1.1 Background of the study
Over the past twenty years an irrefutable shift to Corporate Social Responsibility (CSR) in companies has occurred (Martin, 2004). Corporate Social Responsibility (CSR) is about the contributions a company makes to society through its core business activities, its social investment and philanthropy programs. The concept of corporate social responsibility in business has become a popular subject of discussion and debate within both business and academic circles. The paper analyses the impact behind the shift to CSR through a case study analysis of Kenya Pipeline Company and their ensuing effects regarding CSR. Additionally, the ethical proclivities associated with CSR have been analyzed to determine what, if any, effect ethics has on Company’s profits (Jeffrey et al, 2006). This will lead KPC to shift from ethical behavior to perceived ethical behavior via the public relations quick fix a façade of public relations that does not actually change the way companies operate. Although many experts noticed the outward growth of CSR, few have noticed that CSR has also been changing internally in meaning - an exception is Carroll's study of the definitional changes of CSR - (Carroll, 1999). The concept of CSR, particularly in terms of how it relates to other organizational goals, has been steadily evolving ever since the concept was introduced half a century ago. The purpose of this study is to trace the conceptual development path of theories on CSR and to reflect on the implications of change towards KPC and give evidence that suggests the company has failed to effectively meet their economic, social, and environmental responsibilities. Companies like KPC have the responsibility of being economically responsible through producing goods and services, providing jobs or employment, providing prompt and good payment to suppliers, paying taxes as well as meeting the objective of being the margin of making profits. Businesses also have legal responsibility of abiding by law in relation to registration, licenses, registering of employees to statutory bodies and remittance of the deductions, insurance, minimum wages and complying with the labour laws (Mitchell and Sikka 2005).
1.2 History of Kenya Pipeline Company Ltd.
Kenya Pipeline Company Limited (KPC) is a wholly owned State Corporation under the Ministry of Energy. It was established by the Kenyan Government in 1973 under the Companies Act Cap.486 and the State Corporations Act. The company started its commercial operations in 1978. It was charged with the task of transporting, storing and dispensing petroleum products safely and efficiently from Mombasa to the hinterland and the neighboring countries through a pipeline. Kenya Pipeline Company operates a pipeline system for transportation of refined petroleum products from Mombasa to Nairobi and western Kenya towns of Nakuru, Kisumu and Eldoret. The entire pipeline system network consists of a 450km 14-inch pipeline from Mombasa to Nairobi, and a 446km 8-inch extension from Nairobi to Western Kenya. The total storage capacity for all KPC depots is 600,626m3. In collaboration with the Government, KPC facilitates the implementation of Government policies: • Acts as a Government agent in specific projects as directed through the Ministry of Energy. The Company works with the Government in the implementation of key projects such as the extension of the Oil Pipeline to Uganda and the LPG import handling and storage facilities. • Assists in the fight against fuel adulteration and dumping. • Ensures efficient operation of petroleum sub-sector. To ensure that the products flow rate and maintenance work is effectively managed, the pipeline is segmented so that after a given distance, intermediate Pump Station (PS) have been constructed. There are twenty eight (28) such pump stations country wide and they it is the only company in the East Africa Region that gives...