Social Responsibility Impact on Corporate Image, Brand Equity and Profitabiity of Nigerian Firms

SOCIAL RESPONSIBILITY IMPACT ON CORPORATE IMAGE, BRAND EQUITY AND PROFITABILITY OF NIGERIAN BUINESS FIRMS

OLAYENI, AKINTUNDE OLUMAYOWA

Abstract

The study is based on corporate social responsibility of Nigerian business firms and how this affects the level of their profit, their corporate image and ultimately their brand equity that leads to their patronage. It is a study on how the society and an organization connects with each other.

Data were gathered from selected organisations on the variables to find out the extent to which corporate social responsibility imparted on them. The study was designed specifically to:

 (a) Test hypothesis based on the proposition that social responsibility is related to corporate image of Nigerian Business firms.

(b) To examine social responsibility and indicate whether it has relationship with profitability of firms.

(c) Examine social responsibility and know whether it has relationship with customer’s patronage.

The study also examined to what extent are business firms in Nigeria socially responsible to their society and how Managers in Nigerian business firms perceive corporate social responsibility. Spearman’s Rank Order correlation was used in the study to determine the relationship that exists between the independent variable (social responsibility) and the dependent variables (corporate image, brand equity and profitability). The study found out that a significant portion (85.7%) of Nigeria business firms carry out corporate social responsibility one way or the other and that CSR has a lot of impart on organization’s corporate image, brand equity and their profitability. The good news about this according to the study however, is that 88.9% of Managers in Nigerian firms have positive perceptions on CSR..  

Keywords: Corporate social responsibility, corporate image, Brand Equity and Profitability

1.0 Introduction

Background to the Study

In this modern society, corporation and its managers are publically pressurized to play an active role in society; it is called corporate social responsibility. Nigerian business firms perceive and yield to social responsibility in different ways. Some firms believe that a mere contribution to social course like development of education, art and culture and sponsoring of different programs and activities in their environment is social responsibility. While some holds the believe that minimization of social costs like urbanization, environmental pollution and abiding to business ethnics, codes of conduct are all that are needed to be socially responsible.

However, taking an in depth look at firms in different industries in Nigeria, one could easily notice that many going-concerns do not reckon with social responsibility and its impact on business activities, especially its effect on corporate image, brand equity and profit level of a firm.

Different researchers and scholars have discussed the relationship between corporate social responsibility and corporate financial performance. This relationship has always been a topic of debate for last decades. Our study however, moved a little bit away from viewing organisation’s performance from financial point of view alone.  We sought to view organisation’s performance from how the organization is perceived by the society (corporate image), how this perception of the society affects its brand equity by the members of the society and how it ultimately leads to increase in its profit level year on year.  The objective of our study is to find out if there is any relationship between corporate social responsibility, organisation’s perception (corporate image), and brand equity and profit growth. We know that solid brand equity and good patronage of any business is a step in the right direction towards its profitability.  As per finding of our study, there is a strong positive relationship between corporate social responsibility and all the dependent variables, corporate image, brand equity and profitability