CHAPTER ONE
INTRODUCTION
1.1. Background to the Study
The role of organizational ethics in the performance of corporate social responsibility in our nation can never be under-estimated. This is simply because corporate social responsibility is practiced because customers as well as governments today are demanding more ethical behaviors from organizations. However, understanding the landscape of organizational ethics can sometimes be difficult due to the fact that the field is vast and often encompassing such concerns as corporate governance, reputation management, accurate accounting, good labour practices and environmental stewardship, Sullivan (2009). The field addresses the entire scope of responsibilities that an organization has to each of its stakeholders (those who have vested interest in the decisions and actions of an organization like customers, clients, employees, shareholders, suppliers and the host communities).
According to Kashyapetal (2006), organizations are volunteering themselves to incorporate corporate social responsibility as part of their business strategies and mission statement, while taking care of the contradictory interest of various stakeholders. Another justification in favor of organizations that perform corporate social responsibility actions today is to gain competitive advantage which may not be enjoyed by the peer corporations. Corporate social responsibility actions in this respect also help organizations to attract and retain not only customers but also motivate employees, which in turn ensure long-term survival of the organization. Drumwright (2006) opined that organizations with sound corporate social responsibility actions develop positive social identity and enjoy increased loyalty from their customers, employees and host communities.
Corporate social responsibility actions are also often associated with better financial performance of the organizations. However this required long-term perspective but in a short-run, corporate social responsibility actions may be viewed as expense but in the long-run it is viewed as investment which will yield additional cash flows for the organizations. Similarly, Margolis (2001), averred that there is a positive relationship between corporate social responsibility and corporate financial performance. Corporate social responsibility actions have potential to create additional value for organizations. Corporate social responsibility combines both the social and environmental aspects in doing business. It is an approach whereby an organization considers the interests of all stakeholders both within the organization and in society and applies those interests while developing its strategy and during execution. Nolan, Norton (2009), posited that organizations with efficient and effective management of corporate social responsibility would create value for both themselves and the society. Apparently, an organization that is concerned about society as well as earning profits is likely to invest voluntarily in socially responsible activities thus ensuring its economic survival and that of the society. Organization ethics contribute toward the total well-being of the society within which they operate. They support local initiatives in an attempt to deepen their stakeholders’ role and to also show appreciation for the supports they have been enjoying in the host communities. For instance, it is believed that organizations such as banks should not only make profit but they should also consider the social implications of their activities to their stakeholders. This is because their unethical way of making profit can invariably affect the discharge of its corporate social responsibility. Any business organization that practice ethics are expected to derive the following advantages: generate greater drive and efficiency, attract high caliber of people and develop profitable relations with its constituencies.
1.2Â Â Â Â Â Â Â Â Statement of the Problem
Organizations in Nigeria are facing a myriad of challenges in fulfilling their corporate social responsibilities to their communities and other stakeholders. These challenges range from lack of accurate accounting practices, good labour practices, environmental stewardship, corporate governance and reputation management. However, corporate social responsibility demands a careful examination of costs and benefits. Some organizations, for instance, banks might have failed to recognize most of the stakeholders’ groups in their performance of corporate social responsibilities due to poor ethical values.
These poor ethical approaches may affect the way and manner banking organizations go about their corporate social responsibilities. This however, may impact negatively on the achievement of their objectives since the achievement of their objectives depends on the perception and patronage of their customers toward their services. Panic and consequential financial and economic woes could emanate from a situation where there is loss of confidence in the financial institutions by the stakeholders. Such lack or loss of confidence could be attributed to unethical management practices of banks in carrying out their activities. Apparently, ethical issues in organizations have become more complicated and complex because of the complexity of economic, social and environmental issues.
In spite of the acclaimed sound corporate governance in many organizations which ought to promote good ethical practices towards their stakeholders, some organizations for instance, banks are still lagging behind in providing satisfactory services to their stakeholders. No study has yet been seen to support this ethics in the UBA, Uyo. This study seeks to investigate if organizational ethics could enhance performance of corporate social responsibility in United Bank for Africa Plc. Uyo, Akwa-Ibom State.
1.3. Objectives of the Study
The main objective of this study is to investigate the relationship between organizational ethics and corporate social responsibility in United Bank for Africa Plc. Uyo, Akwa Ibom State. Specific objectives include to:
Assess the relationship between bank accurate accounting practices and performance of corporate social responsibility in United Bank for Africa Plc. Uyo, Akwa Ibom State.
Examine the relationship between good labour practices and performance of corporate social responsibility in United Bank for Africa Plc. Uyo, Akwa Ibom State.
Examine the relationship between bank environmental stewardship and the performance of corporate social responsibility in United Bank for Africa Plc. Uyo, Akwa Ibom State.
1.4 Research Questions
i. What is the relationship between bank accurate accounting practices and performance of corporate social responsibility in United Bank for Africa Plc. Uyo, Akwa Ibom State?
ii. What is the relationship between good labour practices and the performance of corporate social responsibility in United Bank for Africa Plc. Uyo, Akwa Ibom State?
iii What is the relationship between bank environmental stewardship and the performance of corporate social responsibility in United Bank for Africa Plc. Uyo, Akwa Ibom State?
