University of Nigeria Research Publications

OTISI, Olamma Chioma

Aut

hor

PG/MBA/93/18141

Title

Social Responsibility and its Implementation By Business Organizations

Facu

lty

Business Administration

Dep

artm

ent

Management

Dat

e

March, 1997

Sign

atur

e

1

SOClAL RESPONSII311LHTY AND ITS IMPLEMENTArFIBN !

DEPARTMENT OF MANAGEMENT FACULYT OF BUSINESS ADMIINISTIRATION

UNIVERSI'I'Y OF NIGEJIIA, ENUGU CAMPUS

MARC ti, 199%

CERTIFICATION

This is to certify that this research work was independently c wried out

and written by Mrs. Olamma Chioma Otisi of the Depa tment of

Management, University of Nigeria, Enugu Campus.

To the best of my knowledge this work has not been subtnitte either in

part or full for any , other diploma or degree of this or any other

University.

................................ Li -3.

DR. m. EWURUM

HEAD OF DEPT. OF MANAGEMENT i

SUPERVISOR

T)EDlGATION

This work is dedicated to my I~uslvind lCa1rr Otisi Esq.

ACKNOWLEDGEMENT

My immense gratitude goes first of all to the Almighty Gocl for keeping me

alive and providing me with everything I needed to carry o ~t this project.

I also wish to say thank you to Dr. Ikeagwu, my project st pervisor for his

excellent academic. He took his time to supervise this work thoroughly and

he really helped me to stay on course.

I also wish to express my gratitude to my husband. He g:lve me a11 the

financial and moral backing that I needed to carry out thi work.

My thanks also goes to my friends and dwell wishers am I any body who in

one way or the other contributed to make this work a suc cess. .

Otisi, O k m m a Chioma

March 1997.

CHAPTER TWO REVIEW OF E L A T E D LITERATURE =

- - - - - - - - 11 CORPORATE SOCIAL RESPONSIBILITY - - - - - - - - 11 AN OVERVIEW = = - - - - - - - - - - - - - - 11 NATURE OF CSR - - - - - - - - - - - - - - - - 12 EVOLUTIONOFCSR = = - - - - d - - - - - - - 12 THE SCOPE OF CSR = - - - - - - - - - - - - - - 14 SOCIAL RESPONSIBILITY = = - - - - - - - - - - 15

- THE ATTITUDE OF BUSINESS ORGANIZATION TO CS 3 = - 16 OPPORTUNITIES - - - - - - - - - - - - - - - - 21 ROLE OF THE BUSINESS CORPORATION = - - - - - 21 IN PROMOTING ENVIRONMENTAL SAFETY AND PUBLIC HEALTH - - - - - - - - - 4

- - - - 25 DIFFICULTIES ENCOUNTERED B'i CORPORATIONS IN CSR = - - - - - - - - - - - - 30

CHAPTER FOUR PRESENTATION AND ANALYSIS OF DATA = = - -

COMPANYPROFILE = = - - - - - - - - - - - -

BUSINESS FIRMS; OBLIGATION = = - - - - - -

FIRMS ENGAGEMENT NON-PROFIT SOCIAL ACTIVIT113S FIRMS INVOLVEMENT IN ENVIRONMENTAL POLLUTION CONTROL - - - - - -- - - - - - HINDRANCE TO FIRMS CSR - - - - - - - - -

IMPLEMENTATION = - - - - - - -- - - - -

TEST OF HYPOTHESIS 1 THE ATTITUDE OF BUSINES: COWOJUTION TO CSR = - - - - - -- - - - -

TEST OF HYPOTHESIS 11 SOCIETAL PROBLEMS AS BUSINESS OPPORTUNITIES - - - - - - - - - -

BUSINESS ORGANIZATION IN POLLUTION CONTROL =

TEST OF HYPOTHESIS IV HINDRANCES TO CSR OF BUSIN-ESS ORGANIZATIONS = = - - - -

CHAPTER FIVE DISCUSSION OF FINDINGS = = - - - - - - - - - 54 ATTITUDE OF BUSINESS TO CSR = = - - - - - - - 54 SOCIAL PROBLEMS AS BUSINESS OPPORTUNITIES - -- - - - - - - - - - - - - - - 59 ROLE OF BUSINESS CORPORATIONS IN PROMOTING ENVIRONMENTAL SAFETY AND PUBLIC HEALTH - - - 61

DIFFICULTIES ENCOUNTERED BY CORPORATIONS IN CSR = - - - - - - . - - - - 6 3 CONCLUSION AND SUGGESTED AREAS FOR FURTHER RESEARCH = = - - - - -- - - - - - 66

ABSTRACT

The purpose of this study is to cvnluate the exlent of awareness and acceptance of

corporate social responsibility by busitless organization and to lvhat cxtent it is

marched by appropriate policics and activi tics.

The questionnaire instmmcnt of data collcction was e~nployed so as to be able to

collect data primarily li-om dlc sclcctcd sourccs.

AAer k c collcction and analysis ofllic data the Soilowing firidings werc made:

1. Dusiness urgat~izalions hiwc not rcally acccplcd their corporate social

respo,lsibili ties.

2. Business organizations do [lot develop profit-making ventures in area o f .

ncedcd social in~provcmcn~.

3. Business orgi~nization are n c ~ t playirlg active role to curb environmental

pollution so as to prornote the safety and health of the public.

CHAPTER ONE

INTRODUCTION

I3usiness Organizations do nol exist in a vacuum. TIicy cxist i I an cnvironmcnt

f b m which thcy draw their resources and limitations. Their en7 iron~nent include

physical elen~ents, human resources, legal requirements, llolitical climate,

regulations am1 attitudes. 'Thc socicty where tlic business Or€ ~nization cxist is

certainly a very crucial aspect of its environment. The interd:pendcnce of the

business Organization and the Community is obvious. Th ; socicty having

comq-dtcd its vduahlc rcsourccs lo tlic business, in rcturr rcccivcs goods,

services, money nnd other production ef'fccts, of both positive a. id negative nature

from the business. A business Organization especially one in he manufacturing

sector brings along with it essential services to scrvice the operations of the

Company. For instance, electricity to operate its machines, jipc borne water,

which are extended to the immediate Community harbouring t ie business. Also

big Companies attract subsidiary Conipanics which provide at xiliary services to

their operations. Thcse subsidiary Companies extend their ser ices to immediate

Community, ttiercby also contributing to the advancement of tht environment they

habituate.

The e k c t of the Colnmunity on thc Organizntio~i may be just is important as the

eEect of the Organization on the Community. The influence ol one on thc other is

reciprocal and just like every other thing, is also constantly cE ~nging in kind and

degree. As Hicks ancl Gullet, 1981 put it, "the interrel !tionship between

Organizations ancl their environnient lias become increasing y irnportant.

The decisions made in large and complex Organizations way for example

influence Comnmnif y prosperity ... Employrncnt and train ng policies can

determine job opportunitics for the disadvantaged. The installation of

pollution control equipment might improve the quality of a r and water in

plant's areas. It may also result in a change in production I. ost and possible

increase in thc price of goods produces ..." The society as wcll as mnnagcrs of'Organizations have become 11 ore aware of this

unavoidable interdependence, as the business Organization is bei \g seen more and

more,as an open system, that is part and parcel of the society. Dl .e to this existing

interrelationship, thc expectations of the society on thc busir :ss Organization

continues to it~creasc. Apart from its traditional purpose which s to cngnge itself

in economic activities, they are also expected to get involved in other matters

affecting the Cotnmunity we1 fhre, which is otherwise known as ( hrporale Social

Responsibility.

According to Kast, 19 ... Corporate Social Responsibility is :he ''Notion that

Corporations have an ohliption to Constituent Grorrps in . he society other

than StockhoMers, and beyond that prescribed by law or mion contract".

The concept of Corporate Social Responsibility g c w as a rcs 11t of the change

from predominantly cconornic rnodcl of business toward a wid( r socio-economic.

view. While tllc economic rnodcl placed primary emphasi; on production,

exploitation of resources, individual interest, a minor role for government, and

qeneral view of the busincss as a closed system, thc socio-econor ~ i c nlodel hinges L

on the ovcrall quality of life, conservation of resources, Con munity interest,

active government participation and an open system view of busin :ss.

Initially, business Innnagcrs as well as thc society, in tine w i h the school of

thought of Milton Friedman, thc Economist, noted in Hicks 3 ncl Gullet, 1981

accepted the social responsibility of business as being restricted t J their economic

performance. 'l'hey bclievcd that the only responsibility of a bu: ilicss is lo make

as much profit for its owners as possible.

It wag considered outside the jurisdiction of busincss to niecidlc M th social matters

that are not purely profit-oriented.

In recent years tl~ough, there have been profound changes taking I lace in the cntire

business world. The Commi t tee on Ecorlomic Development, J 971 confirmed

that Corporations "have also been developing internally in wa: s which are not

so obvious but are of great importance in shaping their role i n society". One

of the most important changes is the change in ownership st m e of business

Organizations. Instead of business being seen as a projection oi the sole owner's

individual interest, it is now viewed and managed as permanent institution in the

society whcre the professional manager assumes thc roIe of truste IS not just for the

shareholders but for other cver widcning claimants or conslituencics.

Consequently, the objective of busincss is no longcr just thc imn- d ia tc cash profit

but also long-tcnn non-cash goals like growth, survival, pr Aic respect and

acceptance. According to Rock Feller, as notcd in Charles ''hilips 1926, the .

concept of business owners having the right to use their resourl cs any how they

desired w i h the sole aim oI'rnaking maximum profit has inetarn ~rphosed into the

idea that there is an inherent social obligation in biisiness owners' lip.

fPL --a changes enhanced the second view of Corporate Social Responsibility,

according to Drucker, 1974 crnphasizes thc contributit n that business

cations can make to tackle and solve problems of the societ; . In this case, it

:ved that Iwsiness has to play an active role in the society w' [ere it exists and

L U I I G L I ~ ~ .

Nevertheless, Social Responsibility is an area, which the modcr I business must

develop a stance, marched by appropriate policies and activities. Such activities

have been identified and categorised into two brand areas by Honible, 1973.

Quoted by Hicks and Gullets as folIows:

A.

THE OUTSIDE WORLD - This includes activities, which

divided into:

hrther sub-

(a) SOCIAL RESPONSIBILITY AND NEW OPPO < 1 UNITIES -

Activities undcr this heading involves developing profit-rn king ventures in

areas of needed social improvement.

(b) CONSUMER RELATIONSI-TIP - Establishing standard: in such areas as

advertising, product safety and accurate labeling.

COMMUNITY RELATIONS - Developing construc .ive relations hip

with those in the Community.

POLLUTION - Meeting established environmental stand ~rds, determining

the impact of new products on pollution level.

PACKAGING - Using recyclable packaging materials where possible.

Analyzing the environtncntal consequences of different typ :s of packaging.

INVESTMENT RELATION - Considering social is ;ues in making

investment decisions.

SHAREHOLDER RELATIONS - Developing efl :ctive two-way

communications with Shareholders. Explaining the firm activities in the

field of social rcsponsihil ity. Encouraging Stockholders to ask questions

,about what the Company is doing.

INSIDE, THE BUSINESS - These include activities n the following

areas:

PHYSICAL ENVIRONMENT - Making the working plr x safe and

pleasant.

WORKlNG CONDITIONS - Making sure that rccruitmc ~t and

placement activities arc efficient and non-discriminaory; developing

equitable pay policies; counseling with employees who arl laid off to help

them find othcr employment.

Nigeria, like other societies of the world, for instance the United : ltates of Anierica

and Britain have also been hit by this new wave of expec. ations of Social

Dqonsibility from business Organization. There have bccn instances of

mifested agitation by some Co~nrnunities owing to these e: pectations. For

;tame, Vanguard, 1995 recorded that over one thousand armed youths of the oil

producing Fghtma District of lmo State sacked Shell Compan! , damaging their

equipment, their grievances being

that their thirtecn villages where Shell had their installations, we e still wallowing

in poverty without water and electricity. In other words, the pet lple expected the

Company to have done something concrete in solving the socia problems in the

Community where it exists and operates.

Business Organizations have occasionally engaged in some so( ial performances

which are gestures of social responsibility. In other words, 30th society and

managers in Nigeria are aware and are also affected by this g :owing business-

societal interdependence. Yet, critics like Hicks and Gullet, 191 1 argue that most

business f irm get involved in Corporate Social Responsibilit activities b'J~~s t

as window-dressing designed for a maximum pubtic relation effect". Others

according to Adewale, 1995 simply pay lip service to it. T le extent of this

awareness and acceptance of the concept of Social Responsib:lity, and to what

extent i t is being marched by appropriate policies and activities i ; the central issue

in this research.

STATEMENT OF PROULEMS

The purpose or this study is to evaIuate the implementation of Zorporate Social

Responsibility by business Organisations which justify their existence in the

society.

STATEMENT OF SUB-PROBLEMS

SUB-PROBLEM I - The purpose of the study is to investigate whether business

;anisations have accepted the concept of Corporate sock l Responsibility,

ich justifl their existence in the Community.

SUB-PROBLEM 11 - The purpose of the study is to investigate whether business

Organisations develop profit-making ventures in areas ox needed Social

Improvement so as to alleviate the problems of the Community.

SUB-PROBLEM TI1 - The purpose of the study is to find out whether business

Organisations me actively involved in cnvironmcntal pollution r onlrol in order to

preserve the physical environment and promotc public health.

SUB-PROBLEM IV - The purpose the study is to find out whether busitless

Organisations encounter somc obstacles which hinder impler lentation of their

Corporate Social Responsibility activities.

HYPOTHESIS

HYPOTHESJS 1 - Business Organisations have accepted the concept of

Corporate Social Responsibility which further justifies the i~ existence in the

Community.

HYPOTEIESTS I1 - Business Organisations develop profit-n- king ventures in

areas of needed social irnprovcment thereby alleviating the problems of the

Community .

HYPOTHESIS 111 - Business Organisations are acti\:ly involved in

environmental pollution control thereby preserving the physica environment and

promoting public hcalth.

HYPOTlIEISl 1V - I3usincss Organisations encounter obstacle ; which hinder the

implementation of thcir Corporate Social Responsibility activit es.

SIGNIFICANCE OF THE STUDY

It is hoped that this research will help to highlight the various racets, views and

requirements or Corporate Social Responsibility. Through th s study also, the '

theoretical and practical stand of managers in the delineated are IS of inquiry will

be ascertained.

Hopehlly too, this work will serve as a good starting point for : tudents and other

categories of researchers who may want to do some further rc search on this or

related topics.

Managers of the sampled Organisations may also find the work interesting, as an

evaluation of their standing on social performance aspect of their responsibilities.

LIMITATJONS OF THE STUDY

The greatest 1 imitations experienced by the researcher was in t' le area of finance

and time and since the researcher is unemployed, full time itudent could not

generate enouyh finances to conduct a much more in-depth stu ly as she desired.

Domestic constraints also played a part in limiting the stuc y area to Enugu

Metropolis.

SCOPE OF THE STUDY

Due to financial, time, and clomestic constraints, the research i 1; focused only on

business Organisations in Enugu Metropolis. The Organ sations uscd are

categorised into Mrlnnfacturing, Service, Merchandise and A? ricultural.

DEFINITION OF TERMS

ORGANIZATION: Organization is defined "as group o' people brought

together for the purpose of achieving objectives", grew out o 'thc pressing need

for a combined and coordinated efforts of pcoplc in order t ) adequately meet

individual and societal needs. Diverse Organizations are emar ating and growing

as fast, and as complex as the society itself, especially business I )rganizations.

RUSTNESS ORGANIZATION: An Organization is referred 1 , as business if its

primary or traditional purpose for existence is lo make profit >y production and

sales of goods and/or scrviccs. To identify a business Organi :ation, we have to

look at its purpose. Drucker, 1998 maintains that "its purpo?: must lie outside

the business itself, in fact it must lie in the society. There is only one valid

definition of l~r~siness purpose - to crentc a customer... whose patronage

enables the hrrsiness to earn returns on its investmentn Marketing and

ation are the distinguishing functions of a business. A b ~siness is sct apart

all other human Organizations by the fact that it markets a xoduct or scrvice.

sts to provide different economic satisfactions.

A BUSINESS ENVIRONMENT: A Business Environment c motes the society

or community in other words the place where the business is.^ tuatcd and carries

out its hnction of production and marketing of goods or serviccs. The

environment includes not only the physical Iocation and elelncn s but other fi~ctors

such as the legal rcquirernent, socio and political climate.

CORPORATE SOCIAL RESPONSIBILITY (CSR): Corpor: te Social

Responsibility is the notion that a business organization or n corp xatc cntity has

an obligation to the society wherc it cxists and operates. This obl gation tra~~scends

its economic interest and encampasscs other social needs o f t ~c community. In

other words thc responsibility of the business organization is not just to make

profit but also to get involved in solving societal problems. T' re organization is

therefore obligated to oiher constituent group in the society ap id from its direct

stakeholders.

CHAPTER TWO

REVIEW OF RELATED LITERATURE

CORPORATE SOCIAL RESPONSIBILITY: AN OF ERVIEW

Business obviously functions by public consent. Its mair purpose has been

to serve the needs of the society, to the satisfaction of tht socicty and to its

own profit -- an obligcllion which they have satisfaltorily discharged

. through supplying the needs and wants of the peop e for goods and

services, crcating jobs a i d providing purchasing power ind producing the

wealth of the nations. That not witlrstanding, advocates c CCorporatc Social

Responsibility state that Managers must consider both thl primary needs of

society and the broad set of human needs in their decisior s. In the words of

Mondy, 1988 "in meeting with its social responsibilitir s, a firm must be

concerned with more than narrow technical and legal requirements. It

should recognize that an obligation exists to protect and enhance the

intcrest and welfare of not only the Corporation bwt also those of the

society''

Corporate Social Responsibility (which may hencefort' I be referred to as

CSR) has been further defined by Mondy, 1988 as "an mplied, enforced,

or felt obligations of managers acting in their official r apacities to serve

or protect the interests of groups other than themselvfi* "

Business Organizations which are regarded as socially re: ponsible are those

that consider both the economic as well as the social imp: ct of their

decisions. Such Corporations behave as though they ha. .e conscience and

according to Ferell, 1989, assume the obligation of maximizing their

posi tive impact and tninirnizing or iT possible, elimin ding its negative

impact on society.

NATURE OF CORPORATE SOCIAL RESPONSIBIJ JTY

'The central fcaturc of CSK is that it must be voluntarq and involvcs the

. discretion of Managers. According to Kast, 19.. .. "An c lemcrlt in CSR is

that willingness to anticipate anti act on potential social problems

without waiting for legal actions or direct regulatior ". In this vein

therefore, CSR assumes a form of self-control. Behav our or any social

action that is as a result of coercive forces of law or un on contract is not

voluntary and is not therefore regarded as Csrporate Social

Responsibility.

EVOLUTION OF CORPORA'TT SOCIAL RESPONF IBILITY

The origin and development of Corporate Social Resp msibiiity may be

seen in the following three courses:

THE INDUSTRIAL REVOLUTION DRAWS ATTE? TION TO THE NEEIS FOR CORPORATE SOCIAL RESPONSIBIL' a --

During the second half or thc 191h cunlury, owing to the industrial

r e v o l u h , and its attendant increasc in efficiency of man ~facturing

process, which brought about increase in demand for man ~factured goods,

there was a trerncndous devclop~ncnt in business. Wo .king conditions

howcver which reflectcd the concepts of scientific man: gerncnt did not

improve. Johs bccamc highly specialized, pay was b ised on output,

employee benefits such as sick pay, paid vacations and o on were non-

existent. At this stagc, busincss was prcvalcntly vicwc 1 from a purcly

cconotnic tnodcl and n closed system.

.l3usiness was largely responsible for defining how they ntcract with the

society. Most busincsscs decided not to engage in polluti In control, good

working conditions and employee benefits, simply becau: 2 they increased

cost. Business were not held accountable for their action and impacts on

society. These abuses intensified as business also nultipl ied, un ti1

government intervention on behalf of consumers and en ployees seemed

inevitable.

THE EARLY DEVELOPMENT OF CSR

The intervention of government in these issues were minirr 11 though,

but business organizations eventually and gradually became a bit

responsive to the needs of at least their immediate : takeholders like

workers and customers. 'Thanks to Ihe free market econc ,my, competition

intensificd and soon business realized that more than efl cient production

and aggressive sales methods (which were greatly elnr hasized between

1920's and 1950's) were needed to increase profit. They I eeded to develop

identities on which to buiId their cvcr increasingly product lines.

SOCIAL RESPONSIBILITY TODAY

By the early 1950's, they bcgan to come to grips with tl e fact that they

needed to producc pr.oclucts that would meet the cons11 ncrs needs. It

mrked tllc dawn of consumer orientation, and for once lerc was public

outcry dwut product sal'cty and reliability; workcrs too demands better

working conditions. A widc varicty of laws and guidc ines rclating to

product safety, labeling, warmntces. advertisements, packa ling, pricing and

,envirrmmcntal issues emanated. Social responsibility seer. led abstract then

but Mar~ngers considered it daily as they dealt with real iss les.

Also cvitlcnt in those agitation was a greater emphasis by he society on an

overall quality of life to be achieved for the entire citiz :nry within well

functioning communities.

THE SCOPE OF CSR

The goals ofthe society as [hey press for a better quality ( f life. which also

represents the scope of Corporate Social Responsibilil t encompass the

followin% issues:

Q Elimination of poverty and provision of good hcalthcar :. *:* Equal opportunities for each person to realize his or her full potential

regardless of race, sex or crced.

+3 Education and training for fully productive and rewar .ling participation

in modcrn society.

Q Amplejobs and career opportunitics in all part ofthc soc cty.

+:* Lovablc Conimunitics and clcccnt housing, safe strcc s. a clean and

plcasnnt environment, eflficient tmnsporlation, goo( cultural and

educational opportunities and a prevailing mood of ci\ ility anlong the

SOCIAL RESPONSIBILITY: WHY BUSINESS CQRPO~L~TIONSICONCLUS~ON -- --

Over thc ycars, t lwe has been a noticcablc incrcase in the public

expeclatio~~s of business. Studies by opinion research co poralion during

1970 sho.rw that ". . .two-thirds of the resporldcnis believe I. ~siness 11ow has

a moral obligation to help other major institutions to achieve social

progress, even at the expcnse of profi (abi lity".

Society is turning to Corporatiolis Tor solutions to yrobk Ins likc povcrly

and urban flight, not so much because it blames busine: s singularly ibr

creating these ills but because it feels that large corp )rations process

considcrahlc resources and prohbly skills that could m: ke a significant

diffcrcncc in solving these problems.

The sepmrrtion of ownership and management of business also conlributed

to this changing role of business. hs iness Corporations ire seen and nm

like a pcrmancnt iristitutioli i n the society and managers 1 avc coine to see

owners only as one of the groups that they have to serve. I'he prorcssionnl '

managers' role has evolved to that of trusteeship for . wide railge of

claimants.

Also tiota!de is thc rcason that government has been seen tc bc incapable of

adequnlc~y meeting all of'socictics ilcccls. I t has railcd in i l ; traditiot~d role

ol- tlic Irir; fallter and provirlcr of dl . 'ff I=: pcoplc having rcnlizcd this are

forced to look to other niorc promising sources for help - hence business

cnrporat i ons.

As o r l w e grown, thcrc Ii:~vc also dct :loped sizcablc

constilw~cit .~, pcoplc whosc intercsls arc linkcd with the Corporatirm and

.whose support is cssct~tial Tor the succcss or Corporalio~~ ;. Accordirig to

the com~niitce on cconomic development, 197 1 "in rcl: lion with their

constitr~cncies aud with the larger society, corporations operate today

in a n intricate matrix of ohligations and responsibili ics. .. the great

growih of corporations in size, market, power and in pact on society

has naturally brought with it a commensura e growth in

responsibilities. In a democratic society, power sooner or later bcgets

equivaletit accountability".

THE ATTIDUDE OF BUSINESS ORGANIZATIONS '

Corpornfe Social Responsilhility like any other new development or

dep:irlurc from the society's original way of-doing things, vas responded to

by various business owcrs , arid managers in different w ys, ranging from

total rcjcction, to verbal acceptance without practical acti.,ities, to absdutc

acceptatwe backcd will1 practical involvement. Thcse . ttitudes to CSR

being susccptil~le to change, we find these stages of dcv :loplncnt (as one

may call it) in various places a1 di ffcrcnt times in their bus ncss history.

In a two year research pro-ject conducted in Britain, hnd:d by the social

science research council in the early l98O's, according tt Harvey, 1984,

their central inquiry was whether Corporate Social Respo~ sibility exists in

observed managerial practice and whether in addition t ) the pursuit of

commercial goals, firms are involved in providing pri\ ate solutions to

public problems, and also whether perhaps in the field of redundancy, the

quality o f working I i k. equal opportuni tics or environ~ lental pollution,

managers pcrccive the role of their business cntcrprise in st ciety.

The result show that T3ritish Managers do not normally s :e themselves as

confronted by issues of social responsibility but rather a series of day-to-

day prohlerns, and they think of the term CSR and im ~ortcd American

abstraction. Managers from the four firms studied saw the business of

business as making profits. This report suggests with e ridence from the

three of the Companies, which is more typical of Britisl Corporations, n

definite no or at least that these new element of CSR wil not find its way

into their Corporations easily.

Of all the four cases studied though, one of them was most positive in

relation to CSR. The question then is whether this exc 2ption portrays a

new wave of CSR in Britain. The researchers observe 1 that "certainly

there is a new mood among ... business leaders that the time for 'private

solutions to public problems' has returned with Co -porations being

urged to take on extra social responsibilities...".

According to Mondy, Sharplin and Flippo, 1988 in their work

"Manayenlent: Concept and Practices" a survey of 232 large

17

Corporations revenlcd that approximately two-thirds have definite policies

regarding social responsibilities and special organizatior al units to deal

with these areas.

Tn another dcvclopment, the business Roundtable, a ma.jor business

association consisting of CEO's of 200 of the largest Co porations in the

Unitcd States took a stnrd on the issue of CSR. IIere ; re sotne experts

which indicate that they are in support of CSR.

."The long tenn viability of the business sector is linked to its responsibility

to the socicty o f which it is a part ... manageine~lt must he mcasul-cd for

perrvrma~lcc in non-coonomic and economic areas alike".

"Corporations must closcly touch people's lives in the individual

coilununities wllcrc they opcratc. Here thcy are expcctcc to bc conccrncd

with local needs and problems - schools, traffic, 1 ollution, health,

recreation".

Coming to the American scene, as far back as 1951, on July 21, the board of

directors of the A.P. Smith Manufacturing Company adopted a ,esolution, which

appointed the sum of one thousand five hundred dollars to Prin ;eton University.

This decision was made in line with their convictions on the pub1 c responsibilities

of corporations. Put in their own, words "whereas it appears that here is a growing

recognition that corporations, which in their own capacities el joy many of the

benefits of citizenship, are under obligations, greater in times of prosperity to

assume their part of the burden of citizenship, onc of such l. ~ rdens being the

support of voluntary charity including the privately supported uni ~ecsities".

The findings of a research in America by the research and policy committee of the

Committee Tor Economic Dcvclopment show that there is also a social rathcr than

economic aspect of a business responsibility. It also revcals tlia corporatio~ls arc

undergoing siguificant changcs. One of the rnqjor changes is tha corporatioris are

now hcing vicwed and operated as permanent inslituliclns in the society. The aim

of the manager therefore is to dcvclop long term goals such a! survival, growth

and increasing respect and acceptance by tllc public currcnt prc Stability that was

once v icwd ;IS the dormant or even exclusive objective is now sccn as an

impodant tmcnns and a strong motivating factor to achieving broo ler ends.

Still on the new trends in corporations, the research findin :s show that the

professional ~nanagcr now sees Iiimself as a trustee balancin ; the interests of

different constituents or stakeholders in the enterprise. Efforts ar : also being made

to enhance the effectiveness of boards of directors. All these im rovements on the

organization of corporations, according to the research report arc "designed to

market the corporation more responsive to its conslituencies and to thc larger

society while maintaining managerial decisiveness that is req tired for eficient

operations in the business world. Thus the modcn~ manager sees thc corporation as

a social as well as an economic organization fhnctioning in tl ole of society --

rather than just in the market".

Also the results of a survey at the Standford Busincss School lerica indicate

that out of the 150 companies h t responded to the question 'sr o u ~ i business take

on an active role in solving social problems'? 50% agreed.

Furthennore, in a research conducted in the United Kingdom i r 1975 by Webley,

180 U.K Chief Executives Illat were questioned, 90% agrced wi h Ihe strttenient

Thccdorc 1,eitt. i l l his work 'l'hc rla~lgcrs of Social ksponsibilit; ', also conli~mis

that \jvhat: originated as a sinccre and personal viewpoints of thc wy few sellless

busincssihen have gradually becotnc the prevailing vogue for all. 4ccording to his

work, it is nntct! (hat "loclny pmnouncc~nents about social rcspons bility issr~c h r t h

so abunctantly Iiorn corprations . . . cvcrybody is it1 on the act, ~ n d nearly all of

thctn acturrlly mcan what they say. Dcdication reverberates thro rghout the ripper

reaches of h e cnrporate officialdom".

Also in his work "I'he Changing IColc of h i i ne s s Kockfellcr, t uoted by I'hilip,

1926, came up with the conclusion that the old conccpt of busine ;s owncrs having

the right to use all tlicir resources as they wish with the sole ai n OF maximizing

profits have gradually given way lo a new conccpt that ownersl. ip carries with it

certain social responsibilities and that the contemporary profc ssional business

managers semc as trustees not just for the stockholclers but alsc for the workers

and tl~c elitit-c stx ic ly .

Still in conCir~n?tion of the acceptance of CSR by business organ zations, Hicks &

Gullets, 1981 i n their work 'Environmental and Social Tssucs \or Management'

states that marlagers of organizations like the society havc hec ~ n c increasingly '

awarc of the strong intcrdependcncc between it and the environn cnt. Managers of

organizations cspecinlly the business sector are no more viewed as totally private

endeavours, instead the public consequences of their actions ar : brought to lime

light. Thus social responsibilities has become a significant ssue Tor today's

managcr.

r - I heir rcscarch iuto tliis issuc sliow Illat "lrl rccc~it ycnrs many la gc corporations

have become quite involved in prost-ams of social rcsponsibility. Sometimes such

activities are primarily window dressing, designs for a maximum public re1 a t' I O ~ S

effect. Yet many have made real contributions to thc achievement 4 social goals".

Still in anothcr work done by Ratcrman. 19-- on thc subject of CSK debate, he

notes that it is apparent t h l Inmy more corporations arc becornin; conccrncd with

issues of social responsibility and

the Anti-CSR rcnsoni~y.

Corning to the Nigerian scene, a

that the pro-CSR arguments arc Tar outweighing

research on tlic Nigerian firms altituilc to CSK

conducted by A-ja, 1986 indicates that 87.6% ot' the 96 resp Indents were in

support of the concept of business organizations having a social re ;ponsibility.

Also in his rcsearcli pro-jcct whcrc he evaluated social responsi ility in General

Cotton Mill LrJ.. Omorcgie, 1994 found that business managers a. e pro-CSR.

In another rcscarch conducted at Elf Oil Nig. Ltd., Agaga 19 1 1 confirms that

business f i r ~ t i s have comc to grips with this new collccpt of CSR, md as a result of

their convicticw are involved in all sorts of com~nurlity developtnc ~t activities.

In his rcscarch study on the corporate social responsibility of t ie three sclectcd

business cntcrpmises in Nigeria, Ezeh 1990 discovcred that a sub: hntial awareness

of CSR has bccn created in Nigeria businesses. Findings fro n thesc selected

cornpanics show that recognition has been given to their social rcsponsibility

convictions by way of various practical social responsibility activ ties.

SOCIAL PROBLEMS AS BUSINESS OPPORTUNTTIES

Social problem especially the need for environmeninl irnprovemf nt, have become

2 1

a major issue in societal thoughts. 'Environmental' improvement i: used here in its

broad sense to encompass not only issue like cleaner water and r ir, but also safe

high ways, healthier communities, and a better educated populace.

With much nttcntion given to the cost of environtnental imj rovernent, it is

therefore seen fiom an ne~ative point-something very exorbitant. Contrary to this

prevailing tnood, Quinn argues that "Environmental itnprovemer t can become a

dynamic profit:rble scries of markets for industry-markets th lt will pay for

thcmsclvcs in tlrc c11d ;111d rcprcscnt important addition to GNP. ' ln his opinion,

private enterprises cannot only lncct the chdlcnge but also thriv : on it. Findings

from his rescarcli sliow that demand for environmental imrrovement orfers

opportunities to nearly all types ofcompanies. For instance, to clc In up a river and

the beaches, it requires sewage treatment plant, waste and by pr ]duct processing

units, hcat tratlsfcr units, stom drain and sewage system, cooling towers, .

sophisticated monitoring apparatus and so on which in turn wi I create supplier

market for metal and steel products, pumps and trcatrnent equip ent, construction

equipment, meters, switches, wires, electronic control devices, p astics, ceramics,

glass, chemicals and so on.

These issues the researcher notes, presents tremendous opport~ nitics as well as

threats to the private enterprise. Business have opportunity of tac Iding these social

needs profitably or to be swept away or drastically changed. Fon 1 I , 1970 puts it,

"The successful companies of the last third of the twentieth ct ntury will be the

ones that look at ccl~angcs in their environment as opporlunities to get a jump on

the conlpetition ... these are the companies that will earn the 1 ighest prolits for

their stock-holders by discharging their responsibilities to the soc ety."

In conclusion, he notes that "Evcty new pull i.c. demand fc- cnvir-onmental

improvement represents and unexploited primary market. C o q anies must take

positive action lo convert these demand into viable opportunities ... the choice is

largely up to business leadership".

Another researcher, Cohn, in his survey of 247 major corpora ions provides a

useful guidclinc on business ability to tackle the conlpanies pressing social

problems. 131 h i 4 survey, 12% of the companies studicd are e n g ~ e d with special

urban programs not directly related with race or poverty. Most o 'these programs

are designed to illcrease income, as well as to assist the cities. TI ere were funded

on the vicw on the view that urban problem present a demand or a market for

corporate scrvices and products.

Findings of thc survey show that businesses involved in the urbnr I affair programs

were beginning to realise some direct and tangible returns on its i nvestmcnts. Few

companies (especially those with training expertise) have been able to translate

urban affairs into a market for their products and scrvices and r hcrc cxpcctcd to

increase in nurnbcr as corporate and understanding of urban llliglit grows and

managerial experience grows.'

In another development Rockefeller, narrates thc many exlleriences of his

company, Inlernational Basic Economic Corporation IBEC, n the aspect of

turning pressing social needs to profitable business vent ures. From his

experiences. Rockfeller is of the view that "Business will pro1 it by assuming a

more aggressive leadership role as an innovative force capable of exercising social 99 i udgement, consciously initiating change, and shaping the overall environment . . .

The founders of IBEC had the motive of investing profitably n the developing.

nations of tlic ~vorld in such a way as to improve their social and :conornic

conditions. With sevcral instances, IBEC testifies "We have r lade money by

meeting human needs in an efficient and business like way. Our tl e past tcn y c m

for example our total revenue has nearly tripled, and over stockhc lclers equity has

more than rloublcd."

One of IBEC's earliest Ventures was channelled toward solvini the retail food

marketing prohlcms in Venezuela. The company identified a g :nuine need for

modern efficient rood retailing operations to replace the so c allcil 'bodegas'

method in which thcre were poorly displayed, inadequate stock u f mcrchandisc,

turnover tended to be slow, and margins high. Also niany essentk I items were not

available locnlly or if there wcrc they had to be itnportcd at high cost. This

situations paralysed the average consumer by causing an unneces: arily high prices

for food that was available within the country, arid cl'fectively ( eprivirig hitn of

items that were not. Therefore in 1949 in Marcaibo, working w: 111 local partners

IBEC opcncd thc first chain of super markets. "this created the assured dernand

needed ta establish a host of local suppliers . .. returns on our inv :stmcnt, and that

of our IocaI parrticrs has been lilost satisfactory."

Concluding Rocl~nan notes that "Fundamental to private enterpr se system is the

quality of enterpreneurship, that peculiar ability to anticipate nee Is and turn them

into markets . . . and to look beyond the year end figures to the grc ater environment

in which the corporation lives".

Still in this vein, Drucker 1974 in his work management: tasks responsibilities,

practices, stresses that managers must convert society's needs i nto opportunities

for profitable business. He notes that the society's needs of today like schools,

those that the nineteenth-ccntury e~itrcprcncurs translated into g, owlh industries

like urban newspper. school text books, tclephone and pham~aceu icals and so on.

The new sociuh~ nccds similarly tlc~nand the innovating business I :nturcs.

Continuing in his work, sub-capt ioned 'social problclns are businer s opporlun it ies'

Dn~cker from hic study finds out that though the most significant (: pportunitics for

business may sirnply Iic in solving social problems, in othe. words, social

innovation which then directly or indirectly profits tlic company or the industry,

social innovation is still to a largc exlent left to cllance and t l ~ the individual

entrcprcneur who stumhlcs upon an opportunity.

In his work, Batcman, 19.. stated that proponents of the CRS sugp :st that business

opportunities can be generated from society's necds and that pro its can be made

by a systematic and vigorous efforts to meet social needs in othc r words Yil may

pay to be good.'

ROLE OF THR -. BUSINESS CORPORATION IN PROMOTTrrG ENVIIRONN1 EWTAL - SAFETY AND PUBLIC FIEALTAII. -

For many ycars, business corpora~ions have fi~lfillcd heir basic r Ae of producing

goods and services with the solo aim of incrcasing the shareholdf rs eqoity. It has

developed thc capacity to satisfy the most dctailcd demand: o f consumers. . Neverthelcss, c~~viron~ncntal conccrns and public licalth is one of the social issucs

that has bcen ncglectcd. This i s due to the Fact that business orga iisations used to

see thernsclvcs RS solely economic units. l'hcrefore, any issue that is likely to

increase cost is played down on, even to the dctrimcnt of public w :It-being.

In recent years. however, much alann has been raised, as societ! .'s consciousness

of the prevailing environmental degradation and dangers posed 01 public Iieallh by

industrial operalions deepens. Studies by opinion research corpo ation in America

in 1970 shows that 60% of the elcctornte consider it the responsibility of business

lo keep the cnvironnient clean and pollution free. Public criticisn had increased to

the point that 49% believed that business corporations are not iving up to their

expectatinns in improving tllc environment. 80% even favourcd he closing tluwn

of plants that go against the pollution control regulations.

A research rcwrt titled "Industrial pollution in India" in 1985 show that

Environn~rr~td pollution by irdustrics l w e reacl~cd alarming y roportions in the

developing co!mtrics especially in tl~c capital and importa~ ~t liahour cities.

According tt? tile study one of thc most significant source of in&-strial pollution is

the processing of industrial raw materials like metal, smel.ers, mineral oil

processing hctors. According to their report, of all industrid environmental

problcm~, ~\'atcl- pollution has the greatest impact, and above all 1 ardly any control

measurcs have hxn implemented so far.

In most coun trics ho~vcvcr, the government have intervened by I mcting laws that

will mandate corporations to take action to control its p dlution resultant

operations. I-lowever it is one thing to set standard for industria pollution control

and quite at~otlcr thing to enforce it. A practical evidencc of this struggle is shown

in the "case of' the ofletding effluent" recorded by Charan and Wormald. In this

case, thc Grca! Mawel manufacturing company was cited on E number of times

violaling the standards on waste discharges into the stream. Ln or e of the incidents,

as a result of tlic potassium permanganate discharged in the river several hundreds

In the advanced countries, the awareness on the need for environmental

improvement is decper and the government have gone a long w ly in enforcing

environmental pollution control acts. For instance in the survey of four British

corporations on corporate social policies, runclcd by the social sience rescrlrch

council, 1 98iI5' i t was discovered also that the companies had corn, wntivc ellluent

problems and arc coerced into taking actions. They were closely monitored and

controlled hy t+e water authority. One of the companies, Petfoods have

success~ully 1~1ar)aged its own prohlcrns, Parker's company could not and had to . pay to the water authority for the water treatment.

It is also note worthy that companies in the advanced world li ie America are

gradually becoming really socially responsive in the area o ' environmental

improvement. Some i f not most of the companies no longer wait for the coercive

forces of law to prompt them to action. Instead out of their owr discretion they

seek to improvc the environment and maintain public health. It .vas recorded by

Mondy, Sharplin, and Flippo, 1988 that Allied Chemical for exam )le had set up an

environmental scrvice department, responsible for air and water )ollution control

and public health.

Also according to the satne source, Koppers company estab1isheC two committees

of outside directors, one concerned with the environment an< the other with ..

human resource. Another instance of business firms being social 'y responsible in

this area is Dow Chemical which invested $20 million in l~ollution control

equipment.

Coning to the Nigcrian scene, a rescarch carried out by the Nigcrian

Environmental sl udy Action Team (NlST) funded by Intcrna tion (1 Developnnent

Research Centre, with the purpose of investigating problems relatcd to thc

pollution of Nigeria land, water, atmospheric vegetation, wildlife and hu~nan

habitant resources. Their study result which is documented unde~ the Wigcrians

Threatened Environment" en~phasised that "Water pdlution problems may

definitely be cxpected to cscalate over the coming years, principal y on account of

... thc incrcnsc i n industrial pollution as a fall out of increasing in lustrialization".

This report show that business orgnnisations me not taking action to curb

industrial pollution.

Also in another research Iinclings titled 'Threat of clicmical polluti m', Ajayi, 1987

reveals that ". . . in industrial centres like Apapa, Illepeju, Ikeja I )r even the new

Agbara estate, the situation is the same, ... industrial wastes dis :barged into the

open or public drains . . . waste discharged into gutters .. . are :orrosive, while

fumes emanatin!: from factories are choking, irritating and have of "ensive odours .. a close look at biological environttlent show vegetation surrol nding them are

willing and wilting .. an indication that most of the wastes, whethc r solid, liquid or

gaseous ram arc. untrcatcd before they are clischargcd into the env ronment.

Furthermore, investigations show that most industries do not Imvc trcahnent plants

of their own. l ' l~ep either depend on olher company's plants for 1 reatment of their

own wastc or simply discharge them without treatment.

This particular research finding also show that Nigeria as at th; t time lacked an

up-to-date and effective factory act to compel factory owners to o mtrol industrial

pollution. Obscrvcrs arc or the opinion that cornpanics can ne rcr voluntarily

engage in polluti~n control activit ics due to the inherent cost, whih mul ti-nat ional

corporation are no t ready to apply the industrial waste guidelines 1s it obtains in

their home countries.

In another writc-up on Air and Water pollution in Nigeria by a special

correspondent, it is noted that Nigcrian govern~nenl, in 1989 csta >Iishcd its own

environtnental wntch-dog - FFPA. As a result of press and public outcry over the

dumping of inc1n;trial wastes. Following FGPA's rclease of its gr idclines on the

handling of indw;trial cfflucnt and other pollutants, government c lactcd a law to

enforce the guidelines. What is not so ccrtain according to 1b2 rcscarchcr is

whcthcr I l ~ c coipomtc polluters arc playing tlicir role in res )onding to the

challenges of cnv ironnlcnt nl pollution.

From the rcscarc!~ findings of Ezch, 1990 in his rosearch prqject ( n CSR of three

selected corpora~ions. business firms are aware of the need fo8 environmental

improvement hut thcy arc nut making any practical ctTo~-t to contro pollution.

In another instnncc, Agnga, 1991 .. on his research on social respo rsibility by ELF

Oil Company Ni3eria Lid. reports that the only pollution control I rhrt was in tllc

area of prevention and control of oil spillage.

Omorcgic, 1994 .. in his evaluation of social responsibility in Ger zral Cotton Mill

discovered that 111c finn givcs minimal assistance in maintaining a healthy and safe

environment.. I t controls pollution to solme extent within the wt rk environment.

Accordingly tho waste are disposed off in the market. Empty c mtainers resold,

while certain wxtc rrom printing are usually treated and recycled.

Like every otllcr of the corporations activities, business org ~nisations have

identified certni~~ difliculties or set backs nssocintcd with CSIt Fi st of all, IIicks -

and Gullcts, 19f:l in their work, "Management" discovered t at one or the

foremost.hindrances to CSR is that there are no clear cut answer or ready made

formula for a socially responsible decision. Management is leR to use its

discretion, to think through what constitutions its social responsibi ities and that of

course'must be influenced at least partially by the values of the top management.

Another hindrance identified by Abotte, 1971 is that CSR wi 1 be especially

difficult for small businesses which are constrained as to capital an 1 personnel.

He also identifies a peculiar problem which is usually present ii towns Chat are

filled with branches and subsidiary companies in his own words, " :he performance

in the social field of top executives in the head office where thc company has a

stronger identity and responsibility to its 'horne town' usually exc As that of heads .-

of subordinate plants and offrces in other cities -- creating 'an a xentee ' effect'

local managers lend to have lcss authority, tighter budgets and 1 :ss local interest

and acceptability.. ."

Another hinclrnnce experienced by corporations is in the m a of gaining

stockho!ders consent and support. For instance the board of I Eircctors of A.P.

Smith manufacturing company, 1951 which decided to make fin[ ncial donation to'

the privately supported University at illinois. "Certain stockholdel s took an

exception to thiq and aslied for 'a judgcmont uecrarltlg LK LUII ~ I V U L I U I ~ LU uc a

mi sap prop ria ti or^ of corporate funds and ultra-wirc act of violatior of property and

contract rights.

Anothcr rcscarc'ler in his survey of 247 ma-jor corporations ill: D c o n l h s this.

According to his own findings, "comniunity groups are not thc only sourcc of

protest ~vnt-ryinv corpnrnte donors, companies that have updatt 1 heir donatiun

policies have a l w r t > ~ ~ n c t themselves the target or criticism li-om s lore holrlcrs and

customers."

Still from the litdines o f cohns research on corporations and t le challenges of'

whnn nfhirs. usins the 247 compnnics, result show that one hindrance

encountered hy ll~cse co~qmt~ics was in tllc arca of cnipioyn cnt of minority

groups. They nwe reports of tensions bcing crc;ltcd by the emp oycc rcsalt~nent

and hostility t m ~ a r d s new black or Spanish spcaking workcrs in I mcrica. I n some

occasions. crrprlde senior workcrs even rcsigned in protest 2 pinst a real or

imagincd favorr I i tisrn toward a nctv minority worker.

Hiring the llnnkore unemployed l w e also presented some dii ficullics to these

companies ". . . There is consensus that the problem is a tough on1 , not only for the

hardcorc coming into the job but also for the regular work Fort e. Hiring people

with long histories oS economic and oRcn emotional handica 1s has presented

employee and rn~ployer alike with an assortmeot of difficullics."

Still according to this report, "urban affairs is a new area of corp rnte involvcrnent

abounding in h:!zards and imponderables. There are no formular or success and

no rcady madc puidclincs to rollow, nusincss if: only now beg rming to Icar-n

which approach 11w a cl~ance ofsworking and which might bcst he a vidcti,"

In the arcn of corooratc financial donations, cohns findings go on 1-1 show that no

systematic ef1i)r-l is ~ n d c by cc~rporations to cviduntc the large IN mlm of' urban

groups to ascertain what such groups do, so as to decide whehcr they arc worth

;I Ions. receiving such doll t'

From I ~ I C Nigcrinl~ sccne, according to the Firdings of Agag, 199 , in h i s inquiry

into thc CSlt of '31,T; oil company, some of the hindrances etlcou ltcrcd wcre the

vandalisation of h i r proiccts by unsct-upulous elamcnts in the cc nmunity. 'l'licy

also cc)mplaincd o f unnecessary dcmar~d by the community for projccts which

were beyond the reach of h e company.

CHAPTER THREE

THE RESEARCII DESIGN DATA COLLECTION APPROACH

Prirnaty Data Mere collected directly from the sa~nplc organisn

research work. through a personal visit of the fir~ns by the resear

THE PRIMARY - MEASUREMENT TECHNIQUE:

QUESTIONNAIRE DESIGN

Data were gathered directly rrom the respondents through the

questionnaire, nhich was made simple in structure, in order tc

The following typcs of questions wcre uscd:

a. Dichotomous Questions: This type of questions provid,, L1lb ,uayvl,ubllba

with two opposite responses; 'Yes' or 'No'.

b. Open-Ended Questions: These questions provided I le respondents

greater independence in expressing themselves.

c. Multiple Choice Questions:This type of question consist: of an array of

suggested possible answers Rom, which respondents 01 ted rrorn. They

were to tick one or more from four or more alternative resp mses.

POPULATION FOR STUDY

The target population comprises all incorporated business irnw in E~lugu

metropolis. 33

The populatior~ was dividcd into various sub-groups, in l i ~ e .r ~ i t h h e stratified

probhbility salnpling techniques. Accordingly, business or ganisations were

classificcl into Ibur groups: manufacturing, service, agricultural c id mcrchandising

companies.

Folded pieces of papers containing the estimated numbers of iusinesscs in thc

area, accord to the four dcsignated strata were picked at random to ensure that a11

the categories of businesses have equal opportunity of being ~:prescnled in the

sample. Thirtythree business firms were selected. Out of H hich cleven were

manufacturing companies, ten of them were service companizs, four of them

agricultural and eight of them mcrcliandising firms.

TECHNIQUE OF DATA ANALYSIS

Although other traditional methods of statistical analysis like frequency tables

were applied, t k m i o r technique used is the chi-square statistic! .

CHI-SQUARE STATlSTICS (x') The following is an illustration of how chi-square statistics worl s.

Row and Column Contingent

C

llere, R and C we h e attributes under sludy: It= rows, C = :olumns Xii =

observations in ntly cell, Xi = row total, Xr - column total and X - wcr all total.

By arranging Ri ill rows and Cj in columns, wc establish a two-way table as shown

above, with a random sample of X elements classified above, thc n the expected

frequencies arc

The computed

cv~nputed as follows:

ei = Xi x 2 X

X' statistics with which we compare with the crit cal value (also

known as table w'iere) are arrived at as follows:

X2 = (Oi - ci12 ei

Where: ci = expected frequencies Oi - observcd frequencies

The approprink x2 table value with which to test the x2 calculata value is baccd

with the level of significance and degree of freedom.

LEVEL OF SlCNII

In trying to determine whell~er the null hypotl.tes~s (rlo) 1s iu we acr :pieu, a 1 1 s ~ is

involved and tlwt is whether our conclusio~~s should really bc accepted. To

recogbise this risk. a probability that (Ho) should be rejected evc n though it is

proved by the rcscarcJi work is sct and that is known as lcvcl or r; igni ficancc for

this particular stwly, the level orsignilicancc in .05.

DECISION KUILG: I f the value of the calculated chi-square, w lich is the test

statistics (2,) is equal to or grcalcr than tho tat~lc or critical cduc, thc null - hypothesis (Ilo) is re-jectcd. It is assumed in this casc that it is unlil cIy (.05 or less

probability) that llle sample could have come From the original pol ulation. On the

other hand if the valuc of celculntcd X* i x . the (Z) is less that the table value, we

shall not reject thc null hypothesis.

rcsearcli, a bricl' history or four Companies, rcprcscnti~ig tllc foul categories of

business d>rgn11i7;~Iiorls t~scrl, such as: Manahctori~~g, Service. Agricnltural

and Merc lmv~ix . will hc given Ilclow.

1 . ANAMltR 4 MO'I*OR CUkllDANY (ANAMCO)

Annrulwa Motor Culnpany is a joint vcnturc bctwccil thc Fcrlcral

Goverrtrner~t of Nigeria and Dnmler Benz A-G of Gemany. The

Company was incorporahl in January, 1977 hut started offi8:ial production

in Janrimy, 198 1.

Its product lines range from heavy buses like 0 13 1, 0371, Tn cks like L911,

1,s 1924, Fire Fighting Vchiclcs, Watcr Tnnkcrs, Ambulanc :r; and Mobile

Clinics. It has also divcrsificri into production of lncdium sii :d buses. And

thc Contray nlso sells Merccrlcs Bcnz Cars.

The staff slrengtli is about seven hundred and filly. The m: in branch is in

Enugu while i t maintains a liaison ofice in Lagos.

2. INTERNA'TIONAL BANK FOR WEST AFRICA

Inlernatiot~al Bank for West Africa commenced operatio on the 7th of

January. 1000, was incorporated as a Private Limi led Liabili y Cornpany on

30th Marc'\, 1969, and was convcrtcd to a Public Company XI 7th October,

Tlic Company is cngrrgcd in all Com~ncrc~a~ uanulng acrv lc :~ , wlln mow

one llundrcd and twenty-five branches locatcd all over the cot ntry.

Enugu maill branch which was used for the study has a st f f strength of

about fifty.

3 . LEVENTIS STORES

Levcntis S Iores startcd as a trnding conccrn in Ghana in thl: early 1920's.

It w s estnldisl~ecl in Nigci-ia in 1950, at Abcoknla. I t was la er cxtenrled to

Tts major line of busiricss was the cstablishrncnt of reta$l twtlets. and

cvcnlually diversified into Levcntis Motor, Nigerim Botf ing Company

and of l r c r ~ . Prcscntly, about thirty-four Subsidiary Compa lies have been

estahlisl~cil.

4. UTHOKOl FARMS (LTD.)

Utlioko F:~rms (Lid.) is jointly owncd by Engineer Akw u K. Nwokedi

Pamilv nvtl The Uthoko Dynasty. It is operated and mar aged by IT. G.

International, according to ihc partnership agreement bc tween the hvo

owncrs.

Thc Farm which con~menced operation in 1984 has it: adniinistrative

hendquartcrs in Enugu. The Farmlands are located in Achalla and other

places. F~rrncrs are recruited as and when necded, and it: main activities

inclr~dc poultry, vegetables, plantations, fishcrics, piggay, rice, maize,

torn:~tocs :lnd others.

38

It is finnnccd partly through loans rrom NACB or lntcn atioml Loan

Schemes Tcrr procurcmcnt of some of its equipment.

TIIIS PRGSFNrrAT1I0N OF DATA

The fi)llowing is ti 111-cscnlation or the data gathered from the ~usincss f i r m

From the abovc table, it is evident that 10, out oS the 1 1 responlents from the

manufacturing companies (that is 90%) say that they accept lhe concept of

corporate social responsibility as par1 of the obligations of business firms, 10%) say

they do not. 90% also from the service firms also accept the conctpl in principle,

as against 10% that do not. 50% of the agricultural companies, cnnd 62Y0 of the

merchandise firms also say they accept the corporate social respon: ibility concept.

Altogether ahout 73% of all the respondents say that they accept CRS concept

while 2 1 '% do nor.

'I'hc data nlwve show that 7 out o f I I respondents from the man1 hcturing firms,

representing about 64Y0 have CSR reflected in their busines; policics with

instances to corilinn it, against 36% tl~at haw nonc. 60% of the scr ~ i c c firins

remondents have cvidence of such policies, while 40% do not. 1 out of the 4

IS respondents representing 33% have such policies while 38Y0 of

: firms also say they do generally about 5 1% reflcc; CSR in their

s wliile 49% do not.

TARCE4:3 FIRMS ENGAGEMENT 1N NON-PROFI'r SOCIAL ACTIVITIES RESPONSES

----5- I3 C D E r;

MANUF. 7 2 - 2

SERVICE - 4 2 4 1 AGRIC. 1 [ I 1 - MEKCI I. 1 1 1 - - t- TOTAL I 1 8 I 2 I 4

The data presented in the above table reveal that only 11 out o - the 33 firms,

representing 33% engage in training and employment of the hard ct re unemployed - - -

6 of the total respondents givl -L :- q ~ n / _ P L I - - c -----

c arms '

a -

to charity homes, while 8 c x

nh1~t-I n ~ n n l ~ 1 n ~ ~ t nf thr 7

npanics only,

whim rs ~470 or me 11ms employ d i ~ - - . ~ ~ yVVI/.V. I YL.L .,& Cnn. 33 companies

which is 3% engage in urban rehabilitation activities. 2 f m s 1 i.e. 6% of the

respondents) provide managerial training to minority groups while 1 firm (i-e. 3%

of the respondents extend its services to the ghetto areas a ; part of their

responsibilities to the community. 4 out of the 33 organisations which is 12%

provide recreational facilities in the community. 6 firms represen ing 18% of the

respondents indicated other unlisted areas of non-profit making ac ivities that they

engage in, such :IS construction of public bus stop shelters, educati ma1 scholarship

hnds for staff and others, joint sponsorship of health and educatio~ ral programs.

TABLE 4:4 PROBLEMS AS BASIS OF BUSWESS VENTUIIES I

The above presented data show that only 18% of the manufacturing companies go

into business in the areas of pressing social needs whilc the remaini ~g 72% do not

have areas of social problems as their priinary considerations. It s also evident

from the data that 60%. i.e. 6 out of 10 scrvicc firms, develop busir :ss from social

problems. 25% of the agriculturnl firms that responded also do, wh le 75% do not.

12% of the merchandise companics consider social problems in chl losing business

areas, as against 78% that do not.

Altogether 36% of the total rcspondents choose to do business in a -eas of pressing

social needs, while 74% do not consider solution to social problems as their

nrimnrv nhiectjves.

FIRMS INVOLVEMENT IN ENVT XONMENTAL POLLUTION CONTROL

-ibove table, 45% of the manufacturing firms claim t ) be involved in

ntal pollution control and that they do so according to the instructional

n pollution control while 55% confessed not to be invc lved. 2 firms i.e.

AGRIC 1 3 -

SERVICE 2 - 8

MANUF.

~e service firms claim to be involved in pollution c mtrol, while the

MERCH. - - 8

(RESPONS

80% say that they are neither concerned nor involved in environmental

5 G -

while the other 3 (i.e. 75% (are not involved. On the 01 her hand all the 8

sing firms, that is 100% claim not to be engaged in pollution control

The dita as presented above reveal that 7 companies, which rcpre: cnt about 64%

of the manufacturing firms say that they encounter some problems in their efforts

to livc up to theis corporate social responsibility expectations, as a pinst the other

4 which is 36%0 of the finns who claim not to encounter any pro dems. 3 firms

that is 30% of the scrvicc companies indicate that they are fac :d with certain

hindrances, as against 70%, which claim not to. 100% of the .a! ricultural firms

claim to he faccd with difficulties. About 88% or the merchatldisit g firms, (that is

7 firms encounter some hindrances, as apinst 1 firm, which is 129 ;) that indicated

ms in their social responsibility efforts.

HINDRANCES TO FIRMS CSW IMPLEMENTATlON

r about 64% of the 33 business organisations admit tha . they encounter '

,,,.,, ,.,,.icultics. which hinder their corporate responsibility acth ities, while 36%

claim not to encounter any problems.

ANALYS.OF DATA

M EI<CI I . I'OTAL 7 I 8 33

For the analysis of data, the chi-square x2 test statistics wa. employed. The

which the x2 t a t is computed is as follows:

RTSI'ONS ES TOTAL

SIXVICE 3 -.

7 10

MANUIT. 7 4 1 1

AGIUC 4

4

urnber of cases

-- - A - ,----.- ..umber of cases under 140

K = the total n ~ ~ m b e r of categories

Ho = null hypothesis

Hi = alternative hypothcsis

Afler computing thc chi-squnre (x2) nccordinlingly, it is rclatcd to tl c table valuc of

Chi-square (x2,). IIIC I W I I hypotl~~sis is rcjcctcd if, at tbc corresmding level of

signifi~ance and dugrce or frecdom, lhe computcd chi-square ( ~ ' 3 is cqual to or

greater than the critical or tablc valuc iron the othcr hand, the (x2 ) is less tlinii the

(x2,), the null hypollmis is not rcjcctcd..

For this particular rcscnrch, the lcvcl of significance used is .05.

TEST OF HYPOTHESIS I

LTTITUDE OF BUSINESS CORPORATIONS ' rO CSR

)THESIS -- Uusirms Organizations have no7 accepted their

11 rcsponsibility, which justify their existence in thc community.

VE HUPOTIWSIS - Business organizations h tve accepted the

tl rcsponsibilitics, which justii'y their existence in 11 ,c community.

FIRM'S IMPLEMENTATION OF CSR

4ANUF. 'I 7

4 11

rrcquencies for the cclls are calculated as folIows: 43

SERVICE 6 4 10

AGRlC 1 3 4

MERCH. 3 5 8 3 3

x2, = (Oi - ei12 ei

Degree of frec

x~~ 0.95 fc

Since the x2, according to 1

- which stated

responsibility

Total x2,

:dorn(df)=(4- 1) (2 - l ) = 3

)r 3 degrees of freedom = 7.815

; value of 2.56 is less than the xZt value or 7.815 .e. 2.56 < 7.815,

Lhc chi-square tcst statistics, it stand therefore that t! .e null hypothesis

that business organisations have not accepted tIiei corporate social '

., which justify their existence in the community is c ccepted. While

the alternative hypothesis which states that busincss organisations lave accepted

their corporate social responsibility, which justify thcir existence ir the society is

rejected.

A second index was used in testing the validity of hypothesis , it is hercby

analyzed in tl~c following table.

TABLE 5:2 FIRM'S ENGAGEMENT IN NON-PROFIT SOCIAL

RESPONSES -

A MANUF. 5 7 2

:sence of zero entries in some of the cells, neighb luring cells are

r and the degree of frecdom adjusted accordingIy.

2 (ei) for the cells are derived as follows:

RESPONSES

A 5 4 I 1

1 1

B 7 2 1

.--

1 11

CID 2 5 1 1 9

EFGH 2 7 1 3

TOTAL

16 -

18 4 G

13 44

Total - - x2, = 8.3

Degree of frcedorn (df) = (4 - 1) (4 - 1) = 9 The table value for x2 0.95 at 9 df = 16.92

Since the calculated X2 value of 8.3 is less than the X2 table value ~f 16.92 i.e. 8.3

according to the chi-square test therefore, the null hy ~othesis, which

srates mat business organizations have not accepted their c xporate social

rcsponstbility, which justi fy their existcncc in the community is ag tin not rejected.

While the alternative hypothesis, which states that business or . . lanization have

accepted their corporate social responsibility, which justify their :xistence in the

cornmunitv i~ hereby re-jected.

TEST OF HYPOTHESIS

EIETAL PROBLEMS AS BUSINESS 4

POTHESIS: Business organizations dc

. . - - _.. lreas of needed social improvement in 01

of the community.

ALTERNATIVE HYPOTHESIS: Business organiz

ventures in areas of necded social improvement in ord

of the community.

XAL PROBLEMS AS SOURCES OF B

1 MANUF. I SERVICE I AGRIC RESPONS I*

The cxpectcd frcqucncics (ci) for all the cells are computed as follo .vs:

Total x', = 6.24

D c ~ r c e of frccdom = (2 - 1 ) (4 - 1) - - 3

x', for x2 = 0.95 at 3 d f - 7.8 15 -

value of 6.24 is less than the x~~ value of 7.81 5 i . 1 . 6.24 < 7.8 15, it

wefore according to chi-square test statistics that the m11 hypothesis,

which states that business organizations do not develop profit-maki ig ventures in

areas of needed social improvement in ortlcr to allcvi& the pr ~blerns of the

community is hereby accepted. In other words, the alternative hyy othesis, which

states that business organizations develop profit-making in areas o ' nceded social

improvement in order to alleviate the problems of the society is reje2:ted.

ROLES OF TldE ORGANIZATIONS IN POLLUTION C'INTROL

NULL HY POTIJESIS: Business organizations are not activr ly involved in

environmental pollution control, which promotes environmental s: fcty and public

rIVE HYPOTHESIS: Business organizations are a :tively involved

IKI ~ W I I U W I I controls, which promotes environmental safety and pu'dic health.

QLVEMENT IN ENVIRONMENTAL POLLUTIOK CONTROL

As a result of the presence of zero entries in some of the cells, s ~ m e cells will be

pooled together and this will also lead to adjustment of the degrec s of freedom.

--

TOTAL

MANUF. 5 6 - 1 1

SERVICE 2 - 8 1 O

AGRlC I 3 - 4

MERCII. - - 8 8 33

The expected v;llrrcs (ci) ;Ire c:rlculntcd as follows:

The x', value of 3.29 is less tllan tlic x2, value of 5.991 i.c. 3.29 < 5 .Wl. It means

therefore in line wirll chi-srprarc test statistics, that thc null hypothe: is which state

that busincss or-gnr~izntiotis we not actively involved in cnvirotimcnt~ 1 polluliotl

control, which promotcs cnvirontnental safety and public hedrh is hereby

accepted. On the other haid the altcrnative hypotl~esis. which stale; that business

organizations arc aclivcly involvcd in cnvirtmiicntnl pollution cmh-01 Illcrcby

promoting envirori~nc~itr~l safety atid public health, is rc.jccted.

TEST OF IIYPOTIIESIS IV

IIINDEIZANCKS TO CORPORATE SOCIAL HESPONS7131LITY OF

BUSINESS VIIGANI%A'~IONS

NULL HYI'OTI1ICSIS: I3usiness corporations do not encounter a1 y prohlctn that

hinders their corporate social responsibility ehrts.

ALTERNATIVE IIYPOTf IESlS: r3usiness corporations enco ~nter problems

that hinder their corpwak social respor~sihility cf'lilrts.

TABLE 5 9 IIINDERANCES TO FIRMS' CSR 1MI'LEMEN'I ATlON

As a result of the presence or empty cell, entries under the columr s of Agriculture

and Merchandise finns will bc pooled together and the degrxs of freedom

adjusted accordingly as shown in the following table.

RESPONS ES 'T'OTAL

SERVICE 3 7 10

MANUF. 7 4 1 1

AGRIC 4 - 4

7 1 8 33

TABLE 5: 10

1 1 MANI[12. 1 SERVICE I AGIUC 1 'I'UI'AJA

O N , 1 I /a TOTAL 1 0 12 33

7 - 1 lie expcclcrl \dues (ei) for all the cells are dcrivecl as Sollows:

C5 == (7 - 3 . ~ ) ~ - 3.2 3.6

' I ' u ~ ~ I I x~~ -

Degrees o f li.cedo~ii - (3 -- 1 ) (2

x2, for 0.95 at 2dS= 5.90 I

Since x2, vnluc o f 9 grcntcr than thc x', valuc of 5.9') 1 i.e. 9 > 5 . 9 1. il is hcrcby

conclurlcd, ~ccortlirig to ihc chi-square tcst statistics h a 1 Ihc null h:~potliesis,

which stat cs that Iwsirwic org:u~izalio~~s do not cricounicr some pl r)bIcms, which

hinder thcir corporate soci:d rcsponsibility clrorts is rejcctcd. In o her words. the

alternative hypo!hcsis, whicli states that business or_patiizations e wunter somc,

problems. which Iii~iclor the corporate social rcsponsibility d o r t , is Ilcreby

accepted.

Findings fi-on~ thc rcscxcli sliow tliat tlic NIIII hypotliesis wh cli slatcs that

business c~rpnizntions Iiavc not acccptcd tlicir corporate social r xponsibility is

Contrary t o !tic l i r d i t i p of this parlicular rcscarcli is lllc rcscarcli c. mluclcd in tllc

1Jnitcd Ki~ipqlorn 1y l vc f~ lcy , 1975, the str~dy sl~ows that out of' 180 Clricf

Exccutivcs tlmt wcrc cl~~cs!irmxl, 90% agreed thal ct~rpon~tions Im c rhct io~is and

obligatio~ls bc\w~itl (Iic pursuit or prof? t.

Tlie f?nding 01' tlw p r c w ~ t I-cscarch is also contrary to t l~c attilr~clc of t l~e I3oar.d of

Directors nf Slniili Mri~lrtfi~cluring Cornpnr~y i n Anrcrica, which 8s Tar back as

195 I . cnpgctl in Ir11p.- Iinrrncial donations to a I'rivatc Univcrsi -y. A ducisiot~

rcacllcd ill lir~c wit11 tlicir cotivictions on thc public rcs~orisibilitics or

Corpomt icwr. 'I ' l~uy Ivl icvcd t l ~ t Corporations \\l11icl1 grow with hr~sincss

prospcri(y m": I M I C F C I - ol~li~?:~t i~ns, to takc responsibility for thc burclcns or thc

Cornrnr~riity .

The result of Iliis rcsearch ~vllich shows that busiricss organi7 ~tions haw not

accepted their Corpnrate Social Responsibility is also contrary 111 the findings of

the resc:lrch co~~~mil tce oI' Econowic Ueveloprnc~it, 197 1 which r xmls tltnl tllct'c

is n social ratlicr tliari cconomic aspect of business rosponsihility, t iclt sig~~iIicatit

Contrary to l l~c liricli~iys o f this rcscorch is also tlic rest~lt of a surv+.y a1 Stanclhrd

I3usi11css Scl~ool, hlorir;cri, 1 Y7X, wliicli indicates tli:~l out of the 50 Cc)tnpmi~s

that respontlctl to tlic qucstion wlicther busii~css sliould takc an activc rolc in

solving social problc~iis. 50% aagrecd I o it.

The findings or' Illis rcscnl-cl~ also cuntmdicts tllc iiidings oS 12ockf *Her, coutaincd

in Philip, 1926 wl~icfi states that the old concept of 'businesr owners' I~ave

gradually given way to a new concept that ownership or busincsr carries with it

certain social ohligittio~ls, that managers serve as irustees not only . i ~ r slockholdcrs

but also fiw thc workers and the entire socicty.

Also contrary to Il~c 171idings of ~liis prcsct~t rcscnrch is the ~mrk of Lcvitt,

conhined i n 11;ward llusiness ~ e v i c r n ~ ~ , this rcvcalcd that soci 11 responsibility

which started as a sil~ccre and personal view point of a few selflc ;s business mcn

has gradually l~ecmnc ll~c prevailing vogue li)r all.

In tlic same vcin. tllc lintlings of Moady. Sllirpli~~ and Plippl. 1985 '~ which

contains a survey or 232 large Corporations rcvcals that two-thi +d oS thein havc

definite policies rcgnrdirig tlicir social resporlsibilitics and spcci;!l organizational

units to dcal will1 i t .

It is propcr t o I I U ~ n( illis jul~tur-c tlmt lnost ol' thc above ~rlcr~lk [led rcscarchcs

whose findings slit nv that, co~itrary to the prcscnt rcscarch fin( lings. busincss

organizalicms I l a w acwptetl their corporate socird rcsponsihilities, lvcrc cotiductcd

i l l the ;~dv:~~icxd ~ o w l r i c s or t l ~ world such ns thc U~iitcd Kinyhn. and the

United St;~lcs. 'T'licse countries, being f ; ~ r ~nnch more developed 1 rat1 Nigeria, in

all ramiliwlions, may also havc hccn rnorc advanced than IS in busincss

opera!ions, st nii(lnrtls, iclcas a d rcl:rt io~lship with the C'o~n~nunity.

As one or the firirli~~gs puts it, husincss ohligations grow with btlsi less prosperity.

So corporrrtc social responsibility has g r o w ovcr the ycnrs to n st: gc of corporate

acceptmcc in t l~c advnliced countrics, u~~l ikc in this arca whcrc tllc -cscarch was

This particular rcscarcti fitding which is that business finns hav : not acceptcd

their corporate social rcspcrnsibility is also k i n g contradicted by a research

findings of Aj9,1986, wliieh states that 87.5% of its respondents a? .cc in principle

with tlic ccwucpt of Ilr~sirics? orgar~izntio~is I~aving a social rcspc nsihility. 'llic

same concl~rsion w:tc also ruaclicd hy Umorcgic, 1904, wl~ich liscovcrorl 111:1t

Managers of li rmc wvr-c pro-C'Sli.

It is evidcrit emn fiotii this prcsent rescnt-ch as cab be seen in table I. 1 of Chapter

four, presentation or data. that 79% of the rcspo~iderits al'firn~ that 1 ~ c y accept the

concept of CSR, hut when the irdices fur thc pr:~clical implel ~icnhtion was

applied, it was cliscovcr~cd that it cannot really be said that they liavc accepted their

CSR.

One can explaill the i ~ h v e clifferenccs in fir~tlings by size a1 d type of the

Corporations used i n llic diflkrcnt rcscarches. In the above rnc~l'.ioncd rcscarcl~

conducted by Agaga. one largc Oil Corporation was used as the crse study, while

Eze selcc.lotl (11t-cc Inrgc scale busincss Corporation f'rotn Nigerir as case s(udy. .

I'hc prcsc~t rcsc:lrul~ 0 1 1 lllc ollwr I1:mI uscd Iliirty-thrcc s~nnll anil mctlii~~ii scale

busincss firms which arc also niostly l~ranclwi and subsidiary orgal liztltions, wliich

are prcdorninmt i n the choscn area of research, Enugo Town.

This goes to buttress thc findings of Abottc, 1971, which he cvprcsscrl in the

memoranda o f cotnmcnts, resewations and dissent, that cl~rporate social

responsihility will \IC especially difficult for snlall businesses which are

constrained by capital and personnel. ilc rnairitaincd that such problcms nr rather

intensified in areas filled with branch olllces, and subsidiary companies tvhicli

have less autl~ority, tighter budgets and less local intcrcsts.

58

This l i r id i~~p~ i~ ~ I I C ~ I I S ~ S ! ~ ~ will^ tlic m c or Q t h ~ . contai~~c~l in !larvard

Rt~aincss I?trvi~w which agrccs t l ~ n l c~lvirtmrncnhl i~nprovc~ncr~t, a Icrm hc uscd to

encompass ~iot just cleaner wntcr aid air, but also sarcr high1 vays, llcalthicr

communities, and a bcttcr educated populace, can in fact become yrofitablc serics

of tnarkcts Sor indrrstrv. Findings from his work show th: t dcma~id for

environ~ncnfal improvcmcnt orkr oppurtunitics to nearly all types v f companies.

The finding of the presctrt research is also inconsistent with the iir7ding of anothcr

researcher, Cohn, cont:~i lied in l l a r v ~ r d hs iness Review. 'I'hi:, survcy of 247

major corpmrion /lad ~ I I C pitrpose o f Orr~ri~lg t~seTul guidelines on business ability

to tacklc soci;~l prc~l~lc~ns. l lis l i t d i ~ i ~ s show (ha1 some or thc c o ~ ~ ~ p a ~ i i e s arc

cngagc.(l in sl><*~ii~l r r l - l ~ : i r ~ prog:lraliirws dcsigncd 10 i~iercasc inclmc and at the

sarnc time r w i s t i l ~ c cii ics with t l~c co~lviction that u r h i problc~ns prcsont marlicts

Tor corpcwk g o o t l c ; arid scrviccs. Results also show Illat such prugraliilncs havc

viclcled cul~st:rtl(inl rctt~rns on its ir~vestmcnt.

ROLE OF TIIE BUSINESS CORI'ORATION IN PROMOTIIV C_ ENVIROMENTAL SAFETY AND PUBLIC' 11~n~r .r -- I.

The findings o f tlic rcscarcli on the third Iypothesis show that the Vull hypothesis

which sta!cs I hat busil~css orgnnizatiorls arc 1101 actively i~ivolved iri cnvirorumcr~tal

pollutio~l ccwtrol i t 1 or-clcr lo promotc crivironrncn~al safety and wblic I~ca l t l~ is

accepted.

1971 w11ir.11 tmtcr; t l int pul)tic criticis~n lins incrcasccl so rnuch I'iat 49% do not

helievc tli:it <_'orpor;\lio~is arc doing the much they sl~nuld lo ilnpsovc the

envirtmncrlL

This llnding also corl firnls llint the 1711rlings of the Social Science ltescarch

Corrncil contai~~cd in Ilarvey, Smith and Wilkinson, 1984, whil:h show that the

Rritish Corporation rrscd in t l~c swvcy had cll lucnt problenis. They wcrc riot . willingly mid ncl ivcly irivolvcd i n coritrolling lllcir opct-rrtionrrl poIlutarlts. 'I'hc

water a~rtlicwily l~nd to pitch in to h ing the ~o~npmiics ~ I I V O I V C C ~ to comply with the

rules.

This research finding also corresponds with that of Charm, arrd Wormald, as

contained i l l I lwvartl Rr~si~wss Heview, which noted that Great Mawcl

Man~~facir~ring Company which is cited on several occasiotls fir not complying

with standards on wasic discharges into the st re an^. In one occasion, the pollutants

resulted in scverd Iiunclreds or fish dying. The company was f i r ed and forced to

apologizetl lo tlic p11Olic.

6 1

Iklit igs Iy lllc Cloi~m~itlcc o ~ i tlic Conh-ibution to I>cvclop~ncnt Policy, 1985, illso

furthcr affirms this particular finding. indicating that c ~ i v i r ~ t ~ n ~ c n t ~ ~ l pollution by

industrics l ~ w c r-eachcd an nlnnnir~g stale. In t l x developing cou~il k s , cspccially

in Capital Citics and irnportanl harbour towns, hardly any cmtro measures arc

being takcri.

Also conlirml ory to the present rcscarch finding is the Iindinps of Nigerian

Environment~l StnrlyfAction rl'ea~ii, 1991, which stntcs that polllition problems

may defjnitely he expcclcd to cscalatc over the coming years due 1 1 ) the rapid rate

of industrialisation; the minimum enforcement of land iise controli, and illcrease

in industrial pdlr~tion tw a result ofincrcased industrialisation.

Another research also, A-jayi, 1087, in line with this research conlinns that

industrial waslcs nrc disclmrgcd into llic opcn or pril~lic drain:. l'herc wcrc

indications that ~nosl or the waste, wlle(lw in solid, liquid, or glseous rortil are

discharged in at1 uti(rez~tcd forin into the ciiviro~iment. Investig:~!ion also show

that industrics lack trcat~lierit plants of their own, so such cornpanic5 rely on ol11er.s

to gct their tv;rslc tru:~lctl or (lo not cngagc in wastc trcatnient at all.

Also n consistcricy will1 tlrc fitdings of this rcscarch, Agaga, 1991', discovers that

the only pc~llutiori cnrilrol carried out by thc ohservcd firm in controlling oil

spillage.

Also in lino will1 the findings oTlhis r-cscnrch which is that husincss firm arc not

actively inwlvcd i n cnvimnlncnlt71 pollution control, New Nigeria, 1991 states

that respordin~ to a public outcry over the dumping of toxic waste, Nigeria

Governmerit estahl islrcrl an cnvironrnentai protection agency 1989 ' o provide

62

guidelines for the handling of industrial emuen[ and li-otn the gl idelines, a law

was enacted to enforce it. What is not certain is liow IBr i t has gcwc in cnlbrcing

this law.

The issue nf crivironmcntul pmtcction and preservation ofpuhlic h(.altli is one area

that husi~icss orgi~~iiznt ion includi~ig thc uric in tllc advatwd countr ies of tlic world

require some nudging arid coercing befim cvcr tl~cy will Icarn 'o he outrigl~tly

socially respotisihle. For an action to bc considcrerl as heing soci: Ily rcspcl~isiblc,

it must,be done willingly and v~luntarily ~tlicrwise it is not a s~cinlly responsible

action.

DIFFICULTIES ENCOUNTERED BY CORPORATION IN COIIPOHATE SOCLAI RRSPONSlRlLITY

Findings from this research show that the Null hypothesis w ~ i c h statcs that

business Corporations ilo not encounter any problem that hinder their Corporate

Social Iiespo~isihility efhrt is rejected, while thc alternative Iypothesis which

states that business organizations encounter problems that hinclcr thcir Corporate

Social Rcspmsibility is acceplcd.

This finding is afini~ative oTllle findings or lrlickr and Gdleis, 1981 wherc they

discovered that one of tllc forernost hitidrances to CSR is lack oCt lcar cut formula

on what conslitutes socially rcsponsible decisioris. Without suc'i a ~ortnula, the

Managemetit a-c lcll to tlwir own cliscrctio~i and tlicir decisions are bound to be

influcnccrl hy t l~c valr~cs orthe top Matlagenlent.

Tliis is quite situililr to some of thc complairits notcd hy some of the responilcnts

as thc rcnson why they are not cluiug much in tlicir CSK. As onc of the111 puts it, -

they need a list Srotn the Goveriinicnt or whoevcr is conct:rnccl 011 social

responsibility activil ics from wlwe they can cl~oosc which w e s I! cy can nfhr t l to

implement. I Iaviug such a comprehensive list or formula docu~ner~ted by probably

Managernent Cotisultant Firms and ~nndc available to Iirnis will I ,o a lorig way in

encouraging them to participate by delineating ever minute areas or invoIvcnlent

which they may not Iinve considcrcd.

Another indicator to the fact that busirless organizations actually ~ e e d a guideline

is that from the data collected, as prcscntcd in tahle 4.3, most of t he organizations

that indicated their irwolvc~nel~t in non-prolit social activities were Toulld to

concentrate k i r clli)r(s 0 1 1 tllc iirst Ihrec categories of activities which inclutlc

gifts to charity lionics, training and c~nploynicnt of disabler', and hardcore

unemployed. 'I'l~is [nay hc n result of ignorat~cc on otlicr probahle areas of

involvcmenl. hasir~g tlicir actions on rncre prcccrlcticc.

Corporate Social I<cspo~isibility cfl'orts, which is tlic finding of this research is

furtlicr conlirrnecl Iy Abolte, 1971 who discovered that CSR v ill bc especially

difliculi ror sm;~ll business which arc hindered by iinancc and manpower. He

rurtlicr statcs 111;it sr~cli proldclns arc crmpounclccl in area prr.:rlomitiatcd with

branchcs : I I ~ s~~l,sitli:rry cornpanics who Ilavc lcss rwtllority, strizter budgets and

lcss local i r l t c r - c s l .

This is rather a prccisc description or thc bulk of the problems encounlered by

organimtions 11scd it1 lhis present rcsearcli. Some cornplaincd of I ot having thc

authority nor the capital to indulge in CSR activities as all such jurisdictions arc

restricted to their headquarters, where the company according o Aboite, has n

stronger identity and responsibility lo their 'home town'. For tli :se cornpanics lo

actually get involvcrl i n CSR, there need to be n delegation of authority in this

area. Thc powcr to indulge in CSR should be dc~cntrali~ccl.

Also in line with the l i ~d ings or his particular rescnrch, in t ~e expcriencc of

Smith Mnnufacir~rinq Comlm~y, Forbosh, 1 <)6O where he stockholrlcrs

disagrce~ncrit poscd t l~c gr-caksl problurn. l'liis particular pr ~blclns was also

confirmed hy Cuhns, Ilnrvmrl Dnsincss Ileview. In his sup cy of 347 finns

where hc notcd h t orie of tlic sources of protest \vorrying corp )rate donors who

have upr1:ltcrl ll~cil- tlorintiol~ policics as sliarcholrlers co~icenl.

Still in Iilic wilh t l ~ c fitdi~igs O C Cohn companies cncouritcrcd prc1I)lcnis in thc area

of eniploy~ncn( r)T niinorily group. 1 Ic riotcd situations wlicrc s~rch rnovcs crcatcd

tensions, resulting kon~ cniploycc rcscnltncnt and hostility to.vards new black

workers in America, to the extent that some capable senior workers resigned clue

to real or it~iagil~erl Savoritis111 sliown to a mirlority worker.

The issue of discritr~inntions against rlcw minority employers is depc~idcrlt on the

prevailing social rnoctds. A place wlicrc Ilierc exists social scgrcytion - tribalism

and group discrif~~inntion is bound to encounter this problem This particular

aspect was not Iiighliphtcd hy finrlings Tram this rescarcli, this is owing rnorc to

the fact that orgmizatiam liavc riot dclvcd ~nnch into this aroa of social

rcsponsihili~y. (3s cvi(lcnl i l l thc 'E' cnkgory ol' tahlo 4.3 in I C ~mscntatiorl of

data) tlim llic ~ I ~ S C I I C C ~I ' s~)c in l scgrcgnti~n.

Colm also Iiiglilightcd the p r o b h inherent in tlic employment ~f the hardcorc

unemployed as con~plcx and describing the involvcmcnt of busin .ss in providing

solutions ti) the urban blight ns an area that is very diflicirlt without a set

guideline. I M n rt-ctni this rcscnrch sllow tl~at busiticss organia dons I~avc riot

really vcnlured i n f ~ tlicsc two ~~~cn t io~ icd areas 811~1 11 ICTC fore ~ V C ' w t expcric~~ccd

the dific~rltics i t may pose.

One of the niqior area of social responsibility engaged hy organiza ions, as evident

from data collcclctl i n this rcsearch is Iinmcial donations to ch; rity groups. A

clear undcrstatiding oS who these groups arc, what exactly they are doing, will

help. Awarcnrss i s also necded on the side of tllc social groups t c know that they

can actually direct (heir request to business Corporations Tor help.

Also in ;~ccord:~tice with h e lil~rlings this research is the me hy Agaga,

1991 whcrc lllc rcspo~~dc~it corporatiori i h l i llcd hindr:wcc> to its social

responsibility erfiwts as h e vanclalizntion of its projcds by unscru x~lous clurncnts

in he ccmim~~nity. a ~ ~ d the clc~iiar~d by thc host corn~nrrnity Ibr prc !jccts which are

beyond tlicir rc:wl~.

CONCI,USION AN!) SUGGESTED AREAS FOR FUKTIIEU RESEARCH

'I'lic Irndil iori:il Iwrlwsc fur wliich the busi~~css organizations exis cd was tu ~nnkc

prolit ly satis (;/ i ~ r f : socichl nceds aid wants by producing goods a.id scrviecs.

66

For I~usir~css org;~r~imtio~~s to S I I~V~VC, it hik~ to i~ilal~t to llic cvc~--cl~;~nging

environrneritnl Elctors. cspccinlly t l~c Iiulnan cxpcctations.

C'crtain proniincnt cl~angcs l w c sitiuc trrkc~ placc i l l lllc busi~ic!:; Corporations.

I'lie Corporations, li)r instn~icc hnvc taken a new staticc as a perm: ncnt institution

in the society. Co~iscqucrilly their traditional shorl-tcr~t~ proilt obj kctivc Ilad to bc

adjusted to iticl~~tlc lo~ig-term oljcclivcs or survival, grow 11 and public

acceptnhility. In order lo aditrst to tl~c society's growing expect ~tiotis, it has to

change from its traclitior~al cco~iurnic postul-c to ;I socio-econt rnic o11c ill its

objectives nrld r-olc wl~icl~ crlahlcs it to willingly and :~ctivcly pro Tcr solutions to

social prablr.ni<.

I iowever, critics nrguc, a~id the cplcstior, still is: Arc busincss org; nizations really

implementing this Ctwpurak Social I<csponsibility? IIavc licy gcntriricly

accepted this new social responsibility? Do they as a rcsult d :vclop husincss

ventures frtm (lie poi~lt or vicw of solvi~ig sociclal problems? Are t h y activcly

involved i n sul'cg~larrfing tlie enviroti~r~cnl and public I~cnlll~? Do tlicy as a rcsult

of this convictior~ 11inkc the working cnvironrncnt s a k and rlcasant Ibr thc

workcrs' satisfi~ction'? Arc they actually being hirdcrcd hy so ~ i c chlaclcs in

trying tc~ ncliicve llicir CSR goalsi?

Data liwn I11c survey ol' thirty-tlirce c n ~ ~ ~ p a t ~ i c s in tlnugu 'l'owr worc analyzccl

using Ihc chi-sqrwr-c lcst stalistics. I;intlitlgs of this rcscarch sl how that tlinugli

husincss twgnni7nlioris ntlrnit(cd 1i:lving a social not j ~ s t econorni : rcspor~sil~ility,

but tlicy arc riot i~rnclically inlplc~ncnhg thcir Corporate Socia' l<csponsi bility.

Tile nctivitirs are still I~uing pro~i~ptcd rnorc by thcir ccoriolriic obicctivcs Illan

fro111 a socinl pcrspccli~.~.

In tlic cowsc or c : ~ r ~ - y i ~ ~ g out this research, the fbllowing arcas tvcrc discovcrcd to

be closely rclatccl n ~ ~ d could in fact al'rcct thc findings of the ~esearcli. The

findings will give lwttcr insight to lie issue or Corporate Social Rcsp msibilitics.

Social l?csl~or~sil~ility of business organizalions.

2. The eff'ecl oT tl~c size or Rusincss Corporation on its Cc rporate Social

Resporlsi hilily.

3. 'I'lie role dGovcnlmcn1 in enforcing the environmental prole :lion laws.

1:zcll. Godwill N. (1990) C o r ~ ~ o ~ n t e Social Rcsporis bility nf tlircc

selected Di~siness Eiiterpriscs in Niget'iii A proiect ;ubmitted to the

d e p r trllelit of rlirrliagement IJNEC; July P. 64.

Ferr-ell, 0. C. slid Georfrey 1-Iirt (1989) Busincss Boston: I loughtori

h,l i mi11 C7~mil~any; 1'. 80.

T;n~.busli. U. I< el a1 (1960) Maiiaqemc~it_Relationsli p with the Public

Illi~iois: Norllnvesteni University. 1'. 27.

1'o1 ( I . 1 Icrwy 11 ( I 970) Tlic I-Iu1iia11 E11virollment am 1 Busi!iesc Ncw

J'OI It: Ll 'n j - lwigl~t arid Tn1lt.y Iric. 1'. 63

I I;llwy I'2rinn ct a1 (1984) h4aringcnierit Corporate ocial I'olig

I ,olidu~i: The blncmillan 1)ress Ltd. P. 127.

I l a n q Urym (1958) Industrial I-lcalh 'Sechnolopy London:

Ruttcnvortli and Co. Ltd, P. 25 1.

1 Iellrinegel, Don & Solcurn, Jol111 W. Jr. (1992) Ma ~ a ~ e m e n t Sixth

Erlitio~l New York: Addison - Wesley Publishing C ornpany.

I licks, Rolw-t G and Gullett, Ray C (198 1) Matnagcmnt Fourth

jiditiy- New Yolk: blc; Graw Hill. P.77.

I lu i~~ldc, .lol~n ( 1 973) "Gcititig Ready ror the Social 12csp011sihilily

Awli~" :T>e Director I7ebsitary 1973 citcd iri Hicks, t. G. and gullct,

I'\. C. ( 1 ?X 1 ) I'vImagetue~lt Fourtli Erlilio~l New YOI lc hllc Gsaw

1 l i l l . 1'. 7-7.

l;nqt, I;. I:. tk Koserizwcig J . E. (1985) Osgmizatio1 and

hlai~rrggtiic~lt: A systc~tls and contin,ggic_v Approacl _I:ou~ t l ~ Edition - -

New Y~urk: Mc Graw I M I . P. 157,

Lilteret; Joseph A. (1978) Maonge~ocnt: Coticegts : nd Cootrovcrsics

John Wiley C ' Sons. 1). 330.

N igcr.ialr Ilnvi~-o~lnvnl Study/Adio~i 'I'c:m (1 99 1) " itudy Rcvcals

CIritlcsprcnrl Pollutiorl in Nigeria T;rcsh Water Resol rces"

Guarclia~i - hloiiday .Itinc 17. P.20

(horegic, AIficcl( 1994) ,411 Evaluation or Social F csyonsibility by

Gcne~-aI Cot1011 hllill Ltcl O~iitslia A IJI qjccl subrni ttt d to h e ikcul ty

of hs incss Adnlinistratior~ IJNEC; Jmuary P. 72

O ~ ~ w u ~ l e ~ n i , IScmyi (1995) "Aug~y Youths attack Sl~ell P e t r o h m

17il m" V;~~l,gw~~-cl 'l'uesrlny July 1 1 . P. 30.

Qr~iri~l, James Bt-ian ( 1 972) "Ncxl Big Intlust~y: 1 3 1 irormental

I ~liplwenlent'' 1413R: Guides to COI poratc Social Rc sr~onsibility

Ikistori: I-lnlvar-d B~lsi~lcss School P. 93

12escar-t;li tl~ld Policy Co~nriiitice (197 I) Social Resc mibility of

l3usincss Corporations: A S h t e ~ i c ~ i t 011 Nntiorlnl 1 ' ~ l i g Ncw York: --

1'ED; June 1\17 I . 1'. I4

Rockcfellcr, Rodrl~ari (1972) "Turn public: problems to Privalc

38. Webley, Simon (1 975) Coiporate Social Respom bili Ly Lotdon:

I'uhlic Relations C'or~sullants Associi~tion. P. 62.