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Comparative Analysis on Corporate Social Responsibility Laws: Perspectives From UK, European Union and Nigeria

Abstract

Corporate Social Responsibility (CSR), the set of standards to which a company subscribes in order to make its impact on society, has the potential to contribute to sustainable development and poverty reduction in the world. What can be questioned though is if the Corporate Social Responsibility models developed in the West are the best suited for CSR implementation in all parts of the world. Today there is knowledge that western institutional and management models exported to other regions of the world are not always very successful (Wohlgemuth, Carlsson & Kifle ed, 1998).

Research also indicates that the understanding and practice of CSR is socio-culturally framed (Amaeshi, Adi, Ogbechie & Amao, 2006). Despite this knowledge, surprisingly very little of mainstream literature and research focus on how other regions than regions from the West embed the CSR agenda. This thesis therefore, takes its focus on Africa in general, and on Nigeria specifically.

The purpose of this thesis is to investigate and analyse the concept of CSR from a Nigerian perspective to form a baseline for further research. The purpose is to examine how Nigerian organisations view their role and part in reaching sustainable growth and development in Nigeria, and to find out what the learning experiences are. The primary data has been collected through a field study, including personal interviews and dialogues with a number of Nigerian organisations.

The field study shows that CSR as a concept is relatively new in Nigeria and started off as a response by multinationals to remedy the effects of their extraction activities on the local communities. CSR from a Nigerian perspective can be viewed as two-fold. Firstly, there is the recent development of formal CSR practices mainly driven by MNEs and large national companies. These initiatives are mainly philanthropic with practices and understanding to a large extent “imported” from the West.

 

 

CHAPTER ONE

INTRODUCTION

  • Background to the study

Since the late 1980´s, there are many who have explored the effects of globalisation and global capitalism. In the beginning most people viewed the system as the best system with regard to contributing to wealth creation. But in the mid 1990´s, the failures of the system, like the huge income gaps between nations, were beginning to become obvious.

The debate has been concerned with the need for a strong and moral ecology which reflects the wider social and cultural mores of society. For this ecology to be developed there is a need for support, not only from governments, but from all stakeholders, not the least from the private business sector.

Dunning (2003) urges the development of what he names a Responsible Global Capitalism that should not be considered as an end in itself, but as a means of social transformation of societies to create a better life for its citizens. According to Dunning no single religion or philosophy can force its unique values and standards upon others but each religion or philosophy can contribute to a sustainable moral ecology.

In this transformation process it is difficult not to consider the private business sector as one of the main stakeholders in transforming and improving society.

The Bali Roundtable on developing countries in 2002 recognised the business sector as a primary driver of economic development and the World Summit for Sustainability identified business involvement as critical in alleviating poverty and achieving sustainable development (www.un.org).

Corporate Social Responsibility (CSR), the set of standards to which a company subscribes in order to make its impact on society, has the potential to make positive contributions to the development of society and businesses. More and more organisations are beginning to see the benefits from setting up strategic CSR agendas. The CSR movement is spreading over the world and in recent years a large number of methods and frameworks have been developed, the majority being developed in the West. This thesis, though, will take its focus on Africa in general, and on Nigeria specifically. The purpose is to investigate and analyse the concept of CSR from a Nigerian perspective.

A number of studies indicate that the understanding and practice of CSR is socio-culturally framed (Amaeshi, Adi, Ogbechie & Amao, 2006). Despite this fact, research on management and CSR in Africa is relatively scarce and to a large extent based on a developing-developed world paradigm (Jackson, 2004).

With regard to Nigeria, studies on CSR do exist, but it seems like most of these studies have focused mainly on multinational companies and less neither on indigenous companies nor on the regional contexts in which the companies operate (Amaeshi, Adi, Ogbechie & Amao, 2006).

Lately, the failures of institutions in Africa have been debated. What is important to remember in this debate is that most African countries inherited a model of strong and centralised state with the main purpose to uphold law and collect taxes. This system served well its original purpose of preserving law and enforcing taxation but it was not particularly well suited to the needs of post independence Africa (Dia, 1996).

Today there is a growing understanding, that western institutional and management models exported to other regions of the world are not always very successful (Wohlgemuth, Carlsson & Kifle ed, 1998).

According to the study, “African management in the 1990´s and beyond” (Dia, 2006), conducted by the World Bank, the institutional failures in Africa are primarily due to no or weak links between the western institutions and institutions with their roots in the history and culture of the country.

Since the exported models have not reflected the values of society, they have not created engagement and ownership amongst the people. Africa needs institutions that are connected to local culture and tradition, but that are also open to new thinking and recent research supports this need for co-existence (Wohlgemuth, Carlsson & Kifle ed, 1998).

It appears logical that the problem of transferring Western models, without the models being linked to local culture and tradition, most probably apply to Corporate Social Responsibility models as well.

Further, there are more and more authors beginning to explore the complexities of CSR. McIntosh (2003) writes about how complexity theory explains, in the natural sciences, the inexplicability of certain observed phenomena and how to understand single residents as parts of the whole. McIntosh refers to the complexity of most CSR situations and how complexity theory can be of support within the CSR context.

McIntosh further claims that one problem for the Corporate Social Responsibility movement is about its efforts to develop instruments that can measure the results of Corporate Social Responsibility. He believes these systems are moving towards a universality that makes it difficult to measure unpredictability. Mcintosh also proposes a practical methodology for managers, a framework that will be based on what South Africa social philosopher and activist Mark Swilling has called “culture of humanity”.

Swilling wants to find greater co-operation between the sciences and the humanities, and wants to use the complexity approach because of the humanistic issues of ethics in theory and practice.

This study has as its entry point CSR from a Nigerian and UK perspective. Nigeria has a long experience of managing cultural diversity and multiple stakeholders and its citizens and business leaders have to manage cross cultural dynamics on a daily basis. There ought to be lessons and experiences drawn from good practice in Nigeria that can contribute, not only to managing in Africa but to managing throughout the world.

1.2 Statement of the problem

CSR has been a major contributor to sustainable competitive advantage for profit and non-profit making organizations. It has been established that firms that practice CSR accrue benefits among which include better sustainability, better anticipation and management of risk, improved reputation, retention of staff, operational efficiency, cost savings and improved relations with regulators  (Chepkwony, 2004).

Governments of developing countries have been accused of refusing to enforce standards and regulations or easing business regulation relating to CSR. (Campbell, 2007; Moon and Vogel, 2008).This could be the reason why some organizations in Nigeria address CSR issues in their strategic plans while others don’t address it at all. In organizations that practice it, it is done so on philanthropic/ voluntary basis. Rowley, (2006) observed that libraries’ commitment to environmental issues which is an aspect of CSR, is significant but implicit rather than explicit. She further noted that there should be more coordinated debate, policy‐making and actions in this area of CSR.

The Nigeria and UK constitution has made provisions for CSR albeit to a limited extent. It is implied and not elaborately provided for. Nigeria vision 2020 social pillar aims at improving people’s quality of life through education, training, health, environment, housing, urbanization, gender, children social development, youth and sports (Ministry of Planning and National Development, 2007 & National Economic and Social Council, 2007).  These are focus areas of CSR. For example the vision acknowledges that country’s institutional framework to manage the environment is characterized by fragmentation.This demonstrates the need to enhance CSR legal framework and policy in the country. This study will compare how institutionalization of CSR by other governments has enhanced strategic positioning of organizations including information institutions. It will identify CSR initiatives being practiced in both UK and Nigeria. It will further recommend strategic approaches that the government can apply to strengthen CSR legal framework and policy in order to guide its practice in information institutions and other organizations.

1.3 Objective of the study

The main objective of this study is to compare the legal framework guiding corporate social responsibility from UK, EU and Nigeria perspectives. To fulfil this purpose and to create a guideline for the research I have defined the specific objectives as:

  1. To evaluate what can be learnt from Nigeria in the continuous improvement journey of CSR worldwide
  2. To evaluate the understanding and reason for CSR in Nigerian organisations
  3. To examine how Nigerian companies implement CSR compared to UK
  4. To evaluate the learning experiences and solutions for the future with regard to business participation in creating a sustainable society

1.4 Significance of the study

The study of corporate social responsibility lies at the crossroads of a number of academic disciplines. It is intimately concerned not only with the management of business enterprises but also goes to the essence of the purpose and role of these organisations in society. This has implications for philosophy, business ethics, law and economics amongst others.

These are not just academic concerns but have a substantial impact on the lives of many people in countries throughout the world. For example the Social Investment Foundation in 2010 estimated that in excess of $3.1 trillion was invested in ethically orientated funds in the USA, approximately one dollar in nine of total managed funds. Similar proportions are invested in Europe with sustained growth in other countries. There is an expectation and desire by people for corporations to act ethically and responsibly, the notion that firms have no duty beyond maximising their profits may be commonplace in economics textbooks but is not recognised elsewhere. There is genuine dismay and anger when from time to time flagrant abuses by companies are exposed in the media.

1.5 Research Question

The study will aim to answer the following questions

  1. What can be learnt from Nigeria in the continuous improvement journey of CSR worldwide?
  2. What is the understanding and reason for CSR in Nigerian organisations?
  3. How do Nigerian companies implement CSR compared to UK?
  4. What are the learning experiences and solutions for the future with regard to business participation in creating a sustainable society?

1.6 Scope/Limitation of the study

The purpose of this study has not been to examine how Western CSR models can be adapted to a Nigerian context or whether these models have failed or succeeded in Nigeria. The purpose of this study has primarily been to gain a first understanding of CSR from a Nigerian and UK perspective to form a baseline for further research.

 

Due to limited time in Nigeria and the choice of using interviews and dialogues as method, this research does not include an extensive benchmark of CSR practices in Nigeria, but is restricted to a few organisations situated in Lagos, Nigeria.

An option had been to use the method of questionnaire to reach a larger number of organisations in Nigeria but according to our contact persons in Nigeria the response rate would probably had been very low since it is difficult to gain access to Nigerian organisations without previous personal contacts and an existing platform in Nigeria. Other researchers have also evidenced the difficulty of getting hold of people given the distance, why they have had to leverage on social networks to overcome this barrier (Amaeshi, Adi, Ogbechie & Amao, 2006).

Therefore I can not claim to present a fully representative picture of CSR from a Nigerian perspective but this has not been the purpose of the research. The purpose of this study is primarily to gain a first understanding of CSR from a Nigerian perspective to form a baseline for further research.

1.7 Methodology

For the collection and analysis of the empirical data I have used an inductive and qualitative method. When we have the real world as a starting point and investigate the reality through observations we call it an inductive research. The aim of my study has been to obtain what can be called soft data, such as personal understanding and experiences, and therefore I have used the qualitative method appropriate since characterised for openness for new knowledge and new understanding

1.7.2 Collection of data

In my research, I have used both primary and secondary data. Secondary data has been collected from books, articles, reports and internet to gain an understanding of the area and what has already been done. The primary data which is information collected especially for the study and not documented before was collected through personal interviews and dialogues.

1.7.3 Validity and reliability

To what extent an investigation will lead to the same results if repeated is called reliability. To achieve reliability one should be able demonstrate that the operations of the study – such as data collection procedures, could be repeated with the same result.

Validity is reached when the results of a research are in accordance with the reality. One reaches high validity when one measures the whole phenomena that is to be measured and nothing else. It is important to be aware of the fact that information is always interpreted and that a researcher cannot observe or measure a phenomenon without some degree of subjectivity. Patel and Davidson (2003) claim it is not possible to fix any procedures to guarantee the validity in a qualitative research since every qualitative research process is unique.

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