In this research, we addressed the following questions that are becoming increasingly important to managers in the banking industry of Ghana: is there a relationship between corporate social responsibility (CSR) awareness, firm commitment and organizational performance? If yes, how is the relationship between these three variables? The study adopted both qualitative (case study) and quantitative methods respectively. Banks were selected to gather data, which was acquired from answers obtained from our administered questionnaire and also through interviews. The population of the survey constituted the management and non-management staff and customers of UT Bank Ghana and Barclays Bank Ghana Ltd in Ghana. Hypotheses of the study will be analyzed using correlation and regression. Results of the study show that there are high positive correlations between the constructs of corporate social responsibility (CSR) awareness, firm commitment and organizational performance.
The study was conducted to examine the relationship between corporate social responsibility (CSR) awareness, firm commitment and organizational performance. In recent times, CSR initiatives have become a priority of the business organizations worldwide in the wake of increasing competition among organizations to win customers through establishing their goodwill in the society by way of undertaking social service activities including donations to charities, community outreach programs, efforts to improve employee diversity, and reducing environmental impact etc. (Bashir et al. [
CSR initiatives have become an integral part of business practice, regardless of the organization’s type of markets, and the businesses now allocate hefty amounts in their annual budgets to make what they call it as “investment” in the social service areas (Bashir et al. [
Academic research on whether CSR is financially beneficial to firms has also burgeoned over the past decade with mixed findings, much like the divergent views of industry participants on the issue. This paper complements and extends this stream of the literature by examining the impact of CSR activities on organizational performance as well as one additional aspect that potentially contributes to corporate success firms’ commitment.
The remainder of this paper is structured as follows: Section 2 will present both the theoretical background and hypothesis to this study. Section 3 provides the research methodology of the study. In Section 4, the resear- chers present the statistical results and discussions of finding. Finally, this study in Section 5 discusses the conclusion of the study.
A number of theoretical perspectives have been examined in the literature on the relation between CSR and firm performance. Examples include agency perspective (Levitt [
The stakeholder perspective asserts that firms have relationships with many constituent groups (e.g., customers, employees, and communities) other than just shareholders and that these stakeholders both affect and are affected by the actions of the firm (Freeman [
Even though the stakeholder concept has been extensively researched over the past two decades it is frequently defined as the “opposite” to the shareholder (or stockholder) model. The latter states that only the shareholders have a legalclaim on the purpose of the firm they own Halal [
The resource-based view (RBV) of the firm contends that a firm’s ability to perform better than its competitors and create value for shareholders depends on the unique interplay of human, organizational, and physical re- sources over time. Barney [
Hillman and Keim [
Hypothesis 1a: The practice of socially responsible activities by firm demonstrates the awareness of CSR demands from its environs.
Using a theory of the firm perspective, McWilliams and Siegel [
Under the McWilliams and Siegel [
Hypothesis 1b: The effective implementation of firm’s CSR activities demonstrates firm’s commitment in attaining CSR goals.
Wartick & Cochran [
In some companies, CSR officials are full-time high-level executives and the company issues detailed annual CSR reports separate from annual reports. In materializing CSR policies in an organization Pohle & Hittner [
Align and incorporate CSR with business strategy and integrate it across all operational functions. Thus, making it easy to invest (not spend) the funds necessary to achieve the company’s objectives, that is both CSR’s and the business’.
Implement an open information strategy for more transparent information-sharing with multiple stakeholders.
Leverage transparency to increase the level of engagement of key constituents and customers.
When these activities are done in combination, CSR can become a dimension of a company’s successful com- petitive strategy. Done right, it offers a company improved relationships with all of its key constituents, more lo- yal customers, lower costs, higher revenues and an overall improvement of the business’ standing in society (Pohle & Hittner [
H2: The practice and implementation of CSR policies and activities are related with the performance of the firm.
This section provides an overview of the method used for our research and how data for this study were collected and analyzed in order to examine our hypotheses and arrive at the findings. The main objective of this research is to examine the relationship between corporate social responsibility (CSR) awareness, firm commitment and Organizational performance. In order to understand and establish a reliable result we adopted both the use of the qualitative approach and quantitative methods. Quantitative method or approach was adopted because of the empirical investigation we conduct into this phenomenon. Data for this section was mainly acquired through the administering of questionnaires to be answered by the firm and its customers. Data obtained from the survey was used to test the hypothesis by SPSS software. In addition, in-depth interviews were used for some questions that investigate how it happened Yin [
The process of selecting a suitable case is an essential step to build theories from case studies. This became important because when unsuitable cases are selected, the result obtained will be misleading and will not help us achieve our research objectives. Appropriate selection of case helps define the limit for generalizing the finding of the study and control waste Eisenhardt [
According to the 2012 Ghana Banking Survey conducted by Price Water House Coopers on behalf of the Ghana Association Bankers, Barclays Bank of Ghana Limited (BBGL), and Unique Trust Bank (UTB) were among the top banks in Ghana ranked by total operating assets, share of industry deposits, net advances, profit margins and representations from their profit and loss statements. The banks were therefore chosen because they represent the top line for Ghanaian banks and they are also comprised of multinational bank (Barclays Bank of Ghana Limited) and the fastest growing indigenous bank (Unique Trust Bank) giving a good local and multinational representation. The selection of the banks also gives representation on listed banks (BBGL and UTB).
The population of the survey constituted the management and non-management staff and customers of UT Bank and Barclays Bank Ltd in Ghana. The researchers used the random sampling technique and accidental technique. The study used a sample size of six hundred and (600) respondents, of which the researchers divided it equally among customers and management staff and non-management staff of both banks. Due to adequate time the researchers devoted for the data collection, the researchers were able to get five hundred and sixty two (562) questionnaires that were administer.
No single measure or instrument can be used universally to study CSR, Hopkins [
Organizational Commitment Questionnaire was designed to measure participant’s commitment to their organizations. All of these questions were measured from “strongly disagree” to “strongly agree”. This scale is adop- ted from Deshpande et al. [
For purpose of this research, questions that relate to Organizational performance were asked and placed on a 5- point scale ranging from strongly agree (5), Agree (4), Undecided (3), Disagree (2), and strongly disagree (1) in form of statement. This scale is adopted from Deshpande et al. [
The reliability of data used for empirical analysis and hypothesis testing was assessed. The reliability of the data was assured by the use of Cronbach’s alpha (numerical value of 0.5 is considered appropriate to show consistency). For this research data, the alpha value for corporate social responsibility is 0.69, firm commitment is 0.59 and organizational performance at 0.74 respectively. The hypothesis formulated for the study was tested by cross-sectional data with the use of statistical software SPSS 20.0. Descriptive statistics and Pearson correlation were generated between variables.
Statistical population of the study consists of the management and non-management staff and customers of UT Bank and Barclays Bank Ltd in Ghana. 600 questionnaires were administered and 562 of them were used for the analysis. As we can observe from following figures, from 562 respondents, 48 people were with basic education, 177 people were high school graduates, 231 people had completed tertiary education, 106 people had other educational certificates, And this is while the age of 164 of these people were 18 - 24, 256 people between 25 - 34, 60 between 35 - 44, 58 people between 45 - 54 and 24 people were more than 55 years old. Also, among the respondents, 337 people who represent 60 percent were male and 225 who represent 40 percent were female.
This section reports the statistical analysis of our data on corporate social responsibility.
The Pearson correlation in
In the study the researchers found out that the respondents were aware of CSR activities by firms. Since the fo-
. Descriptive statistics and person correlation of corporate social responsibility variable
Variables | N | Mean | SD | 2 | 3 | 4 | 5 |
---|---|---|---|---|---|---|---|
1. CSRA | 562 | 3.19 | 1.152 | 0.521** | 0.724** | 0.504** | 0.939** |
2. CSRP | 562 | 3.67 | 1.152 | 0.690** | 0.939** | 0.099 | |
3. CD | 562 | 3.37 | 1.474 | 0.251** | 0.525** | ||
4. PS | 562 | 2.86 | 1.320 | 0.291** | |||
5. CCNI | 562 | 3.47 | 1.038 |
**Correlation is significant at 0.01 level (2-tailed).
cus was on the extent of the practice of these outlined policies, the findings also showed that the firms do support the communities in devise ways. This finding satisfies the hypothesis (H1a) that states that the practice of socially responsible activities by firm demonstrates the awareness of CSR demands from its environs.
From
FR means does the firm review its policies on CSR, CSRG means CSR goals are communicated clearly among employees, FRT means does the firm responds timely to clients complaints, INF means introducing of innovative-customer friendly products and services, ET means employees trained on the ethics of CSR policies implementation and FC (D) denotes is firm committed to its CSR policies and is the dependent variable.
From
The researchers investigated further to know whether these policies were backed with employees’ commitment. The finding showed that the firms back their CSR policies with commitment which enables the firm achi- eves its motives. This finding satisfies our hypothesis (H1b) that states that the effective implementation of firm’s CSR activities demonstrates firm’s commitment in attaining CSR goals.
From
. Regression analysis of corporate social responsibility variables
Models | R-square | Unstandardized coefficients | Standardized coefficient | t-value | Sig. | |
---|---|---|---|---|---|---|
Beta | Standard Error | Beta | ||||
1. CSRP | 0.511 | 0.320 | 0.083 | 0.699 | 3.872 | 0.000 |
2. CSRP, PS | 0.623 | −0.027 | 0.116 | 0.554 | 3.566 | 0.000 |
3. CSRP, PS, CCNI | 0.710 | −0.183 | 0.097 | 0.532 | −2.060 | 0.041 |
4. CSRP, PS, CCNI, CD | 0.887 | 0.007 | 0.035 | 0.511 | 3.023 | 0.009 |
. Descriptive statistics and person correlation of firms’ commitment variable
Variables | N | Mean | SD | 2 | 3 | 4 | 5 | 6 |
---|---|---|---|---|---|---|---|---|
1. FC | 562 | 3.40 | 1.137 | 0.286** | 0.953** | 0.119** | 0.941** | 0.817** |
2. FR | 562 | 3.57 | 1.066 | 0.101** | 0.918** | 0.148** | 0.099** | |
3. CSRG | 562 | 3.37 | 1.176 | 0.227** | 0.955** | 0.843** | ||
4. FRT | 562 | 3.94 | 1.123 | 0.034** | 0.189** | |||
5. ICF | 562 | 3.30 | 1.099 | 0.875** | ||||
6. ET | 562 | 3.28 | 0.918 |
**Correlation is significant at 0.01 level (2-tailed).
based on the regression analysis: Y= α + β1X4 + β2X5 + β3X6 + … + βnXn where: Y is the dependent variable(firm commitment), “α” is a regression constant; β1, β2, β3 and βn are the beta coefficients and (X4, X5, X6 … Xn) are the independent variables. The dependent variable can be predicted as: Y= α + 0.33 X4 + 0.52 X5 + (−1.17) X6 + … + βnXn where X4, X5, and X6 are FR, CSRG and ICF respectively.
FG (D) denotes the firms grow since introduction of CSR activities and is the dependent variable; CSRAE means is CSR activities evaluated for shortcomings, CSRAI means is CSR activities implemented timely, IFR means increase in firm’s reputation, ICB means increase in customer base, FAAT means the firm always achieves its targets are independent variables.
The researchers investigated further to know whether these policies have in one way or the other helped the firms’ to grow. The findings showed that the firms CSR activities have helped to increase customer base, firms’ reputation and the firms always achieve its targets which enable the firms to perform well. This finding satisfies our hypothesis (H2) that states that the practice and implementation of CSR policies and activities are related with the performance of the firm.
From
. Regression analysis of firms’ commitment variables
Model | R-square | Unstandardized coefficients. | Standardized coefficient | t-value | Sig. | |
---|---|---|---|---|---|---|
Beta | Standard Error | Beta | ||||
FR | 0.785 | 0.350 | 0.063 | 0.328 | 5.580 | 0.000 |
FR, CSRG | 0.917 | 0.503 | 0.041 | 0.520 | 12.228 | 0.000 |
FR, CSRG, ICF | 0.918 | −0.179 | 0.031 | −0.177 | −5.789 | 0.000 |
FR, CSRG, ICF, FRT | 0.931 | 0.629 | 0.062 | 0.608 | 10.076 | 0.000 |
FR, CSRG, ICF, FRT, ET | 0.931 | 0.524 | 0.033 | 0.502 | 4.323 | 0.019 |
. Descriptive statistics and person correlation of organizational performance variable
Variables | N | Mean | SD | 2 | 3 | 4 | 5 | 6 |
---|---|---|---|---|---|---|---|---|
1. FG | 562 | 3.40 | 1.160 | 0.865** | 0.099** | 0.907** | 0.895** | 0.936** |
2. CSRAE | 562 | 2.94 | 0.870 | 0.079** | 0.927** | 0.876** | 0.888** | |
3. CSRAI | 562 | 3.28 | 0.992 | 0.203** | 0.106** | 0.277** | ||
4. IFR | 562 | 3.80 | 1.072 | 0.867** | 0.923** | |||
5. FAAT | 562 | 3.09 | 1.092 | 0.901** | ||||
6. ICB | 562 | 3.54 | 1.141 |
**Correlation is significant at 0.01 level (2-tailed).
. Regression analysis of organizational performance variables
Model | R-square | Unstandardized coefficients. | Standarized coefficient | t-value | Sig. | |
---|---|---|---|---|---|---|
Beta | Standard Error | Beta | ||||
CSRAE | 0.764 | −0.456 | 0.053 | 0.342 | −8.556 | 0.000 |
CSRAE, CSRAI | 0.830 | −0.502 | 0.039 | −0.429 | −12.961 | 0.000 |
CSRAE, CSRAI, IFR | 0.913 | 0.518 | 0.045 | 0.479 | 11.551 | 0.000 |
CSRAE, CSRAI, IFR, ICB | 0.929 | 0.069 | 0.035 | 0.065 | 1.986 | 0.048 |
CSRAE, CSRAI, IFR, ICB, FAAT | 0.929 | 0.0.372 | 0.039 | 0.366 | 9.648 | 0.000 |
(Organizational Performance), “α” is a regression constant; β1, β2, β3 and βn are the beta coefficients and (X7, X8, X9 … Xn) are the independent variables. The dependent variable can be predicted as: Y = α + 0.34X7 + (−0.43) X8 + 0.47 X9 + … + βnXn where X7, X8, and X9 are CSRAE, CSRAI and IFR respectively.
The study was conducted to examine the relationship between corporate social responsibility (CSR) awareness, firm commitment and organizational performance. The study adopted both qualitative (case study) and quantitative methods respectively. Banks were selected to gather data, which was acquired from answers obtained from our administered questionnaire and also through interviews.
The statistical findings showed significantly that the firms are committed in practicing corporate social responsibility. Also there was a significant relationship between corporate social responsibility (CSR) and Organizational performance. The relationship between Firms’ commitment and Organizational performance was also positive. The hypothesis established for this study was supported by the researcher findings.
“How good it is to give thanks to you, O Lord, to sing in your honor, O Most High God”. Psalms 92:1. Our thanks go to the Almighty father, the ruler for his protection and guidance over our lives. Our sincerely gratitude also goes to all the staff and management of Unique Trust Bank (Ghana) and Barclays Bank (Ghana) for their assistance and co-operation and not forgetting the respondents who helped us. God richly bless you all.