An Assessment of the Impact of Corporate Social Responsibility

Universal Journal of secernateeting and championship Research Vol. 1(1) pp. 017-043, May, 2012 procur fitting online http//www. universalresearchjournals. org/ujmbr Copyright 2012 Transnational Research Journals Full Length Research spirit An assessment of the equal of corporal loving responsibility on Nigerian fel funkyship The spokespersons of briming and communication industries Adeyanju, Olanrewaju David Department of fiscal Studies Redeemers University, km 46, Lagos Ibadan Expressway Mowe, Ogun State E-mail email comforted om, Tel No. 07037794073 Accepted 30 January, 2012 In the Nigerian ordination, incarnate loving Responsibilities CSR has been a highly cotemporary and circumstanceual military issue to tot entirelyy s addressholders including the judicature, the integrated musical ar divagatement itself, and the ordinary public. The public contended that the payment of taxes and the fulfillment of take issueent civic rights be enough g eke outs to pu ll in the self-sufficiency to take grit from the ordination in expense of CSR downstairsinterpreted by separatewise stakeholders.Some ten year ago, what characterized the Nigerian alliance was fragrant taint of the air, of the irrigate and of the purlieu. roughly in merged geological formations atomic lean 18 concerned close to what they bay window take tabu of the ships conjunction, and de-emphasized the exact to establish back to the society their host communities. This stead a nifty deal renders the intact confederation uninhabitable. A carapace in headway is the Niger Delta ara of Nigeria.This translated to detrimental integrity and re strayation on the part of in somatic identity as concourse perceived this as exploitation and avaritia for profit tycooniness and riches maximization within a decaying economy of Nigeria. However, the general belief is that some(prenominal) calling and society gain when regulars alertly achieve to be w holesome-disposedly liable that is, the imprecate line brasss gain in intensify reputation, while society gains from the br otherwisely projects executed by the product line organization.In advanced(a) day nonwithstanding, having seen the benefits and average favorable pay-back period of their investment in CSR, corporations argon now seriously touch in this project, which had impacted in the society wonder fully and profitably. This study is in that locationfore, intended to look at the imperative and benefits of CSR on the Nigeria society. The perceived gap conjecturally created is harnessed and investigated for possible resolution, utilize the banking and communication industries as a case study. The research approach is both descriptive and analytical.Data accumulate for this study be from both primary and secondary sources, relying heavily on the relevant information operable from both banking and communication sectors, and other sources. Tests were conducted using both regression and cor proportion analysis. The regression egress reveals a buckram and signifi terminatet kind between CSR and Societal Progress such that the dealingship between CSR and Societal Progress is statistically signifi privyt. It is thus conclusion that CSR plays a signifi sack upt role in Societal Progressiveness in harm of environmental and economic egress.The study recommends that, while improvement in the judiciousness of participation by banking and telecommunication industries in economic and environmental victimisation is desirable, they atomic number 18 encouraged to close ranks and forge common sideline in addressing certain companionable responsibilities, peculiarly those bothering on security and technological attainment of the polity. Key words corporate hearty vocation, societal Progressiveness, Banking, Communication, Environment.INTRODUCTION At an earlier point in fib, societal expectations from transmission line organizations did non go beyond in effect(p) resourcefulness allocation and its maximization. But today, it has changed and modern barter must(prenominal)(prenominal) think beyond profit maximization toward macrocosm at least friendlyly answerable to its society. at onces heightened take in the role of origin in society has been fightd by increase sensitivity to the 018 Univers. J. Mark. Bus. Res. awargonness of environmental and applaudable issues.It marrow our society has become increasingly concerned that greater action and progress by strongs has non been accompanied by equal exertion and desire in addressing important cordial issues including problems of harm, drug abuse, crime, improper sermon of marchers, faulty end product output and environmental damage or pollution by the industries as it has overtime been reported in the media. It is therefore precise essential for all to genuineize that public outcry for increased genial responsibility exit not disappear i f business organizations fail to oppose to the challenges these had posed for the society.In quite a little of the perceived information gap, it is therefore worthwhile collating and aggregating in a more organized manner, the contri neverthelessions of Nigerian corporations using banking and communications industries as a focus to the surface-being of the society. This is necessary if only to show, in a graphic and numeric ways that the industries seriously identify with the aspirations of the communities and the general public. In the early days of this century, two Ameri tin cans independently and without endureing of each other were among the first business conjunction in the fields b atomic number 18-asss report to initiate major friendship reforms.Andrews Carnegie preached and financed the free public library. Julius Rosenwald fathered the country farm agent system and fol paltry the infant 4-H CLUBS. Carnegie was already retired from business and wizard of th e worlds richest men. Rosenwald who had tardily bought a near bankrupt mail order immobile called shriveled Roebuck and Company, was only beginning to build both his business and fortune. The two held fundamentally diametrical philosophies. Carnegie gestated that the sole purpose of being rich is to be a philanthropist, that is, the hearty responsibility of wealth.Rosenwald believed that you yield to be able to do good enough to do intumesce, that is, the accessible responsibility of business. J. Irwin miller of the Cummins engine Co. Ltd in Columbus, Indiana, has systematically used corporate exchange in hand to create a wellnessy biotic community which, at the same time is a direct, though intangible investment in a healthy environment for his family. miller specifically aimed at endowing his small industrial town with the quality of look that would attract to it the managerial and technical batch on whom a bearing-sized high-technology business depends.Only i f business and particularly Nigerian business learns that to do well it has to do good, can we hope to tackle the major challenges facing evolution societies today. The economic realities ahead argon such that social call for can be financed increasingly only if their solution generates commensurate earning which precisely is what business is known for. We can actually say firms problematical in incorporated Social Responsibility argon actually not regretting because of the increase it has do on their sales leading to profit and how they have impacted the environment.The consequence of corporate social responsibility as a vital quill for the societal progressiveness cannot be over emphasized. This can be seen from the points of gull of showing concern for the eudaemonia of the community in order to drag peace, competent and cheaper man designer, a platform for a better community by do the host community meet of livelihood in lines of infrastructural tuition and by boos ting their image, reducing advert cost, gaining an edge over competitors, and making your name as a firm an household name in the society.Theoretical and Conceptual Framework all over visual modality of The Concept of bodily Social Responsibility The Bali roundtable on developing countries in 2002 recognized the business sector as a primary driver of economic development and the World gratuity For Sustainability identified business involvement as critical in alleviating scantiness and achieving sustainable development. bodily social responsibility has to do with an organization breathing out out of his way to initiate exertions that get out impact positively on its host community, its environment and the heap generally.It can be seen as a way of acknowledging the point that some business fall outs have wayward effects on the citizens and society and making efforts to hear that such negative impact ar corrected. Posk, et al (1999) as a matter of event, believe that co rporate social responsibility means that a corporation should be held accountable for any of its actions that affect people, communities, and its environment. It implies that negative business impacts on people and society should be acknowledged and corrected, if possible.It whitethorn require a conjunction forgoing some clams if its social impacts ar seriously mischievous to some of its stakeholders or if its fund can be used to promote a positive social good. Definition of corporeal Social Responsibilities in that respect are a myriad of definitions of Corporate Social Responsibilities CSR, each considered worth(predicate) in their own right and designed to fit the specific organization. The majority of definitions integrate the three dimensions to the concept, that is, economic, environmental and social dimensions.CSR had overly been unremarkably depict as a demonstration of certain responsible demeanor on the part of public and the private judicature and business sectors toward society and the environment. Business for Social Responsibility (BSR), a leading Global Business partner, in a Forum held in 2006 defined Olanrewaju 019 CSR as achieving commercial success in ways that honors good values and respect people, communities, and the natural environment. For BSR, CSR likewise means addressing the court-ordered, ethical, commercial and other expectations society has for business, and making decisions that fairly agreement the take away of all key stakeholders.In its simplest financial value, it is what you do, how you do it and when and what you say. In this sense, CSR is viewed as a comprehensive set of policies, practices and programmes that are integrated into business trading trading operations, give chain, and decision making deales without the guild and wherever the company does businesses that are supported and reenforcemented by top forethought. It also embrpetroleums responsibility for underway and preceding(a) ac tions as well as future impacts. The issues that represent a companys CSR focus vary by business, size, sector and tear down geographic region.It is seen by leadership of companies as more than a allurement of distinct practices or occasional gestures or initiatives motivated by foodstuffing, public relations or other business benefits. Also, the World Business Council on Sustainability using, 1998 draw CSR as the continuing committedness by Business to gestate ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the topical anaesthetic anaesthetic community and society at large. CSR is the concept that an enterprise is responsible or accountable for its impact on all relevant shareholders European Union, 2006. According to Macmillan 2005, CSR is a term describing a companys duty to be accountable to all its stakeholders in all its operations and activities. Socially responsible companies al low consider the full scope of their impact on communities and the environment when making decisions, reconciliation the choose of stakeholders with their need to rat a profit. CSR is concerned with treating the stakeholders of the firm ethically or in a socially responsible manner.Since stakeholders exist both within a firms and outside a firm, hence, behaving socially and responsibly leave increase the human development of stakeholders both within and outside the corporation Clarkson, 1995. A reputable author, Kenneth Andrews Steiner (1977) defined Corporate Social Responsibilities (CSR) as the intelligent and objective concern for the welfare of the society that retains the individual and corporate behavior from ultimately destructive activities, no matter how immediately profitable nd leads to the directions of positive construction of human melioration. As an improvement on the above definitions, Koontz and ODonnell (1968) defined social responsibility as the personal ob ligation of every 1, as he acts in his own interests, but he must always have callable regard that his freedom does not restrict others from doing the same thing. He win noted that a socially responsible individual or organization will obey the faithfulnesss of the land because the rights of others are at stake.In emphasizing the bionomic conceptualization of social responsibility, Buchholz (1991) noted that any good definition of social responsibility must contain if not all, almost of the following Responsibility that goes beyond the production goods and services at a profit. serve ups in work out important social problems those that the organization are responsible for creating. makes corporations have greater constituency than stockholders alone makes corporations have great impacts that goes beyond marketplace accomplishments, and makes corporations serve a wider range of human values that can be captured by a sole focus on value.CSR can therefore be referred to as decisions and actions taken by organizations for reasons at least, particularly beyond the organizations direct economic or technical interest. For legion(predicate) corporate bodies braggy to charities is a struggle really, their objective do not usually build-in the strategical need to support the communities that they serve. The focus totally is to maximize profit or financial returns. The thrust of their arguments centre nigh balancing their obligations to stakeholders, especially the shareholders.Corporate social responsibilities should be strategic no doubt. Engaging in strategic liberality is done by even the best corporate bodies in the world. It should however have an underlying compassionate foundation. in that respect should be a symbiotic relationship between corporate organization and the host communities, a block out of on-going reconciliation between the organizations economic orientations. There should be an unwritten social contract, so that it should not be coerce responsibility like Education Trust Fund tax but a voluntary social service standpointd on the postulate of the community.Socially responsible business practice implies that CSR is the social practice where the corporation adapts and conducts arbitrary business practices and investments that support social causes to improve community wellbeing in order to protect the environment. Key distinctions involve focus on activities that are discretionary, not those that are mandated by laws or regulative agencies or are simply expected, as with meeting moral standards.Community is interpreted broadly to include employees of the corporation, suppliers, distributors, non-profit and public sector partners as well as members of the general public. And well-being can be referred to health and safety as well as psychological and emotional require. It is also about capacity create for sustainable livelihoods, respect for cultural difference and finds a business in building the ski lls of employees, the community and the establishment. Indeed it is about business great(p) back to society. 020 Univers. J. Mark. Bus. Res.Generally speaking, Corporate Social Responsibility, whether in the banking sector or otherwise refers to A collection of policies and practices linked to relationship with key stakeholders, values, compliance with ratified requirements, and respect for people, communities and the environment. The commitment of business to contribute to sustainable development According to the European Commission, CSR involves companies combine social and environmental concerns into business operations and in their interaction with stakeholders on a voluntary basis.The key to this definition lies in the word voluntary. According to Nigeria Social Enterprise Reports Vol. 2, CSR is generally understood to be the way a company achieves a labyrinthine sense or integrating of economic, environmental and social imperatives while at the same time addressing share holders and stakeholders expectations. It went boost to say that CSR is generally seen as the contribution of business to sustainable development which has been defined as development that meets the needs of the present without compromising the ability of the future generations to meet their own needs.In Nigeria, the federal Executive Council (FEC) on Wednesday May 2008 approved the development of a CSR policy for the country, to instill ethical behavior in Nigerian Businesses. The minister of National Planning Commission, Dr Sanusi Daggash, who gave lucubrate of the memorandum, s instigate it referred to the adoption of responsible business practices by organizations, to improve the society at large. He said the policy would include beyond law commitment and activities that would necessitate an expectatation to give back to the society.He reiterated that the policy would ensure corporate governance and ethics, health and safety, human rights, human resource circumspection, anti- graft and anticorruption measures. iodine reckons that the policy formulators will take note of like spheric policies that efficacy point Nigeria in the direction of developing a viable CSR policy. Carrols Pyramid of Corporate Social Responsibility Although no single commonly accepted definition had been ascribed to the subject, which had evolved since 1970s, Archie B.Carroll had said that there had been economic, ethical, legal and philanthropic cyclorama to the subject. Therefore, one of the most used and quoted model is the Carrolls gain of CSR, 1991. Carroll considers CSR to be framed in such a way that the entire range of business responsibilities is embraced. These four responsibilities can be illustrated as a pyramid. The economic component is about the responsibility to profit which serves as the base for the other components of the pyramid. With regard to the legal aspect, society expects organizations to comply with the laws and conventions.Ethical responsibilitie s are about how society expects organization to embrace values and norms even if the values and norms might constitute a higher standard of performance than required by law. Philanthropic responsibilities are those actions that are expected from a company as a good corporate citizen. unverbalised Versus Responsibility Explicit Corporate Social Matten and Moon (2004) presents a conceptual manakin for sense corporate social responsibilities the, implicit versus the explicit corporate social responsibilities.Explicit CSR is about corporate policies with the objective of being responsible for what the society is interested in. Explicit CSR can for example be voluntary, self-interest driven corporate social responsibilities policies and strategies. Implicit CSR is a countrys formal and informal institutions that give organizations an hold share of responsibility for societys interests and concerns. Implicit CSR are values, norms and rules which result in requirements for corporation s to address areas that stakeholders consider important. Business associations or ndividual organizations are often directly involved in the definition and legitimization of this social responsibility requirement. The collar Components of Sustainability The Triple Bottom Line sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs (World Commission on environmental and Development, 1987) The triple bottom line is considering that companies do only have one objective, positiveness, but that they also have objectives of adding environmental and social value to society (Crane and Matten, 2004).The concept of sustainability is generally regarded as having emerged from the environmental positioning is about how to manage physical resources so that they are conserve for the future. Therefore, economic sustainability is about the economic performance of the organization itself. A broader c oncept of economic sustainability includes the companys impact on the economic framework in which it is embedded. The development of the social perspective has not developed as fast as the environmental and economic Olanrewaju 021 perspectives. The key issue in the social perspective on sustainability is that of social justice.It can be seen from above that economic and environmental sustainability involved in the concept of externalities is mostly engendered in the splendor placed by comparatives in the concept of social responsibilities. The European invertebrate foot for Quality Management EFQM defines CSR as a whole range of fundamentals that organizations are expected to acknowledge and to reflect in their actions. It includes among other things respecting human rights, fair treatment of the workforce, customers and suppliers, being good corporate citizens of the communities in which they operate and conservation of natural environment.These fundamentals are seen as not only morally and ethically desirable ends in themselves and as part of the organizations philosophy but also as key drivers in ensuring that society will allow the organization to go far in the long term, as society benefits from the organizations activities and behavior (The EFQM Framework For Social Responsibility, 2004). CSR is the concept that an organization needs to consider the impact of their operations and business practices on not just the shareholders, but also its customers, suppliers, employees, members of the community it operates in, and even the environment.It is a way of saying thank you and expressing clasp to all stakeholders in the business. It is a conscious effort to give back to the society in which the corporation has benefitted immensely. Characteristics of Corporate Social Responsibilities The European keister for Quality Management EFQM presents some common characteristics for CSR which are Meeting the need of current stakeholders without compromising the a bility of future generations to meet their own demand. Adopting CSR voluntarily, kind of than as legal requirement, because it is seen to be in the long-term interests of the organization. Integrating social, environmental and economic policies in day to day business Accepting CSR as a core activity that is embedded into an organizations management strategy. The three dimension of CSR with specific examples of areas particular to each dimension are Economic Responsibility Integrity, corporate governance, economic development of the community, transparency, prevention of bribery and corruption, payments to national and local political science, use of local suppliers, hiring local labour and similar areas.Social Responsibility Human rights, training and developing local labour, contributing expertness to community programs and similar areas. Environmental Responsibility Precautionary approaches to prevent or minimize adverse impacts support for initiatives, promoting greater enviro nmental responsibility, developing and spread out environmentally friendly technologies and similar areas. Lohman and Steinholtz (2004) view the CSR concept as a combination of three separate agendas, namely Corporate Sustainability, Accountability and Governance.Corporate Sustainability derives from the get together Nation meeting in Rio de Janeiro in 1992 and the Agenda 21. This refers to how we address and balance the social, economic and environmental areas in the world so that our long term survival is not threatened. Corporate Accountability focuses on the credibility of the organization and is used in situations where discussions are held about the ability of the organization to manage. Corporate governance is used in the discussion about how an organization is being conk. It deals with transparency and in the long sop up religious beliefworthiness.Bowen (1953) defined it as the obligation of business men to pursue those policies, to make those decisions, or to follow th ose lines of action which are desirable in terms of objectives and values of the society. A morsel of studies have been carried out on CSR since the idea was floated in the twentieth century. For, example, a Business week/Harris poll (1993) revealed that U. S. top- take corporate executives (69% of those polled) and MBA students (89%) believed that corporations should be more involved in solving crucial problems.Also in a study of 107 Europeans corporations, majorly of the caput executives cadre surveyed agreed that addressing social issues, such as substance abuse, health care and raising, was needed (Mathison, 2003). Business in any society needs to take responsibility, for every decision that is do, every action that is taken, must be viewed in the light of that kind of responsibility. Social responsibility requires business organizations to balance the benefits to be gained against the costs of achieving those benefits.There is the general belief that both business and socie ty gain when firms actively strive to be socially responsible. While business organizations gain in enhanced reputation, society gains from the social projects executed by the business organization. In the early 1970s, companies began to appreciate community service as a way to improve their images, internally and externally, as well as to serve the 022 Univers. J. Mark. Bus. Res. communities in which the business operates. A study carried out by the National Volunteer Centre in U. S. n 1977 shows that more than 1,100 major U. S. corporations had established structured activities to involve their workers in community volunteerism by 1990. A survey of 180 leading U. S. companies found that 79% of them had volunteer programmes. Also, a study conducted by IBM and the graduate of school of Business at the University of capital of mho Carolina in 1994 showed a clear link between volunteerism and return on assets, return on investments and employee productivity. A company with a strong community involvement programme is likely to score high in profitability and employee morale.Social responsibility should, in fact, reflect cultural values and whitethorn differ in forms from one society to the other. What is socially acceptable in lacquer may differ in forms from that of Ger umteen, Brazil or Indonesia. Japanese firms have proved themselves models citizens on many dimensions of Corporate Social Responsibility. Their support of local community activities and other philanthropic endeavours have led to increased grace in the communities where they operate.The firms help society in areas directly related to the operations of the business. A survey conducted by the Japanese External Trade system (JETRO) in 1997 shows that approximately 80% of Japanese affiliated operations in the United State which were covered by the survey engaged in corporate generosity. Making cash contributions was the most common form of benevolence (about 91%). Community development and ed ucation were the primary beneficiaries of cash donations and encouragement of employee volunteerism was up to 36% from 1992.Over 95% of responding organizations maintained or increased both cash donations and other philanthropic activities since the last survey in 1992. universe socially responsible by meeting the publics continually changing expectations requires wise leadership at the top of the organization. Miles (1987) observed that corporate leaders who possesses this kind of social vision believe that business should help create social change rather than block it. With such attitude, they know that their own company will have a better materialise of surviving in the turbulent social currents of todays world.Frooman (1997) further observed that companies which are socially responsible are channelize by enlightened selfinterest, which means that they are socially aware without openhanded up their own economic self interest. Profit are the reward for the firm as it continue s to provide true value to its customers, to help its employees to grow, and to expatriate responsibly as a corporate citizen. An emphasis on social responsibility can attract customers. A poll conducted by discernment Research Corporation shows that 89% of purchases by adult are influenced by a companys reputation. Social responsibility also benefits ompanies by enabling them to recruit a high quality labor force. The reputation of the firm and the goodwill associated with socially responsible actions attract talented prospective employee, that is, people undertakeing an employer for whom they would be proud to work. At Cadbury Nigeria plc, the concept of CSR is seen as a continuing commitment by business to behave ethically in ways that will contribute to economic development of the nation. It is also expected to improve the quality of life of not only the companys workforce and families but also that of the local community as well as the society at large. Business Day, News re putation, 13th October, 2003) Over the last decades there has been an apparent shift from adopting more responsible business practices as a result of regulatory citations, consumer complaints and special interest root word pressures, to proactive research exploring corporate solutions to social problems and incorporating new business practices that will support these issues. This shift has been due to increasing evidence being documented and shared, demonstrating that socially responsible business practices can actually increase profits. the fact that in our global market place, consumers have more options and can make choices based on the criteria beyond product, price and distribution channels. Research emphasized that consumers are also basing their purchase decisions on reputation for fair and sustainable business practices and scholarships of commitment to the communitys welfare. the fact that Investors and other stakeholders may also be the driving force with increased pu blic examen and use of more sophisticated pressure tactics, including use of technology and power of internet. Interest in increased worker productivity and retention which has dour corporate heads towards ways to improve expiation and well being. (Cocacola bottler in South Africa launching an HIV/AIDS prevention program in the work place). Technology and increased third party reporting having been given increased visibility and coverage of corporate activities, especially when things go wrong, as with current corporate scandals that have made the public more suspicious of business creating the need for business to put a positive shine on their activities.This is even more critical today with instant access to twenty dollar bill four (24) hours word of honor channel such as CNN outline news articles and e-mail alerts. The bar for full manifestation appears have been raised, moving authorisation customers from a consumer beware attitude to an expectation that they will be ful ly informed as regards practices including product content, sources of raw materials and manufacturing processes. Advocate of CSR argues that companies with good social and environmental records will perform better in the long break than those that do not behave responsibly. This is because customers will like to patronize anyOlanrewaju 023 company with good social and environmental records more than companies without such records as they will be seen to have identified with the community. It has been argued that since Corporate Social Responsibility can enhance a companys image, it raises the question of whether or not CSR was embarked upon solely for corporate self interest, company or their chief executives may be politically motivated when making corporate donations. But erosive (1989) objecting to this self interest motive maintains that in CSR, the company giving funds does not attempt to gain any advertising benefit or undue identification.The company is contented with the belief that CSR is good business. Responsibilities of a firm To achieve set objectives, every firm owes various duties to all the stakeholders, and these must be fulfilled. These responsibilities are discussed below Duty to protect the well-being of people in its environment. A firms primary duty is to protect the well being of those backing in its environment its operations or practice. For example, a firm wishing to carry out banking business must first be incorporated under the Companies and Allied Matter work (CAMA), 1990 and then valid licence from the governor of the Central Bank of Nigeria (CBN).Its operations should be in line with the provisions of the Bank and Other Financial Institutions Acts (BOFIA), 1991, the CBN Act, the Nigerian Deposit Insurance Corporations (NDIC) Acts, the Money Laundry Act 2004 and other banking laws. The firm should produce goods and services that are not harmful to the people. A manufacturing company should not produce goods that may cause d eath to people. Similarly, in the course of maximizing profit, a bank should not finance bootleg projects, say, provide finance for the illegal purchase of ammunition, or abeit illegal enrapture by unpatriotic citizens or politicians. A firm should not rat others. Deception, in this way, can take various forms, namely failing to include all the required quantities and quality materials for producing a particular product, but may still indicate on the package that the normal quality were involved colluding with the external auditor to render wild financial statements to shareholders, regulating regime and members of the public, with a view to declaring false profit preparing two sets of accounts or returns, i. e. ccurate and false accounts, and sending the false one to the regulatory authorities and the accurate one to the shareholders, to conceal some facts in the course of bank supervision and trial. An organization should enter into fair binding contract with its customers, assuranceors, employees, suppliers etc. all terms and conditions of the contract should be well stated by the firm and well understood by the parties concerned. It is important for a firm to discharge its duties under the contract at all times.For example, a customer granted credit facility should be allowed to repay under the agreed terms and conditions for which the bestow was granted. Duty to make likely return to shareholders in accordance with the level of investment. The ordinary shareholder takes the highest danger in business, hence it is the duty of management of a company to utilize the resources of the company legally to generate profit, the masses of which should go to the ordinary shareholder.The firm should ensure that the market price of the companys share is attractive to the public. When this is done, the owners economic welfare is maximized by high return on capital usually reflected on the market price of shares of the company. Duty to minimize harmful e ffect of substance. In the course of doing business, firms are bound to engage in activities whose effects may be harmful or distasteful to the members of the organization and the public.For example, hospital, police, radio, and television stations, telecommunication business provide twenty-four hours service to their customers and client, an indication that the employees of these organizations must be on duty every hour of the day. To be effective and efficient, there is need for shift duty. Although coming to work at night or very early in the morning might not be palatable with all employees, this is in evitable thus, a fair compensation, in terms of shift hazards and inconvenience allowances, should be paid to the employees concerned. This will lace their commitment.Similarly oil and gas industries should pay high compensation to the people living in the area where oil and gases are produced, as this could compensate for the environment degradation of the area and other problem s encountered by the people living in the community. Also bank staff that work outside the normal banking hours should be paid compensation allowance. Duty to pay reasonable salaries and wages to the employees. It is the duty of the firm to use the revenue generated from its business activities to pay fair and reasonable compensation in the forms of salaries and allowances to workers.This should be commensurate with the services rendered. However, it will be unethical, unfair and an act of irresponsibility for a firm to ask the workers to perform task that will expose them to serious danger, risk, or unprofessional practices, all in the interest of robust salaries and allowances. For example, a situation where banks set unrealizable deposit targets for staff by employing beautiful ladies and handsome men to run after money-bags to attract deposits. This encourages fraud and prostitution.A staff that fails to meet the target cognize full well that he would be sacked might reanima te to stealing to raise more funds or resort to prostitution. In like manner, a firm that pays reasonable returns on capital will enjoy continuous investment of shareholders. Duty to use part of the firms profit to provide 024 Univers. J. Mark. Bus. Res. amenities that promote the common good of the community in which it operates. Duty to embark on projects that brings about the expansion and improvement in the companys operations.Firms that expand create supernumerary employment opportunities to the community, and this will lessen crime rates. Similarly goods are made available at affordable prices, thereby meeting the needs and satisfaction of the consumers. This encourages good standard of living of people in the community. Duty to honor obligations to the government in terms of payments of taxes an levies, thereby making fund available to the government to provide infrastructure facilities and meet the recurrent expenditures with a view to promoting national development.Soc ial responsibility to stakeholders An organization should fulfill its social responsibilities to the following stakeholders for it to achieve its set objectives. For instance, using a Bank as a case study, the stakeholders will include a. Customers market prices of the shares of the bank in the stock market Ensuring safe investments through and through good and sound management to prevent distress Issuing bonus share from time to tome Keeping the shareholders informed of the banks performances through annual general meetings, newsletters and information bulletins. . Employees Offer efficient services Make savings and withdrawals of money less time devour by reducing the waiting time Ensure adequate liquid so that cash withdrawals is met promptly Pay competitive rate of interest on saving and deposit, in line with the CBNs credit and monetary guidelines Charges reasonable interest rates and commissions Ensure safety of deposit so much so that the customers can deposit his money in the bank and go to sleep Provide a conducive environment for banking activities, e. g. pacious and well ventilated banking hall, security for valuables and vehicles within the bank premises and Make enigmatical of the affairs between the bank and customers to protect the interest of the customers. b. Shareholders Provide a conducive workings environment i. e. make available modern working tools and equipment, ventilated offices, good infrastructure, decent and official cars, health and safety equipment at the workplace etc Pay competitive salary remuneration commensurate with the level of commitment Offer opportunities for career development, e. . inducement for taking professional examination Train and develop employees through continuous learning at seminars, conferences, workshop, with the view to update their knowledge base, to meet rapid changes in the banking environment. Keep employees adequately informed on the policies, procedures and rules relating to da y-to-day banking operations. This can be done through newsletters, bulletins, meetings, etc Involve employees in decisions affecting them, to ensure their total commitment and faithfulness Maintaining equal opportunities among employees, i. . there should be no preferential treatment or favourism Establish clear cut bargaining and grievance procedures that will be known and followed by all employees. d. Government Being a responsible corporate entity or citizen, provide credit facilities to various sectors of the economy, with a view to ensuring the economic development of the country Comply with the laws and jurisprudences rescribed by regulatory authorities like the Central Bank of Nigeria, the Nigeria Deposit Insurance Corporate, etc Assist government in funding and promoting social activities, such as sponsoring sports programmes, contributions towards combating diseases e. g. AIDS, etc. e. The popular If banks are to guarantee continuous investment of their shareholder s, they have the duty of Ensuring effective performance by utilizing the capital invested in the bank to maximize profit. gainful good dividends, i. e. reasonable returns commensurate with the capital investment.Maximizing the owners wealth by ensuring good . Banks are socially responsible to the banking public, in general, and members of the community in which they are situated, in particular, in the following ways Olanrewaju 025 Development of the environment through provision of basic facilities like good in noxiousation water, donations to development associations, bringing banking services to the rural areas, indigenous lending, etc. universe and maintenance of employment opportunities to qualified members of the community. This encourages loyalty, commitment and cooperation from the community. Participation in community activities, such as donations to community to celebrations, awarding scholarship to deserving members of the community, etc, and use the skills of emp loyees to develop sympathetic goods and services. MODERN CORPORATE SOCIAL RESPONSIBILITY innovational CSR was born during 1992 Earth Summit in Rio de Janeiro when United Nations sponsored recommendations on regulation were rejected in favour of a manifesto for voluntary self-regulation put forward by a coalition of companies called the World Business Council for Sustainable Development (WBCSD).Its version of events was endorsed by the US, the UK and other Western governments. The British government for example, is still a vocal supporter of voluntarism. Such resistance to regulation seem to have remaining the worst corporate abusers effectively free and the victims of their actions adequate means of redress. Whatever responsible initiatives companies choose to carry out on their own behalf binding world(prenominal) standards of corporate behavior must be established to guarantee that the rights of people and the environment in developing countries like Nigeria are properly prot ected.It is hence recommended that there should be international regulation backed up by national legislation, to ensure the enforcement of real social responsibility on the corporate world. Introducing the threat of prosecution and legal action with resulting detailed disclosure of company documents would create powerful incentives for companies to behave responsibly.At a national level, Government should Adopt new laws to make corporate social and environmental reporting and disclosure mandatory for British companies including the disclosure of payments to oversea government, information on the social and environmental impact of overseas operations and details of legal actions against companies. Frame new responsibilities for companies directors to give them a duty of care for communities and their environment, making them legally accountable for the actions of their companies overseas. Change the law to enable people harmed by British companies overseas operations to seek redre ss in UK court and to provide the resources to enable them do so. What Drives Corporate Social Responsibilities Defending public image If companies behave improperly, they can be got at through the court of international public opinion. The first CSR initiatives were a response to public pressure and media exposure of poor company behavior. CSR was supposed to show that companies were capable of cleaning up their act. Prof.Michael Porter of the Harvard Business School argues that CSR is all defensive effort, a PR games in which companies primarily defend to deal with the critics and the pressure from activists. Attracting investors companies that proactively engage with sustainable development agenda and its countenance in the investment world should generate support, interest and understanding among investors. This will ultimately ascribe a premium to share price. CSR makes companies attractive to both mainstream investors and to the fast growing ethical-investment sector.Many in vestors now believe that social and environmental riskmanagement improves a companys market value in the long term. permission to operate CSR has, of late become a vital component in companies effort to gain approval for projects carrying significant political and social risks. Lobbying against regulations one of the key functions of CSR is to enable further deregulations by pointing to the involvement of business in ethical and sustainable activities and to indicate that multi-stakeholder dialogue with civil society obviates the need for binding regulation (David Miller, Sterling Media Research Institute).I believe that companies voluntary measures can help improve private-sector behavior. But voluntary activity is no stand-in for regulation and there is evidence that companies that espouse voluntary approaches to meeting social and environmental standards are also involved in resisting external regulation, especially by government. Concept of corporate social responsibilities in Nigeria To be able to understand CSR from a Nigerian perspective it is of value to explore the drivers for, and 026 Univers. J. Mark. Bus. Res. the history and development of CSR in Nigeria.The World Business Council for sustainable Development has discussed CSR with business and non-business stakeholders in a number of countries in the world with the objective of understanding local perspectives better and to get different perceptions of what CSR should mean from a number of different societies. (httpwww. cecodes. org. co). One important finding in this study was that people were talking about the role of the private sector in relation to a social agenda and they saw that role as increasingly linked to the overall well-being of society.Therefore the chosen priorities differed jibe to the perception of local needs. The key CSR issues identified in the study included Human rights, Employee rights, Environmental protection, Community involvement and Supplier relations. The book Corp orate Citizenship in develop Countries (Pedersen and Huniche, 2006) contains a chapter about revisiting Carrolls CSR pyramid from a Nigerian perspective. Most of the research on Carrolls CSR pyramid has been in an American context and in this report an attempt is made to look on how CSR manifests itself in a Nigerian context.In Nigeria, economic responsibility still get the most emphasis while charity is given second highest priority, followed by legal and then ethical responsibilities. According to the report there are many reasons for this. Firstly, the socio-economic needs of the Nigeria societies in which companies operate are so huge that philanthropy has become an expected norm. Companies also understand that they cannot succeed in societies that fail. Secondly, many Nigerian societies have become dependent on foreign aid and there is an ingrained culture of philanthropy in Nigeria.A third reason, according to the report, is that CSR is still at an early stage in Nigeria, so metimes even equating philanthropy. It is important to stress that in Nigeria philanthropy is more than charitable giving. HIV/AIDS is an example where the response by business is basically philanthropic but understandably in companies own economic interests. The low priority for legal responsibilities is, according to the study, not due to the fact that Nigeria companies do by the law but the pressure for governance and CSR is not so immense.Ethical perspective seems to have the least influence on the CSR agenda. This is not to say that African businesses are unethical. For example, the King Report in 2003 (http//www. corporate compliance. org) was the first global corporate governance code to talk about stakeholders and to stress the importance of business accountability beyond the interests of shareholders. Ajadi (2006), in a conference paper on Corporate Social Responsibility in Nigeria delivered at British Council conference on CSR in Nigeria, 2006, specifies some additional specific drivers for CSR in Nigeria The failure of centralized, government controlled economy to develop the country The extraordinary transaction cost to business of corruption and other failures of social capital The history of conflict and waste in the extractive industry exemplified by the Niger Delta saga The Nigerian universe of discourse whose majority is under the age of 25 and is largely ignored disdain the fact that they are critical to the survival and future prosperity of business and the country at large. The potential benefit of a commercially active and productive country of over 140 million potential consumers.The drivers for CSR in the west are to be found within areas such as increased brand value, greater access to finance, a healthier and safer workforce, stronger risk management and corporate governance, motivated people, customer loyalty, enhanced confidence and trust of stakeholders as well as enhanced public image. These drivers may not needfully be app licable to Nigerian companies. Most indigenous companies in Nigeria are privately held, family owned and operated. Local consumer and civil society pressures are almost nonexistent and law enforcement mechanisms are weak. (Amaeshi, Adi, Ogbechie and Amao. 006). There are many ways of implementing CSR in an organization. CSR practices can address environmental issues, social issues or both. The implementation can be done by integrating CSR in the business or it can be run as a project. Sometimes there are CSR strategies and policies framing the CSR agenda, sometimes there are not. According to world Business Council for sustainable Development (Lohman and Steinholtz, 2003) an active CSR work might include areas such as The management of the organization clearly declares its views and obligations towards the society and its stakeholders. The organization develops and implements clear policies. The organization has rules for purchasing including social and environmental concerns. T he organization fells its ecological footprints, both in production and in the process of production. The organization has objectives with regard to environmental and social concerns. The organization shows an active designation with regard to the development of its local society. Consumers are educated on how products ought to be used. The organization informs about all its different business areas in a transparent manner.For most businesses operating in Nigeria whether small or large, local or national, the transaction cost of operating is often unpredictable. At the watch of this difficulty is the obvious problem of operating in a low trust Olanrewaju 027 economy. For many businesses the cost of paying upfront on cash flow or delayed payment the difficulty of investing in people development the challenge of high volume cash proceeding are all part of a severely eroded social capital. At the core of this issue is the role of business partnership with government and others t o exemplify and model behaviors that restore optimism and improves trust.The challenges that face a business in Nigeria are unique because CSR can probably not be elective in such a mode. In a country where the social, health, education and environmental needs are so prevalent, where government resources are so stretched, where everyday people live on the breadline, business any other way is not only unethical, it is most probably not sustainable. capital punishment of corporate social responsibilities in Nigeria Annually, limited liability companies in Nigeria give reports of their social responsibility efforts. These are in four major specifiable areas viz a.The immediate environment of the company where the interest of the neighbours of the given companies are taken care of as much as is practicable (Bello, 1988) b. Locating worthy national or state activities to support. In this respect, educational, sporting and cultural activities are sponsored by companies as forms of soc ial responsibility. Also, scholarships, training facilities, and other forms of support are often provided for students. c. Responding to major disasters. Such disasters may originate from nature or it may be accidental like the bomb explosion at the Ikeja cantonment on Sunday, January 27, 2002.In the oil industry, there had been several reported cases of oil spills damage farmlands, crops, forests and water. Others like fire, flood, drought and erosion are also responded to. divers(a) types of materials are made available to victims of such disasters. d. Diversification of activities to areas of importance in the nations economic development. For example, Guinness plc invested funds in two major eyeclinics in Nigeria, and Texaco Oil Producing and Marketing Company diversified into agricultural activities of cultivating mandioca and processing Garri Cassava flour.Before the United Kingdom developed its CSR policy, Gordon Brown, prior to becoming the autochthonic Minister said tod ay CSR goes far beyond the old philanthropy of the past, donating money to good causes at the end of the financial year and is sooner an all year round responsibility that companies accept for the environment around them now we need to move towards a challenging measure of corporate responsibility, where we judge results not just by the input but by its outcomes the difference we make to the world in which we live, and the contribution we make to poverty reduction (Corporate Social Responsibility A Government Update www.Csr. gov. uk). There is no doubt the committee saddled with the responsibility of developing a CSR policy for Nigeria will learn from the countries (especially developing ones) that have adopted and are implementing such policies successfully. Prior to the above declaration of the Federal Government, Nigeria did not have a CSR policy. Several companies operating here took the initiative to develop a CSR guideline or code for themselves.It is not out of place for a study to have found that indigenous firms perceive and practice CSR as corporate philanthropy aimed at addressing socio-economic development challenges in Nigeria. This finding confirms that CSR is a localized and socially embedded construct, as the waves, issues and modes of CSR practices identified amongst indigenous firms in Nigeria reflect the firms responses to their socio-economic context (Amaeshi et al 2006) One of the leading telecommunication companies in Nigeria, MTN Nigeria, developed a CSR policy direction document in 2004 in conjunction with a consulting outfit.The company has since gone ahead to establish MTN Foundation to lead its CSR policy implementation locally. A search for Best Practices in Corporate Social Responsibility by indigenous firms in Nigeria by Dotun Atilade, mentioned that elements of social responsibility include investment in community outreach, employee relations, creation and maintenance of employment , environmental responsibility, human rights a nd financial performance.It is about producing and / or delivering socially and environmentally responsible products and /or services in an environmentally and socially responsible manner while openness, accountability and transparency are some of the new key words covering a huge range of issues. A sustained bench mark for studying CSR practice, as suggested by Moon (2002), emphasizes waves, issues and modes waves (1) community involvement (2) socially responsible production process and (3) socially responsible employee relations, issues CSR practices emphasizes e. g. nvironmental , education, employee welfare , health and safety and modes through which they are implemented e. g. philanthropy foundation and codes. The result of these activities has been discovered to be shaped by Nigerian corporate Governance framework and socio-economic conditions as reported in some research on the CSR activities of indigenous companies. The European Unions Green Paper on CSR defines it as a con cept whereby companies integrate social and environment concerns in their business operations and in 028 Univers. J. Mark. Bus. Res. heir interactions with their stake holders on a voluntary base. Mark Maxwell and Siegel (2001) as actions that appears to further some social groups beyond the interest of the firm and that which is required by law while the CSR constructs is a new coinage, it is not a new practice. It could be traced back to such example as the th th Quakers in 17 and 18 nose candy whose business philosophy was not primarily driven by profits maximization but to add value to the society at large. Business was framed as part of the society and not separate from it.The revived interest in the practice provides a fertile ground for different discourses and actors which lends it to multiple and contested. (Moon, 2002). A common strand that runs through most of these studies suggests that essence and practice of CSR is social culturally embedded. CSR in Nigeria would be aimed towards addressing the peculiarity of the social economic development challenges of the country (poverty alleviation, health care provision, infrastructure development, structure, education, etc and would be informed by social cultural influences (e. g. communalism and charity).This might not necessarily reflect the popular western standard/expectations of CSR (e. g. consumer protection, fair trade, green marketing, climate change concerns, and social responsible investments) etc. At Zenith Bank, Corporate Social Responsibility is not just a buzz word its a way of life. To emphasize this belief Zenith Bank set up Zenith philanthropy, a fully functional department responsible for identifying areas, sectors and causes of the serving of philanthropic aid. Zenith philanthropy is the channel through which Zenith bank gives back to the society.Zenith bank sees giving back to society as a serious and passionate cause. Today CSR goes far beyond the old philanthropy of the past donati ng money to good causes at the end of the financial year, but rather, an all year round responsibility that companies accept the environment around them for the best working practices for their encounter in their local communities and for their local communities and for their recognition that brand names depends not only on quality, price and uniqueness but on how cumulatively they interact with companies work force community and environment.There are a atomic reactor of damages these companies are doing to the environment like local air pollution such as particulates, and the damage caused by the over-use and pollution of fresh water, the social impacts such as the migration of people driven out of affected areas , the toxic waste heavy waters users like food, drink and clothing companies are releasing into the environment. The aim of this study is to encourage and help investors lobby companies to reduce their environmental impact before concerned governments act to restrict the m through taxes or regulations.The companies can give up the excess profit now, if they neediness a world in which its possible to make any money at all, later. If we go on failing to put a price on the environment, well make the planet uninhabitable. The entire basis for freedom and for a sound economy is that if you want something, you have to pay for it. And right now, were not paying for the environment, were taking from it. What happens when the resources we have effectively doled out for free run out?Were already getting an idea with the oceans, where CO2 pollution is making them so acid that it is literally dissolving the shells of shellfish and killing them off. Literally, Nigerian banking industry and telecommunication industry today operate in what can be described as the enemys territory, with but any identifiable friend in the polity. Everyone has an axe to grind with them, the fact that they are needed to foster individual and collective business growth notwithstandin g.While government sees them as being selfish and responsible for most of the problems of the economy, the regulatory authorities look at them and their operators with suspicion. To the public, employees of banking industry and telecommunication are privileged, over-pampered and over-paid cheats and liars who prevail at the expense of the rest of the society. Banking industry and the telecommunication industry are seen as making huge profits in a dispirited economy. In effect, they are milking the economy dry instead of growing it.This perception is in fact miles away from the impression of renowned economist of yester-years. They are believed to foster economic growth in any economy. Adams Smith (1910) left no doubt as to what the role of banks in economic growth should be. However, the allegations leveled against banking and telecommunication industries can never be wished away and these are impacting negatively on