THE PROBLEMS AND PROSPECTS OF CORPORATE SOCIAL RESPONSIBILITY IN THE NIGERIAN MANUFACTURING INDUSTRY.

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND TO THE STUDY

Academics and practitioners have been striving to establish an agreed-upon definition of the concept of corporate social responsibility for over 30 years. Davis (1960) suggested that social responsibility refers to businesses’ “decisions and actions taken for reasons at least partially beyond the firm’s direct economic or technical interest.”

Eells and Walton (1961) also argued that corporate social responsibility refers to the “problems that arise when corporate enterprise casts its shadow on the social scene and the ethical principles that ought to govern the relationship between the corporation and the society” (p.5).

In today’s dynamic business environment, corporate organizations are faced with the need to impact positively on the host communities, by taking upon themselves certain responsibilities in order to increase their societal and environmental influence. Organizations also included social and environmental concerns in business operations rather than focusing on profit-making only. Organizations have developed a variety of strategies for dealing with this intersection of societal needs, the natural environment, and corresponding business imperatives with respect to how deeply and how well they are integrating social responsibility approaches into both strategy and daily operations worldwide.

Many organizations such as banks and some manufacturing companies in Nigeria are driven by the need to make more and more profits and that is the sole aim of every business. In a bid to meet this target, some companies do not adequately respond to the needs of host communities, employees’ welfare (cheap labor often preferred), environmental protection and community development. Research has shown that corporate social responsibility can increase profitability, sustainability, integrity and reputation of any business that includes it in its policy.

Nkanga (2007) posited that corporate social responsibility involves the commitment shown by companies to contribute to the economic development of a local community and the society at large. The adoption of corporate social responsibility policy should not be driven or motivated by increased profit. Rather, giving back to the society that gave to the business first should be the motivating factor. It is a common practice by Nigerian organizations to put as one of their mission statements the provision of corporate social responsibility. The organizations must have realized that stating corporate social responsibility as one of their mission statements hold special appeal to the stakeholders. Hence, there is an increasing awareness and recognition accorded corporate social responsibility by corporations.

Some critics according to Carpenter, et al. (2010) have argued that corporate social responsibility as implemented by some organizations is a mere facade. It is widely believed by many that corporate social responsibility efforts are mere campaigns by organizations to promote corporate brands. Many Nigerians are ignorant of corporate social responsibility; hence, whenever an organization does something ‘supposedly big’ for society, such a company and its management are eulogized for being caring and philanthropic. Manufacturing companies in Nigeria are expected to manage the impacts of their operations by adopting corporate social responsibility (corporate social responsibility) programs.  Onwuegbuchi (2009) in his studies on corporate social responsibility among manufacturing firms reported that most manufacturing companies in Nigeria embarked on corporate social responsibility programs for the purpose of philanthropic gesture and for government and public appraisal. He further stated that some manufacturing companies applied environmental and labor standards that suit them to satisfy the basic requirements of the laws of the country.

The Nigerian government should ensure that manufacturing companies’ corporate social responsibility policy entails self-regulation, adherence to rules and regulations, ethical standards, environmental responsibility and sustainability, consumers’ satisfaction, employee welfare, communities, and stakeholders' benefits.

The problems of the environment in which an organization operates cannot be ignored. Therefore, there is a need to examine the problems and prospects of corporate social responsibility in Nigeria. In its stronger form, the concept of Corporate Social Responsibility (corporate social responsibility) asserts that corporations have an obligation to consider the interests of customers, employees, shareholders, communities, as well as the ecological ”footprint” in all aspects of their operations.

1.2       STATEMENT OF THE PROBLEM

Despite the huge attention recently given to corporate social responsibility (CSR) in Nigeria, an area of concern still remain in organizations in the manufacturing sector. Most manufacturing organizations still do not see any reason for corporate social responsibility policy acceptability. Companies that reluctantly accepted and adopted the corporate social responsibility policy, do so for profit-making purposes.

Another lacking area on corporate social responsibility is that most of the studies on corporate social responsibility were conducted on nations with developed economies and their findings were found out not to be applicable to some developing nation’s economy like Nigeria. Therefore, this study will examine the problems and prospects of corporate social responsibilities in Nigeria using the manufacturing industry as a case study. It is ironic that these organizations take resources from the external environment and it is only natural to give back what has been exploited. Unfortunately, this anomaly is a norm in this part of the globe and this cankerworm can only be ameliorated through research thesis such as this, publication, media publicity, campaigns, and awareness emphasizing the importance of corporate social responsibility in our society.

1.3       OBJECTIVES OF THE STUDY

The broad objective of this study is to examine the problems and prospects of corporate social responsibility in the Nigerian manufacturing industry. Specifically, the study is designed to:

1.  Investigate how corporate social responsibility (corporate social responsibility) influences organizational reputation in the Nigerian manufacturing industry.

2.   Cross-examine the difference between the level of perceived customers’ patronage and brand loyalty among companies that practices corporate social responsibility and organizations that do not practice corporate social responsibility in the Nigerian manufacturing industry.

3.   Analyze how corporate social responsibility adoption influences organizational performance and profitability.

4.                  Assess the economic, social and environmental factors influencing corporate social responsibility (corporate social responsibility) adoption among manufacturing companies in Nigeria.