LITERATURE REVIEW CORPORATE SOCIAL RESPONSIBILITY THEORY.

LITERATURE REVIEW

1.0            IntroductionL

2.0            This chapter deals with Theoretical Framework, Conceptual Review and Empirical Review

2.1 Theoretical Framework

          The theory for this study hinge on the corporate social responsibility theory, this theory emerged in 1947 following the report of the Hutchins commission, which was set to look into the abuses of press freedom by media workers. The commission was set up on the reason that freedom without responsibility leads to abuse. The concept states that the media shall be free from government interventions, but at the same time responsible to the society. Government can only interfere where the media fail. Thus, corporate social responsibility theory, in the views of Kunczik

(1998):

Is a response to the recognition that one had hoped in vain for self-regulation and self-control of the media market The double functions of private enterprise mass media, to make profits and to serve their advertisers is serving the public, was met only one-sidedly. As a rule the public got the worse of the bargain.

          This theory is based on the fact that freedom carries concomitant, responsibilities and obligations which includes amongst others, those derived from the freedom of the press. This theory is based on the principle of give and take. It states that organization should see itself as indebted to its public in the perspective of being socially responsive to their needs, which is what corporate management is all about.

          For the public to be better served, the media should be guided by certain principles. Those principles are summarized by McQuail (1957) thus:

i.                   The media should accept and abide by certain obligations to the society.

ii.                 Based on the above principle, the society has the right to expect the media to maintain high standards of performance.

iii.              Accountability of media workers should be to members of the public, the employer and the market.

iv.              The media should operate within the framework of law and rules set by the appropriate institutions for them to effectively carryout their responsibilities.

v.                 That media should pursue and hold onto informativeness, truth, accuracy, objectivity and balance.

          The ethical theory thus, hinges on these principles that express the right thing to do or the necessity to achieve a good society as well as cementing the relationship between business and society. Every business corporation owes a duty to the community and some of its resources should be deployed to promote their welfare of the society. This notion is based on good ethical principles.

2.2 Conceptual Review

2.2.1 The Concept of Corporate Social Responsibility

          Social responsibility refers to the business organization’s actions that are taken at least beyond the organization’s direct economic and technical interest. “Concern for social responsibility has risen as society’s expectation of corporate activity has become increasingly ambivalent in the midst of this uncertainty; corporations have sought to improve their internal machinery of effecting reasonable response to societal expectations.

          The point must be made that scholars are divided on their perception of the obligations of firms to society. Theodore (2008) posit that, it is not the business of companies to be socially responsible at the expense of their shareholders. In what seems to be a tacit support for this position, Milton (2008) stressed that there is one and only social responsibility of business, to use its resources and energy in the activities designed to increase its profit so long as it stays within the rules of the game.

          A corollary to the above is Mill’s position that the corporation should not fashion out ways of being too good, it should not seek to develop the qualities of a natural person, such as goodness and charity. Companies are not created to be charitable to their external communities, they are created to do business, and through the process, to create wealth for their employees, shareholders, the tax man and through him the community at large.

          To be sure, these are extreme positions in the light of reality. This probably explains Paul Samuel’s position when he enjoined companies to engage in social responsibility because they are functionaries in the society they contribute to the complex nature of society and help in creating certain problems. Increasingly, people are realizing that business organizations are corporate citizens, with rights, obligations and responsibilities. In fact, business organizations are not independent of society but are part and parcel of it (Fregene, 2006).

          Business has no market for its product expect that provided by community, local or global. Business must look to society for its fundamental purpose of business to produce and distribute goods and social calculations of firms. Fregene (2006), has shown that there is an iron law of responsibility, which states that in the long run those who do not use power in the manner the society considers responsible will loose it. The oil firms must be responsive to the needs and desires of their host communities. The oil firms in Nigeria appear to have weighed this option in their dealing with their host communities, but within the oil industry, corporate social responsibility is a much abused concept. This is particularly so because of the diverse perception of corporate responsibility by oil firms and oil bearing communities.

          The oil firms appeared to have much to show in their corporate social responsibility in the Niger Delta in the sphere of provision of infrastructures and community development projects. These projects include providing and maintaining basic amenities for communities, such as portable water, roads and market stalls. For example, in 1988 Annual Community report detailing the policy thrust of its community relations and achievements in this regards. Shell claimed her community spending intensified by some 37percent to $43.0 million, above the normal rate, this which was due to significant number of high value projects.

          The high value projects spanned educational health and energy sectors. What of course is not mentioned in Shell’s report is the fact that several of the projects were indeed never executed and, even when they were, they either did not function at all or they functioned improperly. Moreover, while Shell claimed a 37percent rise in community spending, we are not told what the amount represents in relations to its revenue from the area during the same period. The claim of Shell connotes a kind of proactive response to the yearnings of the people contrary to this however is the fact that this period coincided with the period of the low intensity in the Niger Delta as epitomized by the Ogoni crisis which dove-tailed into virtually every part of the Niger Delta thus the so called high value projects were mere reaction to an otherwise sordid situation.

          It appears the main objective of the data on community development project is to portray the image of the oil companies as organizations that have high sense of social responsibility and concern for their host communities.

          However, as Fregene (2006), has acknowledged, while Chevron produced oil worth US$ 2.30 billion from Itsekiri land, the value of community assistance projects is next to nothing. In the extreme, there are indications that in order to maximize the public relations effects of projects, some of the figures are critically inflated.

          The 1996 community budget of Shell included US$7.4million spent on roads. However, the company advert brochure failed to mention that the oil companies required road for access to oil fields and locations. It is hardly debatable that the roads constructed by the oil firms serve their interest more than the rural communities as their heavy-duty trucks normally traverse these roads. It must be pointed out that most of these roads by-passed villages. They also do not serve as thorough fares to the villagers as they are private roads with intimidating caution signs. In any case, Brunner (2007) points out; the cost of developmental projects can be offset against tax. Expectedly the oil companies have an economic motive to increase their figures for expenditures, a position that Shell refuted. The effectiveness of these projects is limited in a number of ways, as the development projects have failed to satisfy the desire of the people. The independent report commissioned by Shell for example to examine her community development projects reveals that less than 60% of these projects are successful. Prom the report it is obvious that Shell has made attempt to carry out some social responsibility, but this has not gone far enough.

          The oil firms have also been concerned with improving the health status of the people of the Niger Delta. This they have done by providing community medical services through building, staffing and equipping health centres. In 1986, Shell presented a standard operating table to the Baptist Hospital, Eku. A number of government shoptalk were refurbished. They include the general hospital at Sapele, Ozoro and Agbarho. The apparent absence of social infrastructures in the region, oil companies are priding themselves of having provided so much for the oil producing communities. What is worse is that most of these amenities provided are apparently inadequate. Besides, they function only a few months after the noise of the initial commissioning. For example, the Utu-Jeremy clinic commissioned by Shell in 2000 lacked the basic facilities for its effective functioning (Brunner, 2007).

          The oil firms also attempted to encourage local skills in the Niger Delta. They tried through diverse efforts to pay attention to   development and modernization of occupations that are indigenous to the people. One of the key crops of this region is cassava. To this end, between 1988 and 1Q91, millions of naira was spent on the establishment of modern cassava facilities. Some of these factories employ modern and scientific methods in processing cassava into garri. An ancillary to this is the provision of cassava cuttings, pineapple suckers, yam seedlings, plantain suckers and oil palm seedlings to farmers at subsidized rates.

          It must be noted that the Agbarho farm centre comprising seed multiplication and research centres has been making improved variety of cassava cutting available to farmers. Periodic training are held with farrs by extension workers who educate and advice farmers on new agricultural techniques.

          Possibly, in an attempt to whittle down youth unrest in the region, the oil firms have also engaged in the employment of idle hands through skills acquisition. The SPDC initiated the youth development scheme. It was conceived as a means of channeling the energy of youths in oil producing communities to engage in gainful economic activities through the acquisition of entrepreneurial, usable and marketable skills that would make them relevant to themselves. The trainee are attached to master trainers who could be paid by Shell.

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