CHAPTER ONE

INTRODUCTION

1.1      BACKGROUND TO THE STUDY

The impact of social responsibility is a concept whereby an organisation considers the interest of society by taking responsibility for the impact of their activities on customer's suppliers, shareholders in the environments. Social responsibility of management is the ethical and moral responsibility of the organizational image to the total society. It refers to social obligation beyond legal and economic obligation for an organisation to pursue long term goals that are for the benefit of the society.

The social obligation of management isthe obligation of the organisation to meet its economics and legal responsibility. Social responsibility is seen as obligation beyond the statutoryobligation to comply with legislation and sees organisation voluntary taking a steps further to implore the quality of life of the employees and their families as well as the local community. and the societies at large. All organizations have an impact on society and environment through their operations, products orservices and through their interactions with the key stakeholders group including employment, customers, suppliers, investors and local community. While traditional business models primary emphasize on the economic aspects of organizational activities (e.g profitability and growth) more modernconception of organizational behaviour lay equal stress on social, ethical, and environmental impact as exemplified by the notion of corporate socialresponsibility. It is in view of this that business are today much more sociallyresponsible than before. Business are interested not just in the quality of goods

and services they produce but also in their business environment. Theyappreciate good image and acceptability of their product and services by thepublic. This could means substantial improvement of long run profits. A lessimage could have a negative effect on the business social responsibility. Buta result of greater influence and pressure from groups like labourresponsiveness to social needs, this could make the business more responsive. Social responsibilities whether of a business, government, non-government orany organisation may arise in two ways.          They may arise out of the socialimpact of the institution, or arise as problems of the society itself.    Both are concern to management because the institutions, which the managers oversee,exist within the society. The first deals with what an institution can do for the society. Based on the fact that business relies on society for existence. For example, business depends on society for high quality of goods and services at affordable prices. In view of these, the interrelationship between organization servicing the interest of everyone effected by or connected to it. Like the government, shareholder, employees, consumers and the society.

Corporate social responsibility is defined as the serious attempts to solve social problems caused wholly or in part by the corporation or the obligation of a business to assist the society within which it operates, to solve some of the social problems affecting the welfare of the society.It is a truism that companies whether local or international corporations (ICH's) have certain corporate social responsibilities to perform. The area of controversy is whether companies is the performance of these corporate social responsibilities should adopt a strict and technical approach or a liberal and broad approach. The technical is to the effect that a company owes responsibilities only to its shareholders. Advocates of this approach base there arguments on the long laid down company law and rules a company owes responsibility only to the shareholders who invest their money in the company and appoint directors to manage the affairs of the company in their interest.

The liberal approach is a contemporary approach adopted by some legal scholars. The thesis of this approach is that a company owes responsibility not only to its shareholders but also to its employees, customers as the case may be the community and the state within which it operates. Despite the above, ascertaining the call for corporate social responsibilities has not been effectively overblown. The problems however are where this or such responsibility does begins and where does it end, what rules of conduct should govern the exercise of executive authority? Should a firm plan shareholdersinterest before those of society or environment? Should a firm be held responsible for social consequence of this operation? When is this relationship necessary and when is it an excessive burden? What even is corporate social responsibility? Drucker (2004) came out with two ways through which the demand for social impact of business organisation is required.

The negative consequence on business activities like rural-urban drift traffic jams, environment pollution, deception and advertising defective products offered for sales in seller markets, tax aversion and avoidance etc. It may arise from problem of the society itself, which includes falling standardsof living, illiteracy, poor infrastructural facilities, inadequate social amenitiesand the growing dis-enhancement with government and its ability to solve major social problems. Hence, society has come to expect business with successful operations of this task to solve major parts of their problems by developing social responsibility objectives and processes. Conclusively, business cannot run away from the problems of the society.

According to Luthans and Hodgets (2006), social responsibilities are the obligation of businessmen to provide those policies, to make those decisions or to follow lines of action which are the desirable in terms of the objectives andvalues of our society. Bedetin (2007) defined social responsibility of the business as including the reactive responsiveness to its obligatory operational legal requirement to its stockholders and also its shareholders. The stockholders of the business are society, the government customers, employees and the community at large. From the above, it can be stated that impact ofsocial responsibility is obligation of business to assist the society within whichit operates to solve some of its social problems resulting directly or indirectlyfrom the functioning or activities of the business. A business is a subset of thesociety, within which it operates, it imports its human and material resourceswhich it operates, it process into output of goods and services from the society and subsequently exports back to output to the society, it therefore means thatsociety responsibility is the need for the corporate bodies to give back from it. Should a business be socially responsible? "Yes".

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