Investigating Stakeholder Perception and Response to Corporate Social Responsibility of Firms in Ghana

Abstract

The business case for corporate social responsibility (CSR) is hinged on the assertion that “doing good” is not only “the right thing to do” but also leads to “doing better” as a business. However, inconsistent results in support of this assertion has increased the need to clarify the mechanism by which CSR leads to positive returns to the firm from their stakeholders. Although studies have investigated this response mechanism, such studies are yet to be extended to the African context. Additionally, there has also been little focus on the role of individual factors in influencing response to CSR. The main objective of this study was therefore to examine a mechanism through which stakeholders’ CSR perception translates into a response to CSR initiatives while accounting for the influence of other individual factors; the gender, work experience and the academic degree respondents were pursuing at the time of the study. The study employed a survey research design using semi-structured questionnaires and the structural equation modelling (SEM) technique of data analysis to investigate the role of stakeholders’ CSR predispositions and other individual factors in a proposed CSR response mechanism within the Ghanaian context. The results of the study indicate that CSR predisposition had either negative or no significant direct effect on CSR-based employer attractiveness but rather had a significantly positive effect on CSR-based employer attractiveness through CSR-induced identification. Thus, CSR practices of firms’ in Ghana only have positive effects of stakeholders if stakeholders first identify with the firms based on firms’ practice of CSR. Gender and work experience were also found not to significantly affect the identified mechanism, however, level of education was found to significantly affect the identified mechanism of response. Findings of the research suggest that potential employees in Ghana will react with scepticism to CSR initiatives of firms unless they first identify with a firm based on the firm’s performance of CSR. Additionally, this reaction mechanism is not significantly affected by their gender or work experience but is however affected by the academic degree that potential employees are pursuing. The implications of the study and its findings as is related to theory and practice are discussed.