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EXAMINING CORPORATE SOCIAL RESPONSIBILITY AS A RISK MANAGEMENT STRATEGY

CHAPTER ONE

INTRODUCTION

Background of the study

Firms are increasingly subjected to complicated and ever-changing demands in their operational environment, according to recent trends. Such expectations can put a company’s survival at danger, especially if it doesn’t have a solid risk management strategy in place to respond to changes in its operating environment. As a result, businesses are rapidly establishing capabilities to comprehend and respond strategically to any dangers they may face in their working environments (Zadek, 2007). The development of learning capacities and 43 comprehending the wants and concerns of their stakeholders are two of the many strategic alternatives offered to businesses (Bowie and Dunfee, 2002; Castells, 1996). As Millington (2008) points out, western companies who do not manage their supply chains in compliance with minimal ethical standards run the risk of not just consumer boycotts, but also shareholder activism and stringent government laws. 44 Clearly, companies that operate in global supply chains can mitigate these risks by implementing solid ethical standards (Jenkins, 2001; Tallontire, 2007). Such activities and pressure on southern suppliers can be achieved by developing and enforcing compliance with various standards and codes for these southern suppliers, either jointly or unilaterally (Barrientos and Gorman, 2007)

Problem statement

Despite their widespread use, firm risk perceptions and their implementation are understudied in the literature. Risk is frequently mentioned but rarely examined in studies, with most using the industry’s own broad terminology of’social risk.’ “A fundamental problem in exploring the mining industry’s implementation of social risk assessment is the paucity of empirical studies on this topic,” one study stated, and drew on published data to address this gap (Kemp et al., 2016, p. 22). This important analysis falls short of tracing the industry’s risk thinking and CSR connections. In this paper, I examine how mining corporations framed a variety of constraints and processes as distinct categories of risk and positioned CSR initiatives using interview data.

Purpose of the study

The goal of this research is to look at the influence of corporate social responsibility as a risk management approach in the mining industry. The study’s specific goals are as follows:

1. Evaluate the impact of corporate social responsibility on overall company performance.

2. Determine the link between corporate social responsibility and risk management.

3 assess the influence of corporate social responsibility on risk management

Significance of the study

Because there are no substantial disparities in the structural and operational models of the various mining firms in Nigeria, it is predicted that this study will provide an idea of how the corporate social responsibility landscape in Nigeria’s mining firming system looks. This study is also significant since it will add to the existing literature on mining companies’ CSR, specifically on how socially responsible Nigerian mining companies are in tackling risk management concerns.

The findings of this study will help Nigerian mining companies assess their commitment to corporate social responsibility aims and functions in light of their reliance on the environment as a source of inputs and a market for their products.

Study hypothesis

The following is the study hypothesis:

Ho: In Nigeria, there is no link between corporate social responsibility and risk management in mining companies.

 

H1: In Nigeria, there is a strong link between corporate social responsibility and mining firm risk management.

Scope and Limitations of the Study

The purpose of this research is to look into the impact of corporate social responsibility on risk management in mining companies. The scope of this research is limited to the Nigerian mining firming industry from 2003 to 2013.

Definition of Basic terminologies

CSR (Corporate Social Responsibility) is a business process that a company follows beyond its legal obligations in order to add economic, social, and environmental value to society while minimizing the negative consequences of business activities, which includes interactions with suppliers, employees, consumers, and communities in general. It also refers to a company’s responsibilities to all of its stakeholders in all of its operations and activities. It’s a concept that describes a company’s voluntary responsibility to all of its stakeholders in all of its operations and activities.

The revelation of information about a company’s contacts with society is referred to as social responsibility disclosure (Branco and Rodrigues, 2006). Information asymmetry necessitates the revelation of private information, which brings with it a plethora of benefits.

Organisation of study

The research is divided into five sections. This is the opening chapter, and it provides an overview of the research. The second chapter is devoted to a review of the relevant literature. The research methodology is presented in Chapter 3; the data analysis, as well as the interpretation and discussion of the results, are presented in Chapter 4. The findings and recommendations are summarized in Chapter 5.

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