CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Academics and practitioners have been striving to establish and
agreed upon definitions of the concept of corporate social
responsibility for over 30 years. Davis (1960) suggested that social
responsibility refers to businesses’ “decisions and actions taken for
reasons at least partially beyond the firm’s direct economic or
technical interest.”
Eells and Walton (1961) also argued that corporate social
responsibility refers to the “problems that arise when corporate
enterprise casts its shadow on the social scene, and the ethical
principles that ought to govern the relationship between the corporation
and the society” (p.5).
In today’s dynamic business environment, corporate organisations are
faced with the needs to impact positively on the host communities, by
taking upon themselves certain responsibilities in order to increase
their societal and environment influence. Organisations also included
social and environmental concerns in business operations rather than
focusing on profit making only. Organisations have developed a variety
of strategies for dealing with this intersection of societal needs, the
natural environment, and corresponding business imperatives with respect
to how deeply and how well they are integrating social responsibility
approaches into both strategy and daily operations worldwide.
Many organisations such as banks and some manufacturing companies in
Nigeria are driven by the need to make more and more profits and that is
the sole aim of every business. In a bid to meet this target, some
companies do not adequately respond to the needs of host communities,
employees’ welfare (cheap labour often preferred), environmental
protection and community development. Research has shown that corporate
social responsibility can increase profitability, sustainability,
integrity and reputation of any business that includes it in its policy.
Nkanga (2007) posited that corporate social responsibility involves
the commitment shown by companies to contribute to the economic
development of a local community
and the society at large. The adoption of corporate social
responsibility policy should not be driven or motivated by increased
profit. Rather, giving back to the society that gave to the business
first should be the motivating factor. It is a common practice by
Nigerian organisations to put as one of their mission statements the
provision of corporate social responsibility. The organisations must
have realised that stating corporate social responsibility as one of
their mission statements hold special appeal to the stakeholders. Hence,
there is an increasing awareness and recognition accorded corporate
social responsibility by corporations.
Some critics according to Carpenter, et al. (2010) have
argued that corporate social responsibility as implemented by some
organisations is mere facade. It is widely believed by many that
corporate social responsibility efforts are mere campaigns by
organisations to promote corporate
brands. Many Nigerians are ignorant of corporate social responsibility;
hence, whenever an organisation does something ‘supposedly big’ for the
society, such a company and its management are eulogized for being
caring and philanthropic.Manufacturing companies in Nigeria are expected
to manage the impacts of their operations by adopting corporate social
responsibility (corporate social responsibility) programme. Onwuegbuchi
(2009) in his studies on corporate social responsibility among
manufacturing firms reported that most manufacturing companies in
Nigeria embarked on corporate social responsibility programme for the
purpose philanthropic gesture and for government and public appraisal.
He further stated that some manufacturing companies applied
environmental and labour standards that suit them to satisfy basic
requirements of the laws of the country.
The Nigerian government should ensure that manufacturing companies’
corporate social responsibility policy entails self-regulation,
adherence to rules and regulations, ethical standards, environmental
responsibility and sustainability, consumers’ satisfaction, employee
welfare, communities and stakeholders benefits.
The problems of the environment in which an organisation operates
cannot be ignored. Therefore, there is a need to examine the problems
and prospects of corporate social responsibility in Nigeria. In its
stronger form, the concept of Corporate Social Responsibility (corporate
social responsibility) asserts that corporations have an obligation to
consider the interests of customers, employees, shareholders,
communities, as well as the ecological ”footprint” in all aspects of
their operations.
1.2 STATEMENT OF THE PROBLEM
Despite the huge attention recently given to corporate social
responsibility (CSR) in Nigeria, anarea of concernstill
remainorganisations in the manufacturing sector. Most manufacturing
organisations still do not see any reason for corporate social
responsibilitypolicy acceptability. Companies that reluctantly accepted
and adopted the corporate social responsibility policy, do so for
profit-making purpose.
Another lacking area on corporate social responsibility is that most
of the studies on corporate social responsibility were conducted on
nations with developed economies and their findings were found out not
to be applicable to some developing nation’s economy like the Nigeria.
Therefore, this study will examine the problems and prospects of
corporate social responsibilities in Nigeria using the manufacturing
industry as a case study. It is ironic that these organisations take
resources from the external environment and it is only natural to give
back what has been exploited. Unfortunately, this anomaly is a norm in
this part of the globe and this cankerworm can only be ameliorated
through research thesis such as this, publication, media publicity,
campaigns and awareness emphasising the importance of corporate social
responsibility in our society.
1.3 OBJECTIVES OF THE STUDY
The broad objective of
this study is to examine the problems and prospects of corporate social
responsibility in the Nigerian manufacturing industry. Specifically,
the study is designed to:
- Investigate how corporate social responsibility (corporate
social responsibility) influences organisationalreputation in the
Nigerian manufacturing industry.
- Cross-examine the difference between level of perceived customers’
patronage and brand loyalty among companies that practices corporate
social responsibility and organisations that donot practice corporate
social responsibilityin the Nigerian manufacturing industry.
- Analyse how corporate social responsibility adoption influences organisational performance and profitability.
- Assess the economic, social and environmental factors influencing
corporate social responsibility (corporate social responsibility)
adoption among manufacturing companies in Nigeria.
The manufacturing industry plays a significant role in the growth and
development of the Nigerian economy, and corporate social
responsibility ought to be a voluntary act by the manufacturing
companies. It should not have to be forced on organisations by the law,
government, and civil rights groups or by the communities. Social
responsibility should be a deliberate inclusion of public interest into
corporate decision-making and the honouring of a triple bottom line of
people and profit making.
In this dissertation there are four specific research questions
coined after the statement of the problem and they are listed below.
- Are there differencesbetween level of perceived customers’
patronage and loyalty among companies that practices corporate social
responsibility and those that do not practice corporate social
responsibility in the Nigerian manufacturing industry?
- What extent would corporate social responsibility adoption influence organisational performance and profitability?
- Whatare the economic, social and environmental factors responsible
for the poor performance of corporate social responsibility (corporate
social responsibility) adoption among manufacturing companies in
Nigeria?
1.5 RESEARCH HYPOTHESES
To provide empirical answers to the research questions above, the
following research hypothesis were developed. They are as stated below;
Hypothesis I
H0: Corporate social responsibility (corporate social
responsibility) does not influence organisational reputation in the
Nigerian manufacturing industry.
H1: Corporate social responsibility (corporate social
responsibility) influencesorganisational reputation in the Nigerian
manufacturing industry.
Hypothesis II
H0: There is no significant difference between level of
perceived customers’ patronage and loyalty among companies that
practices corporate social responsibility and those that doesn’t in the
Nigerian manufacturing industry.
H1: There is a significant difference between level of
perceived customers’ patronage and loyalty among companies that
practices corporate social responsibility and those that doesn’t in the
Nigerian manufacturing industry.
Hypothesis III
H0: Corporate social responsibility adoption does not influence organisational performance and profitability.
H1: Corporate social responsibility adoption influences organisational performance and profitability.
Hypothesis IV
H0: Economical, social and environmental factors do not influence the performance of corporate social responsibility.
H1: Economical, social and environmental factors influence the performance of corporate social responsibility.
1.6 RESEARCH METHODS
This study adopts descriptive survey method. Therefore, a
cross-sectional research design is used to design the methodology. The
premise for this research method is because data are collected from the
population for intensive study and analysis.
More often than not, the research cannot possibly study all subjects
or items in the population. Hence, a selective random sample from or a
subset of, the population was taken.
The reasons for random sampling are;
- Among the elements (manufacturing companies in Lagos state) that
make up the population of study there are similarities and therefore a
study of few of these elements will give the researcher sufficient
knowledge of what is obtainable in the entire population study.
- It is cheaper to engage in the random study
- It allowed for quicker results and more thorough research conduct.
- It is practically impossible to consider all elements in this research considering the limited time frame.
The target population for this study arethe manufacturing companies
in Lagos State, but due to large number of manufacturing companies
located in the State, some selected organisations will be considered for
this study. Primary data will be gathered through questionnaire
administered among randomly selected employees of the selected
companies. The data will be analysed using frequency and percentage
tables and a descriptive analysis will be carried out using a software
package for statistical analysistool.
1.7 SCOPE AND LIMITATION OF THE STUDY
The focus of this research would encompass the problems and problems
of corporate social responsibility and its impacts. The impacts of
social services by corporation shall be examined in relations to
financial performance, employee commitment, and community development.
The study shall focus on the Nigerian manufacturing industry. The
perceptions of some key players of the industry shall be sought for the
purpose of this research work.
Due to limited time of the study and the choice of using
questionnaire method, this research does not include an extensive
benchmark of corporate social responsibility practices in the Nigerian
manufacturing industry, but is restricted to a few organisations
situated in Lagos, Nigeria. Though the study uses vital insider
information from these organisations, confidentiality of names, data,
facts and figures were treated with utmost secrecy and with a caveat.
The reliability and validity of the data can also be verified and contested, but of course that will not be necessary.
1.8SIGNIFICANCE OF THE STUDY
The importance of this dissertation is not just to analyse the
practice of corporate social responsibility but to understand the
current practice, the level of understanding of corporate social
responsibility by manufacturing organisations in Lagos state in relation
to how it should be. It will explain how corporate social
responsibilities affect the performance of these firms.
The research would also help to explore the impact of corporate
social responsibility on employees’ commitment to the organisation.What
part does the employee play in corporate social responsibility? Can he
influence the decision making process? What is their level of
understanding of the concept?
1.9 ORGANISATION OF THE STUDY
Chapter one of the study provides background of the study, stating
the problem of the study and the research questions and hypotheses to be
tested in the study. It also highlights the significance of the study
and scope of the study.
Chapter two reviews related literature on problems and prospects of
corporate social responsibility of Nigerian manufacturing industry. It
looks at different authors’ definitions of corporate social
responsibility and its activities affects organizations’ reputation,
customers’ patronage and brand loyalty. Chapter two examines corporate
social responsibility adoption influences organisational performance and
profitability. How economic, social and environmental factors are
responsible for the poor performance of corporate social responsibility
(corporate social responsibility) adoption will also be extensively
reviewed.
Chapter three discussed the research methods to be used in designing
the study which will include research design, population, sample size
and sampling technique, data collection and data analysis methods.
Chapter four presents the data gathered in frequency and percentage
tables. The data will also be analysed and research hypotheses will be
tested with chi-square statistical test.
Chapter five summarises the outcome of the study, draw conclusions
based on the findings of the study and make necessary recommendations.
1.10 DEFINITION OF TERMS
Commitment: Commitment as defined in this study
means when an employee pledges his loyalty to an organisation. It is an
application, dedication or pledge to an engagement or obligation that
restricts freedom of action.
Community: Community as used in this study means a
group of people who live in an area where an organisation operates. They
are a group of people having a religion, race, profession, or other
particular characteristic in common.
Social Responsibility: Social responsibility as
described in this study is a demonstration of certain responsible
behaviour on the part of public and the private (government and
business) sectors toward society and the environment.
Performance: Performance is the manner in which an organisation functions, operates, or behaves in the society.
Stakeholder: This study describes a stakeholder as a
person or group with a direct interest, involvement, or investment in a
business organisation e.g. the employees, stockholders, and customers
of a business organisation.
Hypothesis:A hypothesis is a tentative statement
about relationships that exist between two or among many variables. It
is a conjectural statement about relationships and need to be tested and
subsequently accepted or rejected.
Theories and laws: A hypothesis, if it is true,
state a law. Therefore, the hypothesis is a law like statement. Law is
defined as a statement of invariant relationship among observable or
measurable properties.
REFERENCES
Carpenter, T. Andrew,A.D., Da-silva, B. (2010): Corporate Social Responsibility in India- An Empirical Research. [Online] Available:http://www.EzineArticles.com
Davis, T. (1960). Corporate Social Responsibility and organizational Profitability”. J. Econ. Soc. Res.3(1):113-124.
Eells, S and Walton, T (1961). The path to corporate responsibility, HBR, December 2004, pp. 125-132.
Onwuegbuchi, D.K. (2004). “The relationship Between Perceptions of corporate citizenship and Organizational Commitment.” Business and society, Vol. 43 no. 3: pp 296-319, Sage Publications
Nkanga, E. (2007). Nigeria: Telecom Operators and Corporate Social Responsibility. This Day, 31st Jan, 2007.www.google.adservices.com Free Article Submission Sites.