The Ethnical And Social Responsibility Of The Purchasing Practice In Industries

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The Ethnical And Social Responsibility Of The Purchasing Practice In Industries


This research project intends to explore the Ethnical and social responsibilities of the Purchasing Practice in Industries in Nigeria. The study was limited to Golden Guinea Breweries Plc, Nigeria. The study adopted a descriptive survey design. The researcher used the Taro Yamane formula to calculate the sample size which was 223 from a population of 500. The instrument that was used for data collection was an online survey questionnaire. After collection of the questionnaires, the study was then analyzed using descriptive (frequency and percentages) and inferential statistics. The results were presented on tables. The concepts of ethical behavior and corporate social responsibility have come to the fore in recent years in both developed and developing countries as a result of growing sense of corporate wrongdoing. These two concepts can bring significant benefits to a business. The idea that business enterprises have some responsibilities to society beyond that of making profits for shareholders has been around for centuries.

The study addressed the concepts of organizational ethics and social responsibility. From the perspectives of Managers, it came out that organizational ethics and social responsibility are very important for organizational growth and success. Specifically, they consider organizational ethics to lead to positive employee, customer and community relations. Not only that but also, they perceive that better public image/reputation; greater customer loyalty; strong and healthier community relations can inure to the benefit of corporations that are socially responsible. Implications of the findings are finally drawn.

Table Of Contents

Preliminary Page(s)

  • Title page i
  • Certification page ii
  • Dedication iii
  • Acknowledgement iv
  • Abstract v
  • Table of content

Chapter One


  • 1.1 Background of the study
  • 1.2 Statement of the Problem
  • 1.3 Objectives of the study
  • 1.4 Research questions
  • 1.5 Significance of the study
  • 1.6 Scope of the study
  • 1.7 Limitation of the study
  • 1.8 Organization of Study

Chapter Two

Literature Review

  • 2.1 Introduction
  • 2.2 Organizational ethics
  • 2.3 Three levels of ethical standards
  • 2.4 Establishing an ethical framework
  • 2.5 Corporate Social Responsibility (CSR)
  • 2.6 Stakeholders and CSR

Chapter Three

Research Methodology

  • 3.1 Research design
  • 3.2 Sources of Data
  • 3.3 Population and Sampling Procedure
  • 3.4 Sampling procedure
  • 3.5 Instrument for Data Collection
  • 3.6 Reliability
  • 3.7 Validity
  • 3.8 Data collection and analysis
  • 3.9 Ethical consideration

Chapter Four

Results And Discussion

  • 4.1 Results
  • 4.2 Discussion

Chapter Five

Conclusion And Recommendations

  • 5.1 Conclusion
  • 5.2 Recommendations
  • References

Chapter One


1.1 Background of the study

Purchasing had been practiced right from ancient times. Organizational purchasing started in Nigeria Seriously after Independence. Before Independence, the Industry was mainly administrative and not manufacturing, manufacturing firm started shortly after Independence in Nigeria in earnest.

Ethical behavior and corporate social responsibility can bring significant benefits to a business. The idea that business enterprises have some responsibilities to society beyond that of making profits for shareholders has been around for centuries (Barry, 2000). This partly accounts for the reason why the concept of Corporate Social Responsibility (CSR) has continued to grow in importance and significance (Carroll & Shabana, 2010).One of the core beliefs is that business organizations have a social and ethical responsibility, as well as, the economic mission of creating value for shareholders or owners of businesses (Carroll, 1989). Whereas, the economic responsibilities of a business are to produce goods and services that society needs and wants at a price that can perpetuate the continuing existence of the business, and also satisfy its obligations to investors; ethical responsibilities are those behaviors or activities expected of businesses by society and other stakeholders such as employees (Ferrell & Fraedrich, 1997).

Corporate social responsibility has become a common practice among most industries in Nigeria. It is one of the newest management strategies where companies try to create a positive impact on society while doing business. Holme and Watts (2000) defined CSR as the continuous commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large. Businesses can use ethical decision making to secure their businesses by making decisions that allow for government agencies to minimize their involvement in the corporation. Several reasons have been advanced to explain why commercial institutions voluntarily engage in social activities. Most companies practice social activities to satisfy their primary needs of presenting themselves as legitimate members of society (Bowen, 1953). This legitimacy has led companies to pursue their primary purpose of seeking sustainable profitability.

Leaving aside the fact that the corporate sector provides significant economic benefits to society, there are growing concerns that larger society provides great opportunities for companies to use public resources to operate their businesses (Carroll, 1979). Some experts are of the idea that most rules and regulations are formed due to public outcry, which threatens profit maximization and therefore the well-being of the shareholder and that if there were no outcry, there would be little regulation (Carroll, 1999). A firm is not socially responsible if it merely complies with the minimum required of the law, because this is what a good citizen would do.

It’s now recognized that sustainable development and reduction of poverty are the key issues that need to be addressed by the governments, mostly in the developing world. However, the government cannot meet this alone without the help of the private sector. Policy makers are paying much attention to the potential contribution of the private sector to such policy objectives. As the issue of sustainable development becomes more important, CSR becomes an element that addresses these issues and therefore it becomes more vital in the daily operations in industries. According to Pranjali (2011). The World Business Council for Sustainable Development (WBCSD) describes CSR as a contribution to sustainable economic development; It is said that there is no way to avoid paying serious attention to corporate social responsibility: the costs of failing are simply too high. There are countless win opportunities waiting to be discovered: every activity in a firm’s value chain overlaps in some way with social factors, everything from how you buy or procure to how you do your research, yet very few companies have thought about this. The goal is to leverage your company’s unique capabilities in supporting social causes, and improve your competitive context at the same time. The job of today’s leaders is to stop being defensive and start thinking systematically about corporate responsibility according to Michael Porter (2005) who says successful executive or leaders know that CSR is inevitable and their long-term success is based on continued good relationship with the society.

CSR is also practiced because customers as well as governments today are demanding more ethical behaviors from organizations. In response, corporations are volunteering themselves to incorporate CSR as part of their business strategies, mission statement and values in multiple domains, respecting labor and environmental laws, while taking care of the contradictory interest of various stake holders according to Kashyap et al., (2006).

Corporate Social Responsibility (CSR) activities are no longer only charitable events but tools for boosting positive image of the company, employee and customer satisfaction and organizational profitability. Islam (2012) confirmed that the concept of business has changed from profit making activities to social welfare activities where businesses are not only responsible to its shareholders but also to all of its stakeholders of which employees satisfaction forms a nucleus. The main force that drives companies to adopt corporate social responsibility is CSR’s financial benefits (Rapti and Medda, 2012).

All the foregoing practices constitute unethical behaviour. Unethical behaviour can be described as anything on the part of the purchasing officers who betrays the confidence their employers and consumers repose on them. These unethical acts have anti-social effects on the products by Nigerian industries.

Unethical acts run counter to objectives of purchasing officers to abide by the codes of conduct of the organization or professional body.

The researcher therefore, focuses his study on how ethical and social responsibilities of the purchasing practice for buyers in industries can improve the level of productivity and the general standard of the industries performance and to erase the notion that purchasers are failures and further project the ethical and social conduct expected of a professional buyer in industries.

Golden Guinea Breweries Plc, have their major roles which cannot be achieved except purchasing principles and practice are fully employed. In many organizations the need for ethnical and social responsibilities of the purchasing practice for buyers in Industries can easily be identified. This is because the Industry, we observed the prevalent tendency among some of the purchasing officers who embezzle money in their purchasing activities as against the Interest of the company’s use. Besides, for further experience on the job, which will attract more advancement and responsibilities. Infact ethical and social responsibility is important that without it the industry will suffer from managerial obsolescence.

Golden Guinea Breweries Plc being a production firm has purchasers, stores managers etc. It is a state government owned enterprise established to meet the industrial and social needs of the state to a large extent, it has been striving to achieve these goals, although there is still room for improvement to this and there fore, the background of the study is aimed at the finding out how effective the ethical and social responsibility could help in achieving this goal.

1.2 Statement of the Problem

As for the manufacturing industry, the relation between organizational ethics and social responsibility and organizational productivity has not been examined extensively, and the few existing studies offer conflicting evidence. In spite of the existing of some literature about the role of corporate social responsibility in the aspects of environment and society, there is a significance gap about how corporate social responsibility improves organization performance due to lack of documented evidence of the benefits hence the researchers focus was to find out the effect of CSR on organization performance based on Golden Guinea Breweries Plc as we find out whether this organization realize any benefits from the much they spend.

Industries with good operating results and strategies can reduce screening and monitoring costs and diversify risk across different projects and overcome liquidity risks which ultimately provide savers with high return. Having long term financial success can attract investment in long-term projects while allowing investors access to their savings at short-term notice (Levine, 1991).

These institutions allow cross-sectional diversification across projects, allowing risky innovative activity while guaranteeing contracted interest rate to savers (King and Levine, 1993). Industries can boost the rate of technological innovation by identifying the entrepreneurs with most promising technologies. Successful institutions can help reduce liquidity risk and enable long-term investment (Diamond and Dybvig, 1983). Organizations with sound long term performance can offer job security to its employees, create new employment opportunities, assure government of continuous revenue apart from satisfying their shareholders’ expectations. These problems necessitate the need to carry out a study on ethnical and social responsibility of the purchasing practice in industries.

1.3 Objectives of the study

The main objective of the study is to examine the ethnical and social responsibility of the purchasing practice in industries.

Specifically, the study sought to:

  1. Examine the perceptions of managers on the benefits of Ethics and CSR to purchasing practice.
  2. Examine what the organization get out of CSR and ethical behavior.
  3. Examine how they benefit tangibly from engaging in CSR policies, activities and ethical practices.

1.4 Research questions

  1. What are the perceptions of managers on the benefits of Ethics and CSR to purchasing practice?
  2. What do the organization get out of CSR and ethical behavior?
  3. How do they benefit tangibly from engaging in CSR policies, activities and ethical practices?

1.5 Significance of the study

The study also seeks to articulate what social responsibility and ethics means, and why it makes good business sense to integrate the two concepts into strategic decisions, policies and practices of businesses.

The study is expected to make contributions to knowledge in a number of ways. The outcome of this research will provide information about CSR in relation to corporate institutions especially the industries in Nigeria. It is also expected that the results of this study would produce relevant material for scholarly discourse in management science relating to corporate social responsibility and profitability. Another benefit is that in a truly global economy, industries in Nigeria would be more responsible and become citizens. Organizations would more easily and willingly respond to the social needs of the societies where they operate.

The findings generated in this study are useful in testing the existing theories under extreme conditions not present in developed economies where most of the prior studies were carried out. Current and potential investors are supplied with information to help them make good investment decisions. The findings and conclusion may enable the regulators to know the nature of demand placed on manufacturing industries in Nigeria and ways the organizations have responded to them.

The work is important to the government, host communities and non-governmental organizations involved in development programmes. This study fills literature gap by investigating the effects of CSR on purchasing practice of Golden Guinea Breweries Plc. The results provide useful evidence to other emerging sectors in Nigeria.

1.6 Scope of the study

The study focuses on the ethnical and social responsibility of the purchasing practice in industries. The study is limited to the industries in Nigeria, focusing solely on Golden Guinea Breweries Plc Nigeria.

1.7 Limitation of the study

The following limitations were anticipated in this study:

  1. Since the study was only carried out in only one province, the results may not be generalizable to the whole country. The researcher collected data on his own without research assistants.
  2. Financial constraints were also anticipated in the current study. Although the researcher received assistance from the bursary, it was not possible to carry out the study at national level.
  3. The researcher is a full-time employee so time to carry out the study was limited.

1.8 Organization of Study

The study is organized into five chapters. Chapter one deals with the study’s introduction and gives a background to the study. Chapter two reviews related and relevant literature. The chapter three gives the research methodology while the chapter four gives the study’s analysis and interpretation of data. The study concludes with chapter five which deals on the summary, conclusion and recommendation.

Chapter Five

Conclusion And Recommendations

5.1 Conclusion

The objective of the study was to determine the ethnical and social responsibility of the purchasing practice in industries, using Golden Guinea breweries Plc as case study. Corporations are facing increasing demands, and that, they should look beyond their own interests and prioritize those of the societies in which they operate. This is because businesses host their operations within society, and in return, society expects these businesses to show responsibility for aspects of their operations. It is no longer acceptable for a firm or corporation to experience economic prosperity in isolation from the stakeholders.

This study showed that many of the Managers perceive organizational ethics and social responsibility as important for organizational growth and success. Specifically, they consider organizational ethics to lead to positive employee, customers and as well community relations. Furthermore, they perceive better corporate image/reputation, greater customer loyalty; and a strong and healthier community as benefits that can inure to the benefit of corporations that are socially responsible. It is therefore, important that business schools and professionals in the corporate world turn their attention to these factors, since they are critical components in their training and practices. Our study is however without limitations. Further research with a larger sample of business schools should help us to contribute to this line of inquiry. These studies may also deploy both the quantitative and qualitative approaches to research. This has the potential to complement any inherent weaknesses that may exist in either approach.

5.2 Recommendations

Organizations can manage ethics in their workplaces by establishing ethics management programs that convey their corporate values, codes and policies to guide decisions and behavior. However, the mere presence of a code of ethics does not necessarily guarantee causation of ethical behavior within a company, unless it is integrated into all aspects of an organization.

Employees must buy into the programs and code of ethics for easy and proper implementation. Therefore, there is need for training on the ethical code which may include the values, codes, and standards of the organization. In addition, every employee wants to be part of an organization where they are recognized and made aware of the truth and what is going on, particularly in crisis situations. Companies which are responsible and transparent with their employees have a better chance of attracting and retaining more talented staff.

Also, CSR is not only relevant because of the changing policy environment, but also, because of its ability to meet business objectives. As the business environment gets increasingly complex and stakeholders become vocal about their expectations, good CSR practices can only bring in greater benefits. Undertaking CSR initiatives and being socially responsible can have the following benefits: strengthening relationships with stakeholders; attracting the best industry talents; and risk mitigation because of an effective corporate governance framework. Additionally, a well-managed CSR creates social and environmental value, while supporting a company’s business objectives and reducing operating costs, and enhancing relationships with key stakeholders and customers. It is therefore imperative that corporations establish a CSR unit whose primary responsibility is coordinating and integrating all CSR initiatives.

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