CORPORATE SOCIAL RESPONSIBILITY AND COMMUNITY DEVELOPMENT: A CASE STUDY OF EXXON-MOBIL NIGERIA UNLIMITED, EKET.
TABLE OF CONTENT
Table of content………v
1.1 STATEMENT OF THE PROBLEM
1.2 OBJECTIVES OF THE STUDY
1.3 RESEARCH QUESTION
1.4 STATEMENT OF HYPOTHESES
1.5 SIGNIFICANCE OF THE STUDY
1.6 SCOPE AND LIMITATION OF THE STUDY
1.7 DEFINITION OF TERMS
2.2 Conceptual Framework
2.2.1 Concept of Corporate Social Responsibility (CSR)
2.2.2 Concept of Community Development (CD)
2.2.3 Types of Corporate Social Responsibility
2.2.4 Goals of Corporate Social Responsibility (CSR)
2.2.5 Corporate Enthusiasm for CRS
2.3 Review of Related Literature
2.4 Historical Background of Exxon Mobil Development in Akwa Ibom State
2.5 Theoretical Frameworks
2.5.1 The utilitarian theory
2.5.2 The managerial theory
2.5.3 The relational theory
2.6.1 The Utilitarian Theory
2.4.2 The Managerial theory
2.4.3 Relational theory
1.2 Research Design
1.3 Population of the Study Area
1.4 SAMPLING TECHNIQUES AND SAMPLING SIZE
1.5 Source Of Data
1.6 Research Instrument/Method Of Data Collection
1.9 BACKGROUND OF THE STUDY
Corporate social responsibility (CSR) simply refers to strategies corporations or firms employ in conducting their business in a way that is society-friendly. CSR can involve a range of activities such as working in partnership with local communities, socially sensitive investment, developing relationships with employees, customers and their families, and involving in activities for environmental.
Today, there is a persistent call for companies operating in the Niger Delta Region to be socially and environmentally responsible to a range of stakeholders like host communities, government, and shareholders (Eweje, 2011). This means that there is an acknowledgement that business can play a crucial role in reducing poverty and social inequality prevalent in the Niger Delta. The concept of Corporate Social Responsibility (CSR) has therefore been debated for a long time on how large companies like Exxon Mobil can assist in sustainable community development (Moon 2004).
Most companies believe that CSR is a voluntary management decision to give back to the society by doing philanthropic gestures to their host communities (Eweje, 2006, p.93). However available literature reflect the opposite as host communities believe that CSR is the company’s payment for the negative externalities resulting from their operations. This research seeks to understand how CSR can be a means of achieving community development by comparing the perceptions of Eket people as the host communities to that of Exxon Mobil’s perception on its CSR policies and practices.
Exxon Mobil is one of the oil companies operating in Nigeria today. Others are; Shell Petroleum Development Company of Nigeria, Chevron Nigeria Limited, Total Nigeria Plc, Nigeria Agip Oil Limited and TaxacoNig Plc. More than seventy percent (70%) of the country’s wealth comes from oil which is pumped out of the Niger Delta region in millions of barrels daily by the multinational oil corporations. Despite this profit from the oil sector, the indigenous people of this area are still very poor and their environment polluted (Aluko, 2001). This explains why, most of the time, the multinational oil companies are in conflict with the host communities. In order to appease the people of these communities, the multinational companies have over the years engaged in the rehabilitation and construction/provision of new facilities in areas such as education, housing, health and social welfare etc. as part of their CSR.
The mistake that has been made over the years is to judge oil companies based on the impact of their exploitative and exploratory activities without the considering the impact of their development projects under CSR (Ukpongson, 2004). This is the gap this research work is designed to address. However, since its establishment, Exxon Mobil Nigeria has made contributions in the areas of health, education, sports, water supply, electricity, good roads, capacity building and economic development etc. in and around communities located within and outside its operational areas in both AkwaIbom State and Rivers States of Nigeria.
1.10 STATEMENT OF THE PROBLEM
The multinational companies through their exploitation process cause harm to the communities in which they are operating thus, it is important for them to show serious concern in terms of being socially responsible to these communities. We cannot conclude that Exxon Mobil has contributed adequately to the development of its host communities. Because developments cut-across so many things like; provision of infrastructural facilities, employment, and scholarships etc. which the communities benefit from multinational corporations.
However, studies have revealed that there are some negative consequences of oil exploitation and exploration in the Niger Delta Region of Nigeria where AkwaIbom State and Exxon Mobil are located. These problems (oil spillage and seepage, gas flaring, biodiversity loss, loss of livelihoods, environmental pollution and degradation to mention just a few) cause the agitation and conflict we have in the region as the multinational corporations have neglected the communities. But in response, Exxon Mobil has embarked on some development projects which cannot in any way compensate for the negative impact of their activities on the environment and community members. Thus this study looked at accounting perspective of corporate social responsibility and community development.
1.11 OBJECTIVES OF THE STUDY
The general objective of this study was to examine the effect of corporate social responsibility on community development.
The study has the following specific objectives:
(i) To identify ways in which corporate social responsibility leads to community development.
(ii) To examine the extent to which the host communities benefit from the provision of corporate social responsibility by Exxon Mobil.
(iii) To investigate the extent to which corporate social responsibility projects provided by Exxon Mobil meets the needs of the host communities.
1.12 RESEARCH QUESTION
The following research questions were considered:
(i) To what extent can corporate social responsibility lead to community development?
(ii) How has the host communities benefited from corporate social responsibility of Exxon Mobil?
(iii) In what ways do corporate social responsibility provided by Exxon Mobil meet the needs of the host community.
1.13 STATEMENT OF HYPOTHESES
The hypotheses used in this study were stated in a Null form as follows:
(i) H0: There is no significant relationship between corporate social responsibility and community development.
(ii) H0: There is no significant relationship between Exxon Mobil’s CRS Programmes and benefits derived by members of the community from such programmes
(iii) H0: There is no significant relationship between the corporate social responsibility projects provided by Exxon Mobil and the needs of the host communities.
1.14 SIGNIFICANCE OF THE STUDY
The study would engender efficient and effective human relations between the corporation and the host community. The study would help to consider the claims of two parties because of the disunity in their claim. The study would show if CRS performed by Exxon Mobil could in turn affect community development.
However, the researcher was convinced that not only the people of Eket, the government of the federal republic of Nigeria and staff of Exxon Mobil but also members of the general public would find this study valuable. The research work would be beneficial to researchers who want to go into this area of study. It would serve as a guide for future research
1.15 SCOPE AND LIMITATION OF THE STUDY
This research work centered on accounting perspective of CSR and community development. Hence, it was focused on Exxon Mobil located in Eket of AkwaIbom State. Exxon Mobil was selected because its corporate activities have tremendous impact on the environment. In order to ameliorate these negative impacts CSR programmes were carried which might not completely compensate for the negative effects of exploitation suffered by the host communities. Due to the large number of communities in AkwaIbom State and multinational companies, the study was limited to Eket Local Government Area of AkwaIbom State and Exxon Mobil Nigeria Ltd, and covered the company’s social responsibilities to the people. The respondents used in the research study were gotten from the of the host communities.
In the course of conducting the research, the researcher came face to face with some practical problems. One of the constraints was lack of cooperation from the respondents as some of them felt that the questions were made to expose the community’s backwardness in terms of socio-economic development. Another problem was the task of moving from one community to another to administer the questionnaire, which was very stressful due to distance and transportation difficulties. It was difficult to get information from illiterate villagers who in most cases did not allow for interview. Other limitations included; time constraints, limited financial resources and other technical issues which were needed to examine the multinational company (Exxon Mobil).
1.16 DEFINITION OF TERMS
In order to have a better understanding of the research work, the following key words and concepts were clearly defined as follows:
CORPORATE SOCIAL RESPONSIBILITY: Corporate social responsibility (CSR) is defined as a corporation’s initiatives to assess and take responsibility for the company’s effects on the environment.
COMMUNITY DEVELOPMENT: Community development (CD) refers to initiatives undertaken by the community with partnership with external organizations or corporations to empower individuals and groups of people by providing these groups with the skills they need to effect change in their own communities.
HOST COMMUNITY: Host community is a community that provides land for use by a corporate organization.
MULTINATIONAL CORPORATION (EXXON MOBIL): This is an organization which has it’s headquarters in one country but has assembly or production facilities in other countries..