CHAPTER ONE
1.1 BACKGROUND TO STUDY
It is becoming increasing apparent that organizations in the
telecommunication industry 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 responsibility practices. Mohr, Webb and Harris (2001) describe corporate social responsibility as a firm’s commitment to minimize or eliminating any harmful influence and maximizing its long- run beneficial impact on society. For example, one could observe that in recent times MTN Nigeria and other telecommunication industry are embarking on a number of social intervention programmes in area of health, education, and general community development. This concept of corporate social responsibility (CSR) which has long been established in academic literature as both a business philosophy and practice is seemingly much more prevalent, timely and important in this millennium, as firms attempt to be seen as being sustainable or socially responsible in nature due to demands of target stakeholders. The stakeholders are requesting that firms act responsibly and behave ethically and are therefore, expected to respond to the changing beliefs and values of the target audiences.
There were several researches on corporate social responsibility; however, majority of such researches concentrated on financial performance, consumer behavior and effects on environment. For example, Stanwick and Stanwick, Mc William and Siegel and others have studied the effect of corporate social responsibility on financial performance. Financial performance may be defined as the results of a firms policies and operations in monetary terms. These results are reflected in the firm’s return on investment, return on assets, net profit margin, and return on equity e.t.c. Most of these surveys however, were base on international data and in context of developed markets with contradictory finding. For example, while Mc Williams and Siegel in their analysis of extant literature argued that there been mixed results of the financial impact of CSR on short and long – run profitability on the organization.
Berrone, Surroca and Tribo and Orlitzky,Schinidt and Rynes held that CSR practices enhance overall profitability of firms. Determine how CSR and financial are connected is also complicated by the lack of consensus of measurement methodology as it relates to corporate social performance. From the above, there is a lack of consensus in the literature with regards to the effect of corporate social responsibility on financial performance. And since most of the studies were based on international data, this research seeks to contribute to the existing body of knowledge in the area by examining the impacts of adaptation of corporate social responsibility on financial performance in the Nigerian context, using the experiences of MTN Nigerian Limited and finally identifies opportunities for further research in this area.
1.2 STATEMENT OF RESEARCH PROBLEM
The researcher seeks to find answers to the following questions that relate to corporate social responsibility and firm performance of MTN Nigeria.
i. Are MTN Nigeria practicing corporate social responsibility as it
MTNF foundation?
ii) Does corporate social responsibility have significant effect on the financial performance of MTN Nigeria Limited?
iii) Are MTN Nigeria are facing challenges in the adaptation of corporate social responsibility?
iv) Does corporate social responsibility guarantee customers’ confidence and increase customer patronage?
1.3 RESEARCH HYPOTHESES
In the course of this research, the researcher develops the following hypothetical statement that will be tested to assess the effect of corporate social responsibility on firm performance of MTN Nigeria a case study of Sokoto branch.
1) That MTN Nigeria practice corporate social responsibility as it MTNF foundation
2) That MTN Nigeria does not practice corporate social responsibility as it MTNF foundation
3) That Corporate social responsibility do have significant effect on the financial performance of MTN Nigeria Limited
4) That Corporate social responsibility has significant positive effect on the financial performance of MTN Nigeria Limited
5) That MTN Nigeria are facing challenges in the adaptation of corporate social responsibility
6) That MTN Nigeria are not facing challenges of corporate social responsibility in its adaptation
7) That corporate social responsibility guarantee customers’ confidence and
increase customer patronage
8) That corporate social responsibility does not guarantee customers’ confidence and increase customer patronage
1.4 OBJECTIVE OF THE STUDY
The main aim of this research is to examine the impact of corporate social responsibility of MTN Nigeria vis – a – vis its firm performance.
The study is essentially geared towards achieving the following objectives:
i. To examine CSR in relation to MTN Nigeria in focus. ii. To evaluate the impact of CSR on the firm performance of MTN Nigeria; iii. To examine the challenges of CSR in MTN Nigeria; iv. To investigate whether CSR guarantee customers’ confidence and increase patronage of its customer.
1.5 THE SIGNIFICANCE OF THE STUDY
These studies will acquaint us with various MTNF foundations as it affects lives of our people in one way or the other.
It will also provide information on the impact of corporate social responsibility on the business performance of MTN Nigeria a case study of MTN branch Sokoto .
The research work is also importance to students, enterprises businessmen, policy makers and entire citizens as it give an insight on the activities of MTN Nigeria, and how it improve businesses in the metropolis and direct our policy makers on appropriate policy to be adopted in the state as it regard corporate social responsibility.
The research goes a long way in providing information on the challenges faced in adaptation of corporate social responsibility in MTN Nigeria and provides recommendation for further action.
It finally give a reference point for future research on the topic under study.,
1.6 SCOPE AND LIMITATION OF THIS STUDY
The study is focused on MTN Nigeria. It critically examines what impact corporate social responsibility has on firm performance of MTN Nigeria a case study of MTN branch Sokoto.
1.7 CHAPTER’S SCHEME
The work titled: Corporate Social Responsibility and firm performance of MTN Nigeria.
The work is divided into five (5) chapters:
Chapter one comprise of general introduction which include the background of the study, research questions, purpose of the study, significant of the study, scope and limitation of the study chapters schemes and definition of terms.
Chapter two (2) is the review of related literature. The research examines the impact of CSR on firm performance of MTN Nigeria. Overview of the concept of CSR, Carol’s pyramid of CSR, implicit versus explicit CSR., characteristics of CSR, benefits of incorporating CSR to organization, drivers of CSR, modern CSR, historical background of MTN Nigeria and emphasis on CSR by MTN Nigeria.
Chapter three (3) is the research methodology which focused on CSR and firm performance of MTN Nigeria. It comprise of research design, instrument for data collection, method of data analysis and testing of hypothesis.
Chapter four (4) present and analysis the data collected from secondary data using regression and correlation techniques, the hypothesis stated and tested.
Chapter five (5) will be summary, conclusion and recommendation