TITLE PAGE CORPORATE SOCIAL RESPONSIBILITY IN NIGERIA’S TELECOMMUNICATION SECTOR A CASE STUDY OF GLOBACOM NIGERIA LIMITED ENUGU ZONE BY EZEIGWE, GRACE CHINYERE BA/2007/163 A PROJECT REPORT SUBMITTED TO THE DEPARTMENT OF BUSINESS ADMINSTRATION, CARITAS UNIVERSITY, AMORJI- NIKE, ENUGU, ENUGU STATE. IN PARTTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR OF SCIENCE (B. Sc. ) DEGREE IN BUSINESS ADMINISTRATION. AUGUST, 2010. CERTIFICATION This is to certify that this project written by Ezeigwe G. Chinyere With Reg/No.
BA/2007/163, has been duly supervised, approved and found adequate in scope and content for the award of Bachelor of Science Degree in Business Administration, in the Faculty of Management and Social Sciences, Department of Business Administration, Caritas University, Amorji Nike, Enugu, Enugu State. _______________________________________ Mr. Innocent UbawikeProf. Godwin Nwanguma Project Supervisor Head of Department, Business Administration Department ________________ _______________________ DateDate
DEDICATION I dedicate this project work to God Almighty for His infinite mercy all through my studies and also, for the wisdom and inspirations towards the successful completion of this work. ACKNOWLEDGEMENT All thanks and Praise be to All Mighty God, for His guidance, protection, mercy and love towards me. I thank Him for the wisdom, knowledge and inspiration throughout the period of my academic years. To my beloved parents, Mr. and Mrs, J. O. Ezeigwe, I lack words to express my feelings. Thanks for your love, prayers, and financial support.
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You are the best parents anyone can ever ask God for. I love you. To Emmanuel and Paul, you are the best choice of brothers. Big thanks go to my supervisor, Mr. Innocent Ubawike. May God bless you for your kindness, patience and good supervision. I also use this opportunity to say a big thank you to my Head of Department, Prof. G. Nwanguma. Thank you for filling my brain with a lot of good stuffs and I will miss your lectures. Also to Mr. Walter Ani, Mr. Agbo Melletus, Mr. Kenneth Eziedo. Thank you all for imparting knowledge in me.
I promise you, by the Grace of God, it will not be a waste. Rebecca, Damilola, Kemi, Thecla Thanks. Roseline Adeloma, John Akaeme, Ebere Ugwuja, Lorreta, Nneka, you are the best choice of course mates one can ever wish for. George Henri Jonas, God bless you. To Ifezue Chukwunnamdi, thanks for everything. God bless you all. ABSTRACT The topic of the research is Corporate Social Responsibility in Nigeria’s Telecommunication Sector (A case study of Globacom Nigeria Limited, Enugu). The researcher used survey design in the study.
The population of the study was one hundred and twenty; comprising of both staff and customers of Globacom . The sample size was ninety two and it was determined using the yaro Yamane formula. The research used both the primary and secondary sources of data in the course of study. The primary data were collected through the instrument of questionnaire, interviews and observation. The secondary data were collected from text books, journals, magazines, newspaper and libraries. The research finding of the project work revealed that social responsibility programmes are necessary . he findings also unveiled that Globacom Nigeria, a telecommunication firm carries out its social responsibility programme in its host community. The researcher recommended that the company should increase and expand its social responsibility programmes. Corporate social responsibility is therefore something that a company should try and get right in implementing. It is something that business today should wholeheartedly be committed to. The danger of ignoring social responsibility is too dangerous. . TABLE OF CONTENTS.
Title page i Certification ii Dedication iii Acknowledgement iv Abstract v Table of content vi CHAPTER ONE: INTRODUCTION . Background of Study 2. Statement of the Problem 3. Purpose of the Study 4. Research Questions / Hypothesis 5. Significance of study 6. Limitation of study 7. Scope of study 8. Definition of special terms CHAPTER TWO: REVIEW OF RELATED LITERATURE 2. 1Theoretical Framework 2. 2Historical Background 2. 3 Current Literature on theories postulated CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY 1. Research Design 2. Sources of Data 1. Primary Sources of Data 2. Secondary Sources of Data 3. Population of study 4. Sample Design and Determination of Sample Size . Methods of Data Collection 1. Questionnaire Design, Distribution and Collection of Responds 2. Secondary Method of Data Collection 3. 6Methods of Data Presentation and Analysis CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS 1. Data Presentation 2. Presentation According to Key Research Question 2. Analysis Based on Research Hypothesis CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATION AND CONCLUSION 5. Summary of Findings 5. 1. Conclusion 5. 2. Recommendation. References Bibliography Appendix CHAPTER ONE 1. 1INTRODUCTION: BACKGROUND OF THE STUDY
Corporate Social Responsibility an essentially American phenomenon has over the years become a major concern in Western Europe and in other countries of the world following the western model of development. According to Drucker, (1986:66). The genesis of the debate on the concept of corporate social responsibility has been traced to the wave of crisis in social values that engulfed America in the post World War II period and most especially in the sixties. The Chief Executive of General Motors who observed the changing trend could not help observing: I am concerned about a society that has demonstrably lost confidence in its institutions – in the government, in the press, in the church, in the military, as well as in business”. Business to America has had a most unique history. Its development growth and impact on social life in America since the civil war II is almost common knowledge. What may not be common knowledge, however, is the fact that business which has hitherto shaped and controlled the lives of millions of Americans some two hundred years ago is today being threatened by a wave of protests from various publics it uses to serve.
The crisis of confidence in the social role of business as made explicit in debates on corporate social responsibility points to the fact that America sees big business as a big powerful machine gone out of control. And efforts to control and at least re-orientate its directions form the core of the argument of all who urge business to change with the times. In other words, to deemphasize its so much vaunted profit maximization dogma and pay attention to the human lives and environment which it is subtly, ruthlessly and almost surely grinding out of existence.
As one of the protagonists has viewed the concept of corporate social responsibility it is a crude blend of long-run profit-making and altruism, a doctrine which fuses social values with profit maximization goals. In the early years of the American Republic and especially in the post civil war reconstruction era, business in America played an almost indispensable role as a powerful social tool for harnessing resources and ensuring material progress. Ducker (1986:66).
But as the years rolled on and business began to concentrate and centralize capital, its role in the economy became expansive and pervasive. At the height of prosperity, the captains of industry were heralded as heroes of the society. The later years of the post World War II era harbored a different story. The boom period following the end of World War II soon gave way to a periodic wave of depressions and crisis that was to rock every foundations of society on which business existed.
The frustrating economic situation characterized by inflation, unemployment, failing profit, declining investment, pollution of the external environment etc. , pushed Americans to re-examine almost every old values and the assumptions behind them. According to Drucker, (1986:96) the debate on corporate social responsibility did not only take place in the United State of America. The noise of the debate filtered through to other countries that shares similar business cultures with America most especially the Western European countries.
While the western European nations have responded positively to the debate, accepted and even implemented some of its own far reaching conclusions it is pertinent to know if the discussions and conclusion so far reached have had an impact on the countries periphery. One of the objectives of this study is to investigate to what extent the current debate on corporate social responsibility and its conclusion has trickled down to the periphery of Nigeria in particular and how it is applied here by firms who have embarked on such projects in Nigeria.
It is believed by the researcher that although the present level of industrialization does not entitled us to discuss the issue on the same platform with the industrialized western economies; the fact that they are imitating their path to industrialization should imply that we should study their experience closely to avoid mistakes. It is arguable also that foreign corporate bodies operating in host countries especially in the Third World countries are most likely to pay lip service to such principles as corporate social responsibility which are most likely to be of benefit to their host countries.
Also local or indigenous organizations can neglect this principle of corporate social responsibility to their host communities. These days, social responsibility of business is on what should or might be done to tackle and solve problems of society. The emphasis is on what contribution they can make to such social problems as protected and restoration of physical environment, racial discrimination or social discrimination. In striving to satisfy its corporate goals and achieve its objectives the organization cannot operate in isolation from its environment. .
The performance of corporate social responsibility is not undertaking to boost profit at the short-run but to meet some social needs, aspirations, and profit at the long-run. Organizations who hold this view of corporate social responsibility believes that once it does what is expected of it by law and its host community the organization is socially responsible. Owing to the vastness of this topic – corporate social responsibility we shall have to restrict our investigation to manageable proportions by focusing attention on telecommunication sector Nigeria, using Globacom Nigeria Limited.
The telecommunication industry is one of the fastest growing sectors in Nigeria. There are so many telecommunication companies owned by foreign and local corporate bodies in Nigeria. These telecommunication industries have covered a large area in Nigeria from urban to rural areas in the country. As a result of this, the researcher has selected one out of the many telecommunication companies to take a look at its corporate social responsibility project.
The researcher has decided to pick on Globacom Nigeria Limited, Enugu Zone, and has decided to look into its corporate social responsibility activities, to see how the company has gone in performing its social responsibility in host community. 1. 2STATEMENT OF PROBLEM: In recent years there have been series of arguments, debates and controversies among businessmen, academics, government officials and the society in general on what should be the principle objectives or business enterprises. Over the years, managers have neglected the problems created by corporate firms to their host communities.
These problems possess a lot of threat and sometimes make life difficult for these communities. The privilege giving to organization to operate in the society stems from the act that society believes that there is a mutual interdependency existing between them, that is, the organization and the society. The relationship between organizations and their host community has become increasingly important. The decision made in an organization may influence community prosperity and also national and even internationally economic activity might be affected.
An example of these problems is the on-going crisis in the Niger Delta region which has led to the destruction of lives and properties. There are accusations from the youths in these areas that companies misdirect their efforts and resources that they should have used to develop the community to bribe opinion leaders in order to overlook their responsibilities to the community, and these have caused a lot of acrimonies between the two parties, community and the firm. These same problems can also be identified in other arrears and in other communities across the country where large companies are located.
This prompted the researcher with deep sense of burden to these communities to unraveled the need for these large firms to see the need in helping the society solve some of its problems, most especially those they help to create, and involve in philanthropic donations to the needs of these communities and provide the community with some social amenities. Despite the roles played by organizations carrying out corporate social responsibility and the growing importance of social responsibility, the following issues have not been fully addressed: i. Why should organizations be socially responsible to their environment? ii.
What benefits do organizations get from performing its corporate social responsibility? iii. Why is social responsibility considered as a waste drain of business resources? iv. Are organizations in Nigeria socially responsible? In view of the above, the researcher has taken up the issue of social responsibility in the telecommunication sector in Nigeria and used Globacom Nigeria as a case study to examine the extent of the company’s involvement in corporate social responsibility. 1. 3PURPOSE OF STUDY: For organizations to successfully survive in business, it must recognize the importance of social responsibility to the society.
The broad objective of the study is to – i. Examine the argument for and against corporate social responsibility. ii. Whether Globacom Nigeria Limited has been involved in social responsibility activities, and if so, to what extent have they been involved in their corporate social responsibility to their environment? iii. To examine whether the immediate environments are taking into cognizance during planning and implementation of social responsibility, iv. To know the factors that motivates the adoption of corporate social responsibility. 1. RESEARCH QUESTIONS/HYPOTHESIS: In pursuit of the objective of identifying the effectiveness and workability of corporate social responsibility the following hypothesis have been formulated, which intend to test in the course of this study: Ho: The organization involvement in social responsibility does not have an effect on the company and its host community. Ha: The organizations in social responsibility activities have an effect on the company and its host community. Ho: Globacom corporate social responsibility programme does not enhance organization-societal relationship.
Ha: Globacom corporate social responsibility programme enhances organization-societal relationship. We also intend to answer the following research questions to collaborate with the above hypothesis. 1. Why is social responsibility necessary in an organization? 2. To what extent does an organization involvement in social responsibility have an effect on the company and its host community? 3. What factors motivates the company in carrying out social responsibility activities? 4. Who do you think are the beneficiaries of the company social responsibility activities? 1. 5SIGNIFICANCE OF THE STUDY:
The study of social responsibility of a business organization is hoped to be of benefits not only to student’s businessmen, government, customers, community, stockholders, academics, but the whole society. The study also hopes to highlight the problem associated with social responsibility and to make use of the analysis to improve the working situations thereby minimizing the problems social responsibility conflict in that organization and its environment as well. Finally, the study will inform all at large, the need for corporate social responsibility not only to the firm, but to the society at large. . 6 SCOPE AND LIMITATION OF THE STUDY: This research work focuses on the telecommunication industry in Nigeria, but with particular reference to Globacom Nigeria, Enugu sector. This research was faced with a lot of problems and limitations. The major problem acting as a limitation was a problem of Nigerians attitude to the supply of data to a researcher due to fear. Secondly, because of financial constraints, the scope and dimension of this study could not be extended beyond this limit. 1. 7DEFINITION OF SPECIAL TERM 1:(Globacom): Global communication.
It is a name of a telecommunication firm in Nigeria. Global communication limited is the case study for this research work. 2: (Glo): A short name for Globacom. 3: (CSR): Corporate social responsibility. 4: (BSc): Bachelor of Science. 5: (NCE): National Certificate in Education. 6: (OND): National Diploma. 7 :( HND): Higher National Diploma. 8: (MBA): Master in Business Administration. 9: (SSCE): Senior School Certificate Examination. 10: (FSLC): First School Leaving Certificate. REFERENCES Drucker, P. (1968). Management Task, Responsibility and Practice.
London ; Pan Books Limited. Drucker,P. (1981). The New Meaning of Social Responsibility. California Management Journal Review, vol. 6(2):p 58-62. CHAPTER TWO 2. 1THEORETICAL FRAMEWORK THE CONCEPT OF ENVIRONMENT: No business enterprise exists and operates in a vacuum. Business operates in a dynamic environment. The growth and survival of a business is dependent on the environment and other factors. A better understanding of the environment and how it works will help in the understanding of the social responsibility of business.
According to Edgar (1982:61) business organization is a system, and a system can be defined as a set of interdependent parts which come together to make up the whole business. Each of these components or parts contributes and in return receives something from the whole which in turn is interdependent on the environment. A system may be closed or open. A system is said to be closed when it does not receive inputs from outside, that is its external environment nor does it contribute output to the external environment. A system can be said to be an open system when it exchanges inputs and outputs with its environment.
It gives output to the environment and in return receives inputs from the environment. The case study which is Globacom Nigeria is an example of an open system as it receives inputs and gives outputs to the environment. Environment can be defined as surroundings, especially the materials and other influences which affect the growth, development and existence of a living being or a business organization. Enudu (1999: 98), citing Onuoha (1991:121) defined an environment as a set of conditions and forces which surround and have direct or indirect influence on the organization.
Generally speaking, environmental variables that affect business organizations may be classified into internal and external environmental variables. An organization’s survival is dependent upon a series of exchange and the continual interaction with the environment gives rise to a number of broader responsibilities to society in general. To understand the business organizational environments, we must borrow some concepts from Systems Theory. One of the basic assumptions of systems theory is that business organizations are neither self-Sufficient nor self-constrained.
Rather, they exchange resources with and care dependent on the external. Thus, business organizations take inputs such as raw materials, money, labour and energy from the external environment, transform them into products or services and then send them back as outputs to the external environment. Koontz et al (1980:89) maintained that the relationship between a business organization and its environment can be examined in three main ways:- First, a business organization can be viewed as importing various kinds of inputs such as man, materials, money and machine.
These inputs are then transformed to produce outputs such as products and services,Secondly, in the study of the relationships between business organization and its environment is to focus on those publics which the business organization must service. These publics are, Employees, consumers, suppliers, stakeholders, government and the community where the business organization is located. A third approach is to view the business organization as operating in an external environment of opportunities and constraints which some authorities classified as economic, political, legal, technology etc.
Thus, all managers whether they operate in a small or medium or large business organization, take into consideration the elements and force of their external environment. It is necessary for us to discuss the various environment of a business. ELEMENTS OF DIRECT AND INDIRECT ACTION ENVIRONMENT OF AN ORGANIZATION: Fig. 4. [pic] Sources: Onuoha: Management (1999:121) ELEMENTS OF DIRECT ACTION ENVIRONMENT. Direct-action elements are elements of the environment that directly influence a business organization’s activities. Some people prefer to refer to “direct-action” as the task environment.
The direct-action environment is made up of stakeholder. The stakeholders fall into two categories: External and Internal stakeholders. Stakeholders are defined as individual or groups that are directly or indirectly affected by business organization’s pursuit of its objectives. INTERNAL STAKEHOLDERS: These are groups or individuals such as employees, shareholders that are not strictly part of a business organization’s environment but for whom an individual manager remains responsible. They are a part of the environment for which an individual manager is responsible.
EMPLOYEES: The employees of a business organization render services. They also involve in the production of goods or services which the business organization sell. Therefore, managers must always seek to get the right caliber of workers in the workforce, SHAREHOLDERS: The shareholders are primarily interested in the return on investment but in recent time, managers and shareholders have become interested in how a business is run. The governing structure of a large company allows shareholders to influence a company by exercising their voting rights. MANAGEMENT:
The management of an organization is responsible for the smooth running of the organization while they deal with multiple shareholders and balancing conflicting claims. EXTERNAL STAKEHOLDERS: CUSTOMERS: Consumers are those people and organizations that buy the organization’s products and services. They therefore, exchange resources, usually in form of money. Their patronage or lack of it determines whether a business organization’s operations will be successful or not. Customers and market situation determines selling tactics that should be employed by the organization in marketing the organization’s products or services.
Usually, a marketing manager analyses the potential customers and market conditions and direct a marketing company based on that analysis. Globacom managers understands this, that is why they make sure that their product quality is unbeatable and prices less so that competitors will not have an hedge over them in the market. They also make sure that they have their products readily available for distributors at all time, and this they do by having depots all over the nation. SUPPLIERS: Suppliers are those people and organizations that provide the materials, equipment and spare parts with which business organizations operate.
Every organization buys inputs – raw materials, services, energy, equipment and labour – from the environment and uses them to produce output. What the organization brings in from the environment and what it does with the price of its final products. Organizations are therefore dependent upon suppliers of materials and labour and will try to take advantage of competition among suppliers to obtain lower prices, better quality work and faster deliveries. GOVERNMENT: In Nigeria, the relationship between government and business organizations has been that of restrictive control in nature.
Government had acted as a protector of business through maintaining domestic peace and security. Government has shown interest in the private sector of the economy and this they do by regulating the activities of all productive organizations to public interest and reinforcing laws and establishing agencies or regulatory bodies to ensure that these laws are adhered to. Like consumers and environment advocates, are social critics who use the political process to further a position on particular issues. Managers have to study and defect groups formed to oppose the company on any issue.
Special interest groups can use the media to gain attention; therefore managers must take both present and future special interest groups into account when setting organization strategy. MEDIA: The economy and business activity have always been covered by the media, since these topics affect so many people. There is an increase reports of business activities in the media, therefore, managers who regularly deals with the media should often seek for professional coaching to improve their ability to present information and opinions clearly and effectively. LABOUR UNIONS:
Labour Unions seek to improve the quality of work-life of members of another by giving workers more control over what they do and how they do it. Managers through collective bargaining try to negotiate wages, working conditions, hours, etc. They have improved workers sense of responsibility and participation. FINANCIAL INSTITUTIONS: Business organizations depend on a variety of financial institutions, including commercial banks, investment banks and insurance companies to supply funds for maintaining and expanding their activities. Both old and new or well established business may rely on short-term loans to build new facilities.
Managers have to establish and maintain a working relationship with these institutions. COMPETITORS: A firm must always seek to increase its market share by gaining additional customers or it must beat its competitors in entering and exploiting and expanding market. These it must do by defining its marketing strategy. ELEMENTS OF INDIRECT-ACTION ENVIRONMENT: These are elements of the external environment that affect the climate in which a business organization’s activities take place, but do not affect the business organization directly Stoner et al (1996:63).
Some people refer to indirect-action as the “General environment”. The following are factors that influence business organization in an indirect-action environment:- ECONOMIC VARIABLES: These are factors, such as inflations, recessions, price stability, tax, etc, that affects business. These are general economic conditions and trends that may be factors in an organization. Other important economic variables are capital, economic stability and government fiscal policies. In addition to the above economic controls, Farmer and Richman (1965:56), identified three other economic variables, one of them they referred to as factor endowment”, which is the extent to which a country has available natural resources, adequate and useful labour, and capital which can be employed for efficient production. Another one is the size of market and the third major pervasive economic constraint is the extent to which social overhead capital is available. SOCIAL VARIABLES: These are factors such as demographics, lifestyles and social values that may influence and organization from its external environment. POLITICAL VARIABLES: These are factors that may influence an organization’s activities as a result of political process or climate.
The political process involves competition between different interest groups, each seeking to advance its own values and goals. Political legal variable also refer to political and legal environment which relate primarily to compel of laws, regulations and government agencies and their actions which affects all kinds of enterprises. TECHNOLOGICAL VARIABLES: One of the most pervasive factors in the environment is technology. The term ‘Technology’ refers to the sum total of knowledge we have of ways to do things, which affects an organization’s activities. APPROACHES TO SOCIAL RESPONSIBILITY.
By approaches to social responsibility, we mean the perception or view of people about the concept. While it is no longer new that social responsibility of business is necessary, there is still no consensus on what actually constitutes social responsibility. The various perceptions of social responsibility are: i. Social obligation ii. Social Reactions iii. Social Responsiveness. SOCIAL OBLIGATION: Those who hold this view of social responsibility believes that once the organization does what is expected of it by the law, that it is socially responsible. They believe that the major role of business in the society is to make profit.
Once this objective is achieved within the ambit of the law, the business is socially responsible. Their target therefor4e is to meet government standards and not to exceed it even if it would benefit society more. The proponents of social obligation believe that the first obligation of business is to return high profit to its shareholders for whom it is primarily accountable. The also believe that the duty of executing social programmes is that of the government and not business. Organizations are socially responsible when they pay taxes to government to enable it embark on these programmes.
Furthermore, the cost of social responsibility will ultimately be added to the cost of the goods and services offered by the companies, thereby leading to higher prices. This then means that it is the people who are paying for social service and not the company. SOCIAL REACTIONS: This view of social responsibility believes that business must be concerned about the social costs of its activities. It should exceed legal set targets in its attempt to responsible behavior. In doing this, it is helping to solve some of the societal problems arising from activities and even those that are traceable to it.
Social reaction therefore according to Seithi (1976:66) means behavior in reaction to currently prevailing social norms, values and expectations to various groups in the society for it to be socially responsible. Consequently any business that does not react favorably to the demands of societal groups is not socially responsible even if it means its legal obligation to society. SOCIAL RESPONSIVENESS: Business is socially responsible if its actions are anticipatory and preventive instead of reactive and restorative Seithi, (1976:70).
To this group, social responsibility means acting in anticipation of the future needs of society. A socially responsive organization sees itself as part of the society and as such takes stand on public issues and contributes its quota toward solving societal problems. It does not have to wait for groups to make demands on it before it acts rather, it initiates social programmes which it feels would help society and execute them without prompting from any quarters. 2. 2 HISTORICAL BACKGROUND OF GLOBACOM NIGERIA LIMITED:
Globacom Limited is a Nigeria multinational telecommunication company. Glo is a privately owned telecommunication company that started operations on the 29th August, 2003 in Nigeria. Globacom is privately owned by Mike Adenuga Group which consists of Equitorial Trust Bank, Conoil Plc. , and a petroleum marketing company producing a crude exploration company. The sole aim of introducing and lunching Globacom in Nigeria on the 29th of August, 2003 was to provide telecommunication service to the people of Nigeria as a means of solving the problem of inadequate communication flow.
Although Glo Mobil was the fourth telecommunication operator in Nigeria, within seven years of the company’s operation, its subscriber base has grown to over 25 million. Glo has an estimate of over 25 million subscribers. It has a reputation as one of the fastest growing multinational carrier in the world and the vision for Glo is to be the biggest and best carrier in Africa. Globacom currently operates in four countries in West Africa namely Republic of Benin, Ghana, Ivory Coast and Nigeria. Its Headquarter is in Lagos, Nigeria because it is 100 percent a Nigerian owned company.
According to Globacom Annual Report: (2009:6). In August, 2003, Glo Mobile was launched in Nigeria and it introduced lower tariffs, pay per second billing and along other value added services. Glo Mobile is a subsidiary of Glo, its Glo Mobile Network Unit. Globacom ability to become the best telecommunication company in Africa and all over the world is due to the strategies they design in other to carry out their business smoothly. An example of their strategic business units are, Globacom Broad Access, Glo Gateway, Glo 1 Submarine cable, etc.
In 2005, Glo Mobile introduced Glo fleet manager which is the most comprehensive Vehicle Tracking solution offered to save time and money. Glo fleet manager helps managers, transporters fleet operator manage their fleet effectively and efficiently. They also introduced the Glo Mobile Internet Service which provides subscribers with speed access to all popular Internet sites which have been customized for mobile phone browsing. The company in 2006 introduced Black Berry (A) which is the leading wireless solution that keeps mobile professionals around the world connected to people and information.
In 2009, Globacom launched Blackberry prepaid service which gives subscribers options to pay daily, weekly or monthly for the service The company now provides coverage to over 85 cities and towns and well over 5000 communities and villages spinning every geo-political zone and 36 of Nigeria’s States. Globacom products and services are available at its friendship centers which have a structure and some departments. It also have nationwide network of dealership, banks and convenience channels where its products are sold. Under the chairmanship of Otunba Michael Adeniyi Ishola Adenuga Jr. Globacom has turned out to become the fastest and best telecommunication industry in West Africa. Recently, in June, 2008, Glo mobile was launched in Republic of Benin. Glo Mobile showed unprecedented growth through sales of 600,000 Sim Cards in the first ten days of operation. Glo acquired an operating license through its Glo Mobile division in Ghana and currently has about 11 millions subscribers in Ghana, and in 2009, the company acquired submarine cable landing rights and international gateway services in Ivory Coast.
Globacom Nigeria Limited is a leading telecommunication company in Nigeria, which has been at the forefront of promoting sustainable development and high standards of corporate governance and is one of the few signatories that keep date to the convention of business integrity. According to Frank Nweke, (2006. 5. guardian newspaper) “Glo is an authentic Nigeria Company. What is has achieved in the past years demonstrates great potentials, great opportunities, drive for excellence and commitment to Nigeria”.
The Nigeria Communication Commission awarded the company as the second national operator driven by the success of Globacom in Nigeria. DEFINITIONS AND CONCEPTS OF CORPORATE SOCIAL RESPONSIBILITY. The concept “Corporate Social Responsibility” has been defined in many ways – Most writers on social responsibility see the concept as a disposition of an organization to exhibit “Missionary rather than “Mercenary” attitude towards the society. Holmes and watts (2000:19) on behalf of the World Business Council for Sustainable Development provide a reasonable representative definition as:
The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and other families as well as Those of the local community and society at large. Caroll (1979:96) proposed a four-part definition of corporate social responsibility. It consists of Economic, Legal, Ethical and Altruistic or discretionary corporate social responsibility. “The social responsibility of business encompasses the economic, legal, ethical and discretionary expectations that the society ask of organization at a given point in time”. Caroll (1979:98).
An organization’s economic responsibility to the society entails producing goods and services that society wants and setting them at a fair price that society wants and accepts. The goods and services must be of quality standard. The Legal responsibility that a company has to its society is to comply with the law and “play by the rules of the game”. (Lantos 2001:6). Ethical responsibility embraces the range of norms, standards and expectations that reflect a concern for what consumers, employees, share-holders and the community regard as fair, just or in keeping with respect for or protection of stakeholders moral rights.
Caroll, (1997:100). Discretionary responsibilities are purely voluntary and often guided by the personal values of an individual within a company. They go beyond the legal and are not generally expected in ethical sense. Caroll definition remains a useful basis for analysis as it encompasses the crucial elements of a company’s responsibility to society. According to Andrews (1977:43), the concept of corporate social responsibility can be described as the intelligent and objective concern which constrain individuals no matter how profitable, and leads them in the direction of the positive contribution to human betterment.
Luttons and Hodget (1976: 24) noted it as the means to pursue those policies, to make decision, or to follow these line of action which are desirable in terms of objective and value of the society. Imoiseh (1985:27) noted that the major limitation of these conceptions about social responsibility is the failure to take into account:’ i. Who determines what action of an organization constitutes social responsibility? ii. Where should be the “arena” for the organization to perform social responsibility?
Corporate social responsibility can be best understood in terms of the changing relationship between business and society. The European Commission’s (2001. vol6:22) Green Paper on Corporate social responsibility defines CSR as “a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment”.. According to Caroll, (1979:56) corporate social responsibility is about businesses and other organizations going beyond the legal, obligations to manage the impact they have on the environment and society.
In particular, this could include how organizations interact with their employees, suppliers, customers and the communities in which they operate, as well as the extent they attempt to protect the environment. The notion of a company look beyond profit to their role in society is generally termed corporate social responsibility, involves a company linking itself with ethical, values, transparency, employee relations, compliance with legal requirements and overall respect for the community in which the operate.
It goes beyond the occasional community service action, however, as CSR is a corporate philosophy that drives strategic decision making, partner selection, hiring practices and ultimately brand development Corporate social responsibility also known as corporate responsibilities, corporate citizenship, responsible business or corporate social performance, is a form of corporate self regulation integrated into a business model.
Lately, CSR policy would function as a business built-in, self regulating mechanism whereby business would monitor and ensure it adherence to law, ethical standards, and international norms. Business would embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere, furthermore, business would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality.
Essentially CSR is the deliberate inclusion of public interest into corporate decision making and the honoring of a triple bottom line: People, Planet and Profit. The entirety of corporate social responsibility can be discerned from the three words obtained within its title phrase: ‘Corporate’, ‘Social’, and ‘Responsibility’. Therefore, in broad terms, corporate social responsibility covers the responsibilities corporations or other profit organizations have to the society within which they are based and operate.
More specifically, corporate social responsibility involves a business identifying its stakeholder groups and incorporating in their needs and values within the strategic and day-to-day decision-making process. CATEGORIES OF CORPORATE SOCIAL RESPONSIBILITY: Public relations scholars have classified corporate social responsibility into various categories. Sam Black’s four categories of corporate social responsibility are Enterprise, Education, Arts and Culture and environment. Of recent, many organizations added sports to their corporate social responsibility activities.
Again, Seithi (1987) provides what he calls a partial list of social responsibility categories to include being responsible for: ? Product Lines; not producing dangerous products, maintaining good product standard that are environmentally safe. ? Marketing Practices; responding to consumer complaints setting fair prices and maintaining fair advertising message contents. ? Employee Services; training, counseling, granting allowances for the welfare of employees. ? Corporate Philanthropy; contributing to community development activities and involving social projects. Environmental Activities; embarking on pollution control projects, adherence to federal standards and evaluation procedures of new packages to ensure ease of disposal or possible recycling. ? Employee Safety and Health; setting effective work environment policies, accident safeguard, food and medical facilities. Through these categories of corporate social responsibility, a company is able to provide a healthy business environment for its operations and contribute to the well-being of the community 2. 3 CURRENT LITERATURE ON THEORIES AS POSTULATED.
ARGUMENT AGAINST CORPORATE SOCIAL RESPONSIBILITY The most eminent personality against social responsibility is the late Milton Friedman who argued against social responsibility on social and economic ground. Milton Friedman in his word said that “there is one and only one social responsibility of business – to use resources and engage in activities design to increase its profit so long as it stays within the rules of the game, which is to say, engage in open and free competition without deception or fraud”.
He argues that managers are agents to stakeholders but if they spend corporate funds for social purpose they are essentially stealing from stakeholders. David Henderson puts it as follows – companies will best discharged the responsibilities which specifically belong to them by taking profitability as a guide, subject always acting within the law, and that they should not go out of their way to define and promote wider self chosen objective. Some arguments are stated thus:- LESS ECONOMIC EFFIENCY: The primary task of business is to maximize profit by focusing strictly on economic activities. This school of thought believes that concentrating resources in the social area could lead to less economic efficiency and therefore actually become detrimental to the society. It holds that when business organization concentrates resources that suppose to be used for other meaningful economic activities on social arrears, the tendency is that, it will reduce the economic efficiency of the organization which may not argue well for the society at large.
Social involvement could reduce economic efficiency, ? EXCESSIVE COST THAN BENEFITS TO SOCIETY: Cost incurred in undertaking some of these social responsibility programmes are higher than the benefits society will derive from them and business organization knows the way of passing this burden to society in terms of raising prices of their product or services to excessive levels to the detriment of the consumers. Invariably, society still bears the burden. VIOLATION OF BUSINESS DECISION-MAKING: There is a believe that undertaking some social responsibility activities violates sound economic business decision making that should rightfully concentrate on earning profit. ? TO LACK OF SKILLS ON THE PART OF MANAGERS DETERMINE SOCIALLY DESIRABLE PROJECTS: Managers are neither trained nor do them posses the skills and knowledge of resources to determine which social desirable project to support. Even where they have the knowledge, it may not be easy as they think because of the technicality involved. THERE IS NOT COMPLETE SUPPORT FOR INVOLVEMENT IN SOCIAL RESPONSIBILITY: Consequently, disagreements among groups with different viewpoints will cause friction. However, it should be noted that Friedman criticism was directed solely against the introduction of corporate social responsibility within profit-making business organizations in the private sectors. ARGUMENT FOR SOCIAL RESPONSIBILITY: The arguments for social responsibility rest on the notion that accepting social responsibility is the correct moral position of the firm.
People who argue in favour of social responsibility claims that our modern industrial society faces many serious social problems brought by larger corporations such as water, land and air pollution and resources depletion, they should play a major role in solving this problem. They also argued that because businesses are legally defined entities with most of the same privileges as private citizens, business should not try to avoid its obligation as citizens.
Advocates of social responsibility points out that while government organizations have stretched their budget to their limit many large businesses often have surplus revenue that could potentially be used to help solve social problems. Another more general reason for social responsibility is profit itself. For example, organizations that make clear and visible contributions to its society can achieve enhanced regulation and profit benefit at the long run. Other factors on which the argument for social responsibility is based are :- ? The improvement of internal opportunities and the creation of better job environment. The business firms controls so many resources and can devote some of the resources to the betterment of the society. ? Social investments create a favourable public image thus a firm may attract customers, employees and investors. ? It is better to prevent problems than to cure them. It may be easier to help hardcore unemployed than to cope with social unrest. ? Social responsibility actions may increase profit in the long-run. There are certain actions of the business in relation to social responsibility which may increase the company’s profitability.
For example, identifying consumer needs and wants, producing goods tailored to these needs may not produce desired result in the short run but on the long run. More profit can be realized with increase in productivity. Social responsibility makes business organization have more concern for society. Businesses must be concerned about society’s interest and needs because society is affected by business operation. FACTORS MOTIVATING THE ADOPTION OF CORPORATE SOCIAL RESPONSIBILITY. Business operates in a global market where companies are increasing in the public eye.
It is difficult for companies to hide in discrepancies as they are highly visible and vulnerable to attacks from stakeholders. Companies need to be sensitive to societal anxiety if they are to avoid damage to their reputation. These anxieties changes over time as different issues come into the public eye. So companies must be dynamic in the way they respond. The main factors that may motivate companies to carry out social responsibility are stakeholder management, financial performance, consumer pressure, risk management, attracting employees and personal values. STAKEHOLDER MANAGEMENT:
Stakeholder management is a generally accepted concept in the business community. Stakeholders have been discarded as “the groups and individual who benefit from or are harmed by, and whose rights are violated or respected by, corporate actions (Freeman 2006:20). Increasingly, corporations are motivated to become more socially responsible because their most importantly stakeholders expect them to understand and address the social and community issues that are relevant to them. Understanding what causes are important to employees is business benefits that can be derived rom increased employee engagement that is, more loyalty, improved recruitment, increased retention, high productivity and so on. Greater media exposure, environmental and health related incidents resulting from site management or planning decisions have ensured that effective management of stakeholders has risen up the list of priorities for company managers. The various stakeholders a company may have are shown in the model below: Fig. 3. [pic] Source: Onuoha: Management (1999:106). Some questions may be asked, if business is to be responsible to the society, whom in society must it be responsible to?
Society today consists of a wide range of people who have interests, expectations and demands as to what companies and organizations ought to provide, and the ways in which they should behave. Companies are increasingly embracing these stakeholder groups and individuals, whether by considering or including them in decision-making. The motivation here is for business to become involved in corporate social responsibility by addressing the wide range and constant set of demands made by stakeholders. FINANCIAL PERFORMANCE:
Since the early 1980s a significant body of corporate social responsibility research has centered on the debate over the relationship between corporate social responsibility and strong financial performance. Government agencies and organizations promoting the corporate social responsibility agenda seems to be convinced that, assuming a social responsibility role will bring financial gain to the business world. Social responsibility is a powerful way of making sustainable competitive profit and achieving lasting values for the shareholders as well as for the stakeholders.
Therefore being involved in social responsibility is a win- win opportunity not just for companies and financial investors but also for the society at large. Research carried out has shown that there is a good relationship between social performance and financial benefit. That is, organizations that are involved in social responsibility activities stands out to gain financial reward at the long-run and this has been a motivating factor to the organization adoption of corporate social responsibility.
Furthermore, McWilliams and Siegel (1979:88) predict that there is a neutral relationship between social responsibility activities and company’s financial performance. In their study, they investigated this relationship using a theory of the firm’s perspective, economic scale and cost benefit analyses. Their main conclusions were: - The neutral relationship exists because the company that carries out social responsibility activities will have higher cost but higher revenue. While the company that has no social responsibility activities sill have lower cost and lower revenue, thus, profit is equal. Large firms will have lower average cost for providing social responsibility activities than small companies. - There are optimal levels that will maximize profit while satisfying the demand for social responsibility from multiple stakeholders. The ideal levels of social responsibility can be determined by cost benefit analysis. CONSUMERS: Consumer’s pressure and damage to the global image of a popular brand is one of the reasons why companies may be motivated to assume the mantle of social responsibility.
Much recent pressure has centered on the protection of the environment, example campaign against water pollution (Niger Delta Regions), road maintenance, consumers protection, protection of human rights, safeguarding jobs, etc. In Nigeria, organizations and agencies like National Food and Drug Administration Campaign, Standard Organization of Nigeria and National Drug Law Enforcement Agency, has been an advocate for consumer’s protection especial in the current climate of concern about public health.
It is high profile consumer related concern such as these that will force more and more companies into adopting principles of social responsibility. RISK MANAGEMENT: Risk management centers on problems that can be caused by consumer’s pressure. However, today’s management encompasses a wider range of stakeholders, each of which must be considered if a company is to avoid variety pitfalls and protect its reputation. Companies often conduct business in areas where they can be at low risk especially working in a densely populated area or with companies with irresponsible practices.
Social responsibility activities can be use to mitigate this risk. The increased exposure of companies to the glare of public scrutiny has encouraged business to increase transparency in their environmental and social disclosures. This has led to a growing trend reporting and a commitment of sustainability of social performance. EMPLOYEES: Many studies has shown that investing in employees can bring direct benefits to a company both financially and in terms of increased employee loyalty and productivity.
Such investment can include schemes like provision of healthcare services to employees, childcare facilities, flexible work hours and job sharing. Employee’s investment is an essential aspect of social responsibility as the workforce is also the community, especially in companies where a substantial portion of employees are likely to come from the local community. Involving employees in social responsibility activities is another way in investing in them. Good social performance also provides companies with a competitive advantage when attracting a skilled force.
Applicants are more likely to pursue jobs from socially responsible companies than companies with poor social responsibility performance reputation; they feel that they will have a higher self image when working for responsible companies. PERSONAL VALUES: Companies and individual within an organization may be motivated to carry out social responsibility for moral reasons. Managers of organization may carryout social responsibility activities because of the respect accorded to them for being involved in such activities by members of the society.
This approach to corporate social responsibility is described in literature as voluntary or philanthropic social responsibility. But this approach has been questioned by a number of commentators famously Milton Friedman (1970:30) who argued that, “the social responsibility of business is to increase its profit”. And even more recently by Lantos (2001:56) who argues that voluntary social responsibility lies outside the scope of business responsibility.
The answer lies in the personal values and principles of some individuals in business who argues that it is fundamentally the right thing to do. THE BENEFITS OF CORPORATE SOCIAL RESPONSIBILITY: Drucker emphasizes the importance of the exercise of social responsibility by business and by managers. This responsibility can no longer be based on the assumption that the self-interest of the owner of property will lead to the public good, or that self-interest and public good can be kept apart and considered to have nothing to do with each other.
On the contrary, it requires of the manager that he assume responsibility for the public good, that he subordinate his actions to an ethical standard of conduct, and that he restrains his self-interest and his authority wherever their exercise would infringe upon the common weal and upon the freedom of the individual. An enlightened business recognizes that it is in its own interest to be socially responsible, since an enhanced public image is more likely to be attractive to investors – employees, customers, consumers, suppliers and most community and government.
Companies addressing issues related to the right of indigenous people have reaped a lot of benefits. Some of the benefits accruing to business organization that is involved in social responsibility include the following. 1. ENHANCED REPUTATION: Good company performance in relation to sustainability issues can both build reputation while poor performance when exposed can damage brand value. In the course of this research work, it was noted that Globacom Nigeria Limited has a very good reputation in the community where it exists. II. INCREASED ABILITY TO RECRUIT, DEVELOP AND RETAIN STAFF:
These can be direct or indirect. The 1999 business Ethics study found that employees are more likely to be loyal when they believe their workplace has ethical practices. An organization that engages in corporate social responsibility will have dedicated and productive employees. IIIBETTER RELATIONS WITH GOVERNMENT: The formal and informal license to operate is a key issue for many companies looking to extend their business. Diligence in meeting social and environmental concerns can result in a reduction in red tape and a more cooperative relationship with government departments.
A good relationship with government can give a company significant competitive benefit in terms of gaining a social license to operate from local community, particularly in the resource sector with regard to gaining access to scarce reserves. IV. ENJOYING PREFERRED BUSINESS PARTNER STATUS: Given the opportunity to choose among several bidders for a potential project, some governments are more likely to choose a company with the best reputation with respect to indigenous relations and human rights practices.
For instance, Globacom Nigeria has gained a lot of good reputation in the government circle and these are shown by the different award that the management has received both nationally and internationally. When companies take a strategic approach to corporate social responsibility, it would have a positive effect on mainstream business performance. Records have shown how benefits go beyond performance and also how benefits go beyond the long-term intangible measures of success to include direct financial measures (mostly in developing countries).
CORPORATE SOCIAL RESPONSIBILITY FOCUS IN THE TELECOMMUNICATION INDUSTRY: Service industries such as the banking; insurance retail and telecommunication industries are generally perceived as corporate ‘bodies’ and have an image of modern and clean business. Although, their direct social and environmental foot print is often relatively small; their role as market gatekeepers means that they can have substantial influence. Corporate social responsibility leaders in these sectors tend to be motivated by the strategic need to innovate in fast moving industries as well as the competitive “war for talent”.
The telecommunication industry is the fastest growing sector in Nigeria. As such, corporate social responsibility is a strategy used by these companies to gain their ground and to provide sustainable development to the country and to their host community. They focus on the potentials of information communication technologies to empower enterprise development, educational opportunities and the capacity to respond to emergencies. Developments such as tele-banking, internet trade and others has the potential to save energy, paper and the need to travel, reducing air pollution, and resources waste.
However, despite these opportunities, there are a number of problematic issues such as: i. Concerns about the environment and health implication of new technologies ii. The emergence of a “bridge” between those who have access to educational, health and opportunities through information communication technology and those who do not. iii. Tension between the drive for efficiency and profitability and the need to meet legislated “universal service obligation” to provide access for all.
Many companies in the telecommunication industry are aligning themselves towards the commercial opportunities that sustainable devel
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