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CORPORATE SOCIAL RESPONSIBILITY AND HOST COMMUNITY
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CORPORATE SOCIAL RESPONSIBILITY AND HOST COMMUNITY RELATIONS A STUDY OF SHELL NIGERIA PLC PORT HARCOURT
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Effective host community relations can only be achieved when an organization recognizes its interdependence with other institutions. When
the management recognizes the many ways its organization can impact on the local community and the extent of reciprocal dependence, it
will help to establish social balance. The practice of good community relations assists the organization in securing its needs from the
community while it also provides what the community expects. Also, it helps to secure the company’s investments, increase sales of
products, the value of stocks, and improve the general operating climate of business.
Community relations are not about window dressing; rather, it is about protecting the host community. As Baskinm (1997) point out, even
the staff of the organization would be productive when proper community relations is carried out. Considering the fact that most of the staff
of any organization live in that community, any improper or inconsiderate attitude displayed by the management can endanger their lives,
as can be seen in the kidnap cases in the Niger Delta. One of the ways an organization can have good relationship with host communities is
by practicing corporate social responsibility. Corporate social responsibility is a nebulous concept that has been described in a number of
ways; it is widely used in literature of sociology, anthropology, economics, politics and business administration. Most writers on corporate
social responsibility see the concept as the disposition of an organization to exhibit ‘missionary’’ rather than “mercenary’’ attitudes toward
the society. Corporate social responsibility in relation to business is the obligation of a business organization to pursue those lines of action,
which are desirable in terms of objectives, and values of society. (Lawal & Sulaimon, 2007) defined it as ‘’ intelligent and objective concern,
which restrains individual or corporate behaviour from ultimately destructive activities, no matter how immediately profitable, and leads
to the direction of the positive contribution to human betterment. Presumably, corporate executives as agents of the owners are to be
responsible for conducting the business in accordance with the desire of the owner while conforming to the basic rules of the society. The
responsibility has three broad facets (Ikpeze, 2001).First, contribution to charity. Second, elimination of social costs. The third facet of
social responsibility is the adoption and observance of ethical codes aimed at reducing business malpractices.
Oil exploratory firms in Nigeria and other types of business must be seen in many actions domains can pursue social responsibility in areas
such as: concern for ecology and environment, commitment to quality, truth in advertisement, customer satisfaction and education. Other
concern include service to community needs, fair employment practices, progressive labour relations, employment assistance and
corporate philanthropy.(Ogbeuchi, 2008). This study proxies corporate social responsibility with economic, legal, ethical and discretionary
responsibility while host community relation was proxies with three non-financial outcomes associated with Shell Nigeria PLC namely;
Adaptability, community involvement and community opinion.
1.2 Statement of the Problem
The purpose of this study is to investigate corporate social responsibility and host community relations. 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 return on them.
This study attempt to understand which CSR elements have the ability to influence the corporate reputation. The study also attempt
employees’ perception on their organization’s 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’ perceived corporate
image that can affect their commitment to their organizations well as host community relations (Ikpeze, 2001). From the foregoing,
therefore this study seeks to examine the relationship between corporate social responsibility and host community relations in Shell Nigeria
PLC Port Harcourt, Rivers State.
1.3 Objectives of the Study
The main objective of the study is to examine the relationship between corporate social responsibility and host community relations in
Shell Nigeria PLC Port Harcourt. The following objectives are to be achieved:
i. To examine the relationship between economic responsibility and host community relations in Shell Nigeria PLC Port Harcourt.
ii. To examine the relationship between legal responsibility and host community relations in Shell Nigeria PLC Port Harcourt.
iii. To examine the relationship between ethical responsibility and host community relations in Shell Nigeria PLC Port Harcourt.
iv. To examine the relationship between discretionary responsibility and host community relations in Shell Nigeria PLC Port Harcourt.
1.5 Significance of the Study
One of the main reasons this study is being conducted is because society’s expectation on organizational CSR effort is gaining momentum
and fast becoming a standard business practice. Many organizations have started implementing CSR as part of their organization practices
as well as to fulfill their legal obligation. However, in order for CSR to be effective and bring to bring value to the organization (such as
improving the corporate image and employees commitment), organization and employees’ need to have a deeper insight to the benefit of
investing in CSR prior to embarking on this time consuming, resources demanding and costly project.
This study is also significant because it has been able to unveil the roles of corporate social responsibility and host community relations in
Shell Nigeria PLC Port Harcourt.
1.7 Scope/Limitation of the study
The study is delimited under the following heading: content scope, geographical scope and unit of analysis.
Content Scope: The content scope of this study involves an investigation to ascertain the relationship between corporate social
responsibility and organizational effectiveness. The independent variable is corporate social responsibility measured by Economic
responsibility, Legal responsibility, ethical responsibility and discretionary responsibility. While dependent variable is host community
relations, measured by community relation, Adaptability, Community Opinion and Community Involvement.
Geographical Scope: This study is delimited in Port Harcourt Metropolis with special reference to Shell Petroleum Development Limited in
Port Harcourt, Rivers State.
Unit of Analysis: The unit of analysis in this research involves the individuals at the time of carrying out the study.
In carrying out an investigation of this nature the researcher must of necessity be faced with the following constraint; Time, poor response
from respondents and finance.
This study involves an investigation of corporate social responsibility in relation to organizational effectiveness. Hence it is a micro
level study
CORPORATE SOCIAL RESPONSIBILITY AND HOST COMMUNITY RELATIONS A STUDY OF SHELL NIGERIA PLC PORT HARCOURT
CORPORATE SOCIAL RESPONSIBILITY AND HOST COMMUNITY RELATIONS A STUDY OF SHELL NIGERIA PLC PORT HARCOURT
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