ABSTRACT
This study explores the impact of the
corporate social responsibility of TOTAL Exploration and production Nigeria
Limited (TEPNG) on its host communities.
One
hundred and fifty (150) questionnaires were administered equally amongst staff
in the Lagos and Port-Harcourt offices respectively. All the administered
questionnaires were retrieved and subsequently used for data analyses.
The
results obtained from the study indicate that
TEPNG and its host communities enjoy a mutually beneficial relationship and the
company’s reputation and brand have been strengthened by its corporate social
responsibility (CSR) activities.
The study also showed that the company’s CSR
activities enhances its ability to attract and retain employees in its
workforce and also presents investment opportunities in its host
communities.
TABLE OF CONTENTS
Abstract I
Acknowledgements II
Declaration by candidate III
Table of contents IV
Chapter 1: Introduction 1
1.0.
Overview of the Study 1
1.1.
Objectives of the Study 7
1.2.
Research Questions 8
1.3.
Research Hypothesis 8
1.4.
Statement of the Problem 9
1.5.
Significance of the Study 10
1.6.
Limitations of the Study 11
Chapter 2: Literature Review 12
2.1.
Introduction 12
2.2.
The concept of CSR 14
2.3
The evolution of CSR concept from a stakeholder perspective 15
2.4
The pyramid of CSR 17
2.4.1
Economic Responsibilities 17
2.4.2
Legal Responsibilities 18
2.4.3
Ethical responsibilities 19
2.4.4
Philanthropic responsibilities 20
2.5
The Advantages of Human resource Development for CSR 20
2.6
Approaches to implementing CSR 21
2.7
Drivers of CSR Commitment 22
2.8
Improving Stakeholder Relationship 24
2.9
The Economics of CSR 24
2.10
Strategic CSR and its Importance 25
2.11
CSR and value chain and context of competitiveness 26
2.12
Different CSR strategies and performance reactive strategies 27
2.13
Governance and CSR in Nigeria 31
2.14
Importance of CSR 39
2.15
Corporate norms on CSR and International norms 41
2.16
CSR and financial performance 42
2.17
Social and Environmental problems as business opportunities 46
2.18
Comparative Attitude towards CSR 49
2.19
Comparative consumer Attitude towards CSR 57
2.20
Corporate identity and ethics 59
2.21
CSR and Accountability 62
2.22
Leadership Capabilities and competencies in CSR initiative
Programme 62
2.23
Organizational challenges and limitations 64
2.24
Total in Nigerian Petroleum Industry 66
2.25
Chapter summary 72
Chapter 3: Research Methodology 73
3.0 Introduction 73
3.1.0 Research Question (a re-call) 73
3.1.1 Research Hypotheses 73
3.2 Research Strategy 74
3.3 Research Design 76
3.4 Characteristics of the study population 76
3.5 Sample size and sample frame 77
3.6 Sampling Method 78
3.7 Data Gathering and Instrumentation 79
3.7.1 Standardization of Instruments used 80
3.7.2 Scoring and Data collation 81
3.8 Data Analyses Techniques 82
3.9 Limitations of methodology 83
Chapter 4: Data Presentation, Analyses and Interpretation 84
4.1 Introduction 84
4.2 Respondents’ Characteristics 84
4.3 Analyses of responses to research questions 89
4.4 Analyses of data according to research
hypotheses 93
Chapter 5: Conclusion and recommendation 105
5.1 Conclusion 105
5.2 Recommendation 108
References 110
Appendix 122
List of tables
Table 4.2.1 Collection of Data by respondents 85
Table 4.2.2 Sex of respondents 85
Table 4.2.3 Age of the respondents 86
Table 4.2.4 Educational background of the
respondents 86
Table 4.25 Designation of respondents 87
Table 4.2.6 Income Distribution of respondents per
annum 88
Table 4.2.7 Marital status of respondents 88
Table 4.3.1 Responses to Question 1 89
Table 4.3.2 Responses to Question 2 90
Table 4.3.3 Responses to Question 3 90
Table 4.3.4 Responses to Question 4 91
Table 4.3.5 Responses to Question 5 92
Table 4.3.6 Responses to Question 6 92
CHAPTER
ONE
INTRODUCTION
1.0 Overview of the Study
Business organizations, right from the inception of
the human race, have been regarded as constructive partners in the communities
in which they operate. Though they have been instrumental in creating
employment, wealth, products and services, yet the pressure on business to play
a role in social issues involving employees, stakeholders, society,
environment, government etc. is continuously increasing. The society is
questioning the existence of business organizations, especially in the wake of
the scandals and scams conducted by the corporate organizations. In response to
it, the organizations around the globe are forced to wake up to the need for
being committed towards Corporate Social Responsibility (Sharma et. al.2009).
Over the years, the concept of Corporate Social
Responsibility (CSR) has gained unprecedented momentum in business and public
debate and has become a strategic issue crossing the departmental boundaries,
and affecting the way in which a company does business. It has become so
important that many organizations have rebranded their core values to include
social responsibility. Almost all corporate websites, policies and reports talk
about their endeavors for CSR which has become a way of ensuring that the
organization is fulfilling all the obligations towards society and thus is
eligible for the license to operate. It assures that the organization can grow
on a sustainable basis (Malikarjunan K. 2006).
In support of
the above, Sharma et. al.(2009) say
these activities of CSR range from small donations to bigger projects for
social welfare. Sustainable practices between organizations to organization
depending on the resources available to an organization for undertaking
sustainable practices. Business practices of big and successful companies, with
plenty
of resources at their disposal, have set the trend for being committed to
sustainable practices. Such companies around the globe show their commitment to
social responsibility. Examples include, Microsoft, ExxonMobil etc.
Corporations
are encouraged to behave socially responsibly on a wide range of issues
(Welford and Frost, 2006; Engle, 2006). However, in both the corporate and the
academic world there is uncertainty as to how CSR should be defined. Some go as
far as saying ‘We have looked for a definition and basically there isn’t one’
(Jackson and Hawker, 2001:3). This is not quite true; the problem is rather
that there is an abundance of definitions, which are, according to Van
Marrewijk (2003), often biased toward specific interests and thus prevent the
development and implementations of the concept. The definitional confusion
surrounding CSR might potentially be a significant problem. If competing
definitions have diverging biases, people will talk about CSR differently and
thus prevent productive engagements. Unfortunately, any attempt to develop an
unbiased definition is challenging, because there is no methodology to verify
whether it is indeed unbiased or not (Dahlsrud,
2005).
Davis
(1960:70) 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. At about the
same time, Eells and Walton (1961) argued that CSR refers to the problems that
arise when a corporate enterprise casts its shadow on the social scene, and the
ethical principles that ought to govern the relationship between the
corporation and society.
Drucker (2002) explains his position on the concept
of corporate social responsibility saying thus, “A business that does not show
a profit at least equal to its cost of capital is socially irresponsible; it
wastes society’s resources. Economic profit performance is the base without
which business cannot discharge any other responsibilities, cannot be a good
employer, a good citizen, a good neighbor. But economic performance is not the
only responsibility of a business. Every organization must assume
responsibility for its impact on employees, the environment, customers, and
whomever and whatever it touches. That is social responsibility.’’
Holme and Watts
(2000) define corporate social responsibility as continuing commitment by
business to behave ethically and contribute to economic development while
improving the quality of life of the workforce and their
families as well as of the local community and society at large.
Corporate social responsibility
has been defined as a ‘contract’ between society and business wherein a
community grants a company a license to operate and in return the matter meets
certain obligations and behaves in an acceptable manner (Woodward-Clyde, 1999)
CSR
is about businesses and other organizations going beyond the legal
obligations
to manage the impact they have on the environment and society. In particular,
this could include how organizations interact with their employees, suppliers,
customers and the communities in which they operate, as well as the extent they
attempt to protect the environment (Lea, 2002)
In
general, corporate sustainability and CSR refer to company activities –
voluntary by definition – demonstrating the inclusion of Social and
environmental concerns in business operations and in interactions with
stakeholders (Van Marrewijk, 2003)
CSR
is generally seen as the business contribution to sustainable development,
which has been defined as development that meets the needs of the present
without compromising the ability of future generations to meet their own needs,
and is generally understood as focusing on how to achieve the integration of
economic, environmental and social imperatives (Strategis, 2003). CSR is the
voluntary assumption by companies of responsibilities beyond purely economic
and legal responsibilities (Piacentini et al.,
2000). CSR is the degree of moral obligation that may be ascribed to
corporations beyond simple obedience to the laws of the state (Kilcullen and
Kooistra, 1999)
Corporate
social responsibility is operating a business in a manner that meets or exceeds
the ethical, legal, commercial and public expectations that society has of
business. It describes the body of management systems and tools that help
companies minimize their environmental impact, adhere to international labor
standards, contribute to their communities and manage toward a more economically
sustainable world Dahlsrud (2005)
Corporate
social responsibility is about companies having responsibilities and taking
actions beyond their legal obligations and economic/business aims. These wider
Economic responsibilities cover a range of areas but are frequently summed up
as social and environmental – where social means society broadly defined,
rather than simply social policy issues. This can be summed up as the triple
bottom line approach: i.e. economic, social and environmental (Commission of
the European Communities, 2002)
At
its best, CSR is defined as the responsibility of a company for the totality of
its impact, with a need to embed society’s values into its core operations as
well as into its treatment of its social and physical environment.
Responsibility is accepted as encompassing a spectrum – from the running of a
profitable business to the health and safety of staff and the impact on the
societies in which a company operates
(Ethical Performance, 2003).
Corporate
Social Responsibility is a company’s sense of responsibility
towards the community
and environment
(both ecological and social) in which it operates.
Companies
express
this citizenship
through their waste
and pollution
reduction
processes, by contributing educational
and social programs,
and by earning adequate
returns
on the employed
resources.
The concept of CSR has become a business strategy to
prevent and mitigate economic crisis, at the same time, preserving social
relationships and environmental well-being (Dahlsrud, (2005).
Another twist to the concept of CSR is that of EU’s
Green paper which defines it as a concept whereby companies integrate social
and environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis. While McWilliams and
Siegel (2001) define it as actions that appear to further some social good,
beyond the interests of the firm and that which is required by law.
The World Business Council for Sustainable
Development as quoted by Swanson (2002:1) saw CSR as „the commitment of
business to contribute to sustainable economic development, working with
employees, their families, the local community and society at large to improve
their quality of life‟.
Jones (1980:59-60) suggested that CSR is the
„notion that corporations have an obligation to constituent groups in society
other than stockholders and beyond that prescribed by law and union contract‟. Carroll (1983: 604) added that CSR is „composed
of four parts: economic, legal, ethical and voluntary or philanthropic‟.
Amaeshi & Adi
(2007) have argued that CSR needs to be reconstructed in a neutral business
language to enhance its permeation and embeddedness in organisations. While not
disparaging normative expressions of CSR, the challenge for proponents of CSR
from the normative perspective is either to dismantle the current capitalist
system, which is
rather much more inclined to instrumental rationality than normative
rationality, or empty their CSR discourse of its overly moral constructions and
reconstruct it in pragmatic business oriented expressions. Unfortunately, the
possibility of the first option is remote and that of the latter as challenging
as it is necessary. If not, CSR in practice will continue to be treated as
something outside the business lingua and within the domain of
non-for-profit. It could be noticed that where CSR has been fully embedded in
organizational practices, such cases had to a large extent gained support of
appropriate business expressions. Some examples of this include the “ecoimagination” programme of GE
and Marks and Spencer’s Plan A programme
(Amaeshi, 2010)
1.1 Objectives of the Study
This study aims to:
(1). Examine the effect of corporate social
responsibility on human capital management performance.
(2). Establish if corporate social responsibility
increases sales and customer loyalty.
(3). Identify if corporate social responsibility
improves financial performance of the organization and attract more investment
opportunities with immense economic value.
(4). Assess If corporate social responsibility
improves ability to attract and retain employees.
(5). Evaluate
whether corporate social responsibility enhance brand image and reputation of
the organization.
1.2 Research Questions
In view of the aforementioned problems and
objectives, the research study will find answers to the following questions:
(1). Does corporate social responsibility have an
effect on Human Capital Management performance?
(2). Does the practice of corporate social
responsibility increase sales and customer loyalty to an organization?
(3). Does corporate social responsibility improve
financial performance of the organization and attract more investment
opportunities with immense economic value?
(4). Is there any relationship between Corporate
Social Responsibility and; attraction and retention of employees in an
organization?
(5). Does
Corporate Social Responsibility enhances brand Image and reputation of the
organization?
1.3
Research Hypotheses
1. H0: Corporate social
responsibility has no effect on human capital management performance.
H1: Corporate social responsibility has
effect on human capital management performance.
2. H0: There is no relationship
between increased sales, customer loyalty and corporate social responsibility.
H1: There relationship between increased
sales, customer loyalty and corporate Social responsibility
3.
H0: Corporate social
responsibility has no effect on improving financial performance of the
organization and does not attract more investment opportunities with immense
economic value.
H1:
Corporate social responsibility has an effect on improving financial
performance of the organization and does not attract more investment
opportunities with immense economic value.
4. H0: There is no relationship between Corporate
Social Responsibility and; attraction and retention of employees in an
organization.
H1:
There is relationship between Corporate Social Responsibility and;
attraction and retention of employees in an organization.
5. H0: Corporate Social
Responsibility does not enhance brand Image and reputation of the organization.
H1: Corporate Social Responsibility
enhances brand Image and reputation of the organization.
6.
Ho:
Corporate Social Responsibility does not improve better relationship with host community.
1.4
Statement of the Problem
Business organizations have woken-up to the need for
being more committed towards corporate social responsibility and still majority
have taken
up some form of philanthropic activities for its stakeholders. Although, it is
only in the last decade that businesses have begun to exhibit serious evidence
of CSR in their strategic management and stakeholder social reporting.
However,
there have been a number of studies on CSR in Nigeria
(Amaeshi
& Amao, 2008), most of which have, mainly, focused on
multinational firms; the question therefore arises as to how these
multinational firms perceive and practice CSR in Nigeria. Also, if there are
structured procedures and policies that ensure the internalization of quality,
ethics and excellence practice of Corporate Social responsibility in Nigeria. These
are the major issues to this study.
1.5 Significance of the Study
The practice of
Corporate Social Responsibility in Nigeria business institutions
became of interest to this study due to the significant role it plays in the
economy. It helps in stimulating economic growth and achievement of Millennium
Development Goal (MDG) and vision 20; 2020 is anchored on the effective
practice of Corporate Social Responsibility.
This study will educate and enlighten the management
and employees of Multinational Corporation, and Corporate organizations to take
more advantage of Corporate Social Responsibility and see it as leverage for
competitive advantage in their industry. The study will also benefit the
individuals in the business environment and enhance seamless societal exchange
relationship.
Another
import of this study is that it will be of immense aid to government policies
and reforms.
1.6 Limitations of Study
This research was limited to one organization
(TEPNG), rather than the entire industry. One obvious limitation to this study
is inadequate time during which the research is required to be conducted. This
is attributed to the restriction of the scope to TEPNG only. Another major challenge is the accessibility
of staff members and management of the Company.
Though the survey will be made from TEPNG, it is
expected that findings will not differ from opinions of staff of other
organization since they have related experience, education and training.
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