Corporate Social Responsibility (CSR) in Nigeria: western mimicry

No. 39-2006 ICCSR Research Paper Series - ISSN 1479-5124

Corporate Social Responsibility (CSR) in Nigeria:

western mimicry or indigenous practices?

Kenneth M Amaeshi, Bongo C Adi

Chris Ogbechie and Olufemi O Amao

Research Paper Series

International Centre for Corporate Social Responsibility

ISSN 1479-5124

Editor: Jeremy Moon

International Centre for Corporate Social Responsibility

Nottingham University Business School

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Corporate Social Responsibility (CSR) in Nigeria:

western mimicry or indigenous practices?

Kenneth M Amaeshi, Bongo C Adi

Chris Ogbechie and Olufemi O Amao

Abstract

Drawing empirical evidence from indigenous firms, this study explores

the meaning and practice of CSR in Nigeria. It was found that

indigenous firms perceive and practise CSR as corporate philanthropy

aimed at addressing socio-economic development challenges in

Nigeria. This finding confirms that CSR is a localised and socially

embedded construct, as the ‘waves’, ‘issues’ and ‘modes’ of CSR

practices identified amongst indigenous firms in Nigeria reflect the

firms’ responses to their socio-economic context. It is anticipated that

this paper will add to the body of knowledge on CSR, especially as it

relates to Africa, which has a relatively dearth of literature on CSR;

and provide some insights to multinational firms operating in Nigeria.

Keywords: Corporate Social Responsibility, Socio-legal business

context, Developing countries, Africa, NigeriaAuthors

Authors

Kenneth M. Amaeshi

(Warwick Business School, United Kingdom),

Bongo C. Adi

(Regional Development Economics, University of Tsukuba, Japan)

Chris Ogbechie

(Lagos Business School, Pan-African University, Nigeria)

Olufemi O. Amao

(Department of Law, University College Cork, Ireland)

Address for correspondence

All correspondence to:

Kenneth M. Amaeshi

Warwick Business School

The University of Warwick

Coventry, CV4 7AL

Email: [email protected]

Introduction

This paper seeks to contribute to the meagre literature on CSR in

developing economies by providing a Nigerian perspective of CSR.

Nigeria makes an interesting case to explore the meaning and practice

of CSR for many reasons. Nigeria is the most populous black-country

in the world and is influential both within sub Saharan Africa and in the

global economy – not least in the proven capability of her internal

events to destabilize the global oil market. In fact, incessant political

unrests within the country are not unconnected to the social and

environmental concerns that lie at the heart of CSR debate

. Problems

of poverty in the midst of plenty, environmental negligence and

bureau-political corruption implicate both the behaviour of the Nigerian

government and those of multinational oil companies in particular.

There have been a number of studies on CSR in Nigeria, most of which

have, mainly, focused on multinational firms and less on indigenous

firms (e.g. Ite, 2004, 2005; Frynas, 2000, 2001; Boele et al 2001;

Wheeler et al., 2002). If the CSR practices of multinational firms

operating in Nigeria reflect the national business systems of their

home countries, as Jones (1999) and van Tulder and Kolk (2001)

argue, the question therefore arises on how indigenous Nigerian firms

perceive and practice CSR. In other words, is there a Nigerian brand

of CSR or is it an imitation of western CSR practices?

The EU’s Green paper on CSR defined it as ‘a concept whereby

companies integrate social and environmental concerns in their

business operations and in their interaction with their stakeholders on

a voluntary basis’

. And more recently, McWilliams and Siegel

(2001:117) define it as “… actions that appear to further some social

good, beyond the interests of the firm and that which is required by

law”

. While the CSR construct is a new coinage

, it is not a new

practice. It could be traced back to such examples as the Quakers in

17th and 18th centuries whose business philosophy was not primarily

driven by profit maximisation but by the need to add value to the

society at large – business was framed as part of the society and not

separate from it. The resurgent interest in the practice provides a

fertile ground for different discourses and actors, which lends it to

multiple and contested constructions (Moon 2002).

Given the dominance of the West in shaping the CSR agenda, the

contemporary CSR movement could be, arguably, said to be largely

founded on Anglo-American priorities, philosophies and values (Kemp

2001; Chapple and Moon, 2005; Fig, 2005). And as typical of other

business concepts, CSR is on its way to globalization, especially

through Multinational Corporations (MNCs) and Multinational

Institutions (MNIs)

. However, a central concern in the current drive

for global CSR practice is the seeming underlying assumptions of the

homogeneity of the CSR construct at a global level. In this regard,

there is a burgeoning literature on the meaning and practice of CSR

across cultures and national boundaries (e.g. Orpen, 1987; Langlois

and Schlegelmilch, 1990; Bennett, 1998; Jones, 1999; Quazi and

O’Brien, 2000; Maignan, 2001; Kusku and Zarkada-Fraser, 2004;

Hamann et al., 2005; Fig, 2005; Chapple and Moon, 2005)

. A

common strand that runs through most of these studies, suggests that

meaning and practice of CSR is socio-culturally embedded.

In this paper, we explore the current meaning and practice of CSR in

Nigeria with emphasis on the waves, issues and modes

of CSR

amongst indigenous firms. The study is largely exploratory and does

not present or adopt any normative stance (or ‘best practice’

approach) towards the practice and meaning of CSR. It examines CSR

as a neutral business practice (Amaeshi and Adi, 2006). We first

explore the context in which firms operate in Nigeria – i.e. the

corporate governance framework and socio-economic conditions

influencing indigenous firms. And then use the results of a purposive

survey of the meaning of CSR among Nigerian banks to conduct an

exploratory analysis of indigenous conception of CSR. We finally

discuss the findings and conclude.

Nigerian Corporate Governance framework and Socio-economic

conditions: Implications for CSR

This section is founded on the assumption that firms are products of

their socio-economic environment, which in turn shapes or influences

their CSR activities. In order to understand the meaning and practice

of CSR amongst Nigeria indigenous firms, therefore, it is worthwhile to

situate the concept of ‘the firm’ within the Nigerian context. We do this

by, first, examining the characteristic of the Nigerian corporate

governance framework – which is the socio-legal contract between

firms and society; and later by exploring the socio-economic conditions

in which these firms operate.

Characteristic of the Nigerian Corporate Governance framework

Present Nigerian firms as institution of socio economic production and

exchange originated within the context of colonial imperialism and

have therefore evolved in the context of modernisation and contact

with the Western world. Nigeria gained independence from Britain in

1960. Before the contact with the west the mode of production was

largely agrarian and peasantry in nature. Nigerians were mainly

engaged in agriculture, hunting, cattle rearing and trading. The trading

was in the mains internal until the contact with North African in the

trans-Saharan trade (Orojo, 1992). The first generation of Nigerian

firms evolved toward the end of the slave trade.

The United Africa Company (UAC), founded by George Goldie in 1879

was one of the earliest modern firms that operated in the area that

later became Nigeria. It was this firm that received the British

concession for control of areas surrounding the Niger River under the

charter of the Royal Niger Company in 1886. But it had to compete

with a number of equally “rough-hewn British” merchants who were

originally slave traders but turned into other trading lines at the

abolition of the slave trade. These large companies, together with the

UAC were as ruthlessly competitive as the local towns themselves and

frequently engaged force to compel local trading partners to comply

with the terms of exchange. Occasionally however, the slave raiding

instinct prevailed and these merchants resorted to outright banditry

(see Law, 1995, for instance). In other words, banditry characterised

the initial strategy of colonial firms in their dealings with the

indigenous people of Nigeria. The case of the Niger Delta versus

Nigerian State and Oil corporations therefore, has a rich historical

antecedent.

The abolition of slave trade and the formal establishment of British

Authority over its Nigerian colony saw a rapid growth both in internal

and external trade in 19th Century Nigeria (Orojo, 1992). The early

companies in Nigeria were British based. By virtue of Colonial statutes

enacted between 1876 and 1922, the law applicable to companies in

Nigeria at this time was the ‘common law, the doctrines of equity, and

the statutes of general application in England on the first day of

January, 1900’ subject to any later relevant statute. The implication of

this approach was that the common law concepts such as the concept

of the separate and independent legal personality of companies as

enunciated in Salomon v. Salomon was received into the Nigeria

Company law and has since remained part of the law (Orojo,

1992:17). However with continued growth of trade, the colonialist felt

it was necessary to promulgate laws to facilitate business activities

locally. The first company law in Nigeria was the Companies Ordinance

of 1912, which was a local enactment of the Companies

(Consolidation) Act 1908 of England; and even the current company

law of Nigeria (now known as the Companies and Allied Matters Act

1990 - CAMA) is largely modelled on the U.K Company Act, 1948

(Guobadia, 2000).

Despite the fact that the Nigerian Company Law was modelled after UK

law it has been largely interpreted and applied from the perspective of

the U.S contractarian model. While in the U.K there has been a

noticeable shift in focus in the conception of the purpose of the

company to ‘enlightened shareholder value’ and the requirement that

companies report on the impact of their operations on other

stakeholders such as employees, suppliers, communities and the

environment (see Williams and Conley, 2002), culminating in the

recent Company Law Reform Bill

, which is in the process of being

taken through parliament, the Nigerian legal framework has not gone

the same direction. It still essentially reflects the shareholder

supremacy and shareholder wealth maximization goal

characteristic of

the U.S contractarian school (Fannon, 2003). Companies are thus

viewed as private actors to be run exclusively in the interests of

shareholders. This view has been followed by the Nigerian courts,

which have consistently ruled in favour of the supremacy of

shareholders.

This position has also been reflected in the interpretation of the

relationship between the company and stakeholders. In essence, this

conception of the company for example differentiates the relationship

of employees of companies from employees in the public service in

Nigeria. Whereas the termination of the employment of public servants

are statutorily protected so that the relationship cannot be brought to

an end except on specific grounds provided by statute;

that of

companies employees are not so protected. A company could

terminate the employment of its employees at will and for no reason

after giving due notice which is one month by statute and usually

three months by contract.

This, in our opinion, creates some real

challenges in adopting and implementing some western notions of CSR

(i.e. responsible employee relations) in Nigeria and further questions

the touting of CSR as a standardised global practice. Given the

contractarian orientation of the Nigerian corporate governance

framework we propose, therefore, that:

CSR activities in Nigeria would not be framed from a

stakeholder perspective (or socialist model). In that

regard, little or no emphasis would be placed on such CSR

waves as employee relations or consumer protection

(a) Socio-economic conditions

Nigeria is a concatenation of tribes, cultures, languages and religions,

necessitated by the imperialist interests of the then British government

to ease the governance of this amalgamated entity called Nigeria. The

predominant ethnic groups and languages in Nigeria are the Hausas,

Yoruba and Ibo. The Hausas dominate the northern part of the

country, the west by the Yorubas and the east by the Ibos. These

tribes have continued to co-exist, albeit, with great internal tension.

An example of this tension was the 1967 to 1970 civil war and the

tribal militarization of the Nigerian polity (over 35 odd years of her 46

years of independence) that plunged the country back in all indices of

development.

Nigeria has abundant natural and human resources, with a population

of about 140 million

. The Nigerian economy is largely dependent on

its oil sector which supplies 95 percent of its foreign exchange

earnings. Nigeria is very rich in natural resources and earns significant

revenue from her oil reserves. However, the presence of oil in Nigeria

has remained more of a curse than a blessing in many ways. First, it

destabilised the then emergent strong economic base of the country.

The primary sources of growth of the Nigerian economy prior to the

1960s have traditionally been agriculture, industry and services.

During that era, cash crops were introduced, infrastructure was

developed, and a market for consumer goods began to emerge. At

independence in 1960, agriculture was the dominant sector,

accounting for well over 50 percent of Gross Domestic Product (GDP)

and was the main source of export earnings and public revenue, with

the agricultural marketing boards playing a leading role. By the early

1970s, oil emerged as the leading variable in the national economic

scene. Since then, its dominance and overwhelming importance has

left Nigeria operating an almost mono-culture economy with oil

accounting for 78 percent of federal government revenue, more than

95 percent of export earnings and about 11 percent of GDP in 2000.

Second, it has continued to unleash untold devastations on the locales

where the oil resources are extracted – especially the Niger-Delta

region of the country. Their main sources of livelihood (i.e. rivers and

farmlands) are polluted and destroyed. These damages often lead to

conflicts between the oil firms and the host communities. The case of

the Ogoni people and Shell is a well documented study in the CSR

literature. In addition, the marginalisation of the Niger-Delta region is

further compounded by oil politics – a reflection of the tribal politicking

in which the country is engulfed.

Despite her rich natural resources, Nigeria has a per capita income of

around $390 and life expectancy of 45 years (World Bank, 2006). A

more graphic comparative data on the socio-economic condition of

Nigeria is presented in the table below:

Nigeria suffers from poor infrastructural development. The road

networks are underdeveloped and there are a host of communities and

cities cut off from each other due to unassailable transportation

networks. The education system is under-funded and illiteracy rate is

up to 40 percent. More than two-thirds of Nigerians are poor. In 1980

an estimated 27 percent of Nigerians lived in poverty. By 1990, 70

percent of the population had income of less than $1 a day – and the

figure has risen since then (NEEDS, 2005). Nigeria has one of the

worst health care systems in the world and the doctor-patient ratio is

almost 1:1000. The public sector is very weak and on top of these,

corruption threatens to crumble the country. As such, compared to the

Western standard, there is a total collapse of governance in Nigeria. In

sum,

Businesses wishing to operate in Nigeria face many

constraints, including poor infrastructure, particularly road

networks and electricity supply; inadequate physical

security; corruption; weak enforcement of contracts, and

the high cost of finance. These factors have deterred

foreign entrepreneurs from investing in Nigeria and

induced many Nigerians to take their money and skills

abroad (NEEDS, xv)

The Niger-delta region of the country, and indeed the entire Nigerian

nation, has up to today continued to seek social justice and

environmental protection but the oil politics is restlessly driven by

powerful interests – the government and the oil firms. The Nigerian oil

sector is dominated by MNCs. In order to make up for the

government’s governance failures and in order to protect their

business interests in the region, these firms often engage in CSR.

Arguably, the history of ‘organised’ CSR in Nigeria can be traced to

practices in the oil and gas sector driven by western MNCs. Shell, for

instance, has over time described their CSR activities in various terms

to match with their intended strategies at each time – sustainable

development, community investment, etc. The CSR activities in this

sector are mainly focussed on remedying the effects of their extraction

activities on the local communities. So, the firms operating in this

sector have often provided pipe-borne waters, hospitals, schools, etc.

However, these provisions have often been on an ad hoc basis and

often not sustained. Christian Aid (2004) in its report on the activities

of Shell in this region, for example, confirmed that some of the

schools, hospitals and other social amenities claimed to be provided by

some of the firms in this sector have been abandoned or did not meet

the needs of the communities they were meant to support. On the

other hand, Ite (2004) argued that the government has continued to

renegade on its commitment that it becomes almost impossible for the

CSR investments by the oil firms to contribute positively to their host

communities.

As typical of MNCs, the motivations to engage in CSR are varied –

response to market forces, globalization, consumer and civil society

pressures, etc. The activities of these firms are therefore visible

because of their global reach. As such, there is a higher incentive to

protect their brands and investments through CSR. However, most of

these compelling pressures to be engaged in CSR may not necessarily

be applicable to most Nigerian indigenous firms. For instance, no

indigenous Nigerian firm has multinational operations and less than

20 percent of all registered companies are publicly quoted. Most

indigenous firms in Nigeria are SMEs, privately held, family owned and

operated (Limbs and Fort 2000; Oyejide and Soyibo, 2001; Ahunwan,

2002). Local consumer and civil society pressures are almost non-

existent. And moreover, law enforcement mechanisms are weak and

made inefficient by institutionalised corruption.

However, some traditional/indigenous values could be glimpsed, albeit

with some difficulties, in the midst of these colonial influences on

business practices. Limbs and Fort (2000) for example identified

ethnicity, language and religion as the three major contexts that

shaped Nigerian business practices. A common trend among the

different tribes and peoples, which could have implication for the CSR

discourse, is the communal philosophy of life and concern for the less

privilege. This trend is rooted in the concept of ‘extended kinship’,

which is common to all the groups (Limbs and Fort 2000). The family

network is very important in Nigeria and almost if not all ethnic group

in Nigeria believes that individual responsibility extend beyond the

boundaries of immediate family. This practice has been described as

Nigeria’s form of social security (Limbs and Fort 2000). In establishing

a firm, the founder represents not only the company but also the

family (Limbs and Fort 2000). Therefore in his business judgement the

founder balances the demand of business with his responsibility to the

extended family, which could be a whole community sometimes.

According to Limbs & Forth (2000) ‘the family-owned nature of most

private businesses and the cultural notions of extended kinship

suggest a propensity toward communitarian identity. Further, there

appear to be strong notions of group identification according to

ethnicity, language and religion.’

In this regard, we argue the case that the socio-cultural characteristics

of Nigeria are unique and as such, the meaning and practice of CSR

amongst indigenous Nigerian firms would mainly be shaped by the

socio-economic conditions in which these firms operate. This is driven

by our proposition that:

CSR in Nigeria would be aimed towards addressing the

peculiarity of the socio-economic development challenges

of the country (e.g. poverty alleviation, health care

provision, infrastructure development, education, etc) and

would be informed by socio-cultural influences (e.g.

communalism and charity). They might not necessarily

reflect the popular western standard/ expectations of CSR

(e.g. consumer protection, fair trade, green marketing,

climate change concerns, social responsible investments,

etc)

Methodology

We ensured that the research design and data collection matched the

research objective – to explore the meaning and practice of CSR in

Nigeria. In order to avoid imposing any pre conceived connotations of

CSR, the study adopts a two pronged and two stage approach. First, it

starts by drawing on ‘informed’ public opinion of Nigerian indigenous

private sector leaders across the four key sectors of the Nigerian

economy: oil & gas, telecom, finance and manufacturing. From

available directories, comprehensive list of companies in each sector

was generated. These business leaders were identified and selected

based on their entrepreneurial achievements, which are visible in the

public domain. Most of these respondents are CEOs or other Senior

Executive Personnel who, by virtue of their positions have sufficient

knowledge of CSR activities in their sector and the economy. Data

were collected through structured interviews (face-to-face, telephone

and emails). Getting hold of this calibre of people is very challenging

given their very busy schedules and distance. We leveraged on social

networks to overcome this barrier. One of the authors is a faculty

member of a premier and highly respected business school in Nigeria

and had access to a good number of these business leaders. Using a

‘snow-ball’ circulation technique, the business leaders were used when

possible to gain access to other business leaders within their

respective social networks. In all we recorded 41 interviews.

The instruments for the structured interviews were designed and

developed strictly to elicit responses in relation to meaning and

practice of CSR activities in Nigeria. The researchers recognise that

one of the drawbacks of self reporting of CSR activities is the danger of

public relations (PR) misuse (i.e. blowing one’s trumpet), as such,

questions were open-ended to avoid biasing the responses. In

addition, the questions were phrased to give respondents the leeway

to talk of activities outside their firms and not use the self reporting for

PR. The questions were also brief and straight to the point (see sample

in the appendix section).

The second leg of the research maps the outcome of the interviews on

one of the key sectors of the economy in order to validate the first

stage. In this case, the financial services sector (especially banks) was

chosen because it is about 90 percent owned and run by indigenous

entrepreneurs. It is anticipated that this sector will provide a much

more succinct indigenous meaning and practice of CSR in the Nigerian

economy than manufacturing, telecoms and oil/gas sectors,

respectively, which have significant presence of multinational firms.

This part of the study was based on CSR web reporting of the firms in

this sector in line with similar studies in this area (Chapple and Moon,

2005).

The Nigerian banking sector has recently undergone a consolidation

whereby existing 90 banks pre December 2005 were reduced to only

25 banks. As such the sector is still caught up in after-merger-trauma.

Although it could be argued that CSR reporting ‘…is not necessarily a

reflection of CSR policies and practice’ (Chapple and Moon, 2005); as

would be expected, issues like CSR would be amongst the first to be

kept on hold in situations like this. We, therefore, work from the

premise that Nigerian banks who currently web-report their CSR

activities have a strong commitment to CSR. From the list of 25 we

eliminated foreign owned banks from our sample (i.e. Standard

Chartered Bank and Stanbic Bank) and also banks without websites or

web-based CSR reports; and were finally left with 11 banks in our

sample (i.e. 44 percent of the sector - as shown in the appendix

section). The CSR web reports were content-analysed with emphasis

on the waves, issues, modes in line with Chapple and Moon (2005).

The result of both the structured interviews and the content analysis of

the web-based CSR reporting are presented below.

Analyses/Discussions

Meaning of CSR

As anticipated, the meaning of CSR was largely framed to reflect the

local realities. In an environment where basic human needs and

infrastructure (by western standards) are a luxury, CSR was mainly

seen from a philanthropic perspective – a way of ‘giving back’ to the

society. Almost all the people interviewed described CSR along the

lines of philanthropy and altruism. Some of these descriptions include:

“[CSR is] The corporate act of giving back to the

immediate and wider community in which organisations

carry out their business in a manner that is meaningful and

valuable and relevant to that community” (CEO of a

consulting firm)

“[CSR] is a way for the companies to reach out to their

host communities by positively impacting on their environ”

(Senior Executive of an Oil/Gas firm)

“[CSR] is a way of saying ‘thank you’ to the environment

in which they [sic] operate and a way of also showing a

sense of belonging to the society at large” (Senior

Executive of a bank)

Content analysis of the web reports also confirms this inclination to

interpret CSR in terms of philanthropy. Writing on its CSR practice and

philosophy, one of the first four banks in Nigeria states

At Zenith, Corporate Social Responsibility is not just a

buzzword; it is a way of life. To emphasize this belief,

Zenith Bank set up Zenith Philanthropy, a fully functional

department responsible for identifying areas, sectors and

causes deserving of philanthropic aid…. Zenith

philanthropy is the channel through which Zenith Bank

gives back to society. One would invariably ask why we

have to set up a department just to give money out? At

Zenith Bank, we see giving back to society as a serious

and passionate cause [emphasis, original] .

The overwhelming conception of CSR as philanthropy may not be

unconnected to traditional socio-cultural heritage of the indigenous

firms. For different regions of Nigeria, the traditional, family or kinship

pattern of production characteristic of agrarian mode of livelihood –

the household economy – has been the governing order of business

organization which is still reflected in the structure of most indigenous

firms (see Nafziger, 1969, 1977; Silverstein, 1983, 1984). For CSR

therefore, the kinship-network-based system of business organization

would imply that businesses first serve the interest of their network

members as their primary constituency. Philanthropy, goodness to

society, charity are therefore conceived within the moral economy of

kin-based solidarity and reciprocity (Adi, 2006). A traditional and

informal sector example of this would be the case of auto spare-parts

business cluster found in Nnewi, Eastern Nigeria that play crucial roles

in their local community development including, provision of city-wide

security.

CSR as philanthropy in Nigeria could also be tied to some religious

influences. Nigeria is a very theistic country. The belief in the

supernatural or some spiritual realities is central to the weltenschaung

of an average Nigerian (Adi, 2006). It can be argued, therefore, that

since gifts and sacrifices are core to religion, the same beliefs could

have easily found an outlet/expression in the Nigerians’ understanding

and practice of business-society relations. However, one would have

expected this religious inclination to influence the attitude of Nigerian

businesses to bribery and corruption – the domain of ethical

responsibilities. This did not come through in the study. One way of

accounting for this could be that the firm as a mode of production is a

borrowed practice and therefore alien to most African countries. As

such most of these countries make less demands on firms in terms of

economic responsibility, legal and ethical responsibilities, especially as

these responsibilities are enforced through market and regulatory

forces, which unfortunately are weak in most African countries,

including Nigeria. This could also account for the lack of emphasis on

the other waves of CSR (i.e. socially responsible products and

processes and socially responsible employee relations), which are

prevalent in western economies with strong markets and regulatory

mechanisms.

CSR in Nigeria: Waves, Issues and Modes

All the interviewees acknowledged that Nigerian firms are engaged in

one CSR activity or the other. However, In line with this philanthropic

and altruistic understanding of CSR 85 percent of the respondents said

that there is an awareness of CSR in Nigeria but without significant

actions, while 7.7 percent either claimed there is almost no awareness

of CSR or there is high awareness with significant actions, respectively

as shown in the table below:

In terms of CSR waves, the interviews and web reporting both show

that the emphasis is more on community involvement, less on socially

responsible employee relations and almost none existent in relation to

socially responsible products and processes. Only a bank reported of

its social responsible investment product – ethical funds. The top five

issues reported on the community involvement wave from the

interviews are as shown below:

These correspond to what were identified through web reporting

analysis (see appendix). When asked of issues they would want

addressed via CSR the respondents repeated the above issues but

substituted sports/arts and culture CSR activities with security issues:

These priorities, again, mirror the peculiarity of the Nigerian socio-

economic conditions. As expected, most multinational firms operating

in Nigeria miss out on these priorities but rather focus on either CSR

mandates from their home countries or CSR activities that directly

impact on their businesses (i.e. ‘strategic’ CSR), while sometimes

ignoring local constructions of CSR. However, these firms are

beginning to respond to local needs, albeit, strategically. In November

2002, the British American Tobacco (BAT) Nigeria established a British

American Tobacco Foundation, the role of which is to identify and

implement community enhancement programmes across Nigeria. The

foundation has commenced series of Poverty Reduction Projects for

unemployed youths in different States of Nigeria. The foundation is

also working with the International Institute of Tropical Agriculture to

provide improved maize seedlings and cassava cuttings to farmers

from communities of production.

These activities targeted at the community and the suppliers (tobacco

farmers) are meant to directly raise the livelihood of these

stakeholders and ultimately the purchasing powers of consumers

(mostly youths). BAT Nigeria in the same year introduced an

Undergraduate Internship Programme to contribute towards the

development of promising undergraduates and prepare them for life in

the corporate world. This programme, it could be argued, is primarily a

strategy for BAT to enhance the quality of its employable labour pool.

It could also benefit the wider society in form of knowledge spill over

as BAT may not be in a position to employ all the interns. Shell

Nigeria, also, has a similar programme which it uses to enhance the

science and engineering skills required in the Nigerian oil and gas

sector. In essence, while indigenous firms are more involved in

philanthropic CSR, the multinational firms are more strategic - their

CSR activities (e.g. poverty alleviation and capacity building) cut

across both the market and non market environments corporate

strategy (Baron, 1995; Lantos, 2001).

The following were identified by the interviewees as the top five main

drivers of (reasons for) CSR in Nigeria:

These drivers are not unique to Nigeria and have been identified in

other cultures and national business systems, as well. But the

interesting thing, here, is how similar drivers across localities give rise

to different CSR responses, which further reinforces the argument that

CSR is a socially embedded construct and practice.

The respondents all agreed that CSR is necessary in the Nigerian

business environment. Some of the reasons they gave for this

response include the need for the private sector to complement the

government in providing for the people (e.g. through capacity building,

infrastructure development and healthcare provision), as well as the

awareness that companies cannot truly claim to be successful and

outstanding performers if the economy and people in which they claim

to have attained this success are below par – as the case of Nigeria.

Some also argued that many of the firms in Nigeria make huge profits

and they need to give back to assuage the sometimes overt or covert

deleterious effect of their activities. This view is well reflected in one of

the comments of the interviewees:

…it is necessary mainly to remind the companies which

make huge profits from Nigeria that their customers are

not only economic clients but social beings with social

needs which can be enhanced by the corporate social

responsibility activities (Academic/Consultant)

While this comes across as a reasonable expectation, it will be

worthwhile to situate it within the context offered by the Nigerian

corporate governance framework for such social orientations.

Unfortunately, this will be hard to achieve as long as the institutional

framework places more emphasis on firms as private actors, with

private rights mainly embedded in contracts (license of operation), and

less emphasis on firms as fabrics of the society with the purpose of

providing some social benefits (i.e. employment, productivity,

economic growth, sustainability, etc) (Fannon, 2003). By its emphasis

on shareholders wealth maximization the Nigerian legal framework as

earlier discussed in this paper would appear to be promoting a U.S

type contractarian approach. To further underscore the recognised

interest within a registered company, the Act makes the constitution of

a company i.e. the memorandum and article of association of the

company a contract between the company and its members

(stockholders) and officers (management) and between members and

officers. Under the Act, the law thus essentially reflect the

shareholder supremacy and shareholder wealth maximization goal of

the U.S contractarian school. In other words, a corporate governance

framework reform would be needed to orientate Nigerian firms

towards social considerations.

In summary, the results/analyses show that the understanding and

practice of CSR in Nigeria is still largely philanthropic and altruistic.

And most people think that CSR is one of the many ways companies

can plough back a portion of their profit to their immediate

environment. This finding is in many ways at variance with the current

understanding and practice of CSR in Western economies, where CSR

is argued to have ‘advanced’ beyond philanthropy:

Today, corporate social responsibility goes far beyond the

old philanthropy of the past – donating money to good

causes at the end of the financial year – and is instead an

all year round responsibility that companies accept for the

environment around them, for the best working practices,

for their engagement in their local communities and for

their recognition that brand names depend not only on

quality, price and uniqueness but on how, cumulatively,

they interact with companies’ workforce, community and

environment. Now we need to move towards a challenging

measure of corporate responsibility, where we judge

results not just by the input but by its outcomes: the

difference we make to the world in which we live, and the

contribution we make to poverty reduction. (Gordon

Brown, Chancellor of the Exchequer of the UK

government)

The study also confirms that cultural manifestation of CSR does not

necessarily need to follow a linear progression as predicted by Carroll

(1991, 2004). In Carroll’s model, economic responsibility is the first

stage of CSR development while philanthropic responsibility is the last

stage of CSR maturity. In the case of Nigeria, philanthropic

responsibilities were emphasised over and above other aspects of

Carroll’s model (i.e. economic, legal, and ethical responsibilities). This

does not in any way suggest that CSR practice is much more advanced

in Nigeria but corroborates some studies (e.g. Visser, 2006) that have

argued against Carroll linear predictions of CSR development. It also

emphasises CSR practice as a socio-cultural product, which confirms

our proposition.

Conclusion

Recent studies in institutional economics and economic history about

the evolution of norms that under gird social exchanges, for example,

suggest that firms, markets and society in which they are embedded,

are co-determined over time (Grief, 1989, 1993, 2003; Leeson, 2005).

The specific nature of information asymmetries, incentive problems

and efficiency calculations facing individuals or groups of individuals

engaged in transactions determine the type of institutions of social

exchange that evolve within such contexts. Considering this, cartels,

oligarchs, guilds and sometimes, banditry have at various times and in

various places emerged as the “rational,” equilibrium mode of social

organisation of labour and socio-economic production. What the

literature on the socially embedded nature of corporate social

responsibility seems to suggest is that the behaviour of firms within a

given society is determined by this interaction between firms, markets

and society, such that a specific corporate action that may be

considered socially responsible in one area might just not be

indistinguishable from ordinary social etiquette in another. Firms are

therefore, socially constructed and their behaviour reflects those of the

society in which they are embedded. Thus, the distinctive feature of

the Nigerian society and the history of its firms, combined with

insecure property rights regimes and poor contract enforceability have

considerable ramifications for CSR insofar as firms are socially

embedded. It is within this context that CSR in Nigeria has been

examined.

Since the firm as a mode of production is a borrowed concept in most

African communities, Nigerian businesses have always looked up to

the Western for ‘best practices’. This is evident in the adoption of such

practices as relationship marketing, corporate strategy formulation and

implementation, total quality management, et cetera. This strong

dependency on the West could as well reshape the current

understanding and practice of CSR in Nigeria, especially as some

Nigerian firms (in banking and oil/gas sectors) move towards

internationalization of their products and services. Such banks as

Zenith, Guaranty Trust and Diamond that have presence in some other

African countries appear to be investing more in CSR. In this regard, it

is suggested that further research be conducted on how these

internationalisation activities could impact on CSR practices of Nigerian

firms. It will be also worthwhile to examine if CSR activities in Nigeria

are sources or outcomes of corporate performance and to extend the

study to other sectors of the Nigerian economy.

For other types of modern firms in Nigeria such as the multinational

corporations and indigenous firms that are modelled on the western

(post-colonial) notion of the firm, their relationship with the society is

again, influenced by the process by which the Nigerian economy got

integrated into the world economy as the history of the modern firm in

Nigeria reveals. Hence, given the colonial origins of the modern

Nigeria firms, it is only natural to imagine that the formulation of CSR

in theory and practices should retain significant colonial undertones.

Competition between foreign multinationals and local firms is still as

stiff as ever in some sectors especially oil/gas and telecoms. Finally,

like the colonial state, foreign firms and the local ones modelled after

them are not embedded within the society and culture. It is therefore

not surprising that such firms should largely view the larger society as

an arena for philanthropy.

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Research Paper Series

International Centre for Corporate Social

Responsibility

ISSN 1479-5124

Editor: Jeremy Moon

The ICCSR Research Papers Series is intended as a first-hand outlet for research

output of ICCSR. These include papers presented at symposiums and seminars, first

drafts of papers intended for submission in journals and other reports on ongoing or

completed research projects.

The objective of the ICCSR Research Papers Series is twofold: First, there is a time

goal: Given the quality of ICCSR publication, the targeted journals normally require

large time spans between submission and publication. Consequently, the ICCSR

Research Papers Series serves as a preliminary airing to working papers of ICCSR

staff and affiliates which are intended for subsequent publication. By this, research

output can be made available for a selected public which will not only establish

ICCSR’s lead in advancing and developing innovative research in CSR but will also

open the opportunity to expose ideas to debate and peer scrutiny prior to submission

and/or subsequent publication. Second, the ICCSR Research Papers Series offers the

opportunity of publishing more extensive works of research than the usual space

constraints of journals would normally allow. In particular, these papers will include

research reports, data analysis, literature reviews, work by postgraduate students

etc. which could serve as a primary data resource for further publications. Publication

in the ICCSR Research Paper Series does not preclude publication in refereed

journals.

The ICCSR Research Papers Series consequently is interested in assuring high quality

and broad visibility in the field. The quality aspect will be assured by establishing a

process of peer review, which will normally include the Editor of the ICCSR Research

Papers Series and one further academic in the field. In order to achieve a reasonable

visibility the ICCSR Research Papers Series has full ISSN recognition and is listed in

major library catalogues worldwide. All papers can also be downloaded at the ICCSR

website.

Published Papers

No. 01-2003 Wendy Chapple & Richard Harris

Accounting for solid waste generation in measures of regional

productivity growth

No. 02-2003 Christine Coupland

Corporate identities on the web: An exercise in the construction and

deployment of ‘morality’

No. 03-2003 David L. Owen

Recent developments in European social and environmental reporting

and auditing practice – A critical evaluation and tentative prognosis

No. 04-2003 Dirk Matten & Andrew Crane

Corporate Citizenship: Towards an extended theoretical

conceptualization

No. 05-2003 Karen Williams, Mike Geppert & Dirk Matten

Challenges for the German model of employee relations in the era of

globalization

No. 06-2003 Iain A. Davies & Andrew Crane

Ethical Decision Making in Fair Trade Companies

No. 07-2003 Robert J. Caruana

Morality in consumption: Towards a sociological perspective

No. 08-2003 Edd de Coverly, Lisa O’Malley & Maurice Patterson

Hidden mountain: The social avoidance of waste

No. 09-2003 Eleanor Chambers, Wendy Chapple, Jeremy Moon & Michael Sullivan

CSR in Asia: A seven country study of CSR website reporting

No. 10-2003 Anita Fernandez Young & Robert Young

Corporate Social Responsibility: the effects of the Federal Corporate

Sentencing Guidelines on a representative self-interested corporation

No. 11-2003 Simon Ashby, Swee Hoon Chuah & Robert Hoffmann

Industry self-regulation: A game-theoretic typology of strategic

voluntary compliance

No. 12-2003 David A. Waldman, Donald Siegel & Mansour Javidan

Transformational leadership and CSR: A meso level approach

No. 13-2003 Jeremy Moon, Andrew Crane & Dirk Matten

Can corporations be citizens? Corporate citizenship as a metaphor for

business participation in society (2

Edition)

No. 14-2003 Anita Fernandez Young, Jeremy Moon & Robert Young

The UK Corporate Social Responsibility consultancy industry: a

phenomenological approach

No. 15-2003 Andrew Crane

In the company of spies: The ethics of industrial espionage

No. 16-2004 Jan Jonker, Jacqueline Cramer and Angela van der Heijden

Developing Meaning in Action: (Re)Constructing the Process of

Embedding Corporate Social Responsibility (CSR) in Companies

No. 17-2004 Wendy Chapple, Catherine J. Morrison Paul & Richard Harris

Manufacturing and Corporate Environmental Responsibility: Cost

Implications of Voluntary Waste Minimisation

No. 18-2004 Brendan O’Dwyer

Stakeholder Democracy: Challenges and Contributions from

Accountancy

No. 19-2004 James A. Fitchett

Buyers be Wary: Marketing Stakeholder Values and the Consumer

No. 20-2004 Jeremy Moon

Government as a Driver of Corporate Social Responsibility: The UK in

Comparative Perspective

No. 21-2004 Andrew Crane and Dirk Matten

Questioning the Domain of the Business Ethics Curriculum: Where the

Law ends or Where it Starts?

No. 22-2004 Jem Bendell

Flags of inconvenience? The global compact and the future of United

Nations

No. 23-2004 David Owen and Brendan O’Dwyer

Assurance Statement Quality in Environmental, Social and

Sustainability Reporting: a Critical Evaluation of Leading Edge Practice

No. 24-2004 Robert J. Caruana

Morality in consumption: towards a multidisciplinary perspective

No. 25-2004 Krista Bondy, Andy Crane & Laura Browne

Doing the Business: A film series programmed by ICCSR in conjunction

with Broadway Cinema

No. 26-2004 Stanley Chapman

Socially Responsible Supply Chains: Marks & Spencer in Historic

Perspective

No. 27-2004 Kate Grosser and Jeremy Moon

Gender Mainstreaming and Corporate Social Responsibility: Reporting

Workplace Issues

No.28-2004 Jacqueline Cramer, Angela van der Heijden and Jan Jonker

Corporate Social Responsibility: Balancing Between Thinking and

Acting

No.29-2004 Dirk Matten and Jeremy Moon

'Implicit' and 'Explicit' CSR: A conceptual framework for understanding

CSR in Europe

No.30-2005 Nigel Roome and Jan Jonker

Whistling in the Dark

No.31-2005 Christine Hemingway

The Role of Personal Values in Corporate Social Entrepreneurship

No.32-2005 David Owen

Corporate Social Reporting and Stakeholder Accountability The Missing

Link

No.33-2005 David Owen

CSR After Enron: A Role for the Academic Accounting Profession?

No. 34-2006 Judy Muthuri, Jeremy Moon and Dirk Matten

Employee Volunteering And The Creation Of Social Capital

No.35-2006 Jeremy Moon and Kate Grosser

Best Practice on Gender Equality in the UK: Data, Drivers and

Reporting Choices

No. 36-2006 Amanda Ball

Environmental Accounting as ‘Workplace Activism’

No. 37–2006 Kenneth M. Amaeshi & Bongo Adi

Reconstructing the corporate social responsibility construct in Utlish

No. 38-2006 Aly Salama

The ICCSR UK Environmental & Financial Dataset 1991-2002

No. 39-2006 Kenneth M Amaeshi, Bongo C Adi, Chris Ogbechie and Olufemi O Amao

Corporate Social Responsibility (CSR) in Nigeria: western mimicry or

indigenous practices?

Appendix

CORPORATE SOCIAL RESPONSIBILITY IN NIGERIA: MEANING

AND PRACTICE – Interview Schedule



What is your industry of business operations?



What is your understanding of Corporate Social Responsibility

(CSR)?



Do Nigerian firms engage in Corporate Social Responsibility (CSR)?

Please, give reasons for your answers and where possible cite

examples



How would you rate the awareness and practice of corporate social

responsibility in Nigeria?



What do you think are or could be the main drivers of (reasons for)

CSR in Nigeria?



Please, give some examples of CSR activities in Nigeria and what

they are meant to address



In your opinion, what should be the main 5 priorities to be pursued

by Nigerian firms as CSR at the moment?



Is CSR necessary in the Nigerian business environment? Please,

give reasons for your answers