Social Responsibility Adoption and Outcomes of Etihad Atheeb Telecommunication Company - Research Proposal Example

A Research Proposal on Social Responsibility Adoption and Outcomes of Telecommunications Companies Operated in Saudi Arabia Name: University: Instructor: Course Title: Date: Evaluation of Social Responsibility Adoption and Outcomes of Telecommunications Companies Operated in Saudi Arabia: A Case Study of Etihad Atheeb Telecommunication Company ABSTRACT The concept of companies engaging in corporate social responsibility has gained momentum in Saudi Arabia. However, the outcomes associated with the same elicits mixed reactions where some companies have exploited it as means of improving company image and thus brand value and market leadership. On the other hand some adopt it because of social and legal pressure. The aim of the research is to evaluate social responsibility and their outcomes in telecommunication companies in Saudi Arabia. The outcomes examined here is if adoption of social responsibility leads to improved brand value as a result of good reputation & social legitimacy gained leading to increased market shared which leads to market leadership or not. The study will be conducted at Etihad Atheeb Telecommunication Company in Saudi Arabia. The research will use non experimental research design by interviewing employees, managers and customers about the same so as to establish the reality. Table of Contents ABSTRACT ii 1.0 INTRODUCTION 1 1.1 Background of the Study 1 1.2 Problem Statement 1 1.3 Purpose of the Study 2 1.4 Scope of the Study 2 1.5 Research Objectives 3 1.6 Research Questions 3 1.7 Justification 4 1.8 Assumptions of the Study 4 2.0 LITARATURE REVIEW 5 2.1 Business Stakeholders and Their Expectations 5 2.2 Business in the Context of Profits and Corporate Social Responsibilities 6 2.2.1 Concept of Purely Profit Driven Business 6 2.2.2 Concept of Corporate Social Responsibilities 6 3.0 RESEARCH METHODS 7 3.1 Study Area 7 3.2 Research Design 7 3.3 Research Population 7 3.4 Sampling Design and Determination of Sample Size 7 3.5 Sources of Data 8 3.5.1 Secondary Sources of Data 8 3.5.2 Primary sources of Data 8 3.6 Data Collection Methods 8 3.7 Method of Analysis and Presentation 8 REFERENCES 9 1.0 INTRODUCTION 1.1 Background of the Study In the approach of bounded rational decisional making and consequentialism theories such as utilitarian model, the ultimate goal of business is to make profit irrespective of other side effect (Hodgkinson & Starbuck, 2008, p.457). The basis of this argument is that business should engage in venture where pleasure is more that pain. In business term this means where returns are higher than losses (Chandra, Krovi and Rajagopalan, 2009, p.48). This kind of thinking is anchored from the approach that a company gain market leadership through understanding the needs of consumers and executing strategies that generate superior quality, value and service (Moorman & Rust, 1999 p.180). This was informed by the shareholders framework and economic responsibilities approach in business. On the other hand, there is the realization that firms can not only base their performance on profits recouped alone (Geraghty, 2010, p.141). This realisation has been shaped by various socio-economic and political factors such as social legitimacy. Ethical approaches to doing business have over the years gained a paramount position. Moreover, Kantian ethics demand that human beings engage in what are morally upright and ought to be upheld. Further emergence of concept of sustainable development and sustainability reporting/ accounting has heightened the cause. Corporate social responsibility (CSR) forms a level of appreciation by business organizations for being given opportunity by the host community to conduct business amongst them by drawing resource from their community and injecting wastes on their environment. The chief benefit is brand value. Firms are able to ride on the good reputation they have created amongst their clients (Geraghty, 2010, p.143). 1.2 Problem Statement Telecommunications industry forms one of the critical sectors in Saudi Arabian economy by proving communication platforms to individuals and corporate thus, enabling interaction and business. Moreover, they employee people and contribute to national coffers. However, they equally withdraw resources from their areas of operations and inject wastes. The ultimate goal of businesses is to make profit. In the earlier years of industrialisation and up to 20th century, businesses were concerned with profit recouped alone. In this belief, the goal was to create product that meets the needs of consumer irrespective of other side effects. From the late 20th century to present the trend has been changing. Area that has gained prominence includes environmental management where businesses try to be sustainable in their operations by reducing impact to the environment. From the Brundtland report, most countries now have environmental management agencies that address the issues of sustainable development and carbon restricted economy. Others include diversity management and participating in community empowerment. These two differing opinions in the discourse above then inform the urge to evaluate social responsibility and their outcomes in telecommunication companies in Saudi Arabia. The outcomes to be examined here is if adoption of social responsibility leads to improved brand value as a result of good reputation & social legitimacy gained leading to increased market shared which leads to market leadership or not so as to advice if it is prudent to engage in the same or for businesses to focus purely on profit oriented approach. 1.3 Purpose of the Study The knowledge gap that this research seeks to bridge is on the outcomes derived by telecommunications companies in Saudi Arabia by investing incorporate Social Responsibility. Apart from the mere good reputation as a caring & responsible organisation and protection of environment through sustainable operations, the study seeks to measure if there is significant difference in profitability when a company decides to be purely profit driven and when they decide to adopt corporate social responsibility to augment their corporate and competitive strategy. By holding other factors constant, the study will dwell on marketing perspectives of brand value and market share as parameters of establishing the outcomes of social responsibility adoption. The findings of this study could be used by other companies who have not involved in the same if the study proves that CSR contributes positively to brand value and market leadership or a rethink on their position of not using the approach as a marketing platform, but as a mere compliance strategy of gaining social and legal legitimacy. 1.4 Scope of the Study The study will dwell on marketing perspectives of brand value and market share as parameters of establishing the outcomes of social responsibility adoption. Spatially, the study will be conducted in Saudi Arabia with the specific specimen being Etihad Atheeb Telecommunication Company. In terms of participants to the study, stakeholders like owners, employees, management and customers will be interviewed to establish their opinion on the role of corporate social responsibility in addressing brand value and market leadership or to refute the same by showing that it is just a means to social legitimacy and legal compliance without any marketing significance. 1.5 Research Objectives To examine if implementation of corporate social responsibility contributes to improved brand value and consequently expanded market share. To establish if there is significant difference in profitability when a company embraces corporate social responsibility if other things held constant. To explore the perception of various stakeholders towards adoption of corporate social responsibility by the company. 1.6 Research Questions Does implementation of corporate social responsibility contributes to improved brand value and consequently expanded market share? Is there significant difference in profitability when a company embraces corporate social responsibility if other things held constant? What are the perceptions of various stakeholders towards adoption of corporate social responsibility by the company? 1.7 Justification Iamandi (2007, p.6) notes that there are three levels of CSR. However, the ultimate one is the societal approach. The societal approach is built on social democratic and socio-economic framework where all operations of human beings are tied to promoting social welfare of society. The companies which engage in CSR have outlined various reasons why they do so. The first justification is based on pragmatic and rational reasons. The reason behind this is that firms want to improve their public image. Companies that engage in CSR have higher ratings in terms of image as opposed to those who do not. The second reason is deontological view. This is the sense that a business has a moral obligation to the society. The last is the social pressure. This is the worst route because the company has entrenched the concept out of societal pressure (Iamandi, 2007, p.7). 1.8 Assumptions of the Study The study assumes that adoption of CSR leads to improved performance in terms of profitability which is derived from improved brand value and expanded market share. Moreover, the study assumes that once the company has streamlined its internal operations and competitive strategies the next frontier that offers layer of advantage is CSR. The ultimate thinking is that people are becoming more conscious of organisation’s behaviour and those that can’t guarantee good behaviours are castigated. For instance issue of Kyoto Protocol and Global Warming has highlighted this. Others include the labour relations that a company has. 1.9 Definition of Terms and Variables European Commission (2011, p.6) defines Corporate Social Responsibility as “the responsibility of enterprises for their impacts on society”. Merriam-Webster dictionary (2012) defines an outcome as “something that follows as a result of consequence”. For this research, the independent variable is the implementation of CSR programmes like sustainability accounting, diversity management and involvement in charitable causes such as helping during drought. On the other hand the dependent variables are the outcomes associated with implementation of CSR like improve brand value, market share and profitability. 2.0 LITARATURE REVIEW 2.1 Business Stakeholders and Their Expectations To build the basis of argument for this paper, it is important to indulge and look into the expectations of the stakeholders in the business fraternity. The essence of this is that different stakeholders have different expectations which they would want to be achieved. These expectations are like a cross road to corporate management since some are incompatible and if they were to be addressed all, then there has to be a compromised middle ground. There are various theories that can be used to explain human expectations and how they are shaped. These expectations if not met are likely to cause reluctance, withdrawal and even social unrest. The understanding of stakeholders’ expectations is important in defining how the concept of social responsibility has grown and how businesses have gradually shifted from pure profit oriented approach. This is based on Caroll (1991, p.40) that factors like sustainable development, occupational health & safety, consumer safety and equal employment opportunities have given rise to CSR. Expectation theory looks at performance in relation to anticipated satisfaction of valued goals set by the interested parties. According to Victor Vroom (1964) cited in Brim (2012, p.3), people adapt their behaviour in certain way so as to attain desired goals. For instance this means if the business is not of good name in the society they are likely to shun even through mass action. On the other hand investors will shy away from businesses that operate like charities since they do not guarantee high returns. This then calls for a mid ground approach. The same can be analysed in the context of bounded rationality framework. Jones (1999, p.297) notes that bounded rationality approach to decision making asserts that decision makers are goal-oriented or rather objective and adaptive in their decision making. As such, in bounded rationality decision makers are intentional in their decisions. The ultimate goal of business shareholders is to earn revenue from their business. This means at all cost the business has to make profit by creating value to the end customers and locking them in. on the other hand, the ultimate aim of customers to satisfy their needs by buying goods or services that create value to them. The host community aim is to have a responsible business that has a good reputation in terms of employment policy, diversity and environmental conservation among others. The other is the employees. Their role is to provide man power that enables company to create value. In return they expect to be rewarded by the firm. This reward can only come when organisations make profits. Apart from the reward, employees expect to work in environment that is safe, healthy & free from discrimination and offers opportunity for development. The government aim is to offer level playing field by ensuring that businesses comply with legal provisions (Iamandi, 2007, p.5). The above framework shows that CSR is bigger than economic success and legal provisions. One has to be ethically and philanthropically responsible (Caroll, 1991).The advantage of this approach was that the company was guaranteed higher profits, but this was in short term especially when a new competitor emerged. The reason behind this is that while the company made profits, it had no good public relations with the society. The basis is that they internally did good, but externally bad. 2.2 Business in the Context of Profits and Corporate Social Responsibilities 2.2.1 Concept of Purely Profit Driven Business The utilitarian principle of utility seeks to either approve or disapprove the actions of individuals depending on whether or not they promote/increase the amount of an individual’s happiness (one’s interests). Utilitarianism ethical theory is in principle related to the theory of hedonism. These principles reiterate that the actions, behaviours and policies of individuals are geared towards achieving pleasure and avoiding pain. As such, humankind will always act, behave and formulate policies which enable leads them towards the acquisition of wealth, power, position, good health, as well as virtue among others. These enhance individual’s chances towards achieving or maximizing pleasure while avoiding pain (Sunita, 2005, p.112). This approach to CSR is based on the Friedman (1970) cited in Iamandi (2007, p.6) view of businesses. He noted that the role of businesses is to “The Social Responsibility of Business Is to Increase its Profits”. The concept later expanded to stakeholder’s approach where it was seen that stakeholders had the power of impacting on business operations (Iamandi, 2007, p.6). 2.2.2 Concept of Corporate Social Responsibilities The pure profit driven is based on the share-holder value approach as envisaged by Adam Smith. In a face value view, it is the government that is supposed to regulate the failures associated with pure economic approaches. However, there has been great recognition that this can’t be left to government alone. Business have equal task of addressing the same (Pigou, 1920 cited in Benabou & Tirole, 2010, p.1). Kantian ethics stresses for the need of doing the right things in the way they ought to be. The theory is against bad will and ill motives. Businesses can be seen to have a social contract with the rest of the public. Good faith concept in contractual agreement requires that one acts honestly and fairly in meeting his contractual obligation (Zeller, 2003, p.4). 3.0 RESEARCH METHODS 3.1 Study Area The study will be conducted in Saudi Arabia with the key concentration being Etihad Atheeb Telecommunication Company. 3.2 Research Design The study will be a non experimental survey design. The main aim of this approach is to evaluate if there is significant difference in market leadership and profitability in Etihad Atheeb Telecommunication Company after implementing CSR or it is just a means of getting social and legal legitimacy. This study is going to adopt descriptive statistics to evaluate if there is significant difference. The descriptive statistics based on nominal and ordinal level of measurements will be used to explain the same. 3.3 Research Population Okeke (1995, p. 10) defines population as “the collection of elements, units or individuals for which information is sought”. The population will be drawn from Etihad Atheeb Telecommunication Company with the population being owners, employees and managers. Externally, customers of the company will be interviewed. 3.4 Sampling Design and Determination of Sample Size In order to select sample strata for this research, the researcher used judgmental sampling. Judgmental sampling basically means that the researcher selects cases best suited to answer the research questions (Saunders, Philip and Adrian, 2000). In the case of departments, the researcher will use random method of systematic sampling to pick departments that will be interviewed. However, marketing department will be automatically interviewed based on the fact that they are the link between the firm and customers. For directors and managers, the study will employ key informant interview with those available through purposive sampling to get respondents. In this approach those who are deemed to possess characteristics are in position to offer the required information is used. While picking the household/ customer’s respondent, the researcher will apply convenience sampling/ grab sampling. This is due to factors such as availability and willingness of respondent. 3.5 Sources of Data 3.5.1 Secondary Sources of Data Saunders, Philip and Adrian, (2000) note that secondary data is data, which already has been collected by someone else for another purpose. The research obtained data from text books, Journal, magazine, newspapers and internet from related literature. 3.5.2 Primary sources of Data Primary data is collected directly by researcher for a specific purpose. Two main techniques for gathering primary data exist, that is, inquiries and interviews. Either one or a combination of both can be used (Saunders, Philip and Adrian, 2000). The identified population as will be narrowed in sample frame will provide the required information. 3.6 Data Collection Methods The research instruments that will be used by the researcher in collecting useful information on this are questionnaire, direct observation and interview schedule. In this study, the questionnaire designed by the researcher will be structural and open ended. The questionnaire contains only relevant information for the study. 3.7 Method of Analysis and Presentation According to Yin (2003), data analyses consist of examining, categorising and tabulating or otherwise recombine the collected data. In data analysis there are three concurrent flows. These are data reduction so as to organise data so that conclusion could be drawn. The second is data display so that conclusions can be easily drawn. The last is drawing conclusion. This involves noting regularities, patterns, explanations, possible configurations, casual flows and propositions. The essence of data collection is to make something good out of it. The data collected have to be treated and analysed by so that it would serve its purpose. In analysing the data collected using the questionnaire descriptive simple percentage tables and charts will be used. REFERENCES Benabou, R & Tirole, J 2010, Individual and corporate social responsibility, Economica, Vol. 77, pp. 1-19. Brim, R 2012, A history of MBO, and recommendation for today’s manager. Retrieved on 6 October, 2012 from: www.managePro.com. Carroll, A 1991, The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders, Business Horizons Vol. 34, No. 4, pp. 39- 69. Chandra, A., Krovi, R. & Rajagopalan, B 2009, Risk Visualization: A mechanism for Supporting Unstructured decision Making Processes. The International Journal of applied management and Technology Vol. 6, No. 4, pp. 48-70. Geraghty, L 2010, Sustainability reporting - measure to manage, manage to change. Keeping Good Companies, No. 3, pp. 141-145. Hodgkinson, G. P. & Starbuck, W. I 2008, The Oxford handbook of Organizational Decision Making. Oxford: Oxford University Press. Iamandi, I 2007, Corporate social responsibility and social responsiveness in a global business environment: a comparative theoretical approach. Romanian Economic Journal, No. 23, pp.1-16. Jones, B. D 1999, Bounded Rationality. Annual Review of Political Science, 2, 297-321. Moorman, C. & Rust, T 1999, The Role of Marketing, Journal of Marketing, Vol. 63, No. 4, pp. 180-197. Okeke, A. O 1995, Foundation Statistics for Business Decision, Enugu,High mega system Limited. Saunders, M., Philip, L. and Adrian, T 2000, Research methods for business students, Essex, pearson Educational Limited. Yin, R 2003, Case study research, Thousand Oaks, Sage Publications. Zeller, B 2003, Good Faith - Is it a Contractual Obligation? Bond Law Review Vol. 15, No. 2, pp. 1-16. Read More