THE IMPACT OF SOCIAL RESPONSIBILITY ON ORGANISATIONAL IMAGE
(A CASE STUDY OF CADBURY NIGERIA PLC)
ABSTRACT
This study focuses on the impact of social responsibility on organizational image. A case study of Cadbury Nig. Plc. The main objective of the research work was to determine the real impact of social responsibility as a tool for organizational image in other to make profitability and maximize shareholder wealth, to make the interest of shareholders such as owners, employees, customers, community government and society at large. The survey method was used, the size of the entire population is too large for the study but in this study a sample size of sixty (60) staffs were selected out of the total, number of seventy (70). Questionnaires were distributed to sample size of sixty (60) respondent randomly selected. The research instrument employed in this study were questionnaire and interview. Data were presented in tabular form for easy understanding. In analysis of data, simple percentage (%) method was used for easy understanding while chi-square statistical technique was employed to test the hypothesis. The findings revealed that, business organisation in Nigeria are socially responsible to some extent but not adequately responsible to employees and society at large. The corporate social responsibility has not been effective in the country due to: Reduced profitability, Excessive government taxation, lack of corporate and public awareness, Government policy, High cost of production, management principle and policy etc There is positive correlation between social responsibility and achievement of business goals. Recommendations in this research study is that the Government should grant tax concessions to corporate bodies so as to reduce financial pressure on the business units. The outcome of the study has revealed that corporate organizations should be socially responsible for their direct impacts on the community.
Basically, the five (5) key words from the project are deal with the following: Impact, Social responsibility, society, organisation and image.
TABLE OF CONTENTS
Pages
Title of page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of Contents vii
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 6
1.3 Research Questions 7
1.4 Objectives of the Study 7
1.5 Significance of the Study 8
1.6 Research Hypotheses 8
1.7 Research Methodology 9
1.7.1 Scope of the Study 9
1.7.2 Limitations of the Study 10
1.7.3 Sources of Data 10
1.7.4 Analysis of Data 11
1.7.5 Area of Study 12
1.8 Definition of the Terms 12
References 15
CHAPTER TWO
LITERATURE REVIEW AND THEORETICAL FRAMEWORK
2.1. The Concept of Social Responsibility 16
2.2 Definition Of Social Responsibility 17
2.3 Historical Background Of Cadbury Nigeria Plc 20
2.4 Current Review 23
2.5 Classification Of Social Responsibility 30
2.6 Should Organisation Be Socially Responsible (View Points
of Different Scholars) 32
2.7 Organisation Objective and Mission 34
2.8. Argument in Favour of Social Responsibility 36
2.9. Factors Affecting Corporate Social Responsibility 38
2.10 Summary 39
References 41
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction 43
3.1. Research Design 43
3.2. Data Sources and Method of Collections 43
3.3. The Study Population 44
3.4. Sample Size and Sampling Technique 44
3.5. Research Instrument 44
3.6. Method Of Data Presentation And Analysis 45
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1. Analysis of Questionnaire Administration 46
4.2 Analysis of Respondents 46
4.3. Analysis of Respondents Bio-Data 46
4.4 Analysis of Research Questions 50
4.5 Test of Hypotheses 59
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings 62
5.2 Conclusions 64
5.3 Recommendations 65
5.4 Suggestion for Further Studies 69
Bibliography 71
Appendix Questionnaire 74
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The impact of social responsibility is a concept whereby an organisation considers the interest of society by taking responsibility for the impact of their activities on customer’s suppliers, shareholders in the environments. Social responsibility of management is the ethical and moral responsibility of the organizational image to the total society. It refers to social obligation beyond legal and economic obligation for an organisation to pursue long term goals that are for the benefit of the society.
The social obligation of management isthe obligation of the organisation to meet its economics and legal responsibility. Social responsibility is seen as obligation beyond the statutoryobligation to comply with legislation and sees organisation voluntary taking a steps further to implore the quality of life of the employees and their families as well as the local community. and the societies at large. All organizations have an impact on society and environment through their operations, products orservices and through their interactions with the key stakeholders group including employment, customers, suppliers, investors and local community. While traditional business models primary emphasize on the economic aspects of organizational activities (e.g profitability and growth) more modernconception of organizational behaviour lay equal stress on social, ethical, and environmental impact as exemplified by the notion of corporate socialresponsibility. It is in view of this that business are today much more sociallyresponsible than before. Business are interested not just in the quality of goods
and services they produce but also in their business environment. Theyappreciate good image and acceptability of their product and services by thepublic. This could means substantial improvement of long run profits. A lessimage could have a negative effect on the business social responsibility. Buta result of greater influence and pressure from groups like labourresponsiveness to social needs, this could make the business more responsive. Social responsibilities whether of a business, government, non-government orany organisation may arise in two ways. They may arise out of the socialimpact of the institution, or arise as problems of the society itself. Both are concern to management because the institutions, which the managers oversee,exist within the society. The first deals with what an institution can do for the society. Based on the fact that business relies on society for existence. For example, business depends on society for high quality of goods and services at affordable prices. In view of these, the interrelationship between organization servicing the interest of everyone effected by or connected to it. Like the government, shareholder, employees, consumers and the society.
Corporate social responsibility is defined as the serious attempts to solve social problems caused wholly or in part by the corporation or the obligation of a business to assist the society within which it operates, to solve some of the social problems affecting the welfare of the society.It is a truism that companies whether local or international corporations (ICH’s) have certain corporate social responsibilities to perform. The area of controversy is whether companies is the performance of these corporate social responsibilities should adopt a strict and technical approach or a liberal and broad approach. The technical is to the effect that a company owes responsibilities only to its shareholders. Advocates of this approach base there arguments on the long laid down company law and rules a company owes responsibility only to the shareholders who invest their money in the company and appoint directors to manage the affairs of the company in their interest.
The liberal approach is a contemporary approach adopted by some legal scholars. The thesis of this approach is that a company owes responsibility not only to its shareholders but also to its employees, customers as the case may be the community and the state within which it operates. Despite the above, ascertaining the call for corporate social responsibilities has not been effectively overblown. The problems however are where this or such responsibility does begins and where does it end, what rules of conduct should govern the exercise of executive authority? Should a firm plan shareholdersinterest before those of society or environment? Should a firm be held responsible for social consequence of this operation? When is this relationship necessary and when is it an excessive burden? What even is corporate social responsibility? Drucker (2004) came out with two ways through which the demand for social impact of business organisation is required.
The negative consequence on business activities like rural-urban drift traffic jams, environment pollution, deception and advertising defective products offered for sales in seller markets, tax aversion and avoidance etc. It may arise from problem of the society itself, which includes falling standardsof living, illiteracy, poor infrastructural facilities, inadequate social amenitiesand the growing dis-enhancement with government and its ability to solve major social problems. Hence, society has come to expect business with successful operations of this task to solve major parts of their problems by developing social responsibility objectives and processes. Conclusively, business cannot run away from the problems of the society.
According to Luthans and Hodgets (2006), social responsibilities are the obligation of businessmen to provide those policies, to make those decisions or to follow lines of action which are the desirable in terms of the objectives andvalues of our society. Bedetin (2007) defined social responsibility of the business as including the reactive responsiveness to its obligatory operational legal requirement to its stockholders and also its shareholders. The stockholders of the business are society, the government customers, employees and the community at large. From the above, it can be stated that impact ofsocial responsibility is obligation of business to assist the society within whichit operates to solve some of its social problems resulting directly or indirectlyfrom the functioning or activities of the business. A business is a subset of thesociety, within which it operates, it imports its human and material resourceswhich it operates, it process into output of goods and services from the society and subsequently exports back to output to the society, it therefore means thatsociety responsibility is the need for the corporate bodies to give back from it. Should a business be socially responsible? “Yes”.
A business operation causes environmental pollution and sanitation hazards to the society in which it exist. One is responsible for one’s impact whether they are intended or not. Therefore, the social impact of the business organisation is the management business, because one is responsible for one’s impact. One minimize them. Impacts are at times a nuisance e.g. sanitation -hazards and at worst harm e.g. environmental pollution. They are never beneficial as they carry within themselves a cost and a threat. Furthermore, a business is a meeting place of interest for shareholders such asowners, employees and customers etc reconciled before it can achieve its desired objectives and there some interest groups who contribute to business performances, and build good image for the organisation. Impact of social responsibility is the actions that protects and improve the welfare of the society along with its own interest. It is frequently said that companies ought not merely to sense only the interest of their customers but the interest of all the people who have a stake in the organisation social responsibility focus on somethree key areas. The fist was the extent to which a manager should compromise his loyalty to the society in general in the interest of his loyalty and responsibility to his organisation. The second relates to the manner in which the employers exercise his authority and use his wealth in meeting not only the economy but also the human need of employers. The third concept concerns expectation of business enterprise (e.g Banks) to serve as patrons and financial benefactors. Social responsibility is viewed as those investment in, and contributions to the wider community designed in creating the healthy environment or good environment that the company requires to survive andoperate efficiently. It involves upholding shareholders interest in a venture byensuring good return on invested capital. It involves creating good will and good public image for the company by rendering efficient services and maintaining a satisfy work force to the society. It involves maintaining customers satisfaction by reducing customer complains, it involves cooperating and working hand in globe with government by helping them to set national objective and creating the framework infrastructure that will help individual component in the economy to promote growth and development. From the above, it can be seen that business has various groups to whom it should be socially responsible and in different forms. The researcher will further bring out or highlighted more important areas of impact of social responsibility insubsequent chapter.
1.2 STATEMENT OF THE PROBLEM
If problems can be define as conditions that are affecting the majority of people as affecting the majority of business organisation adversely about whichsomething should and can be done. Then, some problems which this study is attempting to look into could be profit maximization, Government policies in the area of high tax rate, revenue, ‘levies and rate. Lack of good will, poor customers satisfaction, poor economic infrastructural – framework in thesocieties i.e bad road, water, power supplies, administrative systems and unemployment. The main objective of many organizations is profit maximization.
Experience has shown that many organisation has failed to achieve this objective (i.e profitabilityand growth) because of their inability Ito perform the impact of social responsibility on the organisation.
1.3 RESEARCH QUESTIONS
The research work on the impact of social responsibility is a mechanism for creating a positive organizational image. To evaluate this study, some tentative statements and questions shall be tested. Some of the question are includes:
(1) What impact does social responsibility have on the corporate image of the organisation?
(2) What impact does social responsibility have on customers’ patronage?
(3) Should government policies affect corporate bodies in the discharge of their social responsibilities?
(4) What impact does image of the organisation have , on their performance?
1.4 OBJECTIVES OF THE STUDY
The major objectives is of this study is to examine the impact of social responsibility on organizational image. Other specific objectives are;
1. To examine the organization policy, image and the activities on the society.
2. To examine the effect of social responsibility on organizational image
3. To determine how government policies affect company in the discharge of their duties.
1.5 SIGNIFICANCE OF THE STUDY
This study will evaluate the impact of social responsibility on organizational image towards organizational survival with special reference to Cadbury Nig. Plc. The study on social responsibility is important to organisation and society at large. The organisation would benefit by knowing the fact and different area whereby they can be socially responsible measure their impact on the society and be able to convert this opportunity hence improve their corporate image and maximize reasonable profit. It also assists the organisation to understand the opinion of the public and their reactions to society responsible organisation. The study on social responsible organisation.
The study of social responsibility will be useful to scholars especially those in the field of social sciences.
1.6 RESEARCH HYPOTHESIS
The research hypothesis show the relationship between the explain variable thatrelatively important to determine the correlation between organizational imageand social responsibility. In order to achieve the aims and objectives of thisstudy, the following hypothesis have been formulated:
1. Ho: There is no impact of social responsibility on an organizational image.
Hl: There is impact of social responsibility on an organizational image.
2. Ho: Business organisationsare not socially responsible in the cause ofmaking profit and maximization shareholder wealth.
H1: Business organisationsare socially responsible in the cause ofmaking profit and maximization shareholder wealth.
3. Ho: Social responsibility is not waste of resources.
H1: Social responsibility is a waste of resources.
1.7 RESEARCH METHODOLOGY
Research methodology is the operational blue print which the researcher plans to employ in accomplishing the objective of the study. It adequacy will determine the success or failure of the study. It deal with ‘how’ and not the ‘what’ and ‘why’ aspect of the study.
1.7.1 SCOPE OF THE STUDY
The study focuses on the impact of social responsibility on organizational image. The scope of this study is also centre on Cadbury Nigeria Plc especially in the performance of their moral and ethical content of managerial and corporate decision and the resultant effect it has on the organizational profit. It has been established earlier that business contributes more to the equality of life than only producing. This research work focused on areas where organisation failed to respond to the need of Nigeria population and to introduce new dimension of responsibility to organization thereby strengthen and faith which the customers have in the organisation.
1.7.2 LIMITATIONS OF THE STUDY
In the course of conducting this research work it is expected that the following will constitute impediments to the effective conduct of the study
a) Time constraint within which the study must be completed.
b) Financial constraint
c) Inaccessible and inadequate data
Nevertheless, I believe the above limitations will in no way affect the reliability and validity of the research study.
1.7.3 SOURCES OF DATA
Data were sourced from both primary and secondary sources. For primary sources, interviews and questionnaires were administered to allow for proper and direct responses. For the questionnaires, the questions were mostly of the open ended type. This was to enable the respondents to:
· Give answers in a complete form to all areas needed for the research study
· To enhance quick and timely response to the questionnaire
· To facilitate easy understanding of the needs of the research and
· To increase the response rate of the questionnaire administered.
Also, to consolidate the reliability of the primary collection of data, in addition to the interview and questionnaire earlier mentioned, a critical observation of activities was also done, and this also added to collection of more facts on the research study.
Secondary sources of data are sources outsides the direct site of study, and these include published annual reports, journal, unpublished work of courses and seminar, library and desk research literatures and other related articles and manuals.
1.7.4 ANALYSIS OF DATA
The study used both descriptive and inferential statistics in analyzing the data. Also, simple frequency counts, percentages and the chi-square were used in the data analysis.
Questionnaires would be used to gather data. In analyzing the data and information made available through questionnaire, tables would construct and the percentage distribution of the information supplied would be determined.
Chi-square would be used to test the relationship between the variables. The hypothesis are formulated from a negative and positive position i.e. a Null and alternative hypothesis (Ho and H1 ) respectively.
A procedure that enables a decision to be reached as to whether to accept or reject a hypothesis will be carried out they are called test of significance.
Once the chi-square value is calculated at 5% confidence interval shall be used to determine whether he hypothecs sis true.
1.7.5 AREA OF STUDY
The research covers LagosState, specifically Cadbury Plc. Located at Ogba area of LagosState.
1.8 DEFINITION OF THE TERMS
For the study of magnitude the keyword used in the research study shall be defined for better understanding of the topic. The following terms are defined as they are used in the context of this research work.
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