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EFFECTS OF COOPERATE SOCIAL RESPONSIBILITY ON PROFITABILITY OF MULTINATIONAL COMPANIES (A CASE STUDY OF NESTLE NIGERIA PLC, AGBARA)

Dept: BUSINESS ADMINISTRATION File: Word(doc) Chapters: 1-5 Views:

Abstract

The study has been able to explore the full impact of the corporate social responsibility as an instrument that creates a good image of an organization. It position CSR as the foundation on which the goodwill of an organization is well established. The study is an attempt to see if corporate social responsibility addresses the need to take cognizance of all the principle of ethics and morality in business. The problem associated with this study is the opposing views of classical school of thought and socio economic school of thought The classical school of thought believed that corporate social responsibility should not be performed by the firms as they are not expected to be interested in social issues. After all people are in business making money and there is no reason to divert firms profits into social and economic issues. The socio economic school of thought opined that firm must perform social responsibility to justify the mutual relationship between its environment where

• BACKGROUND TO STUDY

For an organization to be highly reputable within the society it exist, the conceptual meaning of corporate and social responsibility must be well understood and must be carried out consistently. The continuous commitment by business organization to have an ethical conduct and add to economic development while improving the quality of the workforce and their family as well as if the local community and society at large.

Social responsibility has been seen as an integral part of wealth creation process if managed properly should enhance the healthy competiveness of business and maximize the value of wealth creation to society. It strictly focuses on the impact of how you manage your business outside the scope of the business operations. It is an ethical conduct where by companies decide voluntarily to contribute to a better society and a conducive environment.

Social responsibility is also a concept where by companies integrate social and environmental concerns in their business operation and in their interaction with their stakeholders on a voluntary basis.

Therefore, corporate social responsibility can be defined as an attracting way of operating a business in a manner that meets or exceed the ethical, legal, commercial and public expectations that society has of business. From these determinations, we can say there exists a symbolic relationship between a business firm and its environment which of course is one of mutual benefit. It is believed that it is only through such a relationship can business firm survive and prosper, otherwise it will wither away. It is not enough to stress that the business men create wealth and employment in a society which they undoubtedly do but how they do it has become the subject of public debate, criticism and scouting.

 

• PROBLEM ANALYSIS

Despite being a concept that involves many positive actions, it still has some constraints attached in its implementation and these are public regulation possible outcry of labour movement or pressure groups, decision making process of an organization and inadequate cost of initiating it.

 

• PURPOSE OF STUDY

The essence of this study is to know the extent at which corporate social responsibility is truly beneficial to an organization, employees shareholders, government, society and consumers as claimed by many business analysis.

 

1.3     RESEARCH QUESTIONS  

The question relevant to this research is as follows.

• Does social responsibility helps in shaping the reputation of an organization immensely?
• Does social responsibility increase sales and customers loyalty or satisfaction rapidly?
• Does corporate social responsibility helps in attracting and retaining employees?
• Does corporate social responsibility enhance product safety and decrease liability?

 

1.4     RESEARCH HYPOTHESIS

This is a tentative statement based on the researchers’ assumption. The hypotheses to be tested are:

HYPOTHESIS ONE

H0:    Corporate social responsibility does not enhance the image and reputation of an organization

H1:    Corporate social responsibility enhances the image and reputation of an organization

HYPOTHESIS TWO

H0:    Corporate social responsibility does not increase customer’s acceptability of product.

H1:    Corporate social responsibility increases sales and customer’s satisfaction

 

1.5     SIGNIFICANCE OF STUDY

The importance of this study is to investigate the research topic “Corporate social responsibility as an instrument to improving organizational image” and also making relevant recommendations that will be useful in the subsequent year.

 

1.6     LIMITATION TO STUDY

This study focuses on the relevance of corporate social responsibility in an organization, government, shareholders and other element involved. It also emphasized on what must be done to curb the negative factors that surrounds or hinder its implementation.

 

1.7     DEFINITION OF TERMS

• BUSINESS: This is individual and collective efforts or activities that are divided towards achieving profitability return on production and exchange.
• CORPORATE SOCIAL RESPONSIBILITY: It is an attracting way of operating a business in a manner that meets or exceeds legal, ethical, commercial and public expectations the society has on a business organization.
• COMPETITION: A situation whereby people or organizations try to be more successful than their counterparts.
• ENVIRONMENT: This is a place where business activities are done both internally and externally.
• ETHICS: These are stated rules and regulations an individual or organization must adhere to. It can be said to be basic rules or principles that define right or wrong decisions in terms of managerial decision or behavior.
• GOVERNMENT: This is an institution whose major activity is to formulate and implement basic rules and regulations that will check the conducts of the people.
• MANAGEMENT: This is a systematic process of getting things done with effective and efficient use of both human and capital resources to achieve stated objectives.
• OBLIGATIONS: This is a duty expected to be carried out
• ORGANIZATION: A group of people with the same sense of direction towards a common goal.
• SOCIETY: A group of people considered in relation to the laws and the organizations that made it possible for them to live together.

 

1.8     BRIEF DETAILS ON CASE STUDY

Great Kings Hotel is a leading organization in the hospitality business with much patronization than its competitors within Igbesa Ogun State, Ado Odo Ota local government. It was established in 2011 by Chief Femi Obanla who is also from Igbesa Ogun State. It is situated along Oba Adesola road, opposite ogun state institute of technology (formerly gateway polytechnic) Igbesa.

As at the year of establishment, the number of workers or staff were eight (8) which has been reduced to 5 due to retrenchment and also to have workers that will work effectively. There service is in diverse ways coupled with a good treatment for each guest so as to enhance patronage.