Corporate Social Responsibility and Its Impact on the Nigerian Consumer Behavior

Abstract

Purpose: This research explores the relationship between Nigerian consumer perception towards corporate social responsibility (CSR) and its influence on their buying behavior. Research design, data, and methodology: In order to achieve this, a structured three-part questionnaire was developed and distributed to 400 respondents to gather relevant information. The respondents were randomly selected from Lagos and Adamawa, Nigeria. Only 222 questionnaires. were completed and data was later analyzed using administering descriptive and inferential statistics. Results: a) Nigerian consumers have adequate knowledge about CSR; b) Nigerian consumers' awareness of socially responsible practices largely influences their purchasing decisions; c) Nigerian consumers' perceptions of the traditions of socially accountable actions influence their buying behavior. Conclusion: Although the research was targeted at the urban areas of Lagos and Jimeta/Yola in Nigeria, the findings indicate Nigerian consumers generally have a positive perception of CSR. The research offers invaluable contribution to the Nigerian corporates based on which they can reassess their existing CSR policies for better positioning of their company and their products.

1. Introduction

In the last two to three decades, corporate social responsibility (CSR) is sluggishly gaining momentum in the developing and underdeveloped world. Almost all the stakeholders of the industry have realized the significance of socially responsible actions from the corporate world.

Particularly consumers, employees, and the general public firmly believe that the introduction of more steadfast social activities from the corporate world would lead to radical changes in the lives of almost all the stakeholders in the society. In recent years, a lot more changes have taken place in the dietary consumption trends because of a myriad number of reasons particularly socio-economic, increasing the direction of awareness towards health, disposable income, demographic growth, the establishment of nuclei families, availability of tech-savvy products (Boccia, Malgeri Manzo, &Covino, 2019). The most vulnerable community in the world, consumers are expecting more direct social actions from the business community because of the bitter experiences they have had in their past purchase actions.The exploitation of consumers is the most promising situation widely spread in the developing world in which many of the stakeholders will not have a proper understanding of their rights and privileges and who are regularly failing to get the appropriate value to their purchasing. Irrespective of the magnitude and sector of the business, consumers are playing a more prominent role in these days. As said by Maignan (2001), Marin, Ruiz, and Rubio (2009), and Hassan, Shaw, Shiu, Walsh, and Parry (2013), it is an immediate situation to know the perceptions of the consumers through marketing research along with the remaining marketing issues on the socially responsible actions of the companies. The socially responsible activities of the corporate world reflect information to the stakeholder about the organization‘s values and are useful in increasing the confidence that individuals have on companies (Perez & del Bosque, 2013). Several studies (Bhattacharya & Sen, 2004; Sen & Bhattacharya, 2001; Page & Fearn, 2005;Marin & Ruiz, 2007; Alcaniz, Caceres, & Perez, 2010) revealed that the perception of consumers about the practices of CSR influence the affective responses of consumers who identify with the company. Most of the time, the concept of corporate social responsibility replicates how the corporate world integrates its business strategies with the well-being of various stakeholders like shareholders, employees, customers, suppliers and bankers, governments, and the general public at large. However, this research study investigates CSR from the consumers‘ perspective. There are limited studies that have investigated consumers‘ attitudes toward CSR (Swaen, Chumpitaz, Bigné, &Andreu, 2003). Even in the case of CSR in Nigeria, most of the studies highlighted information about the challenges of corporate social responsibility (Ijaiya, 2014), meaning and practice of CSR in Nigeria (Amaeshi, Adi, Ogbechie, &Amao, 2006). Some researchers concentrated on the implementation of corporate social responsibility in Nigeria‘s petroleum industry (Ndu &Agbonifoh, 2013) and some industry specific studies like CSR and consumer buying behavior in the Nigerian oil and gas sector (Akanno, Che, Radda, &Uzodinma, 2015). However, relevant studies have conducted in Nigeria, and most of them are industry-specific, predominantly concentrated on the oil and gas sector of the country. However, there is no effort put up by either the business world or academia to know the influence of CSR on the general purchasing behavior of Nigerian consumers. Most of the companies in different parts of the globe, now a day try to position their company and its activities by communicating social actions or practices to distinguish themselves from the competitors (Rodrigues &Borges, 2015). This paper attempts to highlight the neglected research area of Corporate Social Responsibility (CSR) focusing on the influence that CSR initiatives have on the Nigerian consumer behavior.

2. Literature Review

Most of the researchers in Nigerian have initiated research on corporate social responsibility but concentrated only on awareness, implementation, and challenges related to this concept. There is a good number of research contributions on the influence of socially responsible actions of companies on consumer purchasing preferences. Most of the researches highlighted that there is a positive relationship between socially accountable initiates and consumers' attitudes towards these companies and their products (Agudo-Valiente, Garces-Ayerbe, & Salvador- Figueras, 2015; Brown & Dacin, 1997; Creyer, 1997; Ellen, Mohr, & Webb, 2000). Some of the researchers also have completed industry-specific studies. Until recently, many of the developing and underdeveloped countries not yet introduced any law or enactment to implement and practice CSR by the entire corporate world. The same has revealed in Ugunwanyi, and Ekene's (2016) study that the reason behindthis might be because ―there is no law in place to theNigerian government that forces companies to practice CSR, foreign and local companies lack the necessary drive to effectively carry out CSR because they are not mandated bylaw.‖ Another recent research by Adeyemi and Ayanlola(2015) says that CSR discloses that the implementation of CSR not regulated in Nigeria.

The present situation in Nigeria demands a more active approach from the government to implement CSR meticulously. These studies also highlighted the only partial implementation of CSR and, at the same time, requires a sincere and dedicated effort from the government for more commitment towards CSR. Some of the industry-specific studies on CSR like Odetayo and others (2014) confirmed that the Nigerian bank's response to CSR over the years has been positive since they have realized that it enhances their image and that billions of Naira (Nigerian currency) have spent towards contributing to the community development in Nigeria. Tran (2014) showed that the banking sector in developing countries might face economic, political, and knowledge and perception barriers to corporate social responsibility. Besides, as findings from Adeleke (2014) stated that ―a majority of Nigerian bankers are satisfied with the banking sector which they feel, overall, behaves in a socially responsible way, although they also noted concerns related to insider abuse and a lack of transparency among internal processes.‖ One side of the issue is that managers, as shareholders agents, must ensure positive economic performance, which is ―the organization‘s primary social responsibility, which if they cannot satisfy, they cannot satisfy the society‖ (Ndu & Agbonifoh, 2014). Anyorganization's prime social responsibility is to keep the organization in business with profits because without profits, shareholders are not happy, and it may run out of business. Therefore, this approach works for managers to keep their jobs and expand markets. However, on the other side, some studies have shown that business managers have a responsibility that they owe to business stakeholders like employees, customers, governments, and the general public.

Rahman and Nurullah (2014) stated that the ―role of business worldwide and specifically in the developed economies have evolved from classical 'profit-maximizing' approach to a 'socially responsible' methods, in which businesses should keep in mind the interests of stockholders along with remaining stakeholders in a broad sense.‖ The researchers Potluri and Temesgen (2008) and Potluri, Batima, and Madiyar (2010) conducted dyadic perspective studies in Ethiopia and Kazakhstan to know about the perceptions of different stakeholders viz., owners and shareholders, employees, customers, creditors and suppliers, the general public and government towards social actions of the companies along with the commitments shown by the companies in implementing the CSR.

2.1. Theoretical Framework and Hypotheses Selected

The corporate social responsibility (CSR) has an extensive history in which it evolves from a mere idea to the philosophy of doing business, coupled with how it affects organizations‘ performance. According to Lee (2008), the conceptualization of and research on CSR have evolved along the following avenues. In terms of the level of analysis, researchers have moved from a discussion of the macro social effects to an organizational-level analysis of CSR and its impact on organizational processes and performance. Moreover, in terms of the theoretical orientation of this field, researchers have shifted from explicitly normative and ethics-oriented arguments to implicitly normative and performance-oriented managerial studies. Carroll and Shabana (2010) expressed a similar kind of opinion and said that CSR became one of the most conventional and widely accepted concepts in the business world during recent years. From the definition, corporate social responsibility is more of an obligation by a business to maximize a positive impact on stakeholders and minimize the negative impact (Ferrell, Fraedrich, & Ferrell, 2011; Maignan & Ferrell, 2001).

Generally, businesses which are operating in different parts of the world comprehensively depend on society for all its resource and making profits. The question is, therefore, what are these societies getting in return from the business organizations? These communities are getting and suffering from all kinds of pollution, sanitation, traffic, law and order, and other problems related to industrialization. Suffering from all types of pollution created by manufacturing is the reason why many entrepreneurs or business people like to become socially responsible in their business activities and have become interested in implementing CSR (Rahman & Nurullah, 2014). In his landmark book Social Responsibilities of Businessman, Bowen (1953) defined the term CSR is the obligations of businesses to implement their policies, to introduce their decisions to achieve their objectives in line with the societal values. The focal philosophy of this Bowen‘s work is that firms are vital centers, and the firm‘s actions impact the lives of the population in various ways. He also argues that social responsibility is not a universal remedy for all businesses' social problems. Because of Bowen‘s early and influential work, Carroll (1999) has argued that Howard Bowen called as the "Father of Corporate Social Responsibility." From a different perspective, Kotler and Lee (2008) articulated the term CSR as a commitment of corporates by administering its practices and resources for the well-being of the community. The social responsibility concept mainly based on the principle that businesses have a more significant influence on society than can be measured merely by profit or loss. The idea of CSR can be a compound thought to grasp because different people have different beliefs as to which actions improve society‘s welfare (Sherwin, 1983). Not only academicians,as mentioned by Nigel, Chambers, and Johnston (2010), the UK government also defined the concept of CSR as to how businesses take into account it is an economic, social, and environmental impact in the way it operates. It is an initiative to listen and respond to the needs of business stakeholders. The sole purpose of this definition is to make sure that they minimize the risks posed to society and the environment while maximizing the benefits and still be getting an economic value. Based on the above-discussed literature review and theoretical framework, researchers propose the following hypotheses.

H1: Nigerian consumers have adequate knowledge about the corporate social responsibility of companies.

H2: Nigerian consumers‘ knowledge of socially responsible practices largely influences the purchase of products.

H3: Nigerian consumers‘ perceptions of the practices of socially responsible actions influence their buying behavior.

3. Research Methodology

This study adopts a quantitative research method with a preference for a survey strategy. Considering the exploratory nature of this study, Lagos (South-West) and Adamawa (North-East) of Nigeria adopted the sample location. In the absence of a sample frame, a sample of 400 respondents selected, while the content validated questionnaire with a reliability Cronbach‘s Alpha Test of 0.88, was administered to the 400 respondents using a purposive sampling technique. They were requested to provide information on the outlook of Nigerian consumers towards CSR and its influence on their buying behavior. Although a purposive sampling technique is a non- probability sampling, its use is justified when randomization is impossible and where the population is very large or unknown (Etikan, Musa, & Alkassim, 2016). From the 400 administered questionnaires, a total of 222 surveys were finally returned (corresponding to 55.5%). The gathered data analyzed using descriptive and inferential statistics by which informed conclusions made. This approach aligns with the best practice in business and management research (Saunders & Lewis, 2012).

4. Analysis and Findings

The data generated from 222 respondents are as presented hereunder as tables 1, 2, 3, and 4. The reliability of the CSR questionnaire tested with Cronbach‘s Alpha. The result is as given below:

Table 1: Reliability Statistics

Source: Survey Result (2019)

Table 2: Personal Data of respondents

Source: Survey Result (2019)

Table 3: Perception of CSR by Nigerian consumers

Source: Survey Result (2019)

Table 4: Results of Hypotheses

Source: Survey Result (2019)

The Cronbach‘s Alpha reliability coefficients based on standardized items indicated coefficient values of 0.88(for the whole instrument), 0.83 (for ecological details), and 0.85 (for social issues), which are higher than 0.60 mini mum reliability threshold, an indication that the whole questions on the instrument have internal consistency and ar e reliable.

Table 2 provided information on the personal data of respondents ranging from sex, age, and education. Majority of the respondents are male (69.10%), while the female respondents are (29.41%). With regards to age, most of the respondents (48.65%) are within the 20-29 age bracket, followed by 40-49 years of age bracket, 30-39 years, and 50-59 years with 21.62%, 15.77%, and 13.96% respectively. On education status, those with secondary school are 32.43%, National Diploma (4.95%), Higher National Diploma (7.66%), BSc (26.58%), MSc (21.62%) and PhD (6.76%).Research shows clearly that people with different degrees of educational attainment participated in the survey.

In Table 3 below, all the mean scores for the 18 questions relating to the Perception of CSR by Nigerian consumers. These high mean scores have three implications associated to the research hypotheses. These are: (a) Majority of respondents have adequate knowledge about the corporate social responsibility of companies; (b) Majority of Nigerian consumers‘ understanding of socially responsible practices largely influences the purchase of products; and (c) Majority of Nigerian consumers‘ perceptions of the methods of socially accountable actions have an influence on their buying behavior.

In Table 4 below, the three (3) formulated hypotheses accepted at a 5% level of significance. The first hypothesis affirmed that Nigerian consumers have adequate knowledge about the corporate social responsibility of companies at p-value = 0.000 <0.05. The second hypothesis also confirmed that Nigerian consumers‘ understanding of socially responsible practices largely influences the purchase of products was accepted at p-value = 0.007 <0.05. The third hypothesis supported that Nigerian consumers‘ perceptions of the traditions of socially responsible actions influence their buying behavior was at p-value = 0.001 <0.05

5. Managerial Implications

Based on this research, a good number of practical implications can be acknowledged. Mostly, the study offers guidance to all kinds of governments viz., federal, state-level, and local and corporates. Researches from Brown and Dacin (1997), Creyer and Ross (1997), and Ellen, Mohr, and Webb (2000) highlighted a positive relationship emerges between the corporates socially acclaimed initiates and the behaviors of the consumers towards these companies and their products. There is no exception to African consumers in general and Nigerian consumers. Even though consumers in Nigeria have a confident ken and positive attitude on the social initiates of the companies, the traditional purchasing criteria with price sensitiveness continue to prevail. With this observation of this research, companies can restructure its marketing mix in general and pricing policies. As said by Mohr and Webb (2005) and De Pelsmacker, Driesen, and Rayp, (2005) stated that consumer behavior is not at all consistent with the attitudes towards products and its ethical issues. Most of the consumers in developing markets and underdeveloped markets would not have enough knowledge in observing and evaluating the moral, social, environmental, and other social initiatives of the companies in their respective countries. Consumers in this part of the world typically consider several factors, and these considerations are often guided by their purchasing capacity, and the perception towards specific products, and much more. The corporate sector who are planning to win the hearts of this segment of the consumers need to follow cause-related marketing with caution, and these pragmatic investigative results more specifically useful to marketing managers of the Nigerian corporates, along with SME‘s who have plans to intensify their businesses with the careful introduction of some social actions in the market. Based on the increasing trend of positive attitude towards corporate social responsibility in the consumers‘ minds, governments also should force the companies to design and develop policies, programs, strategies, budgets for their social actions by introducing modifications in the respective company laws.

6. Conclusions and Scope for Further Research

In this research, researchers have set the goal of contributing to the knowledge about the impact of the socially responsible actions of the Nigerian companies on consumers. Therefore, the research has oriented to the perceptual displays of Nigerian consumers towards their purchase behavior. The research on CSR and its influence on consumer behavior confirmed that most of the consumers had developed a positive frame of mind towards companies who have a social responsibility in their actions. Moreover, companies exceptionally involved in the implementation of social initiatives have received notable and tremendous success, particularly in monetary issues. This research particularly limited or covered only consumers from Lagos and Adamawa states of Nigeria. There is significant scope for further investigation of this kind with more samples by taking the sample from other parts of the country also. Mostly, researchers collected the opinions of only randomly available consumers in the selected areas for the study. However, industry-specific, sector-specific investigations would provide more detailed information about the changing trends of consumers towards socially responsible actions of the corporate sector. These types of research intended to be further take-up in Nigeria and other parts of the world, which would provide accurate information about the expectations of different stakeholders of the corporate sector.