(A STUDY OF UNILEVER NIG PLC ABA, ABIA STATE)
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ABSTRACT
The study examines corporate social responsibility and organizational reputation with special reference to Unilever Nig PLC Aba, Abia state. The main objective of the study is to examine corporate social responsibility and organizational reputation. The specific objective are to examine the relationship between economic obligations and organizational reputation, to examine the relationship between obligations and organizational reputation, to examine the relationship between ethical obligations and organizational reputation, to examine the relationship between voluntary obligation and organizational reputation. The target population of interest of the researcher is the management and member of staff of Unilever PLC in Aba, Abia State. Convenience sampling procedure was adopted for easy accessibility and courage of the sample size. The sampling size is one hundred (100). The Yaro Yemen formula was used to determine the sample size of 80. The chi-square statistical analysis was used to test the hypotheses. It was concluded that organizational culture moderates the relationship between corporate social responsibility and organizational reputation. Based on the finding of the study summary, conclusion and recommendations were made that, Unilever PLC should improve in her activities of corporate social responsibility, that corporate social responsibility should be properly addressed on the company, for the fact that corporate social responsibility is the appropriate mechanism for organizational productivity, therefore, Unilever should go ahead with it.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In contemporary business environment organizations are paying much more attention to the facets of corporate social responsibility. Interest in corporate social responsibility has increased in recent years and is regarded as an important and emerging topic for research (Burton & Goldsby, 2009).
Corporate social responsibility can be defined as an ongoing commitment by business organizations to play their role in economic development of the society, improving quality of life of workforce and their families as well as the society and community at large (Holme & Watts, 2000). Usunier, Jean, Olivier and Amandine, (2011) sees corporate social responsibility as actions that focus on some social good beyond the interest of the business and that which is mandatory by law.
The concept of corporate social responsibility can also be seen as an idea whereby businesses consider the interests of society by taking responsibility for the impact of their operations and activities on stakeholders such as customers, shareholders, communities, employees, and the environment in all aspects of their business. Brammer and Pavellin, (2006) argued that corporate social responsibility has been considered as a source of sustainable development and has become an emerging imperative. Edwards (2005) argued that in order to achieve business objectives, business organizations should look at the environmental and social impacts of their business processes as well as their products. Addressing the interests of direct stakeholders should not be the only priority of the businesses but they must attend to also indirect stakeholders.
The effects of corporate social responsibility are multifaceted, but in this research we shall try to develop a relationship of corporate social responsibility with corporate reputation as perceived by different stakeholders.
It is therefore important for organization to develop a system that is able to encourage their employees into putting more commitment to assist the organization in achieving the organizational goal. One of the methods is by having a good corporate image. Corporate image is a perceived mental picture about the organization.
Employees developed their perception of their organization by encoding information relating to both factual company practices and imaginary or attributed qualities.
This information can come from personal experience, interpersonal communication or mass media communication (Dowling, 1986).
When employees hold their organization’s image in high regards, they will be more prepared to promote their company. Alternatively, when employees hold their organization’s image in poor regard, it can poison the atmosphere at work and demoralize staff and affect the service delivery. Employees’ perceptions can have a direct impact on how outsiders perceive their organization. For example, surveys have shown that people who know (and like) someone who works for an organization tend to regard that organization more highly than similar people who do not know anyone working there (Dowling, 2001).
External stakeholders (such as customers, societies and suppliers) perception can also influence the employees’ attitude and behavior. Research on employee behavior found that employees’ behavior is driven by whether or not they believe that the images and reputation of their organization held by outsiders are favorable. When they believe that outsiders see their organization in a positive light, they bask in its glory. This in turn can translate into greater self-confidence, cooperation, and citizenship behavior (Dowling, 2001). When they perceive that outsiders view their organization negatively (as found by Dutton and Dukerich (1991) research on Port Authority of New York and New Jersey in addressing the rising number of homeless people seeking shelter in its transportation facilities), the employees became depressed and stressed. This indicates the importance of corporate image to an organization.
For these reasons, it is important for organization to build a desired employees corporate image by presenting itself as a concerned, honest, trustworthy and reliable organization. Developing a good corporate image need to start from inside out because employees represent the organization. Employees interact with the other stakeholders to convey organizational messages. Therefore, organization needs employees to promote positive messages to portray a positive corporate image. To achieve this, employees must first of all view their own organization’s corporate image positively.
A qualitative studies conducted by Mattila (2009) discovered that employees develop a positive image of their organization when their organization focuses on both internal and external Corporate Social Responsibility (CSR) effort because when organization shows concern for the wellbeing of their employees, the organization implanted a positive image in the mind of the employees. If the organization focuses purely on external Corporate Social Responsibility, employees feel that the organization’s Corporate Social Responsibility effort was a pretence developed in order to fulfill external stakeholders’ pressure and expectation.
Therefore, organization’s Corporate Social Responsibility practices need to be executed with the mindset of which stakeholder they wish to influence.
Corporate Social Responsibility practices today is lacking in satisfying the internal stakeholder (i.e. employees) (Fenwick & Bierema, 2008; Mattila, 2009) although the notion of CSR for business is gaining recognition with initial association of 50 founding companies in 1992 to more than 250 member companies in 2007. Where the current members include top-tier international global companies such as American Express, BP, Coca-Cola, Exxon Mobil, Hewlett-Packard, Microsoft, Wal-Mart and the Walt Disney Company (Sons, 2007).
1.2 STATEMENT OF THE PROBLEMS
The purpose of this study is to investigate the impact of a corporate social responsibility on organizational reputation. It attempts to determine how an organization carries out its obligation to the stakeholders which serves as a strategy for carrying out business activities peacefully. Most times claims made by various stakeholders are too much on the organization, yet they are expected to get actively involved in getting them solved. In trying to meet up these expectations, most organizations indulge in some unethical acts which most times boomerang on them.
This study attempt to understand which CSR elements have the ability to influence the corporate reputation.
The study also attempts to know how employees’ perception on their organization’s and corporate image affects their behavior as well as how they promote their organization to the other stakeholders.
Previous researchers indicated certain elements of CSR (such as organizational ethics) as having impact on employees’ perception on the corporate image that can affect their commitment.
1.3 OBJECTIVES OF THE STUDY
The main purpose of the study is to examine the relationship between corporate social responsibility and organizational reputation. The specific objective of the study is to:-
- To examine the relationship between economic obligations and organizational reputation.
- To examine the relationship between ethical obligations and organizational reputation.
- To examine the relationship between voluntary obligation and organizational reputation.
1.4 SIGNIFICANCE OF THE STUDY
One of the main reasons this study is being conducted is because society’s expectation on organizational Corporate Social Responsibility effort will be improved in gaining momentum and fast becoming a standard business practice. Many organizations will start implementing Corporate Social Responsibility as part of their organization practices as well as to fulfill their legal obligations. However, in order for Corporate Social Responsibility to be effective to bring value to the organization (such as improving the corporate image and employees commitment), organization and employees’ will have a deeper insight to the benefit of investing in Corporate Social Responsibility instead of looking at its negative angle of time consuming, resources demanding and costly project.
This study is also significant because it will be able to unveil the roles of corporate social responsibility and organizational reputation to the various stakeholders, mangers, scholars etc.
1.5 RESEARCH QUESTIONS
In light of the research problem, the following questions demand answers from this study;
- Does economic obligations influences organizational reputation?
- Does legal obligations influences organizational reputation?
- Does ethical obligations influences organizational reputation?
- Does voluntary obligations influences organizational reputation?
1.6 STATEMENT OF THE HYPOTHESIS
The following hypotheses were formulated for the study
HO1: There is no significant relationship between economic obligation and improve organizational image.
HO2: There is no significant relationship between ethical obligation and improve organizational image.
HO3: There is no significant relationship between voluntary organizational and customer loyalty.
HO4: There is no significant relationship ethical obligation and customer loyalty.
HO5: Organizational culture does not moderates the relationship between corporate social responsibility and organizational reputation.
1.7 SCOPE AND LIMITATION OF THE STUDY
The study of corporate social responsibility and organizational reputation covers a wide area of investigation. However, the scope of this study is confined to Unilever PLC Abia State, Nigeria. The investigation is being limited to employees, managers and supervisor of this business enterprise.
1.8 DEFINITION OF RELATED TERMS
Corporate Social Responsibility: Is defined as corporate social responsibility referring to employees’ perspective of Corporate Social Responsibility focusing on the following three categories: economic, ethical and voluntary obligation.
Corporate image: Is defined as employees’ perceived mental pictures about their organization’s reputations, working environment, activities and accomplishment. In this study, corporate refers to profit making organization.
Employees’ commitment: In these study employees’ commitment and employees’ organizational commitment carries the same meaning. The employees’ commitment to the organization defined the following Meyer and Allen’s (1991) three components model of commitment known as organizational commitment.
Organizational commitment: Is defined as the “mind sets” or psychological state (i.e. feelings and/or beliefs) concerning an employee’s commitment to the organization.
Employees in this study refer to employees from a profit making organization.
Reputation: The beliefs or opinions that are generally held about someone or something.
Organization: An organized body of people with a particular purpose, especially a business, society, association, etc.
Stakeholder: A person, group or organization that has interest or concern in an organization.