1.1 Background of the Study
Corporate social responsibility (CSR) relates to the role and obligations expected of business as a creation of modern society. Two opposing schools of thought emerged during the early birth of CSR. While one school argues that business should assume some responsibilities in the society beyond their primary economic role, the other stands against. In the later case, CSR is based on purely its economic role of profit. This is regarded as the ‘classical view’, based on the neoclassical economic theory while the former which is the ‘stakeholder view’ is based on stakeholder theory (Branco and Rodriques, 2007). However, businesses of different sizes and concerns are competing to be seen as socially responsible (Crowther, 2004).
Business primarily exist to make profit. The profit motive has often been perceived as representing a lack of concern for all other objectives off small scale enterprises. But, today businesses are realizing that in other to stay profitable in a rapidly changing environment, they would have to become socially responsible. Presently, businesses continually face pressure from different stakeholders, such as employees pressures to recognise certain employee rights in the work place, consumer pressures for the businesses to withhold price increase and to produce safe products, community and environmental pressures that the business operation does not threaten the safety of the local community (McWilliams and Siege, 2001).
It is pertinent to mention that although idea of CSR has existed for more than half a century, there is still no consensus ever its definition. CSR generally refers to business practices that are based on ethical values, compliance with legal regulations, and respect for people and the environment (Dahlsrud, 2006). The World Bank defined CSR as the commitment of businesses to contribute to sustainable economic development by working with employees, the local community and the society at large to improve their lives in ways that are good for business and for development (Lantos, 2001). CSR is considered as corporate citizenship which essentially means that a company should be a good neighbor within its host community (Freeman et al, 2010). Carrol (2000) proposed a popular four part definition of CSR, suggesting that corporations have four responsibilities (economic, legal, ethical and philanthropic responsibilities) to fulfill before being considered as good corporate citizens.
Corporate social responsibility (CSR) according to Azinde (1999) is the promise by business organizations to behave in a way that is ethically acceptable and at the same time contributing to the economic development and improvement of the living conditions of the employees, the catchment community and the larger society. It is the set of conditions to which a company relates its impact on society. The major advantages of corporate social responsibility are its potentials to bring about sustainable development and contribute to poverty reduction in any given society. Corporate social responsibility is the contributions of the organization to the development of the community in which such organizations is found in term of the social, economic, political, educational involvements. However, the company is not compelled to do by any law to do it (Adebayo, 1998).
Brownson (2016) defines social responsibility as “developing a business with a positive relationship to the society and environment which they operate, it also affect their performance, efficiency and effectiveness in the operation of their business”. Nkanga (2007) posited that corporate social responsibility involves the commitment shown by companies to contribute to the economic development of a local community and the society at large. The adoption of corporate social responsibility policy should not be driven or motivated by increased profit. Rather, giving back to the society that gave to the business first should be the motivating factor. It is a common practice by Nigerian organisations to put as one of their mission statements the provision of corporate social responsibility. The organisations must have realised that stating corporate social responsibility as one of their mission statements hold special appeal to the stakeholders. Hence, there is an increasing awareness and recognition accorded corporate social responsibility by corporations.
One key area which can help in the development of the Nigerian economy is Small Scale Enterprises. A small-scale enterprise is an enterprise with total cost above N1.5m but less than N50m with a workforce of between 11 and 100 workers (NCI, 2003). Ariyo (2005) has noted the important roles played by Small scale Enterprises in the growth and sustainable development of any economy as they serve as the strong support of any nation that has been industrialized. This is also the view of Kpelai (2009) as Small scale Enterprises form the bulk of business enterprises in developed and developing economies like Nigeria.According to Baker (2009), “corporate social responsibility is about how companies manage the business process to produce an overall positive impact on society.” Social responsibility is a business’ intention beyond its legal and economic obligation to do the right things and act in ways that are good for the society. Holmes and Wattes,, said ‘corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large’, cited in Baker, (2009). A socially responsible organisation views things little differently , and goes beyond what it is obligated to do or chooses to do because of some popular social need, to do what it can to help improve society because it is the right thing to do (Robbins and Coulter, 2007:119). Carrol (1996:35) states: ‘Total corporate social responsibility, pragmatically and meaningfully stated, is the strive by a business to make profit, obey the law, be ethical and be a good corporate citizen.’
1.2 Statement of the Problem
Many small scale enterprises in Akwa Ibom State face myriad of challenges in fulfilling their corporate social responsibility to their communities/environment in which they operate, and also to their stakeholders. One major problem is that they feel they should not indulge in corporate social responsibility because of the huge funds or finance required to perform such operation and their limited scope of business as a result discourages them from being socially responsible (Onwumere, 2000).
In spite of the huge attention recently given to corporate social responsibility (CSR) in Nigeria, an area of concern still remain in the small scale enterprises (Obitayo, 2001). Most small scale enterprises in Akwa Ibom State do not see any reason for corporate social responsibility because they feel it should be done by those large scale enterprises which undertake a wider scope of business operation (Fabunmi, 2004).The problem here is that small scale enterprises (SSE) feel that CSR are not to be done by them because they lack the fund to carry out CSR activities. CSR is not only for big firms, small scale enterprises (SSE) can also involve in CSR in other to gain more market share and also, it will help foster cordial relationship between the firm and the community. It is because small scale enterprises does not see any significance why they should indulge in (CSR) that is the major problem am yet to find out if or not small scale enterprises in Akwa Ibom State are into the practices of (CSR), and to what level have they performed it.
1.3 Objectives of the Study
The objectives of this study will be to:
Find out the Corporate Social Responsibility initiatives being practiced in the different small scale enterprises in Akwa Ibom State.
Find out small scale enterprises perception towards the Corporate Social Responsibility practices being adopted.
Ascertain the barriers of small scale enterprises to Corporate Social Responsibility.
Find out the benefits small scale enterprises get from performing its corporate social responsibility.
1.4 Research Questions
The following research question will guide the study:
What are the Corporate Social Responsibility initiatives being practiced in the different small scale enterprises in Akwa Ibom State?
What are the perceptions of small scale enterprises towards the Corporate Social Responsibility practices being adopted?
What are the barriers by small scale enterprises to Corporate Social Responsibility?
What benefits do small scale enterprises get from performing its corporate social responsibility?
1.5 Significance of the Study
This work will be of immense importance to stakeholders of small scale businesses because it will serve as enlightenment on the Corporate Social Responsibility activities that should be carried out by them as well as enumerate the possible effect of the application of these CSR activities on small scale enterprises. Also government and non-governmental agencies might find the outcome of this study relevant. This work will also be relevant for other researchers who may find this work useful for further research. The significance of this work will also be of importance to the Academics of the (researcher) and small scale enterprises. It will be useful towards the intellectual aspect of the researcher, making the researcher to know more about CSR and things that pertains it, also making the researcher to meet with people of high intellectual during the investigation. And also to the SSE, it will make them see opportunity that was not recognized and also increase their financial state or level making them to go out by doing CSR and with that creating awareness for their own firm. This work will also be relevant for other researchers who may find this work useful for further research.
1.6 Limitations of the Study
A lot of factors would serve as limitations and constraints to this research work.
Time Frame: Time frame to go to the field, libraries and write the report and submit at the required time was a problem to the researcher.
Shortage of fund: Lack of adequate fund for carrying out this research.
1.7 Definition of Terms
Small scale enterprises: A small-scale enterprise is a business that employs a small number of workers and does not have a high volume of sales. Such enterprises are generally privately owned and operated sole proprietorships, corporations or partnerships. The legal definition of a small-scale enterprise varies by industry and country (http://smallbusiness.chron.com/definition-smallscale-enterprise-17652.html).
Corporate social responsibility: Corporate Social Responsibility is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (EU Commission, 2002 cited in David C. and Guler A.).
Corporate performance management: Is the area of business intelligence involved with monitoring and managing an organization’s performance, according to key performance indicators such as revenue, return on investment, overhead and operational cost (Crowther, 2004).
Financial Performance: Is a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues (Baker, 2009).
In my investigation, CSR places a huge role in the success of a business. Most SSE does not practice CSR because they believe or feel that it will not increase their financial state rather they will lose finance. Many journal and books by different authors and has also shown that CSR is an important key to the success of a business and that businesses that indulge in it will have an edge over other competitors in the market. And also touching lives around them through the CSR activities.
THE PRACTICES OF CORPORATE SOCIAL RESPONSIBILITY OF SMALL SCALE ENTERPRISES IN AKWA IBOM STATE