IMPACT OF CORPORATE SOCIAL RESPONSIBILTY ON ORGANIZATIONAL

PERFORMANCE

(A STUDY OF MTN OGUN STATE.)

ABIOYE, JELILAT BUKKY

H/BAM/17/0571

DEPARTMENT OF BUSINESS ADMINISTRATION

SCHOOL OF MANAGEMENT STUDIES,

FEDERAL POLYTECHNIC, ILARO

JUNE, 2019

i
 THE IMPACT OF CORPORATE RESPONSIBILITY ON
ORGANIZATIONAL PERFORMANCE
(A STUDY OF MTN OGUN STATE.)

BY

ABIOYE, JELILAT BUKKY

H/BAM/17/0571

A PROJECT SUBMITTED IN PARTIAL FULFILMENT OF THE AWARD OF

HIGHER NATIONAL DIPLOMA (HND) IN THE DEPARTMENT OF
BUSINESS ADMINSTRATION AND MANAGEMENT,
SCHOOL OF MANAGEMENT STUDIES,
FEDERAL POLYTECHINIC ILARO,
OGUN STATE, NIGERIA.

JUNE, 2019.

ii
 CERTIFICATION

This is to certify that this research work was carried out by ABIOYE JELILAT BUKKY with

matriculation number H/BAM/17/0571 under the supervision of MR. R.A. RAJI in the

department of BUSINESS ADMINSTRATION AND MANAGEMENT in partial fulfillment

of the award higher national diploma.

_________________________
MR. R.A. RAJI
Supervisor's Signature & Date

_________________________
DR. Y. O. BAKO
Head of Department's Signature& Date

iii
 DEDICATION

I dedicate this project to God Almighty my creator, my strong pillar, my source of

inspiration, wisdom, knowledge & understanding and the reason I have not failed. He has

been the source of my strength throughout this programme and on his wings only have I

soared. I also dedicate this work to my foster parent, Mr. & Mrs. Beckley Abioye who has

encouraged me all the way and whose encouragement has made sure that I give it all it takes

to finish which I have started. To my parent, late Mr. & Mrs. Abioye who have wanted me at

the top. Thank you, my love for you all can never be quantified, God bless you.

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 ACKNOWLEDGEMENT

My deepest gratitude goes to God Almighty who has provided all that was needed to

complete this project and the programme for which it was undertaken for. There was never

lack or want throughout this entire study. He took care of everything that would have stopped

me in my tracks and strengthened me even through my most difficult times.

My appreciation also goes to my overwhelming and supporting project supervisor Mr. R.A.

Raji for his supportive criticism and fatherly contribution throughout my project and

programme. Thank you, God bless you in return.

Also my appreciation goes to the Head of department of Business administration and

management, Dr. Y.O Bako who made me experienced true research and to all other lecturers

in the department of Business Administration and Management, I say a very big thank you.

Finally, My profound gratitude goes to my foster parent and my friends for their immense

supports.

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 Abstract
Managers have come to terms with the pertinence and essentiality of the strategic and
pregnable tool of CSR on the performance of an organization. This study empirically
investigates the impact of corporate social responsibility on organizational performance of
MTN in Ogun state .The result is intended to educate managers of the enhanced form of
carrying out CSR and its impact on organizational performance. A population of 150 was
used. Sample size of 110 which was derived from the population using the Yaro Yamani
formula. The SPSS was used. . Analysis of the research study was carried out using
descriptive and inferential statistics techniques. The descriptive part of the analysis
comprises of frequency and percentage and weighted average technique. Frequency and
percentage analysis was adopted for the socio-demographic information of the respondents
while weighted average was used to score the responses gotten from respondents on 5 point
likert scale in order to know the category of responses the respondents belongs. Multiple
linear regression method of inferential statistics was adopted to test the significance of the
aforementioned hypotheses using the t-statistic of coefficients of the multiple linear
regression model and the generated P-values. The model also shows how positive or negative
the impact of Corporate Social Responsibility is on Organizational Performance. The results
of the Hypotheses tested conclude that CSR has significant impact on organizational
performance. However, the significant influence is within the a priori opinion as CSR was
found to be positively inclined on performance of organization. The results also implies that
compliance with regulatory requirements such as tax payment significantly lead to positive
performance of an organization and active involvement in CSR has a significant contribution
to it’s customers satisfaction and sales. Recommendations were therefore made for
organizations to actively engaged in Corporate Social Responsibility activities so as to
improve the performance of the organization increase customer’s satisfaction and well as
sales.

Keywords: Corporate Social Responsibility, customers’ satisfaction, Compliance,

Regulatory, Performance

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 TABLE OF CONTENTS

Title page i

Certification ii

Dedication iii

Acknowledgement iv

Abstract v

Table of contents vi

List of table ix

CHAPTER ONE

1.0 Introduction 1

1.1 Background Introduction to the study 3

1.2 Statement of problem 4

1.3 Significance of the study 5

1.4 Objective of study 5

1.5 Scope of the study 5

1.6 Research Questions 5

1.7 Research hypotheses 5

1.8 Limitation of the study 6

1.9 Definition of terms 7

1.10 Historical Background 7

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

2.2 Conceptual Framework 10

2.2.1 Types of corporate social responsibility 11

2.2.2 Areas or activities of CSR and benefits to both companies and community 12

2.2.3 CSR in the Telecom industry and its benefit to both community and the
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 company 13

2.2.4 Challenges associated with the practice of CSR in the Telecom industry 14

2.3 Theoretical Framework 17

2.3.1 Stakeholder’s theory 17

2.3.2 Legitimacy Theory 18

2.3.3 Ethical Aspects 19

2.3.4 Shareholder Theory

2.3 .5 Information and Asymmetry Theory

2.3.6 Fiduciary Capitalism Theory

2.4 Empirical Review

2.5 Summary of the Literature 20

CHAPTER THREE

METHODOLOGY

3.0 Introduction 30

3.1 Research design 30

3.2 Population of the Study 30

3.3 Sample and sampling techniques 30

3.4 Method of Data collection 31

3.5 Questionnaire Design 31

3.6 Validity and Reliability Test 31

3.7 Method of Data Analysis 32

3.7.1 Weighted mean intervals and decision rules on Likert scale

3.7.2 Model Specification

3.7.2 Significance Test of Correlation Coefficient

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CHAPTER FOUR
RESULTS, DISCUSSION AND INTERPRETATION

4.0 Introduction 33

4.1 Presentation and Discussion of Results 33

4.2 Hypotheses testing 39

4.3 Summary of findings/Interpretation of results 41

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary

5.1 Conclusion 42

5.2 Recommendations 42

REFERENCES

APPENDIX

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 LIST OF TABLES

Table 3.1: Reliability statistics 34

Table 4.1: Frequency and Percentage Analysis of respondents socio-demographic

information 35

Table 4.2: Weighted Response of Staff Perception to CSR and Organizational Performance

Table 4.3: Weighted Response of Customers Perception to CSR and Organizational

Performance

Table 4.4: Weighted Response of Host Community Perception to CSR and Organizational
Performance

Table 4.5: Weighted Response of Other External People Perception to CSR and
Organizational Performance

Table 4.6: Model Summary

Table 4.7: ANOVA(Test of Model Significance)

Table 4.8: Regression Model Coefficient and Test of Significance

Table 4.9: Correlations 36

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 CHAPTER ONE

1.0 Introduction
1.1 Background Information to The Study

Since the middle of the twentieth century, the concept of corporate social responsibility has
become very paramount to the development of world economy. This evolution of corporate
social responsibility has helped business organizations to change their ideology from profit
maximization only to social problems that bother on the environment of operation. Although,
there may be a lot of questions as to why businesses do exist – some could say that businesses
were formed for profit maximization, while some others could say for profit making as well
as contributing to the host community (Dickson & Levi, 2018). With this development, it has
become imperative for both service and manufacturing companies to chart a new course of
action. By so doing, they overcome the challenges that lie in allocating a corporate social
responsibility (CSR) approach that meets government and social standards and to achieve
compliance with formal CSR guidelines related to social economic and environmental
responsibilities, Dickson and Levi (2018).

It is important to note that the CSR approach cannot be complete without recognizing
responsibilities it has to employees’ performance, customer satisfaction, tax payment to
government and services rendered to the host community. These obligations show that the
Mobile Telecommunication of Nigeria have complied with legislation and voluntarily taken
initiatives to improve the well-being of their employees and their families as well as that of
the host community and society at large (Dickson and Levi,2018). However, the integration
of these corporate social responsibility elements (employees’ performance, customer
satisfaction, payment of taxes and host community well-being) can help to influence
company’s profit, increase sales, returns on investment and savings in a positive note. If this
goal has to be realized, then much needs to be done to make both service and manufacturing
firms in Nigeria aware of social responsibility as an integral part of their business activity. To
this end, firms should deal with the challenges and issues that affect them and other
stakeholders by setting clear objectives, incorporating corporate social responsibility into
their activities, as this could help to build long-term benefits to the firm in a particular
environment and country in general. (Dickson & Levi,2018).

In their article, The Truth About CSR, Rangan, Chase and Karism(2015:42) siccintly
captured the arguments both for and against corporate social responsibility : “Moat
companies have long practiced some form of corporate social and environmental
responsibility with the broad goal, simply contributing to the well-being of the community
and society they affect and on which they depend. But there is increasing pressure to dress up
CSR as a business discipline and demand that every initiative deliver business result. That is
asking for too much of CSR and distracts from what must be it’s main goal: to align a
company’s social and environmental activities with it’s business purpose and values. If in
doing so CSR activities mitigate risks, enhance reputation, and contribute to business results,
that is all to the good. But for making programs, those outcomes should be a spillover, not
their reason for being “. (Okocha, 2015)

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Corporate reports are required to furnish all stakeholders with the financial and non-financial
information, which are relevant, faithfully represented and useful for making prudent,
reliable, effective and efficient decisions. Companies worldwide are now focusing on how
best to integrate their financial and non-financial information, particularly as businesses are
experiencing unexpected environmental and social changes. Hence, the need for every
organization to disclose in their annual reports the various activities that affect the
stakeholders. This practice is becoming a very fundamental issue the world over (Umoren,
Isiavwe-Ogbari & Atolagbe, 2018).

Corporate social responsibility is a form of internal monitoring, management and external

communication, which allows organizations of all sizes to meet the growing information
needs of internal and external stakeholders. In essence, it conveys information about an
organization’ economic, environmental and social operations, the related impacts it has
through its everyday activities and the consequences of those impacts for the company and
others. Stakeholders (investors, governments, employees, customers, suppliers, trade
associations and environmental groups) are expecting companies to produce reports that will
demonstrate financial value, drive innovation and promote learning. Long term business
success depends not only on a healthy financial position, but also on vibrant social and
environmental performance. CSR is a crucial step towards achieving a sustainable global
economy. It enhances corporate accountability, builds trust, create transparency, drives
greater innovation, improve internal management and decision-making processes, reduce
compliance costs and give competitive advantage (Umoren, Isiavwe-Ogbari&Atolagbe,
2018).

In order for organizations to survive in the competitive marketing environment, they need to
note that their long term survival partly depends on their ability to confront social and
environmental issues by being socially responsible (Barnabas, 2017). In recent years,
research has revealed the importance of Corporate Social Responsibility (CSR) and its
significant impact on organizational performance. Barnabas (2017).

Given this, the study is concerned with the aspect of external social corporate responsibility
aimed at satisfying the consumers’ needs and a wants. Some scholars such as Guchait, Anner
and Wu(2012) view corporate social responsibility as obligations that companies have 5o
integrate environmental and social parameters into the modus operandi and long-term
development policies. To this effect, Robins(2005) opined that corporate social responsibility
is centered on the notion that the business sector should not focus only on profit-oriented
commercial activities but also pay a non-economic role in the society.

From the foregoing, it is arguable that today, business performance is no longer measured
only in terms of balance sheet value, but by the positive impact of business on the
shareholders and other relevant public. Image and reputation has thus become an important
parameter for assessing the performance and sustainability of any organization. Reputation is
important for several reasons.

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In real sense, the corporate social responsibility is the coalition of business operations with
social standards. Some companies are operating corporate social responsibility much more
than their lots of business opponents. As the companies practicing corporate social
responsibility, build good reputation in the market and attract more jobs seekers and
customers, which lead 5o increase in organizational performance (Siddiq&Javed, 2014). On
the other side then, by practicing corporate social responsibility, the company gets successful
in increasing the customer’s loyalty, job satisfaction and business performances
(Siddiq&Javed, 2014).

Corporate social responsibility is a concept whereby firms commit to improve their

environmental and society performance beyond legal obligations. It is a commitment to
improve the well being of a community through discretionary business practices and
contributions of corporate resources. It is the commitment of business to contribute to
sustainable economic development, working with employees, their families, the local
community and society at large to improve quality of life, in ways that are both good for
business and good for development (Tabitha, 2014).

Performing corporate social responsibility is necessary for firms that want to be successful in
the long-run. Fundamentally, corporate social responsibility internalize and all external
consequences of an action, both its coats and benefits. Corporate social responsibility
encompasses a variety of issues revolving around companies interactions with society
(Tabitha, 2014).

This study is motivated by the fact that as global business world is getting more competitive
by the day due to globalization and technological change, only the effective will continue to
maintain the top position and gain competitive advantage.

1.2 Statement of the Problem

Over the years, the concept of corporate social responsibility has not been fully integrated by
the firms in both service and manufacturing sector. The argument is that there exists a
systematic approach in allocating Costa, whether for investment or societal well-being. They
rather see their involvement in corporate social responsibility as the function of the culture of
the firm, Size and stakeholders demand. It is pertinent to note that in developing countries
like Nigeria where customer education awareness is low, with little or no organized pressure
group put in place, there is difficulty in demand of dull implementation of the concept of
corporate social responsibility by society or institutions. A food number of managers of those
firms in Nigeria tend to demonstrate poor attitude towards corporate social responsibilities.
There is every possibility that corporate social responsibility when measured, the bottom line
is a problem as social and environmental programs are hard to account for with regard to
information gained.

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This study, is therefore, aimed at examining the impact of corporate social responsibility on
organizational performance in order to bridge the knowledge gap and adding to existing
knowledge.

1.3 Significance of the Study

This study of corporate social responsibility is significant to organization in particular and the
society in general. The organization would benefit by knowing the different areas where they
can be socially responsible, measure their impact on the society, thus improving their
corporate image and on the long run to make more profit. This research work also intended to
assist immensely other corporate organizations and general public to know the significance of
social responsibilities and to relate their roles as a stakeholder in the wheel of progress, if
adequately studied.

More so, the general public will be aware and be informed about the various kinds of social
performances which corporate bodies can extend to them. It will create awareness that
environmental degradation. It also enable corporate bodies to benefit greatly as various forms
of social responsibilities and area they can readily assist the public and other stakeholders,
this will be of tremendous significant to them, as it will increase their goodwill.

Finally, the researchers are not to be left out of the benefits as the researchwill allow them to
discover more about this crucial and ever controversial concept of our time.

1.4 Objectives of the Study

The main objective of this study is to “examine the impact of corporate social responsibility
on organizational performance of MTN in Ogun state.

The specific objective is to :

i. Assess the impact of corporate social responsibility on organizational

performance.
Other objectives are to determine :

ii. Compliances with regulatory requirements such as tax payment do lead to positive
performance of an organization.
iii. The relationship between customers’ satisfaction and sales

1.5 Scope of the Study

The scope of this study is in the areas of social responsibility and involvement of
organizations. The scope covers telecommunication industry in Nigeria using Mobile
Telecommunication of Nigeria (MTN) Ogun state as a study.

4
1.6 Research Questions
To address the above stated objectives, the following research questions were asked to guide
the study.

i. Does social responsibility responsibility of an organization have impact on it’s

performance?
ii. Does Compliances with regulatory requirements such as tax payment do lead to
positive performance of an organization?
iii. What is the relationship between customers’ satisfaction and sales?

1.7 Research Hypotheses

The main purpose of this study is to examine the impact of corporate social responsibility on
performance of an organization, this will form the basis for formulating the Hypotheses
which will be tested and validated with a view to making some recommendations.

Hypothesis 1

H0: Corporate social responsibility has no Significant impact on organizational performance

H1: Corporate social responsibility has significant impact on organizational performance

Hypothesis 2

H0: Compliances with regulatory requirements such as tax payment do not lead to positive
performance of an organization

H1: Compliances with regulatory requirements such as tax payment do lead to positive
performance of an organization

Hypothesis 3

H0: There is no relationship between customers’ satisfaction and sales

H1: There is a relationship between customers’ satisfaction and sales

1.8 Limitation of the Study

The limitation of the Study arises from the fact that the researcher was given a short period of
time as the study is numerous, lack of finance of the researcher due to the current economic
situation of the country. Most business organizations hardly gives out their information to
outsiders for fear of competitors, however the little information gathered will be used as a
generalization of others.

Low responds from the respondents most especially in the area or retrieving the
questionnaires from the respondents.

5
1.9 Operational Definition of Terms
Social Responsibility: It is the intelligent and objective concern, which restrains individual
or corporate behavior from ultimately destructive activities no matter how immediately,
profitable, and leads to the direction of contributing to human betterment.

Corporate Image: The intangible possession that distinguishes and enables a business
organization of similar type and capability.

Organization: A structured system of rules and functional relationship designed to carry out
a firm’s policies.

Performance: Operationally, it is a function of profitability, survival, market share and

efficiency and growth achievement.

1.10 Historical Background of MTN Nigeria

Since inception in 2001, MTNN has led the growth in the voice market to become the biggest
mobile operator in Nigeria and West Africa. It is now pursuing new growth opportunities in
the data and ICT space. This lead position is evident in a differentiated and attractive array of
product and service offerings, as well as a growing bouquet of ICT products.

With 15 Service centers, 144 Connect Stores and 247 Connect Points located in every state of
the federation, MTN is poised to lead the delivery of a bold, new digital world to the Nigerian
market.

MTNN is 75.81% owned by MTN International (Mauritius) Limited (MTNI); 18.7% held by
Nigerian shareholders through special purpose vehicles; 2.78% owned by Mobile Telephone
Networks NIC B.V and 1.76% owned by Public Investment Corporation SOC Limited.

Our Vision and Values

Our vision is to lead the delivery of a bold, new, Digital World to our customers.

Our mission is to make our customers' lives a whole lot brighter.

While we add value through our products and services, we are also committed to adding
value by ensuring good corporate governance, which has earned us commendation from
various arms of government. We are proud to note that our level of fiscal compliance
(through various tax payments) has made a significant contribution to Nigeria's Gross
Domestic Product.

As a global brand, MTN subsists on the core brand values of Leadership, Integrity,
Relationships, Innovation and a Can do attitude. We pride ourselves on our ability to make
the seemingly impossible possible, connecting people with friends, family and opportunities
and enriching lives through our products and services.

6
 CHAPTER TWO

2.0 Literature Review

2.1 INTRODUCTION

This chapter reviews the related work performed by scholars and researchers. For clarity

purpose, this chapter will examine the Conceptual framework; explain the meaning of

corporate social responsibility, areas or activities of Corporate Social Responsibility and the

challenges faced by CSR in the telecom industry, theoretical framework, Empirical review

and summary of literature.

2.2 Conceptual Framework

The concept of corporate social responsibility started with Boroen in 1953 when he published

a paper on “social responsibility of captains of industries”. Soon after this, there have been

publications on corporate social responsibility from others who followed his step like Davis

(1960), Cochran and Wooch (1984), Carrol (1979).Freeman (2002) postulated that corporate

social responsibility is seen as an action which a company decided to take that will

adequately affect identifiable social stakeholders’ welfare. Tsoutsoura (2004) also postulated

that the management and of corporate companies should take a step forward and implement

policies and business practices that go above the minimum legal requirement and positively

affect the welfare of its key stakeholders. In its totality, corporate social responsibility is set

of policies, practices and programs that form part of business operations and affect major

decision making process the firm and are usually in tandem with business ethics,

environmental protections, government, people’s rights as well as the workplace and market

place.

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As one of the ‘new’ key elements to business strategy, and a duty as expected by society in

this ever competitive market, Corporate Social Responsibility has several times been

discussed by many scholars and practitioners. Many definitions have been given, and some

are as follow:

It is the commitment of business to contribute to sustainable economic development, working

with employees, their families, the local community and society at large to improve quality of

life, in ways that are both good for business and good for development (Tabitha, 2014).

Barnabas (2017) defined Corporate Social Responsibility (CRS) in terms of three distinct

constructs: environment Corporate Social Responsibility (CSR), external social Corporate

Social Responsibility (CSR) and internal social Corporate Social Responsibility (CSR).

Environmental Corporate Social Responsibility (CSR) encompasses any action undertaken in

order to promote environmental sustainability; external social Corporate Social

Responsibility (CSR) deals with initiative aimed at addressing the needs of individuals and

communities while internal social CRS deals with issues such as the degree to which

organizations address social asymmetries with regard to gender, race, sexual orientation and

disability.

It is important to note that for corporate social responsibility to deliver on its core mandate,

the following should be taken into consideration: the policies of the company, size of the

firms, culture, stakeholders’ demand, and the past antecedence of how firms have been

engaging in corporate social responsibility. However, some of the ways in which firms have

involved in corporate social responsibility are:

I .Health Care Services – MTN do take care of the cost of their employees’ health treatment

and other citizens in the host community of their operation. It is also right to state that they

build and maintain hospitals within the community where they operate (Joseph and Michah,

2016).

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II. Youth Empowerment Programs – This simply means designing programs by the MTN

to empower the youth of the host community. This can help to promote the image of MTN in

the minds of the citizens (Joseph and Michah, 2016).

III. Education – It is important to state here that MTN can give scholarship to their

employees and other citizens who cannot afford to pay their school fees. Furthermore, they

can also encourage their employees to go for in-service training which can help to increase

their mental ability, among other things.

If some of the stated means of embarking on corporate social responsibility is taken into

cognizance by this firm (MTN) during policy formulation, implementation, they will have the

following benefits: enhanced brand image and good reputation, etc. It is important to note

that customers are often drawn to brands and firms with good reputation in corporate social

responsibility. Good reputation can also increase the firms’ ability to attract capital and

business partners, although, it is difficult to measure and quantify reputation (Tsoutsoura,

2004 cited in Joseph and Michah, 2016).

Payment of Taxes

Firms contribute substantial amount to the development of their host communities, for

instance, through the local tax base. It will be irresponsible for any firm, whether service or

manufacturing firm, to see corporate taxes as the cost to be avoided, rather than being seen as

part of social contract with the host community in particular and society at large. Taxes have

positive effect on the creation and distribution of wealth. Therefore, avoidance of taxes

deprives the host community and the entire society of their benefits (Ms, 2013).

Customer Satisfaction In business, it is often said that a customer is a king. Customers are

the reasons for the establishment of any business; therefore, the idea of treating customers

9
with maximum respect is no longer new to the business. It will be right to say that offering

quality product, whether goods or services, to the customers can help influence the firm’s

sales and profits. The corporate social responsibility in this aspect are safety and durability of

goods and services, provision of after-sales services, quick or prompt handling of customers’

complaints, avoidance of falsehood in advertisements, etc.

Employees Performance Firms contribute substantially to employment creation in the

community. The corporate social responsibility to employees should go beyond the terms and

conditions that are contained in the firm’s formal document of employment. There is the need

for firms to provide employees with quality life at work place, taking care of personnel

welfare and safety, developing their skills and motivating them for work well done,

irrespective of the gender, age, religion, status, etc. It is important to note that the moment

any firm can fulfill its own part of the obligation, the employees will be left with no choice

than to give their best which will in turn affect the firm’s output, leading to an increase in its

profit.

2.2.1. TYPES OF CORPORATE RESPONSIBILITY

This refers to the traditional corporate philosophy which suggests three broad areas in which

business companies can, and should discharge their social responsibility. These three areas

are: traditional corporate philanthropy, corporate social responsibility (with a focus on

sustainable development and attending to stakeholder priorities) and ethical business (Saari

A., nd).

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2.2.1.1. CSR versus Traditional Corporate Philanthropy

To Danso and Kokuma (2016) a more common approach to CSR is corporate philanthropy.

Over the years, philanthropy has been defined in various ways. Some linguistic in nature,

some tracing back to the Greek Classics, some grounded in religious principles. The root of

the word suggests a love for mankind and the responsibility to share one’s possessions with

others has been a central component of all major religions for thousands of years. On the

practical level, however, it may be most helpful to utilize a simple definition: “Philanthropy

is the voluntary capture of private wealth for public purposes”. While philanthropy primarily

connotes the distribution of financial wealth, it importantly includes non-financial

components such as gifts-in-kind, voluntary services and knowledge.

Philanthropy comes in two broad categories, individual - whether the sums are large or small

- and organized philanthropy. Some forms of philanthropy may be either individual or

organized, such as faith-based philanthropy, while other forms, such as giving circles,

essentially form a mixture between individual and organized giving.

Wikipedia, the free encyclopedia(2009) explains that corporate philanthropy includes

monetary donations and aid given to local and non-local non-profit organizations and

communities, including donations in areas such as the arts, education, housing, health, social

welfare, and the environment, among others, but excluding political contributions and

commercial sponsorship of events. These forms of giving have existed for thousands of years

and in all parts of the world.

Samuel and Saari (nd) view corporate social responsibility as qualitatively different from the

traditional concept of corporate philanthropy. It acknowledges the debt that the corporation

owes to the community within which it operates, as a stakeholder in corporate activity. It also

defines the business corporation's partnership with social action groups in providing financial

11
and other resources to support development plans, especially among disadvantaged

communities.

The emerging perspective on corporate social responsibility focuses on responsibility towards

stakeholders (shareholders, employees, management, consumers and community) rather than

on maximization of profit for shareholders. There is also more stress on long-term

sustainability of business and environment and the distribution of well-being. There is an

increasing recognition of the triple-bottom-line: People, Planet and Profit.

The triple-bottom-line stresses on the view that stakeholders in a business are not just the

company's shareholders, sustainable development and economic sustainability, and finally

corporate profits are to be analyzed in conjunction with social prosperity.

2.2.1.2 Ethical Business

Ethical business is the more fundamental, emerging trend on the international scene. It

focuses on specifics such as how a business is conceptualized, how it is operated and the

notion of fair profit. In an ethical business the essential thrust is on social values and business

is conducted in consonance with broader social values and the stakeholders' long-term

interests.

2.2.2 AREAS OR ACTIVITIES OF CSR AND THE BENEFITS TO BOTH

COMPANY AND COMMUNITY

Areas or Activities of CSR

According to Nana and Danso (2016), corporate social responsibility differs from place to

place, from industry to industry and over time. It is gradually being accepted that in order to

define precisely what social responsibility means to a company, it needs to interact with its

communities and take into consideration their needs, expectations and aspirations when

12
designing CSR strategies and programmes. That is one of the reasons why it is difficult to

define CSR precisely because it will always have a location-specific context. It is therefore

vital to understand the priorities of communities and take them into account. To some extent,

companies need to engage in their own stakeholder dialogue, specific to their own company,

but the focus here is to provide the business sector (and others) with some guidance in terms

of expectations and CSR priorities of the society.

Common Types of Corporate Social Responsibility Actions in the Telecom Industry

There are many aspects of corporate social responsibility; whether a company decides to

develop one area of CSR or multiple, the end result is a more profitable company

experiencing a higher level of employee engagement and business performance. The

following is a list of common ways corporate social responsibility is implemented in the

telecommunication industry (Wikipedia).

-Environmental sustainability: Areas include recycling, waste management, water

management, renewable energy sources, utilizing reusable resources, creating 'greener'

supply chains, pollution control, developing buildings according to Leadership in Energy and

Environmental Design (LEED) standards etc…

- Community involvement and support: This can include raising money for local charities,

supporting community volunteerism, sponsoring local events, employing people from a

community, supporting a community's economic growth, engaging in fair trade practices,

support of arts and health programmes, educational and housing initiatives for the

economically disadvantaged.

- Ethical marketing practices: Companies that ethically market to consumers are placing a

higher value on their customers and respecting them as people who are ends in themselves.

13
They do not try to manipulate or falsely advertise to potential consumers. This is important

for companies that want to be viewed as ethical.

- Employee Support: Concern for safety, job security, profit-sharing, union relations, and

employee involvement.

2.2.3 CSR IN THE TELECOM INDUSTRY AND ITS BENEFITS TO THE

COMMUNITY AND THECOMPANY

Benefits of CSR to the Community

Community Defined

‘Community’ has been defined in so many ways and is sometimes confused with the word

‘society’ which is much broader. But for the purpose of the topic being treated the following

definition will be considered:

A community is a group of people with a common background, who live in the same area and

with shared interests within society. (Microsoft Encarta Dictionaries, 2009)

So it transpires from the above definition that taking into account the “shared interest” of a

community when engaging in CSR activities is very important, because CSR when not well

managed leads to poor business performance. Corporate organizations (including

management and employees as individuals) belong to a social set up or are part of it and must

therefore behave responsibly. This is what a former South African Supreme Court judge told

a gathering of corporate in Bangalore in these words: “Companies are a part of society, not

apart from society. So be socially responsible” (DNA Agency, January, 2014)

Today, CSR has become the new business strategy at heart for many telecom companies in

Ghana. This is because a number of issues have been raised concerning the negative effects

of their operations on the community. That is, the need to regulate hazardous emissions from

telecommunication equipment (for example, radiation).

14
Being socially responsible can take place at various levels and society has benefitted in so

many ways from the practice of CSR.

But as well as bringing revenues to an area and providing financial compensation for the loss

of land, housing and livelihoods, community involvement initiatives that telecommunication

companies have been employing over the years according to Jenkins and Obara (nd) include:

- Infrastructure improvements - for example, building access roads, community buildings

and schools.

- Community Health Initiatives - offering health services to communities (e.g.: Vodafone

health line which gives medical assistance to Ghanaian) and building and equipping hospitals

and health centers for communities.

- Community foundations - a fund generated by the company that is used for social

investment purposes, these also attracted interest from external donors.

- Supporting small local businesses - preferential procurement policies for local suppliers.

- Sustainable livelihood projects - the purpose of these is to reduce the communities’

economic government, and develop alternative and sustainable employment opportunities

for stakeholder communities.

- Micro-credit finance schemes - these loans are used to launch new enterprises, create jobs,

and help economies to flourish. With access to credit, families can invest according to their

own priorities, for example schools fees, health care, nutrition, or housing, and rather than

focusing on day-to-day survival, people can plan for the future. Micro-credit schemes aimed

at women, offered opportunities to the most disadvantaged groups in communities.

15
Benefits of CSR to Companies

Winning with Integrity, the 2000 report of The Business Impact Task Force of Business in

the Community (United Kingdom) identified the benefits to companies of engaging in

corporate social responsibility as being:

- Reputation- Affected by the costs and benefits of a company’s goods and services, how it

treats it employees and the environment, its record on human rights, its investment in local

government and even its prompt of bills;

- Competitiveness- The advantages of good supplier and customer relationships, workforce

diversity and work or life balance, as well as efficient management of environmental issues;

- Risk management-Better control of risk-financial, regulatory, environmental, or from

consumers’ attitude. (Enimil et al, June,2012)

2.2.4 THE CHALLENGES ASSOCIATED WITH THE PRACTICE OF CSR IN THE

TELECOMINDUSTRY

Companies are confronted with a lot of challenges when engaging in their CSR activities. A

study conducted by Enimil et al (2012) on the topic suggests that there are four (4) main

challenges which companies are likely to encounter when undertaking CSR. They are

categorized into community issues, governmental issues, infrastructure and internal issues.

 The community challenges that came up were companies’ inability to reach all the

communities that needed help, and their inability to support as many people as they

would. This is due to limited resources and sometimes companies exceed their budget

allocated to CSR as people keep on coming to them to solicit help. Another

community challenge organizations face is illiterate communities’ resistance to

change. They tend to put up an antagonistic behavior until they understand that it is in

their interest if companies act responsibly.

16
  Governmental issues: The study revealed that there is not much of a governmental

challenge since there is no law on CSR in Ghana but the researcher realized that there

is a problem with that because this is the reason why many organizations engage in

‘anything’ in the name of CSR.

 Infrastructure issues: Poor road network leading to communities was a main

challenge.

 Internal issues: Lack of resources run through as the most important challenge

management faces in their quest to be philanthropic, which balls back to the above

limited resources.

Problems companies face in carrying out their social responsibility are almost

insurmountable. However through commitment and their willingness to give a hand to

society they are able to overcome some of those challenges

2.3 Theoretical Framework

The amount of literature available on CSR is massive and it continues to grow. Over the

years the social involvement of corporations has increased. Earlier corporate entities mainly

focused on their economic objectives; profitability, cost of production, margins etc. Corporate

entities are now posed with the challenge pertaining to the social responsibility of business

(Swapna, 2011).

Companies can no longer satisfy just the needs of the investors, i.e. shareholder value. There

are a number of persons or groups who influence the company. The company also influences

these groups, which are called stakeholders.

Aligned with above, today’s corporations are operating in a more connected world, one that is

improving their conception of their social responsibilities. International trade has led to new

17
aspects on the relationships between business and society especially for the multinational

companies (MNCs). As globalization accelerates and large corporations serve as global

providers, these corporations have progressively recognized the benefits of providing CSR

programs in their various locations. CSR activities are now being undertaken throughout the

globe.

The scope of activities included in CSR programs is wide and subject to debate; however,

most definitions include three key pillars of economic growth, ecological balance, and social

progress. Elements within the framework of CSR include the adaptation of products and

manufacturing processes to address social values (such as eliminating excess packaging),

valuing human resources (such as personal development training and Occupational Health &

Safety programs), improving environmental performance through recycling and pollution

abatement (such as emission reductions), and supporting community organizations (such as

by sponsoring a local sporting club) (Jones & Bartlett, 2009).

Carroll’s model provided four dimensions of societal expectations for socially responsible

business behavior- economic, legal, ethical, and discretionary (philanthropic) i.e. CSR

Pyramid (Korkchi and Rombaut, 2006). There are three main perspective of CSR concerning

the point ethical business based on social values and the stakeholders long term interest

(Alpana, 2014). This is the triple bottom line approach of CSR which states that organizations

should respect its important parts namely people, planet and profit (the triple-P bottom line).

A variation of the term is the triple-E bottom line (economic, ethical and environment). The

corporation should care about the sake of all this three parts at the time of taking decision and

performing activities. Some theories on which CSR are founded are discussed below

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2.3.1 Stakeholder Theory

A very basic theory to CSR is stakeholder theory. It asserts that managers must satisfy a

variety of constituents (e.g., workers, customers, suppliers, local community organizations)

who can influence firm outcomes. The theory was originally detailed by Freeman in 1984. It

attempts to identify numerous different factions within a society to whom an organization

may have some responsibility. Developments on stakeholder theory that exemplify research

and theorizing in this area include Donaldson and Preston (1995), Mitchell, Agle, and Wood

(1997) and Phillips (2003).

Normative theory of stakeholder is used to interpret the function of the corporation and

identify moral or philosophical guideline for corporation operations. It tries to stipulate what

should happen based on moral value. One of the architects of deontological theory believed

that individuals have the right to be treated as ends in themselves and not merely as a means

to an end. Emily, Solomon, Egessa, Douglas and Gerald (2014) argued that ultimate

justification for stakeholder theory is to be found in its normative base.

2.3.2. Legitimacy Theory

Another theory from which CSR stems is legitimacy theory. The theory posits that businesses

are bound by the social contract in which the firms agree to perform various socially desired

actions in return for approval of its objectives and other rewards and this ultimately generates

its continued existence. Legitimacy is defined as a generalized perception or assumption that

the actions of an entity are desirable, proper, or appropriate within some socially constructed

system of norms, values, beliefs, and definitions (Van derLaan, 2009). The theory implies

that there is interaction between groups and society. Organizations are one part of society and

they exist if they are considered legitimate by groups in society. Depending on an

organization’s perception of its state or level of legitimacy, it may employ legitimation

19
strategies either to establish, extend, maintain or defend their legitimacy (Tilling, 2004) and

control for potential, existing or perceived legitimacy gaps following legitimacy threats

(Vourvachis, 2008). The theory implies that organizations seek to operate within what is

considered accepted in society which is the essence of CSR. Stakeholder theory and

legitimacy theory have developed from the broader political economy perspective. They both

focus attention on the nexus between the organization and its operating environment despite

the fact that they are different (Van derLaan, 2009).

2.3.3 Ethical Aspect

The ethical case for CSR, argues that corporations have a moral obligation to people and the

planet which supersede the singular pursuit of profit. The ethical branch of stakeholder theory

suggests that all stakeholders have the right to be treated fairly by an organization. The author

of ethical theory is Immanuel Kant (1990). The ethic of CSR has been described as “the

alignment of business operations with social values. It is not ethical to give attention only to

shareholders and neglect employers‟ and customers‟ interest (Gotherstrom, 2012). In ethical

stakeholder theory, the firm is a vehicle for coordinating stakeholder interests and

management has a fiduciary relationship to all stakeholders: where interests‟ conflict,

business is managed to attain optimal balance among them (Tilt, 2010).

2.3.4 Shareholder Theory

The shareholder theory proposed by Milton Friedman states that a company's only

responsibility is to increase its profits. He argued that a company should have no "social

responsibility" to the public or society because its only concern is to increase profits for itself

and for its shareholders. However, shareholders must rely on management to perform various

functions as; managers may prioritize themselves in running of companies, which means that

20
in actual fact, they do not create value for shareholders (Lazonick and O‟sullivan, 2000).

Furthermore, companies do not always have the knowledge or competence for different kinds

of social and environmental projects. Resources are not used effectively when companies

engage in different CSR activities (Henderson, 2001).

The origin of the shareholder perspective is that most companies start from an owner

initiative associated with risk. The owner or entrepreneur invests his or her resources in an

idea, but without a guaranteed returns on investment whereas, the return to other stakeholders

such as lenders, employees, suppliers, is often regulated in contracts (Gotherstrom, 2012).

From the perspective of shareholder value, the owners are special stakeholders and their

interests should be prioritized. The owner can exert influence over the business, which to

some extent compensates for the higher risk. The owners should therefore be prioritized over

other stakeholders (Borglund et.al. 2012).

2.3.5 Information Asymmetry and Agency Theory

An asymmetric-information occurs when the quality and quantity of information available to

parties to a transaction is not the same such that one party is at an advantage over the other.

The theory of information asymmetry was propounded by George Akerlof in 1970 in his

work “The Market for Lemons: Quality, Uncertainty and the Market Mechanism”. Akerlof

investigated the effect of asymmetric information on the market equilibrium, based on the

example of the used cars market. The lemons problem can be solved through optimal

contracts, regulations and information intermediaries such as analysts (Gotherstrom, 2012).

CSR activities of organizations need to be effectively communicated to stakeholder groups.

Information asymmetry consists of adverse selection (the pre-decision consequence of

information asymmetry) and moral hazard (the post-decision consequence of information

asymmetry).

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Information asymmetry can be grouped into the “principal-agent problem”. Agency theory

dates back to Jensen and Meckling, (1976). Agency relationships exist when one or more

persons, the principal(s), hire another person, the agent, to perform some task on his (or their)

behalf through delegation of some decision-making authority to the agent (Omolehinwa,

2006). The problem occurs when there is a conflict of interest between the principal and the

agent. Agency theory recognizes that people are unlikely to ignore their own self interest in

making decisions; in other words people do not behave altruistically (Crowther and Aras,

2008).

Under agency theory, both principal and agent are assumed to be rational economic persons

i.e. they know what they are doing and they act consistently and rationally. They are both

motivated by self-interest although they possess different preferences, beliefs and

information. Both wish to maximize their own utility; the value or benefit they place on any

economic good they receive (Crowther and Aras, 2008). The managers of an organization are

essentially agents for the shareholders, being tasked with running the organization in the

shareholders‟ best interests. The shareholders however have a little opportunity to assess

whether the managers are acting in the shareholders‟ best interest (Akinsulire, 2010).

2.3.6 Fiduciary Capitalism Theory Fiduciary Capitalism Theory of CSR, which leads to

shareholder value-oriented management, holds that the only social responsibility of

businesses is to make a profit and, in the supreme goal, to increase the company’s economic

value for its shareholders. This is the theory that underlies traditional neoclassical economic

theory, primarily concerned with shareholder utility maximization. The Nobel laureate Milton

Friedman , with his wife Rose Friedman said that In such an economy, there is one and only

one social responsibility of business; to use resources and engage in activities designed to

22
increase its profits so long as it stays within the rules of the game, which is to say, engages in

open and free competitions, without deception or fraud according to Friedman and Friedman

(1962). Generally, shareholder value-oriented goes along with the Agency Theory according

to Ross(1973), Jensen and Meckling,( 1976), which has been dominant in many business

schools in the last decades. In this theory, owners are the principal and managers are the

agent. These later bear fiduciary duties towards the formers, and are generally subject to

strong incentives in order to alienate their economic interests with those of the owners, and

with the maximization of shareholder value.

2.4 Empirical Review

Corporate Social Responsibility

The development of corporate social responsibility and related literature has undergone a

long history. In 1953, Bowen first put forward the merchant's social responsibility theory in

his book “Social Responsibilities of the Businessman”, and puts forward a point of view that

enterprise and society has a certain relationship. Later, a lot of industrialism and writers have

on this novel presents the relationship between business and society commented, Bowen in

his book first admitted the enterprise should bear the social responsibility, in answer to the

problem whether the enterprise should bear the responsibility, Bowen's answer is obviously.

It also acknowledges that corporate social responsibility is not to solve all the problems of

society as a “panacea”, corporate social responsibility need encouragement and support.

Secondly, he put forward the second question, what is the social responsibility? Bowen

proposed the concept of corporate social responsibility, the social impact of a strong. During

this period, the United States issued many relevant laws to control the behavior of enterprises,

but also many scholars in United States rapidly transform the social environment rational

23
thinking, and the introduction of the laws related too many on the protection of workers and

consumers control the behavior of enterprises. A lot of consumer rights movement, the

destruction of the relationship between the enterprise and the public, in this period, the

enterprise senior advocates of corporate social responsibility, but in reality is to regard it as a

public relations strategy. Corporate social responsibility get little support and implementation

of all levels of the organization, most mid-level managers that corporate social responsibility

to destroy the financial performance of the organization in the bottom line, so they were

sloppy deal with corporate social responsibility. Friedman firmly opposed to corporate social

responsibility [8], he believes that enterprises and there is only one kind of responsibility, that

is, "in an open, free without the fraud of the competition and make full use of the resources

and capabilities to create the maximum profit for shareholders.

Corporate Social Performance

The corporate social response strategies are divided into four reactive as adaptive, defensive,

and active, social response, especially to the enterprise to supplement and complete, point of

view. At the same time also raised the consumer, environmental, racial discrimination,

product safety, occupational safety, stakeholder stakeholders responsible. Second, the

stakeholder theory has been put forward, it can solve the problem of social fuzziness, from

then on, corporate social responsibility on stakeholder level discussion, no longer under the

social state .Carol requirements of corporate social performance: one is corporate social

responsibility should be measured; second, enterprises are facing the social problems must be

identified; the third idea response can choose according to the enterprise.

Wood (1991) developed the model, combined the model with related theories such as system

theory, stakeholder management theory and other social problems. Develop three-

dimensional model into other theoretical traditions, its purpose is forming a more practical

24
and useful for the administration model. The positive effect of the corporate social

performance and corporate financial performance has not been verified can be explained by

the intermediary variables and environmental contingency, this view allows us to see the

impact on corporate financial performance of the full potential of corporate social

responsibility initiative. Many of these factors are associated with human resources

management related to the intermediary variables related. Frolova (2014) pointed out that

corporate social responsibility and human resource management cooperation aims to have an

important impact on the outcome of the organizational performance.

Organization performance

Klassen and McLaughlin (1996) after carrying out there research they conclude that

environmental management can play a positive role in improving corporate organization

performance. Cheruiyot (2010) carried out a research to establish the relationship between

corporate social responsibility and financial performance of firms. His conclusion was that

there was a statistically significant relationship between CSR and organization performance.

Li X., (2009) measured different corporations in China on an assessment index system and

found that organization with higher scores have high financial performance. Obusubiri (2006)

in a study on CSR and portfolio performance also found a positive relationship between CSR

and portfolio performance. He attributed this positive relationship to good corporate image

that comes with CSR making investors prefer such companies. The good CSR behavior has a

reputational benefit for the company.

The question as to whether CSR enhances business performance has been the center of many

debates over the past years and to date no real consensus has been reached on the topic. This

is because, although many companies in developed countries claim CSR has taken their

businesses to a whole new level and therefore swear by it, others(especially in the emerging

25
countries) on the other hand view it as a way of wasting organizational resources. But the fact

of the matter is, CSR has helped improve business performance at various levels, and in the

long-term. In other words, CSR and business performance are so correlated that it will be

difficult to dissociate them. Having said that, the researcher looked at “business performance”

in five (5) angles (though other angles may be exploited); financial, organizational

performance; employee’s commitment, corporate reputation and brand differentiation; which

can be used to measure the success or otherwise of CSR activities.

Financial performance is one of the most studied indicators of the strategic value of CSR

(Orlitzkyet al.,2003). Margolis and Walsh’s (2001) meta-analysis found that 55% of the 160

studies examined identified a positive relationship between CSR and financial performance,

22% reported no relationship, 18% found a mixed relationship and 4% a negative

relationship.

Orlitzkyet al. (2003) conducted another meta-analysis and found similar results. These

studies give credibility to the widely accepted notion that being socially responsible would, in

most cases, improve a firm’s financial performance. Indeed, Aguilera et al. (2007) recently

called for closure of the debate on the relationship between CSR and financial performance,

arguing that there is over whelming evidence of a positive and significant association

between the two.

A number of arguments and rationales have been advanced as to why CSR has a positive

impact on financial performance (Allouche and Laroche, 2006). One of the prominent

arguments is that the ways in which a firm satisfies its stakeholders and communicates CSR

activities to stakeholders can affect its financial performance.

Orlitzky et al. (2003, p. 405) noted that ‘‘the satisfaction of various stakeholder groups is

instrumental for organizational financial performance’’. Therefore, one could argue that in

26
emerging economies, as is the case in Ghana, the link between CSR and a firm’s financial

performance is dependent on stakeholders’ perceptions of and subsequent reactions to CSR

efforts. Stakeholders’ reaction to CSR efforts is mediated by the availability and intensity of

information on CSR initiatives and preferences of stakeholder’s relative to available

alternative

(Schuler and Cording, 2006). Hartman et al. (2007) argued that notwithstanding the

motivation for the engagement, firms must ultimately communicate their rationale for CSR

engagement to stakeholders.

Several studies have tried to explain the relationship between CSR and financial performance

of firm. Among the list, Mittal et al (2008) investigated the relationship between CSR and

organizational profitability in terms of economic value added (EVA) and market value added

(MVA). The authors found that there exists a positive relationship between CSR and

company's reputation and that there is little evidence that companies with a code of ethics

would generate significantly more economic value added (EVA) and market value added

(MVA) than those without codes. Also Hossein, et al. (2012) examined the link between CSR

and economic performance by examining different impacts of positive and negative CSR

activities on financial performance of hotel, restaurant and airline companies, theoretically

based on positivity and negativity effects. Findings suggest mixed results across different

industries contributing to companies‟ appropriate strategic decision-making for CSR

activities by providing more precise information regarding the impacts of each directional

CSR activity on financial performance.

Similarly Emilson, (2012) researched into the correlation between CSR and profitability

using economic value added (EVA). The study shows a low positive correlation between

profitability and CSR. But previous research and the practical examples from the selected

27
companies show a strong positive correlation between CSR and profitability. In the same

vein, Skare and Golja

(2012) investigated the relationship between CSR and financial performance. The authors

confirmed that CSR firms in the average enjoy better financial performance that non-CSR

firms.

Pava and Krausz’s (1995) comprehensive review of empirical studies of the relationship

between CSR and organizational performance found that, overall, firms perceived as having

met social responsibility criteria have either outperformed or performed as well as other firms

that are not necessarily socially responsible. Such positive relationship has also been

supported by a recent meta-analysis of the relationship between CSR and organizational

performance (Orlitzky et al., 2003).

A number of studies have explored the link between CSR and employee commitment

(Albinger and Freeman, 2000; Backhaus et al., 2002). Overall past research shows that a

firm’s social responsibility actions matter to its employees (Albinger and Freeman, 2000;

Greening and Turban, 2000; Peterson, 2004), and tend to have a positive impact on

employees’ commitment. Branco and Rodrigues (2006) reported that firms perceived to have

a strong social responsibility image often have an increased ability to attract better job

applicants, retain them once hired, and maintain employee morale. Similarly, Maignan et al.

(1999) suggested that firms that engage in

CSR activities are likely to enjoy enhanced levels of employee commitment for two main

reasons: first, they are dedicated to ensuring the quality of workplace experiences; and

second, they address social issues such as the protection of the environment or the welfare of

the community that are of concern to society in general and therefore also to employees.

28
Existing research provides evidence to suggest that corporate reputation is a crucial intangible

resource that contributes to a firm’s competitive advantage (Roberts and Dowling, 2002;

Shamsie,2003), ‘‘precisely because the development of a good reputation takes considerable

time and depends on a firm making stable and consistent investments overtime’’ (Roberts and

Dowling, 2002, p. 1091). Corporate reputation is enhanced or destroyed by firms’ decisions

to engage or disengage in CSR activities. Bhattacharya and Sen (2003) pointed out that CSR

‘‘builds a reservoir of goodwill that firms can draw upon in times of crisis’’. Similarly,

McWilliams and Siegel (2001, p. 120) reported that CSR ‘‘creates a reputation that a firm is

reliable and honest’’.

The link between CSR and corporate reputation in emerging economies is not straight

forward. Contrary to employee commitment where employees are able to observe their firms’

CSR activities, the impact of CSR on corporate reputation, in the eyes of different but mostly

external stakeholders, is shaped by how the firm communicates its CSR activities and how its

activities are reported in the national media and other communication media. Branco and

Rodrigues (2006) noted that when firms are able to demonstrate, by communicating

effectively with a wide range of stakeholders, that they operate in accordance with social and

ethical criteria, they can build a positive reputation, whereas failing to do so can be a source

of risk to their reputation.

In crowded marketplaces, companies strive for a unique selling proposition that can separate

them from the competition in the minds of consumers. CSR can play a role in building

customer loyalty based on distinctive ethical values. Several major brands, such as The Co-

operative Group, The Body Shop and American Apparel are built on ethical values. Business

service organizations can benefit too from building a reputation for integrity and best

practice. (Wikipedia,2009). Though opponents suggest that companies may not benefit from

29
their CSR initiatives, the researcher strongly believes that stakeholders are not indifferent and

unresponsive to the firms’ actions. Neither do they react negatively. On the contrary, people

respond to CSR undertaking in the sense of attachment or connection they feel with

companies engaging in CSR activities they care about. They are therefore led into buying

from socially responsible companies, a way of supporting what they do.

Some studies focused on the impact of CSR on the environment. For instance, Lyon and

Maxwell, (2008) examined the relationship between CSR and the environment. The study

showed how both market and non-market forces are making environmental CSR profitable,

and discussed altruistic CSR. The authors found that non-governmental organizations

strongly influence CSR activities, through both public and private politics. The authors posit

that CSR can have varied effects; from attracting green consumers or investors, to preempting

government regulation, to encouraging regulation that burdens rivals. They however,

observed that welfare effects of CSR are subtle, and there is no guarantee that CSR enhances

social welfare. Also, Tilt (2010) examined the contribution of accounting and accountants to

the debate and practice of CSR. The study concluded that accountants‟ interest in CSR is

much more wide ranging than simply an interest in the financial impacts on society.

The area of CSR and society is not left out in the studies on CSR. Of the studies, Swapna,

(2011) investigated the role of CSR in community development (CD). The study concluded

that being so much dependent, business has definite responsibility towards community

development. In another study Okeudo (2012) examined the effect of social responsibility

(SR) on the society. The study concluded that the society stands to benefit from company SR.

Among studies conducted on CSR and Corporate Governance is Germanova, (2008)

investigation of the practice of CSR as Corporate Governance Tool in Bulgaria. He

30
concluded that SR connects to governance at values level, making companies accountable to

broad range of stakeholders (employees, suppliers, local community, and society at large) and

incorporating social and environmental values in their operations in order to manage their

relations with these stakeholders that can have impact on the company development.

Also, Choi, Lee and Park investigated the relationship between CSR, Corporate Governance

and Earnings Quality and found that CSR ratings are negatively associated with the level of

earnings management for overall firms but positive relationship for firms with highly

concentrated ownership.

On the concept of CSR and Shareholders Value much have been done but with no consensus

as to whether CSR improves the shareholders value. Bechetti et al. (2007) investigating the

relationship between CSR and shareholders‟ value found a significant upward trend in

absolute value abnormal returns, irrespective of the type of event, and a significant negative

effect on abnormal returns after exit announcements from the Domini index. The latter effect

persists even after controlling for concurring financial distress shocks and stock market

seasonality. The findings established that CSR leads corporations to refocus their strategic

goals from the maximization of shareholders‟ value to the maximization of the goals of a

broader set of stakeholders. Bechetti et al. concluded that market penalizes the exit from

social responsibility index and ethical funds.

In a related study Baruch, (2013) examined the impact of CSR on shareholders money. The

study in an attempt to find out if CSR amounts to doing good or wasting shareholders money

concluded that the business upside (potential gain) from CSR is modest at best. On the other

hand the reputational downside from damage to communities or the environment can be

huge. The study recommended that if CSR enhances sale and earnings, companies should just

do it.

31
Studies conducted on the association between CSR strategies and competitive advantage,

have all agreed that CSR enhances a firms competitive advantage. Amongst the studies

investigating the impact of CSR strategies on competitive advantage, Filho, et al., (2010)

found that there is an intense association between social responsibility, corporate strategy and

competitive advantage. Similarly, Shuili, et al., (2007) examined the moderating influence of

the extent to which a brand's social initiatives are integrated into its competitive positioning

on consumer reactions to CSR. The researchers‟ found that positive CSR beliefs held by

consumers are associated not only with greater purchase likelihood but also with longer-term

loyalty and advocacy behaviors. More importantly, the study found that not all CSR

initiatives are created equal: a brand that positions itself on CSR, integrating its CSR strategy

with its core business strategy, is more likely than brands that merely engage in CSR to reap a

range of CSR-specific benefits in the consumer domain.

Studies linking CSR with economic and financial crisis have been conducted. One of them,

an investigation of the consequences of the economic and financial crisis on CSR by

Fernández-Feijóo (2008) acknowledged and explained the existence of double relationship

between CSR and the crisis. The relationship appears in both the lack of CSR as one of the

causes of the economic and financial crisis and as a tool for managing the situation and

helping firms overcome the consequences of the crisis. He opined that organizations in their

CSR implementation process must redefine their essential business objective so as to align

with the strategy of the company and be coherent with the change in organizational culture

that CSR represents. The new attitude, forms and perspectives should be the result of a deep

internal reflection that will increase the core value of the firm.

Some studies have been carried out on CSR and firm value. A study in this area, Servaes and

Tamayo, (2013) investigated the role of customer awareness with respect to the impact of

32
CSR on firm value. The study showed that CSR and firm value are positively related for

firms with high customer awareness, as proxy by advertising expenditures. The relation is

either negative or insignificant for firms with low customer awareness. In addition, the

authors, Servaes and Tamayo, found that the effect of awareness on the CSR–value relation is

reversed for firms with a poor prior reputation as corporate citizens. This evidence is

consistent with the view that CSR activities can add value to the firm but only under certain

conditions. In the work, awareness is just a by-product of firm advertising.

According to a research carried out by Nevine, Sobhy, Abdel and Megeid (2013) Customer

satisfaction is a post purchase attitude formed through mental comparison of the quality a

customer expects to receive from an exchange, and the level of quality the customer

perceives actually receiving. Customer satisfaction results in behavioral outcomes such as

customer retention, commitment, creation of a mutually rewarding bond between the user and

the service provider, increased customer tolerance for services and products failures, positive

word-of-mouth advertising about the organization, increased future customer spending, and it

might result in more selling, attracting new customers, lowering costs, and greater

profitability.

Luo and Bhattacharya (2006) studied the 500 companies and concluded a direct positive

relationship between CSR and customer satisfaction. Marketing studies focused on customer

satisfaction with physical products and services delivered through channels according to

Khalifa and Liu (2002).Customer satisfaction leads to faster market penetration and in turn,

to accelerated cash flows and likely acts as underlying mechanism by which customers’

satisfaction affects shareholder value in any industry according to Eugene et al (2003).

Communication is vital to any organization in that good communication leads to no deficit or

gap between the company and the public there by creating a positive image, this leads

33
customer retention. Accordingly, Kim et al., (2008) related that customer satisfaction

positively influences brand loyalty. Satisfaction occurs as a result of performance of a

product or services meets purchaser expectation .Ganesan(1994) proposed that satisfaction is

a positive affective reaction to an outcome of a prior experience.

Philanthropy involve the following activities in a organization;-Donation of sales,

Unrestricted cash donations, Donation of products, Employee volunteerism, Collection of

customer donations, Charity events, Promotion of public service announcements to mention

but a few

2.5 Summary of the Literature

In summary the literature review indicates that corporate social responsibility impacts on the

performance of an organization. This study therefore intends to add to the existing body of

knowledge by domesticating the study of the relationship between CSR and performance of

MTN and to use more recent data than previous data observed by the researchers.

34
 CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter focuses on the systematic approach for solving the research problem in the study

and highlights the instruments and techniques used to seek solutions to the research problem.

It consists of the research design, sample population, sample frame, sample size

determination, sampling techniques, research instruments, validity and reliability of research

instruments and methods of data analysis. The purpose of this research is to examine the

Impact of Corporate Social Responsibility on organizational performance. MTN Ogun state

was the only selected organization used as a study in this research.

3.1 Research Design

Coopers and Schindler (2006) suggested that the research design is the structure of

investigation aimed at identifying variables and their relationships to one another. It refers to

the blue print, plan and guidelines utilized in data analysis with respect to the study. It is a

necessary step required in a research process if research problems and hypothesis are to be

adequately addressed. Descriptive research design and causal research design as well as the

survey method was used. Descriptive research design was used to describe some phenomena

because it aids a researcher in gathering, summarizing, presenting and interpreting

information for the purpose of clarification while the causal research design was used to

describe the effect of one variable on another that is establish cause and effect relationship

(Mugenda&Mugenda, 2003). The researcher also utilized the survey strategy for this study

because it creates room for gathering large amounts of data from a sizeable population in a

cost-effective way.

35
3.2 Population of the Study

The study population was 150 staff of the MTN. The research instrument would be surveyed

on the workforce of the organization considering the fact that they all fall under the category

of employees within an organization.

3.3 Sample and Sampling Technique

Sampling is concerned with the choice of a subgroup of individuals from the target

population in order to enable the estimation of the characteristics of the entire population. It is

vital to use an adequate number of subjects so as to ensure a higher probability that results of

the study will be more generalizable and interpretable. The sample size was calculated using

the “sample size determining for research activity table” by (Krejcie and Morgan, 1970). In

estimating the sample size, a 5 percent margin of error (confidence interval) and 95 percent

confidence level was used. The sample size for the study therefore is one hundred andten

(110) for a sample population of one hundred and fifty (150) which was derived using the

Yaro Yamani formula.

3.4 Method of Data Collection

Data collection involves gathering of relevant and important data used for conducting a

particular research work. It is the basis for acquiring data. Data can be collected in two ways

which are; primary data and secondary data. Primary source of data was used for gathering

data in this research work. It is the data collected for the purpose of the research, these are the

responses generated or obtained from administered questionnaires (Mugenda&Mugenda,

2003).

The questionnaire research instrument was used in this research work because it helps to

access a large number of respondents and obtain information at a minimal cost.

36
3.5 Questionnaire Design

The instrument used for data collection for in this study is the questionnaire, the

questionnaires were administered. A questionnaire is a structured or semi structured

instrument, an array of questions to be answered by persons in order to provide information

for a specific purpose. The questionnaire is structured about the research objectives, the

research questions and the research hypotheses (Mugenda and Mugenda, 2003). For the

purpose of this research, the questionnaire was based on close-ended questions aimed at

generating brief and specific answers from the participants. The questionnaire used for this

study consists of three sections. Section A was based on the respondents’ bio-data using five

items, section B contained 15 statements on corporate social responsibility and organizational

performance. Five-point Likert scale that best describes the extent to which the respondents

agree with each items in the questionnaire was used.

3.6 Validity and Reliability Test

The validity of test reveals the degree to which a measuring instrument measures what it is

intended to measure Norland (1990). He stated that the accuracy and significance of

inferences are based on research results. The validity of the research instrument is determined

by the amount of build in error in measurement. The validity of the research instrument is to

be gotten from the various questions posed to the respondents.

Reliability is the degree to which a measurement is consistent with similar results over time.

Measurements can be reliable and yet not useful but if measurements are useful or valid, it is

certainly reliable. Reliable measurements show stability when tests are repeated with similar

outcomes. Reliability of the research instrument involves the consistency of the result

obtained with the instrument and if the instrument gives similar, close or the same result if

37
the study is repeated under the same assumptions. For Cronbach’s alpha test; this is relating

each measurement item with the other measurement item so as to obtain the average inter

relationship for all the paired associations. Cronbach’s alpha method of reliability is for

measuring the reliability of this research work.

Table 3.1: Reliability Statistics

Cronbach's Alpha N of Items

0.779 15

Source: Extracted from SPSS, Version 20.

Reliability analysis made on scaled research instrument returned a Cronbach’s Alpha statistic

of 0.779in table 3.1, which indicates a high level of internal consistency for the scales used

under study. It also implies that the research instrument is valid for the research study.

3.7 METHOD OF DATA ANALYSIS

Analysis of the research study was carried out using descriptive and inferential statistics

technique. The descriptive part of the analysis comprises of frequency and percentage and

weighted average technique. Frequency and percentage analysis was adopted for the socio-

demographic information of the respondents while weighted average was used to score the

responses gotten from respondents on 5 point likert scale in order to know the category of

responses the respondents belongs.

Multiple linear regression method of inferential statistics was adopted to test the significance

of the aforementioned hypotheses using the t-statistic of coefficients of the multiple linear

regression model and the generated P-values. The model also shows how positive or negative

the impact of Corporate Social Responsibility is on Organizational Performance.

38
3.7.1 WEIGHTED MEAN INTERVALS AND DECISION RULES ON LIKERT

SCALE

The weighted average comprises of threshold at which the decision of the test instruments lie

as analysed in the interval below. Results of the analysis were presented as number of

respondents. Small and medium Enterprise was coded by giving 1 to SD, 2 to D, 3 to U, 4 to

A, and 5 to SD. Reversed questions were coded otherwise.

Strongly Agree (SA) = 4.5 - 5.0; Agree (A) = 3.5 - 4.4; Undecided (U) = 2.5 - 3.4

Disagree (D) = 1.5 - 2.4; Strongly Disagree (SD) = <1.5

WF = Weighted Frequency; WM = Weighted Mean

3.7.2 MODEL SPECIFICATION

The model specification of table 4.6 is written as:

OrgP=f(CSR, CWRR) (3.1)

The OLS model of this functional relationship is given as:

𝑂𝑟𝑔𝑃 = 𝛼 + 𝛽1 (𝐶𝑆𝑅) + 𝛽2 (𝐶𝑊𝑅𝑅) + 𝜀𝑖 (3.2)

Where:

OrgP= Organizational Performance

CSR= Corporate Social Responsibility

CWRR =Compliance with Regulatory Requirements

α = Autonomous Organizational Performance when the independent variables are held

constant

𝛽1 , and 𝛽2 , are coefficients of CSR and CWRR respectively.

𝜀𝑖 = Random Error term which is assumed to be NIID  (0, 𝜎 2 )

39
3.7.3 Significance Test of Correlation Coefficient

Significance of the correlation coefficient was tested using student “t” test of correlation

significance. The test statistic is given as;

𝑟
𝑡= 2
𝑡𝛼 (𝑛 − 1) (3.4)
√1−𝑟 2
𝑛−2

40
 CHAPTER FOUR

RESULTS, DISCUSSION AND INTERPRETATION

4.0 Introduction

This chapter present the data collated and analyzed in the course of this research study. The

data was generated using the research instrument that was adopted for the study.

Questionnaire that sought the opinion of respondents on CSR on Organizational Performance

was drafted and examined. Sample of One Hundred and Ten respondents were target for the

research study where all the research instruments was returned. Statistical analysis of the

returned instrument was done using Statistical Package for Social Sciences (SPSS) Version

20 (IBM Inc.).

4.1 Presentation and Discussion of Results

Table 4.1: Frequency and Percentage Analysis of Respondents Socio-Demographic

Information

S/N VARIABLES Frequency Percentage

Male 61 55.5
1 Gender Female 49 44.5
Total 110 100.0
18-25 years 15 13.6
26-35 years 50 45.5
2 Respondents Age 36-45 years 30 27.3
46 years and above 15 13.6
Total 110 100.0
0-5 years 50 45.5
6-10 years 43 39.1
3 Duration worked with MTN
11-15 years 17 15.5
Total 110 100.0
ND/NCE 15 13.6
4 Educational Qualification HND/BSc 53 48.2
MBA/MSc 32 29.1

41
 Others 10 9.1
Total 110 100.0
Single 28 25.5
Married 64 58.2
5 Marital Status
Divorced 18 16.4
Total 110 100.0
Source: Field Survey 2019

Frequency and percentage analysis of the respondents’ socio-demographic information in

table 4.1 indicates from item 1 that the male respondents were 55.5% of the total sampled

respondents while 44.5% were female. This shows that majority of the respondents were

male. Respondents age distribution in item 2 showed that majority (45.5) of the them were

between 26-35 years while the minor constitute 13.6% and are between 18-25 and 46 years

above. item 3 shows the year of experience of respondents as it depicts that majority of them

representing 45.5% have worked in the organization for between 0-5 years. It can also be

seen that majority of the respondents are HND/BSc holders constituting 48.2% and are

married as analysed on item 5 respectively.

Table 4.2: Weighted Response on Staff Perception to CSR and Organizational

Performance

S/N Items SD D U A SA WF WA Decision

Organization emphasizes the
importance of its corporate social
1 responsibilities which has a very 0 11 14 47 38 442 4.0 A
crucial impact on organizational
performance
Compliances with regulatory
requirements such as tax payment
2 has a significant effect on 0 0 9 51 50 481 4.4 A
investment which leads to positive
performance of the organization

42
 CSR activities creates a positive
relationship with an organization's
3 5 0 3 43 59 481 4.4 A
stakeholders thereby improving
firm's performance quality
Every organization should focus on
and practice appropriate CSR to
4 0 2 3 40 65 498 4.5 SA
sustain in the competitive business
market with competitive advantage
The influence of the CSR operations
of the organization to their staff can
5 0 0 6 65 39 473 4.3 A
significantly improve the outcome
of the staff.
A well-performed CSR has an
6 impact on customer's satisfaction 3 0 21 58 28 438 4.0 A
which leads to increase in sales
Staff Response was scored by giving 1 to SD, 2 to D, 3 to U, 4 to A, and 5 to SD. Reversed
questions were coded otherwise.
Source: Researcher Self Computation

Table 4.2 depicts the weighted average response of staff perception to CSR and Organizational

Performance. It can be seen from item 1 that the respondents agreed on a weighted average of 4.0

that Organization emphasizes the importance of its corporate social responsibilities which has

a very crucial impact on organizational performance; item 2 showed on a weighted score of

4.4 that compliance with regulatory requirements such as tax payment has a significant effect

on investment which leads to positive performance of the organization. Item 3 indicates the

agreement of the respondents on the opinion that CSR activities creates a positive

relationship with an organization's stakeholders thereby improving firm's performance quality

on a weighted average of 4.4 and strongly agreed (WA = 4.5) that every organization should

focus on and practice appropriate CSR to sustain in the competitive business market with

competitive advantage and its influence to their staff significantly improve their outcome.

43
 Table 4.3: Weighted Response on Customers Perception to CSR and Organizational
Performance

S/N Items SD D U A SA WF WA Decision

Through provision of certain
corporate social responsibility
activities, organization can build
7 0 6 11 70 23 440 4.0 A
better and clear customer perception
of their products or services and
improve product/brand quality
Company's CSR attracts you to
8 purchase and re-purchase a product 0 0 12 66 32 460 4.2 A
or services
Various actions of organization
regarding CSR has positive
9 0 0 8 28 74 506 4.6 SA
influence to the customers or clients
of the organization
An organization's poor record of
10 CSR would put you off purchasing 3 0 22 77 8 417 3.8 A
profit
Customers Response was scored by giving 1 to SD, 2 to D, 3 to U, 4 to A, and 5 to SD.
Reversed questions were coded otherwise.
Source: Researcher Self Computation
The weighted response of customers perception to CSR and Organizational Performance can

be evidenced in table 4.3. item 7 showed that weighted average of 4.0 indicates the agreement

that organization can build better and clear customer perception of their products or services

and improve product quality through provision of certain CSR. Item 8 depicts that customers

agreed on the opinion that company’s CSR attracts them to purchase and re-purchase a

product or services (WA =4.2) . It can also be seen that various actions of organization

regarding CSR has positive influence to the customers or clients of the organization as

strongly agreed by the respondents on an average 4.6 in item 9. Item 10 depicts that

44
organization’s poor record of CSR would put them off purchasing profit as evidenced on a

weighted average of 3.8

Table 4.4: Weighted Response of Host Community on CSR and Organizational

Performance

S/N Items SD D U A SA WF WA Decision

CSR offer individualized support and
humanitarian interaction to improve
14 6 2 17 29 56 457 4.2 A
the welfare of the host community
and other communities
The company's CSR offer skill
15 training to host community thereby 3 5 14 47 41 448 4.1 A
improving their standard of living
The company's production activities
16 has negatively affect the natural 44 50 9 4 3 202 1.8 A
resources of the host community
The company has for once
17 compensated the host community for 2 0 9 43 56 481 4.4 A
using their natural resources.
Host Community Response was scored by giving 1 to SD, 2 to D, 3 to U, 4 to A, and 5 to
SD. Reversed questions were coded otherwise.
Source: Researcher Self Computation
Weighted response of host community on CSR and organizational performance indicates from table

4.4 that CSR offer individualized support and humanitarian interaction to improve the welfare of

the host community and other communities (WA= 4.2) and was opined by the respondents

that the company’s CSR offer skill training to host community thereby improving their

standard of living. Although, people in the host community disagreed on the opinion that

company’s production activities has negatively affect the natural resources of the host

community on a weighted average of 1.8 but company has for once compensated the host

community for using their natural resources (WA= 4.4)

45
Table 4.5: Weighted Response of Other External People on CSR and Organizational
Performance.

S/N Items SD D U A SA WF WA Decision

You as an external person and not a member of

15 host community has been a beneficiary of any 5 8 22 45 30 417 3.8 A

of the Company's CSR activities.

Response of Other External People was scored by giving 1 to SD, 2 to D, 3 to U, 4 to A,

and 5 to SD. Reversed questions were coded otherwise.
Source: Researcher Self Computation
Other external people not living in the host community said that they have been a beneficiary
of one of the company’s CSR activities.

Table 4.6: Model Summary

R R Square Adjusted R Square Std. Error of the Estimate

.649a .421 .407 .43368

Source: Extracted from SPSS, Version 20.

The R of 0.649 in table 4.6 showed that there is strong positive degree of relationship

between the CSR, compliance with regulatory requirements and organizational performance.

This implies joint increase in organisations CSR and Compliance tend to an increase in

performance of organization. R-Square of 0.421 shows that 42.1% variation ofCSR and

Compliance with Regulatory Requirements be accounted for by Organizational Performance.

The adjusted R-square of 0.407 indicates that the coefficient of determination will be 40.7%

when other measured variables of organizational performance are added to the model. Also,

the lower standard error of estimate (0.43368) implies that the model is of good predictive

ability.

46
Table 4.7: ANOVA(Test of Model Significance)
Model Sum of df Mean F Sig.
Squares Square
Regression 5.650 2 2.825 3.347 .039b
1 Residual 90.314 107 .844
Total 95.964 109

Source: Extracted from SPSS, Version 20.

The overall test of model significance of table 4.8 reports the F-statistic of 30.339 with d.f

(3, 125) and an associated sig. value of 0.039< α=0.05 level of significance implies that the

model is adjudged to be a good fit and can be adopted to measure the impact of corporate

social responsibility on organizational performance.

Table 4.8: Regression Model Coefficients and Test of Significance

Coefficients
Model t-statistic Sig.
B Std. Error

(Constant) 2.060 .785 2.624 .010

CSR .353 .140 2.521 .012
CWRR .290 .143 2.028 .045
Predictors: (Constant), CSP, TP, SF
Source: Extracted from SPSS, Version 20.

Variables of question 1, 2, 4, 7 and 10 were used to fit the model and test the stated

hypotheses in this research study.

Substituting the coefficients, we have;

𝑂𝑟𝑔𝑃 = 2.060 + 0.353(𝐶𝑆𝑅) + 0.290(𝐶𝑊𝑅𝑅) (4.1)

The intercept of 2.060 in model (4.1) shows the autonomous mean response of organizational

performance on a scale of 5 when the predictor variables are held constant. This value implies

that companies will achieve organizational performance without the influence of the

47
considered predictors. Also, a unit increase in CSR and CWRR result to 35.3%,

and 29%, incremental rate inorganizational performance respectively. However, the

coefficients were found to have positive influence on performance and do not negate the a

priori opinion.

4.2.1 HYPOTHESES TESTING

The hypotheses of this research work were tested using t-test of the significance of linear

regression model extracted from the parameter estimates in table 4.5.

Decision rule:

Reject H0 if =0.05 level of significance is greater than the probability value (P-value)

generated for the T-statistic value. Otherwise, fail to reject H0. For the purpose of this

research work, the hypotheses was tested at 95% confidence level i.e. =0.05.

Hypothesis One

Ho1:Corporate Social Responsibility has no significant impact on organizational

performance.

H11:Corporate Social Responsibility has significant impact on organizational performance.

Parameter estimate of Corporate Social Responsibility (CSR) on table 4.8with t-statistic of

2.521 and an associated P-value of 0.012<α = 0.05 implies that we reject H01 and thereby

conclude that CSR has significant impact on organizational performance. However, the

significant influence is within the a priori opinion as CSR was found to be positively inclined

on performance of organization.

48
Hypothesis Two

Ho2: Compliance with regulatory requirements do not significantly affect performance of the

organization

H12: Compliance with regulatory requirements do not significantly affect performance of the

organization

Parameter estimate of CWRR with t-statistic value of 2.028 and associated P-value of 0.045<

0.05 indicates the rejection of H02. This implies that compliance with regulatory

requirements such as tax payment significantly lead to positive performance of an

organization.

Hypothesis Three

Ho3: There is no significant relationship between customers’ satisfaction and sales.

H13: There is no significant relationship between customers’ satisfaction and sales.

Table 4.9: Correlations

Customer Sales
Satisfaction
Pearson Correlation 1 .851
Customer Satisfaction Sig. (2-tailed) .000
N 110 110
Pearson Correlation .851 1
Sales Sig. (2-tailed) .000
N 110 110
Source: Extracted from SPSS Output, Version 20.

Pearson Correlation of 0.851 implies that there is strong positive relationship between

Customer Satisfaction and Sales. P-value 0.000< α =0.05 level of significance showed that

we reject the H03 and thereby conclude that there is significant relationship between customer

satisfaction and sales.

49
4.3 Interpretation of Results

This research study was based primarily on Impact of Corporate Social Responsibility on

Organizational Performance taking MTN, Ogun state as case study. Empirical analysis of the

research study showed that compliance of every organization on focusing on CSR for

sustainability increases their performance. In addition, analysis also indicates that

organization build better and clear customer perception of their products and brands through

provision of certain CSR.

However, analysis of host community’s perception indicates that CSR offer individual

support and humanitarian interaction to improve the welfare of the host community and other

communities; and they also offer skill training thereby increasing the host community

standard of living.

Based on the set objectives of this research study, analysis of the research study indicates that

organization cannot achieve its optimal performance if Corporate Social Responsibility does

not play significant role. It can also be observed that CSR has significantly influence

performance of the organization.

50
 CHAPTER FIVE

5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

The success of modern business is apparent, but recently there is much concern in the

business and society literature and in the general press on whether business fulfils its social

role responsibly. Business ethics, corporate social responsibility and corporate governance

movements have been developed in recent decades as responses to a growing sense of

corporate wrongdoing. The research is about the impact of corporate social responsibility on

organizational performance.

The main objective of the research was to determine the impact of corporate social

responsibility on organizational performance. Other objectives were to find out if compliance

with regulatory requirements such as tax payment does lead to positive performance of an

organization; and to discover of there is any relationship between customers’ satisfaction and

sales. For collecting the necessary primary data, a survey was conducted where the

respondents are interviewed by a close ended questionnaire. In this research paper, in the data

collection process, the questionnaire is designed by using five-point Likert scale.

So, the survey is effective for gathering essential data for the research to identify the impact

of corporate social responsibility on organizational performance.

After the successful survey and data collection, the analysis of the survey responses was

illustrated and described by using tables and Statistical Package for Social Science (SPSS) .

The research methodology chapter indicates the entire process through which the research

was done in general. Analysis of the research study was carried out using descriptive and

inferential statistics technique. The descriptive part of the analysis comprises of frequency

51
and percentage and weighted average technique. Frequency and percentage analysis was

adopted for the socio-demographic information of the respondents while weighted average

was used to score the responses gotten from respondents on 5 point likert scale in order to

know the category of responses the respondents belongs. The source is the survey

questionnaire that was done by the author to find the necessary data. The gathered data was

analyzed properly in terms of the statistical and numerical measure.

From the survey analysis, the research represents certain major findings and

recommendations. Through the data analysis, the purpose of research the research is

identified.

So, the research determined the positive and effective impacts of the corporate social

responsibility on organizational performance. Through the research outcome/result, the

learners and the organizations can utilize the information to better knowledge and

implementation in practical use appropriately. So, the organizations should properly

emphasize on the identified factors in the research on corporate social responsibility to

improve the organizational performance.

5.2 Conclusion

Corporate social responsibility has no boundaries and is not constrained by race, color, or

religion. Corporate social responsibility is a culture and unwritten contract with the

community.

This invisible culture can shape brighter futures for nations. If employees don't see the point

of CSR initiatives, or understand the message, initiatives are unlikely to be effective. The

52
research is conducted to analyze the impact of corporate social responsibility on

organizational performance. The first chapter of the research is based on the introductory

aspect of the research that includes the basic objective, aim, and research questions that the

research paper will aim to find the answer of. The second chapter of the research is the

literature review where the entire literary topic has been discussed in proportion. Topics such

as corporate social responsibility, organization performance, corporate social responsibility

and financial performance , corporate social responsibility and environmental issues, effect of

corporate social responsibility on the society, conceptual framework, Empirical framework

and Theoretical framework are been discussed in the literature review.

Through the data analysis the research is identified the purpose of research. So, the research

is determined the positive and effective impacts of the corporate social responsibility on

organizational performance.

It can be concluded that corporate social responsibility has significant impact on the

performance of an organization. More so, compliance with regulatory requirements such as

tax payment do lead to positive performance of and organization. There is also a positive

relationship between customers’ satisfaction and sales.

So, by these research outcomes, the learners and the organizations can utilize the information

to better knowledge and implementation in practical use appropriately.

5.3 Recommendations

Recommendation of the research is the most important part for the researcher as it defines

what the decision makers should do based on the given data analysis and result of survey.

Effective recommendation can drive success for the decision makers by reflecting the key

53
areas where the issue lies and more concentration should be given. Some recommendations

on the basis of the research analysis and findings are discussed in below for the different

organizations regarding the corporate social responsibility study:

i. Consumers and society in general expect more from the companies whose products

they patronize. This sense has increased in the light of recent corporate social

responsibility, which enhanced public trust of corporations and public confidence. So,

organizations should practice corporate social responsibility. Growing influence of the

media sees any mistakes by companies brought immediately to the attention of the

public.

ii. A CSR program can be an aid to recruitment and retention, particularly within the

competitive graduate student market. Potential recruits often ask about a firm’s CSR

policy during an interview, and having a comprehensive policy can give an advantage.

So, organizations should focus on corporate social Managing risk is a central part of

many corporate strategies. Responsibility Reputation as take decades to build up can

be ruined in hours through incident such as corruption scandals or environmental

accident. These can also draw unwanted attention from regulators, courts,

governments & media. Building a genuine culture of doing the right thing within a

corporation can offset these risks.

iii. Brand competition in crowded market places, company’s striving for a unique selling

position. That can separate them from the competition in the minds of consumers.

CSR can play role in building customer loyalty based on distinctive ethical values.

License to operate corporation are keen to avoid interference in their business through

taxation. By taking substantive voluntary steps, they can pursue government

regulations that they are taking issues such as health & safety, diversity, or the

environment seriously as good corporate citizen with respect to labor standards and

54
 impacts on the environment. So, the implementation of the corporate social

responsibility is essential.

The above are the potential recommendations for the various organizations about the

importance and impact of corporate social responsibility on the organizational performance.

55
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 APPENDIX
RELIABILITY
/VARIABLES=ORGP CWRR Q3 CSR Q5 Q6 CustSatisfaction q8 q9 Sales q11 q12
q13 q14 q15
/SCALE('ALL VARIABLES') ALL
/MODEL=ALPHA
/STATISTICS=DESCRIPTIVE
/SUMMARY=MEANS.

Reliability
[DataSet1] C:\Users\user\Documents\BUKKY BAM.sav

Case Processing Summary

N %
Valid 110 100.0
Cases Excludeda 0 .0
Total 110 100.0
a. Listwise deletion based on all variables in the
procedure.

Scale: ALL VARIABLES

Reliability Statistics
Cronbach's Alpha Cronbach's Alpha N of Items
Based on
Standardized
Items
.779 .762 15

Item Statistics
Mean Std. Deviation N
Organization Performance 4.02 .938 110
Compliance with regulatory
4.37 .633 110
requirements
CSR activities creates a
positive relationship with an
organization's stakeholders 4.37 .917 110
thereby improving firm's
performance quality
CSR 4.53 .646 110
The influence of the CSR
operations of hte organization
to their staff can significantly 4.30 .567 110
improve the outcome of the
staff.
A well-performed CSR has an
impact on customer's
3.98 .835 110
satisfaction which leads to
increase in sales
Customer Satisfaction 4.00 .729 110
Company's CSR atracts you to
purchase and re-purchase a 4.18 .609 110
product or services
Various actions of organization
regarding CSR has positive
4.60 .624 110
influence to the customers or
clients of the organization
Sales 3.79 .692 110

59
CSR offer individualized
support and humanitarian
interaction to improve the 4.15 1.102 110
welfare of the host community
and other communities
The company's CSR offer skill
training to host community
4.07 .965 110
thereby improving their
standard of living
The company's production
activities has negatively affect
4.40 .638 110
the natural resources of the
host community
The company has for once
compesated the host
4.37 .788 110
community for using their
natural resources.
You as an external person and
not a member of host
community has been a 3.79 1.067 110
beneficiary of any of the
Company's CSR activities.

Summary Item Statistics

Mean Minimum Maximum Range Maximum / Variance N of Items
Minimum
Item Means 4.196 3.791 4.600 .809 1.213 .063 15

DATASET ACTIVATE DataSet1.

SAVE OUTFILE='C:\Users\user\Documents\BUKKY BAM.sav'
/COMPRESSED.
FREQUENCIES VARIABLES=Gender Age Duration
Educational_QualificationMarital_Status STAFF q1 Q2 Q3 Q4 Q5 Q6 CUSTOMR q7
q8 q9 q10 HOSTCOM q11 q12 q13 q14 OEXP q15
/ORDER=ANALYSIS.

[DataSet1] C:\Users\user\Documents\BUKKY BAM.sav

Frequencies
Frequency Table
Gender
Frequency Percent Valid Percent Cumulative
Percent
Male 61 55.5 55.5 55.5
Valid Female 49 44.5 44.5 100.0
Total 110 100.0 100.0

Age
Frequency Percent Valid Percent Cumulative
Percent
18-25 years 15 13.6 13.6 13.6
26-35 years 50 45.5 45.5 59.1
Valid 36-45 years 30 27.3 27.3 86.4
46 years and above 15 13.6 13.6 100.0
Total 110 100.0 100.0

60
 Duration worked with MTN
Frequency Percent Valid Percent Cumulative
Percent
0-5 years 50 45.5 45.5 45.5
6-10 years 43 39.1 39.1 84.5
Valid 11-15 years 17 15.5 15.5 100.0
Total 110 100.0 100.0

Educational_Qualification
Frequency Percent Valid Percent Cumulative
Percent
ND/NCE 5 4.5 4.5 4.5
HND/BSc 42 38.2 38.2 42.7
Valid MBA/MSc 53 48.2 48.2 90.9
Others 10 9.1 9.1 100.0
Total 110 100.0 100.0

Marital_Status
Frequency Percent Valid Percent Cumulative
Percent
Single 28 25.5 25.5 25.5
Married 64 58.2 58.2 83.6
Valid Divorced 18 16.4 16.4 100.0
Total 110 100.0 100.0

STAFF
Frequency Percent
Missing System 110 100.0

Organization emphasizes the importance of its corporate social responsibilities

which has a very crucial impact on organizational performance
Frequency Percent Valid Percent Cumulative
Percent
D 11 10.0 10.0 10.0
U 14 12.7 12.7 22.7
Valid A 47 42.7 42.7 65.5
SA 38 34.5 34.5 100.0
Total 110 100.0 100.0

Compliances with regulatory requirements such as tax payment has a significant

effect on investment which leads to positive performance of the organization
Frequency Percent Valid Percent Cumulative
Percent
U 9 8.2 8.2 8.2
A 51 46.4 46.4 54.5
Valid SA 50 45.5 45.5 100.0
Total 110 100.0 100.0

61
CSR activities creates a positive relationship with an organization's stakeholders
thereby improving firm's performance quality
Frequency Percent Valid Percent Cumulative
Percent
SD 5 4.5 4.5 4.5
U 3 2.7 2.7 7.3
Valid A 43 39.1 39.1 46.4
SA 59 53.6 53.6 100.0
Total 110 100.0 100.0

Every organization should focus on and practice appropriate CSR to sustain in

the competitive business market with competitive advantage
Frequency Percent Valid Percent Cumulative
Percent
D 2 1.8 1.8 1.8
U 3 2.7 2.7 4.5
Valid A 40 36.4 36.4 40.9
SA 65 59.1 59.1 100.0
Total 110 100.0 100.0

The influence of the CSR operations of the organization to their staff can
significantly improve the outcome of the staff.
Frequency Percent Valid Percent Cumulative
Percent
U 6 5.5 5.5 5.5
A 65 59.1 59.1 64.5
Valid SA 39 35.5 35.5 100.0
Total 110 100.0 100.0

A well-performed CSR has an impact on customer's satisfaction which leads to

increase in sales
Frequency Percent Valid Percent Cumulative
Percent
SD 3 2.7 2.7 2.7
U 21 19.1 19.1 21.8
Valid A 58 52.7 52.7 74.5
SA 28 25.5 25.5 100.0
Total 110 100.0 100.0

CUSTOMER
Frequency Percent
Missing System 110 100.0

Through provision of certain corporate social responsibility activities,

organization can build better and clear customer perception of their products or
services and improve product/brand quality
Frequency Percent Valid Percent Cumulative
Percent
D 6 5.5 5.5 5.5
U 11 10.0 10.0 15.5
Valid A 70 63.6 63.6 79.1
SA 23 20.9 20.9 100.0
Total 110 100.0 100.0

62
Company's CSR attracts you to purchase and re-purchase a product or services
Frequency Percent Valid Percent Cumulative
Percent
U 12 10.9 10.9 10.9
A 66 60.0 60.0 70.9
Valid SA 32 29.1 29.1 100.0
Total 110 100.0 100.0

Various actions of organization regarding CSR has positive influence to the

customers or clients of the organization
Frequency Percent Valid Percent Cumulative
Percent
U 8 7.3 7.3 7.3
A 28 25.5 25.5 32.7
Valid SA 74 67.3 67.3 100.0
Total 110 100.0 100.0

An organization's poor record of CSR would put you off purchasing profit
Frequency Percent Valid Percent Cumulative
Percent
SD 3 2.7 2.7 2.7
U 22 20.0 20.0 22.7
Valid A 77 70.0 70.0 92.7
SA 8 7.3 7.3 100.0
Total 110 100.0 100.0

HOST COMMUNITY
Frequency Percent Valid Percent Cumulative
Percent

CSR offer individualized support and humanitarian interaction to improve the

welfare of the host community and other communities
Frequency Percent Valid Percent Cumulative
Percent
SD 6 5.5 5.5 5.5
D 2 1.8 1.8 7.3
U 17 15.5 15.5 22.7
Valid A 29 26.4 26.4 49.1
SA 56 50.9 50.9 100.0
Total 110 100.0 100.0

The company's CSR offer skill training to host community thereby improving
their standard of living
Frequency Percent Valid Percent Cumulative
Percent
SD 3 2.7 2.7 2.7
D 5 4.5 4.5 7.3
U 14 12.7 12.7 20.0
Valid A 47 42.7 42.7 62.7
SA 41 37.3 37.3 100.0
Total 110 100.0 100.0

63
 The company's production activities has negatively affect the natural resources
of the host community
Frequency Percent Valid Percent Cumulative
Percent
U 9 8.2 8.2 8.2
A 48 43.6 43.6 51.8
Valid SA 53 48.2 48.2 100.0
Total 110 100.0 100.0

The company has for once compensated the host community for using their
natural resources.
Frequency Percent Valid Percent Cumulative
Percent
SD 2 1.8 1.8 1.8
U 9 8.2 8.2 10.0
Valid A 43 39.1 39.1 49.1
SA 56 50.9 50.9 100.0
Total 110 100.0 100.0

OTHER EXTERNAL PEOPLE

Frequency Percent
Missing System 110 100.0

You as an external person and not a member of host community has been a
beneficiary of any of the Company's CSR activities.
Frequency Percent Valid Percent Cumulative
Percent
SD 5 4.5 4.5 4.5
D 8 7.3 7.3 11.8
U 22 20.0 20.0 31.8
Valid A 45 40.9 40.9 72.7
SA 30 27.3 27.3 100.0
Total 110 100.0 100.0

REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT ORGP
/METHOD=ENTER CSR CWRR.

Regression
[DataSet1] C:\Users\user\Documents\BUKKY BAM.sav

Variables Entered/Removeda
Model Variables Entered Variables Method
Removed
Compliance with
regulatory
1 . Enter
requirements,
b
CSR
a. Dependent Variable: Organization Performance
b. All requested variables entered.

64
 Model Summary
Model R R Square Adjusted R Std. Error of the
Square Estimate
1 .649a .421 .407 .43368
a. Predictors: (Constant), Compliance with regulatory requirements, CSR

ANOVAa
Model Sum of Squares df Mean Square F Sig.
Regression 5.650 2 2.825 3.347 .039b
1 Residual 90.314 107 .844
Total 95.964 109
a. Dependent Variable: Organization Performance
b. Predictors: (Constant), Compliance with regulatory requirements, CSR

Coefficientsa
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
(Constant) 2.060 .785 2.624 .010
1 CSR .353 .140 .214 2.521 .012
Compliance with regulatory
.290 .143 .196 2.028 .045
requirements
a. Dependent Variable: Organization Performance

CORRELATIONS
/VARIABLES=CustSatisfaction Sales
/PRINT=TWOTAIL NOSIG
/MISSING=PAIRWISE.

Correlations

[DataSet1] C:\Users\user\Documents\BUKKY BAM.sav

Correlations
Customer Sales
Satisfaction
Pearson Correlation 1 .851
Customer Satisfaction Sig. (2-tailed) .000
N 110 110
Pearson Correlation .851 1
Sales Sig. (2-tailed) .000
N 110 110

65