector reforms that started in mid 1990s, the country experienced a growth of entrepreneurs in the hotel and hospitality industry. While entrepreneurs in the hotel industry form a major part of the booming tourism industry and contribute significantly to economic growth, their potential is being undermined by an unorthodox business practices such as overpricing and provision of substandard services. However, this does not mean they are not participating in corporate social responsibility such as providing food to the needy and supporting people faced with natural calamities such as floods. Despite the growing interest in corporate social responsibility (CSR) and initiatives of entrepreneurs, little attention has been paid to these small scale entrepreneurs in developing countries such as Tanzania. The purpose of this paper is to understand corporate social responsibility (CSR) implemented by entrepreneurs in the hotel industry in Tanzania. This paper is intended to fill the gaps in the literature of the CSR implemented by entrepreneurs in developing countries. The data were collected in Morogoro and Dar-es-Salaam from October 2011 to January 2012. Samples of 156 respondents were recruited for the study and included managers, owners and managing directors of these hotels. Quantitative approach was employed and a questionnaire was used for data collection. A 37-item, five point Likert scaled questionnaire was administered to 156 respondents. SPSS window 16.0 was employed for data analysis. Cronbach α was used to measure scale reliability and communality to test the suitability of the elements used. The findings reveal six strong factors:, supporting sport, supporting community, environmental concern, cultural events, supporting elder people, and fund raising. The study shows that entrepreneurs in hotel industry in Tanzania paid attention to CSR as capital assets to win the confidence of communities in their business operations.

Key words: Corporate Social Responsibility, entrepreneurs