ABSTRACT
This research work focused entirely on the effect of Social Responsibility on organizational effectiveness. This study however, shows that investing in CSR initiatives brings about employees’ commitment and organizational survival. It shows the importance of CSR to Human Resources Management, the Risk of HR’s involvement in implementing CSR initiative and some theories and models were used for further explanation. Academy Press Pic was used as a case study of which 30% of their staff was randomly selected as my sample, questionnaires were given and completed by them. Hence, the major instruments used in the collection of information for this research work were questionnaires and interviews. The data obtained were subjected to analysis through the use of percentage and Chi-square to calculate the findings. Recommendations were made based on the findings which will go a long way in ensuring the effectiveness of an organization if implemented.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
As recent as a decade ago, many companies viewed business ethics only in terms of administrative compliance with legal standards and adherence to internal rules and regulations. Today the situation is different. Attention to business ethics and social initiative are on increase across the world and many companies realize that in order to succeed, they must earn the respect and confidence of their customers and other stakeholders. Like never before, corporations are being asked, encouraged and prodded to improve their business practices to emphasize legal and ethical behaviour, through their employees. Companies, Professional firms, government parastatals and individuals alike, are being held increasingly accountable for their actions, as demand grows for higher standards of Social Responsibility.
Social Responsibility is an ethical or ideological theory that an entity whether it is a Government Corporation, Organization or Individual is accountable to the society. This responsibility can be ‘negative’ in that it is a responsibility to refrain from acting (resistance stance) or it can be ‘positive’, meaning there is a responsibility to act (proactive stance). While primarily associated with business and governmental practices, activist groups and local communities can also be associated with social responsibility, not only business entities.
Nevertheless, the practice of Corporate Social Responsibility (CSR) will be the focus of this study and its effect on organizational effectiveness will be thoroughly examined. Corporate social responsibility simply means eliminating corrupt, irresponsible or unethical behaviour that might bring harm to the business or company, its people and most especially, the environment before the behaviour is being portrayed.
The following are some simple definitions of Corporate Social Responsibility (CSR)
Ø It is the responsibility to profitably serve employees and customers in an ethical and lawful manner.
Ø It is an organization’s obligation to maximize its positive impact and minimize its negative impact on society.
Ø It is the concern for the consequences of an institution’s or a person’s act as its might affect the interests of others including the environment and involuntary customers.
Ø Also, it is a concept that businesses should be actively concerned with the welfare of society at large.
Ø It is a business’s collective code of ethical behaviour towards the environment, its customers, its employees and its investors.
Ø It is the responsibility of a responsible agent who chooses to participate in a society and acquire the benefits thereof.
According to International Standardization for Organisation (ISO), “CSR is the action of an organization to take responsibility for the impacts of its activities on the society and the environment, where this action; is consistent with the interests of the society and its sustainable development; is based on ethical behaviour, compliance with applicable law and inter-governmental instruments and; is integrated into the ongoing activities of the organization” (Drafted definition of Social Responsibility of ISO 26000).
In principle, the term CSR refers to the obligations of companies to society; more specifically, it refers to a company’s stakeholder and those affected by corporate policies and practices. Although, there is a CSR dichotomy between the “right thing to do” (normative case) and an “enlightened self-interest” (the business case), executives and companies’ reasoning as they relate to engaging in CSR will likely reflect a mixture of these (Smith 2003: 52-76). Also, CSR principle is concerned with the societal obligations of business which many organizations agree, but, the nature and scope of these obligations has been a subject of debate.
In today’s society, a business must maintain ethical principles in order to be successful. According to Kaliski (2001), businesses can use ethical decision making to strengthen their business in two (2) main ways. The first way is to use their ethical decision making to increase productivity by embarking on programs that employees feel directly enhances their benefits, like, better health care, better pension program and effective career management among others. So, one thing that all companies must keep in mind is that employees are stakeholders in the business, that is, they have a vested interest in what the company does and how it is being run, since, most employees will be proud to be identified with an organization that is socially responsible and have favourable reputation.
The second way that business can use ethical decision making to strengthen their business is by making decisions that affect its health as seen by the stakeholders outside the business environment, that is, customers, suppliers, citizens and so on. If we were to look at company like Academy Press Pic, their strong sense of responsibility to the public is well known to be a training ground. As the company attract student on Industrial attachment and a lot of citizens in their neighborhood under its apprenticeship training scheme. Not only does the company train the above mentioned, rather, allowances and other welfare packages were paid. The company does this as its own C5R initiative by bearing the training cost and brought itself to people’s minds as a training ground. Hence, it enjoys additional effort these trainees put into its overall productivity and performance.
However, these are the two ways in which management of any company can use ethical behaviour or decision making to strengthen their business and they serve as the scope to cover when embarking on the implementation of C5R initiative.
The Importance of CSR to Human Resources Management
CRS needs to embedded in an organization’s culture to effect a change to action, attitude and gain the support of the top level communication and implementation of ideas and policies in order to enhance behavioral changes towards the ethics and culture of both the organization and society at large. It is the role of HR Manager to influence attitudes and link line managers with the top level management which mean that it is ideally placed to play the same role with CSR.
HR is also responsible for the key systems and processes assisting effective delivery. Through HR, CSR can be given credibility and aligned with how businesses are run. CSR could be integrated into HR process through employer brand, recruitment, appraisal, retention, motivation, reward, internal communications, diversity, coaching and training.
HR has a key role in making CSR work. CSR without HR runs the risk of being dismissed as PR or mere “window dressing”. Hence, effective CSR initiative gives HR Practitioner better opportunity of having good strategic focus and act as a business partner.
The way a company treat its employees contribute directly to its being seen as willing to accept wider responsibilities, build credibility and having trust in them. This is increasingly seen as important by employees, especially when they choose who they want to work for. People, especially younger generation, don’t want to work where there is a clash with their personal values. Present and future employees are placing increasing value on the credibility of an organization’s brand. Employers are using the positive aspects of their brand in recruiting, motivating and retaining highly-skilled people.
Finally, companies need to co-ordinate their CSR activities and demonstrate their commitment to it. Effective CSR depends on being seen as important throughout service delivery and not rhetoric, which is required by the stakeholders in developing trust in organization.
The Risk of HR’s Involvement in Implementing CSR Initiative
As good as it is necessary that the HR department in an organization should be involved in implementing CSR initiative, an extensive caution should be ensure as a result of the risk involved in the process.
The trust built through successful CSR is hard to regain if lost. HR needs to ensure that their organization’s social responsibility can stand up to the inevitable scrutiny by stakeholders, and that Training and Effective·
Communication with regards to the best ethical behaviours expected, are embedded in the organization’s culture.
HR needs to be an active business partner working with other functions, for example, finance, sales & marketing and so on. It will need to look beyond the boundaries of usual practice and arguably work on its own PRO CSR is a strategic opportunity which is market-led and is restrained by bureaucracy. It must be dynamic, creative, and imaginative and even create better opportunity.
1.2 STATEMENT OF PROBLEM
Corporate social responsibility has become a subject of debate in virtually all organizations among members of management. While, some view it as a cost and a diversion from the corporate goals, others view it as a tool to organizational effectiveness and corporate survival.
As a result, two schools of thought with divergent views of social responsibility of management have emerged. They are the Classical and the Socio-economic school of thoughts.
The Classical school of thought is of the view that the only social responsibility of Management is to maximize profit since the only concern of owners is the financial return. Milton Friedman is an advocate of this school of thought. The believe of the advocate of this school of thought is that they see Corporate Social Responsibility (CSR) as a cost which could hinder the accomplishment of any organization’s main objective – Profit Maximization. Thus, the proponent of this school of thought against investment in CSR.
The Socio-economic school of thought is of the opinion that the responsibility of Management is both to make profits and to protect and improve the welfare of the society. Although, this school also agrees that there are some cost associated with CSR, hence, the proponent of this school are of the view that management must accept not only some social obligations, but also, the cost that goes with them so as to maximize their financial returns in the long run.
It is in the light of the aforementioned problem drawn from an extensive study and in an effort towards achieving organization effectiveness, in terms of increasing productivity and corporate survival, through CSR that this research will be undertaken.
The Research tries to investigate if CSR could really serve as a tool of achieving organizational effectiveness, using Academy Press Pic as a case study.
The study shall deal extensively in validating whether CSR is a cost or benefit to an organization.
1.3 PURPOSE OF STUDY
The main purpose of this study is to determine if an organization’s Social Responsibility initiative could serve as a tool to achieve organizational effectiveness. However, the following could also serve as the purpose of this study, viz;
i. To examine the benefits derivable from investing in CSR.
ii. To examine if the fair treatment of stakeholders in organization is compatible with increasing productivity and corporate survival.
iii. To examine if CSR serves as a proactive strategy to societal demands or complaints.
iv. To make appropriate recommendations.
1.4 RESEARCH QUESTIONS
The research study shall provide answer to the following questions;
i. Is Social responsibility a tool for Organizational effectiveness?
ii. Can CSR give any long-run benefit to an organization?
iii. Is CSR capable of keeping an organization on-going?
iv. Can CSR help an organization to attract and retain competent staff?
v. Can CSR help an organization to improve its productivity level?
1.5 RESEARCH HYPOTHESES
The hypotheses to be tested in this study are;
Ho: There is no relationship between social responsibility and Corporate Survival
Hi: There is relationship between Social responsibility and Corporate Survival
Ho: There is no relationship between Social Responsibility and Workers’ Commitment in an organization
Hi: There is relationship between Social Responsibility and Workers’ Commitment in an organization
Ho: There is no inverse relationship between CSR and the Hostility of the people.
Hi: There is inverse relationship between CSR and the Hostility of the people.
1.6 SIGNIFICANCE OF THE STUDY
This research work will be beneficial in many respects to all organizations – Academy Press Pic in particular. It will help the organization to know that, embarking on Social responsibility initiative among other factors will enhance organizational effectiveness, corporate survival and reduce the rate at which stakeholders become hostile to an Organization.
The study will also gear up the HRM department of the need to advise Management accordingly on the issue of social responsibility and to whom Management should be socially responsible to. Also, it will enhance other researchers in similar field.
1.7 SCOPE AND LIMITATIONS OF THE STUDY
This study is about the effectof Corporate Social Responsibility on organizational effectiveness. It thus, focuses on the importance of ethical behaviour, if imbibed in them, which often times brings about employees’ commitment, reduces stakeholders’ hostility, develop best social initiative and finally enhance organizational survival.
The limitation of this research study will be subjected to financial constraint, time insufficiency, inaccessibility to foreign materials among others.
Also, the extent to which the organization in which reference will be made in this study is secretive and the numerous numbers of people the research study will cover, in terms of organization’s stakeholders, serve as limitations of the study.
1.8 ORGANISATION OF THE STUDY
The study begins from chapter one in which the background to the topic in question is being dealt with states clearly some of the objectives, significance purpose and likely problem of the study and the rest of this study proceeds as follows; chapter two briefly reviews the pertinent Literature and Theoretical framework for this study; chapter three encompasses the Methodology of the study, while chapter four is the Data Analysis using Chi-square. Finally, in chapter five, the Summary of the Findings as well as Recommendation for further research and conclusion will be examined.
1.9 DEFINITION OF TERMS
SOCIAL RESPONSIBILITY: – It is a social obligation beyond legal and economic obligation, for an organization to pursue long-term goals that are for the benefit of the society. It is an obligation put up by organization in order to give back to the society from which it sources its inputs.
SOCIAL OBLIGATION: – This is the obligation of management directed to meet its economic and legal responsibility.
ORGANISATION EFFECTIVENESS: – This as to do with harnessing the available resources to achieve the best result which leads to increased productivity, faster decision making, less internal conflict.
ORGANISATION PERFORMANCE: – This refers to the effectiveness of the organization in fulfilling its purpose.
CORPORATE SURVIVAL: – This is a process of coping with the strength and exploiting the opportunities open to an organization by defining its vision and mission and devising strategies towards their accomplishment.
PR: – This simply means Public Relations as used in the context of this research work.
HR: – As used in this research work, it means Human Resources Management as a profession.
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