Corporate Social Responsibility and NGOs - Essay Example

Case study: Corporate social responsibility and NGOs Table of Contents Introduction 3 2.Understanding corruption 4 3.Corruption from a global perspective 5 4.Institutional perspectives of corruption 6 5.Historical developments of corruption 6 6.Normalization of corruption in Nigeria 7 7.Pro-corruption theoretical arguments 9 8.Obstacles to anti-corruption strategies 10 9.Possible solutions to corruption in Nigeria 10 10.Implications for NGO’s and public policy 11 11.Conclusion 12 12.References 14 1. Introduction The myriad shifts in the global business environment as a result of both globalization and the rapid technological advancements witnessed in the 21st century have on one hand transformed and revolutionized the way of conducting business thereby presenting numerous opportunities for enterprises all over the world. On the other hand, the ever-rising complexity and uncertainty of the global business environment in the era of globalization has made it completely difficult for enterprises to achieve their primary objectives due to the myriad pressures that continuously undermine effectiveness and efficiency of enterprise operations. Precisely, enterprises have operation chains that cut across different societies, communities, cultures and national frontiers where they encounter unique business environments that pose both challenges and opportunities; most importantly, multinational corporations must be responsive to the myriad social and ethical concerns in their specific environments of operations (Husted & Allen 2006 p.838). Ethics and social values are integral aspects of management since businesses have an obligation to take responsibility for the adverse effects of their actions and operations both on the local environment and on the populations in the global business environment (Bennett 2002, p.394). In view of the ambivalent nature of the global business environment, thanks to the challenges and opportunities of globalization and technological advancements, the concept of Corporate Social Responsibility has emerged as one of the crucial areas of management focus today (Lim & Tsutsui 2012, p.69). The heightened global focus on ethical behaviour and societal values implies that multinational corporations have to prove themselves as responsible global actors in their dealings in markets where their operations are hosted across the world. For that reason, multinational corporations the world over are increasingly paying more attention to Corporate Social Responsibility today more than ever before, particularly given its crucial significance in determining not only business success, but also enterprise survival in the long term (Branco and Rodrigues 2006, p.111). For all the good reasons conceivable, international businesses as well as organisations of various kinds are starting to explore the significance of pursuing a more proactive and comprehensive approach towards CSR as a solution to the myriad challenges of globalization, which undermine sustainable development (Herrmann 2004, p.205). Given that actions have global consequences, the idea of social connectedness is gradually becoming firmly embedded and firms are now assuming greater responsibility for issues which were previously considered beyond the scope of their remit and responsibility (Ihugba 2012, p.68). For instance, corruption is a serious ethical concern in the global business environment, particularly in the rapidly developing African countries such as Nigeria, where corruption is deeply entrenched in mainstream societies as a common day business practice in enterprises (Nageri, Umar & Abdul 2013, p.46). This report will assess the issue of corruption in Nigeria from a variety of institutional as well as stakeholder perspectives while exploring the theoretical arguments highlighting the significance of corruption in the country; similarly, this report will highlight the complex nature of corruption in Nigeria and what firms can do to confront and overcome corruption. This report will end by reflecting on some of the implications this has for NGOs and for public policy; all along, this report will be drawing key evidence from theoretical, empirical literature as well as recent empirical examples to illustrate its points. 2. Understanding corruption Corruption has been defined in various terms by different scholars and organizations the world over; for instance, the World Bank defines corruption as “the abuse of public office for private gains” while to the United Nations Development Program (UNDP), corruption is “the misuse of public power, office or authority for private benefit (Obuah 2010, p.18).” Transparency International conceptualizes corruption as not only the inappropriate, but also the illegitimate tendency of officials in the public sector to misuse the power entrusted to them for private gains at the expense of effective public service. Etymologically, the concept of corruption espouses from the Latin word “rumpere,” which loosely implies “to break” thus, corruption nuances the act of breaking away from societal norms and practices respectively (Abdullahi, Abdullahi & Yelwa 2012, p.240). Clearly, the different definitions of the concept highlights the lack of a systemic consensus on the exact conceptualization of corruption the world over; nonetheless, it can be deduced from the various attempts at defining the term that it entails the abuse of official mandate for private gains. 3. Corruption from a global perspective Traditionally, international financial institutions (IFIs) have been overly fixated with rolling back states and development of markets oblivious of the existence of public corruption; however, given the discovery of the significant contribution of state institutions in the effective functioning of markets, IFIs have stated giving attention to the centrality of corruption. Recent studies have struck a consensus that corruption is indeed a serious challenge for a vast majority of modern societies and it has resulted to catastrophic impacts especially in the still developing African countries such as Nigeria (Ojukwu & Shopeju 2010, p.18). The global society’s reawakened devotion to the fight against corruption has prompted the formation of international institutions dedicated to promoting transparency in public institutions while drafting international legislation to combat the recent phenomenon of internationalization of crime. The reasoning behind the formulation of national anti-corruption initiatives is the concern that corruption does undermine the effective operation of market institutions, redirecting aid and subverting policy reforms while undermining both democracy and development. The global perspective on corruption is that it does break the link between collective decision making and the capacity of people to influence policy through public opinion and free elections; similarly, corruption undermines the interests of the poorest and most marginalized individuals in society. 4. Institutional perspectives of corruption According to Transparency International, Nigeria ranks high in the list of the most corrupt countries in the world and more specifically, the county has been famed for its notorious “419” emails, faxes as well as messages, which often seek individuals’ bank account details for money laundering practices. The United Nations’ Department of State Country Report on Human Rights Practices 2000 highlights that Nigeria is marked by high wealth inequalities since most of the country’s wealth is concentrated in the minority elite population due to corruption as well as numerous malpractices in the government’s contracting. For instance, public procurement, which entails all manner of acquisitions of public goods as well as services, is marked by high incidences of corruption as indicated by the World Bank’s report on Nigeria (Achua 2011, p.324); the World Bank highlights the existence of numerous operational challenges in the management and administration of Nigeria’s procurement and contract system respectively. Mounting evidence confirms that government contracts in Nigeria are awarded and paid in surreptitious and clandestine manner due to numerous vested interests at the administrative level. The British Department for International Development views corruption and mismanagement of resources especially in the public sector as the main reasons for the persistence of poverty in Nigeria; poverty incidences remain extremely high in Nigeria despite the country being one of Africa’s richest owing to its oil resources (Nwankwo 2013, p.305). 5. Historical developments of corruption Corruption in Nigeria is a pervasive phenomenon in nearly all aspects, from public to private spheres of life and is usually assumed in all forms of human transactions because most average Nigerians strongly believe in the use of corruption to achieve their ends (Makinde 2013, p.110). Notably, corruption is neither a strange nor a new phenomenon in Nigeria since it can be traced back to pre-colonial era, when traditional rulers sold out their subjects after certain inducements; for instance, a vast majority of traditional leaders sold out their subjects for gifts such as hot drinks, mirrors, umbrellas, or walking sticks from western slave traders. The prevalence of systemic corruption has often been strongly correlated with the absence of sustainable peace and order since the two cannot co-exist in any given society; precisely, corruption and sustainable peace have long been conceptualized in a cause-effect relationship whereby the absence of one is the cause of the existence of the other (Olaifa 2012, p.85). The prevalence of corruption in Nigeria has been attributed to the ineffective model of state imposed on African countries and the subsequent widespread mismatch between constitutional logic and societal imperatives (Pierce 2006, p.900). That is, the initial indirect rule model of government established by the colonial government unwittingly led to the emergence of cons that masqueraded as government officials and soldiers and extorted money from the countryside, thereby setting the initial precedence of corruption as the core of governance. Numerous state agencies and institutions in Nigeria deny the acceptance of corruption, partly due to its normalization as a common day practice in the Nigerian society, thereby further reinforcing its persistence. 6. Normalization of corruption in Nigeria Corruption in Nigeria is deeply embedded into the country’s mainstream society as a common day practice and the country’s culture of political corruption is highly representative of the nature of governments and governance in a typical African state. Embezzlement has recurrently been conceptualized as the strategic essence of governance in Nigeria and the notorious reoccurrence of this phenomenon does underscore the notion that corruption is no longer the exception, but the norm in this African state (Agbiboa 2010, p.474). The origins of corruption in Nigeria are attributable to the corrupt nature and practices of the military wing of the ruling elite when the country was under military rule; military rule permitted corruption, letting it to grow without resistance or regulation. The Country’s leadership under President Olesegun Obasanjo made initiatives to fight corruption through the establishment of anti-corruption bodies such as the Independent Corrupt Practices and other Related Offences Commission (ICPC) as well as the Economic and Financial Crimes Commission (EFCC) (Ogbeidi 2012, p.10). Previous government’s attempts to combat corruption in Nigeria have remained largely ineffective and corruption still remains the single most serious obstacle to both the development of effective democratic governance as well as the realization of sustainable development in the country (Agbiboa 2012, p.325). The public acceptance of corruption in Nigeria has consequently blurred the lines between legal as well as illegal activities while reinforcing an enabling environment for generalization and trivialization of corrupt practices in the country. Corruption in Nigeria manifests in different forms including resource mismanagement, embezzlement, in addition to contract over invoicing, drug peddling, gratification as well as advance free fraud, among numerous other subtle forms. The complex nature of corruption in Nigeria is attributable to the numerous and varied factors that create an enabling environment for corruption to thrive including obsession with materialisms, as well as the dearth of ethical standards in government agencies and institutions. Similarly, the absence of clear understanding of ethical considerations due to irreligiousness, departure from societal norms and the value system, as well as poverty and the ineffective Nigerian taxation system coupled with bad rules and priorities are to be blamed for the flourishing corruption in Nigeria. Corruption in all its various facets has resulted to catastrophic impacts both on the country’s effective democratic governance as well as on its economic development; generally, corruption has devastated the Nigerian state and held it backwards for numerous decades since independence. 7. Pro-corruption theoretical arguments Over the years, corruption has been justified on various grounds despite its obvious negative impact on societies; for instance, some scholars have justified corruption on the grounds that it could potentially translate to positive contributions to the social, economic, as well as political development of a society. A significant number of these scholars have conceptualized corruption as a deliberate tool of administrative delay which encourages bribes thereby acting as a significant catalyst to the otherwise sluggish economy (Obuah 2010, p.18). In other views, corruption in the form of nepotism, spoils as well as graft is considered beneficial particularly in political development because it allegedly promotes unity and stability while supporting popular participation in politics, establishment of sustainable parties, as well as bureaucratic responsibility respectively. Similarly, corruption in capital hungry developing economies such as Nigeria has been regarded important for its perceived role in the promotion of industry since large-scale graft helps funnel capital to struggling entrepreneurs. Furthermore, the “Nigerian factor,” a pervasive notion that corruption is inevitably the way of doing things and getting things done in Nigeria, which stems from the country’s long standing tradition of exchanging gifts for favours granted, has also been cited as one of the strongest justifications of the vice. In this respect, corruption conceptualized as an expression of gratitude for a favour has gradually become deeply entrenched in the Nigerian culture as a significant cultural norm (Atelhe & Agada 2014, p.307); it is therefore common knowledge that corruption is merely but a person’s expression of goodwill in appreciation of benefits enjoyed by the individual. 8. Obstacles to anti-corruption strategies Largely, the persistence of corruption indicates the failure of governance since if the political leadership tolerates the practice then even the most comprehensive anti-corruption strategy is bound to fail eventually. The anti-corruption bodies established by President Obasanjo have long lost their bite and the present President Jonathan’s government largely overlooks corruption thereby perpetrating a culture of impunity across all areas of in the public sector. Despite Nigeria’s stated anti-corruption initiatives, corruption thrives particularly due to the widespread lack of political will on the side of the county’s subsequent governments as well as its ineffective judicial system, which has been known to dismiss elite corruption cases. For instance, the Nigeria’s Federal High Court in Lagos dismissed corruption charges involving stealing and financial impropriety, which had been levelled against a former managing director of Intercontinental Bank. 9. Possible solutions to corruption in Nigeria The prevalence of corruption in nearly all aspects of both public and private life in Nigeria is indeed a worrisome trend that needs immediate redress to effectively stem the vice from the Nigerian community. Generally, for Nigeria to succeed in the war against corruption, the leadership at all levels of the country must take deliberate and proactive measures in promoting transparency, integrity, as well as accountability in all aspects of both public as well as private transactions (Ayobami 2011, p.5). More specifically, three viable solutions for the pervasive corruption bedevilling the Nigerian society include social transformation, enforcement of anti-corruption laws, as well as improvement of socio-political and economic life in the country. To overcome corruption, firms and individuals need to undergo a thorough social transformation to deconstruct reform and re-orientate the pervasive tolerant mainframes and views of corruption as a necessary evil that are rife in the country. Similarly, firms in Nigeria should embark on a serious commitment to the enactment as well as reinforcement of the country’s anti-corruption law to put an end to it in the Nigerian society. Equally important in the fight against corruption is the enhancement of socio-political as well as economic lives of individuals, which significantly diminishes the tendency of individuals to engage in corruption. 10. Implications for NGO’s and public policy Corruption in all its varied forms and extremities is inevitably a significant violation of citizen’s confidence and trust, which implies that any responsible individual or group of individuals have a crucial role to play in the anti-corruption war; furthermore, significant reforms can only be achieved in organizations if the specific people affected by them recognize the need for reforms. For that reason, the civil society organizations or non-governmental organizations operating in Nigeria have an equal stake in public affairs as the country’s citizens, which should be incentive for them to press for change. NGO’s should take a more proactive role in championing for transparency in the public sector since corruption indicates a failure of systems meant to serve the public while safeguarding public assets and resources. The civil society which comprises of voluntary and collective actions that are focused on promoting shared interests, purposes as well as values has a remarkable part to play in breaking the vicious cycle of corruption in Nigeria; NGO’s as a significant component of the civil society must actively strengthen transparency and accountability in the public sector. Public policy will have to focus on good governance and the promotion of transparency and accountability in the public sector is the war on corruption is to be won any time soon, since the prevalence of corruption highlights failure of governance. There is need for an urgent revitalization of anti-corruption efforts within the Nigerian leadership embedded in sound anti-corruption policies and frameworks since a serious dearth of political will and commitment on the part of the government undermines the war against corruption. Given that political leaders are the main agents of corruption in Nigeria, it is indubitable that even the most comprehensive anti-corruption strategy is bound to fail if it is not adequately backed by a positive political will to strengthen public policy in the fight against corruption from the top to the grassroots. Consequently, the elite political class should set a good example by being sincerely committed to the minimization of corruption through the pursuit of policies and practices that promote rather than undermine the war against corruption. 11. Conclusion Ultimately, corruption poses a great ethical concern in the modern global business environment particularly because it undermines the effective operation of market institutions, redirecting aid and subverting policy reforms thereby not only stifling democracy but also preventing socioeconomic as we as political development of affected societies, especially in African countries. The catastrophic impacts of endemic corruption in the African state of Nigeria has risen to alarming heights in the recent past thereby raising significant concerns from policy makers and various other quarters around the world; Transparency International ranking of Nigeria as one of the world’s most corrupt countries coupled with other disheartening narratives of the prevalence of corruption in Nigeria supports the thesis of normalization of corruption in the country. Sadly, despite numerous attempts of the subsequent governments to overcome the corruption menace, the country is yet to make any significant progress in the pursuit of transparency, accountability, as well as integrity, particularly in the public sector where the highest incidences of corruption occur. This report recommends three viable solutions for the pervasive corruption bedevilling the Nigerian society including social transformation, enforcement of anti-corruption laws, as well as improvement of socio-political and economic life in the country. Overall, sound anti-corruption laws and legislations are not enough to tackle corruption given that even the most comprehensive anti-corruption strategy is bound to fail if it is not adequately backed by a positive political will to strengthen public policy. 12. References Husted, B. W., & Allen, D. B. (2006). Corporate social responsibility in the multinational enterprise: Strategic and institutional approaches. Journal of International Business Studies, 37(6), 838-849. Available at: http://epubs.surrey.ac.uk/791899/3/CorporateSocialResposibilityInTheMultinationalEnterprise%20FINAL%20DA.pdf Herrmann, K. K. (2004). 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