Impact of Corporate Social Responsibility on Organizational Performance (a Case of Nigeria Bottling Company Plc)
Chapter One
Purpose Of The Study
The main purpose of this is to examine empirically the relationship between corporate social responsibility and organizational performance. Social responsibility has been neglected overtime, organization have forgotten that they operate in an environment and the environment also expect the organization to assist in tacking its socio-economic problem.
This study seeks to:
- Determine the effect of social responsibility on organization
- Discuss why some organizations are socially responsible than others
- Identify and evaluate the various forms of social responsibility companies will achieve their set objectives and attain their goals.
Above all, the purpose of this study is to partially fulfill the requirement for the award of higher national Diploma in Business Administration.
CHAPTER TWO
LITERATURE REVIEW
Introduction
The interrelationship between organisations and their environment has become increasingly important. There is no business organisation that can exist in isolation; it must have a community that it associates with in terms of location for its successful operations. Also in any society, the need for a remarkable growth and development cannot be easily attained if the principal actors, that is, the citizenry, the government and the corporate business organizations are not in harmony.
Therefore, this section expressly and critically reviews literatures on corporate social responsibility as discussed by various scholars.
Conceptual Framework
The Concept of Corporate Social Responsibility (CSR)
In the literature on CSR different authors described it in different ways. There is no universal definition of CSR, organizations have framed different definitions and there are several perceptions of the term according to the context locally and among the countries. According to Egels (2005), the area defined by advocates of CSR increasingly covers a wide range of issues such as plant closures, employee relations, human rights, corporate ethics, community relations and the environment. According to Ruggie (2002), CSR is a strategy for demonstrating good faith, social legitimacy, and a commitment that goes beyond the financial bottom line.
In the opposite, Frederick (1994) explained a move from Corporate Social Responsibility to “Corporate Social Responsiveness” defined as “the capacity of a corporation to respond to social pressures”. The World Business Council for Sustainable Development, in its publication “Corporate Social Responsibility: making good business sense” by Holme and Watts (2002) provided different perceptions of what CSR should mean from a number of different societies. For example, “CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and the government”.
The concept of social responsibility has very high important components of ethics that are the guidelines going to improve the quality of life of the people in organizations and, at the same time, provides an industrial competitive advantage for the firm and needs to be developed as a corporate strategy of the firm focusing in the issues of social, environmental and economics. According to Frooman (1997), the definition of what would exemplify CSR is the following: “An action by a firm, which the firm chooses to take, that substantially affects an identifiable social stakeholder’s welfare.” A socially responsible corporation should take a step forward and adopt policies and business practices that go beyond the minimum legal requirements and contribute to the welfare of its key stakeholders. CSR is viewed, then, as a comprehensive set of policies, practices, and programs that are integrated into business operations, supply chains, and decision-making processes throughout the company and usually include issues related to business ethics, community investment, environmental concerns, governance, human rights, the marketplace as well as the workplace.
Corporate Social Responsibility (CSR) is “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” (European Commission, 2001). Corporate Social Responsibility (CSR) is a means of discussing the extent of obligations a business has to its immediate society; a way of proposing policy ideas on how those obligations can be met; as well as a tool by which the benefits to a business for meeting those obligations can be identified (CSR Guide). CSR is also referred to as ‘corporate’ or ‘business responsibility’, ‘corporate’ or ‘business citizenship’, ‘community relations’, ‘social responsibility’. It involves the way organizations make business decisions, the products and services they offer, their efforts to achieve an open and honest culture, the way they manage the social, environmental and economic impacts of business activities and their relationships with their employees, customers and other key stakeholders having interest in the Business and its operations.
As Warhust (2001) points out, the three major elements of CSR are product use which focuses on contribution of industrial products which help in well-being and quality of life of the society, business practice which focuses on good corporate governance and gives high impetus for the environmental well-being and equity, and finally distribution of profits equitably across different societies, in particular the host community.
Historical Background And Development Of Corporate Social Responsibility
Ali et al (2010) expressed that the inception point of corporate social responsibility (CSR) can be traced to 1953 when New Jersey Supreme court allowed standard oil company to donate money to Princeton University as a philanthropic action. This decision was given against the suit filed by one of the shareholders of standard oil, believing that it would reduce shareholder’s wealth. CSR notion was initially advocated by Beyer (1972) and Drucker (1974) while stating that corporations should do social activities for the welfare of the community and feel the sense of self-ombudsmanship.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitute of individuals or elements that are homogeneous in description.
This study was carried out to examine empirically the relationship between corporate social responsibility and organizational performance. All the staff of Nigeria Bottling Company Plc Lagos state form the population of the study.
SAMPLE SIZE DETERMINATION
A study sample is simply a systematic selected part of a population that infers its result on the population. In essence, it is that part of a whole that represents the whole and its members share characteristics in like similitude (Udoyen, 2019). In this study, the researcher adopted the convenient sampling method to determine the sample size.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of hundred and twenty (120) questionnaires were administered to respondents of which 100 were returned. The analysis of this study is based on the number returned.
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS:
Introduction
This chapter summarizes the findings on The Impact Of Corporate Social Responsibility On Organizational Performance, Nigeria Bottling Company Plc as case study. The chapter consists of summary of the study, conclusions, and recommendations.
Summary of the Study
In this study, our focus was on The Impact Of Corporate Social Responsibility On Organizational Performance, Nigeria Bottling Company Plc as case study.. The study is was specifically focused on examining the effect of social responsibility on organization; Discussing why some organizations are socially responsible than others; Identifying and evaluate the various forms of social responsibility companies will achieve their set objectives and attain their goals and above all, the purpose of this study is to partially fulfill the requirement for the award of higher national Diploma in Business Administration.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent are staff of Nigeria Bottling Company Plc Lagos State.
Conclusions
With respect to the analysis and the findings of this study, the following conclusions emerged;
There is no doubt given the findings of this study, that corporate social responsibility performance plays significant role in improving the performance of manufacturing companies as a whole. After subjecting the data collected to thorough test, the results showed that corporate social responsibility performance should be incorporated into every organization’s long-term goal/plan which invariably helps in ensuring growth, survival and continuity.
Also, from the findings of the study, conclusion can be reached that corporate financial performance, in greater dimension, will rest on a company’s perspective and attitude towards social responsibility programmes it intended and have been embarking upon. Data gathered suggested that manufacturing firms will enjoy good and healthy relationship with financial institutions and creditors given that they prioritize and implement, in the environment, worth-while social responsibility projects. Consequently, investment portfolio of manufacturing corporations will witness an upward movement as a result of the benefit that would be accruable to them when corporate social responsibility is observed. Growth and development would seem inevitable as constituting the long-term impact of the phenomenon studied. Summarily here, corporate social responsibility expenditure impact positively on the performance of manufacturing firms.
The manufacturing industries / companies, through their voluntary performance of social responsibility over the years, has proved that investment in social responsibility activities do not cause the demise of the business since it would make it to establish that social responsibility may not conflict with other business operations, neither does it impoverish the provider of fund. Instead, it is found to be supportive to business interest.
It should however be noted that for the company to be more responsive in assisting the society in the provision of viable social services, management must step up its more basic mission of maximizing profits. With social responsibility obligation in view, management team will step up their drive towards making better profit day-in-day-out with which other objectives can be met conveniently.
Finally, it can be concluded that since the greater portion of the populace, together with the government, places more importance and expectation on businesses to be responsible towards their immediate environment, corporations have no choice than to incorporate its exercise as a core programme of theirs in order to keep on existing; ensure customers’ retention; improve the industry image; create goodwill; and to attract potential investors
Recommendation
Based on the findings the researcher recommends that;
- Despite all efforts that may have been given by manufacturing industries in the performance or discharge of social responsible activities, certain steps still need to be taken to improve socially responsibility programmes and improving the operational performance of the manufacturing corporations indirectly. Some suggestions are therefore offered which, if followed, would improve the implementation of the programmes and enhance both the status and profitability of the company.
- Since manufacturing industries considers investment in social responsibility as beneficial to the society and its own business operation, it will be necessary for the company/industry to earmark more funds as social responsibility investment fund so as to meet the increasing demands from members of the public for its social assistance. To meet these increasing public demands, the company should maintain a fixed percentage of its after tax profit which would be spent each year. For instance, the company should invest more in Education and Training centre in order to ensure a qualitative manpower base from which it can recruit its qualified employees.
- To effectively and efficiently meet the companies’ social responsibility objectives, the determination of social needs should not be concentrated exclusively in the hands of management staff. Rather, this study suggests the inclusion of other employee in planning process of the company’s social responsibility programmes with probably an outside consultant.
- The outside consultant, who should be an expert in social relations, will introduce valuable and workable ideas which together would help ensure a more objective analysis of social needs of its environment and at the same time, benefiting the industry.
- Manufacturing industries all across the nation should be compelled to include among their long-term objectives, if not in the short-term, corporate social responsibility programmes. This will go a long way in guiding their decisions almost every time their objectives are examined. It should be documented with proper control put in place to ensure their attainment.
- Government can and should also help at making social responsibility exercise competitive. This will be achieved by public commendation spelt out in recognition of any project executed by any manufacturing corporation. This will invariably improve the image of the organization and indirectly promote its product, metamorphosizing into increased productivity and improved profitability.
- Additionally, other firm would be moved to discharge social responsive programme, hence ensuring continued growth and development of the community at large.
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