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THE
EFFECTIVENESS OF REGULATIONS OF CORPORATE SOCIAL RESPONSIBILITY IN MTN NIGERIA
CHAPTER ONE
INTRODUCTION
Chapter
Overview
This
introductory chapter discusses the background to the study, statement of the
problem, aim and objectives of the study, research questions, scope, limitation
of the study and the significance of the study.
Background
to the Study
Globally,
organizations are concerned with value re-investment to the society in
appreciation of the contributions of the society to their growth, survival and
continuity. Our attention is further directed to the potential consumers as
well as non-consumers of corporate offers (products) as marketing concept and
philosophies are integrated into societal marketing which is explained as a
means of achieving desired level of social responsibility (Oko and Agbonifoh,
2014).
Public
relation is the management function that identifies, establishes and maintains
mutually beneficial relations between an organization and the various publics
on whom its success or failure depends (Broom, et al, 1994). The British
Institute of Public Opinions says that “public relations are a deliberate,
planned and sustained effort to establish and maintain mutual understanding
between an organization and its publics.’ Public relation is a distinctive
function of management that helps create a communication bridge, a mutual
acceptance and cooperation between an organization and its external
environment, a convergence between own structure and own image, as well as
maintaining theses relations(Harlow, 1976). One major way to identify,
establish and maintain a mutually beneficial relations is through Corporate
Social Responsibility.
Given this
as the thrust of operations, corporate attention is increasingly being given to
issues like equal employment opportunity, thus it is easier for corporation to
be re-oriented to corporate social responsibility philosophies. In Nigeria,
consumers are unwilling to sacrifice convenience and pay higher prices for
products in order to protect the environment as they either lack the knowledge
or have no access to information which will enable them make informed decisions
in dealing with their purchase, use and disposal of these products; pollution
control; energy, natural resources conservation; consumers’ and workers’
protection. Businesses thus operate on the philosophy of maximization of
positive effects of their activities on the society as the negative impacts of
these activities are minimized. The core principle of corporate social
responsibility is considered as an obligation among businesses in the advanced
societies around the globe (Oko and Agbonifoh, 2014).
Since the
advent of mobile telecommunication into Nigeria arising from deregulation and
liberalization of the economy in 2001, the Global System for Mobile
Communication (GSM) industry have been responsible for the employment of
millions of Nigerians, either as distributors or retailers of phones, recharge
card vendors or phone repairers. This sector has in no small way boost the
country’s economy and engaged a huge number of the previously unemployed folks.
As the most active sector in the Nigerian economy, the corporate social
responsibility role expected from the operators cannot be over-emphasized.
According to Altschuller and Smith (2011), stakeholders expect companies to
manage the social and environmental impacts of their operations. Given the
impact of the GSM advent into Nigeria, the wide acceptability of this mode of
communication, the role it plays in the Nigerian economy, CSR ought to be taken
seriously by the mobile communication service providers. CSR should be
willingly dispensed by these organisations instead of it being enforced on them
by the law, governments, civil rights groups or the communities. Onwuegbuzie
(2009) argued that CSR is the deliberate inclusion of public interest into
corporate decision making and the honouring of a triple bottom line of people,
planet and profit. In other words, CSR policy entails self-regulation,
adherence to rules and regulations, ethical standards, environmental
responsibility and sustainability, consumers’ satisfaction, employee welfare,
communities and stakeholders’ benefits.
Some years
back, the concept of Corporate Social Responsibility (CSR) has been a very good
strategy for most business organization to escape in a highly competitive
market environment. In a situation where there is a variation and unstable
scales of preference from the consumers, the Corporate Social Responsibility is
therefore the most applicable tool in order to survive. In the event of
Corporate Social Responsibility, most company tends to reduce their operating
cost for been socially and environmentally responsible. A company being
socially responsible tends to gain the attention of more customers and increase
its market share. CSR makes the company more visible while it also serves as a
medium by which the company communicates to the public (Lawrence and Webber,
2008).
In order to
grow the Nigerian economy, the telecommunication industry, was deregulated
thereby appropriating the private-sector a dominant role in the economy.
Private sector participation is preferred because it offers operational
efficiency in the delivery of products/services and possesses workable ideas
for sustainable development (Hassan, 2011). Government realized it cannot grow
the economy alone; it therefore provided the enabling environment for
deregulation policy in Nigeria. For deregulation exercise to achieve its policy
objectives, the government put in place a sound legal and regulatory framework
to safeguard and strengthen the Nigerian Business Environment (NBE). Analysts
stated that quality regulations are necessary in business environment to compel
corporations to act responsibly within the ambit of the extant laws as well as
protect property rights, guarantee citizens’ wellbeing and create an enabling
investment environment in line with international best practices (Braithwaite
and Drahos, 2000). Several of these laws/regulations prescribe minimum
obligations for corporations as corporate citizens; and as well demands for
social/environmental reporting for the purposes of averting corporate excesses,
executive abuse and other widely reported corporate misbehaviours in the
literature (Campbell, 2007).
To some
scholars, CSR regulations could elicit positive compliance and effective
social, financial and environmental reporting from corporations (Hart, 2012).
In support of more regulation, McBarnet (2009) reports that In the European
Union, Socialists and Green Members of Parliament (MEPs) have argued against a
purely voluntary policy on CSR and urged the European Commission to impose
binding rules on corporations as opposed to voluntary compliance. However, the
view of CSR regulations is considered needful, but its effectiveness is in
doubt; to imagine that regulations might make business responsible for
corporate social responsibility is paradoxical and elusive. Osuji (2011) adds
that the weakness of regulations in eliciting compliance in the face of growing
gross misconducts and corporate corruption of multinational corporations (MNCs)
question the fluidity of the regulation of CSR relationship.
With regards
to regulations, there are three domains of CSR regulations, namely
self-regulation, government regulations and international regulations (UN
Global Compact, 2014). Self-regulation expects voluntary compliance by
corporations on social involvements and reporting. When self-regulation failed,
government regulations emerged to compel corporations to comply with binding
laws on business operations, environmental reporting and disclosures, as well
as engaging in dialogue with all stakeholders across board. Government
regulations take the form of intervention by the states by formulating laws on
health and safety, labour standards, consumer protection, host community
rights, sustainable business operations, environmental reporting and
stakeholder management etc. The third level of regulation called International
Regulations emerged to complement the two previous domains of regulation
(Raimi, Adeleke, Aljadani and Fadipe, 2014).
The
International Regulations are typically policies, protocols, conventions and at
times laws made by institutions like International Labour Organization (ILO),
United Nations (UN), Organization for Economic Co-operation and Development
(OECD) etc, to provoke compliance from multinational corporations and large
indigenous corporations on international standards and best practice on
business. The United Nations for instance developed minimum ethical standards
for corporations called 10 Principles of UN Global Compact which strengthens UN
goals (UN Global Compact, 2014), while ILO and United Nations Children’s Fund
(UNICEF) have developed conventions on Child Labour, Forced Labour and
Enslavement for employment purposes. However, with reference to Nigeria, the
Environmental Law Research Institute (2011) identifies at least twenty-seven (27)
extant regulations providing direct and indirect support for CSR and SR.
Attention to CSR compliance from viewpoint of regulations is described as
‘theory of responsive regulation’ (Shamir, 2010).
Many
organizations in Nigeria are driven by the greedy need to make more profits
even at the detriment of the stakeholders. Some do not adequately respond to
the needs of host communities, employees’ welfare (cheap labour often
preferred), environmental protection and community development. Research has shown
that CSR can increase profitability, sustainability, integrity and reputation
of any business that includes it in its policy. Nkanga (2007) posited that CSR
involves the commitment shown by companies to contribute to the economic
development of a local community and the society at large. It is a common
practice by Nigerian organizations to put as one of their mission statements
the provision of corporate social responsibility. The organizations must have
realized that stating CSR as one of their mission statements hold special
appeal to the stakeholders. Hence, there is an increasing awareness and
recognition accorded CSR by corporations.
MTN Nigeria
is a leading mobile telecommunications company in Nigeria. The vision of MTN is
“to be the leading provider of telecommunications services in Nigeria with a
mission to provide first class network quality, customer service and value”
(MTN, 2012). The company’s CSR programmes as published on its website and
publications cover: health, economic empowerment, education and environmental
sustainability. The performance of MTN with respect to CSR has earned it a good
reputation and appellation of “The No .1 CSR telecommunication company” in the
Nigerian telecommunication landscape.
MTN Nigeria
is a part of the MTN Group, a South Africa based company which was licensed on
February 9, 2001 as a GSM operator in Nigeria and on May 16, 2001, it became
the first GSM network to make a call in Nigeria. As of February 10, 2003 MTN
became the first mobile company to record one million active subscribers on its
network and by June 30 2010, the subscribers’ base of MTN had risen to 35
million. National Bureau of Statistics quarterly report for the first quarter
of 2016 indicates MTN accounts for 38% (57.04 million subscribers) of active
mobile subscribers in Nigeria. MTN is a major operator in the Nigerian
telecommunications industry that provides network coverage to 85.24% of
Nigeria’s land mass. MTN has been a catalyst for Nigeria’s economic growth and
development especially through the MTN Foundation, through which it has been
executing projects spanning the education, health and economic empowerment
sectors in Nigeria (Bolajoko and Jagun, 2013).
1.2 Statement of the Problem
The mobile
telecommunication industry in Nigeria is currently going through intense
competition as several communication companies (MTN, Globacom, Airtel, 9mobile,
Visafone, Starcomms amongst others) jockey for fair share of market space.
Consequently, it would not be out of place for communication firms to device
strategies and programmes capable not only to contend with the forces of
competition, but also to achieve and sustain competitive advantage. Beside the
well-known generic strategies dominating the literature, telecoms companies
globally are currently considering socially responsible behaviours as a viable
strategy with a view to winning and sustaining customers’ patronage.
In Nigeria,
interest and research on CSR have recently been (upbeat) following the
aftermath of the Niger Delta crises involving multinational oil firms. Most of
these studies have focused on multinational oil and gas companies. They have
ignored multinational and indigenous communication companies. This study
explores the current meaning and practice of CSR in Nigeria with emphasis on
health and education strategies of MTN Nigeria. This study examines the
effectiveness of regulations of corporate social responsibility in MTN Nigeria
and whether MTN Nigeria is concerned about improved staff working conditions,
improved work environment and community wellbeing through CSR.
1.3 Aim and Objectives of the study
The main aim
of this study is to examine the extent of MTN Nigeria involvement in corporate
social responsibility activities. Other specific objectives are to:
Identify the
factors that influence MTN Nigeria involvement in CSR activities;
Appraise the
corporate social responsibility programmes on education by MTN Nigeria;
Investigate
the effect of health focused CSR activities of MTN Nigeria;
Examine the
effect of government policy and priority on MTN Nigeria; and
Scrutinize
the impact of CSR activities on MTN Nigeria performance.
1.4 Research Questions
The
following research questions shall be considered in this study:
What are the
factors influencing MTN Nigeria involvements in CSR activities?
What are the
effects of corporate social responsibility programmes on education by MTN
Nigeria?
To what
extent does MTN Nigeria contribute to CSR on health?
What are the
effects of government policy and priority on MTN Nigeria?
What
benefits does MTN Nigeria get from performing its corporate social
responsibility?
1.5 Scope and Limitation of the Study
The study
focuses on two aspects of corporate social responsibility in MTN Nigeria.
Specifically; on health and education.
The
researcher’s intended to investigate the practice of CSR in MTN Nigeria as a
whole but due to time, availability of materials and information as well as
their adequacies, the researcher is limited to study only the MTM corporate
social responsibility on health and education. Getting information from the
staff of MTN Nigeria may pose a great limitation to this study due to various
privacy policies and non-disclosure of vital information. However, despite
these limitations, efforts will be made to provide a detailed research work on
the subject.
1.6 Significance of the Study
There has
been debate over the benefits of social service of organizations; writers argue
that corporate social responsibility is for community development while others
are of the opinion that it is a profit-making gimmick by organizations. The
current study exposes the various strategies with which MTN should respond to
social issues to its stakeholders. It helps to explore the impact of corporate
social responsibility on stakeholders, if indeed, there is a relationship
between MTN and these stakeholders. The study also reveals the perception of
the beneficiaries of the corporate social responsibility of MTN towards the
company.
The study
generates ideas which could lead to improvement in the level of corporate
social responsibility. The findings could also stimulate further studies on
corporate social responsibility in Nigeria most especially for MTN Nigeria. The
importance of this study also lies in the fact that it throws more light on the
types of corporate social responsibility in MTN Nigeria. The study however,
increases the volume and the quality of the available studies on CSR in the
telecommunication sector in Nigeria.
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