The Role Of Importance Of Corporate Social Responsibilities On Crisis Management

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The Role Of Importance Of Corporate Social Responsibilities On Crisis Management

Chapter One


1.1 The Background Of The Study

The growing complexity of modern society and a growing insight into what motivates individuals and groups gave birth to corporate social responsibility being incorporated into organisations .The current business environment is now a much more dynamic, challenging and demanding environment. The consciousness of social responsibility in managing crisis is growing by the day in the people, governments, and organisations as well. All over the world, business organisations both private and public thrive to be socially responsible both to their employees and their host community, to be able to effectively manage crisis. Bearing in mind that the responsibility of any organisation or establishment determines to a great extent the corporate image and opinion created in the minds of the public. Effective social responsibility no doubt, helps to create a conducive working or industrial atmosphere, attract investment, stop or reduce opposition against a company and dispose domestic decisions favourably to the company.

Corporate trends in the 1990s in the areas of social responsibility and corporate governance in the U.S.A include changing models of corporate governance from the traditional model that is dominant in the U.S.A which is based on property rights. According to this model, shareholders control the corporation and the major factors in the governance process. They supply the capital and the corporation needs and therefore own the property, legitimizes the shareholders theoretical control over the use of corporate resources. (Bucholz 1994).

1.2 Crisis Management

Crisis management is the process by which an organisation deals with a major event that threatens to harm the organisation,, its stakeholders or the general public. The study of management crisis originated with the large scale industrial and environmental disaster in the 1980, it is considered to be the most important process in public relations and corporate social responsibilities.

Three elements are common to a crisis:

  1. A threat to the organisation.
  2. The element of surprise.
  3. A short decision time (Wikipedia).

Venette S.J(2013) argues that “crisis is a process of transformation where the old system can no longer be maintained”.

Therefore the forth defining quality is the need for change. If change is not needed, the event could more accurately be described as a failure or an incident.

1.3 Corporate Social Responsibility (C.S.R)

C.S.R focuses on what an organisation does that affects the society in which it exists. More recently, managers and theorists have broadened their concerns to include basic ethical questions such as “How should we live in relation to each other”? James A.F Stoner, R. Edward Freeman, Daniel R. Gilbert, J.R.

The business dictionary says corporate social responsibility is a company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates.

Also C.S.R refers to business practise that involves participating in initiatives that benefit the society. Liz Maw, C.E.O of non-profit organisation (net impact), noted that C.S.R is becoming more mainstream as forward thinking companies embed sustainability into the core of their of their business operations to create shared value for business operations and society.

1.4 Grand Hotel Convention Centre And Resort Asaba:

Grand hotel is nestled between the beautiful Niger coast of the Niger and the impressive town of Asaba, capital of Delta state. Grand Hotel Convention Centre and Resort, Asaba is one of the most luxurious hotels in Asaba.
The hotel offers various social services to the community, it find itself, which have led to it been rated as the number one hotel in Asaba. It offers various services to customers, which include the following:

  1. Guest relations: including car hire services.
  2. 24 hours valet parking
  3. Fully equipped business centre.
  4. Doctor on call, etc.

1.5 The Statement Of The Problem

In a third world country like Nigeria where development is beginning to crawl, one factor that has been seriously neglected in organisational structures is the role and importance corporate social responsibility can play in crisis management.

Obviously, when an organisation and it’s host community is at loggerheads, the bone of contention is usually the failure of been socially responsible. More often than not, the parties involved do not understand what corporate social responsibility is, they often mistake it for governmental responsibility. Corporate social responsibility is an old idea with American roots in the writings of the steel magnate Andrew Carnegie. Carnegie believed that, “the goal of businessmen should be to do well in other to do good”. He also said for the success at prodding companies operating in today’s high risks environmental roles, the corporate social responsibility movement suffers from the two fundamentals problems. One relates to lack of standard defining what counts as corporate social responsibility, leaving it to business managers to decide. The second one relates to the over- reliance on citizens oversight, sometimes referred to as civil regulation. To make corporate social responsibility work, these two problems are closely linked because there are no clear standard for corporate social responsibility.

It begs the question, why should an organisation bother itself with corporate social responsibility? When a company’s image is strong and commands respect, is corporate social responsibility needed? How corporate social responsibility graded and what is does an organisation gain from being socially responsible? How effective and important is corporate social responsibility in crisis management.

1.6 Objectives Of The Study

Generally, this work is the role and importance corporate social responsibilities play in crisis management. The research seizes to highlight the place of effective corporate social responsibility in organisations with a view of bridging the gap between an organisation and its public. As a result, specific objectives of this research include the following:

  1. Carefully analyze the role and importance of corporate social responsibility and it role in crisis management.
  2. Analyze the challenges of organisations that operate without corporate social responsibility.
  3. Examine the risks involved in crisis management without adequate corporate social responsibility.
  4. To carefully examine the benefits that is involved in corporate social responsibility
  5. To know why companies involve in corporate social responsibility and still succeeds as a business firm.

1.7 The Research Questions

For this research, the following research questions have been put to guide the study.

  1. Could lack of corporate social responsibility lead to crisis in an organisation?
  2. Can corporate image be boosted with effective corporate social responsibility?
  3. How effective is corporate social responsibility in GRAND HOTEL, Asaba?
  4. To what extent should an organisation be socially responsible to avoid crisis?

1.8 The Research Hypotheses:

For this research, the following hypotheses have been used to guide the project.

  1. Ho: There is no significant relationship between corporate social responsibility and crisis management.
    Hi: There is a significant relationship between corporate social responsibility and crisis management.
  2. Ho: There is no significant relationship between a Grand Hotel’s corporate image and corporate social responsibility.
    Hi: There is a significant relationship between a Grand Hotel’s corporate image and corporate social responsibility.

1.9 Scope Of The Study

This work is limited to Asaba relative to corporate social responsibility of Grand Hotel Asaba. It evaluates and considers the management techniques adopted by the management of Grand Hotel to meet the needs of the community as a means of aiding the development of the environment it operate in. It also looks at how effective the management of Grand Hotel handles and manages crisis from it employees.

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