Reference code: C041
ABSTRACT
This research project investigated the impact of corporate social responsibility on the financial performance of quoted companies in Nigeria. In order to achieve the objectives of the study, four hypotheses were proposed and data collected through secondary sources from the annual financial reports of five quoted companies. The data which was collected using the content analyses method was analyzed using multiple regression analyses. in the course of analyses, the study revealed the following findings: There is a negative relationship between environmental management system and return on asset. Our findings also showed a positive relationship between employee relations and return on assets. Environmental management systems has a positive relationship with return on equity. Finally, employee relation has a negative relationship with return on equity of quoted companies in Nigeria. Our findings also showed that none of variables were statistically significant in explaining the financial performance of the sample firms. Given the findings, it is concluded that: Environmental management systems related costs and expenses are not an important consideration or factor in the financial performance of quoted companies in Nigeria. Costs related to employee relations are not an important factor in the financial performance of quoted companies in Nigeria. Finally, it was concluded that Corporate Social Responsibility (CSR) activities of quoted companies in Nigeria is inadequate to yield the desired fruit of contributing to the financial performance of the companies. Based on the findings and conclusions, we make the following conclusions: It is recommended that quoted companies should get more involved in environmental management activities in order to reap the resultant benefits of growth in return on equity. It is also recommended that standard setting organizations should set up environmental management and employee welfare reporting framework, in order to improve the level of financial and non-financial environmental disclosures among the listed firms. Finally, we recommend that the relevant governmental agencies in whose purview corporate social responsibility falls should organize enlightenment campaigns to educate quoted companies in the benefit derivable from implementing CSR activities within the appropriate stakeholder units.
INTRODUCTION
............... Corporate social responsibility is the initiative of businesses to invest part of their profit for the welfare of the society in order to portray a positive public image and create an educated customer base. The business dictionary defines corporate social responsibility as a company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. They express this citizenship – through waste pollution reduction process – by contributing educational and social programs - and by earning adequate returns on the employed resources. Mohr, Webb and Harris (2001) also described corporate social responsibility as a firm’s commitment to minimizing or eliminating any harmful influence and maximizing its long run beneficial impact on the society.
It is becoming increasingly apparent that corporate firms are constantly looking for new strategies to gain a positional advantage over their competitors in order to increase their customer base and enhance their financial performance. One of these strategies is the adoption of corporate social responsibilities practices. Corporate social responsibilities (CSR) could be viewed as a symbolic relationship that exists between a firm and all its stakeholders. According to Buchholz, and Magnum and Ferrell(are cited Alex. A, Joseph. A et al 2014) there are five main categories of stakeholders; organizational (customers, employees, suppliers, creditors and shareholders’), community (local residents and lobby groups), regulatory bodies at all levels of government, media and the natural environment. These stake holders are requesting that firms act responsibly and behave ethically and are therefore expected to respond to the changing believes and values of their target audience. In the modern business world, CSR has been emphasized by stakeholders as a driving tool for success to be accomplished (Basil .U. Onwe 2014)
CSR has been an increasingly evident and crucial component of overall business organization. Conscious of this concept, ordinary citizens, potential investors, pressure groups, politicians, insurance companies and a wide range of other stakeholders are increasingly demanding organizations to account for their social/natural environment and economic impact that they have on every community in which they operate, Nwachukwu (2012) as cited in Onwe (2014). Firms commit huge amount of money in undertaking CSR activities especially in their host communities. The major reason of going into CSR activities is to bring back returns to them from people in the society that their actions have affected positively. Wiston Churchhill says “we make a living by what we get but we make a life by what we give”. The result therefore, reflects on the firm’s financial statement (Return on Investments, Return on Assets, Net Profit Margin, and Return on Equity etc) which in turn serves as a medium to measuring the firm’s financial performance.
CSR is about how businesses align their values and behaviors with the expectation and needs of stakeholders. It also describes a company’s commitment to be accountable to its stakeholders; and demands that businesses manage the economic, social and environmental impact of their operations to maximize benefits and minimize the down sides. Mahajan (2011) as cited in Fontaine (2013) suggested that there is growing perception among enterprises that sustainable business success and shareholder value cannot be achieved solely through maximizing short term profit but instead through market oriented yet responsible behavior, companies are aware that they can contribute to sustainable development by managing their operations in such a way ...............
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INTRODUCTION
1.1 Background of Study 1
1.2 Statement of problem 4
1.3 Objectives of Study 5
1.4 Research Questions 6
1.5 ResearchHypothesis 6
1.6 Significance of Study 7
1.7 Scope of Study 7
1.8 Limitations of Study 7
1.9 Operation Definition of Terms 8
1.10 Organization of Study 9
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction 10
2.2 Concepts of Corporate Social Responsibility 10
2.2.1 Historical Background 12
2.2.2 Principles of CSR 15
2.2.3 Economic Drivers of Corporate Social Responsibility (CSR) 17
2.2.4 List of Corporate Stakeholders 20
2.2.5 Mode of CSR Delivery in Nigeria 22
2.2.6 Benefits of Corporate Social Responsibility 26
2.3 Financial Performance 27
2.3.1 Guiding Principles Of Financial Analysis 28
2.3.2 Measures Of Corporate Social Responsibility(CSR) 28
2.4 Theoretical Framework 29
2.5 Empirical Analysis 30
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction 37
3.2 Research Design 37
3.3 Population and Sampling Design 37
3.4 Sources and Methods of Data Collection 38
3.5 Technique of Data Analysis 38
CHAPTER FOUR
DATA PRESENTATION, ANALYSES AND DISCUSSION
4.0 INTRODUCTION 39
4.1: CSR Disclosure Index 39
4.1 DATA PRESENTATION 40
4.2 DATA ANALYSES AND INTERPRETATION 42
HYPOTHESES TESTING 44
4.3 DISCUSSION OF FINDINGS 46
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS 48
5.2 CONCLUSIONS 49
5.3 RECOMMENDATIONS 49
REFERENCES 51
APPENDICES 52
71 Pages
Reference code: c041
Reference code: c041
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