Abstract:
The main purpose of this study was to examine the effect of corporate social responsibility on
organizational profitability in the case of Awash bank S.C West Addis Ababa district. To achieve the
research objectives, the researcher employed both descriptive and explanatory research designs. The
study used both primary and secondary data sources and as well a quantitative research approach
was used. Structured questionnaires were used to gather data from the targeted group of the study,
and both probability and non-probability sampling technique was employed. Purposive sampling
from non-probability and simple random sampling from probability sampling was used. Five Likert
scale structured questionnaires were used for data collection. The validity and reliability of the
questionnaire were checked by using the pilot test and Cronbach's alpha test, respectively. The study
targeted employees of Awash ban West Addis Ababa district. Yamane sample size formula was used
to obtain 255 respondents from company employees. Data was collected using a closed ended
questionnaire. The collected data were presented and analyzed using the SPSS statistical software
package. Data collected were coded and analyzed using both descriptive statistics (frequency,
percentage, mean and standard deviation) and inferential statistics (Multiple regression and
Pearson correlation) with the help of the Statistical Package for Social Science
(SPSS). Philanthropic activity with beta value and p-value of (β=0.565 and P=0.036) and legal
activity (β=0.240 and P=0.043) have a strong effect on the profitability while economic activity
(β=0.120 and P=0.025) and ethical activity with (β=0.15 and P=0.031) have a moderate effect. The
study showed that philanthropic activities, ethical activities, legal activities, and economic activities
affect organizational profitability, have a positive relationship, and are statistically
significant. Generally, all CSR activities in this study have been taken place in the bank and the bank
is practicing them as these have positive effect on its profitability. The bank should consider
establishing a separate department for CSR, which is responsible for formulating policy and strategy
of CSR and its integration with the daily operations of the bank. As the bank is the leading and the
first profitable private bank in the country, it should enhance its reputation and goodwill by
achieving CSR more and that will help the company to retain its reputation and attract more
customers that leads to better profitability for the bank.
