CORPORATE SOCIAL RESPONSIBILITY AND THE PERFORMANCE OF MTN IN NIGERIA

1.1 Introduction

The mobile telecoms industry in Nigeria is currently going through intense competition as several communication companies (MTN, Globacom, Airtel and Etisalat, Visa phone, Multtichoice, Starcomms among others) jockey for fair share of market space. Consequently, it would not be out of place for communication firms to device strategies and programs capable not only to contend the forces of competition, but also to achieve and sustain competitive advantage. Beside the well known generic strategies dominating the literature, telecoms companies globally are currently considering socially responsible behaviours as a viable strategy with a view to winning and sustaining customers’ patronage.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

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1.2 Background of Study

Many African countries, including Nigeria are highly dependent on foreign aids and grants. Pederson and Huniche (2006) observed that economic responsibilities are accorded the highest priority by organizations in Africa. Others such as philanthropic, legal and ethical follow respectively. The socio-economic needs in Nigeria are so enormous that companies must come to the aid of people and environment where government has failed. It is becoming increasing apparent that organizations in the telecommunication industry are constantly looking for new strategies to gain a positional advantage over their competitors’ in order to increase their customer base and enhance their financial performance. One of these strategies is the adoption of corporate social responsibility practices.

Mohr, Webb and Harris (2001) describe corporate social responsibility as a firm’s commitment to minimize or eliminating any harmful influence and maximizing its longrun beneficial impact on society. This concept of corporate social responsibility (CSR) which has long been established in academic literature as both a business philosophy and practice is seemingly much more prevalent, timely and important in this millennium, as firms attempt to be seen as being sustainable or socially responsible in nature due to demands of target stakeholders. The stakeholders are requesting that firms act responsibly and behave ethically and are therefore, expected to respond to the changing beliefs and values of the target audiences. There were several researches on corporate social responsibility; however, majority of such researches concentrated on financial performance, consumer behavior and effects on environment. For example, Stanwick and Stanwick,

Mc William and Siegel and others have studied the effect of corporate social responsibility on financial performance. Financial performance may be defined as the results of a firm’s policies and operations in monetary terms. These results are reflected in the firm’s return on investment, return on assets, net profit margin, and return on equity e.t.c. Most of these surveys however, were base on international data and in context of developed markets with contradictory finding.

Berrone, Surroca and Tribo and Orlitzky,Schinidt and Rynes held that CSR practices enhance overall profitability of firms. Determine how CSR and financial are connected is also complicated by the lack of consensus of measurement methodology as it relates to corporate social performance. From the above, there is a lack of consensus in the literature with regards to the effect of corporate social responsibility on financial performance. And since most of the studies were based on international data, this research seeks to contribute to the existing body of knowledge in the area by examining the impacts of adaptation of corporate social responsibility on financial performance in the Nigerian context, using the experiences of MTN Nigerian Limited and finally identifies opportunities for further research in this area.

Amaeshi, Adi, Ogbechi and Amao (2006) averred that indigenous perceive CSR as corporate philanthropy to address the socio-economic challenges in Nigeria. The failure of the federal government controlled economy (despite the super abundance of natural and human resources) to develop the country is a major driver of CSR. The mobile telecommunication industry in Nigeria comprises MTN, Globacom, Airtel, Etisalat, Multilinks, Starcomms, Vodaphone, Zoom mobile and Visaphone. Nigeria, so far has maintained the lead as Africa’s largest telecoms market (Mathew-Daniel, 2012). This is not surprising given Nigeria’s population of over 160 million people. The deregulation of the telecommunication sector was as a result of the failure of the Federal government controlled NITEL (the only telephone service provider until 2001).

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Corporate Social Responsibility and the Performance of MTN.

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1.3 Statement of Problems

Investigation revealed that there are many problems associated with the existing literature on corporate social responsibility such as:

1. Lack of awareness as to the actual meaning of corporate social Responsibility,
2. Lack of audit of Corporate Social Responsibility, no accepted standard to reporting of Corporate Social Responsibility,
3. Poor implementation of Corporate Social Responsibility and overall, there is death of relevant data concerning the actual impact of CRS on the performance of private telecommunication companies in Nigeria.

It is based on the above problems that this study is undertaken to fill the knowledge gap.

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1.4 Aim and Objectives of Study

The aim of the study is to examine the Corporate Social Responsibility and the Performance of MTN in Nigeria. In achieving this aim, the following specific objectives were laid out as follows:

1. To examine Corporate Social Responsibility (CSR) in relation to MTN Nigeria in focus;
2. To evaluate the impact of CSR on the firm performance of MTN Nigeria;
3. To examine the challenges of CSR in MTN Nigeria;
4. To investigate whether CSR guarantee customers’ confidence and increase patronage of its customer.

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1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• Is MTN Nigeria practicing corporate social responsibility?
• Does corporate social responsibility have significant effect on the financial performance of MTN Nigeria Limited?
• Are MTN Nigeria are facing challenges in the adaptation of corporate social responsibility?
• Does corporate social responsibility guarantee customers’ confidence and increase customer patronage?

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1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: Corporate social responsibility does not have significant effect on the financial performance of MTN Nigeria Limited
• H1: Corporate social responsibility has significant positive effect on the financial performance of MTN Nigeria Limited

Hypothesis Two

• H0: MTN Nigeria is not facing challenges of corporate social responsibility in its adaptation
• H1: MTN Nigeria is facing challenges in the adaptation of corporate social responsibility

Hypothesis Three

• H1: Corporate social responsibility does not guarantee customers’ confidence and increase customer patronage
• H0: Corporate social responsibility guarantees customers’ confidence and increase customer patronage

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1.7 Significance of Study

The study will acquaint us with various MTN foundations as it affects lives of our people in one way or the other, it will also provide information on the impact of corporate social responsibility on the business performance of MTN Nigeria.

The research goes a long way in providing information on the challenges faced in adaptation of corporate social responsibility in MTN Nigeria and provides recommendation for further action.

The research work will also be of immense benefit to students, enterprises businessmen, policy makers and entire citizens as it give an insight on the activities of MTN Nigeria, and how it improve businesses in the metropolis and direct our policy makers on appropriate policy to be adopted in the state as it regard corporate social responsibility.

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1.8 Scope of Study

The study focuses on the Corporate Social Responsibility and the Performance of MTN in Nigeria using Imo State MTN Branch as a case study.

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1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this establishment to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
3. Research material: availability of research material is a major setback to the scope of the study.
4. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
5. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

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1.10 Definition of Terms

Telecommunication: This is the transmission of information by various types of technologies over wire, radio, optical or other electromagnetic systems.

Telecommunication Industry: The telecommunications industries within the sector of information and communication technology is made up of all telecommunications or telephone companies and internet service providers and plays the crucial role in the evolution of mobile communications and the information society.

Management: Management (or managing) is the administration of an organization, whether it is a business, a not-for-profit organization, or government body.

Prima Facie: sufficient to establish something legally until disproved later.

Researcher: an enquirer basically concerned with search knowledge.

Government: according toDibie (2010) an institution of the state whose responsibility is to maintain law and order in the society.

Auditor: according to Adeniji (2009) is a person who is qualified to examine the accounts of an organization to see that they are in order.

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1.11 Organization of the Study

Chapter one of the study, provides background of the study, stating the problem of the study and the research questions and hypotheses to be tested in the study. It also highlights the significance of the study and scope of the study.

Chapter two reviews related literature on the Corporate Social Responsibility and the Performance of MTN in Nigeria.

Chapter three discussed the research methods to be used in designing the study which will include research design, population, sample size and sampling technique, data collection and data analysis methods.

Chapter four presents the data gathered in frequency and percentage tables. The data will also be analyzed and research hypotheses will be tested with chi-square statistical test.

Chapter five summarizes the outcome of the study, draw conclusions based on the findings of the study and make necessary recommendations.