ANALYSIS OF CUSTOMER PERCEPTION ON CORPORATE SOCIAL RESPONSIBILITY (CSR) OF AN ORGANIZATIONAL PERFORMANCE

ABSTRACT

The purpose of the study was to determine the analysis of customer perception on corporate social responsibility (CSR) on organizational performance at CSquad Security Company. The research aimed at accomplishing the following objectives; to establish factors affecting CSR activities involvement and performance of CSQUAD Nigeria Limited; to examine CSR strategies and performance of CSQUAD Nigeria Limited and lastly to determine the effect of government policies and regulations on CSR performance of CSquad Nigeria Limited. All of the objectives were evaluated in the context of security firms in Nigeria. Descriptive research was used with a sample size of 140 supervisors who comprised of (30)  Financial department, (20) Courier Division, (50) Guarding Division, and  (20) HRM staff. Structured questionnaires were used to collect data. The data was collected using self-administered questionnaires; the collected data was analyzed using the Statistical Package for Social Sciences (SPSS) version 2. The study analyzed data from primary research to determine the effect of corporate social responsibility (CSR) on the performance of CSQUAD Nigeria. Analysis entailed the examination of the effect of CSR on performance. It was found that the means of the parameters examined in this objective were assessed as average. The best management styles for use in CSR are participative and democratic because the two engage members for their contributions. The final objective related to the examination of the role, the government plays in facilitating CSR initiatives by CSQUAD. Government policies and regulations influenced the nature of CSR activities that CSQUAD could partake in through advice and recommendations. The government also played a role in enhancing the sustainable growth of the CSR strategies advanced by CSQUAD by creating and enabling a regulatory environment. Because of government keenness in overseeing CSR in firms such as CSQUAD, it led to more responsible management of such initiatives. It was concluded that CSQUAD has multiple opportunities that it could harness in CSR to boost its performance. The use of CSR was observed to improve the performance of the company in financial and non-financial terms. Regarding the CSR ability, it was made clear that the strategy had a significant potential to impact company performance positively. The involvement of organizational members was also concluded to be an essential ingredient in refining CSR strategies. By involving members in the firm’s CSR activities, CSQUAD reinforced the quality of its initiatives from multiple sources of input. Finally, it was concluded that the government’s role should not be much and that most CSR policies should be left to the discretion of CSQUAD.

 

CHAPTER ONE

1.0       INTRODUCTION

1.1        Background of the Study

On a global view, the corporate sector has a number of social responsibilities it owes towards society. Social responsibility of the corporate is whereby organizations decide to lay down strategies in such a way that is voluntary though many firms globally have chosen to bind both environmental and social issues as part of their strategic plans. There is a great need to monitor the impact that our businesses make in society and from this, we will be able to find equilibrium whereby the environmental, social, and economic aspects of the community (Carroll & Shabana, 2015). The United Nations on its part has made significant efforts to make this initiative a reality. The body established the Global Compact (GC) which serves as a guide to social responsibilities for parties, and here they sign treaties stating that they will follow and obey the ten principles which protect and serve human and social rights, anti-corruption practices, and environmental protection (Dans, 2015).

Many nations have come out to promote corporate social responsibility with the help of nonprofit organizations, International agencies dealing with Aid, companies, and governments in general. Developed countries have gone a step further and included funds for the responsibility in their annual budget thus making the whole nation responsible for these actions. Transparency and accountability are witnessed in the allocation and management of the funds being dispersed. In the United States, for example, there are leading security companies that are well renowned. One of the largest companies in America is Securitas USA which is a well-established security company employing over 88,000 customers. The company has its roots both in the local states and nationally with the task given to provide security services in banks, malls, and learning institutions. Security firms in America are well trained to provide services like electronic guarding, fire, and safety among others (Mieres, 2017).

According to Carroll & Shabana (2015), corporate social responsibility (CSR) is a primary avenue for businesses to respond to the social needs of people in the environment in which they operate. Various schools exist with respect to the motive behind a firm’s CSR practices. CSR as a term dates back to the 1960s but as an action has a longer history. Furthermore, records have shown that human beings had a grasp of CSR since the beginning of civilization.  King Hammurabi of Mesopotamia for example keeping in mind the welfare of his citizens formed a rule that ensured his builders produced the best quality work. According to the decree, if a structure collapsed leading to the harm of people, the builder responsible for the construction was to be put to death. This ensured that builders would not neglect their responsibility of building safe structures in the aim of making profits (Freeman, 2013). This rule legally bided craftsman to be responsible and exercise honesty in their work. In addition to this rule, he enacted over 282 laws that protected the citizens from the shoddy works of artisans.

In times of war, Ancient Rome required the businesses of the day to contribute in efforts to supporting the military campaign. The Bible as an ancient text has numerous examples of CSR. The parable of the Good Samaritan is one where communal ownership of wealth is encouraged (Valli, 2015). This idealism we see replicated in the African context. Cameroonian hunters, for example, were required to bring back their hunt to the chief for the division to other members of the society. In Nigeria, it was a requirement for all members of community to surrender their first harvest during the Yam Festival. Asungo further notes that in most African countries, medicine men provided their services for free or for a small fee. The reason for this was that the welfare of the community was considered important to self-enrichment.

In later years, CSR would gain much popularity as scholars gained an interest in the subject. Robert Owen began experiments on the benefits of CSR as early as 1810. During the time, he was in charge of the Lanark Mill factory in the United Kingdom. He noticed that reducing employee working hours to ten from thirteen increased their productivity by 50% (Husted, 2017). The use of the term CSR began in the early 1960s. One of the earliest scholars on the subject Bowen wrote an article on the need for businesses to factor in the needs of the society. Later, the likes of Rhou, Singal, and Koh (2016) and Madrakhimova (2013), would in great detail publish their views on the subject. Countries and the international organization began creating laws and regulations requiring businesses to be CSR compliant. The benefits of CSR were evident both to the state and corporations. International organizations as the United Nations have played a significant role in creating awareness of the benefits of CSR. The Global Compact, for example, is a platform created by the UN that facilitates learning to enable businesses achieves CSR compliancy.

Organizations have used charitable events to market products and services, but this is at the cost of social responsibilities. These are public stunts that do not cater to or address the social challenges that are genuinely affecting the environments surrounding the organizations. In Africa for example, is MTN which is a big telecommunications team in South Africa. The company sponsors teams in the top Ghanaian leagues and requires the teams to wear jerseys with the company logo on them. In addition to this, the company states that the teams should not enter into further agreements with other companies that are competitors (Kigotho, 2014). Activities done by MTN are seen to be supportive and worth it, but the conditions for the sponsorship raise questions as to whether the company is committed to offering an effective Corporate Social Responsibility.

The diverse nature of CSR causes it to lack a universally accepted definition. This seems to be the case ever since its conception. Early adopters of the term as Milton Friedman and Kirk Russell even seem to have different opinions when it comes to the meaning of the term. Milton argues that businesses have the sole responsibility of generating profits as long as the process of achieving this objective is transparent and non-fraudulent. If businesses observe and practice this rule, then they are CSR compliant. On the other hand, Russell deviates from this notion arguing that companies are morally and socially bound by duty in carry-out their operations (Singh, 2014). This means that businesses need to evaluate if the action they undertake is morally approving and socially acceptable before performing it.

The earliest definition of CSR is given by Howard Bowen in which he argues that CSR is an obligation to people engaging in business to make decisions and perform actions in line with the society (Hamidu, Haron & Amran, 2015). In more recent years, the definition has been expanded to include sustainability, accountability, environmental protection, and competitive strategy. The concept of CSR is deeply rooted in the relationship between the company, customers, citizens, and the government. These four elements must work together in the achievement of CSR.

In East Africa, KK security Limited is the most common security firm with the company stretching its branches in Uganda and Tanzania. The companies are employed to provide services in residential estates, banks, shopping malls and schools around the region. According to Musau (2015), Nigeria implies the ideology of Corporate Social Responsibility is relatively new, but there have been efforts by the government and the private sector to attract funding from other parties like the International corporate and multinational agencies who are more aware of this initiative. The sense of responsibility is improving gradually, and the nation is taking this move as an act of philanthropy. Some firms that are profit-oriented have coined the move to be giving back to society and thus used this to improve their acceptance by the public. A significant question that needs to be asked is whether the amount they claim to give back is in line with what they extract from the same society they are helping (Khan, Halabi, & Samy, 2013).

The African private security industry is dominated by foreign security firms that face very little competition from local firms (Choongo, van Burg, Masurel, Paas, & Lungu, 2017). Their idea of CSR is borrowed from their respective home countries and how they have undertaken these initiatives through time. Since they come from different countries, the majority of them apply this concept a lot differently from others. While CSQUAD may prefer to offer scholarships to vulnerable students, Fargo prefers to participate in environmental preservation initiatives.

However, they learn from each other’s strategies and emulate such approaches towards CSR. Unfortunately, there is always the limitation of financial inputs, and hence the need to prioritize which activities a firm should engage in.

The African society has benefited from CSR by private security firms and from other industries as well (Kipruto, 2014). It has eased their respective governments’ burden when it comes to looking after its citizens. Because of lack of trust in commercial entities, governments have required companies to present their proposals on their CSR plans especially when such plans involve the people. The fear is that as these companies collect funds from the public in a bid to help in a societal situation, they may take advantage of it and extort the public. Governments requires transparency, accountability, and utmost honestly in such practices. In South Africa, for example, there is a need to get clearance and approval from relevant ministries when calling for donations from the public.

According to Hong and Minor (2016), proper corporate governance breeds good CSR. When properly executed, CSR projects will subsequently influence consumer behaviour. Profitability and revenue vary from time to time, but the stakeholders have seen the importance of maintaining a good social ground between the organization and those around them. An organization may be valued using the profitability level and the concern they give towards society (Sam, 2016). This concern may be negative, positive, large, indirect or direct on the parties in the society involved. The project manager uses the four elements involved in a project which are money, time, scope and resources. CSR projects need these elements at all levels of development and must be handled together for proper management to occur.

CSQUAD is among the leading top security companies in Nigeria dealing not only security but also courier and managing security risks in buildings and households (Odhong, 2018). CSQUAD has grown its business portfolio through mergers and acquisitions with both international and local companies to give its now well established global and regional presence. In Nigeria, CSQUAD offers secure logistics and security solutions in areas of Courier services, Cash services, manned guarding, Alarms and Response services, Fire protection and safety and Secure Data solutions.

CSQUAD is the market leader in all these service sectors working with blue-chip companies, successful private businesses, and non-governmental organizations in providing security solutions and services. The company has made significant milestones and covers a large geographical area both in and out of the country and this can be attributed to the management’s efforts to improving their service delivery and participating in Corporate Social Responsibility.

Fairness and integrity are part of the company’s core values, and this has made it grow to great heights and improving how they treat their customers in their way of doing things (CSQUAD Annual Report, 2017).

1.2       Statement of the Problem

Organizations in the modern world have changed roles in that they are more interested in the social life that the traditional earnings and profits. The society members in these first world nations like the United States are the agents while the organizations are the source of the business environments. It is both a volunteer and involuntary role that everyone plays in the society to ensure that this chain continues for the longest time possible. African countries like South Africa has made efforts too in ensuring social responsibility through the gold mining companies and sports sponsorship companies  (Kaingu, 2016).

Mbogoh and Ogutu (2017) explained that CSR activities are on the increase in Nigeria, with major corporate players trying to out-do each other in terms of endearing themselves to the local communities in terms of participating in community projects, sinking, boreholes, providing educational scholarships, sponsoring charity events, among others. What has been missing, though, is the link between the much-hyped CSR projects and the needs of the local communities.

In Nigeria, Cheruiyot and Tarus (2016) established that firms are driven in to CSR practices to meet legitimacy and shareholders demand. The study concluded that link between CSR and financial performance is not clear. Tarus (2015) conducted a study that assessed factors that impact on corporate social responsibility. The study focused on commercial banks in Nigeria and established that profitability was one of the key factors influencing CSR activities in the surveyed commercial banks.

As observed by Nyaga (2016), CSR expenses are being accepted by managers much the same way as operational expenses. This then raises complex issues as to whether firms that are socially responsible perform better or worse than those firms that are not considered to be socially responsible. This further raises the question of how much effort and resources that firms should allocate to social activity.

According to CSQUAD Annual Report (2017), CSQUAD security company employs its social responsibility through some ways namely, sponsorship for football and basketball matches. Another role the company plays in the country is their efforts they give to the community through projects like the building of children homes for the underprivileged. CSQUAD Security Company exceeds compliance and engages in actions that enhance social welfare surpassing the interests of the company and conforms to legal guidelines.

CSQUAD Security Company is to embrace responsibility for the company’s actions and encourage a positive impact through its activities on the environment, consumers, customers, communities, stakeholders and all other members of the public sphere. By leveraging the company’s strengths and resources, the company raises awareness of the importance of corporate philanthropy, and encourages society to participate in and contribute to the development of social responsibility (CSQUAD report 2016).  Many studies on CSR have been conducted both locally and internationally, but little research has focused on this issue. There have been few studies in Nigeria on CSR and its effect on performance such as Cheruiyot & Tarus (2016), Kigotho (2014), and Mburu (2014).

1.3        General Objective

The general objective of the study was to find out the analysis of customer perception on corporate social responsibility (CSR) on organizational performance of CSQUAD Security Company

1.4        Specific Objectives

The researcher was guided by the following specific objectives:

1.4.1 To examine the effect of CSR strategies on the performance of CSQUAD Nigeria Limited.

1.4.2 To establish factors affecting CSR activities involvement on performance of CSQUAD Nigeria Limited.

1.4.3 To determine the effect of government policies and regulations on CSR performance of CSquad Nigeria Limited.

1.5       Significance of the Study

1.5.1 Management of CSQUAD

The study was significant as the researcher hoped that the study gave CSQUAD Management a reason to rethink and be more active in participating in the CSR projects specifically in giving /the information that affects them in regards to what affects the performance of CSR projects security firms in Nigeria.

1.5.2 Other Organizations Implementing CSR

The study was expected to help other organizations that are experiencing challenges in the implementation CSR program in Nigeria. They were expected to  learn how  to develop informed decisions that can help in formulating ways that involve the formulation of strategies to minimize cost and enhancing effective implementation of the CSR program in Nigeria. It is also hoped that with insight from this study, the CSR scope could be expanded to cover all aspects that might be causing the limitations in the achievement of those projects objectives.

1.5.3 The Researcher

The study provided an opportunity for the researchers to enhance their analytical, evaluative and writing skills and also to carry out further research in the field and explore new areas that have not been fully researched.

1.5.4 Policy Makers

The findings from this research helped those charged with the responsibility of formulating policies that involve social responsibility among corporate organizations. Policy makers will know the correct measures that can be put in place to help improve the situation among the corporate.

1.6       The Scope of the Study

The study covered on the effects of corporate social responsibility projects on the performance of security firms on a global perspective and the African region while specifying more on Nigeria a case study of CSquad Head office in Abuja. There are a total of 585 security companies distributed all over Nigeria. CSQUAD particularly has 41 branches in Nigeria alone. However, the research did not cover the security related matters and policies that the institution covers. The target population in the study is 140 supervisors in different branches in Nigeria and a sample size of 42 individuals in this position. The study took a period of three months from June 2018 to August 2018.

1.7       Definition of Terms

1.7.1 Government Policy

This is a rule or regulation put across by those in charge of governing the nation to maintain stable conditions for its citizens. The government of the state sets a number rule of conduct to help monitor and enforce the control and regulate the conduct of people. This, in turn, helps protect the people, contractual rights and the people’s property (Knudsen, Moon, & Slager, 2015).

1.7.2 Corporate Social Responsibility

A concept that is used by the corporate organization where they give back to society as part of their responsibility towards them. This is whereby companies voluntarily combine environmental and social concerns in the business operations and the interaction with stakeholders in society (Madrakhimova, 2013).

1.7.3 Community Involvement

This is whereby the community brings all the efforts and resources to reach a common goal. A process that includes identifying stakeholders, establishing systems which allow engagement with both the stakeholders by public officials and some mechanisms that helps in development (Carroll & Shabana, 2015).

1.7.4 Projects

Activities that are well formulated and organized to achieve a definite result that will be beneficial. These are a set of tasks that are interrelated and are scheduled to be enforced over a fixed time frame and within a certain cost and limitations (Avaye, 2015).

1.7.5 Security Firms

Organizations charged with the responsibility of offering security and related services. Essentially it is a business that offers both unarmed and armed security services for public and private clients (Kaingu, 2016).

1.7.6 Performance

This is the measure of the success or failure of a particular task (Kipruto, 2014). This may be measured by the number of positive outcomes that have come from the projects that the company is involved in.

1.8       Chapter Summary

This chapter dealt with the analysis of the various issues surrounding the corporate social responsibility on the performance of security at CSquad Company. The chapter begins with small background information about the study, followed by the statement of the problem, the objectives, and justification of the study, scope and the definition of terms used in the research. The next chapter on the literature review looked at secondary data that has been shared by other researchers on corporate social responsibility and performance. How corporate social responsibility impacts performance.