THE ROLE OF CORPORATE SOCIAL RESPONSIBILITY IN THE PROFITABILITY OF SMALL AND MEDIUM ENTERPRISES IN GHANA

ABSTRACT
A firm exists to pursue the interest of stakeholders. Society is a key stakeholder for any firm, and hence, its interests, needs, and viewpoints must be considered. The role of CSR, therefore, is to attain profitability in a manner that uplifts and protects societies as well as conserving the environment. The purpose of the research was to examine the role of corporate social responsibility on small and medium enterprises in Ghana, with SMEs in Accra as reference. The research had ROA as the dependent variable and CSR, efficiency and capital intensity as the independent variables. The study used a descriptive and a cross-sectional study design and targeted SMEs operating in Ghana. The research used secondary data. Descriptive statistics and inferential statistics were the mode of statistics. The results showed that an insignificant positive relationship between ROA and CSR whereas there is an insignificant positive relationship ROA and efficiency. The findings also found out that capital intensity had an insignificant negative relationship with ROA

CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
According to Osemene O.F. (2012), many organizations in Ghana are established for the purpose to make and increase profit to the neglect of all the stakeholders.

Some organizations do not respond to the need and interest of the host community.

There is a dier need for organizations to begins to incorporate public interest. Companies are struggling in finding the edge between responding to consumer pressure, employee demand and government mandates and at the same time satisfying their investors and shareholder (Pax S.2006) According to Onwuegbuchi (2009), corporate social Responsibility is the inclusion of public interest into corporate decision making and the honoring of a triple bottom line of people, plant and profits, corporate social responsibility policy is a self regulation assembles into rules and regulations, ethical standards, consumer satisfaction, employee welfare, environmental responsibility and sustainability, community and shareholders benefit.

Corporate social responsibility programmes according to Travis (2006) can help organization strengthen its brand reduce operation cost, attract and retain talents, boost employee morale, assures investors an d enhance a company’s image, the benefit and challenges of corporate social responsibility programmes should be understood by organization owners inorder to choose an initiative that benefits the company and community. Many organizations have been forced into corporate responsibility because they are part of the community and they are also a corporate citizen of the community; therefore it does not make good business sense to be seen as a company that is destroying the environment of the society.

The SMEs Ghana Limited, in fulfillment of its corporate social responsibility as part of its commitment to development initiative has given scholarship and sponsored many youth to Ihu institute of Individual Technology the programme was designed to bridge the gap that exist in the Ghana education system and as well as to impact knowledge and skills to help them become responsible and independent citizens of the country.

Corporate social responsibility has a huge impact on local communities and the world; it affects social economic and environment.

According to (Garry C.2003) who stresses that corporate social responsibility has even affect the air that we breath in further stated that investors are more likely to invest in a corporations that has shown corporate responsibility. Investors are aware of the customer’s strength of opinion regarding unethical companies. The customers are now in a better position to shape corporate responsibility than ever before. Good corporate social responsibility policy will attract good investors which will provide necessary resources to improve and sustain organizational performance.

1.2 Statement of the problem
The issue of corporate social responsibility has generated a lot of discuss and debate; some scholars argued for CSR while other scholars argued against CSR and its principles.

Hence, the question is, how will organizations carryout their social responsibility? What area of the host community requires social responsibility? To what extent do corporate social responsibilities affect performance of a firm? How can performance of a firm been improve through social responsibility? It is to these that the following research questions are further asked which the research intends to investigate.

1. Is the corporate social responsibility of SMEs Ghana Limited acceptable to the host community?

2. Does corporate social responsibility affects the performance of a firm?

3. Does corporate social responsibility affects the profitability of a firm?

1.3 OBJECTIVES OF THE STUDY
1. Investigate how corporate social responsibility (corporate social responsibility) influences organisational reputation in the Small and medium enterprise in Ghana.

2. Cross-examine the difference between level of perceived customers’ patronage and brand loyalty among SMEs that practices corporate social responsibility and organisations that do not practice corporate social responsibility in the Small and medium enterprise in Ghana.

3. Analyse how corporate social responsibility adoption influences organisational performance and profitability.

4. Assess the economic, social and environmental factors influencing corporate social responsibility (corporate social responsibility) adoption among small and medium enterprises in Ghana.

1.4 RESEARCH QUESTIONS
1. Are there differences between level of perceived customers’ patronage and loyalty among SMEs that practices corporate social responsibility and those that do not practice corporate social responsibility in the Small and medium enterprise in Ghana?

2. What extent would corporate social responsibility adoption influence organisational performance and profitability?

3. What are the economic, social and environmental factors responsible for the poor performance of corporate social responsibility (corporate social responsibility) adoption among small and medium enterprises in Ghana?

1.5 RESEARCH HYPOTHESES
To provide empirical answers to the research questions above, the following research hypothesis were developed. They are as stated below;

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Item Type: Ghanaian Project Material  |  Size: 86 pages  |  Chapters: 1-5
Format: MS Word  |  Delivery: Within 30Mins.
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