SOCIAL RESPONSIBILITY PRACTICES OF EXXONMOBIL: AN EVALUATION OF ITS IMPACT ON ECONOMIC DEVELOPMENT IN NIGERIA 

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Social norms about commercial organisations used to stop at maximising resources and allocating them in an effective manner. However, in contemporary times, there has been a shift in perspective. Modern businesses are now expected to go beyond the sole goal of profit maximisation and instead prioritise their social responsibility to society. Today's heightened interest in the role of business in society has been promoted by increased sensitivity to the awareness of environmental and ethical issues, my dear students. It signifies that our society has experienced a growing preoccupation with the notion that the increased power and advancement of companies has not been met with an equivalent commitment and motivation to tackle significant social concerns. These concerns encompass issues such as poverty, drug abuse, crime, mistreatment of workers, subpar production output, and environmental harm or pollution caused by industries, as consistently highlighted in media reports. It is thus imperative for everyone to recognise that the public's demand for greater social responsibility will not diminish if business organisations neglect to address the challenges they have presented to society. 

Corporate social responsibility (CSR) plays a pivotal role in fostering economic development by promoting sustainable business practices and community engagement. Recent studies indicate that corporate social responsibility (CSR) initiatives have a positive impact on economic growth through multiple channels. For instance, a report by the World Bank emphasises how CSR activities improve business competitiveness while also contributing to societal welfare. By integrating ethical standards, environmental stewardship, and philanthropic endeavours into their operations, corporations not only mitigate risks but also create long-term value for stakeholders and the economy at large (World Bank, 2022).

Furthermore, empirical research highlights that CSR activities have the potential to stimulate economic development through the promotion of innovation and enhancement of corporate governance. According to a study published in the Journal of Business Ethics, it has been found that companies that adopt Corporate Social Responsibility (CSR) practices tend to demonstrate increased levels of innovation. This, in turn, leads to improvements in productivity and technological advancements within their respective industries. These innovations not only enhance firms' market competitiveness but also contribute to overall economic dynamism and resilience (Journal of Business Ethics, 2023).

Moreover, CSR initiatives are becoming more acknowledged for their role in tackling socio-economic inequalities and fostering inclusive growth. A recent analysis by the International Labour Organisation (ILO) underscores the importance of CSR practices in poverty reduction and social equity. These practices, which include promoting decent work conditions and investing in local communities, have been found to make a significant contribution in these areas. By prioritising the well-being of employees, supporting fair labour practices, and empowering marginalised groups, corporations can catalyse inclusive economic development that benefits broader society (ILO, 2024).

Corporate social responsibility serves as a critical driver of economic development by fostering sustainable business practices, promoting innovation, and addressing socio-economic challenges. As evidenced by recent studies and reports, it is clear that CSR not only enhances corporate reputation and resilience but also generates positive externalities that contribute to robust economic growth and societal well-being. By aligning business objectives with ethical and social considerations, corporations can play a transformative role in building more prosperous and equitable economies globally. Therefore, the need for this study arises, with focus on ExxonMobil, Akwa Ibom State.

1.2 Statement of the Problem

ExxonMobil, a prominent entity in the oil and gas industry, conducts extensive operations in Eket, thereby making a substantial contribution to the local economy. Nevertheless, the degree to which the company's corporate social responsibility (CSR) initiatives influence the economic development of the district continues to be a significant concern.

ExxonMobil's corporate social responsibility programmes in Eket Senatorial District encompass a range of initiatives focused on community development, education, health, and infrastructure improvement. These initiatives are anticipated to promote socio-economic growth and improve the quality of life for residents. Recent studies indicate that effective CSR practices can stimulate economic development by promoting local employment, supporting small and medium enterprises (SMEs), and investing in community infrastructure (Ehab, 2023).

Notwithstanding these endeavours, there exist persistent challenges and criticisms concerning the alignment of ExxonMobil's corporate social responsibility (CSR) strategies with the particular economic requirements of Eket Senatorial District. Issues such as transparency in fund allocation, the sustainability of development projects, and the actual socio-economic impact on local communities have been raised (Reham, 2022). Furthermore, one must also consider the potential issue of local economies relying too heavily on corporate initiatives, as this could potentially impede their long-term economic resilience and self-sufficiency (Birky, 2015).

Furthermore, the socio-economic context of Eket Senatorial District, which is characterised by its heavy dependence on the oil and gas sector, introduces additional intricacy to the analysis. The district's economic diversification and resilience against oil price volatility and environmental challenges remain pivotal in evaluating the effectiveness of ExxonMobil's CSR contributions (Wanyama, 2023).

Therefore, while ExxonMobil's CSR initiatives in Eket Senatorial District aim to promote economic development and improve community welfare, it is imperative to conduct a critical examination in order to assess their actual impact and sustainability.  This study will be investigating the corporate social responsibility of exxonmobil and the economic development of Eket Senatorial District of Akwa Ibom State.

1.3 Aim/objectives of the study

The primary objective of this study is to examine social responsibility practices of exxonmobil: an evaluation of its impact on economic development in Eket Senatorial District, Akwa Ibom State. Specific objectives of this study are;

To determine the extent of CSR activities undertaken by ExxonMobil within Eket Senatorial District.

To investigate the impact of CSR activities undertaken by ExxonMobil on the economic development of Eket Senatorial District of Akwa Ibom State.

To investigate the challenges faced by ExxonMobil in implementing effective CSR initiatives in Eket Senatorial District.

To propose recommendations for enhancing the effectiveness and sustainability of ExxonMobil's CSR initiatives in Eket Senatorial District.

1.4 Research Question

The following research questions will be answered in this study;

What is the extent of CSR activities undertaken by ExxonMobil within Eket Senatorial District?

What are the impact of CSR activities undertaken by ExxonMobil on the economic development of Eket Senatorial District of Akwa Ibom State?

What are the challenges faced by ExxonMobil in implementing effective CSR initiatives in Eket Senatorial District?

What are the recommendations for enhancing the effectiveness and sustainability of ExxonMobil's CSR initiatives in Eket Senatorial District?

1.5 Statement of Hypotheses

The statements below will be validated in this study.

Ho: The extent of CSR activities undertaken by ExxonMobil within Eket Senatorial District is low.

Ho: The extent of CSR activities undertaken by ExxonMobil within Eket Senatorial District is high.

1.6 Significance of the Study

The study will be beneficial to Exxonmobil as it contain information that will help improve its corporate responsibility programme. The research will also benefit other organizations who have not been participating in corporate social responsibility activities. Also the research will help researchers of this field of study because its relevant literature will serve as a point.

1.7 Delimitation of the Study

This research study will examine the corporate social responsibility of exxonmobil and the economic development of Eket Senatorial District of Akwa Ibom State. Empirically, this study will assess the impact of CSR activities undertaken by companies, the challenges faced by companies in implementing effective CSR initiatives and propose recommendations for enhancing the effectiveness and sustainability of CSR among companies.

This study will be carried out in Akwa Ibom State.

1.8 Definition of Terms

Corporate social responsibility: A concept whereby organizations consider the interest of society by taking responsibility for the impact of their activities on all the stakeholders including the environment.

Economic development: Economic development refers to the sustained, concerted actions of policymakers and communities that improve the economic well-being and quality of life for a region or a country. It typically involves efforts to increase productivity, employment opportunities, income levels, and overall standards of living through various means such as infrastructure development, technological advancement, education, and investment in human capital.

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