Corporate Social Responsibility and Growth of large-scale Business Organisations in Akwa Ibom State

Table of Contents

Abstract

Introduction

Statement of the problem

Purpose of the study

Research Questions

Null Hypotheses

Research Method

Results

Discussion of findings

Conclusion

Recommendations

References

Abstract

The study examined the relationship between corporate social responsibility and growth of large-scale business organization in Akwa Ibom State. Two research questions were answered and two corresponding null hypotheses were tested at .05 level of significance. The study adopted an ex-post facto research design. The population of the study comprised 286 managers selected from 38 large scale business organizations in Akwa Ibom State. A sample of 125 managers was drawn from the population using simple random sampling technique. A researcher-made structured questionnaire titled: Corporate Social Responsibility and Growth of Large-scale Business Organisation Questionnaire (CSRGLSBOQ) was used to collect data for the study. The instrument was validated by two validates while Crombach Alpha method was used to establish the reliability of the instruments and this yielded a reliability coefficient index of 0.87. Pearson Product Moment Correlation (PPMC) was used to answer the two research questions and test the null hypotheses. The study revealed that, economic responsibility, and environmental responsibility have a high positive relationship with the growth of large-scale business organisations in Akwa Ibom State. Also, the study showed that there is a significant relationship between economic responsibility and environmental responsibility and growth of large-scale business organization. The study therefore concluded that economic and environmental responsibilities could enhance the growth of large-scale business organisations. It was therefore recommended among others that Federal government should provide enabling social and political environment to motivate companies in Nigeria to carry out sustainable social responsibility to improve the growth of businesses and the general lives of Nigerians.

KEYWORDS: Corporate Social Responsibility, Growth, Large Scale Business Organisation

Introduction

The activities involved in the production of goods and rendering of services constitute business. According to Udukeke (2015), a business is any organised set of legal activities carried out by an individual or an organisation for the purpose of producing goods or rendering services in exchange for other goods, services or money, for the mutual benefit of the individuals or organisations concerned. The primary objective of a business organisation is to make profit. Other objectives of a business organisation include shareholders’ satisfaction, employees’ satisfaction, growth, innovation, productivity, good public image, customers’ satisfaction among others. A business organisation may be micro, small, medium or large-scale. Ukandu, Azubuike, Onuoha, Chukwu and Emelike (2013) opined that large-scale businesses are the life wire of any nation because the rate at which an economy of a country generates and sustains annual increase in its Gross Domestic Products (GDP) depends, to a great extent, on the volume of activities of large-scale business organisations.

According to the Nigerian Institute of Management (2009), a Large-Scale Business Organisation (LSBO) is an enterprise that has full-time labour force of more than 100 people and a total cost and working capital, less cost of land, of more than two hundred million naira. Large-scale business organisations constituted the main stabilizing force in Nigerian States economy in the 1970’s and early 1980’s. These organisations provided employment and income to citizens. The number of people who worked for large-scale business organisations increased significantly with the introduction of the Indigenization Decree of 1977, which ensured the transfer of ownership and control of business organisations from foreigners to indigenes. This reduced foreign domination of these organisations and increased indigenous participation leading to the employment of citizens at all levels of management (lower, middle and top levels) in these organisations in cities like Uyo, Ikot Ekpene among others. The businesses improved local technology and raised the standard of living of the people through the provision of high quality goods, services and social amenities. Okandu, Azubuike, Onuaha, Chukwu and Emelike (2013) opined that it has become obvious that sustainable growth of business activities in any nation remains the key for unlocking the developmental potentials of the nation. Large-scale business organisations such as Exxon Mobil Nigeria Ltd, University Press Plc and others flourished as they were patronized not only by Nigerians but also by other West African countries (Esene, 2015). However, observations by the researcher seem to show that Large scale business organizations have not been given much attention to corporate social responsibilities as the they believe that the motive of every business is to achieve the bottom line of maximum financial benefits.

For many years, community development goals were philanthropic activities that were seen as separate from business objectives. “Doing good” and “Doing well” were seen as separate pursuits. But today, that view has changed. Modern organizations are learning that cutting-edge innovations and competitive advantages can be gained from weaving social and environmental considerations into business strategy (Obi, 2011). Involvement in corporate social responsibility or philanthropic activities improve the image of a corporation among its varied publics, including customers, employees, suppliers, community organizations especially the ones that track and report on corporate giving. Managers in organizations admit that corporate philanthropy increases respect and community good-will and builds stronger brand position (Kotler and Lee, 2005). Socially responsible companies have been found to achieve greater market shares and increased revenues. Reputation of companies which are socially responsible organizations are greatly enhanced and product the brands of such companies do better in the market (McCabe, 2005). Socially responsible companies are able to develop better relationship with the government agencies and communities, which, in turn, increases the companies’ sales volume and makes it easier for such companies to operate in different regions of the world.

Several multinational business corporations operate in countries where there are no direct responsibility imposed on organisations to enforce corporate social responsibility (CSR) activities, and at such some writers have argued that businesses that pursue CSR may be perceived as doing so more from fear of public backlash than because they believe that CSR is good for long-term business performance. The above contentions set the tone for evaluating the reason why businesses adopt CSR. Researchers have used several theories to explain the reason why companies voluntarily indulge in CSR activities. Some of the theories are: the stakeholder theory, the legitimacy theory and the political economy theory (Gray, Kouhy and Lavers 1995). The stakeholder theory contends that organisations perform CSR activities because of the ethical demand on organisations to do so and also because of the need to manage the perception of powerful stakeholders that could exert an adverse impact on organisation (Deegan 2002). The legitimacy theory argued that organisations voluntarily indulge in CSR to show that they are conforming to the expectations and values of the society within which they operate (Gray, Kouhy and Lavers 1995). The political economy theory says that organisations engage in CSR because they want to create a political arrangement that would in the long-run suit their private interest (Guthrie and Parker 1990). In a recent study by KPMG (2008) on the world’s 250 largest organisations, it was revealed that the main reason why organisations have chosen to engage in CSR is because of the ethical consideration by organisations that it is in their best interest to contribute to healthy societies, ecosystems and economies and also because of the economic consideration that CSR will enhance the long-run financial position of the organisations.

Statement of the problem

Performance and growth of large-scale business organisations has traditionally been viewed from the financial perspective, with little or no attention given to the corporate social responsibilities. This is a disadvantage when it comes to achieving long-term results, adequate levels of customer satisfaction and employees’ creativity and innovation. By placing less emphasis on environmental responsibilities for example, many organisations have lost substantial customers and their reputation in this business world. Also, by failing to measure up with the economic responsibilities, businesses are open to losing market share to competitors, falling productivity and efficiency, losing key staff, experiencing steadily reduction in profit margin. It is worrisome that the rate of complaints from societies regarding social responsibilities and poor service delivery of organisations is alarming. An organisation that gives little or no attention to satisfying its immediate and extended environment will likely fail to perform significantly when compared with other organisations in the same industry.

The problem of this study is that the little or no attention given to corporate social responsibilities by Large-scale Business Organisations (LSBOs) may led to down-sizing and complete winding-up of many of such organisations due to financial insolvency when the organization starts falling. This will result in loss of substantial investment by investors in the organisations, retrenchment of workers and increase in the level of unemployment with related vices such as armed robbery, kidnapping and youth restiveness. If this ugly trend is not urgently reversed, the state will lose its attraction to investors, standard of living will fall. Growth in some large-scale business organisations have not been improved considerably even with the maximum attention that is given to financial indices. This makes it imperative to conduct this study so as to determine whether corporate social responsibility relates to the growth of large-scale business organisations in Akwa Ibom State.

Purpose of the study

The purpose of this study was to examine the relationship between corporate social responsibility and growth of large-scale business organisations in Akwa Ibom State. Specifically, the study aimed at examining the relationship between;

1. economic responsibility and growth of business organization in Akwa Ibom State,
2. environmental responsibility and growth of business organization in Akwa Ibom State,

Research Questions

The following research questions guided the study.

1. What is the relationship between economic responsibility and growth of business organization in Akwa Ibom State?
2. What is the relationship between environmental responsibility and growth of business organization in Akwa Ibom State?

Null Hypotheses

The following null hypotheses were tested at .05 level of significance.

Ho1 There is no significant relationship between economic responsibility and growth of business organization in Akwa Ibom State.

Ho2 There is no significant relationship between environmental responsibility and growth of business organization in Akwa Ibom State.

Research Method

The ex-post facto research design was adopted for the study. The study was conducted in Akwa Ibom State. The population of the study comprised 286 managers of all the 38 large scale business organizations in Akwa Ibom State. A sample of 126 managers was drawn from the population using simple random sampling technique. The researcher-made structured questionnaire with 20 items which was titled: Corporate Social Responsibility and Growth of Large Scale Business Organisation Questionnaire (CSRGLSBOQ) was used for data collection for the study. The questionnaire was divided into two sections (I and II) section ‘I’ contained the personal data of the respondents. Section ‘II’ was further divided into two sub-sections A and B. Sub-section A contained the statements on the variables grouped into two clusters namely; economic responsibility, and environmental responsibility while sub-section B contained items on Growth of Large scale business organisaion. The response options were: Strongly Agreed (SA) - 4 points, Agreed (A) - 3 points, Disagreed (D) – 2points and Strongly Disagreed (SD) - 1 point. The instrument was subjected to face-validity by two experts in the department of Business Education, Universitoy of Uyo. The internal consistency of the instrument was determined using Cronbach’s Alpha technique and a reliability coefficient of 0.87 was obtained. The questionnaire was administered on the respondents by the researchers and 125 copies were returned representing 99% return rate. Pearson Product Moment Correlation coefficient was used in answering and testing both the research questions and hypotheses.05 level of significance respectively. In answering the research questions, the relationship between the corporate social responsibility variables and growth of large scale business organization are determined using the calculated coefficient where a positive result was obtained, it is assumed that there is a positive relationship between the two variables, if otherwise, there is a negative relationship. Conversely, in testing the null hypotheses at .05 level of significance, Ho was accepted at the expense of HI when P-value was greater than .05, otherwise Ho was rejected.

Results

Research Question 1

What is the relationship between economic responsibility and growth of large-scale business organisation?

Table 1: Pearson Product Moment Correlation of the relationship between economic responsibility and growth of large scale business organisation n= 125

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The result presented in Table 1 reveals that the correlation coefficient (r) is 0.68. This means that economic responsibility has a high positive relationship with the growth of largescale business organisaion in Akwa Ibom State. This shows that economic responsibility is a crucial factor that enhances the growth of largescale business organization.

Research Question 2

What is the relationship between environmental responsibility and growth of largescale business organization?

Table 2: Pearson Product Moment Correlation of the relationship between environmental responsibility and growth of large scale business organization. n= 125

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The result presented in Table 2 reveals that the correlation coefficient (r) is 0.72. This means that environmental responsibility has a high positive relationship with growth of largescale business organization. This shows that being environmentally responsible can facilitates the growth of largescale business organization.

Testing of Null Hypotheses

Hypothesis 1

There is no significant relationship between economic responsibility and growth of largescale business organization.

Table 3: Pearson Product Moment Correlation of the relationship between economic responsibility and growth of large scale business organisation. n= 125

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The result presented in Table 3 reveals that at 123 degree of freedom the calculated p-value is lesser than the alpha value of .05. Therefore, the null hypothesis which stated that there is no significant relationship between economic responsibility and growth of large scale business organization is rejected. This mean that there is no significant relationship between economic responsibility and growth of large scale business organization.

Hypothesis 2

There is no significant relationship between environmental responsibility and growth of large scale business organization.

Table 4: Pearson Product Moment Correlation of the relationship between environmental responsibility and growth of large scale business organization. n= 125

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The result presented in Table 4 reveals that at 123 degree of freedom the calculated p-value is lesser than the alpha value of .05. Therefore, the null hypothesis which stated that there is no significant relationship between environmental responsibility and growth of large scale business organization is rejected. This mean that there is a significant relationship between environmental responsibility and growth of largescale business organization.

Discussion of findings

The result of research question one and hypothesis one revealed that economic responsibility has a positive relationship with growth of large scale business organisation and that there is a significant relationship between economic responsibility and growth of large scale business organisation in Akwa Ibom State. This finding correlated with the findings of Eze and Bello (2016) who find out that economic responsibility underlines the necessities for a business working inside a community to perform in a way obvious with expanding compensation per offer.

The result of research question two and hypothesis two revealed that environmental responsibility has a positive relationship with growth of large scale business organisation and that there is a significant relationship between environmental responsibility and growth of large scale business organisation in Akwa Ibom State. This finding correlated with the findings of Obi (2011) who concluded that being socially responsible is good for both the society and the organization executing the social projects and programmes.

Conclusion

The concept of CSR has continued to be the subject of academic and business debate. CSR pertains to business actions taken for reasons beyond the direct profit interest. One of the key features addressed by CSR is its intent to cause companies to recognise responsibilities to stakeholders (customers, communities, employees and suppliers) outside of shareholders. The common reasons why businesses undertake in CSR activities include the ethical demand to be socially responsible; the economic consideration of the long-term financial benefit of CSR; employee motivation; risk reduction; market position enhancement; cost savings; and brand protection. Without doubts, the profit maximising objective of businesses can conflict with the CSR objective because pursuing CSR activities may involve some profit sacrifices on the part of businesses in the short run, however, in the long run corporate social responsibility could bring about general growth in the operation of large scale business organisation. Therefore, CSR requires a balancing act of maximising profit whilst at the same time serving key stakeholders.

Recommendations

Base on the above conclusion on Corporate Social Responsibility, the following recommendations stand to be made.

1. Federal government should provide enabling social and political environment to motivate companies in Nigeria to carry out sustainable social responsibility to improve the lives of Nigerians.
2. The Federal Ministry of Environment and other agencies saddled with the responsibilities of enforcing environmental laws in Nigeria should adequately be funded to be able to manage the activities of the government.
3. The Government of Nigeria should put into law, which is providing a legal framework for companies on Corporate Social Responsibility. This will make CSR to be taken seriously and seen as obligatory as against non-obligatory.

References

Deegan, C. (2002). Introduction: the legitimising effect of social and environmental disclosures -a theoretical foundation. Accounting, Auditing and Accountability Journal 15(3), pp. 282-311.

Esene, R. A. (2015). Introduction to business and management. Agbor: Royal Place Press.

Eze, S. C. and Bello, A. O. (2016). Corporate social responsibility in Nigeria: a critical review of the literature. International Journal of Business and Management Review. Vol.4, No.10, pp.86-103.

Gray, R., Kouhy, R. and Lavers, S. (1995). Corporate social and environmental reporting: a review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing and Accountability Journal, 8(2), pp. 47-77.

Guthrie, J. and Parker, L. D. (1990). Corporate social disclosure practice: a comparative international analysis. Advances in Public Interest Accounting, 3(1) pp. 159-176.

Kotler, P. and Lee, N. (2005). Corporate Social Responsibility (CSR) Activities. John Wiley & Sons Inc., New Jersey, 2005.

KPMG, (2008). International survey of corporate responsibility reporting [online]. Amsterdam, KPMG .Available from http://www.kpmg.com/lu/en/issuesandinsights/ articlespublications/pages/kpmginternationalsurveyoncorporateresponsibilityreporting2008.aspx. Accessed 26 July 2021

McCabe, P. (2005). Research Paper on Corporate Social Responsibility. The Paper Stores Enterprises Inc. New York, 2005.

Nigeria Institute of Management (2009). Entrepreneurship study pack. Lagos: Management house Press.

Obi, J. N. (2011). Corporate social responsibility: how socially responsible are business organizations today? International Journal of Social Science, vol.3, no. 6. ISSN: 2382-142x

Udukeke, O. F. (2015). Human resource management challenges and operation of large-scale business organisations in Delta State. An unpublished M. Sc (Ed) Thesis, University of Uyo, Uyo, Akwa Ibom State.

Ukandu, C. N., Azubuike, C. R., Onuoha, M. I. Chukwu, M. K. and Emelike, N. O. (2013). Small business management. Enugu: Immaculate Publications Limited.

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