PROBLEMS AND PROSPECTS OF CORPORATE SOCIAL RESPONSIBILITY OF NIGERIAN MANUFACTURING INDUSTRY
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PROBLEMS AND PROSPECTS
OF CORPORATE SOCIAL RESPONSIBILITY OF NIGERIAN MANUFACTURING INDUSTRY
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO
THE STUDY
Academics and practitioners have been striving to establish
and agreed upon definitions of the concept of corporate social responsibility
for over 30 years. Davis (1960) suggested that social responsibility refers to
businesses’ “decisions and actions taken for reasons at least partially beyond
the firm’s direct economic or technical interest.”
Eells and Walton (1961) also argued that corporate social
responsibility refers to the “problems that arise when corporate enterprise
casts its shadow on the social scene, and the ethical principles that ought to
govern the relationship between the corporation and the society” (p.5).
In today’s dynamic business environment, corporate
organisations are faced with the needs to impact positively on the host
communities, by taking upon themselves certain responsibilities in order to
increase their societal and environment influence. Organisations also included
social and environmental concerns in business operations rather than focusing
on profit making only. Organisations have developed a variety of strategies for
dealing with this intersection of societal needs, the natural environment, and
corresponding business imperatives with respect to how deeply and how well they
are integrating social responsibility approaches into both strategy and daily
operations worldwide.
Many organisations such as banks and some manufacturing
companies in Nigeria are driven by the need to make more and more profits and
that is the sole aim of every business. In a bid to meet this target, some
companies do not adequately respond to the needs of host communities,
employees’ welfare (cheap labour often preferred), environmental protection and
community development. Research has shown that corporate social responsibility
can increase profitability, sustainability, integrity and reputation of any
business that includes it in its policy.
Nkanga (2007) posited that corporate social responsibility
involves the commitment shown by companies to contribute to the economic
development of a local community and the society at large. The adoption of
corporate social responsibility policy should not be driven or motivated by
increased profit. Rather, giving back to the society that gave to the business
first should be the motivating factor. It is a common practice by Nigerian
organisations to put as one of their mission statements the provision of
corporate social responsibility. The organisations must have realised that
stating corporate social responsibility as one of their mission statements hold
special appeal to the stakeholders. Hence, there is an increasing awareness and
recognition accorded corporate social responsibility by corporations.
Some critics according to Carpenter, et al. (2010) have
argued that corporate social responsibility as implemented by some
organisations is mere facade. It is widely believed by many that corporate
social responsibility efforts are mere campaigns by organisations to promote
corporate brands. Many Nigerians are ignorant of corporate social
responsibility; hence, whenever an organisation does something ‘supposedly big’
for the society, such a company and its management are eulogized for being
caring and philanthropic.Manufacturing companies in Nigeria are expected to
manage the impacts of their operations by adopting corporate social
responsibility (corporate social responsibility) programme. Onwuegbuchi (2009) in his studies on
corporate social responsibility among manufacturing firms reported that most
manufacturing companies in Nigeria embarked on corporate social responsibility
programme for the purpose philanthropic gesture and for government and public
appraisal. He further stated that some manufacturing companies applied
environmental and labour standards that suit them to satisfy basic requirements
of the laws of the country.
The Nigerian government should ensure that manufacturing
companies’ corporate social responsibility policy entails self-regulation,
adherence to rules and regulations, ethical standards, environmental
responsibility and sustainability, consumers’ satisfaction, employee welfare,
communities and stakeholders benefits.
The problems of the environment in which an organisation
operates cannot be ignored. Therefore, there is a need to examine the problems
and prospects of corporate social responsibility in Nigeria. In its stronger
form, the concept of Corporate Social Responsibility (corporate social
responsibility) asserts that corporations have an obligation to consider the
interests of customers, employees, shareholders, communities, as well as the
ecological ”footprint” in all aspects of their operations.
1.2 STATEMENT OF
THE PROBLEM
Despite the huge attention recently given to corporate social
responsibility (CSR) in Nigeria, anarea of concernstill remainorganisations in
the manufacturing sector. Most manufacturing organisations still do not see any
reason for corporate social responsibilitypolicy acceptability. Companies that
reluctantly accepted and adopted the corporate social responsibility policy, do
so for profit-making purpose.
Another lacking area on corporate social responsibility is
that most of the studies on corporate social responsibility were conducted on
nations with developed economies and their findings were found out not to be
applicable to some developing nation’s economy like the Nigeria. Therefore,
this study will examine the problems and prospects of corporate social
responsibilities in Nigeria using the manufacturing industry as a case study.
It is ironic that these organisations take resources from the external environment
and it is only natural to give back what has been exploited. Unfortunately,
this anomaly is a norm in this part of the globe and this cankerworm can only
be ameliorated through research thesis such as this, publication, media
publicity, campaigns and awareness emphasising the importance of corporate
social responsibility in our society.
1.3 OBJECTIVES OF
THE STUDY
The broad objective of this study is to examine the problems
and prospects of corporate social responsibility in the Nigerian manufacturing
industry. Specifically, the study is designed to:
Investigate how corporate social responsibility (corporate
social responsibility) influences organisationalreputation in the Nigerian
manufacturing industry.
Cross-examine the difference between level of perceived
customers’ patronage and brand loyalty among companies that practices corporate
social responsibility and organisations that donot practice corporate social
responsibilityin the Nigerian manufacturing industry.
Analyse how corporate social responsibility adoption
influences organisational performance and profitability.
Assess the economic, social and environmental factors
influencing corporate social responsibility (corporate social responsibility)
adoption among manufacturing companies in Nigeria.
RESEARCH QUESTIONS
The manufacturing industry plays a significant role in the
growth and development of the Nigerian economy, and corporate social
responsibility ought to be a voluntary act by the manufacturing companies. It
should not have to be forced on organisations by the law, government, and civil
rights groups or by the communities. Social responsibility should be a
deliberate inclusion of public interest into corporate decision-making and the
honouring of a triple bottom line of people and profit making.
In this dissertation there are four specific research
questions coined after the statement of the problem and they are listed below.
Are there differencesbetween level of perceived customers’
patronage and loyalty among companies that practices corporate social
responsibility and those that do not practice corporate social responsibility
in the Nigerian manufacturing industry?
What extent would corporate social responsibility adoption
influence organisational performance and profitability?
Whatare the economic, social and environmental factors
responsible for the poor performance of corporate social responsibility
(corporate social responsibility) adoption among manufacturing companies in
Nigeria?
1.5 RESEARCH
HYPOTHESES
To provide empirical answers to the research questions above,
the following research hypothesis were developed. They are as stated below;
Hypothesis I
H0: Corporate
social responsibility (corporate social responsibility) does not influence
organisational reputation in the Nigerian manufacturing industry.
H1: Corporate
social responsibility (corporate social responsibility) influencesorganisational
reputation in the Nigerian manufacturing industry.
Hypothesis II
H0: There is no
significant difference between level of perceived customers’ patronage and
loyalty among companies that practices corporate social responsibility and
those that doesn’t in the Nigerian manufacturing industry.
H1: There is a
significant difference between level of perceived customers’ patronage and
loyalty among companies that practices corporate social responsibility and
those that doesn’t in the Nigerian manufacturing industry.
Hypothesis III
H0: Corporate social responsibility adoption does
not influence organisational performance and profitability.
H1: Corporate
social responsibility adoption influences organisational performance and
profitability.
Hypothesis IV
H0: Economical,
social and environmental factors do not influence the performance of corporate
social responsibility.
H1: Economical,
social and environmental factors influence the performance of corporate social
responsibility.
1.6 RESEARCH
METHODS
This study adopts descriptive survey method. Therefore, a
cross-sectional research design is used to design the methodology. The premise
for this research method is because data are collected from the population for
intensive study and analysis.
More often than not, the research cannot possibly study all
subjects or items in the population. Hence, a selective random sample from or a
subset of, the population was taken.
The reasons for random sampling are;
Among the elements (manufacturing companies in Lagos state)
that make up the population of study there are similarities and therefore a
study of few of these elements will give the researcher sufficient knowledge of
what is obtainable in the entire population study.
It is cheaper to engage in the random study
It allowed for quicker results and more thorough research
conduct.
It is practically impossible to consider all elements in this
research considering the limited time frame.
The target population for this study arethe manufacturing
companies in Lagos State, but due to large number of manufacturing companies
located in the State, some selected organisations will be considered for this
study. Primary data will be gathered through questionnaire administered among
randomly selected employees of the selected companies. The data will be
analysed using frequency and percentage tables and a descriptive analysis will
be carried out using a software package for statistical analysistool.
1.7 SCOPE AND
LIMITATION OF THE STUDY
The focus of this research would encompass the problems and
problems of corporate social responsibility and its impacts. The impacts of
social services by corporation shall be examined in relations to financial
performance, employee commitment, and community development. The study shall
focus on the Nigerian manufacturing industry. The perceptions of some key
players of the industry shall be sought for the purpose of this research work.
Due to limited time of the study and the choice of using
questionnaire method, this research does not include an extensive benchmark of
corporate social responsibility practices in the Nigerian manufacturing
industry, but is restricted to a few organisations situated in Lagos, Nigeria.
Though the study uses vital insider information from these organisations,
confidentiality of names, data, facts and figures were treated with utmost
secrecy and with a caveat.
The reliability and validity of the data can also be verified
and contested, but of course that will not be necessary.
1.8SIGNIFICANCE OF THE STUDY
The importance of this dissertation is not just to analyse
the practice of corporate social responsibility but to understand the current
practice, the level of understanding of corporate social responsibility by
manufacturing organisations in Lagos state in relation to how it should be. It
will explain how corporate social responsibilities affect the performance of
these firms.
The research would also help to explore the impact of
corporate social responsibility on employees’ commitment to the
organisation.What part does the employee play in corporate social
responsibility? Can he influence the decision making process? What is their level of understanding of the
concept?
1.9 ORGANISATION
OF THE STUDY
Chapter one of the study provides background of the study,
stating the problem of the study and the research questions and hypotheses to
be tested in the study. It also highlights the significance of the study and
scope of the study.
Chapter two reviews related literature on problems and
prospects of corporate social responsibility of Nigerian manufacturing
industry. It looks at different authors’ definitions of corporate social
responsibility and its activities affects organizations’ reputation, customers’
patronage and brand loyalty. Chapter two examines corporate social
responsibility adoption influences organisational performance and
profitability. How economic, social and environmental factors are responsible
for the poor performance of corporate social responsibility (corporate social
responsibility) adoption will also be extensively reviewed.
Chapter three discussed the research methods to be used in
designing the study which will include research design, population, sample size
and sampling technique, data collection and data analysis methods.
Chapter four presents the data gathered in frequency and
percentage tables. The data will also be analysed and research hypotheses will
be tested with chi-square statistical test.
Chapter five summarises the outcome of the study, draw
conclusions based on the findings of the study and make necessary
recommendations.
1.10 DEFINITION OF TERMS
Commitment: Commitment as defined in this study means when an
employee pledges his loyalty to an organisation. It is an application,
dedication or pledge to an engagement or obligation that restricts freedom of
action.
Community: Community as used in this study means a group of
people who live in an area where an organisation operates. They are a group of
people having a religion, race, profession, or other particular characteristic
in common.
Social Responsibility: Social responsibility as described in
this study is a demonstration of certain responsible behaviour on the part of
public and the private (government and business) sectors toward society and the
environment.
Performance: Performance is the manner in which an
organisation functions, operates, or behaves in the society.
Stakeholder: This study describes a stakeholder as a person
or group with a direct interest, involvement, or investment in a business
organisation e.g. the employees, stockholders, and customers of a business
organisation.
Hypothesis:A hypothesis is a tentative statement about
relationships that exist between two or among many variables. It is a
conjectural statement about relationships and need to be tested and
subsequently accepted or rejected.
Theories and laws: A hypothesis, if it is true, state a law.
Therefore, the hypothesis is a law like statement. Law is defined as a
statement of invariant relationship among observable or measurable properties.
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