ROLE OF CORPORATE SOCIAL RESPONSIBILITY ON THE SURVIVAL OF BUSINESS ORGANIZATION
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ROLE OF CORPORATE SOCIAL RESPONSIBILITY ON THE SURVIVAL OF BUSINESS ORGANIZATION
ABSTRACT
This study will look at the impact of corporate social responsibility on listed consumer and industrial goods firms in Nigeria’s economy. The ex-post facto (causal comparative research) technique will be used, with the study focusing on companies listed on the Nigerian Stock Exchange (NSE).
To assess primary data, the study will use standardised simple and multiple linear regressions (Ordinary Least Square-OLS) in SPSS version 23. The study used both time series and cross-sectional data (observationally pooled or panel data).
The researcher intends to use the non-probability sampling technique to cover the business bottom line for seven years, from 2012 to 2018. Panel data (secondary data) will be extracted from audited annual reports and accounts of consumer and industrial goods companies.
As a result, the research will use a standardised linear regression model to analyse data acquired from audited financial statements for the relevant time period.
Chapter one
INTRODUCTION
In this chapter, the author will explain why the subject was chosen, as well as how corporate social responsibility impacts or influences corporations’ bottom lines. The author will provide context and an outline of the suggested studies.
1.1 Background of the Study
The challenges that Nigerian firms face in today’s complex and competitive economy are the result of both economic and noneconomic factors. Thus, in order to survive and succeed in the business world, organisations must arrange their activities in a way that balances the demands of the legal, economic, philanthropic, social, and ethical dimensions. Interested parties believe that firms have some sort of responsibility to them.
As a result, people attempt to analyse how successfully firms have met their perceived responsibilities. For example, investors focus on the extent to which their expectations are satisfied by referring to various financial indices such as company performance, return on investment, earnings per share, and market share prices.
While the community concentrates on socially responsible activities such as environmental restoration and the provision of social amenities, the government ensures that enterprises comply with relevant legislation (Rabi’u, Asma’u, & Musa 2016).
From a global viewpoint, financial scandals and unethical actions of big firms such as Enron, WorldCom, Parmalat, and Nike, as well as climate change, present an alternative dimension to CSR as the most pressing concern among the other millennium challenges.
CSR is associated with civil society and current political theory, and it entails taking action to lower the magnitude of eternalized costs or avoid distributional disputes. According to (Muhammad, Ejaz, Javeria, & Mumhza, 2014)“
CSR is defined as achieving commercial success in ways that honor ethical value and respect people, communities and the natural environment or as a concept whereby company integrate social and environmental concerns in their business operation and in their interaction with their shareholders on voluntary basis”
Roger created the virtue matrix concept in 2002 to depict how businesses are socially responsible for their actions and business operations. This paradigm implies that CSR has gained prominence (Rogers, 2002; Muhammad, Ejaz, Javeria, & Mumhza, 2014).
Companies have focused not only on financial outcomes, but also on a broader set of societal expectations. According to the global study, 76 percent of managing executives believe that CSR adds value to long-term shareholders, and 55 percent believe that sustainability helps their companies build a strong reputation.
According to McKinsey (2022) and Prahalad and Hamel (1994), the primary goal of CSR is to sustain company activities in order to generate shared benefit for the company and society. As a result, corporate social responsibility has become one of today’s most important business practices.
CSR is also a business strategy that contributes to long-term development by providing financial, environmental, and social benefits to all stakeholders (Bushra & Rabia, 2017).
An important premise in finance theory is that managers and executives maximise owners’ resources on their behalf. However, CSR is a phenomenon that encompasses corporate or business companies’ ethical, environmental, and social responsibilities. Organisations play an important role in participating with CSR.
The concept of corporate social responsibility has grown dramatically in recent decades. CSR is not a new topic of interest for the business sector. However, corporate social responsibility is vital since it affects all aspects of organisational operations.
CSR is a multifaceted concept with numerous practices, therefore the concept of corporate social responsibility is linked to a business model that contributes to sustainable development by giving economic, social, and environmental benefits to all stakeholders (Rabia & Bushra, 2017).CSR operations are now one of the organization’s most predictable aspects.
The majority of renowned organisations conduct CSR activities for the benefit of society or as part of their obligation and accountability. Most organisations have embraced corporate social responsibility without seeing a significant improvement in industry performance or receiving government rebates for tax savings (Samira, Noor, & Masudul 2018). As a result, the study tried to determine the impact of CSR on the organisation’s bottom line.
Given the problems and relevance of CSR in Nigerian consumer and industrial products industries, which has led in significant CRS expenditures in recent decades, it is critical to determine the impact of CSR on the corporation’s bottom line. ”
What effect does CSR costs have on organisational bottom line in Nigeria” a follow-up question is “what influence does CSR expenditure have on business tax-income ratio in Nigeria”
1.2 Statement of the Research Problem
Despite the existence of some literature on the effect of corporate social responsibility on environmental, social, and economic dimensions, there is an important gap in how corporate social responsibility improves the bottom line in the consumer and industrial products industries in terms of tax-income ratio; owing to the absence of documented proof of the benefits
The research goal was to look into the impact of CSR on the bottom line of chosen consumer and industrial products companies, as well as whether firms profit from government rebates.
It also seeks to determine the government’s rules regarding Corporate Social Responsibility operations, as CSR has been used by firms as a permitted expense to decrease tax liabilities.
This study seeks to answer the following questions: what impact does CSR implementation have on organisational bottom lines in Nigeria? This question is significant because it has both theoretical and practical implications for CSR application in contemporary business practices and literature.
1.3 RESEARCH QUESTIONS
The general study questions are: “What is the impact of CSR on consumer and industrial goods survival of business organisations?” In contrast, this study seeks to use simple and numerous linear regression models (ordinary least square-OLS) to conduct this research, and hence specific research topics are:
To what extent does the expense of socioeconomic welfare effect the tax revenue of Nigerian listed consumer and industrial products companies?
How much do educational and health donation costs effect the gross profit margins of Nigerian listed consumer and industrial goods companies?
How do CSR surrogates effect the return on investment (ROI) of Nigerian listed consumer and industrial goods companies?
How much does the difference in respondents’ mean/median perceptions of CSR surrogates influence listed consumer and industrial goods businesses in Nigeria?
1.4 Research Objectives
The primary goal of this research is to examine the impact of CSR on consumer and industrial goods survival for commercial organisations. Specific aims include:
The purpose of this study is to estimate the impact of socioeconomic welfare costs on the tax revenue of Nigerian listed consumer and industrial goods companies.
To determine the impact of educational and health donation costs on the gross profit margins of Nigeria’s publicly traded consumer and industrial goods industries.
The purpose of this study is to assess the impact of CSR surrogates on the return on investment (ROI) of Nigerian listed consumer and industrial goods companies.
To examine the extent of the difference in respondents’ mean/median perceptions of CSR surrogates’ influence on Nigerian publicly traded consumer and industrial goods companies.
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