CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND STUDY

The broadest definition of corporate social responsibility is concerned with what is – or should be – the relationship between global corporations, governments of countries and individual citizens.

More locally the definition is concerned with the relationship between a corporation and the local society in which it resides or operates. Another definition is concerned with the relationship between a corporation and its stakeholders.

The issue of corporate social responsibility (CSR) has been debated since the 1950s. Latest analyses by Secchi (2007) and Lee (2008) reported that the definition of CSR has been changing in meaning and practice. The classical view of CSR was narrowly limited to philanthropy and then shifted to the emphasis on business-society relations particularly referring to the contribution that a corporation or firm provided for solving social problems. In the early twentieth century, social performance was tied up with market performance. The pioneer of this view, Oliver Sheldon (1923, cited in Bichta, 2003), however, encouraged management to take the initiative in raising both ethical standards and justice in society through the ethic of economizing, i.e. economize the use of resources under the name of efficient resource mobilization and usage. By doing so, business creates wealth in society and provides better standards of living.

The present-day CSR (also called corporate responsibility, corporate citizenship, responsible business and corporate social opportunity) is a concept whereby business organizations consider the interest of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders as well as their environment. This obligation shows that the organizations have to comply with legislation and voluntarily take initiatives to improve the well-being of their employees and their families as well as for the local community and society at large.

CSR simply refers to strategies corporations or firms conduct their business in a way that is ethical and society friendly. CSR can involve a range of activities such as working in partnership with local communities, socially sensitive investment, developing relationships with employees, customers and their families, and involving in activities for environmental conservation and sustainability.

1.2     STATEMENT OF THE PROBLEM

The growth of an organization is determined by the collective imput of the customers, employee, stakeholders and the environment. It has been observed most organizations are failing in their corporate social responsibility.

Most organization releases exhaust gas from manufacturing process in to the environment therby putting the people of the community at risk. It is however the responsibility of the organization to take the safety of the host community at high esteem. One an organization’s social responsibilities are community development, the organization is expected to give back to the host community.

The productivity of any organization is determined by the input of the employees. If the employees are treated unfairly, this will affect the productivity of the organization. The welfare of employees is one of the social responsibilities of organization. The welfare of employees should be paramount of the management of organizations but most organization treats their employees unfairly.

The level of sales made by an organization is dependent on the patronage of customers. Customers must be addressed properly and not harshly. It is the social responsibility of an organization to reverence its customers. This study is carried out to examine the necessity of corporate social responsibility for organizational growth.

1.3     OBJECTIVES OF THE STUDY

The general objective for this study is to examine the necessity of corporate social responsibility for organizational growth. The specific objectives are:

1.     To ascertain if organizations carry out their corporate social responsibilities.

2.     To find out if poor business behavior towards customers have effect on organizational growth.

3.     To examine if treating employees unfairly influences organizational growth.

4.     To know the roles of corporate social responsibility on community development.

5.     To ascertain the relationship between corporate social responsibility and the profitability of an organization.

1.4     RESEARCH QUESTIONS

The relevant research questions related to this study are:

1.     Do organizations carry out their corporate social responsibilities?

2.     Does poor business behavior towards customers have effect on organizational growth?

3.     Does treating employees unfairly influences organizational growth

4.     What are the roles of corporate social responsibility on community development.

5.     What is the relationship between corporate social responsibility and the profitability of an organization?

1.5     SIGNIFICANCE OF THE STUDY

The findings from this study are relevant to the management of organizations. The growth of an organization is influence by the ability of an organization to strictly carry out its corporate social responsibility.

The finding from this research can also be used as a reference material for other researchers who will likely carry out a study on a related topic

1.6     SCOPE OF THE STUDY

The scope of this study restricted to the necessity of corporate social responsibility for organizational growth.

1.7     LIMITATION OF THE STUDY

Some of the major constraints the researchers encountered in putting up this research include lack of time, lack of willingness to give information by respondent and also limited resources

1.8     DEFINITION OF TERMS

Corporate social responsibility (CSR) is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders

Organizational Growth: A process through which the structure of a multi-gent system organization increases the number of its roles and links.

Stakeholder is a person who has an interest in or investment in something and who is impacted by and cares about how it turns out.

Community development is a process where community members come together to take collective action and generate solutions to common problems