Economic crises” and “corporate social responsibility (CSR) initiatives” are two issues that dominate the modern business agenda. Although related, these issues have been analysed separately, and so a significant gap is perpetuated between the two. What are the effects of economic crises on CSR initiatives? Can organisational social initiatives withstand economic crises?
The concept of corporate social responsibility (CSR) has been gradually spreading in Nigeria since its introduction. Nevertheless, it still had not been fully embedded in many companies culture. Despite the implementation of some new and creative practices, in general the progress of CSR in Nigeria has failed to meet the expectations of many stakeholders, including most importantly those of employees.
Despite its growing recognition, CSR has been advanced primarily by transnational and multinational companies, and less so by other stakeholders – a structural shortcoming typical of Nigerian factor. As the majority of CSR initiatives have been implemented by companies, local programmes are often outright translations of the corporation’s CSR policies with no relevance to local needs and interests.
Implementation greatly depends on whether human resources (HR) or public relations (PR) managers are in charge of CSR. Often, local CSR activities have nothing to do with the company’s core business, which does not ensure sustainability for the programme.
The difference between the perception of CSR before and after the recession has in all surveyed companies many common characteristics. During our interface with companies, most of them agreed that recession has demonstrated the importance of corporate CSR and depth of its actual implementation.
Before recession, companies were still learning what CSR is and they did not use fully the potential of CSR as a competitive advantage. During the recession, however, specific activities and projects were reviewed. Projects of marginal interest were dismissed and CSR ceased to represent only the allocation of funds for charitable purposes. CSR has become more targeted.
There was a shift from reactive to proactive CSR. Companies began to understand CSR more conceptually and strategically. All companies particularly dropped from the support of smaller projects and strongly focused on projects that are in line with their business activities, to enhance their competitiveness in unstable time of economic recession.
In the future, all companies would consider CSR more strategically and targeting their projects 93 better. They would like to support especially those projects which have proved to be effective. Rather than new projects would like to enrich the current dimension of CSR. In the social area, they would like to return benefits for employees and again support social or cultural events, which were very limited due to the recession.
Companies also place great emphasis on developing the relationship with stakeholders and getting feedback. In accordance with the current trend, companies also started to focus more on volunteering, which is very beneficial and does not require too much financial support. According to surveyed companies, in future, CSR should not only underline business strategy and contribute to the reputation of the company, but also increase its value and competitiveness.
Findings revealed that, CSR helps companies to cope with economic crises by increasing the efficiency of investments and establishing better relations with stakeholders and markets; environmental practices are related to negative environmental performance in periods of economic crises; and CSR relates positively to financial performance in periods of economic crises.
Also, it was assumed that intelligent business strategies would perceive CSR-based initiatives not just as threats during an economic crises but also opportunities, which was found to be true through many companies’ global initiatives of healthcare, economic, and sustainability efforts. Most companies have similar goals in regards to conservation of natural, renewable resources, and protection of the physical environment; since all of them consume enormous amounts of natural resources and have the need to soften their image within the communities that they conduct business.
As managements must adapt to business changes that are driven by legislative and governmental actions that may be self-serving and issues driven without a true long-range strategic focus, any CSR-based initiative does not guarantee secure and profitable outcomes; hence, there will always be an element of risk involved in such ventures.
