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- Name: EVALUATION OF THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON BUSINESS ENVIRONMENT IN TELECOMMUNICATION INDUSTRY IN IBADAN AND ABEOKUTA (A CASE STUDY OF MTN NETWORK SERVICE PROVIDER)
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In the Nigerian society, Corporate Social Responsibility (CSR) has been a highly contemporary and contextual issue to all stakeholders including the government, the corporate organization itself, and the general public. Most corporate organizations are concerned about what they can get out of the society, and de-emphasize the need to give back to the society (their host community). This attitude often renders the community inhabitable. The general belief however is that both society and business gain when firms actively strive to be socially responsible; that is, the business organizations gain enhanced reputation, while the society gains from the social projects executed by the business organizations.
The purpose of this study therefore is to understand the various CSR activities carried out by telecommunication industry (MTN service provider) in Nigeria and how these CSR activities affect the business environment. Hundred (100) questionnaires were administered by the researcher to users and subscribers of MTN service provider.
TABLE OF CONTENTS
Title page i
Table of Content v-vii
CHAPTER ONE – INTRODUCTION
1.1 Background to the study 1-3
1.2 Statement of Research Problem 3-4
1.3 Research Questions 4
1.4 Research Objectives 4-5
1.5 Statement of Hypotheses 5
1.6 Significance of the study 5-6
1.7 Scope and Limitation of the Study 6-7
1.8 Expected Contribution to Knowledge 7
1.9 Definition of Operational Terms 7-8
CHAPTER TWO – LITERATURE REVIEW
2.1 Review of relevant literature on Corporate Social Responsibility 9-14
2.1.2 Implicit versus Explicit Corporate Social Responsibility 14
2.1.3 The Three Components of Sustainability-The Triple Bottom Line 14-15
2.1.4 Characteristics of Corporate Social Responsibility 15-18
2.1.5 Historical Background of MTN Nigeria 18-26
2.1.6 Five C’s in Corporate Social Responsibility 26-29
2.1.7 Arguments For and Against Corporate Social Responsibility 29-30
2.2 Theoretical Framework 31-36
2.3 Conceptual Clarification 36-39
2.4 Conclusion 39
CHAPTER THREE – RESEARCH METHODOLOGY
3.1 Research Design 40
3.2 Study Area 40
3.3 Population and Sampling 40
3.4 Methods of Data Collection 41
3.5 Methods of Data Analysis 41
CHAPTER FOUR – DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.2. Data Presentation and Analysis
4.2 Questionnaire to Staff
4.2.1 Descriptive Statistics
4.2.2. Presentation and Analysis of research questions
4.3 Questionnaire to External Stakeholders
4.4 Test of Hypothesis
CHAPTER FIVE – SUMMARY, RECOMMENDATION AND CONCLUSION
5.1 Summary of Findings
Background to the Study
At an earlier time in history, societal expectations from business organizations did not go beyond efficient resource allocation and its maximization. But today, it has changed and modern business must think beyond profit maximization toward being at least socially responsible to its society. Today’s heightened interest in the role of business in society has been promoted by increased sensitivity to the awareness of environmental and ethical issues. It means our society has become increasingly concerned that greater influence and progress by firms has not been accompanied by equal effort and desire in addressing important social issues including problems of poverty, drug abuse, crime, improper treatment of workers, faulty production output and environmental damage or pollution by the industries as it has overtime been reported in the media. It is therefore very essential for all to realize that public outcry for increased social responsibility will not disappear if business organizations fail to respond to the challenges these had posed for the society. In view of the perceived information gap, it is therefore worthwhile collating and aggregating in a more organized manner, the contributions of Nigerian corporations (using communication industries as a focus) to the well-being of the society. The significance of corporate social responsibility as a vital tool for the societal progressiveness cannot be over emphasized.
Corporate social responsibility has to do with an organization going out of his way to initiate actions that will positively impact its host community, its environment and the people generally. It can be seen as a way of acknowledging the fact that some business fall outs have adverse effects on the citizens and society and making efforts to ensure that such negative impact are corrected. Posk, et al., (1999) as a matter of fact, believe that corporate social responsibility means that a corporation should be held accountable for any of its actions that affect people, communities, and its environment. It implies that negative business impacts on people and society should be acknowledged and corrected, if possible. It may require a company forgoing some profits if its social impacts are seriously harmful to some of its stakeholders or if its fund can be used to promote a positive social good.
Corporate social responsibility had also been commonly described as “a demonstration of certain responsible behavior on the part of public and the private (government and business) sectors toward society and the environment”.
Business for Social Responsibility (BSR), were of the opinion that Corporate social responsibility is a way of achieving commercial success that honors ethical values and respect people, communities, and the natural environment. Most writers on Corporate Social Responsibility see the concept as the disposition of an organization to exhibit “missionary” rather than “mercenary” attitudes towards the society. Corporate Social Responsibility has been described as a management concept whereby organizations integrate social and environmental concerns in their business operations and interactions with their stakeholders. It is a way through which an organization achieves a balance of economic, environmental, and social imperatives and at the same time addressing the expectations of stakeholders and shareholders (known as the Triple Bottom Line). Corporate Social Responsibility in relation to business is the obligation of a business organization to pursue those lines of actions that are desirable in terms of objectives and values of a society. (Lawal & Sulaimon, 2007), “defines Corporate Social Responsibility as an intelligent and objective concern, which restrains individuals or corporate behaviour from ultimately destructive activities, no matter how immediately profitable and leads to the direction of the positive contribution to human betterment”. Presumably, corporate executives as agents of the owners are to be responsible for conducting the business in accordance with the desire of the owner while conforming to the basic rules of the society. The responsibility has three broad facets (Ikpeze, 1981).
Nigeria Business Organization and other types of businesses must be seen in many actions that can pursue social responsibility in areas such as; concern for ecology and environment, truth in advertisement, commitment to quality, customer satisfaction, and education. Other concerns include service to community needs, fair employment practices, progressive labour relations, employment assistance and corporate philanthropy (Ogbeuchi, 1998).
1.2 Statement of Research Problem
Most corporate organizations are concerned about what they can take out of the society, and de-emphasize the need to give back to the society (their host community). This attitude often renders the entire community inhabitable. This translates to negative integrity and reputation on the part of corporate identities as people perceive this as exploitation and greed for profitability and wealth maximization within a decaying economy of Nigeria.
Telecommunication industry operations all over the world are technological driven, right from the point of associating their businesses with the environment where they operate, creating awareness of their services to the point of rendering their major service to the ultimate service users requires one technology or the other which must be powered with electricity. Due to epileptic power supply in Nigeria, most organizations have to provide alternative power supply rather the relatively, cheaper National grid (PHCN) in which telecommunication industry is not left out most especially MTN network service provider.
This and some other factors have been militating against efficient running of business organization in Nigeria. As they have to factor the cost of fueling the alternative source of power which is always costly among others (like LPFO/Black oil, AGO/diesel and GAS) into their factors of production or operations.
However, in the face of the above challenges for telecommunication industry in Nigeria, the practice of corporate social responsibility as a concept entails the practice whereby corporate entities voluntarily integrate both social and environment upliftment in their business philosophy and operations. A business enterprise is primarily established to create value by producing goods and services which society demands. It therefore, seems that the practices of CSR will further pose a burden on the effectiveness of telecommunication industry on their immediate environment where they operate. This has made most observers perceive Nigeria business environment has been hostile. Hence, the need to look into how business organization can be socially responsible to the environment in which it operates.
1.3 Research Questions
- What effect does corporate social responsibility have on business environment?
- What effect do philanthropic activities of organizations have on standard of living of its host community?
- What effect does service quality have on customer satisfaction?
1.4 Objectives of the Study
The main objective of this study is to evaluate the effect of corporate social responsibility on business environment in Telecommunication industry in Ibadan and Abeokuta using MTN network service provider as a case study, while specific objectives are:
- To evaluate the effect of corporate social responsibility on business environment.
- To examine the effect of philanthropic activities carried out by business organizations on the standard of living of its host community.
- To determine the effect of service quality on customer’s satisfaction.
1.5 Statement of Hypotheses
The following hypotheses are constructed for the purpose of this study;
H0: corporate social responsibility does not have any effect on business environment in the study area.
H0: philanthropic activities carried out by organizations do not improve the standard of living of its host community.
H0: service quality does not have an effect on customer’s satisfaction
1.6 Significance of the Study
Traditionally, governments have assumed principal responsibility for assuring environmental management, and have focused on creating and preserving a safe environment. They have directed the private sector to adopt environmentally sound behavior through regulations, sanctions and occasionally, incentives. When environmental problems have arisen, the public sector has generally born the responsibility for mitigation of environmental damage. In this approach, some have contended that unrestricted private sector behavior has been considered as presenting the “environmental problem”. However, the roles of sectors have been changing, with the private sector becoming an active partner in environmental protection. Many governments and businesses are now realizing that environmental protection and economic growth are not always in conflict. It is the general belief that both business and society gain when firms actively strive to be socially responsible, that is, the business organizations gain enhanced reputation, while the society gains from the social projects executed by the business organizations.
As a result the environmental aspect of CSR is defined as the duty to cover the environmental implications of the company’s operations, products and facilities; eliminate waste and emissions; maximize the efficiency and productivity of its resources; and minimize practices that might adversely affect the enjoyment of the country’s resources by future generations. In the emerging global economy, where the Internet, the news media and the information revolution shine light on business practices around the world, companies are more frequently judged on the basis of their environmental stewardship. Partners in business and consumers want to know what is inside a company. This transparency of business practices means that for many companies, CSR is no longer a luxury but a requirement. This study therefore intends to discover how improvement in the depth of participation by telecommunication industries can increase economic and environmental development.
1.7 Scope and Limitation of the Study
The scope of this research will encompass the practice of corporate social responsibility and its impact on firm’s host environment. The impact of social services by telecommunication firms (MTN network service provider) in Nigeria shall be investigated in relation to firm’s environment and community development. The study focuses on MTN network service provider and the perceptions of residents of its retail outlets in Ibadan and Abeokuta, south-west Nigeria. Also, annual reports, budgets and accounts of MTN network service provider between (2005-2014) financial years will be accessed to reduce relevant financial information regarding the investment of the firm in social responsibility activities on its host environment (Ibadan and Abeokuta).
The following are the limitations that might be encountered during the course of the research: inaccessibility to information, cost constraint and limited time frame.
1.9 Definition of Operational Terms
Commitment: this is the show of willingness to give time and energy to something that is believed in or to make a firm decision to do something. (www.google.com)
Corporate Social Responsibility: this is also referred to as corporate conscience, corporate citizenship or sustainable responsible business. Corporate social responsibility is all about embracing responsibility for corporate actions and to encourage a positive impact on the environment and stakeholders including consumers, employees, investors, communities and others. (www.google.com)
Ecology: this is a branch of Biology that deals with the reactions of organisms with one another and their physical and chemical environment. (www.google.com)
Environment: environment is the sum total of what is around something or someone. It includes living things and natural forces. The environment consists of interactions among plants, animals, soil, water, temperature, light, and other non- living things. (www.google.com)
Ethical: it pertaining to or dealing with morals or principles of morality. It pertains to right or wrong in conduct. (www.google.com)
Legal: this means allowable or enforceable by being in conformity with the law of the land and the public policy; not condemned as illegal. (www.google.com)
Mercenary: this is a person who is primarily concerned with making money at the expense of ethics. It means working or acting merely for money or other rewards. (www.google.com)
Philanthropy: this is the show of love for humanity in the sense of caring, nourishing, developing, and enhancing “what it is to be human” on both the beneficiaries and the benefactor. (www.google.com)
Stakeholders: is a person, group, or organization that has interest or concern in an organization. Examples of stakeholders include; creditors, directors, employees, government, suppliers, unions, and the community from which the business draws its resources.
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