EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON THE DEVELOPMENT OF LOCAL COMMUNITIES: A CASE STUDY OF KARU LOCAL GOVERNMENT AREA, NASARAWA STATE

CHAPTER ONE INTRODUCTION 1.1 Background of the Study To achieve meaningful and sustainable changes in people's lives, individuals must unite within a community, collaboratively plan, and take action aimed at improving their living conditions through cooperative engagement (Pratama, 2019). Community development, as a process, serves as a means to actively engage and motivate community members to recognize, understand, assess, and find solutions to the challenges they consider important. As such, community development emphasizes strengthening the capabilities of individuals within the community to accomplish collective goals (Situmeang & Siwi, 2017). It is widely believed that the poverty and underdevelopment prevalent in many host communities are partly due to the conduct and policies of multinational corporations operating within these areas. The activities of local multinational corporations have had a profound negative effect on the environment, social structures, and the general well-being of the communities in which they operate (Retnaningsih, 2015). Moreover, many of these corporations have been criticized for failing to fulfill their social responsibilities, thus worsening poverty levels and increasing the vulnerability of residents by limiting access to basic social services such as clean water, electricity, and healthcare. In response to this, organizations are now placing greater emphasis on engaging in self-regulated efforts that contribute positively to the communities they operate in. Multinational corporations possess the necessary financial, human, and physical capital to support initiatives aimed at community development (Wiwoho, 2015). The concept of Corporate Social Responsibility (CSR) has, over the last few decades, attracted growing interest from researchers, business leaders, and the general public alike. Companies that aim for long-term success and sustainable growth frequently work in close partnership with the communities surrounding them. These companies increasingly recognize the impact of their activities on stakeholders and are choosing to incorporate CSR as an essential part of their business strategy. In developed countries such as the United States and the United Kingdom, many major corporations view CSR as a critical component of operations and often align their CSR activities with their organizational strengths (Zainal, 2020). According to Andrini (2016), companies with global connections often have a deeper understanding of CSR and how it can be utilized for strategic advantage, although they sometimes continue to rely on conventional rather than modern CSR approaches. While Nigerian companies are aware of CSR and demonstrate a willingness to engage in it, their understanding often remains limited to acts of charity or philanthropy (Abugre & Nyuur, 2015). CSR refers to the voluntary commitment by an organization to meet the needs and promote the welfare of various stakeholders—such as investors, customers, employees, suppliers, government bodies, and the broader community—within its business environment (Ebert & Griffin, 2017). The benefits of CSR can be substantial for both the business and the community. Bahri (2016) found a positive relationship between a company's financial performance and its CSR engagement. When a company acts responsibly, it contributes to the development of society by generating employment, wealth, and access to goods and services that collectively improve social well-being over time. Arnold (2017) emphasizes that one of the primary outcomes of CSR is the strengthening of relationships between corporations and communities. Organizations that recognize the importance of CSR are more likely to create strategies, policies, and practices that align their operational goals with socially responsible actions. True social responsibility goes beyond simply complying with the law; it involves adopting ethical business practices that exceed regulatory requirements and actively seek to improve the lives of individuals and groups within the community (Zainal, 2020). It is against this backdrop that the researcher seeks to examine the effect of corporate social responsibility on the development of local communities: a case study of karu local government area, Nasarawa state. 1.2 Statement of the Problem Corporate Social Responsibility (CSR) has become a key measure for evaluating both businesses and their role in society. In today’s highly competitive business environment, companies have realized that maximizing profits at any cost is no longer a viable or sustainable approach to maintaining or enhancing competitive advantage (Selcuk & Kiymaz, 2017). Businesses now face increasing pressure to engage in socially responsible initiatives, especially as they strive to meet the diverse expectations of their stakeholders. Stakeholders are demanding that corporate entities be held accountable for the social and economic effects they have on the communities where they operate (Osisioma, Nzewi & Paul, 2015). Despite this growing awareness, many business owners continue to overlook or neglect the negative consequences their operations may have on local communities. These issues often result in significant challenges for residents, sometimes making day-to-day life more difficult. The rationale for allowing corporations to operate within society is grounded in the idea that society and business are interdependent and must function in harmony. In recent years, there has been an urgent and widespread call for heightened corporate accountability, driven by global challenges such as economic recessions, financial market instability, and widespread food insecurity. These issues have necessitated swift and responsible corporate responses (Andrini, 2016). Therefore, this study seeks to investigate effect of corporate social responsibility on the development of local communities: a case study of karu local government area, Nasarawa state . 1.3 Research questions The following questions have been prepared to guide the study i.What are the corporate social responsibility practices that promote community development in Karu LGA Nasarawa state? ii.What is the impact of corporate social responsibility on community development in Karu LGA Nasarawa state? iii.What are the challenges faced by corporations in implementing CSR initiatives in Karu LGA Nasarawa state? 1.4 Objective of the study The broad objective of the study is to investigate the effect of corporate social responsibility on the development of local communities: a case study of karu local government area, Nasarawa state . i.To examine the corporate social responsibility practices that promote community development in Karu LGA Nasarawa state ii.To assess the impact of corporate social responsibility on community development in Karu LGA Nasarawa state iii.To identify the challenges faced by corporations in implementing CSR initiatives in Karu LGA Nasarawa state 1.5 Research hypotheses The stated hypotheses have been formulated to guide the study H0: Corporate social responsibility does not have an impact on community development in Karu LGA Nasarawa state Ha: Corporate social responsibility does have an impact on community development in Karu LGA Nasarawa state. 1.6 Significance of the study The study will be significant for the following reasons Business corporations: The study will be valuable to business organizations as it will demonstrate how aligning Corporate Social Responsibility (CSR) initiatives with the specific needs of communities can promote sustainable development. It will help companies recognize both the visible and hidden advantages of engaging in CSR, including enhanced corporate image, improved relationships with the community, and greater customer loyalty. The insights gained from the research can assist businesses in developing more impactful CSR strategies that not only meet their moral responsibilities but also support their overall profitability. . Academia: the study will be significant to the academic community as it will contribute to the existing literature, it will also contribute to library resources and serve as a guide to future researchers. 1.7 Scope of the study The study focus on effect of corporate social responsibility on the development of local communities: a case study of karu local government area, Nasarawa state. Empirically, the study will examine the corporate social responsibility practices that promote community development in Karu LGA Nasarawa state, assess the impact of corporate social responsibility on community development in Karu LGA Nasarawa state and identify the challenges faced by corporations in implementing CSR initiatives in Karu LGA Nasarawa state. Geographically, the study is delimited to Karu LGA Nasarawa state 1.8 Limitation of the study Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraints are: Time: The researcher encountered time constraint as the researcher had to carry out this research alongside other academic activities such as attending lectures and other educational activities required of her. Finance: The researcher incurred more financial expenses in carrying out this study such as typesetting, printing, sourcing for relevant materials, literature, or information and in the data collection process. Availability of Materials: The researcher encountered challenges in sourcing for literature in this study. The scarcity of literature on the subject due to the nature of the discourse was a limitation to this study 1.9 Definition of terms Corporate Social Responsibility (CSR): Corporate Social Responsibility refers to the voluntary actions and initiatives taken by companies to contribute to the social, economic, and environmental well-being of the communities in which they operate. Community Development: This is a process where community members come together to take collective action and generate solutions to common problems.