CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Towards the end of 1800’s to the early 1990’s the mission of business firms was exclusively economic. During this period, the cardinal purpose of business owners is to make as much profit as possible. To underscore the above assertion, Milton Friedman (1972:88) had contended that the only responsibility of the business is to make as much profit as it can for the owners. Today, partly due to the interdependencies of many groups in our society, the values, goals and attitudes of the society changed significantly. This accounts for the complexity in the society in the area of social, economic as well as environmental problems which have been experienced. This situation is in consonance with the view of Ackerman (1973:89), when he opined that the people increased awareness has brought some expectation and demand to bear on companies to be socially responsible to the society in which they operate. Thus we often talk about the social responsibility and social responsiveness of all organizations although the focus of this study shall be on corporate organizations. There is a question as to what the social responsibility of business really means.
The concept of social responsibility is not new, although the idea was already considered in the early part of the twentieth century. The modern discussions of social responsibility got a major impetus with the book “social responsibility of business men” by Howard .R. Bowen, who suggested that business actors should consider the social implications of their decisions, society being awakened with respect to the urgency of social problems is asking managers and owners of business what they are doing to discharge their social responsibility to the society in which they operate given negative social impacts of their business on the society such as pollutions of all kinds air, water, solid waste noise to mention but a few.
The concept of social responsibility refers to the firm’s consideration of and responses to the issues beyond narrow economic, technical and legal requirement of the firm. It is the firm’s obligation to evaluate in its decision making process the effects of its decision on the external social system in a manner that should accomplish social benefits along with the traditional economic gains which the firm seeks for. However, Harper D. (1976) a classical economist consistently argued against the need to do anything that negates profit maximization. He sees business social responsibility as an aberration Harper, (1976). xii
1.2 STATEMENT OF THE PROBLEMS
Oil spillage in some of the oil producing state is alarming and some pollution caused by industries in our country is on the high rate. The problems of the communities where the oil companies operate bring these problems constructively to the attention of the companies with which they have developed regular form for meetings. These companies have created ecological disaster, gas flowing in the communities. Therefore, the problem to be looked into in this research is that a corporate organisation does not bother about their social responsibility to the environment where they operate. Furthermore, poverty, lack of essential facilities and unemployment are increasing is alarming proportion. As a result the needs and expectation of the society are not met by the business organisation.