ABSTRACT
This research study was based on the
impact of corporate social responsibility (CSR) on organizational performance.
The research work concentrated on the background of the study, which showed
that there was a need for an economic of responsibility embedded in the
business ethics of corporation which restrains individuals and organization
from destructive activities on humanity and help redress societal problems, and
the objective of the study which was to determine the impact of public social responsibility
on organizational performance as well as
determine the extent to which CSR
promote social and economic development in communities. More so, it considers
the concept of corporate social responsibility and it benefits to the
organization, community and government.
The survey research design and stratified random sample techniques was used and data collected were derived from
questionnaires designed and administered on a sample of eighty three (83)
selected in Ikeja, Apapa and Amuwo-Odofin local government area, which were
analyzed using simple percentage and goodness of fit test (chi-square).
The research work based on the
hypothesis formulated and tested showed that an organization has legal and
moral obligation to its shareholders. There obligation include but are not
limited to ensuring that owners receiver an adequate return on investment but to offer value to local
communities and enriched quality of life in the society and the environment
even when business decision may be economically unattractive.
TABLE
OF CONTENT
PAGES
Title page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
CHAPTER ONE
INTRODUCTION
1.1 Background
of the study 1
1.2 Statement
of problems 4
1.3 Significance
of the study 6
1.4 Objective
of the study 7
1.5 Scope
and limitation of the study 7
1.6 Research
question 8
1.7 Research
hypothesis 9
1.8 Definition
of terms 9
CHAPTER TWO
LITERATURE
REVIEW
2.1 Preamble 11
2.2 CSR
– The meaning 14
2.3
CSR Theories and Definition 18
2.3.1
Utilitarian Theory 18
2.3.2 Managerial
Theory 19
2.3.3 Relational Theory
21
2.4 Theoretical basis of CSR 23
2.4.1
Economic basis of CSR 23
2.4.2 Sociological Basis of CSR 24
2.4.3 Legal Basis of CSR 24
2.5 Value Theory of CSR 27
2.5.1
Theory of maximized profits
for shareholders 27
2.5.2 Theory of social responsibility for
protection on the
interests of the corporate stakeholders other
than
shareholders 27
2.5.3 Theory of social responsibility on being good
citizens 28
2.5.4 Theory of social responsibility on minimum
requirement
of morality 28
2.6 CSR as a Driver of
Organizational Performance 29
2.7 Approaches
to CSR 32
2.7.1
Laisiez Faire Approach 33
2.7.2 State
Intervention Approach 33
2.7.3 Coercive Approach by the Local Community 34
2.8 Areas of CSR 35
2.9 Benefits of CSR to Business Firms And
Community 36
2.10.
Contribution of MTN to Corporate Social Responsibility
in Nigeria 39
2.10.1 Education
Portfolio 40
2.10.2 Health
Portfolio 43
2.10.3 Economic
Empowerment Portfolio 45
2.11
Other examples
of CSR of companies in Nigeria 46
2.11.1 Dufil
Prima Food Plc 46
2.11.2 Exxon –
Mobil Nigeria 47
2.11.3Nigerian Breweries PLC 48
2.11.4United Bank For Africa Plc 49
2.11.5Intercontinental Bank Plc 50
CHAPTER
THREE
RESEARCH
METHODS
3.1
Area of study 52
3.2 Research
design 52
3.3 Sample
size and sampling technique 53
3.4 Method
of data collection 53
3.5 Research
instrument 54
3.6 Validation
of research instrument 54
3.7
Population of the study 55
3.8 Method
of data analysis 56
CHAPTER
FOUR
DATA
ANALYSIS AND PRESENTATION OF RESULT
4.1 Introduction 57
4.2 Demographic
analysis of respondent 57
4.3 Testing
of hypothesis 66
CHAPTER
FIVE
SUMMARY,
RECOMMENDATIONS AND CONCLUSION
5.1 Summary 71
5.2 Conclusion 72
5.3
Recommendations 74
5.4 Suggestion
for further studies 76
Bibliography 77
Appendix 79
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The practice of corporate social
responsibility (CSR) is much debated and criticized. Proponents argue that
there is a strong business case for corporate social responsibility in that
corporations benefit in multiple ways by operating with a perspective broader
and longer than their own immediate short term profit.
The Nigerian business environment has
not really had a strong support for CSR. The massive rate of improper waste
disposal, land degradation, poverty, pollution, lack of basic infrastructures
etc especially in the Niger Delta region overtime has created intense agitation
from all stakeholders in ensuring that organization such as multinational
corporations (MNC) do not only concentrate on profit making but also make
conscious effort to better their surrounding environment both economically and
socially.
Multinational corporation (MNC) like
Shell" Texaco, Chevron etc have made billions of dollars of oil revenue in
the last '40 years of oil production in the Niger Delta. Despite this huge
amount of money, the local people remain in abject poverty and deprivation as
they lack basic things of life like water and electricity. The social and
environmental cost of oil production have been very expensive. They include
destruction of wildlife and biodiversity, loss of fertile soil, pollution of
air and drinking water, degradation of farmland and damage to aquatic
ecosystems, all of which have caused serious health problems for the
inhabitants of areas around oil production. The indigenes and the environment
suffer from oil spillage and lack of coordinated efforts by the oil companies
and the federal government to clean up as soon as oil spillage takes place.
In June 2003, a spillage from a pipeline
owned by Shell Petroleum Development Company (SPDC) in the Karama community of
Okordia/Zarama Local government area of Bayelsa state caused enormous economic
and environmental damage and hardship to the area. They are also wrecking the
fragile ecosystem of the region through uncontrollable gas flaring which takes
place 24 hours, and some have been burning for over 30 years, thereby resulting
in the release of hydrogen sulphide (sour gas) into the environment which
produces acid rain.
Unemployment is very high among the
people of the Niger Delta as the oil companies do not hire their employees from
the region that produce oil, but from the non-oil producing region of Nigeria.
Less than five per cent of the people from Niger Delta work in these companies
with massive distortions in the social and economic fabric of the local
societies, where oil executives live quite lavishly in comparison to the
impoverished conditions of the local communities.
The region is underdeveloped in its
entire ramification, despite the fact that it is the bread basket of Nigeria.
Away from the main towns, there is no real development, no road, no
electricity, no running water, no comfortable shelter. The underdevelopment is
so severe; the youths of the region have resulted to militancy in an effort to
focus national and international attention to their plight. Organization (MNC)
must therefore realize that the quality of life not only means quality and
quantity of consumer goods and services but also enriched quality of the life
in the society and the environment even when business decisions may be
economically unattractive. Thus, CSR emerged after a realization that there is
need for an economies of responsibility embedded in the business ethics of
corporations which restrain individual and organizations from destructive
activities on humanity and help redress societal problems. Hence, the impact of
CSR on organizational performance will be focused on a multinational
corporation like MTN Nigeria which will be used as a case study.
1.2
STATEMENT OF THE
PROBLEM
Corporations have long been criticized for
their negative effect on the natural environment in terms of wasting natural
resources and contributing to environmental problems such as pollution and
global warming. The use of fossil fuel is thought to contribute to global
warming and there is both governmental and societal pressure on corporations to
adhere to stricter environment standards and to voluntarily change production
processes in order to do les harm to the environment. Other issues related to
the natural environment include waste disposal, deforestation, acid rain and
land degradation.
Moreso,
corporations increasingly operate in a global environment. The globalization of
business appears to be an irreversible trend, but there are many opponents to
it. Critics suggest that globalization leads to the exploitation of developing
nations 'and workers, destruction of the environment and increased human rights abuses. They also argue that
globalization primarily benefits the wealthy and widens the gap between the
rich and poor. Perhaps the most pressing issue is that of labour standards in
the different countries around the world. Many corporations have been stung by
revelations that their plants on branches around the world were “sweatshops”
and employed minors. CSR also requires that
organizations carefully consider the role that they are playing and could play
in terms of social welfare. Some organizations such as the fast food industry
that do an excellent job of satisfying consumer wants are not necessarily
acting in the best long-run interest of consumers and society because they
offer tasty but unhealthy food. The hamburgers have a high fat content and the
restaurant promote fries and pies, two products high in starch and fat. The
products are wrapped in convenient packaging which leads to waste accumulation.
Therefore in satisfying consumer wants these restaurants may be hurting
consumer's health and causing environmental problems. In the increasingly
conscience-focused market place of the 21st century, the demand for
more ethical business process and actions (known as ethicism) is increasing.
Thus, for many corporations it is difficult to know where their
responsibilities began and end in relation to building infrastructure, creating
economic opportunities education and poverty alleviation. Therefore, this study
is an attempt to investigate the impact of corporate social responsibility on
organizational performance by multinational corporations.
1.3
SIGNIFICANCE OF THE
STUDY
The rise of
modern corporation created and continues
to create many social problems, hence the importance of this study cannot be
overemphasized became it will highlight reasons why the corporate world should
assume responsibility of addressing these problems, increase the chances that they will have a future and
reduce the chances of increased governmental regulations. This research study
will contribute significantly to the unresolved problems of corporate social
responsibility in Nigeria as well as provide added knowledge or insight in the
areas of community development for all concerned stakeholders i.e government,
corporations (MNC), non governmental organizations, public etc.
This study is
important because it will highlight the role CSR from the perspective of being
an indispensable necessity and an important variable considered in the growth
of an organization. It will also expand the various researches’ that has been
conducted in the areas of community development and the result would also
enable us to understand the relationship between CSR and organizational
performance.
The study will most
notably enable us understand the relationship between corporate social
responsibility and organizational performance.
1.4
OBJECTIVES OF THE
STUDY
The primary
objective of this study is to examine the impact of corporate social
responsibility on organizational performance. Other objectives are:
1.
To understand how a company’s CSR initiatives are
perceived by their stakeholder groups
and others
2.
To determine the extent to which corporate social
responsibility has promoted economic and social development in
communities.
3.
To examine the level of awareness of communities on the
need for multinational corporation to be socially responsible.
4.
To ascertain if there is any relationship between
corporate social responsibility and organizational performance.
5.
To asses how other significant groups such as general
pubic, opinion formers, city analysts, the media, experts from the financial
and community affairs sector view CSR.
1.5
SCOPE AND
LIMITATION OF THE STUDY
This study will
look at a GSM operator (MTN Nigeria Ltd) within the Ikeja, Apapa, and Amuwo/Odofin
local government area of Lagos. This
research work will examine their CSR programmes form 2003 till date to know the
effect of CSR on their organizational performance.
The nature of this
study is such that the entire nation should be covered but because of the
constraints of time, finance, strictness of relevant respondents to relevant
information and manpower the scope of this study is limited to the three local
government areas mentioned earlier within the Lagos metropolis where MTN Nigeria
center is located.
1.6
RESEARCH QUESTIONS
1.
What is the impact of corporate social responsibility on
organizational performance?
2.
How is a company’s CSR initiative perceived by their stakeholder groups and others
3.
To what extent does corporate social responsibility
promote economic and social development in communities?
4.
Are the communities aware of the need for multinational
corporations to be socially responsible?
5.
Is there any relationship between corporate social
responsibility and organizational performance?
1.7
RESEARCH
HYPOTHESIS
The research
hypotheses are stated as follows:
1 Ho: Corporate
social responsibility does not contribute to organizational performance,
H1: Corporate
social responsibility contribute to organizational performance,
2.
Ho: Corporate social responsibility does not
promote social and economic
development in communities.
H1: Corporate
social responsibility promotes social and economic development in communities.
1.8 DEFINITION OF TERMS
CBN: The CBN (Central Bank of Nigeria) is
the apex financial institution or government owned bank which is responsible
for controlling and supervising the entire monetary and financial system of the
country.
NGO: NGO (Non-government Organization) are
non-profit making organization that are often established with the motive of
achieving a particular objective or fostering
a cause e.g orphanages, museums, churches, political parties etc.
SON: SON (Standard Organization of Nigeria) is
that government agency that is in charged with the responsibility of ensuring
strict adherence to internationally accepted standard for all manufactured
goods.
NAFDAC: NAFDAC (National Agency for Food and Drug
Administration and Control) is a government agency or body responsible for
regulating the effectiveness of quality control in goods (food and drugs) in
Nigeria
NCC: NCC (Nigeria Communication Commission)
is a government body that is charged with the responsibility of regulating
telecommunication operations or operators in Nigeria i.e. ensuring strict
adherence to set rules and regulations as well as protect right of consumers.
MAN: MAN (Manufacturers Association of Nigeria) is
a non-government organization or an association of producers or manufacturers
established for the purpose of promoting the protecting the rights of
manufactures as well as ensuring favourable government support for
manufacturers.
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