IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON ORGANIZATIONAL EFFECTIVENESS (A CASE STUDY OF FEDERAL TEACHING HOSPITAL, ABAKALIKI)

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

              The concept of business social responsibility has continued to evolve and expand today. Traditionally, business has been viewed as an economic institution and profit-maximization as its sole objectives. This represents the classical view advocated by economist and Noble Laureate, Milton Friedman. Today, business manager are expected to serve as trustees of various stakeholders groups such as inventor, customers, employees, government and it community. This represents the socio-economic views which say that management’s social responsibility goes well beyond the making of profit to include protecting and improving society welfare (Njoku and Nwosu, 2010).

The idea of corporate social responsibility began in the earlier part of the twentieth century, interesting enough, corporate social responsibility comes from business executive who believed that corporation has an obligation to use its sources in ways that could benefit the entire society Sama(1994). Although, the role of business firms is that of producing goods and services as profit, social expectations of business have increase dramatically since 1960. So, there is a need for social response, in other to bridge the gap between expectations and response, and keep business in tune with society, while an organization is busy establishing its goal and objectives, developing and executing strategies for achieving its stated purpose. Epstein (2006) succinctly points out, business enterprises gives adequate attention to the issue of social responsibility because they want to achieved social harmony between themselves and their environment and companies see it expenses associated with social responsibility as tax or license fee they paid to society so that the latter can allow them to carry out their every day economic functions. Seittim in Abubakar (2002), says business social responsibility implies bringing about corporate behaviour to a level congruent with the prevailing social norms, values and expectation of performance. Corporate Social Responsibility is the transparent business practices that are based on ethical values, compliance with legal requirements and respect for people - communities and the environment.

Contemporarily, CSR is a concept whereby business organisations consider the interest of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other shareholders as well as the environment. While CSR is practiced by corporate bodies, it is imperative to evaluate its contributions to the attainment of organisational effectiveness. By definition, organization effectiveness is the efficiency an organization, group, or company can meet its goals. How an organization produces its set quota of products, how much waste it produces, or how efficient its processes fall under organizational effectiveness.

The former Federal Medical Centre Abakaliki now Federal Teaching Hospital, Abakaliki was established in the 1930s by the then colonial administration to serve as a casualty control post for soldiers wounded in the Cameroon theatre of the 2nd world war. It subsequently became the Abakaliki General Hospital, administered successively by the then Eastern Regional Government, the then East Central, Anambra, Enugu and finally Ebonyi States Governments.

              By 1973, the Hospital had a full complement of Consultant Staff and was approved for training of House Officers. Subsequently, the facilities deteriorated and the progressive loss of Consultant Staff as the East Central State was split into many States impacted adversely on the hospital services. Thus, accreditation for training of House Officers lapsed and services deteriorated to such an extent that the Hospital almost became moribund. Following the agreement between the Federal government of Nigeria and the Enugu State Government, the General Hospital, Abakaliki was taken over by the Federal Ministry of Health as a Federal Medical Centre on March 1, 1990 with Dr. Ekuma Orji Uzor as the pioneer Medical Director. With the takeover, the Hospital made tremendous progress, and assumed all the responsibilities of being a Federal Health Institution. Dilapidated facilities were rehabilitated in 1999, broken down equipments were repaired and modern equipments acquired. Two additional modern theatres were constructed and a modern neo-natal Unit commissioned. An ultramodern Casualty and Children’s Emergency Unit and a Residents Hall Complex were put in place as well as an Intensive Therapy Unit.

On 7th December, 2011, President Goodluck Jonathan in fulfillment of his election promise to Ebonyi people upgraded the Federal Medical Centre to a Federal Teaching Hospital and directed that Ebonyi State University Teaching Hospital be absorbed into the new mega Teaching Hospital. The handover

process was completed on 23rd December 2011 including the absorption of the staff of the defunct EBSUTH (Ebonyi State University Teaching Hospital).

1.2  Statement of the Problem

              According to Nwachukwu (2017), a majority of Nigerians believed that business enterprise had not shown sufficient interest to their social responsibility. At present, many Nigerian businessmen’s attitude to social responsibility is characterized by the belief in the doctrine of laissez-faire. This belief has result in conflicts between management and the society. Large number of people now believed that organization is expected to behave in socially beneficial ways particularly in relation to the physical environment, product quality, and removal of unfair discrimination in hiring and firing staff.

      Corporate social responsibility is treated within the context of the research work in relation to Federal Teaching Hospital, Abakaliki activities with respect to its employees. According to Tuzcu, A. (2014),CSR for employees are relevant to successfully implementing CSR for the other stakeholders. This is logical because employees play a leading role in implement CSR for community and customers. However, there have been wide spread complaint and write ups on the poor job performance and the resultant unimpressive productivity of employees in FETHAI. Reasons been due to the perception of both employees and management of Federal Teaching Hospital, Abakaliki seems to be different base on each group and aspirations. FETHAI is constantly maximizing profit but not much attempt has been made in balancing ethical, environmental and philanthropic decisions with economic decisions. This therefore compelled the researcher to examine the impact corporate social responsibility has on organizational effectiveness.

1.3  Objectives of the Study

              The following aims and objectives of the study comes to the mind in the choice of the topic (Impact of corporate social responsibility on organizational effectiveness):

1.  To determine the impact of ethical business practices on organizational profitability.

2.  To ascertain the effect of environmental responsibility on staff morale.

3.  To assess the effect of legal responsibility on organizational

commitment.

1.4. Research Questions

       The following questions are posed to this study;

1.  To what extent do ethical business practices affect

organizational productivity.

2.  To what extent does environmental responsibility affect staff morale.

3.  To what degree does legal responsibility affect organizational commitment.

1.5. Hypotheses of the Study

Ho1: Ethical business practices do not impact significantly on      organizational profitability.

HA1: Ethical business practices impact significantly on      organizational profitability.

Ho2: Environmental responsibility has no significant effect on       staff morale.

HA2: Environmental responsibility has significant effect on staff       morale.

Ho3: There is no significant association between legal responsibility and organizational commitment.

HA3: There is significant association between legal responsibility             and organizational commitment.

1.6 Scope of the Study

              This study focuses on Federal Teaching Hospital, Abakaliki. The respondents in this study constitute the employees in FETHAI. The choice of FETHAI staff was based on the fact that, they occupy a crucial position in the development of the organization. The content scope covers the extent of impact between corporate social responsibility and organization effectiveness in Federal Teaching Hospital, Abakaliki.

1.7 Significance of the Study

To Managers: The result of this study will acquaint managers with in-depth knowledge of corporate social responsibility and its effectiveness as regards to society or communities in modern business.

To Organization: This study will be useful to the organization in decision making and will help government in polices formation. It will also serve to broaden the frontier of knowledge and draw attention of Business Corporation in the role they operate are excepted to in the society where they operate

To Future Researchers: This study will serve as a source of knowledge and reference to the future researcher in order to aid their research in the future.

To Academic Scholars: A s a result of this study, those in the academic field will benefit from it based on the perception that they might stumble upon if read or study it in order to improve them academically.

1.8. Limitations of the Study

Time Constraint: respondents were not able to response to questionnaire administered to them due to their busy schedule and period when this research was conducted was not enough due to the fast approaching of second semester examination which warranted some part of this research to be rushed.

Financial Constraint: some of the companies in view are located at distant places that required excessive transport. Also some of the respondents reside very far from the location were the research was been conducted. This made it almost impossible and difficult to retrieve questionnaire that were administered.

Uncompromising Attitude of Respondent: Most respondents felt reluctant in responding to questionnaire administered to them. This also proved to be a limitation on this research.

1.9 Definition of Terms

Corporate: this is a company which has a legal right as an entity separate from its owners, shareholder and it managers.

Corporate social responsibility: This refers to the comprehensive approach organization take to meet or exceed expectations to stakeholders beyond such measures as revenue, profit, and legal obligations. It involves community investment, human right and employee relations environmental practices and ethical conduct. Corporate social responsibility is also concern with the way in which an organization exceeds minimum obligation to stakeholders specified through regulation.

Responsibility: this is a duty or obligation to satisfactorily perform or complete a task (assigned by someone or created by one’s own promise or circumstances) that one fulfill, and which has a consequent penalty for failure.

Social responsibility: this is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem. Social responsibility is also an ethical theory that an entity, be it an organization or individual has an obligation.