Corporate Social Responsibility (CSR) As A Tools For Maintaining Peace In Society A Study Of Kaduna Refinery And Petrochemical Company ,Kaduna State,Chikun Local Government Area
1.1 Background to the Study
All nations in the world survive by one means or the other. Some rely on tourism for survival, while others depend solely on agriculture. There are however some that are fortunate enough to be blessed with mineral resources such as oil and gas, which bring in a lot of revenue. At a time, Nigeria depended mainly on agricultural products like groundnut, cocoa, palm produce and others to survive. This was before the discovery of oil in 1956 at Olobiri in Rivers State. Today, the main sources of revenue to the country are oil and gas. The blessing also came with its attendant problems and these include environmental degradation, damage of economic crops and fish ponds, pollution of sources of drinking water and general hazards to the health of the people in the oil and gas producing areas.
The definition of this concept actually depends on how those who believe in it and those who do not, see it. People see it from different perspectives. To those that believe in it, it is the responsibility to plan and manage an organization’s relationship with everybody involved in or affected by all its activities in all its ramifications of operations. It is a beneficial social investment and they believe that a socially responsible company is that, that do not take actions that might be perceived as unreasonable, callous or insensitive by the public. On the other hand, those who do not believe in it, strongly argue that business cannot be “responsible”, only people can have responsibilities. To them, it is a loss of accountability to shareholders who have invested their hard earned resources to make profit. (Ogbemi, 2015). The truth is that profit making should not be at the expense of the public. Profit making should be fair and human.
The concept of CSR is concerned with critical issues that concerns environmental policies and actions. Its main business is about organizations giving back to societies where they make profit. According to Zadek (2000) organizations take part in it not only to attract good image but also to bring in stakeholders into the main stream of the business. CSR usually encourages mutual understanding between organizations and the communities where they operate. (Keinert, 2008; Matten & Moon, 2008; Monowar & Humphrey, 2013). In this contemporary times, the practice of Corporate Social Responsibility is now an important part of business organizations which encourages a lot of gains in the future. (Brik, Rettah & Mellahi, 2010; Carroll & Shabana, 2010; Halme & Laurila, 2009; Kemper, Schilke, Reimann, Wang & Brettel, 2013; Monowar & Humphrey, 2013; Porter & Kramer, 2006; Rodriguez; Melo & Mansouri, 2011). Its importance has also come to the fore as most companies and organisations have now come to embrace the concept.
Kurucz, Colbert, and Wheeler (2008) listed and categorized the organization being involved in CSR as follows. These are cost and risk reduction, gaining competitive advantage; developing reputation and legitimacy; and seeking win-win outcomes through synergistic value creation. In contrast to what Kurucz, Colbert, and Wheeler (2008) did, Carroll (1991) developed a model that consists of four other kinds of social responsibilities namely: economic, legal, ethical, and philanthropic. Similarly, other dimensions of CSR activities include: Profit Concerns – Economic Responsibility, Legal Concerns – Legal Responsibility, Ethical Concerns – Ethical Responsibility and Voluntary action Concerns – Philanthropic Responsibility (Olajide, 2014).
Corporate Social Responsibility as a concept is closely associated with corporate governance because they are both concerned with the corporate image of the organization and its portrayal as a good corporate citizen. Corporate governance can be described as the stewardship responsibility of directors and corporate bodies to provide oversight for the overall goals and strategies of a company and see to their implementation. It may therefore be seen as the set of related rules by which corporations, shareholders and management govern and guide their corporate behavior. These rules refer to the attributes of individual firms and factors that allow companies to practice sound governance even where public institutions are somehow weak. According is Cornelius and Kogut (2003) such factors normally include a corporation’s ownership structure, its relationships with stakeholders, financial transparency and information disclosure practices as well as the makeup of its managing boards. It is the company management techniques, and processes in general or the way a particular company is managed. It further refers to the mechanisms, processes and relations by which corporations are controlled, directed and managed. (www.investpedia.com/terms/c/arpirategover).
Cornelius and Kogut (2003), also defined corporate governance as a system that consists of those formal and informal institutions, laws, values, and rules that generate the menu of legal and organizational forms available in a country and which in turn determine the distribution of power on how ownership is assigned, managerial decisions are made and monitored, information is audited and released, and profits and benefits allocated and distributed. Corporate governance is also a philosophy and mechanism that entails processes and structure which help and facilitate the creation of shareholders value through management of the corporate affairs in such a way that ensures the protection of the individual and collective interest of all the stakeholders. It is generally associated with the existence of agency problem and its roots can be traced back to separation of ownership and control of the firm. Corporate governance therefore involves transparency to the public and shareholders and it is closely related to Corporate Social Responsibility (CSR). They both emphasize responsibility to the shareholders and stakeholders, which is a way of managing conflict.
Conflict management is very important in the peaceful resolution of conflicts in any organization. Conflict theory helps in explaining how it affects societies and organizations. Studies in management of conflict states that it is important especially as regards to the changes and growth of organizations. (Azar, 1990). Conflict theory further states that conflict creeps into the society when there arise a situation when the interest of the majority is ruled against by a few privileged and powerful minority groups. Conflict is very rampant and prominent in the Niger Kaduna region of Nigeria, where most of the multinationals or oil and gas companies operations are carried out and this has resulted to a lot of violence (Ojokarotu, 2008). Conflict is unabated and variegated because of how long it lasts. This is what has been characterized as “deep rooted” conflict. Azar (1990) considers it as protracted and tractable i.e. as complex, severe community enduring and often violent.
Conflict can be explained as disagreements which arise because unidentical ideas, interest and beliefs by those involved. It can also be looked at as a tussle among people that feels their interest are being threatened. The ways and plans used in handling it is what is called conflict management. Conflict management involve those strategies and processes which aid in controlling or resolving conflict. These include proper method of solving conflicts, communication challenges and complaints and to achieve organizational objectives as well as cordial and sustainable relationship. Researches on communication and related fields have given an insight on the ability of communication to bring about sustainability in relationship, which can drive change in the right direction (Kotter, 1990). This will also help to foster peaceful and smooth business transactions between them and the host communities –wider stakeholders.
Information and communication are very vital ingredients for the survival of any organization. There is basically a thin line between information and communication. “While communication always contain information, not all information has communication value”. (Myers & Myers, 1982, p. 15). They are therefore not exactly the same thing but very similar in meaning. As Myers and Myers (1982) further said:
Information is like an enormous umbrella, a broad concept which covers communication as one particular type of information. Information is a global concept referring to any pattern of energy input you are exposed to. ‘Communication’ refers to a special kind of patterning which is expressed in symbolic form. For communication to take place between and among people, two requirements must be met: (1) a symbolic system must be shared by the people involved. (2) The association between the symbols and their referents must be shared (p. 15).
Communication is based on perception, which requires a message to be sent by somebody to a recipient who in turn decodes the message, thus communication involves at least two entities. On the other hand, information is based on logic and is not enshrined in mutuality (Drucker, 2007). Communication is the sending and receiving of messages by means of symbols and in this context, organizational communication is a key element of organizational climate (Kotter, 1990). Communication is the process by which individuals promote meanings in the minds of others by means of verbal or nonverbal messages (McCroskey & Richmond, 1996). The most uncomplicated conceptualization of communication can be found within the Encoder/Decoder paradigm, in which communication is described as the transfer of information by means of a code (Ivancevich, 2002), where communicators understand each other based on shared social and communicative cues. However, where this is absent, conflict comes up. In order for communication to be effective and shared within and outside an organization for managing conflict, people’s (stakeholders) views have to be factored in for mutuality.
According to Ivancevich (2002) the degree of meaning in relation to understanding is quite often signified by the reaction of the recipient. When messages are understood by the receivers, the chances of understanding between the sender and receiver increases. When there is understanding, there is bound to be mutual relationship. This also helps in resolving conflicts. Corporate Social Responsibility (CSR) practice has therefore become an accepted means and method of trying to resolve conflicts between organizations, corporate bodies and stakeholders which include host communities. This is because Corporate Social Responsibility (CSR) involves communication between the oil producing companies and members of the host communities with a view to arriving at an understanding of the areas of needs of the communities. The result of the ensuing effective communication process could be responsiveness of the oil producing companies to the needs of the host communities based on the understanding achieved. As the oil producing companies meet the communities’ needs, friction between the communities and the companies is bound to reduce as goodwill could be shared between the two parties. It is in this light that this study examines the roles of Corporate Social Responsibility (CSR) as a conflict management strategy in selected oil refinery communities in Kaduna State,
TABLE OF CONTENTS
Title Page i
Table of Contents ix
List of Tables xi
List of Figures xii
List of Abbreviations xiii
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study 1
1.2 Statement of the Problem 7
1.3 Objective of the Study 8
1.4 Research Questions 9
1.5 Hypothesis 9
1.6 Scope of the Study 9
1.7 Significance of the Study 10
1.8 Operational Definition of Terms 11
CHAPTER TWO: REVIEW OF LITERATURE
2.0 Introduction 15
2.1 Conceptual Review 15
2.1.1 Corporate Social Responsibility
Premise, Origin and Meaning 15
2.1.2 Arguments Against and in Favour of Corporate
Social Responsibility (CSR) 20
2.1.3 The Charity and Stewardship Principles 21
2.1.4 Importance of Corporate Social Responsibility (CSR) 23
2.1.5 Conflict and Conflict Management 26
2.1.6 Communication in Conflict Management 31
2.1.7 Corporate Social Responsibility (CSR) in Managing Conflict 32
2.2 Theoretical Framework 33
2.2.1 Definition of Theory 33
2.2.2 Stakeholders Theory 34
2.2.3 Social Responsibility Theory of the Press 36
2.2.4 Social Relations Theory 38
2.2.5 Games Theory 39
2.2.6 Conceptual Model of the Study 41
2.3 Review of Past Studies 43
2.4 Summary of Literature Review 49
2.5 Gap in Literature 50
CHAPTER THREE: METHODOLOGY
3.0 Introduction 52
3.1 Research Design 52
3.2 Population 53
3.3 Sample size and sampling Technique 53
3.4 Instrument of Data Collection 58
3.5 Validity 58
3.6 Reliability 59
3.7 Procedure for Collecting Data 59
3.8 Method of Data Analysis 60
3.9 Ethical Consideration 60
3.10 Post-Research Benefits 60
CHAPTER FOUR: DATA ANALYSIS, RESULTS
AND DISCUSSION OF FINDINGS
4.0 Introduction 62
4.1 Presentation of Results 62
4.1.1 Respondents’ Demographic Characteristics 63
4.1.2 Analysis of Research Questions 65
4.2 Test of Hypothesis 74
4.3 Report of Indepth Interviews 76
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 Introduction 90
5.1 Summary 90
5.2 Conclusion 93
5.3 Recommendations 94
5.4 Contribution to Knowledge 96
5.5 Limitations of the Study 97
5.6 Suggestion for Further Studies 98