CORPORATE SOCIAL RESPONSIBILITY AND ORGANIZATIONAL PERFORMANCE OF CATERING FIRMS IN KHANA LOCAL GOVERNMENT AREA

CHAPTER 1

INTRODUCTION

1.1 Background of the Study

Organizational performance comprises of the actual output or results of an organization as measured against its intended outputs, goals and objectives. In other words, organizational performance comprises real results or outputs  qcompared with intended outputs. The analysis focuses on three main outcomes, first, shareholder value performance; second, financial performance; and third, market performance. It is a broad construct which captures what organizations do, produce, and accomplish for the various constituencies with which they interact.  Performance is seemed to be the fulfillment of an obligation in a manner that released the performer from all liabilities under the contract. This means that an employee must be properly appraised in terms of their productivity, skills, taken decision and total commitment to their jobs so as to enable the organization to achieved expected goals (Kuvaas, 2006). One way an organization can perform is by practicing corporate social responsibility. Corporate social responsibility is a nebulous concept that has been described in a number of ways; it is widely used in literature of sociology, anthropology, economics, politics and business administration. Most writers on corporate social responsibility see the concept as the disposition of an organization to exhibit ‘missionary’’ rather than “mercenary’’ attitudes toward the society. Corporate social responsibility in relation to business is the obligation of a business organization to pursue those lines of action, which are desirable in terms of objectives, and values of society. (Lawal & Sulaimon, 2007) defined it as ‘’ intelligent and objective concern, which restrains individual 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, 2001).First, contribution to charity. Second, elimination of social costs. The third facet  of social  responsibility is the adoption  and observance  of ethical  codes aimed  at reducing  business malpractices.

Oil exploratory firms in Nigeria and other types of business must be seen in many actions domains can pursue social responsibility in areas such as: concern for ecology and environment, commitment to quality, truth in advertisement, customer satisfaction and education. Other concern include service to community needs, fair employment practices, progressive labour relations, employment assistance and corporate philanthropy (Ogbeuchi, 2008). This study proxies corporate social responsibility with economic, legal, ethical and discretionary responsibility while organizational performance was proxied with three outcomes associated with selected catering services in Khana Local Government Area, Rivers State, namely; profitability, effectiveness and efficiency.

1.2 Statement of the Problem

The purpose of this study is to investigate corporate social responsibility and organizational performance. It attempts to determine how an organization carries out its obligation to the stakeholders which serves as a strategy for carrying out business activities peacefully. Most times claims made by various stakeholders are too much on the organization, yet they are expected to get actively involved in getting them solved. In trying to meet up these expectations, most organizations indulge in some unethical acts which most times return on them.

This study attempt to understand which corporate social responsibility elements have the ability to influence the organizational performance. The study also attempt employees’ perception on their organization’s corporate image affects their behavior as well as how they promote their organization to the other stakeholders.

Previous researchers sees certain elements of corporate social responsibility (such as organizational ethics) as having impact on employees’ perceived corporate image that can affect their commitment to their organizations as well as organizational performance (Ikpeze, 2001). From the foregoing, therefore this study seeks to examine the relationship between corporate social responsibility and organizational performance in selected catering services in Khana Local Government Area, Rivers State.

1.3 Objectives of the Study

The main objective of the study is to examine the relationship between corporate social responsibility and organizational performance in selected catering services in Khana Local Government Area, Rivers State. The following objectives are to be achieved:

i.        To examine the relationship between economic responsibility and organizational performance in selected catering services in Khana Local Government Area, Rivers State.

ii.       To examine the relationship between legal responsibility and organizational performance in selected catering services in Khana Local Government Area, Rivers State.

iii.      To examine the relationship between ethical responsibility and organizational performance in selected catering services in Khana Local Government Area, Rivers State.

1.4 Research Question  

The following research questions are posed to guide the study:

i.        To what extent is economic responsibility associate with organizational performance in selected catering services in Khana Local Government Area, Rivers State?

ii.       To what extent does legal responsibility associate organizational performance in selected catering services in Khana Local Government Area, Rivers State?

iii.      To what extent is ethical responsibility associate with organizational performance in selected catering services in Khana Local Government Area, Rivers State?

1.5 Research Hypothesis

The following research hypothesis is postulated to guide the study:

HO1: There is no significant relationship between economic responsibility and organizational performance in selected catering services in Khana Local Government Area, Rivers State.

 HO2: There is no significant relationship between legal responsibility and organizational performance in selected catering services in Khana Local Government Area, Rivers State.

HO3: There is no significant relationship between ethical responsibility and organizational performance in selected catering services in Khana Local Government Area, Rivers State.

1.6 Significance of the Study

One of the main reasons this study is being conducted is because society’s expectation on organizational corporate social responsibility effort is gaining momentum and fast becoming a standard business practice. Many organizations have started implementing corporate social responsibility as part of their organization practices as well as to fulfill their legal obligation. However, in order for corporate social responsibility to be effective and bring to bring value to the organization (such as improving the corporate image and employees commitment), organization and employees’ need to have a deeper insight to the benefit of investing in corporate social responsibility prior to embarking on this time consuming, resources demanding and costly project.

This study is also significant because it has been able to unveil the roles of corporate social responsibility and organizational performance in selected catering services in Khana Local Government Area, Rivers State.

1.7 Scope/Limitation of the study

The study is delimited under the following heading: content scope, geographical scope and unit of analysis.

Content Scope: The content scope of this study involves an investigation to ascertain the relationship between corporate social responsibility and organizational performance. The independent variable is corporate social responsibility measured by Economic responsibility, Legal responsibility, and ethical responsibility. While dependent variable is host community relations, measured by organizational performance, profitability, effectiveness and efficiency.

Geographical Scope: This study is delimited in Khana Local Government with special reference to selected catering services which include The Promise Fast Food and Beeks Restaurant.

Unit of Analysis: The unit of analysis in this research involves the individuals at the time of carrying out the study.

In carrying out an investigation of this nature the researcher must of necessity be faced with the following constraint; Time, poor response from respondents and finance.

          This study involves an investigation of corporate social responsibility in relation to organizational performance. Hence it is a micro level study.

1.8 Definition of Terms

The following terms are operationally defined below:

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social responsibility is firm’s obligation to constituent groups in society other than shareholders and beyond that prescribe by law or union contract.

LEGAL RESPONSIBILITY

This relates  to  complying  with  legal  legislations  imposed  by  the  government  and regulatory agencies. It means that corporations that want to be ethical must be the economically, and legally responsible.

ETHICAL RESPONSIBILITY

Those activities expected of corporations as members of the society, which are not defined by laws. This shows corporation as being moral, doing things, just and fair.

ADAPTABILITY

It is a change by an organization in response to external changes. Successful organizational adaptation may result in a more effective organizational structure and process, replacement of outmoded and a better fit with emerging environmental conditions.

COMMUNITY OPINION

It is a judgment, viewpoint or statement that is not conclusive. It may deal with subjective matters in which there is no conclusive findings, or may deals with facts which are sought to be disputed by the logical fallacy that one is entitled to their opinion.

COMMUNITY INVOLVEMENT

          This is where the community is allowed to involve in the decision making process.