Impact of Corporate Social Responsibility (Csr) on Employee Loyalty and Retention (a Case Study of Mtn)

Chapter One of Impact of Corporate Social Responsibility (Csr) on Employee Loyalty and Retention (a Case Study of Mtn)

 

INTRODUCTION

Background to the Study

Corporate Social Responsibility (CSR) is an idea dependent on the possibility that corporation should be responsible for all of their stakeholders liable for the entirety of their partners who engaged with the business forms so as to profit the general public (Freeman, 1984). The aim is to take positive impacts to deliver positive effect towards the general public over the normal business. CSR can be depicted as the proceeding with responsibility by a business to act morally and add to financial improvement while improving the quality of life of the workforce and their families as well as local community and society at large.

Along these lines, CSR has become a significant part in a large portion of the organizations. Being a good citizen is a significant part of the corporate personality, qualities and vision. It has been characterized in a few different ways. CSR is activity with respect to the firm that seem to progress, or beyond the immediate interests of the firm and its shareholders and beyond that which is required by law (Waldman, Siegel, and Javidan, 2006). Other than this definition, CSR likewise been characterized as the setting explicit hierarchical moves and policies that make into account stakeholders’ desires and the triple primary concern of economic, social and environmental performance (Zedeck, 2011).

In light of the finding from World Economic Forum study of CEOs and pioneers, (Voice of the Leaders Survey) corporate brand notoriety outranks budgetary execution as the most significant proportion of progress. Organizations with public commitment to morals perform better on monetary measure which by and large; has 18% higher benefits (Gupta and Sharma, 2009). CSR is one of the manners in which an organization accomplishes a balance or integration of economic, natural and social objectives while simultaneously met the desire of investors and partners (Gupta and Sharma, 2009).

Under globalization, social, economic and political issue can be converging into each other and same applies to the solution. Accordingly, CSR has risen as an unavoidable need for business people and a reaction to new conditions, new difficulties and new open doors for a sustainable business (Gupta and Sharma, 2009). There are a lot of studies identified with CSR that had been done, research found that 181 articles have been distributed in top-level journals with about half being distributed since 2005 (Aguinis and Glavas, 2012). Dominant part of the research in CSR has been basically engaged at the institutional and organizational levels with an emphasis on the effect on external stakeholders (Aguinis and Gllavas, 2012).

Employee retention is one of the basic capacities under human resource management. It alludes to the methods and techniques utilized by the management to enable the workers to stay with the organistaion. Employee retention procedures include motivating the employees to guarantee they adhere to the organisation for the most extreme time and contribute successfully. Be that as it may, employee retention has gotten one of the significant worries in organisations. Employees that had been prepared tend to leave their organisations for better possibilities which incorporate worthwhile compensations, agreeable timings, better condition and better careerl success.

Worker turnover can be baffling particularly when the departures are sudden or unexpected and making the management to invest valuable efforts and exertion to enlist, select and train new replacement employees (Buck and Watson, 2002). Hence, it is significant for the human resource management to actualize some efficient plans to improve employee retention and loyalty so that the trained and experienced employee will stay in the organisation to give their best to the organisation to the extent that this would be possible. View of organisations being fair towards and caring for well-being of the employee directly have been found to be related to job satisfaction, organizational commitment, evaluation of authority, organizational citizenship behaviours and performance (Colquitt et al., 2001). Aside from that, employees will be affected by view of what the organisation is doing to others notwithstanding perception of how the employee is directly treated.

CSR has been seen as positively identified with employee performance (Jones, 2010) and loyalty (Maignan, Ferrell, and Hult, 1999). In addition, CSR additionally increases the appeal to prospective employees, (Greening and Turban, 2000), commitment (Glavas and Piderit, 2009) and identification with the organization (Carmeli, Gilat and Waldman, 2007). Aside from that, CSR additionally improve creative involvement (Glavas and Piderit, 2009), employee connections (Agle, Mitchell and Sonnenfeld, 1999) and furthermore employee retention. CSR will assist with improving the workplace in numerous viewpoints. Efficient CSR can assist with upgrading the feeling of belongingness in employees, improved loyalty and motivation, better profitability and therefore lead to higher employment fulfillment and expanded in consistency standard. This study will examine the impact of Corporate Social Responsibility (CSR) on employee retention and loyalty by using MTN Nigeria as a case study.

Statement of the Problem

Despite the level of involvement of organisation in Nigeria in CSR, majority of the organisations in Nigeria are not sensitive to social, economic and the physical environment (Hohnen, 2011). Local companies do not take CSR seriously for either ethical or strategic undertaking beneficial to their operations. Moreover, the organisations operate in a poor economy which makes it difficult for organisation to have the necessary funds and resources for CSR availed. It ends up cheaper for organisations not to engage in CSR (Kioko, 2008).

Carroll (2012) stated that there are four elements necessary for business to state that they are socially responsible. These are legal, philantropic, economic and ethical responsbilities. Corporate social responsibility offers ways in which organisation can maintain positive reputation in the society in which they operate in as an organisation strives to attain impact on the stakeholders lies in the investment in both the external and internal stakeholders as not all the investment can be accredited monetarily but could have other values of benefit for the organisation (Lichtenstein, et al., 2010).

There are a number of studies that have been examined by various researchers on CSR. Yeomans (2005) studied social responsibility on development of 30 major international banks and found out that the development of brand of the bank is through the creation of a positive image in front of stakeholders. Tsoutsoura (2004) researched on the relationship between corporate social responsibility and financial performance and the findings indicated that CSR is positively related to better financial performance and this relationship is statistically significant, supporting, therefore the view that firms which have solid financial performance have more resources available to invest in social performance domains. Vollmert (2007) studied on the impact of corporate social responsibility have to students’ propensity to apply and purchase of products and the findings indicated that socially responsible behaviour of companies has an impact on students’ applying and buying behaviour and therefore on the attractiveness of companies.

The extensive researches of CSR in the banking sector suggest that the banking sector may be perceived by the general public to be socially responsible in all sense. With the high number of studies on CSR activities in the banking sector, there has been a very little investigation of the impact of CSR on the stakeholders of insurance companies. Corporate Social Responsibility though a complex phenomenon can offer significant benefits for both businesses and societies (Dahlsrud, 2010).

For MTN Nigeria, the impact on the business should be deliberate to create a positive impact on the stakeholders as well as the employees in order to enable them pledge their loyalty to the organization and thereby bring about their retention through the promotion of activities beyond the core business while serving the interest of the organisation. This study intends on investigating the extent to which MTN Nigeria CSR activities impact the loyalty and the retention of their employees in Nigeria.

Research Objectives

The objective of this study is to examine the impact of Corporate Social Responsibility (CSR) on employee retention and loyalty by using MTN Nigeria as a case study. However, the specific objectives are:

i)               To understand the influence of Corporate Social Responsibility on employee retention among the workers of MTN Nigeria

ii)             To investigate the effect of Corporate Social Responsibility on employee loyalty among the workers of MTN Nigeria

iii)           To find out the reasons for Corporate Social Responsibility among organizations

Research Questions

The following questions were generated during the course of this study

i)               Does Corporate Social Responsibility have influence on employee retention among the workers of MTN Nigeria?

ii)             What is the effect of Corporate Social Responsibility on employee loyalty among the workers of MTN Nigeria?

iii)           What are the reasons for Corporate Social Responsibility among organizations?

Research Hypotheses

The following hypotheses were formulated for this study:

i)               There is significant relationship between employee retention and Corporate Social Responsibility

ii)             There is no significant correlation between employee loyalty and Corporate Social Responsibility

Significance of the Study

Information acquired from this study would help MTN Nigeria management team and employees gain knowledge on CSR and how it impacts the stakeholders. . As such, the Group will gear its efforts to ensure that the right choice of CSR is selected to benefit the organization and the stakeholders.

The findings of this study will help the general public identify with MTN Nigeria on the obligation to give back and cater for their needs. They will also identify their rights as stakeholders through community development, stakeholder consultation and education.

This study would also be valuable to future scholars and researchers as it will contribute to the exciting body of knowledge. The study will add more knowledge which can be used by researchers who seek to explore the importance and benefits of CSR on the stakeholders.

The Scope of the Study

The study concentrated on MTN Nigeria as this reduced the generalization of the findings of this study to other organizations operating within Nigeria. The researcher endeavoured to account for this limitation by seeking responses from the population of 100 employees of MTN Nigeria, over month period. In addition, the data for the study were collected mainly within a short timeframe period of three weeks. This had the potentially of reducing the response rate.

 Definition of Terms

The following terms were used in the course of carrying out this study:

Corporate Social Responsibility: Corporate Social Responsibility (CSR) is defined as emanating from the internal regulation of the organisation to comply with the social and legal obligations (Caroll 1999).

Stakeholders: These are groups of individuals with whom the organization interacts and has interdependency, plus any individual or group who can affect or is affected by the actions of the company (Epstein, Flabholtz and McDonough, 1999).

Employee: An individual who is hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independent business (Muhl, 2002).