CHAPTER ONE
INTRODUCTION
Background of the study
The purpose of organisations in business is to deliver products and services for profit maximisation. When companies have achieved that goal, they feel the need to contribute through developmental projects as a way of demonstrating that they are socially responsible (Eweje, 2007). In a bid to fulfil this mandate, organisations hold in high regard the perceptions of the public. They embark on activities that boost the image of the company through publicity and community events (Zeithaml, Jo, & Bitner, 2009). These communication tools help in maintaining excellent relations with both their internal and external publics. A model proposed by Grunig and Hunt (1984) recommends a two-way symmetrical model as an effective way of enhancing good relationship with publics, resolving conflict and meeting the needs of stakeholders.
One way companies act in socially responsible ways is through Corporate Social Responsibility (CSR) interventions. CSR interventions are projects carried out in deprived areas where the local government has not reached out to, yet these interventions ease their burden and improve the standards of living. Turner (2008), therefore, defines CSR, as corporate behaviours that positively affect stakeholders and go beyond economic interest. The World Business Council for Sustainable Development (2006), as cited in Fontaine (2013), defines CSR as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” (p.112). According to Bronn & Vidaver-Cohen (2009), the globalisation of
the economy and the increasing pressure on communities to survive has created a lucrative environment for companies to perform this social role. There is high demand on multinational companies (MNCs) to demonstrate commitment and social responsibility to their consumers and disadvantaged communities. This goes a long way to help government in its development agenda. Accordingly, through CSR interventions, communities that lacked light for example, have received electricity supply. Those that lacked water have had their water needs met. CSR activities in developing countries like Ghana have contributed significantly to addressing developmental needs particularly in the area of education, health and provision of social amenities.
Evolution of CSR
Socially responsible business initiatives have a deep tradition in western countries where the concept of CSR emerged about 60 years ago. The practice is rooted in the relationship among employees, businesses and the state – a social partnership. Prior to this period, there were different standards and regulations in the areas of corporate governance, corporate ethics, and relationships with competitors, responsibilities towards the society and the country. However, between the late 1960s and 1970s leading U.S. and European companies started to come to an understanding of the need to unite different elements of corporate policies related to the relationship of the company with the environment, and to the development of a single integrated approach to interaction with society. Such a policy, was meant to be associated with the philosophy of the company, its marketing strategy, and the need to meet the expectations of society.
According to Katsoulakos et al. (2004), the evolution of CSR can be identified in three (3) phases beginning from the CSR Initiation Phase (1960 to 1990), the CSR Momentum Building Phase
(1990 to 2000) through to the third phase which is the Mainstreaming Initiation Phase (in the 2000).
The first phase in the 1960s began with a company called Goyder’s Responsible Company in the United Kingdom (Ramathan, 1976 and Katsoulakos et al., 2004). The issues tackled in this phase included environmental issues such as climate change and global warming. Thus, there was the need for companies to develop economically sustainable projects at the time. Subsequently, within the same phase, in the 1980s, prevailing issues were poverty, population pressure, and social inequity among others. During the period, the principles of sustainable development and how these could be measured emerged for the first time with the introduction of the Brundtland report, published in 1987 by the World Commission of Environment and Development. This report highlighted the need for countries to unite in order to pursue sustainable development together. When it came to adopting and reporting practices, most companies at the time recognized the solution to curbing their ecological issues by introducing environmental management systems and quality systems.
In the second phase, the most dominant issue identified in the 1990s was sustainable development in the area of education and the environment. Universities trained teachers and decision makers in promoting eco-friendly attitudes in sustainable development. From then, more and more companies produced reports on the environment to include communities, from which the concept of sustainability reports emerged. In this era as well, some reporting initiatives were formed notably, ‘learning through stakeholder engagement.’ These initiatives were not to suggest what was to be reported on but rather how things were to be reported.
The third phase started in the early 2000 and it elaborated several government initiatives on CSR which sought to improve what began in the previous phases. That year, the UK government, for
example, released its first report on sustainable development towards achieving a better quality of life. In 2001, the World Summit for Sustainable Development generated commitments for action and partnerships in attaining desirable results for alleviating poverty and environmental degradation. In 2003, USA adopted a programme called Commission on Sustainable Development which gave in-depth attention on specific issues that affected the global community. These issues focused on sanitation, water and human settlements.
In 2010, the International Organization for Standardization (ISO), launched the 26000 Voluntary Guidance on Social Responsibility. Figure 1 below illustrates the seven core principles of ISO 26000.
Figure 1
The Seven Core Principles of ISO 26000. Adapted From “CSR Standards and Guidelines: An Analytical Review” by Alpana, 2014, IOSR Journal of Economics and Finance (IOSR-JEF) E- ISSN: 2321-5933, P-ISSN: 2321-5925.Volume 3, Issue 4. (May-June 2014), pg. 54.
In the light of these core principles, companies are expected to work in tandem with stakeholders, notably, in the case of Ghana, key members of the community such as assemblymen, opinion
leaders, head teachers, Imams and pastors. The 26000 Voluntary Guidance on Social Responsibility applies to all types of organizations, irrespective of their size and location. It aims at helping firms operate in socially responsible ways in order to meet the needs of the society.
This study interrogates beneficiaries’ responses to MTN Ghana Foundation’s activities with the view to ascertain the extent to which the Foundation involves the community where its projects are located. The study sheds light on the values that MTN attaches to the core principles of CSR, particularly the principle of community involvement and development and human right. The community thus has a right to participate in projects for their well-being.
CSR in Ghana
Ghana’s first president, Dr. Kwame Nkrumah constructed many State-Owned Enterprises (SOEs) that were geared towards resolving developmental challenges the country faced and improving standard of living and social well-being. However, since independence in 1957, Ghana has been unable to address emerging developmental problems such as energy, education and health. Scholars have attributed Ghana’s development problems partly to increases in population growth, low per capita income, inflation and low productivity (Amponsah-Tawiah, & Dartey-Baah, 2011). Economic and political liberalization in Ghana since the early 1990s opened the way for development agencies and Multinational Companies (MNCs) to support national efforts at addressing development problems. Most MNCs have since been engaged in CSR activities in the country including telecommunication, mining, manufacturing, insurance and banking.
To encourage such initiatives in Ghana, the Ministry of Trade & Industry in 2011, instituted the Ghana CSR Excellence Award (GHACEA). The awards scheme identifies, verifies, evaluates and rewards companies whose CSR activities achieve the most impact. GHACEA Awards
Scheme categorises the various CSR activities by every sector and eventually awards the best CSR Company of the year. Categories include CSR Company of the year, CSR Practitioner of the year, CSR CEO of the year, CSR Telecom of the year, CSR Bank of the year, CSR Insurance Company of the Year, CSR Manufacturing Company of the year among others.
On 23rd September, 2016, MTN was adjudged the overall best CSR Company of the year. MTN provides telecommunication services in all ten (10) regions in Ghana. In 2007, MTN set up a foundation – MTN Ghana Foundation, aimed at brightening the lives of people. In this study, we explore responses and reactions of beneficiaries to CSR activities in the area of education undertaken by MTN Ghana Foundation in two communities.
MTN Ghana Foundation & CSR
MTN Ghana Foundation is a separate legal entity managed by a five-member Board of Directors offering leadership and direction in undertaking CSR projects. The financial status of the Foundation is accrued from 1% of profit after tax allocated to Corporate Social Investments. Since its establishment, the Foundation has undertaken a number of projects specifically in the areas of health, education, and economic empowerment in all the ten regions of Ghana. According to MTN Ghana Foundation, all these three target areas for social impact are taken from the Sustainable Developmental Goals (SDGs) which emphasizes the promotion of healthy living, inclusive and equitable quality education and full and productive employment for all (2030 Agenda for Sustainable Development, 2015, pg. 12).
The Sustainable Development Goals (SDGs), also known as the Global Goals succeed the Millennium Development Goals (MDGs) in eradicating poverty, promoting peace and prosperity and the protection of the planet globally. In February 2016, former president, John Dramani Mahama, launched the SGDs in Ghana and the need for stakeholders to adopt these goals for the
betterment of the country. Sustainable Development Goal 4, enumerates quality access to education globally from lower to higher levels of education (at all levels).
SDG goal four (4) states:
- By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and effective learning outcomes.
- By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university.
- Build and upgrade education facilities that are child, disability and gender sensitive and provide safe, nonviolent, inclusive and effective learning environments for all.
