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THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON FIRMS PERFORMANCE

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The concept of business social responsibility has continued to evolve and expand. Currently, the adequate and efficient use of resources to make profit is still seen as the primary social responsibility of business organization. The idea of corporate social responsibility started in the early stage of the twentieth century. Interestingly and good enough, it began from business executives who believed that corporations have an obligation to use their resources in ways that would benefit the entire society. Nevertheless, the role of business firms is that of providing goods and services at a profit social expectations of business have increased so much that there is a need for social attention in order to narrow the gap between expectations and response and keep business in tune with society.  An organization concerned with establishing it’s goals, objectives and executing strategies for advising its stated purposes should also recognize the fact that it operate in such a manner that would not harm the particular environment. Furthermore, this issue is so important to business organizations in that if adequately maintained, it brings about good  relationship between the organization and the society.

In view of the foregoing, a study which is narrowed down to the case of Guinness Nigeria, Plc can approximately be described as a good case since it is one of the prominent and well known companies in the country. The company celebrated its 50th year (Golden Jubilee) in the year 2002.  Now, it is obvious that it has been in existence since the past 56 years.  Nigeria and the demand for it’s products, no doubt has continued to grow and it has indeed remained consistently high all through the years. VThis company specializes in the production of small and big Guinness stout beer, Harp, Malta Guinness, extra smooth and gordonspark.  The company has branches in various part of the country.  Since early seventies, precisely 1974, its first production plant was established at Ikpoba scope in Benin city and till today, the company has continued to grow and has remained the most dominant and prominent company in the brewery industry.

1.2   STATEMENT OF THE PROBLEM

Majority of Nigeria business organizations have not shown sufficient interest in social responsibilities. At present, many Nigerian business men show a rather non-challant attitude towards social responsibility. Nowadays, This belief has resulted  on conflicts especially in this era where greater number of people now believe that cooperation should exist between the people and the organization. This will enhance the smooth running of business by the organizations and maximum support by the society. In order to receive optimum support from the society, the organizations have to employ the following strategies: education of the people, building of institutions for public health care and employment of the people of the area. They should also engage themselves in environmental protection programmes, and also see to the welfare of the people at large. This issue of corporate social responsibility is treated within the context of this research work, with emphasis on the Guinness Nigeria plc Aba.

The company is constantly maximizing profits but not much attempt has been made in balancing welfare with profit maximization. A balance has to be struck between the activities of Guinness Nigeria which are profit maximization and the welfare of the community.

1.3   OBJECTIVE OF THE STUDY

Social responsibilities of an organization do not in any way interfere with the economic roles and objectives of the organization, rather they enhance very cordial relationship with the community where the organization operates. Therefore, the primary aim of this project is to determine how far business organizations, In this regards, therefore, the objectives of the study are as follows

To evaluate the extent to which the study area is involved in social responsibility projects.

To identify the role, it is expected to play in the area.

To determine the impact of social responsibilities of firm performance.

To ascertain public impression, opinion and perception of the company.

1.4   RESEARCH QUESTIONS

The following questions have been raised to elicit relevant and useful information that will enable me draw my conclusion and make appropriate recommendations.

·      To what extent has study area been socially responsible?

·      What are the roles of study area in terms of social responsibility?

·      What are the impacts of social responsibilities of firm performance?

·      What is the perception of the public on the company’s involvement in social responsibilities?

Answers to these questions will be of immense benefit in making meaningful recommendations which will guide business organizations in their policy formulations

1.5   SCOPE OF THE STUDY

In order to be able to effectively evaluate the activities of business corporation in the communities in which they operate in terms of their social responsibilities, this study will narrow down to the activities of study area to know whether or not it has been involved in social responsibility projects in the community where it operates.

1.6 SIGNIFICANCE OF THE STUDY

“A healthy business organization and a sick society are hardly compatible, noted Drucker (2010) it is pertinent to point out that in order to minimize or avoid constant criticism and also to maintain a very cordial relationship with host communities, business organization should of necessity engage in social responsibility projects. Furthermore, this study will serve to broaden the frontiers of knowledge and draw the attention of business corporations to the role they are expected to play in the community in which they operate.  The emphasis of this study is on business community relationship.

1.7   LIMITATIONS OF THE STUDY

The limitations of the study can be viewed from the different nature, attitude and perceptions which managers of the company, most of whom did not consider it worthwhile offering their assistance in providing answers to the questionnaires. Majority were skeptical about providing required information. There was also the problem of eliciting information from respondents as most of them are illiterates.  There was also the problem of finance. I was not able to travel far and as frequently as I would have loved to due to financial constraints.

1.8     DEFINITION OF TERMS

CORPORATE SOCIAL RESPONSIBILITY (CSR)

According to Business for Social Responsibility (BSR), Corporate Social Responsibility (CSR) has achieving commercial success in ways that honours ethical values and respect people, communities and the neutral enhancement.

ORGANIZATIONAL PERFORMANCE

This refers to the effectiveness of an organization or a firm in fulfilling its purpose for a particular target audience.

STAKEHOLDER

The term stakeholder means those that are affected by firms or organisations performance or activities.

BENCH MARKING

This involves reviewing competitors corporate social responsibility (CSR) initiatives as well as measuring and evaluating the impact that those policies have on society and the environment and how customers perceive competitors corporate social responsibility.

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