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EFFECTS OF CORPORATE SOCIAL RESPONSIBILITY ON PROFITABILITY AND CORPORATE IMAGE OF A PRIVATE ORGANIZATION

EFFECTS OF CORPORATE SOCIAL RESPONSIBILITY ON PROFITABILITY AND CORPORATE IMAGE OF A PRIVATE ORGANIZATION

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EFFECTS OF CORPORATE SOCIAL RESPONSIBILITY ON PROFITABILITY AND CORPORATE IMAGE OF A PRIVATE ORGANIZATION

Chapter one

INTRODUCTION

1.1 Background to the Study

All organisations have intricate relationships with elements in their surrounding contexts. Corporate social performance is thus an organization’s commitment to operate in ways that benefit both its own interests and those of its many external stakeholders.

These stakeholders are individuals and groups who are affected in some manner by an organization’s operations. They are persons affected in some way by its dedication to social responsibility. (Ogbuechi, 1998).

Corporations have grown so huge and powerful that their influence has become more pervasive, resulting in an imbalance that is likely to have had a role in sparking a movement to advocate more socially conscious business practices. (Holmes 1977).

Andrew (1977) defined social obligations as the intellectual and objective concern that prevents individuals or corporations from engaging in damaging actions, no matter how immediately profitable, and instead directs their constructive contribution to human improvement.

According to Ogbuechi (1998), an organisation fulfils its economic responsibilities when it generates profit by providing goods and services that customers desire. Legal responsibilities are fulfilled when an organisation follows the law and the needs of numerous external regulations. Economic responsibility is best handled in a legally responsible manner.

According to Luttan and Hodget (1976), a class discussion of corporate social performance is a businessman’s obligation to pursue policies, make judgements, or follow lines of action that are desirable in terms of societal objectives and values.

According to Imosili (1985), one of the key flaws of these notions of corporate social performance is their failure to include organisations’ ability to become’missionaries’.

There is widespread support of the premise that corporations should engage in socially responsible behaviour; yet, there is significant debate over how they should do so.

Lawal (1993) stated that social responsibility is a fuzzy term that has been defined in a variety of ways. He stated that most writers on social responsibility define the idea as an organization’s inclination to exhibit’missionary’ rather than’mercenary’ views towards society.

1.2 PROBLEM STATEMENT.

Questions of ethnicity and social responsibility have constantly come up in conversations about the activity of corporations in rising markets such as Nigeria. Given the size of the Nigerian economy and the enormous potentials it offers, it has become increasingly necessary to promote higher ethnical standards among leaders of major Nigeria corporations.

As the global awareness of ethnical and corporate responsibilities issues is constantly increasing, the conduct of business transactions, efficiency and effectiveness in technocratic terms is no longer sufficient to preserve the acceptability of Nigerian managers in Though there is no common morality norm,

ethical and social considerations must become an intrinsic component of the decision-making process for Nigerian managers. This decision-making process must consider all aspects of corporate management, including production, marketing, finance, legal, and human resources.

1.3 PURPOSE OF THE STUDY

The study aims to evaluate corporate social performance by identifying areas of commitment among Nigerian business organisations, with a focus on manufacturing enterprises.

The study will also look into the relationship between social responsibility practices and organisational performance. Its purpose is to analyse and debate the findings in order to provide relevant recommendations on how organisations may better implement their social awareness campaigns for profit.

The study will also look at how an organization’s involvement in social responsibility practices affects its profitability and corporate image.

1.4 Research Questions and Hypotheses

RESEARCH QUESTIONS: The following research questions and hypotheses will be addressed to lay the groundwork for the study.

QUESTIONS:

1. Is there a link between organisations’ social performance and profitability?

2. Is there a link between organisations’ social performance and business image?

3. Is there a link between an organization’s social performance and its effectiveness?

Research Hypothesis

1. The null hypothesis (Ho) states that there is no substantial association between corporate social performance and organisational effectiveness.

Alternative Hypothesis (Hi): There is a considerable correlation between corporate social performance and organisational effectiveness.

2. The null hypothesis (Ho) states that there is no substantial association between corporate social performance and organisational profitability.

Alternative hypothesis (Hi): There is a considerable correlation between corporate social performance and organisational profitability.

3. The null hypothesis (Ho) states that there is no substantial association between social performance and organisational profitability.

Alternative Hypothesis (Hi): There is a considerable link between corporate social performance and organisational corporate image.

1.5 Scope and Limitations of the Study

The scope of this study is limited to a few manufacturing enterprises in Lagos and Jos, with respondents recruited at random. This can be attributed to the study’s fundamental limitations, such as the inability to visit all manufacturing enterprises, time constraints, and budgetary consequences. Consequently, the study’s generalizability will be limited. The findings will, however, offer the necessary framework for future research.

1.6 Significance of the Study

The findings and recommendations would help and advise organisations by emphasising different areas where businesses might be socially responsible, as well as monitoring the impact of their efforts.

Furthermore, it will explain how social responsibility can be turned into an advantage, increasing company image and ensuring long-term prosperity for the organisation.

1.7 Definition of Terms

The phrases employed by me in the study can be understood in this way.

CORPORATE IMAGE: This is an intangible asset that distinguishes and enables a business organisation to consistently produce profits that exceed the average profit made by businesses of comparable type.

BUSINESS ETHICS: This is a set of moral principles and behaviours that are applied to specific situations or conduct in business.

ORGANISATION: A physical structure or a structural system of rules, laws, and functional relationships intended to carry out a company’s policies and programmes.

ORGANISATIONAL PERFORMANCE: This is characterised as a combination of profitability, survival, and growth. It can also be described as the accomplishment of a specific goal or target.

ORGANISATIONAL SURVIVAL: This is a circumstance in which a business firm maintains its head above water, i.e. it continues to earn profit by providing goods and services regardless of economic conditions.

SOCIAL RESPONSIBILITY: This is an intellectual and objective concern for the well-being of the community.

ORGANISATIONAL PROFITABILITY: The rate at which an organization’s revenue from sales exceeds its production, overhead, and prime costs.

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