CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

In recent times, organisations are more oriented towards engaging in self-regulated activities to benefit the communities in which they carry out their business activities. The business sector has the necessary human resource, financial capital and physical resources to contribute to community development (CD). Over the last few decades, the concept of Corporate Social Responsibility (CSR) has received great attention by business executives, academicians and the society at large. Business organisations that think of achieving their long-term objectives and obtaining sustainable growth work closely with the local community in which their business activities are being conducted. Those businesses take cognisance of the impact of their activities on stakeholders. CSR is considered as a fundamental component of doing business by many large U.S. and U.K. firms, and these firms realise the need to connect their CSR activities with firm competencies (Dunfee, 2006).

Ofori & Hinson (2007) posit that internationally linked Ghanaian companies appear to have a better understanding of various aspects of CSR and how these could be utilised to the advantage of businesses, but, they used more of traditional approaches to CSR than contemporary ones. Ghanaian firms are aware of CSR and are devoted to it. However, the level at which they understand the concept seems to be narrowed to philanthropic activities (Abugre & Nyuur, 2015). CSR focuses on the general mode of a company trying to balance its commitment to essential stakeholders in its business environment (Ebert & Griffin, 2017, p. 76). CSR is basically a concept whereby an organisation willingly decides to take initiatives that meet the demands and/or contribute to improving the welfare of its stakeholders (shareholders, customers, government, suppliers, employees, communities, among others).

Both the firm and society stand to benefit when a company is socially responsible (Porter and Kramer, 2006). Businesses are instrumental when it comes to provide job avenues, wealth, goods and services that improve social conditions over time. Arnold (2017) holds the view that the first benefit that flows from CSR is improved the relationship between companies and communities. Organisations that recognise the significance of CSR, formulate policies, practices and strategies that connect the objectives of their organisations with socially responsible activities. A company does not merely become socially responsible by complying with the legal regulations of the setting in which it operates. A socially responsible company adopts business approaches that exceed the lowest legal requirements and seeks for an opportunity to contribute to the welfare of individuals and groups in its social environment.

Corporate social responsibility (CSR) initiatives have received increasing attention in research and practice (Rupp et al., 2018; Wang et al., 2020; Xia et al., 2023; Zhao et al., 2022) and are often construed as crucial for modern business success (Orlitzky et al., 2003). CSR encapsulates the “context-specific organizational actions and policies that consider stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance” (Aguinis & Glavas, 2012, p. 933). Firms that engage in high levels of CSR enjoy an enhanced reputation and higher profitability (Orlitzky et al., 2003; Zhu et al., 2014). In addition to these organizational outcomes, a growing body of literature has documented that employee perceptions of CSR can positively affect them. For example, CSR perceptions have been linked to employee attitudes (e.g., organizational identification and engagement) and behaviors (e.g., task performance and creativity; Rupp et al., 2018; see Wang et al., 2020 and Zhao et al., 2022 for meta-analyses).

Although CSR research often treats firm-level CSR activities and employee CSR perceptions interchangeably, it stands to reason that employee perceptions of CSR and the firm’s CSR initiatives may differ in some cases. For example, employee perceptions of CSR may be shaped by their leaders’ motivational tactics (Vlachos et al., 2013). Savvy leaders may paint a picture for employees about how their work contributes to society and improves customers’ lives, leading to high employee CSR perceptions even without concrete firm-level initiatives. The opposite could also be true; the firm may be involved in multiple charitable activities that front-line employees are unaware of. In other words, employees may perceive more or less CSR than is being enacted by the firm. Should the effects of firm-level CSR practices and employee perceptions of CSR differ, there would be enormous practical implications for organizations as their sizeable investments in CSR initiatives may not be moving the needle among their workforces. To bring more theoretical clarity to this process, the present study aims to contribute to the expanding field of CSR’s micro-level effects on employee outcomes (e.g., Jones, 2019; Rupp et al., 2018; Willness et al., 2020) by focusing on firm-level internal and external CSR practices assessed by top managers.

Corporate social responsibility (CRS) is an important concept that is progressively being deliberated and adapted worldwide. Corporate social responsibility is commonly described as a self-regulatory frame work through which cooperation obliges themselves voluntarily to, further some social goods, beyond the interest of the firm and what is required by law MC William $ Siegel 2001. To implement corporate social responsibility, enterprise should have placed a process to integrate social, environmental, ethical, human rights and consumer concern into their business operations and core strategy in close cooperation with their stakeholder.

The program of corporate social responsibility globally, not only seen as an activity of the attitude of the volunteer is made by the company, but a new paradigm of corporate social responsibility leads to a form of commitment of a company, in performing the responsibility to the community and the environment. Corporate social responsibility activities of a company are a strategic decision of the company in a comprehensive manner that involves all the company resources (Nurdizal et al, 2011).

The term welfare suggests the state of well being and implies wholesomeness of the human being. It is a desirable state of existence involving the mental, physical, moral and emotional factor of a person. All these four elements together constitute the structure of welfare on which its totality is based. The term welfare is a relative concept; therefore it varies from time to time, region to region and from country to country. According to the traditional economic theory labour can be defined as, “A factor of production which consists of manual and mental exertion and receives some return by way of wages, salaries or professional fees” (Railkar, 1990). In a Resolution in 1947, the ILO defined labour welfare as “such services, facilities and amenities as adequate canteens, rest and recreation facilities, arrangements for travel to and from work, and for the accommodation of workers employed at a distance from their houses and such other services, amenities and facilities as contribute to improve the conditions under which workers are employed”.

Microfinance encompasses the provision of microcredit, micro savings and micro insurance services especially to low income households Armendariz and Morduch 2005. Many microfinance institutions have adopted the social objective of assisting the poor and businesses to become self-sufficient. Globally, microfinance is estimated to have reached about 200million people by the year 2013 (Cull and Morduch 2017). The emergence of microfinance was a result of the poor performance program set up by the government in the 1960s and 1970s to provide subsidized to farms.

Employee welfare means anything done for the comfort and improvement, intellectual or social, of the employees over and above the wages paid which is not a necessity of the industry. Employee welfare entails all those activities of employer which are directed towards providing the employees with certain facilities and services in addition to wages or salaries. It includes monitoring of working conditions, creation of organizational harmony through infrastructure for health, general insurance, retirement benefits, housing facilities, and education benefits for employees and their children, and so on. Labour welfare implies the setting up of minimum desirable standards and the provision of facilities like health, food, clothing, housing, medical assistance, education, insurance, job security, recreation etc. Such facilities enable a worker and his family to lead a good work life, family life and social life (Sarma, 1996).

In developing country, microfinance is one of the developing tools that are used to reduced poverty in the country. The micro finance helps even the poor to become entrepreneur. When there is lack of capital to start up a business, the provision of loan can be used to reduce poverty strategy. These savings can then be used for emergencies purpose, future investment, education and social activities. Furthermore, from 1998 to 2000, the microfinance program was extended to FALAM TOWNSHIP. In other to increase the coverage of households, as well as to build a self-reliant microfinance institution for the community. In the 1970s, Mohammad Yunus is a Bangladeshi banker and economist who developed the concept of micro credit. He is the founder of the Grammen bank, which provides loans to entrepreneurs to the poor to qualify for traditional bank. He and the bank were jointly awarded the Noble Peace prize in 2006.

The history of microfinance is closely linked with poverty reduction, In Cameroon the history of microfinance dates back to more than one century in its traditional form popularly known as ‘njangi’. The introduction of modern microfinance in Cameroon started in 1963 by a Catholic Priest Father Alfred Jansen in Njinkom in the Northwest Region in Cameroon. The idea of credit union spread all over the northwest region and southwest region of Cameroon; and by 1968, 34 credit unions that were already in existence. These 34 credit unions came to an accord and formed what we have today as the Cameroon Cooperative Credit Union League (CAMCCUL). CAMCCUL is a financial institution that governs all the other Micro Finance institutions in Cameroon. There are more than 460 registered MFIs in Cameroon. Which has a corporate social responsibility on household welfare in Bamenda.

1.2 Statement of the Problem

In today’s globalized world, microfinance institution has many challenges to operate and earn profit. Some of these problems include; financial constraints, regulatory requirements and balancing social goals with professional life. People have more knowledge about microfinance institutions, their services and the way they operate their businesses. People are increasingly aware of the impact micro finance institutions have on the society and the environment in which they operate. In the country, many of these MFIs are facing many problems with a new role, which is to fulfill the demand of the present generation in a socially responsible way. The microfinance institutions must take responsibility for the ways they operate in the societies and natural environment because their operations impact society and the natural environment.

Furthermore, corporate social responsibility has garnered significant attention from executives, especially those in micro finance institutions. Here, MFIs involves in corporate social responsibility are actually not regretting because of the increase it has made on their sales leading to profit and how it has impacted the environment. However, this is not always the case because some MFIs spent more on advertising their corporate social responsibility have affected microfinance institutions in Bamenda. While some micro financial institutions have seen positive developmental impacts from their Corporate Social Responsibility activities, these initiatives often come with increased costs, which in turn affect their financial performances and sustainability.

Despite the role that MFIs play in their CSR, and the betterment of employees welfare in their household, there is a notable lack of empirical research addressing the specific ways in which the various factors on CSR affects employee well-being in these institutions. This gap in knowledge makes it challenging for managers and policymakers to implement evidence-based strategies aimed at improving workplace conditions and enhancing employee performance within MFIs in Bamenda, this study seeks to provide insights that can inform the development of targeted interventions to create a more conducive working environment, thereby boosting employee morale and organizational performance (Robbins & Judge, 2013)

1.3 Research Questions

1.3.1 Main Research Question

What is the impact of corporate social responsibility on household welfare of employees in MFIs in Bamenda II?

1.3.2 Specific Research Questions

• How does work life balance affect household welfare of employees in MFIs in Bamenda II ?
• In what way does motivation influence household welfare of employees in MFIs in Bamenda ?
• How does communication strategic impact household welfare of employees in MFIs in Bamenda II?

1.4 Research Objective

1.4.1 Main Objective

To investigate the impact of corporate social responsibility on household welfare of employees in MFIs in Bamenda II.

1.4.2 Specific Objective

• To assess how work life balance has affected household welfare of employees in MFIs in Bamenda II.
• To examine the influence of motivation on household welfare of employees of MFIs in Bamenda II.
• To determine the impact of communication strategic on household welfare of employees in MFIs in Bamenda II.