ABSTRACT
Corporate Social Responsibility (CSR) has been
recommended and employed by Organisations to make business responsive to the
interest of the customer and the general public. Many Organisations have now
realized that CSR has contributed to their increased profit and competitiveness
and many other also have faced downturn for their neglect of CSR.
This study provides effective way of employing CSR for
improved organisational performance using Nestle Nigeria Plc as a case study.
The main objective of the study is to find out the effect of CSR on Corporate
performance and to determine how it can be employed for improved performance.
Four hypotheses were postulated, the first hypothesis was to test the
relationship between CSR and method of production of an Organisation, second
hypothesis was to test the relationship between CSR and Community Development,
third hypothesis was to test the relationship between CSR and Customer
retention and the last hypothesis was to test
the relationship between CSR and Organisational Performance/ competiveness.
Questions based on the hypotheses were postulated questions, 105 questionnaires
were distributed to the respondent out of which 80 questionnaires were
collected and analysed. An inferential statistical method of chi-squares was
use to test the hypotheses.
Findings revealed that CSR has significant relationship
between methods of production of an Organisation, Community Development, Customer
retention and Organizational performance/competitiveness. The study recommends
that CSR should be employed for improved organisational performance and
competitiveness. Also organizations should see responsibility s business
opportunities that increase profitability in the long run.
TABLE OF CONTENTS
Pages:
Title
Page 1
Abstract 2
Table
of Content 3
Chapter One: Introduction
1.1 Background of the Study 5
1.2 Statement of the Problem 11
1.3 Objective of the Study 12
1.4 Research Questions 12
1.5 Research Hypotheses 13
1.6 Scope/Limitation of Study 14
1.7 Significance of the Study 14
1.8 Definition of Terms 15
1.9 Organization of Study 17
Chapter Two: Review of Literature and
Theoretical Framework
2.0 Introduction 19
2.1 Review of Literature and Theoretical
Framework 19
Chapter Three: Research Method
3.0 Introduction 56
3.1 Restatement of Research Questions and
Hypotheses 56
3.2 Research Design 58
3.3 Population of Study 58
3.4 Sample and Sampling Procedures 59
3.5 Data Collection Instrument 59
3.6 Administration of Data Collection
Instrument 59
3.7 Procedure for Data Analysis 61
3.8 Limitation of Methodology
62
Chapter Four: Presentation, Analysis
and Interpretation of Data
4.0 Introduction 63
4.1 Respondent Characteristics’ and
Classification 63
4.2 Presentation of Analysis of Data According
to Research Questions 66
4.3 Presentation of Analysis of Data According
to test of Hypotheses 71
4.4 Discussion of Findings 78
Chapter Five: Summary, Conclusion and
Recommendations
5.0 Introduction 81
5.1 Summary 81
5.2 Conclusions Drawn from the findings 83
5.3 Recommendations 84
References 86
Appendix I 90
Appendix II 92
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Over the years
companies (Business Organizations) as corporate bodies have not exercised their
obligations. They have failed to impact positively on their immediate
environments let alone the nation in which they operate. They pay an unliving
wages to their employees, shareholders dividend are either accumulated or not
paid at all, evade taxes cheat customers through poor services, unqualitative
product and high prices, engage in unwholesome
competition, circumvent operational guidelines and institutional ethics
and are involved in other odious and undercover activities. They seem not to
understand what their responsibilities are, some companies operate and make a
lot of profit while the communities they operate in are left in squander and
degradation and the people improvised, and traumatized and frustrated young
people become hostage takers social miscreants and consummate criminals. In
some other instance, some business organizations want to show their
benevolence. They engage in self glorification through incessant media and
propaganda to promote their superfluous philanthropic gestures.
A
key point to note is that CSR is an evolving concept that currently does not
have a universally accepted definition. Generally, CSR is understood to be the
way firms integrate social, environmental and economic concerns into their
values, culture, decision making, strategy and operations in a transparent and
accountable manner and thereby establish better practices within the firm,
create wealth and improve society. As issues of sustainable development become
more important, the question of how the business sector addresses them is also
becoming an element of CSR.
The
World Business Council for Sustainable Development has described CSR as the
business contribution to sustainable economic development. Building on a base
of compliance with legislation and regulations, CSR typically includes “beyond
law” commitments and activities pertaining to: corporate governance and ethics
health and safety; environmental stewardship; human rights (including core
labour rights), sustainable development ,conditions of work (including safety
and health, hours of work, wages),industrial relations; community involvement, development and
investment; involvement of and respect for diverse cultures and disadvantaged
peoples; corporate philanthropy and employee volunteering, customer
satisfaction and adherence to principles of fair competition, anti-bribery and
anti-corruption
measures,
accountability, transparency and performance reporting; and supplier relations,
for both domestic and international supply chains.
Generally,
CSR is understood to be the way firms integrate social, environmental and
economic concerns into their values, culture, decision making, strategy and
operations in a transparent and accountable manner, and thereby establish
better practices within the firm, create wealth and improve society. These
elements of CSR are frequently interconnected and interdependent, and apply to firms
wherever they operate in the world. It is also important to bear in mind that
there are two separate drivers for CSR. One relates to public policy. Because
the impacts of the business sector are so large, and with a potential to be
either positive or negative, it is natural that governments and wider society
take a close interest in what business does. This means that the expectations
on businesses are rising; governments will be looking for ways to increase the
positive contribution of business. The second driver is the business driver.
Here, CSR considerations can be seen as both costs (e.g., of introducing new
approaches) or benefits (e.g., of improving brand value, or introducing
products that meet sustainability demands). The remainder of this guide
addresses the second of these drivers.
Since
businesses play a pivotal role both in job and wealth creation in society and
in the efficient use of natural capital, CSR is a central management concern.
It positions companies to both proactively manage risks and take advantage of
opportunities, especially with respect to their corporate reputation and the
broad engagement of stakeholders.
The
latter can include shareholders, employees, customers, communities, suppliers
governments, non-governmental organizations, international organizations and
others affected by a company’s activities.
Above
all, CSR is about sensitivity to context—both societal and environmental—and
related performance. It is about moving beyond declared intentions to effective
and observable actions and measurable societal impacts. Performance reporting
is all part of transparent,
accountable—and, hence, credible—corporate behaviour. There is considerable
potential for problems if stakeholders perceive that a firm is engaging in a
public relations exercise and cannot demonstrate concrete actions that lead to
real social and environmental benefits.
CSR can involve a wide range of stakeholders :A
corporation’s stakeholders can include: shareholders, non-governmental
organizations,
business partners, lenders, insurers, communities, regulators,
intergovernmental bodies, consumers, employees and investors.
In addition, Corporate social
responsibility is the concept that an organization needs to consider the impact
of their operations and business practices on not just the stakeholders, but
also the customers and communities it operates in. In other words, corporate
social responsibility is a way of saying thank you and expressing appreciation
to all stakeholders in the business. This will guarantee or boost the
performance of any organization.
Increased
attention has been focused on the ethics of corporate ventures, the social role
to be played by corporations and the level of responsibility that corporation
have to the society. In the 1980s, it became quite clear that far reaching
changes of this century were, for the most part, necessary. As and new contract
between business and society evolved. We have seen the Traditional ethic of
“caves emptor” (let the buyer beware) gradually erode into a new concept of
corporate social responsibility meanwhile, many individuals, including many
managers believe that beside their responsibility to the organizations they
serve, they have a personal
responsibility to society.
Basically, behind
the take off of every business is the profit motive, and behind its continuity
is profit motive that derives shareholders into buying shares and private
capital owners into investing their capital. It is the profit motive that leads
into goods and services being produced and it is the profit earned that ensure
the existence and growth of the business. This is not to say that immediate
profit should be the only consideration.
Business
organizations are closely and generally identified as an economic institution,
a collection of human and material resources, for the purpose of economic
production at a profit. In a more general sense the word “business” is used to
mean trade or commerce, the art of buying and selling. These conception of
business were more adequate in the 19th century before industrial
revolution with technological innovation and the consequent emergence of high
industrial and commercial establishment, the impact of business transcend the
economic society become more and more dependent on the business institution, as
employer, innovation neighbor and catalyst social change and advancement of
culture. Thus, business becomes a social environment i.e religious, economic,
political, legal and cultural.
Koontz et al
(1983) “noted” that no question has received more attention by business,
government, politician and people in general in the past few years than the
question of what the social responsibility of business is. The same question
originally aimed at business, is now being addressed with in increasing
frequency to government agencies and their leaders universities, non-profit
foundation, charitable organization and even churches.
It is in view of
this that business are today much more socially responsible than before.
Business are interested not just in the quality of goods and service they
produce/image and acceptance from the public could mean substantial enhancement
of a long run profit. A loss in image could have the opposite effect.
At this point, it
is pertinent to note that some managements decision that become engaged in area
of social responsibility can be the result of greater influence and pressure
from groups of like labour union, government legislation or interest group of
voluntary response to social needs or a combination of all. For example quality
control by standard organization of Nigeria (SON) protection of society as a
risk from industrial pollution been monitored by Federal environmental
protection Agency (FEPA) and quality of petroleum and gasoline monitored by the
Department of Petroleum Resources (DPR),all these are social responsibilities
as a result of government legislations.
It is vital to mention
here that not all business have profit motive. Some business, particularly the
statutory corporations before privatization decree emerged
were merely concerned with rendering some services to the public.
Ibekwe (1984) “emphasized” that a Corporate social responsibility neglected by a business
at a particular time, a poor quality good delivered in an alluring package or a
right denied the customer on the course of seeking immediate profit could
result in loss and corporate image of the business.
However, corporate social
responsibility is an aspect of management that is very vital and need to be
approached theoretically and empirically in relation to organizational success.
1.2 STATEMENT
OF THE PROBLEM
Nigeria business
firm conceive and yield to corporate social responsibility at varying degrees.
Taking a wider look at firms in different industries, one can easily conclude
that many going concerns (Organizations) are not socially responsible and its impact on business
activities, the area of corporate image and profitability, level of a firm.
Issues such as corporate social responsibility employed by the organization,
also in response to organizational products by the society the effect of such
in community development and to wider organizational productivity and
competiveness are all encompassed in the formulation of the statement of the
problem.
This study is particularly out to offer recommendations to
certain problems which an organization may encounter in future in relation to
their environment.
1.3 OBJECTIVES
OF THE STUDY
The main objective
of the study is to find out the Effect of Corporate Social Responsibility on
Organisational performance. Specific objectives were as follows:
1.
To examine different aspects of Corporate
Social Responsibility employed by Organisation.
2.
To determine the influence of Corporate
Social Responsibility on customer responses to Organisational product.
3.
To find out the effect of Corporate Social
Responsibility on community development
4.
To determine the effect of Corporate
Social Responsibility on organisational profitability and competitiveness.
5.
To
make plausible recommendations on how Corporate Social Responsibility could be
employed for improved Organisational and Community/National poverty.
1.4 RESEARCH
QUESTIONS
To evaluate the impact of corporate
social responsibility on organizational performance, the following tentative
question shall be tested.
i.
Are Nigerian businesses/ organizations
socially responsible?
ii.
What are the major implications of the
methods of production of these Organisations in relation to the Corporate
Social Responsibility agenda?
iii.
Are Customers/Stakeholders fully benefited
from the Organisations practicing Corporate Social Responsibility?
iv.
Does Corporate Social Responsibility have
a place in the organizational performance and effectiveness?
v.
What role do Corporate Social Responsibility of
organisation impact on the
workforce/employees?
1.5 RESEARCH HYPOTHESES
This study will be geared towards testing the
following theses.
Hypothesis One
1. Ho: There is no significant relationship between
Corporate Social Responsibility and method of production of an Organisation.
H1: There is
significant relationship between Corporate Social Responsibility and method of
production of an Organisation.
Hypothesis Two
2. Ho: There is no significant relationship between
Corporate Social Responsibility and Community Development
H1: There is significant relationship between
Corporate Social Responsibility and Community Development
Hypothesis Three
3. Ho:
There is no significant relationship between Corporate Social Responsibility
and Customer retention.
H1: There is significant relationship between
Corporate Social Responsibility and Customer retention.
Hypothesis Four
4. Ho:
There is no significant relationship between Corporate Social Responsibility
and Organizational competitiveness.
H1: There is significant relationship between
Corporate Social Responsibility and Organizational competitiveness
1.6 SCOPE /
LIMITATION OF STUDY
The study is
restricted in scope to the Nestle Nigeria Plc. The study cannot be extended to
other organization due to time frame and other relevant data. Also all
questions relating to importance and effectiveness of social responsibility
cannot be asked all in the questionnaire due to the constraints which will not
permit their analysis.
1.7 SIGNIFICANCE
OF THE STUDY
The intention of this study is to identify and analyze
managerial corporate social responsibility and its impact on organization focus
of this study will assist the management of an organization to appreciate
importance of being socially to the environment where the business operates.
Descriptively, study will review different literature on social and this will
be useful to scholars, especially ones in the field of social sciences.
Empirically, the study will be useful to government,
firms and individuals, more so, it can also be a foundation upon which other
researchers could emerge. It is within the scope of this study to appreciate
that an organization that is already participating in the area of social
responsibility has made in the improvement of standard of living of its public.
In addition, it is
certain that this study on completion will benefit not only the organization
under the study but to all other organization both big and small and the larger
society.
In conclusion, for organizations, not
only to seek for profit maximization but also maintaining equitable working
balances among some interest group. Hence, understanding that the contribution
of a business to the betterment of the society will make it easier for the
business to grow, survive and make everlasting profit.
1.8 DEFINITION
OF TERMS
Corporate
Social responsibility: This can be
defined as the way of saying thank you and expressing appreciation to all
stakeholders and giving back to the society in the corporate has benefited
immensely. Corporate social responsibility (CSR) is also known by a number of
other names. These include corporate responsibility, corporate accountability,
corporate ethics, corporate citizenship or stewardship, responsible
entrepreneurship, and “triple bottom line,” to name just a few. As CSR issues
become increasingly integrated into modern business practices, there is a trend
towards referring to it as “responsible competitiveness” or “corporate
sustainability.”
Organizational Performance: This can be referred to as the function of
profitability, growth and the achievement of set goals and objectives by an
organization.
Organization: Organization can simply be defined as a co-
operative social system, involving coordinated efforts two or more people,
pursuing a shared purpose. In other words, when people gather and formally
agree to combine effort for a common purpose.
Ethics : Is
a discipline that involves rules,
regulation, guideline and code of conduct for members of a particular
organization so as to ensure healthy practices in such corporation.
Business ethics: Involves
what is good and bad, with moral duty and obligation in business.
Stakeholders: They are group of individual who are affected directly
or indirectly by organizations action and decision in the course of operation
and they include owners, customers, employees, competitors, suppliers and
community.
Consumer affairs:
This is the area where majority of participant, respondents indicate high level
of involvement.
Marketing:
This can be defined as the management process of anticipating, indentifying and
supplying customer requirement efficiently and profitably.
Efficiency: The ability to minimize the use of resources in
achieving organization objectives “doing things right”
Profit: Organization
unit where performance is measured by numerical differences between revenue and
expenditure.
Competition:
The; situation in which two or more parties are striving towards mutually
compatible goals but cannot interfere with each other.
Management: The process of planning, organization,
leading and controlling the work of organization members and of using all
available organization resources to reach stated organizational goals.
Customer:
Customers are the target market of all corporations who consumes the goods or
service rendered by an organization.
Environment: This
is an area where the business firm operates.
Corporate Citizenship: Citizenship is membership of a defined territory,
city, state or nation. This status demands allegiance and loyalty. It also
confers some rights privilege duties and obligations. It is reciprocal
relationship. In the same vein, a business organization is a corporate citizen;
it is registered by the Corporate
Affairs Commission
(CAC) and protected through patent laws and statutory business policies, legal
and infrastructural facilities its operation.
1.9 ORGANISATION
OF STUDY.
Chapter one focuses on
the background of the study where general descriptions of the area of study
were discussed. Statement of the problem, Objective of the study, research
questions and statement of hypotheses were discussed. The scope and the
limitation of the study alongside with the significance of the study were also
discussed. Finally, the definition of terms relating to the study also
featured.
Chapter two focuses on
the review of literature and theoretical framework. Chapter three deals with
structural composition where various analysis will be made. Chapter four deals
with data presentation, analysis and interpretation and chapter five examines
discussion, conclusions, recommendations and suggestions for further studies on
the research project executed.
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