CORPORATIONS AND SOCIETY IN SMALL SCALE ENTERPRISE IN NIGERIA

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CORPORATIONS AND SOCIETY IN SMALL SCALE ENTERPRISE IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Corporate social responsibility (CSR) is the promise by business organizations to behave in a way that is ethically acceptable and at the same time contributing to the economic development and improvement of the living conditions of the employees, the catchment community and the larger society (Azende, n.d). It is the set of conditions to which a company relates its impact on society with. The major advantages of corporate social responsibility are its potentials to bring about sustainable development and contribute to poverty reduction in any given society. Corporate social responsibility is the contributions of the organization to the development of the community in which such organizations is found in term of the social, economic, political, educational involvements. However, the company is not compelled to do by any law to do it (Adebayo, 1998). Corporate social responsibility (CSR), relates to the role and obligations expected of business as a creation of modern society. Two opposing schools of thought emerged during the early birth of CSR. While one school argues that businesses should assume some responsibilities in the society beyond their primary economic role, the other stands against. In the latter case, CSR is based on purely its economic role of profit. This is regarded as the “classical view”, based on the neoclassical economic theory while the former which is the “stakeholder view”, is based on stakeholder theory (Branco and Rodriques, 2007). However, businesses of different sizes and concerns are competing to be seen as socially responsible (Crowther, 2004). Social responsibility has now become the art of every business, whether small and medium enterprises or large corporations. There is now an increased level of awareness of the important functions of small and medium scale enterprises in most developing countries, including Nigeria, particularly in the informal sector of the economy in terms of supply and creation of employment. In Africa, for instance, the informal sector is so large that it is more like a parallel economy. On the average the informal economy in Africa is estimated to have been 42 per cent in 1999/2000. At the country level, Nigeria’s informal sector is at a high end with 59.4 per cent of GDP (http://rru.worldbank.org).

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