AN EMPIRICAL RESEARCH OF THE USE OF CORPORATE SOCIAL RESPONSIBILITY IN TELECOMMUNICATION INDUSTRIES
In a contemporary competitive market, the correlation between corporate social responsibility (CSR) and profitability cannot be overemphasised. Multinational companies gain economic and competitive advantage by active involvement in social responsible programs and good ethical practices. This essay analyses the level of impact of CSR activities in the telecommunication sector of Nigeria using different established theoretical views and approaches. Also, the adverse effects of the telecom operator’s business operation on the environment are delineated. An approach is recommended for the telecom operators to foster a common interest of all stakeholders in the industry.
A publication by Bowen’s Social Responsibility of Businessmen in 1953 initiated the phrase “Corporate Social Responsibility”, and suggested business activities have a wider sphere of influence beside mere profit-seeking. The history of social and environmental concerns about business is as old as trade and business (Brass Centre, 2007). With industrialisation and globalisation, the concept has proliferated by a myriad of debates and a paradigm shift in terminology from social and environmental concerns of business behaviour to CSR. Figure 1 in appendix shows the evolution sequence of CSR research.
According to a new definition of CSR proposed by the European Commission (2001), companies should have in place a process to integrate social, environmental, ethical, and consumer concerns into their corporate structure and core strategy beyond the obligations of the law. It involves giving back to society some of the gains and benefits realised by a company’s activities which bolsters a symbiotic relationship between corporate organisations and the society at large.
In Nigeria, CSR is a contemporary and contextual practise aimed at addressing the socio-economic challenges of all stakeholders in the society. The Federal Executive Council (FEC) on May 21, 2008 approved the development of a CSR Policy for the country to instil corporate ethical behaviour in Nigeria business practises (Adeyanju, 2012). The policy was initiated amidst widespread public awareness and outcry of fragrant pollution of the environment especially by oil companies in the Niger Delta region of the nation where corporations exploited the local communities for wealth maximisation and profitability.
The influence of the telecommunication sector involvement in corporate social responsibility since the deregulation of the industry and issuance of license to some operators is minimal compared to the large wealth amassed by the investors. With over 120 million mobile subscribers, the major telecommunication operators; MTN, GLOBACOM, ETISALAT, and AIRTEL (See Appendix) try to increase their customer base by bogus advertisements and promotions. For example, MTN Ultimate Wonder promo gave an opportunity for customers to win weekly cash prices while the ultimate winner went home with the cash equivalent of a Cessana 182T airplane (Adeniyi, 2013).
Baker (2004) noted that CSR is about how companies manage the business processes to produce an overall positive impact on the society. The word ‘society’ is broad and multifarious in this context. Since companies cannot meet the overall expectations of the society, specific strategic domains of stakeholders are usually selected.
Who are the stakeholders in the telecommunication sector? The stakeholder theory of a firm will give us a firm foundation to decipher the meaning of the term ‘stakeholder’. A stakeholder approach by Freeman defines the term as “any group or individual who can affect or is affected by the achievement of the organisation’s objectives” (Freeman 1984, p. 32; Crane & Matten 2010, p. 61). Hence, the stakeholders for the telecommunication sector are the environment, employee, customers (mobile subscribers), shareholders (owners), competitors, local communities and government.
From a legal perspective, corporations have a fiduciary responsibility to the shareholders who hold a legitimate stake. However, stakeholder management is not limited to shareholders interest but integrating all stakeholders in a firm’s decision-making processes. Friedman’s (1970) view differs from this stakeholder management approach. He pointed out that the only one responsibility of business towards society is the maximisation of profits to the shareholders within the legal framework and the ethical custom of the country. Contemporary researchers have concluded that there is a strong positive correlation between profit maximisation and corporate social responsibility in all segments of business operations (Griffin and Mahon, 1997; Crane and Matten ,2010; McWilliams and Siegel, 2001).
Studies have proposed the relationship between the business size of a company and its voluntary involvement in CSR. Larger companies tend to be more socially responsible than small ones because of several factors including the financial capital, access to resources and economics of scale (Grigoris& Nikolaos, 2011). For Instance, MTN Nigeria licensed in 2001, established a CSR Policy and foundation in 2004 (See Appendix). It is evident that MTN’s CSR activities have a larger penetration in comparison to GLO the second largest subscriber base telecom operator in Nigeria. In addition, Matten and Moon (2004) proposed an ‘implicit’ and ‘explicit’ framework to understanding CSR. The Nigeria corporate governance approach is best exemplified by the explicit CSR framework where companies have voluntary corporate policies towards social responsibility. In contrast, implicit CSR practised in European countries embed CSR stakeholder’s interest in the legal and institutional framework of the business society (Crane& Matten, 2010).